More questions about CG and Economy

From: Always Learning


Dear All

<p>


I asked the question a few weeks back about the relationship between the CG growth and CPI. ie. Can high capitial gains ares such a Sydney North Shore or Melbourne's baysides can the CG always (8~10%) be expected to always remain higher than CPI (3%) and for that matter higher than average CG for the "other" suburbs?

<p>

The basic answer or my interpretation of the answer is as follows: The Australian economy is always expect to grow. Lets say by 3% a year on average.



<p>

Unfortunately this bigger pool of money wont be fairly distributed to all Australians. As we all know the rich will get richer. Via the unfair and unreasonable mechanics of capitalism the money will flow in unfair proportions up the economy "food" chain.

Of course, if it's about me getting rich, then I can delude myself into thinking it's all very fair and very reasonable as I have mustered some self control and "delayed gratification" :).

<p>

Thus the rich will be gett'n richer in the future just as they have done it the past, they will get a much larger slice of the much larger Australian economic pie whilst the poor will get the same small slice as they have now.

<p>

Thus when the economy grows by 3% we could expect the rich to benefit by some multiple of this eg. 3 (3*3%)= 9%. I would susspect the richer you are the higher the multiple.

<p>

With all that extra money the rich will have lots more money to spend on a nice place to live. As the is a limited supply of premium land...prices in premium areas I would expect to grow by the rate the rich are getting richer eg. 9% (or whatever).

<p>

What are the flaws to my picture?

<p>



Now here is my new question, should I buy now in a premium CG suburb, can I expect the growth in rental returns to match the CG? (generally over many many years of holding)

<p>

If CGs are 9% PA but will rental growth be expected to be lower than this eg. only 4.5% (a little more than 3% CPI). Or should I expect on average that the rental growth to match the CGs. (9% PA CG and 9%PA Rental Growth)

<p>

If the Rental Growth lower, then IRR will slowly fall (maybe I wont care once it is +cashflow anyway)

<p>

<table x:str border=0 cellpadding=0 cellspacing=0 width=387 style='border-collapse:

collapse;table-layout:fixed;width:290pt'>

<col width=64 style='width:48pt'>

<col width=81 style='mso-width-source:userset;mso-width-alt:2872;width:61pt'>

<col width=83 style='mso-width-source:userset;mso-width-alt:2958;width:62pt'>

<col width=95 style='mso-width-source:userset;mso-width-alt:3384;width:71pt'>

<col width=64 style='width:48pt'>

<tr height=22 style='height:16.8pt'>

<td height=22 class=xl24 colspan=5 width=387 style='height:16.8pt;mso-ignore:

colspan;width:290pt'>Rental Return and Capital Gains Comparison</td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 colspan=5 class=xl25 style='height:13.2pt;mso-ignore:colspan'></td>

</tr>

<tr height=18 style='height:13.8pt'>

<td height=18 class=xl26 colspan=2 style='height:13.8pt;mso-ignore:colspan'>Capital

Gain Rate</td>

<td class=xl26></td>

<td class=xl27 align=right x:num><a name=CG>9</a></td>

<td class=xl27>%</td>

</tr>

<tr height=18 style='height:13.8pt'>

<td height=18 class=xl26 colspan=3 style='height:13.8pt;mso-ignore:colspan'>Rental

Increase Rate</td>

<td class=xl27 align=right x:num><a name=RG>4.5</a></td>

<td class=xl27>%</td>

</tr>

<tr height=18 style='height:13.8pt'>

<td height=18 class=xl28 style='height:13.8pt' x:str="Year ">Year </td>

<td class=xl29>Value</td>

<td class=xl30>PA Rental</td>

<td class=xl31>Gross Return</td>

<td></td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 class=xl32 align=right style='height:13.2pt' x:num>0</td>

<td class=xl33 align=right x:num="500000">500,000</td>

<td class=xl34 align=right x:num="26071.428571428572" x:fmla="=(500/7)*365">26,071</td>

<td class=xl35 align=right x:num="5.2142857142857144E-2" x:fmla="=C6/B6">5.21%</td>

<td></td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 class=xl32 align=right style='height:13.2pt' x:num>1</td>

<td class=xl33 align=right x:num="545000" x:fmla="=B6+(B6*(CG/100))">545,000</td>

<td class=xl34 align=right x:num="27244.642857142859"

x:fmla="=C6+(C6*(RG/100))">27,245</td>

<td class=xl35 align=right x:num="4.9990170380078643E-2" x:fmla="=C7/B7">5.00%</td>

<td></td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 class=xl32 align=right style='height:13.2pt' x:num>2</td>

<td class=xl33 align=right x:num="588600" x:fmla="=B7*1.08">588,600</td>

<td class=xl34 align=right x:num="28606.875000000004" x:fmla="=C7*1.05">28,607</td>

<td class=xl35 align=right x:num="4.8601554536187572E-2" x:fmla="=C8/B8">4.86%</td>

<td></td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 class=xl32 align=right style='height:13.2pt' x:num>3</td>

<td class=xl33 align=right x:num="635688" x:fmla="=B8*1.08">635,688</td>

<td class=xl34 align=right x:num="30037.218750000004" x:fmla="=C8*1.05">30,037</td>

<td class=xl35 align=right x:num="4.7251511354626803E-2" x:fmla="=C9/B9">4.73%</td>

<td></td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 class=xl32 align=right style='height:13.2pt' x:num>4</td>

<td class=xl33 align=right x:num="686543.04" x:fmla="=B9*1.08">686,543</td>

<td class=xl34 align=right x:num="31539.079687500005" x:fmla="=C9*1.05">31,539</td>

<td class=xl35 align=right x:num="4.5938969372553838E-2" x:fmla="=C10/B10">4.59%</td>

<td></td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 class=xl32 align=right style='height:13.2pt' x:num>5</td>

<td class=xl33 align=right x:num="741466.48320000013" x:fmla="=B10*1.08">741,466</td>

<td class=xl34 align=right x:num="33116.033671875004" x:fmla="=C10*1.05">33,116</td>

<td class=xl35 align=right x:num="4.4662886889982892E-2" x:fmla="=C11/B11">4.47%</td>

<td></td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 class=xl32 align=right style='height:13.2pt' x:num>6</td>

<td class=xl33 align=right x:num="800783.80185600021" x:fmla="=B11*1.08">800,784</td>

<td class=xl34 align=right x:num="34771.835355468756" x:fmla="=C11*1.05">34,772</td>

<td class=xl35 align=right x:num="4.3422251143038916E-2" x:fmla="=C12/B12">4.34%</td>

<td></td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 class=xl32 align=right style='height:13.2pt' x:num>7</td>

<td class=xl33 align=right x:num="864846.5060044803" x:fmla="=B12*1.08">864,847</td>

<td class=xl34 align=right x:num="36510.427123242196" x:fmla="=C12*1.05">36,510</td>

<td class=xl35 align=right x:num="4.2216077500176724E-2" x:fmla="=C13/B13">4.22%</td>

<td></td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 class=xl32 align=right style='height:13.2pt' x:num>8</td>

<td class=xl33 align=right x:num="934034.22648483876" x:fmla="=B13*1.08">934,034</td>

<td class=xl34 align=right x:num="38335.948479404309" x:fmla="=C13*1.05">38,336</td>

<td class=xl35 align=right x:num="4.1043408680727374E-2" x:fmla="=C14/B14">4.10%</td>

<td></td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 class=xl32 align=right style='height:13.2pt' x:num>9</td>

<td class=xl33 align=right x:num="1008756.9646036259" x:fmla="=B14*1.08">1,008,757</td>

<td class=xl34 align=right x:num="40252.745903374525" x:fmla="=C14*1.05">40,253</td>

<td class=xl35 align=right x:num="3.990331399515161E-2" x:fmla="=C15/B15">3.99%</td>

<td></td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 class=xl32 align=right style='height:13.2pt' x:num>10</td>

<td class=xl33 align=right x:num="1089457.5217719162" x:fmla="=B15*1.08">1,089,458</td>

<td class=xl34 align=right x:num="42265.383198543255" x:fmla="=C15*1.05">42,265</td>

<td class=xl35 align=right x:num="3.8794888606397397E-2" x:fmla="=C16/B16">3.88%</td>

<td></td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 class=xl32 align=right style='height:13.2pt' x:num>11</td>

<td class=xl33 align=right x:num="1176614.1235136695" x:fmla="=B16*1.08">1,176,614</td>

<td class=xl34 align=right x:num="44378.652358470419" x:fmla="=C16*1.05">44,379</td>

<td class=xl35 align=right x:num="3.7717252811775251E-2" x:fmla="=C17/B17">3.77%</td>

<td></td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 class=xl32 align=right style='height:13.2pt' x:num>12</td>

<td class=xl33 align=right x:num="1270743.2533947632" x:fmla="=B17*1.08">1,270,743</td>

<td class=xl34 align=right x:num="46597.58497639394" x:fmla="=C17*1.05">46,598</td>

<td class=xl35 align=right x:num="3.6669551344781483E-2" x:fmla="=C18/B18">3.67%</td>

<td></td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 class=xl32 align=right style='height:13.2pt' x:num>13</td>

<td class=xl33 align=right x:num="1372402.7136663443" x:fmla="=B18*1.08">1,372,403</td>

<td class=xl34 align=right x:num="48927.46422521364" x:fmla="=C18*1.05">48,927</td>

<td class=xl35 align=right x:num="3.5650952696315338E-2" x:fmla="=C19/B19">3.57%</td>

<td></td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 class=xl32 align=right style='height:13.2pt' x:num>14</td>

<td class=xl33 align=right x:num="1482194.9307596518" x:fmla="=B19*1.08">1,482,195</td>

<td class=xl34 align=right x:num="51373.837436474321" x:fmla="=C19*1.05">51,374</td>

<td class=xl35 align=right x:num="3.4660648454751017E-2" x:fmla="=C20/B20">3.47%</td>

<td></td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 class=xl32 align=right style='height:13.2pt' x:num>15</td>

<td class=xl33 align=right x:num="1600770.5252204242" x:fmla="=B20*1.08">1,600,771</td>

<td class=xl34 align=right x:num="53942.529308298042" x:fmla="=C20*1.05">53,943</td>

<td class=xl35 align=right x:num="3.369785266434127E-2" x:fmla="=C21/B21">3.37%</td>

<td></td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 class=xl32 align=right style='height:13.2pt' x:num>16</td>

<td class=xl33 align=right x:num="1728832.1672380583" x:fmla="=B21*1.08">1,728,832</td>

<td class=xl34 align=right x:num="56639.655773712948" x:fmla="=C21*1.05">56,640</td>

<td class=xl35 align=right x:num="3.2761801201442897E-2" x:fmla="=C22/B22">3.28%</td>

<td></td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 class=xl32 align=right style='height:13.2pt' x:num>17</td>

<td class=xl33 align=right x:num="1867138.7406171032" x:fmla="=B22*1.08">1,867,139</td>

<td class=xl34 align=right x:num="59471.638562398599" x:fmla="=C22*1.05">59,472</td>

<td class=xl35 align=right x:num="3.185175116806948E-2" x:fmla="=C23/B23">3.19%</td>

<td></td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 class=xl32 align=right style='height:13.2pt' x:num>18</td>

<td class=xl33 align=right x:num="2016509.8398664715" x:fmla="=B23*1.08">2,016,510</td>

<td class=xl34 align=right x:num="62445.220490518528" x:fmla="=C23*1.05">62,445</td>

<td class=xl35 align=right x:num="3.0966980302289775E-2" x:fmla="=C24/B24">3.10%</td>

<td></td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 class=xl32 align=right style='height:13.2pt' x:num>19</td>

<td class=xl33 align=right x:num="2177830.6270557893" x:fmla="=B24*1.08">2,177,831</td>

<td class=xl34 align=right x:num="65567.481515044463" x:fmla="=C24*1.05">65,567</td>

<td class=xl35 align=right x:num="3.0106786405003947E-2" x:fmla="=C25/B25">3.01%</td>

<td></td>

</tr>

<tr height=18 style='height:13.2pt'>

<td height=18 class=xl32 align=right style='height:13.2pt' x:num>20</td>

<td class=xl33 align=right x:num="2352057.0772202527" x:fmla="=B25*1.08">2,352,057</td>

<td class=xl34 align=right x:num="68845.855590796695" x:fmla="=C25*1.05">68,846</td>

<td class=xl35 align=right x:num="2.927048678264273E-2" x:fmla="=C26/B26">2.93%</td>

<td></td>

</tr>

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<td width=81 style='width:61pt'></td>

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<td width=95 style='width:71pt'></td>

<td width=64 style='width:48pt'></td>

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<table border="0" cellpadding="0" cellspacing="0" >

<tr>

<td rowspan="4">

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</td>

<td colspan="2" align="center">

<p align="left"><font size="1">Investment Laws</td>

</tr>

<tr>

<td align="right" >1st Law:</td>

<td>"What ever you don't invest you forfeit."</td>

</tr>

<tr>

<td align="right">2nd Law:</td>

<td>"What ever you reap is what you've sown"</td>

</tr>

<tr>

<td></td>

<td><p align="right">Jim Rohn;</td>

</tr>

</table>
 
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Reply: 1
From: Michael Croft


Hi,

Do you really care at year 20 with 1.8M worth of equity in just one property? I know I don't ;-)

The other thing is that with a reno you get a small boost to cap gain and a larger boost to rental rental returns. I would have done 3 renos in the twenty years on that property and each time would anticipate a 20 - 30% boost to rents each time. Try factoring that into your equation; say a 30% rent hit at year 8 and 15 (the other reno was done at purchase which means you could start your figures at 7-8% if you want). Otherwise you are on the right track.

You should only stop learning when you are dead, and there are even unanswered questions about that!

regards, Michael Croft
 
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Reply: 1.1
From: Gail H


Hi,

I don't know the answer, but here are some possibilities:

- property prices can plateau for years, and after the huge growth we have just seen (I'm in Melbourne where it has been out of control), one may well expect them to. I know Kiyosaki emphasizes timing and the importance of contrarian investing.

- if we are at the crest of a wave, then better not to buy now in high CG areas (perhaps buy in undervalued areas that may experience ripple effect)

- rents can also stall (or barely rise) for many years

- there is some limit on what percentage of income people will spend on housing (housing is now at it lowest level of affordability in Melbourne ever). Higher level property prices may stall, as people turn to different types of housing (eg. appartments). Price rises may not be even among property types.

- some high growth areas can stall for unknown reasons (eg. Carlton in Melbourne has just shown one of the smallest growth cycles of any suburb in Melbourne, despite being inner city and a traditional high growth area)

These are just some thoughts. We can look to the past for some patterns, but the future is always a unique and unknown thing.

Gail
 
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It's how you look at life

Reply: 2
From: Michael Croft


And another thing, it's all how you look at life - your rental return at year twenty is 13.76% on your purchase price. If you borrowed 80% it's a 26% return on your outlay at year one and 68% at year twenty. And that's without renos!

So is your glass half full or half empty?

Of course if you "borrow the lot" via other equity your return would be infinite, YES!

Michael Croft
 
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Reply: 3
From: The Wife


HOly COw....thank goodness I just buy houses, if I looked at all that to closely I might analyse myself right out of the market.

TW
~God Bless my poor education and chronic aversion to 'figures'~
 
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Reply: 1.1.1
From: Brett Burt


This is a multi-part message in MIME format.

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Some suburbs show little or no growth but that is often because no one =is selling. Prices for previous sales are really just indications of =value as if no one is selling and/or their are no comparable recent =sales then a suburb may register a zero growth factor. Any valuers out =there who can shed more light on CG ?

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Some suburbs show little or no growth but that is =often
because no one is selling. Prices for previous sales are really just =indications
of value as if no one is selling and/or their are no comparable recent =sales
then a suburb may register a zero growth factor. Any valuers out there =who can
shed more light on CG ?

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It's how you look at life

Reply: 2.1
From: Rolf Latham


Hi Michael

Its neither half full nor half empty, just give me a full one :eek:)

Ta

Rolf
 
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Reply: 3.1
From: Always Learning


Point taken! I have read some of "The Wife's" posts, I would nominate her for a Stockbroker analysis position any day!!! Buckets of common-sense or analysis, it just depends on which side of the professional divide you are on.
<p>
The last time I purchased in Melbourne (96), you could throw a rock and hit something and you could get 7% returns on it, now 3~4% is the norm. Is 3~4% returns a new game with new rules, or the same game but imbalanced by cheap money and frenzied buying in Melbourne. Buyers agents have told me that Melbourne is tipped for a 10% rise this year...that would take it above Sydney. If it walks, talks and looks like a property bubble is it a bubble?
<p>
I have read Jans recent book! Sometimes I sense the biggest problem is that she recommending a strategy that is so dam boring. Her advice is to buy reasonably priced properties (fair market value in the range of 3~5 / 10), in reasonable locations (not best) with reasonable growth (not best) with reasonable returns (not best) and then hold (forever), its soooo boring!!! (I am just tempting people to flame me...)
<p>
Actually I just cannot help myself, my brain just keeps saying to me:
<quote>
"you can do better than average, with a bit of harder work some analysis, just add some bells and whistles to Jan's strategy. Boost returns and values with smart renovations, buy suburbs with CG potentials, use wraps to boost income, redevelop yourself...bla bla bla".
</quote>
<p>
What I was most interested in with Jans book was the comparison between Mr and Mrs Joe average investing in shares or IP, $1M shares or $1.8M with properties. The problem as I see it is not that Joe averages choose shares but most people choose neither! Hey! $1M aint bad!!!
<p><
OK lets simplify the question then. In general would anyone expect high capital gain areas to get matching gains in rental returns or would it be expected that returns will not match the growth in CG?
<p>




<table border="0" cellpadding="0" cellspacing="0" >
<tr>
<td rowspan="4">
image-display

</td>
<td colspan="2" align="center">
<p align="left">Investment Laws</td>
</tr>
<tr>

<td align="right" >1st Law:</td>
<td>"What ever you don't invest you forfeit."</td>
</tr>
<tr>
<td align="right">2nd Law:</td>
<td>"What ever you reap is what you've sown"</td>
</tr>
<tr>
<td></td>
<td><p align="right">Jim Rohn;</td>
</tr>
</table>
 
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Reply: 3.1.1
From: Robert Forward


I can't see why we can't have both good Cap Growth and good rental income.

Michael Croft, Geoff Doidge, The Wife, Gee Cee, Julie and Simon and a host of others (including me) can get both. The strategies vary amongst all those that get both but there is many varied ways of achieving it.

But one common factor throughout most people that do achieve this, is that they are out finding properties that you can add value to, or seeing it from outside the square and achieving higher returns.

I currently have a new strategy that will create nearly any Eastern Sydney property into a positive cashflow from day one. but this is a business structure not investing that will get this for me.

Cheers
Robert

The Sydney "Freestylers" Group Leader.
 
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Reply: 3.1.2
From: Michael Croft


Spot on! Property is boring! It's slow and obvious and makes people very wealthy but just not in a spectacular or exciting way.

If you you want excitement trade options and futures; better yet import illicit substances or open a house of ill repute!

OK but to your question, rental growth is tied to wages growth not property values. As a rule of thumb 30% of average gross income for the area is about right. It's a little more complex than that because rental affordability comes into it to (an area of students has higher discretionary income than a family area, even though the family area average income is higher). Then students will pay by the room in a group to further throw a spanner in the works, Or the demographics are rapidly (for property) changing eg. the suburb under going "gentrification". Working class to yuppy suburb.

Also there are or can be so many exceptions to the rules that it makes any tabulated statistical type analysis only valid for a specific area at a specific point in time (in other words so limited as to be of no value). Take rezoning as an example, this can't be analised or reduced to numbers but has a huge impact. If you think cities are static have a look at an aerial photograph of the city of your choice 30 years ago.

In short rental returns have little to do with property values - period. The best an investor can do is maximise the return at the time of purchase and perhaps give them a leg up over time with a reno.

regards, Michael Croft
 
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Reply: 3.1.1.1
From: Always Learning


Since I live OS, I have spoken with a few Buyers Advisors.

<p>
The BA's seem pretty good all seem very professional and reasonable, but all want me to accept the fact that I cannot get CG's and IMO reasonable returns ( I wanted good CG and around 7% returns ). I wanted to buy undervalued/undercapitalized places in good CG areas of Melbourne and add value by renovation/redeveloping or subdivision this all BA's said was possible. But then getting 7% returns (or even 6%) I was told basically "your head is in the clouds" "IMPOSSIBLE", accept 4.5% max.
<p>
Evidently many members of this forum are generating such returns from deals every dam day of the week. My gut feel is that you are doing it every dam day of the week, because you are out there on the ground, every dam day of the week.
<p>
It is very human to not want to accept less than you understand others are obtaining. Who can honestly say the don't get a twang in there heart when they hear that someone doing it better than you! This is probably why Jan's method seems so boring, it works, but I imagine that it is not the optimal way to wealth thru IP. Sort of the Joe Average method to wealth, not bad, but not the optimal.
<p>
How do I maximize my IP purchases and wealth building whilst living OS?
<p>


<table border="0" cellpadding="0" cellspacing="0" >
<tr>
<td rowspan="4">
image-display

</td>
<td colspan="2" align="center">
<p align="left">Investment Laws</td>
</tr>
<tr>
<td align="right" >1st Law:</td>
<td>"What ever you don't invest you forfeit."</td>
</tr>
<tr>
<td align="right">2nd Law:</td>
<td>"What ever you reap is what you've sown"</td>
</tr>
<tr>
<td></td>
<td><p align="right">Jim Rohn;</td>
</tr>
</table>
 
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Reply: 3.1.1.1.1
From: The Wife



>told basically "your head is
>in the clouds" "IMPOSSIBLE",
>accept 4.5% max.

Maybe BA are not creative? Maybe their pay doesnt equal the amount of work they would have to do to find what you want, so they dont bother looking. Maybe they have done a deal with some vendors or builders to only sell their property?



>Evidently many members of this
>forum are generating such
>returns from deals every dam
>day of the week. My gut feel
>is that you are doing it every
>dam day of the week, because
>you are out there on the
>ground, every dam day of the
>week.

Yep, every damn day of the week. I am surprised at people who say they only look at their investment issues on weekendsor a couple times a month, I personally live sleep eat and breathe my Investing, quite frankly its a full time job, fortunetly I enjoy it, and have tried to stop, but cant. I do believe your level of return will equal your work.




>it works, but I imagine that
>it is not the optimal way to
>wealth thru IP. Sort of the
>Joe Average method to wealth,
>not bad, but not the optimal.

Joe Average has one IP and then sells it. Jans way is not for Joe Average, Jan's way is a method of continued steady growth, that works for many people, just so happens that it isnt going to work for the dancing dude because he is looking for another way.



>How do I maximize my IP
>purchases and wealth building
>whilst living OS?

DUnno? Dont think you can? The only people I know of who are succesfull with this method, take several months of per year and come over and do their own ground work. How come you dont change jobs? Be closer to where you want to be? Maybe you cant, you may be locked into a contract.



TW
 
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Reply: 3.1.1.1.1.1
From: Always Learning


On 3/7/02 7:22:00 AM, The Wife wrote:
>
>>told basically "your head is
>>in the clouds" "IMPOSSIBLE",
>>accept 4.5% max.
>
>Maybe BA are not creative?
>Maybe their pay doesnt equal
>the amount of work they would
>have to do to find what you
>want, so they dont bother
>looking. Maybe they have done
>a deal with some vendors or
>builders to only sell their
>property?
>
<p>
Pay BA to be creative?...this is tough ask, this is something you got or not. Yes a few BA's have suggested I purchase from their friendly developers for a "cheap" price.
<p>
I have considered the need to align BA's fees with my goals.
>
>
>>Evidently many members of this
>>forum are generating such
>>returns from deals every dam
>>day of the week. My gut feel
>>is that you are doing it every
>>dam day of the week, because
>>you are out there on the
>>ground, every dam day of the
>>week.
>
>Yep, every damn day of the
>week. I am surprised at people
>who say they only look at
>their investment issues on
>weekendsor a couple times a
>month, I personally live sleep
>eat and breathe my Investing,
>quite frankly its a full time
>job, fortunetly I enjoy it,
>and have tried to stop, but
>cant. I do believe your level
>of return will equal your
>work.
<p>
Create an idea (vision for the future) and then work hard (live, sleep, breath it) to make it happen. This seems to be a universal statement from those who are successful. Why do so few of use follow this method? This is something we must ask ourselves everyday, why don't we commit!
>
>
>
>
>>it works, but I imagine that
>>it is not the optimal way to
>>wealth thru IP. Sort of the
>>Joe Average method to wealth,
>>not bad, but not the optimal.
>
>Joe Average has one IP and
>then sells it. Jans way is not
>for Joe Average, Jan's way is
>a method of continued steady
>growth, that works for many
>people, just so happens that
>it isnt going to work for the
>dancing dude because he is
>looking for another way.
<p>
OK, I have two IP's, owned them for years and years and nope...not selling! Got all of Jan's books and these gave me the "faith" to invest in IP. My failure, is that I have not followed thru with accumulation in the last 5 years due to my move to Japan. I am now wanting to change this, but I have been shocked with the high prices and low returns compared to '96.
<p>
I sense that you think I am a "gunna", this is not true. I am committed, I am trying to spend 15 hours a week on the task. My passion is to turn my $800K of holdings into $3M in the next 3~5 years and into $5M in the next 7 years. I think it is very very possible. That's just one $400K property every 6 months, if I add value thru some smart cost effect renovations...again no problem. Do this I can conserve my existing equity and buy again every 6 months or so. The problem with my plan "of course" is the holding costs, when interest rates return to 8~9% (I should be foolish not to think they wont) I must avoid getting caught in a cash flow crisis. Buying a $3M bundle of IP's and getting 3.5% returns is IMO inviting disaster. I may as well put a big neon sign on my door, with a big red arrow and the words "DISASTER THIS WAY"
>
>
>
>>How do I maximize my IP
>>purchases and wealth building
>>whilst living OS?
>
>DUnno? Dont think you can? The
>only people I know of who are
>succesfull with this method,
>take several months of per
>year and come over and do
>their own ground work. How
>come you dont change jobs? Be
>closer to where you want to
>be? Maybe you cant, you may be
>locked into a contract.
>
This is the point where I unlock my excuses box. :)
<p>
"BUT, I HAVE A GOOD JOB HERE", "BUT, MY FAMILY DOESN'T WANT TO MOVE", "BUT, I GET PAID MORE HERE THAN AUSTRALIA", "BUT, IF I BUY WOODEN FRAMED HOUSES EVEN IN THOSE IN AUST I CAN CLAIM GREAT TAX DEDUCTIONS", "BUT, I DONT NEED TO PAY MUCH RENT IN JAPAN".
<p>
"BUT...you are right...if I was truly passionate and committed I would give it all up and do it, however Australia is not the entire world, Japan in some respects is has exciting IP prospects...just the archaic banking system in Japan for IP for foreigners is very tough nut to get around!.
>
>
>TW



<table border="0" cellpadding="0" cellspacing="0" >
<tr>
<td rowspan="4">
image-display

</td>
<td colspan="2" align="center">
<p align="left"><font size="1"> Investment Laws</td>
</tr>
<tr>
<td align="right" >1st Law:</td>
<td>"What ever you don't invest you forfeit."</td>
</tr>
<tr>
<td align="right">2nd Law:</td>
<td>"What ever you reap is what you've sown"</td>
</tr>
<tr>
<td> </td>
<td><p align="right">Jim Rohn;</td>
</tr>
</table>
 
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Reply: 3.1.2.1
From: Anony Mouse



Michael Croft wrote:
"If you you want excitement trade options and futures; better yet import illicit substances or open a house of ill repute!"

I've been trading options and futures for some time now and I can assure you there is no excitement, every thing is done to to a formula with stop losses,for about 2-3% per month. Its about as exciting as watching paint dry, as some months there no action at all. However it does ginger up the overall results from various investments.
I don't know about importing illicit substances, but I hear there is more money importing people, just knocked off drug trafficking as the number one illegal money spinner, and there seems to be no shortage of people with the readies.
Houses of ill repute are legal here in Victoria, if you register, and I hear can be a nice little earner.

"A government that robs Peter to pay Paul can always count on the support of Paul."
Of course, Paul's support is obvious, but it is equally obvious that to rob from Peter to pay Paul will make Peter
very, very angry.
My question is this: "How can you run a good government with a sore Peter?"
 
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