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From: H T


Here's something a bit light for these testing times.

Whats the greatest cap growth anyone has heard of over say a 30 year period.

I'll start. A friend's old man purchased a BIG block in a beach side suburb in melb, on the beach front in the early 70's for high 200's. now worth 10m+ (i dont know -alot)

sort of like reminiscing about the "old days" when i wish i new what i know now.

any one else??
HT
 
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Reply: 1
From: Kpw <----


I got 2 for ya,

One of my mum's friends bought a water front house in Northbridge NSW in the 60s for 175k,,she said they struggled to get it but just the land alone now is worth more than 2 mil.

One of my mate's dad bought a house over looking the point at south freshy beach NSW for round 100k in the 70s,, it's a dinky house and steep ,,but the view,,OH GOD !! the views, the house is about as big as my dog's house but the land was last valued at round 1.5 to 2 mil

I don't even want to go into the stories some of the old folk tell me...geez how depressing.

If I only had a time machine :eek:)
 
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Reply: 1.1
From: Yuch .


Hi Peoples,

I have one for ya, I just heard it yesterday! :)

One of mom's friend bought a single storey brick 3br/2ba home in Kogarah 10 years ago for $230K. The house is located about 15 minutes away from Kogarah station, close to pre, primary and high schools, close to St George hospital etc.

And they just sold the house last week for...guess how much? $630K!!!

Regards
yuchun
~ The secret to success is to start from scratch and keep on scratching. ~
 
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Reply: 1.1.1
From: Owen .


Hands up those who would have liked to have bought a nice terrace in Erskineville 11 years ago. I did!!

It was in the days of 17% interest and we struggled to get the loan required. We also got it at auction (scary way to buy your first home) for $35k below reserve. In hindsight, we can't belive our luck and can't wait for that market to come back again.

The house has more than tripled in value since then and Erskineville is booming.
 
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Reply: 1.2
From: Brett Burt


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But isn't $100 thousand in the early 70's worth the same or have the =value/spending power of $800 thousand today? So if it worth 1.5 million =today it hasn't even doubled in nearly 30 years, compare that to Buffet =and the stock market generally.

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But isn't $100 thousand in the early 70'sworth =the same
or have the value/spending powerof $800 thousand today? So if it =worth 1.5
million today it hasn't even doubled in nearly 30 years, compare that to =Buffet
and the stock market generally.

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Reply: 2
From: Michael Croft


Not 30 years only 13.

1. Bought a standard 3 bed house in Braddon ACT $85k 1km CBD. Latest valuation came in at $380k. Not quite Buffett, but not bad either.

Forgot to mention to mention that back then I used $5k of my own money to buy it. So a $5k outlay has resulted in $295k of equity. It's cash flow positive too - not including offsets.

Like to see any mere mortal do that with a buy and hold shares strategy ;^)

2. Bought a 3 bed house with one bed flat under, in Campbell ACT high up with views for $169,000. Last valuation came in at $560,000. Used $20k of my own dollars to generate $381k - not too shabby. Oh, and it was cashflow positive $80 per week from day one.

I'll have to have a look at some of our regionals because some are quite surprising.

Michael Croft
 
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Reply: 2.1
From: Michael Croft


How about big mistakes too? I like this one - "We don't like their sound and guitar music is on the way out." Decca records rejecting The Beatles in 1962.

Or "We've got them" - George Custer on being attacked at Little Big Horn.
 
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Reply: 3
From: Terry Avery


Your friend's old man made 13.93% per annum if he paid $200,000 and it is
now worth $10 million. If he paid $290,000 then the return drops to 12.53%.

Cheers
 
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Reply: 3.1
From: Kpw <----


"Like to see any mere mortal do that with a buy and hold shares strategy ;^)"

One of the guys interviewed in the first Market Wizards, Ed Seykota ran a managed fund. One of his clients started with $5000 and in 16 years made over 15 mil. That's a return of 250,000% ,,,and "the total return would have been many multiples larger had there been no withdrawals."

All you have to do as a mere mortal is to find a great investment and lots of luck. :eek:)
 
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Reply: 2.1.1
From: RM .


Michael,

Firstly let me get the apologies out of the way for the length of this post. Now.....

As a newbie investor, what I would like to know, like many other newbie investors on this forum, is how many props did you look at, review, do the numbers on, before you finally agreed to purchase that property?
Did the numbers work out straight away to get you that $80 per week positive cashflow?
What about other properties you looked at? What were the prevailing market conditions when you purchased? Did you have it in mind to purchase that very one?

I guess there is a little analysis paralysis in most newbie investors. The current market conditions don't help either. In the current market, what does one do? Line up a number of agents and say, hey I have x to spend but don't show me anything that doesn't show a 8%, 9% 10% return. I tried this with one agent and after he picked himself up off the floor from laughing so much, he said "Good Luck" and went on his way....

So is the current market not conducive to this type of negotiating or is it simply a case of not only looking at a ratio of hundreds??? of properties to find the one that will bring those elusive 8, 9, 10% returns, do you also need to do the same with agents?

That is, keep trying agents till one doesn't laugh and comes back and says, "sure, I know what you want, I will call you when one comes along??? Seriously, how strong are the odds that you will ever hear from that agent again when there are many? investors coming onto the market that think negative gearing is the best invention the tax man ever thought of, even if it does mean that you have to pay for it out of your pocket each week?

Or do you also dispense with that approach? If you are in the land of the living and you don't have every waking hour to be slogging the tarmac looking for positively geared, positive cashflow properties, do you pay someone who is willing to do the legwork in return for mutually acceptable compensation?

Looking through Caveat Emptor, there doesn't appear to be a flood of either "flippers" advertising their "services" or potential props for sale.

I am hoping that some of the learned experts on this site will share some of their experiences in the hope that it may alleviate (some of) the analysis paralysis we newbies face.

Hey, we may even try some of those expert techniques and find we too can achieve what you have.

Thanks RM.
 
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Reply: 3.1.1
From: Michael Croft


Hi,

I've read market wizards too, and from memory that "managed fund' was options/futures trading in the now defunct "greatest bull run in history". Not exactly a buy and hold share strategy.

Michael Croft
"The best parachute folders are those who jump themselves."
 
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Reply: 3.1.1.1
From: Donna Larcos


Greatest misses of the century........

An American friends Mum who was
offered some land very cheap in an
"upcoming town" in the US. "Who'd want
to live in that dustbowl. Does he think I'm
an idiot?" Ten years later - Las Vegas!

This same woman then went into a diner
with a friend. Six months later they moved
the highway and her "friend" embezzled
the remaining funds.

Some people just aren't made for
investments.
 
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Reply: 1.1.2
From: Terry Avery


Hey Yuch that is great, $230k to $630k in 10 years. That is 10.6% p.a.
return.
 
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Reply: 2.1.1.1
From: Terry Avery


Why would an agent spend his time finding a property returning 8, 9 or 10%
return when the market is so hot that properties sell with little effort on
the agent's part? My opinion is that when they can earn their commission
easily then they have no incentive to look for deals for investors. After
all they still only receive the same commission and an investor may make
them work harder by offering a lower price!! Yeah, yeah, I know some will do
some work for investors so they have someone to feed them in the lean times
but there are heaps of agents who pop up in the good times and disappear
into other sales jobs in the lean (for property) times.

Also most of the agent's I have dealt with don't really understand property
as investment as all they know is how to get their commission so they can
put food on the table. They are generally salesmen and not investors.

Basically you have to do the work yourself.

Cheers
 
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Reply: 2.1.1.1.1
From: Robert Forward


Hi Avery

There are a large amount of RE Agents and RE Agent reps out there that have no idea on how to sell a house and probably have never had a deal cross the line, they always have to drag in someone else to get the deal across the line for them. In doing so they then loose a fair whack of their commission.

These are the type of agents that end up turning around and trying their hardest to find a "good" deal for you just so they can say they finally got a deal across the line on their own. When they get that mind set into their head they then start working more for the investor, if the investor plays their cards right that is....

But then that is just my thoughts and what I see happening every now and then.

Cheers
Robert

The Sydney "Freestylers" Group Leader.
 
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