Peter Spann 1 Day Investor Update

[Andrew]

But I think if they're willing to lend 100% on something, then there must be a certain level of performance confidence attached?

At a bare minimum in their own risk assessment of the borrowers...

andy

 

[Ol School Skata]

Yes that was my understanding of it redwing. Another option could be utilising your own finance at a lower rate. Possibly a LOC with a 6.62% rate. It would be secured by your other asets tho as compared to using their finance secured against the fund itself.

Just my thoughts.

Why not do both...if you are comfortable with this approach. Use of funds from LOC eg 100k and take up other $100k loan at 7.5%

If it was me, i would consider using my redraw funds to buy additional property (using your strategy Rixter this may be only slighly cashflow negative or neutral) and take up 7.5% loan to invest in this fund giving a positive cashflow.

Am i missing something here?

OSS

 

[Rixter]

Why not do both...if you are comfortable with this approach. Use of funds from LOC eg 100k and take up other $100k loan at 7.5%

If it was me, i would consider using my redraw funds to buy additional property (using your strategy Rixter this may be only slighly cashflow negative or neutral) and take up 7.5% loan to invest in this fund giving a positive cashflow.

Am i missing something here?

OSS

Its a good idea OSS....I am looking to acquire my last 2 Ips shortly and puchasing a MF is something I was additionally also considering.

Use my funds for Ips, their finance for the MF.

Far better "Opimisation" as Peter describes it.

 

[sonic]

If you can lock in and fix cheaper than their 7.5% you can only be ahead in my oppinion. The only difference I can see is using your own finance you will be using your existing asets as security for the fund purchase, where as if you use their finance its secured against the fund itself.

for me my own situation i wouldn't do this. this is because i'm still relatively young and i don't want to use equity in my properties (which i will get once i revalue hopefully) when i can use the fund itself as equity.

even though its approx 1% more expensive i would prefer to use macquarie finance and then use my own equity to leverage more investments.

but i guess i'm more risky (don't worry i'll come whining and bitching to this forum when i lose all my money in a recession )

 

[willair]

But I think if they're willing to lend 100% on something, then there must be a certain level of performance confidence attached?

That would depend on who owns the title deed,you or the bank
willair.

 

[keithj]

If you can lock in and fix cheaper than their 7.5% you can only be ahead in my oppinion. The only difference I can see is using your own finance you will be using your existing asets as security for the fund purchase, where as if you use their finance its secured against the fund itself.

According to the MacBank flyer I received today, you can choose to pay 7.25% fixed annually in advance, or the 7.5 fixed or var.

The flyer mentioned it expected 'a high degree of correlation with ASX200 & 'market based level of dividends'. I'd estimate that after franking last yrs dividend of the ASX200 would be a little over 5%. I'd expect it to increase annually.

So the investment would be v. close to self funding. The PDS will be interesting.......

 

[Rixter]

even though its approx 1% more expensive i would prefer to use macquarie finance and then use my own equity to leverage more investments.

Its a good idea OSS....I am looking to acquire my last 2 Ips shortly and puchasing a MF is something I was additionally also considering.

Use my funds for Ips, their finance for the MF.

Far better "Opimisation" as Peter describes it.

As you can see above, I agree with you sonic.

 

[Cheeks]

Really keen to understand how the loan will be viewed by other banks.

Will it be taken into account for servicability (similar to a home loan) or will it be reviewed similar to a margin loan.

 

[Cheeks]

Not sure you have to wait for the PDS as the two funds that make up the Equity enhanced income fund are here:

http://personal.macquarie.com.au/pe...rnative_investments/newton/buy-write_fund.htm

http://personal.macquarie.com.au/pe...ive_investments/newton/income_timing_fund.htm

 

[bigfella966]

Really keen to understand how the loan will be viewed by other banks.
Will it be taken into account for servicability (similar to a home loan) or will it be reviewed similar to a margin loan.

I was wondering the same thing, would it be viewed by a lender as a loan that may have to be serviced, or as another source of income that can be utilized for servicability, keeping in mind that the returns are a variable and possibly a negative.

BF

 

[Peter Spann]

While not definitive I believe that most lenders will view it as a debt that has to be paid in a similar way to margin lending.

 

[Peter Spann]

With regards to lending and without giving advice - I personally would be inclined to use the Donut's facility - it is relatively cheap (at least compared to margin), is not secured against anything but the capital protection and the fund and it allows you to use your other borrowing capacity / funds for other investments.

 

[Peter Spann]

According to the MacBank flyer I received today, you can choose to pay 7.25% fixed annually in advance, or the 7.5 fixed or var.

The only finance option that survived is 7.5% fixed for the duration payable annually in advance.

 

[twodogs]

Hi Peter, in the Sydney presentation it was mentioned the PDS should be online by Friday. Any ideas how this is going ?

 

[D.T.]

Hi,

I was at the Adelaide info session last nite. It was quite informative, and seems to be an impressive fund.

Doesn't really suit what i'm searching for at the moment, mostly because it only pays annually If it made monthly or quarterly I'd probably put quite alot in it.

Hope you dont mind me using your quote as my new signature Peter!
[EDIT, damnit somersoft *'s it out , you'll just to guess a 6 letter word starting with W)


Thanks,

 

[bigfella966]

Hope you dont mind me using your quote as my new signature Peter!
[EDIT, damnit somersoft *'s it out , you'll just to guess a 6 letter word starting with W)

Hey!,

Musta been a bloody expensive flight back, because in Perff it was "Mr 37m W****r Man", maybe it's the excess luggage bill for all those crates of Margaret River wine

BF

 

[Rixter]

Hey!,

Musta been a bloody expensive flight back, because in Perff it was "Mr 37m W****r Man", maybe it's the excess luggage bill for all those crates of Margaret River wine

BF

Or the wine purchase costs

Expensive Cellar

 

[bigfella966]

Hi, I was at the Adelaide info session last nite.

So.... did all 15 Adelaidians turn up or were there some drop outs?

BF

 

[D.T.]

Hi

So.... did all 15 Adelaidians turn up or were there some drop outs?

I'm guessing there was about 90-120ish. I didn't count of course so perhaps Peter could confirm if it's of any interest to him. How many were at the Perth one?

Musta been a bloody expensive flight back, because in Perff it was "Mr 37m W****r Man",

No, he had just come back from the Barossa Valley before arriving at the seminar I think

Having lived in both WA and SA, and spent a bit of time in both Margaret River and Barossa Valley, I conclude that Barossa's wine is better, Margaret's beach is better, and Margaret's real estate market is (was?) better. Hmm, 2 vs 1.

Cheers,

 

[bigfella966]

I'm guessing there was about 90-120ish. I didn't count of course so perhaps Peter could confirm if it's of any interest to him. How many were at the Perth one?

Having lived in both WA and SA, and spent a bit of time in both Margaret River and Barossa Valley, I conclude that Barossa's wine is better, Margaret's beach is better, and Margaret's real estate market is (was?) better. Hmm, 2 vs 1.

Cheers,

Aaahh, so you had some extra blow ins hey, they must have blew in from Victoria ....... I think there were 560ish in Perth, there would have been more but "Home & Away " was on

Yeh, I've heard of the Barossa Valley, I believe their "Merlot wood stain" looks very effective

BF