Positive Geared Property

[Melbournian]

Hi Belbo,

Just wanted to give you my thoughts into why i "Ride nathans ***" as you put it.

Firstly i see holes in the numbers that nathan posts (i'll post an example below)... now i couldn't really care if he was posting his achievements (using figures which stretch the truth)... but when he uses these results as a precursor to generate business for his buyers agency thats when i feel i should post some rebuttal so other less experienced forum members can have another opinion rather then getting lost in the excitement.

Now for the example i promised.

http://www.somersoft.com/forums/showthread.php?t=61749

i did post in this thread but will revisit and add info.

Facts:

- He purchased a 2bed 1 bath @ 54-66 Hutton rd for $212,100

- He says the closest things are 1 bedders selling for $220-240k ("Closest things are 1 bedders in he block selling for $220-240k.")

- 2 bedders selling for $300k ("Outside the block 2 beds are selling for $300+)

- "I am always conservative when quoting the numbers"

- He implies that his place is worth $300k again ("however there are comparables right now for $300k")

- He made the thread title "Waterfront unit 4 years old $212,100 renting $320pw"

In this video about the property goto 4min 55sec
http://www.youtube.com/watch?v=ayrkWRVMBkw

He says:

- Compariables 300-350-400k, making out that 300k is the absolute minimum

- the property lends it self to capital growth.

- rent $320 pw

Now ill address some comments

- purchase price is correct via info obtained from onthehouse.com.au

- he says the cloest thing to his is one bedders selling for $220-240k... well lets see

* Unit 11 (1 bedder) - $180k (sold on 21/02/2010)
* Unit 110 (1 bedder) - $180k (sold on 22/03/2010)
* Unit 104 (1 bedder) - $160k (sold on 24/03/2010)

So in the best case the price over stated by 23% and in the worst case 50%

see he tells people they are selling for 220-240k but in reality they are selling for 160-180k.

- He says multiple times his place is worth minimum 300k based on comparable sales.

Ohhh really?

- Unit 16 (3 bedder, 2 Bath) - $262k (03/03/2010)
- Unit 29 (3 bedder, 2 Bath) - $285k (16/03/2010
- Unit 5 (3 bedder, 2 Bath) - $255.5k (28/03/2010)

NOTE these have 1 extra bedroom AND bathroom and are still selling below Nathans valuation on his 2 bedder 1 bath

Seems like someone is stretching the valuations + anyone else can have a look for themselfs type 54-66 hutton rd north entrance into onthehouse.com.au (heaps of other sales suggesting the same)

- "Lends itself to cap growth" More like lends it self to crap growth with 3.6% long term average *quoted from http://apm.domain.com.au*

- "I am always conservative when quoting the numbers" Do i need to say more?

- He says its water front... its water view buddy a difference


So if he keeps the cream of the crop (wow if this is the cream) and flogs the rest to his customers i wonder what sort of awesome deals they are getting.

Remember to get this Awesomeeeee deal he had to get 14 other suckers to sign up, unless he was getting sucked in by someone else. (not saying its a bad deal, but im not getting wet like some of the followers)

Now if the figures here have been overstretched it gets you wondering his most recent interview in the paper which i saw where it says he has 3.5million in equity i just wonder if thats over stretched as well.

http://binvested.com.au/
"How you can realistically retire from the workforce, within 7 years."

I've seen nothing realistic yet

Peace out

RH

Ps. Belbo stop nut huggin

I would be careful if i were you. firstly, you know he has a legitimate business etc doing renovating and you have basically name him by name etc It seems you're attacking his reputation which can rightly can effect his business etc

legally all these comments and the views associated to this can amount to certain defamation charges if he chooses to approach this path(and it has a validity of 1 year from date of posted that is quite a long time if you must know).

So i would firstly just apologize - if you have doubt about his figures or feel that he is upselling himself - why don't you just PM him and get the info direct. There's really no need to tarnish someone's reputation online if you have doubts. i probably do the same stuff that nathan renovating but i don't go all out like he does in renovating burnt down houses etc- i respect investors who have done stuff or things that the normal investor hasn't and i have gladly acknowlegded him as one of the best investors around in this climate.

 

[whatever123]

With respect to all, it appears that RH has posted some valid comments about Nathans claims which on the face of it look fairly exagerated and not exactly "conservative".

I for one would like to see Nathans response.

 

[Melbournian]

yeah but if you see the trail RH (even with RH links) seems to bagging Nathan all the time without being constructive.

It's like saying company X is and the owner (nathan X) is upselling his sales figures without more concrete rationale in a public forum - these are question marks. especially posting a company's name and questioning the integrity - probably better ways to address that. Eitherway be smart about picking your fights. You never know when you're against someone with a real net worth of taking it to the next level or if they're some tough *** "corporate lawyer" - always good to play within the lines and not enter the "grey area" where you only opening yourself to be taken down legally.

 

[Nathan]

Hi Whatever,

I replied upon the thread that this came from in full detail. It has since been deleted as it has become aware he is creating defamatory information.

Rest assure I went into detail.

I will write some quick numbers below to clarify.

I have purchased 6 properties this year, 2 x western sydney 2 x moree, 2 x cairns. In NOV/DEC 2010 I purchased 4, 2 x west sydney and 2 x regional NSW.

I have always been clear and consistent with my numbers.

With the units in question, they sold for $300,000 when they were new and sales stats can be found for hutton rd units on RpData.

The house in moree is different are (bad street) yet still good value and I bought that last week actually to be percise.

To quantify on the carpet thing, I purchased 12 properties in my foundation portfolio ranging from $106-$234,000 and they now worth $220-$400k properties.

They were negative geared as they were foundation portfolios and in GFC so I tried to create a little extra income to take the next level of properties which were full on cashflow ones and purchased many outright - cash money.

I have no shame, and nothing to hide. The main thread was closed as mods were not happy with RH behaviour.

Nathan.

 

[Cdro]

Getting back to the original question for a moment, Damien, I think it's fantastic that you're only 21, have already saved $55K and want to start buying assets - you should be really proud.

If you're interested in positive cash flow property, I'd suggest reading 20 Questions by Margaret Lomas. It tells you what to look for in positive cashflow property, along with the drivers of capital growth.

Good luck with your first investment!

 

[JIT]

With the units in question, they sold for $300,000 when they were new and sales stats can be found for hutton rd units on RpData.

Hi Nathan,

Just wondering what the relevance of the OTP or as new sale price is here?

Aren't the most recent comparables what is relevant, as RH noted?

Thanks.

 

[Paul Do]

In this inflated/bubbley- housing market, are there still bargains?

Don't just restrict yourself to real estate. There is also the stockmarket. They don't always move to the same cycle, so when one market seems overpriced, investigate opportunities in the other one rather than trying to find a need in a haystack in the overpriced one.

 

[PropertyDave]

Hi Nathan,

Just wondering what the relevance of the OTP or as new sale price is here?

Aren't the most recent comparables what is relevant, as RH noted?

Thanks.

I was thinking the same. If you then combined this with the comment 'Lends itself to cap growth' and that the house sold when new (5 yrs ago) for 300k and based on comparable sales at the time were significantly less, then capital growth in the past had been negative.

Note - Being a young investor, I'm envious of Nathan's achievements and not here for arguments, i'm here to learn. I'm just curious about how some of the numbers stack up to how they are suggested to stack up.

 

[Ridin-High]

Wassup Melbournian

http://binvested.com.au/?page_id=33

"With a net worth over $1million at just 21"

http://www.somersoft.com/forums/showpost.php?p=475046&postcount=81

29-10-2008 Note you was 21 in 2007

W2BW, sure...

sitting on around 2mill value wise loans around 1.45 debt...

some cheapies, some 300k style jobs...

no massive plays however, like 500k+ props.

I didn't make any of this up, it was all said by Nathan. So to all the people saying im embarrassing myself.... i rest my case.

 

[gregvinton]

sounds like someone is really Jealous, or Nathans stalker? lol...

 

[jaycee]

OR SOME PEOPLE WITH WAY TOO MUCH TIME ON THEIR HANDS

IF ONLY PEOPLE WOULD USE THEIR POWERS FOR GOOD INSTEAD OF EVIL

(relax monopoly, it's a fkin joke)

 

[Ridin-High]

IF ONLY PEOPLE WOULD USE THEIR POWERS FOR GOOD INSTEAD OF EVIL

I agree with this one

 

[Monopoly]

(relax monopoly, it's a fkin joke)

Dude, if I was anymore relaxed I'd be dead!

 

[BayView]

Is anyone a fan of Robert Kiyosaki - he talks about cash flow, he doesn't sell his assets for capital appreciation, he just expands his means. That's sort of what I want to do, so by 30 I am a millionaire and dont have to work. Hopefully thats possible. Would like to at least be free to work casual/part time by 25.

Had to figure out the best pathway. We have too much info on hand in the Information Age! The hard part is picking out what works and filtering it.

I'm a big RK fan.

Many here poo-hoo him, call him a fraud and so on. I don't care; you use any information how it suits you.

The thing about his writings that appeals to me is how your mindset changes after you've read just one of his books - and I've read all of them at least 3 times each I reckon.

You will start to think about how to acquire income producing assets, to replace your PAYE with passive income etc. You will stop being a mindless penguin consumer, who thinks they are clever, and it will happen very quickly. This one thing will make you rich in your lifetime.

We don't sell our assets for cap appreciation - all we've ever tried to do is keep on acquiring more assets with cashflow.

Having said that, we are trying to sell a few IP's right now - the lesser cashflow ones to decrease some debt and increase our cashflow. This is a consolidation phase, and will allow us to go shopping for better cashflow assets later this year.

I always want the cap growth, but I've experienced the "asset rich rich, cash poor" situation a few times now, and I'm sick of that. The cashflow is what allows you to leave the PAYE world and live off the passive income if you want.

 

[BayView]

I would be careful if i were you. firstly, you know he has a legitimate business etc doing renovating and you have basically name him by name etc It seems you're attacking his reputation which can rightly can effect his business etc

legally all these comments and the views associated to this can amount to certain defamation charges if he chooses to approach this path(and it has a validity of 1 year from date of posted that is quite a long time if you must know).

So i would firstly just apologize - if you have doubt about his figures or feel that he is upselling himself - why don't you just PM him and get the info direct. There's really no need to tarnish someone's reputation online if you have doubts. i probably do the same stuff that nathan renovating but i don't go all out like he does in renovating burnt down houses etc- i respect investors who have done stuff or things that the normal investor hasn't and i have gladly acknowlegded him as one of the best investors around in this climate.

It's an open public forum, and anyone who posts numbers is open to scrutiny and comment.

All based on research if course.

Nathan's a big boy and fend for himself if he wants.

 

[Melbournian]

....................................

 

[Melbournian]

......................

 

[Serenas]

So much to learn

Hi Nathan,

Just wondering what the relevance of the OTP or as new sale price is here?

Aren't the most recent comparables what is relevant, as RH noted?

Thanks.

Hi JIT,

No, solid new sales are more relevant than most recent comparables--vendors could of course ask for as high as their greed or wish takes them, so more biased, but the sales that have been made should and indeed count for more, to many lenders (some banks do take into consideration of most recent comparables though, just diff lenders a bit diff criteria for reval.)

RH seems to have had some valid points to make, but let's not spoil this wonderful forum anyway....Silence is gold sometimes especially in situation like this.--well sorry about my noise though..

 

[JT7]

I'm a big RK fan.

Many here poo-hoo him, call him a fraud and so on. I don't care; you use any information how it suits you.

The thing about his writings that appeals to me is how your mindset changes after you've read just one of his books - and I've read all of them at least 3 times each I reckon.

You will start to think about how to acquire income producing assets, to replace your PAYE with passive income etc. You will stop being a mindless penguin consumer, who thinks they are clever, and it will happen very quickly. This one thing will make you rich in your lifetime.

We don't sell our assets for cap appreciation - all we've ever tried to do is keep on acquiring more assets with cashflow.

Having said that, we are trying to sell a few IP's right now - the lesser cashflow ones to decrease some debt and increase our cashflow. This is a consolidation phase, and will allow us to go shopping for better cashflow assets later this year.

I always want the cap growth, but I've experienced the "asset rich rich, cash poor" situation a few times now, and I'm sick of that. The cashflow is what allows you to leave the PAYE world and live off the passive income if you want.

Agree 100%. I've enjoyed reading RK not only because I agree with the whole acquire income producing assets thing but the mindset his books encourage you to adopt has been life changing for me. Of course RK is not solely responsible for the changes I have experienced but his books have played a part along with many other authors and mentors like: Margaret Lomas; Jan Somers; John Lindeman; George Clason; Steve McKnight; Napoleon Hill; the list goes on.

Balancing capital growth and cashflow has been an important component in my overall investing strategy. I see position as being on a pendulum trying to maintain a neutral position. It's certainly been a journey so far for me and my family. In the scheme of things I haven't been on this journey for long but have acted accordingly to my plan when opportunity has provided and we are well on the road to our goals.

We have many close friends who seem to be well set in the 'penguin' frame of mind. They buy expensive new toys when they simply cannot afford it and then struggle to keep up with the repayments. Life to some is a continual facade of keeping up with the Jones'. I'm not saying this is the wrong journey for them, far be it for me to pass judgement. I've learnt that sometimes the best advice provided to some with the best of intentions is not well received however, I guess time will tell and life will be the ultimate judge.

In seeing this all around me did awaken something inside of me several years ago. I felt I had to do something...life means more to me than leaving my family in the mornings to go to work which I'm still having to do...for now anyway. I knew there had to be something more meaningful out there and I felt I owed it to my family and me to do something about it. RK's books were a piece in the puzzle for me maybe not for everyone but they enabled me to move forward and that to me has been inspirational.

Well...that was my Sunday afternoon rant

JT

 

[JPS25]

Hi. I was thinking of investing in property a few years ago but decided not to. I have been reading a lot more financial education e-Books as well as saving all my money. I now have $55,000 in the bank. I'm 21 -

Now I dont like the idea of buying and "negatively gearing" a property - to me, that's gambling. I kind of want to be investing for cash flow - not the capital gains. I think i've missed that boat. Prices can't go up indefinitely. I never want to sell/flip my properties, only have them bring in constant income stream.

In this inflated/bubbley- housing market, are there still bargains? I'm not willing to borrow up to my eyeballs. I want a modest small investment, $150k-200k max around Melbourne. Can anyone point me in the right direction?

Furthermore - are these short real estate courses on the weekends worth going to? Or are they scams? I'm always wary when I see them. It costs nothing, but I don't want them pressuring me into making commitments.

Thankyou. Please move this thread if I have put it in the wrong section

You have done very well to save so much at a young age Damien275x, keep reading the posts on here and ask lots of questions.

Keep the savings going until you know which way you really want to go and go with what you are comfortable with.

Best of luck