Steve McKnight buy's 30 properties in the US
- Thread starter Platnicka
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I wish everyone take an extra caution on this. Steve has done great and it does not mean he will be always right. What he bought 30 propertis in US does not mean you have to buy 30 in US. You maybe buy somewhere else. I wish you next year to buy some of his properties 
Just use your own brain. It is true - the higher the risk is the higher the profit is. Otherwise you will end in nowhere and pick up a hot potato..
Just use your own brain. It is true - the higher the risk is the higher the profit is. Otherwise you will end in nowhere and pick up a hot potato..
plumtree said:
What dont you understand?
Steve KKK said:Any other suggestions for his next book title??
From 130 to 160 Properties In 0.5 Years.
Let's ignore the fact he most probably had more than 130 properties before his US buying spree...
So where does Steve borrow to buy US property?
Dear Ibeginner,
1. I have just attended Steve McKnight's Masterclass in Perth last Sunday.
2. From what I can see, Steve McKnight is actually looking to invest in properties with certain existing "problems" where he can buy cheaply and then re-sell them for a profit, after offering a solution to these "problematic" properties. He has successfully replicated this strategy in Australia and new Zealand and now he is trying it out in the US property market.
3. What appears as "risky" to many people, is considered "low" risks from Steve's perspective, as he is well -educated about this nature of the investing environment and the rules of the game. In fact, I will further venture to say that is where his real niche is and where he is most likely to succeed in his investing, except that the America property market is a new turf with its own unique sets of hidden minefields awaiting to be uncovered by the unwary investors. Whether Steve Mcknight will actually succeed in his investment in America, only TIME will tell in due course.
4. I know that Steve McKnight will not fully agree with the John Fritzgerald's Capital Growth approach and his replication process through "Buy/Build and Hold Long Term (and Never Sell option).
5. Steve McKnight has admittedly, previously also advocated the "Buy-Hold-Never Sell" strategy as was depicted in his first book, "From 0 to 130 Properties in 3.5 years".
At the question and answer session during the same Masterclass Course, Steve Mcknight has openly admitted that he has changed his position since then. He is now advocating "selling one's properties at the right price" though he has still NOT clearly defined what he meant by the term, "right price".
6. One criticism of Steve Mcknight's concept of investing only in Positve Cashflow Properties is that when the house price increases as during the boom period, and its corresponding rental yield rate falls as a result, other all thing being equal, the initial Positive Cashflow Properties can then all suddenly become "negative gearing" as a consequence. What do we do in this case? I'm sure that Steve McKnight has experienced such situations for some of his Positive Cashflow Properties but he does not openly talk about this nor discuss this issue in his seminars or discussion forums.
7. I guess that Steve McKnight has probably sold some of the properties under such kind of situation, prefering to realise the profits from his properties rather than to continue to hold for its future unrealised capital gains, given his current trend of thought.
8. In this respect, Steve McKnight's strategy is basically one of property trading techniques and how to trade successfully in its own unique niche, from the positive cashflow perspective. He is preaching a new concept known as the "velocity of monies circulation"
9. Both Jan Somers and John FritzGerald do not advocate property trading per se.
10. In fact, Jan Somers clearly differentiate between property investors and property traders, in her book, " More wealth from Residential Properties". Property investors use TIME to leverage and create wealth. Property traders, (like Steve McKnight under the guise of Investing in his Positive Cashflow Properties concept), on the other hand, use timing and other market conditions or/and properties characteristics, to trade for a profit. In Steve MckNight's terminology, this will meant to " invest in a "problem" property and sell a solution to profit from the same property."
11. To me, Steve Mcknight has yet to make his own mark as a "guru" as compared Ms Jan Somer and John FritzGerald who are both widely accepted and well-respected in Australia. I have no doubt that the latter 2 gurus are far more richer than what Steve McKnight has accumulated so far with what he is doing.
regards,
Kenneth KOH
1. I have just attended Steve McKnight's Masterclass in Perth last Sunday.
2. From what I can see, Steve McKnight is actually looking to invest in properties with certain existing "problems" where he can buy cheaply and then re-sell them for a profit, after offering a solution to these "problematic" properties. He has successfully replicated this strategy in Australia and new Zealand and now he is trying it out in the US property market.
3. What appears as "risky" to many people, is considered "low" risks from Steve's perspective, as he is well -educated about this nature of the investing environment and the rules of the game. In fact, I will further venture to say that is where his real niche is and where he is most likely to succeed in his investing, except that the America property market is a new turf with its own unique sets of hidden minefields awaiting to be uncovered by the unwary investors. Whether Steve Mcknight will actually succeed in his investment in America, only TIME will tell in due course.
4. I know that Steve McKnight will not fully agree with the John Fritzgerald's Capital Growth approach and his replication process through "Buy/Build and Hold Long Term (and Never Sell option).
5. Steve McKnight has admittedly, previously also advocated the "Buy-Hold-Never Sell" strategy as was depicted in his first book, "From 0 to 130 Properties in 3.5 years".
At the question and answer session during the same Masterclass Course, Steve Mcknight has openly admitted that he has changed his position since then. He is now advocating "selling one's properties at the right price" though he has still NOT clearly defined what he meant by the term, "right price".
6. One criticism of Steve Mcknight's concept of investing only in Positve Cashflow Properties is that when the house price increases as during the boom period, and its corresponding rental yield rate falls as a result, other all thing being equal, the initial Positive Cashflow Properties can then all suddenly become "negative gearing" as a consequence. What do we do in this case? I'm sure that Steve McKnight has experienced such situations for some of his Positive Cashflow Properties but he does not openly talk about this nor discuss this issue in his seminars or discussion forums.
7. I guess that Steve McKnight has probably sold some of the properties under such kind of situation, prefering to realise the profits from his properties rather than to continue to hold for its future unrealised capital gains, given his current trend of thought.
8. In this respect, Steve McKnight's strategy is basically one of property trading techniques and how to trade successfully in its own unique niche, from the positive cashflow perspective. He is preaching a new concept known as the "velocity of monies circulation"
9. Both Jan Somers and John FritzGerald do not advocate property trading per se.
10. In fact, Jan Somers clearly differentiate between property investors and property traders, in her book, " More wealth from Residential Properties". Property investors use TIME to leverage and create wealth. Property traders, (like Steve McKnight under the guise of Investing in his Positive Cashflow Properties concept), on the other hand, use timing and other market conditions or/and properties characteristics, to trade for a profit. In Steve MckNight's terminology, this will meant to " invest in a "problem" property and sell a solution to profit from the same property."
11. To me, Steve Mcknight has yet to make his own mark as a "guru" as compared Ms Jan Somer and John FritzGerald who are both widely accepted and well-respected in Australia. I have no doubt that the latter 2 gurus are far more richer than what Steve McKnight has accumulated so far with what he is doing.
regards,
Kenneth KOH
************************************************Merovingian said:From 130 to 160 Properties In 0.5 Years.
Let's ignore the fact he most probably had more than 130 properties before his US buying spree...
Dear Merovingian,
According to Steve McKnight's own handout, he was holding on to 110 properties prior to his US venture.
Cheers,
regards,
Kenneth KOH
Two point, Kenneth.
1. In his later book he positively advocates selling under the heading 'multiplicaton by division'. I'm coming to the conclusion that at least mathematically he may well be right.
2. To compare the relative wealth of people is meaningless, especially, but not solely, without comparing how long they've been in the game.
Hope the masterclass was valuable.
1. In his later book he positively advocates selling under the heading 'multiplicaton by division'. I'm coming to the conclusion that at least mathematically he may well be right.
2. To compare the relative wealth of people is meaningless, especially, but not solely, without comparing how long they've been in the game.
Hope the masterclass was valuable.
*********************quiggles said:
Dear Quiggles,
1. Please elaborate further and clairfy what is meant by selling 'multiplicaton by division'
.
2. Thanks.
regards,
Kenneth KOH
Kenneth, you seem to be clarifying what Steve McKn is doing.
For me, he is advocating nothing more than buy a problem or bottom of the cycle asset. And sell after adding value or at the top of cycle.
Jan Somers and Noel Whittaker, and many others did not advocate that. Why? Because they invested through the 70s-90s.
Their investment advice will never be as efficient as one that exploits cycles more efficiently.
Jan and Noel never got into educating their readers about accurate cycle prediction. The pinacle of their investment strategy was dollar cost averaging, in properties and shares.
Roll on the gurus of cycle analysis and prediction.
For me, he is advocating nothing more than buy a problem or bottom of the cycle asset. And sell after adding value or at the top of cycle.
Jan Somers and Noel Whittaker, and many others did not advocate that. Why? Because they invested through the 70s-90s.
Their investment advice will never be as efficient as one that exploits cycles more efficiently.
Jan and Noel never got into educating their readers about accurate cycle prediction. The pinacle of their investment strategy was dollar cost averaging, in properties and shares.
Roll on the gurus of cycle analysis and prediction.
***************************************************thefirstbruce said:
Dear First Bruce,
1. Yes, I am clarifying my own present understanding regarding Steve MckNight's Key Critical Success Factors and what really make it work in his property trading system, using the Positive Cashflow Properties Approach. Steve Mcknight has presented himself as an alternative industry "guru" for property investing in Australia, as compared to Jan Somers and John FritzGerald, both being Capital Growth and Negative Gearing advocates.
2. Care to elaborate why Steve Mcknight is really against the Capital Growth approach and negative gearing?
3. To me, both TIME and timing are important.
4. At the MasterClass Course last Sunday, one of the speakers, John Donjerkovic was actually talking about wealth creation through property renovations and development. Personally, I think that John still a lot to learn from both Geoffrey Doidge and Paul Eslick, who are the accepted gurus, having called themselves as the "Reno Kings" and as far as property development, I have Michael Yardney as the "guru" whom I will want to learn from.
5. I am presently evaluating the various apporaches towards wealth creation through property investing as I will need to develop my own niche and critical success factors to success in my own property investing.
6. Cheers,
Regards,
Kenneth KOH
Kennethkohsg said:
His second book is in my reach now but I'm too lazy to find where it is in the book, but for memory it went something like this. If you have a property, cash flow positive of course, that has gone up in value, then the current yield for that property will have dropped, so there are two options:
- You can revalue the property and redraw against the added value, using those funds to provide a deposit for a couple of new properties, (the book uses 2, for memory).
- Or, you can sell the property and use the funds as a deposit on 2 or more properties.
The second options would sometimes be better because there is no larger interest repayments on the original property, (plus the interest on the 2 new ones), thus providing a better cash flow position. This has now improved the gross yield over the entire property portfolio... (All things being equal of course).
Hence, you have 'multiplied' the number of houses you own, by 'dividing' a house into smaller parts...
I could have this wrong, but it was a while since I read the book...
Ha! I used to live in Tokoroa. People used to call it a "hole". Regional property prices must have helped push it up, especially in Taupo, 40 mins drive away.
There is something to be said for selling the occasional property and realising the profit, in order to make borrowing money a little easier. At least if you're in the position of running your properties as a business.
Currently if I buy a property it might cost me, say, $50k for 20% deposit and costs. That is put as an expense against my business. I may make some lovely positive cashflow, but it's probably not going to be $50k in a year. It probably won't even be $50k any year.
Now, if I only buy the one property, year 2 I have positive cashflow which makes banks happy to lend me money.
However, if I continue to buy properties, each time it's $50k against my expenses, and my tax returns look disastrous - big expenses, smaller cashflow.
You can do it for a while, but eventually banks don't like it. They like to see some "income". The easiest way to do that is to then sell a property, make a nice profit, say $100k, and that gets put into your business income. Result - an income at tax time!
I'm tired, so I hope I've explained this okay, I am repeating the information I was given by a business banker when he was telling me why he didn't think his bank should lend me money, despite my very healthy positive cashflow on my existing portfolio.
Currently if I buy a property it might cost me, say, $50k for 20% deposit and costs. That is put as an expense against my business. I may make some lovely positive cashflow, but it's probably not going to be $50k in a year. It probably won't even be $50k any year.
Now, if I only buy the one property, year 2 I have positive cashflow which makes banks happy to lend me money.
However, if I continue to buy properties, each time it's $50k against my expenses, and my tax returns look disastrous - big expenses, smaller cashflow.
You can do it for a while, but eventually banks don't like it. They like to see some "income". The easiest way to do that is to then sell a property, make a nice profit, say $100k, and that gets put into your business income. Result - an income at tax time!
I'm tired, so I hope I've explained this okay, I am repeating the information I was given by a business banker when he was telling me why he didn't think his bank should lend me money, despite my very healthy positive cashflow on my existing portfolio.
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