Steve McKnight presentation

[Tony1]

I attended Steve McKnight's market outlook presentation last evening in Melbourne. This is the first time I heard him speaking. Apart from about 10 minutes commenting on the state of the market, almost
the entire presentation time was spent on promoting himself and marketing his products and property fund.

The few minutes he spent on commenting on Australian property market, he touched on data on jobs, housing supply, investor Vs home owner activity, possible interest rate hike in future etc. His conclusion is this is not a good time to invest in property in Australia.(Of course he qualified this by saying there can be exceptions)

Then he went in detail how participants can join his US commercial property investing fund and other products. In my opinion it was a waste of two hours. Has anyone dealt with him previously?

 

[cu@thetop]

No I haven't dealt with him previously. Thank you for your summary though. I'm not sure whether now is the right time to invest in the U S of A given the comparative strengths/weaknesses of the currency. I suppose if the dollar was to crash it may be but I gather a better time would have been a few years ago.

 

[Big Will]

How much did you pay to attend the event?

Any event that is free to attend is not going to be more than an information session on their products with a couple of teasers.

No such thing as a free lunch

 

[Rixter]

No such thing as a free lunch

Since it was an evening event, shouldn't that be no free dinner.

 

[Tranquilo]

That's disappointing I'm going tonight here in Sydney.

 

[Big Will]

Since it was an evening event, shouldn't that be no free dinner.

Dinner usually has other 'costs' involved

 

[ChrisA1]

I attended last night in Sydney and found the presentation quite different to previous market update seminars. As you say, he sped through the market update and spent more time on his approaches and relating this to his training and US property fund. He said the time has passed for US residential property but said that the US commercial is still on the way up as the US economy recovers.

Previous market updates included commentary on the macro economic factors - government, RBA comments etc, which were missing from this year's sessions. If you're attending a session in BNE, ADL etc, try and ask a question about the macro economic factors for your capital and the effect on property prices. I was expecting a lot more commentary rather than stats.

(I've also posted this here - http://somersoft.com/forums/showthread.php?p=1302485#post1302485 to keep the conversation going there)

 

[mavericksurfer]

His conclusion is this is not a good time to invest in property in Australia.

so what type of the evidence he used to support his conclusion?

 

[Tranquilo]

He showed a cute puppy dog

 

[Angel]

After reading the comments on Somersoft we stayed home.

 

[Deltaberry]

That's disgraceful.

A) I hate people who promote their products at these seminars.

B) People have been saying don't invest in Aust for years

C) I know someone far more successful in real estate than said name, who sold out of his Syd and Melb CBD holdings at the 'peak' in 2010 to go to the States. Sure he made money there. But market consensus is he would've made more staying here. There's more to property than looking at price to income ratios.

 

[mase5233]

went last night BNE seminars, really wasting time. Steve kept saying he wont sell anything to anyone in the room, but truly for whole 2 hours (actually 2.5 hours) of his presentation, he probably only spent 30 mins updating current market, the rest were all about his own stuff...really wasting time, I could have spend a good quality time at home with family....wasting time and my 10 bucks!!

 

[remingbi]

He basically said no where in australia is suitable to invest atm
Invest in usa good.
Namely my property fd

 

[Heinz57]

The couple who tried to sneak out early got grilled! But I think his fund looks a goer

 

[GreyGhost]

went last night BNE seminars, really wasting time. Steve kept saying he wont sell anything to anyone in the room, but truly for whole 2 hours (actually 2.5 hours) of his presentation, he probably only spent 30 mins updating current market, the rest were all about his own stuff...really wasting time, I could have spend a good quality time at home with family....wasting time and my 10 bucks!!

10 bucks and 2.5 hours.
Totally overcommitted and got it wrong with this one..
Negative attitude.

 

[rohan22no]

He said the time has passed for US residential property but said that the US commercial is still on the way up as the US economy recovers.

A ridiculous assumption there from him. "As the US economy recovers". The US "recovery" is a farce, a false economy that is only propped up by the Fed's stimulus programs which has temporarily papered over the cracks. The US is headed for another crash that will be more severe than the GFC.

 

[hobo-jo]

Overall I thought it was worthwhile going given what I paid (I found the code to get free tickets).

Some of the perspectives & thinking mindset he shared were new to me.

Was interesting to note that he thinks any negatively geared property buyer is a speculator, not an investor.

Shared my concern that cheap money has driven prices too high in many capitals and that rising unemployment along with rising house prices is not a sustainable trend.

Shared my view that foreign buyers will eventually dry up and they've bought a crap load of apartments, what happens if they ever want to sell?

Here's what I didn't like:

Spent 20 minutes describing how to calculate a properties gross yield as an ROI?

Spent too long bragging about the great deals he bought in his US commercial property fund.

He pointed out foreign investment & cheap rates were a risk in Australia, while ignoring the fact that the United States has lower rates and he is a foreign investor buying there...

If you're attending a session in BNE, ADL etc, try and ask a question about the macro economic factors for your capital and the effect on property prices. I was expecting a lot more commentary rather than stats.

I had some lined up, but he never ended up doing a Q&A on stage (in Adelaide).

But going through his measurement on Adelaide (momentum, jobs, finance, construction), it sounds like we were on the same page anyway.

Steve kept saying he wont sell anything to anyone in the room..

Yeah it was cheesy to spin the lines that he did, "I'm here to give [*]..."

[*]P.S. I want you to invest in my US commercial property fund.

 

[Angel]

Thanks for the run down, HJ. Did he have any feedback on his current US fund?

 

[hobo-jo]

Thanks for the run down, HJ. Did he have any feedback on his current US fund?

Not sure if you mean crowd feedback? But he didn't take any questions.

He did ask for a show of hands at one point to hand out EOI cards and perhaps 20% of the crowd showed interest.

He said there is around $9m left available to fund before it will be closed, which indicated around 165 positions left based on average $55k buy in from investors so far. Min $10k buy in.

He detailed a couple of deals that he'd purchased in the fund and compared them to Australian equivalent, on the surface they looked like amazing deals, instant equity, huge cash flow, etc and he showed that since inception (2 years) the fund has returned 38% to investors through distribution of dividends and capital growth (unit price at inception was $1, now $1.26 & 12c div).

My concerns:

AUD has dropped a lot over the last 12-24 months, so everything will be more expensive for the fund to buy being funded by AUD (though the same change could be seen as beneficial with value of existing properties & income stream rising priced in AUD).

US is at 0% rates, it's unknown what will happen when Fed tries to increase rates, economy could slow again (and already signs that it is) and commercial property could take another hit.

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I can see the reasons why people would drop some $ into the fund, but personally won't be.