Supreme secret in property-independant thought

[markpatric]

I got to thinking yesterday what short memories people have, it never ceases to amaze me how quickly people forget, not three weeks ago the talk was property in Brisbane would grow at a rate of 5-10% a year until the next boom due to immigration etc, now the feeling seems to be set in doom and gloom, property will not grow in fact it will go backwards for some time???, what will they say next week, or next year?, everyone is leaving the forums and out of property into shares or the daily grind.
In the blink of an eye property will hit the headlines again, when I don`t know but will you be ready or will you allow the general consensus to stifle your plans.......again.
The current market gives many the chance to prepare to get into property if they are not already.
I think the secret to property success is to a large degree simply independant thought but of course we always need an exit strategy, not be too highly leveraged or overcapitolise so we can enjoy the enjoy the ride, what do you think?.

 

[see_change]

I got to thinking yesterday what short memories people have, it never ceases to amaze me how quickly people forget, not three weeks ago the talk was property in Brisbane would grow at a rate of 5-10% a year until the next boom due to immigration etc, now the feeling seems to be set in doom and gloom, property will not grow in fact it will go backwards for some time???, what will they say next week, or next year?, everyone is leaving the forums and out of property into shares or the daily grind.
In the blink of an eye property will hit the headlines again, when I don`t know but will you be ready or will you allow the general consensus to stifle your plans.......again.
The current market gives many the chance to prepare to get into property if they are not already.
I think the secret to property success is to a large degree simply independant thought but of course we always need an exit strategy, not be too highly leveraged or overcapitolise so we can enjoy the enjoy the ride, what do you think?.

Spot on Mark, though in your particular example some people have been noticing an impeding or real downturn in Brisbane for a while ( lets say since october 2003) and decreasing their exposure to the market in anticipation of a more widely recognised down turn.

Some of the hype I've seen about Brisbane recently has been from people who have ulteria motives.

See Change

 

[Aceyducey]

Independent from what?

'independent thinking' is an oxymoron to me.

All our thinking is dependent on something. Most people spend most of their lives not actively thinking but simply reacting based on learnt or innate patterns. Living unconsciously as it's sometimes called.

Unless if you can define precisely what the thought should be independent of - and what it should be dependent on - there's no intrinsic value in labelling it.

I prefer to consider investing as an act of creativity, creative thought if you will.

Where many people see simply a house, an idea or a consumable product, good investors have a vision of what the asset can be used to achieve and mould the universe to match their vision.

That's why most people say 'oh you're so lucky' and do not see the work involved in creating wealth. They are simply not creative in that way. They see 'what it', not 'what could be'.

Like most art forms it's possible to learn to be quite good at it regardless of your background, but some people have a natural talent in taking the output of human labour and transforming it into wealth.

Exit strategies, leverage, administration and other niggling little factors are the outcomes of having your mind in the correct creative framework and are used by entities that do not possess creativity - such as large corporations - to simulate, mirror and constrain the creativity of individuals.

In other words, all the checklists for investing that state 'define goals, research market, select an approach that will most efficiently reach your goal, define strategy, set exit targets, invest' are simply paint-by-numbers guidelines for people who are yet to open themselves to their creativity within, or are crutches for people who simply do not possess this creative thought in large measure.

Cheers,

Aceyducey

 

[Kiwi Investor]

Well put Acey !!

My formula for what luck is ......

Knowledge + Preparation + Opportunity = LUCK

I have worked hard to get where I am at the stage of my life with mostly 'bad luck' !!

Cheers !

 

[kissfan]

Well put Acey !!

My formula for what luck is ......

Knowledge + Preparation + Opportunity = LUCK

I have worked hard to get where I am at the stage of my life with mostly 'bad luck' !!

Cheers !

Or, in other words.......................

The harder I work, the luckier I get.

Regards
Marty

 

[see_change]

There's a certain irony in this post ...

See Change

 

[TomL]

Spot on Mark, though in your particular example some people have been noticing an impeding or real downturn in Brisbane for a while ( lets say since october 2003) and decreasing their exposure to the market in anticipation of a more widely recognised down turn.
See Change

I've been thinking about this stuff for a while now.

Market sentiment. Price volatility. Decreasing exposure.

Markp highlighted the changing mood of the herd - property prices do go up and down - we all know that.

I want to finetune my capital generation machine to consistently put myself in the best possible position in any market, with any economic outlook, with any prevailing consumer attitude.

How?

Well - I dont wanna sell. Or better put - I dont want to sell my good assets - i only ever really want to shoot the dogs - the ones that are obviously never going to cut the mustard.

I only buy quality assets that meet a very strict criteria. There should be no dogs. But I know there will be.

But how do I ride the bumps, how to I buy the lows and capitalise on the highs?

I DONT want to sell. I've gone to alot of trouble to select great assets, why would I sell a good asset that has the potential to make me a fortune - without much effort, with a high degree of probability and best of all - without even using much of my own money!

So - I lock in my profits. Unlike with shares we cant sell off little bits of a property - its kind of all or nothing. So I will just top up my loans every year. Whenever an IP has appreciated, I lock it in. My current IP LVR is at 86.3%. It would be more except Im not yet comfortable with second mortgages, private lending etc. Of course I do this with the provisio that I can fund the loans no matter what. Which I can.

I make this money available for my next IP purchase. If the market falls by 30% then FANTASTIC. I will be dancing in the street. All of a sudden all of my LOCKED IN equity (which does NOT disappear in a bust) is available to purchase bargains while the proverbial sheep line up for the slaughter. Everyone liquidating their great IP portfolio because IPs are so baaaad is selling themselves out. I'll be leveraging myself to the hilt. What a ride. Bite it all off and chew like crazy.

Am I crazy? Yep. I wouldnt have it any other way. Its my vision, my creativity, my passion that drives me. I only listen to people that have made it - nothing I do is my own idea. Acey touched on something that rich people really focus on to get your mind right - and the rest fill fall into place. Thats why I will succeed. In any market, no luck involved - i will find a way.

Different strokes for different folks.


phew. coffee time.

T.

 

[Simon]

Well put Acey !!

My formula for what luck is ......

Knowledge + Preparation + Opportunity = LUCK

I have worked hard to get where I am at the stage of my life with mostly 'bad luck' !!

Cheers !

Plus a willingness to act - that is usually the crucial part most people don't have.

Cheers,

 

[ibeginner]

Toml,

Good thought.

 

[Panic]

Forcing the market

Some comments appear as you can force the market in your own advantage.
I agree with Acey's discussion but what I get from it and what I have learned so far is that you must be flexible and think outside of the general investment boundaries to create wealth.
Anyone who thinks that they can force or somehow influence the market, by just being ignorant and stubborn is in my mind loss of time (money).
Unless you are Soros or Buffet
Anyway, creativity, flexibility and most of all "balls" is the path to creating wealth.

Thx
V

 

[lizzie]

not all of us have balls ... just stubborn tenancity (or is that a girl trait?)

 

[Panic]

not all of us have balls ... just stubborn tenancity (or is that a girl trait?)

Good one , most of women investors that I know have more "balls" then many men I know.

Thx
V

 

[beech]

I want to finetune my capital generation machine to consistently put myself in the best possible position in any market, with any economic outlook, with any prevailing consumer attitude.

How?
Well for me through small developments

I only buy quality assets that meet a very strict criteria. There should be no dogs.

But I know there will be.

If bought at the right time(early upswing) the dogs do just fine.
Plus when you want to sell a few to balance your portfolio at close to end of the cycle they will be the ones to offload.
SeeChange done this in a short period with excellent results

I DONT want to sell. I've gone to alot of trouble to select great assets, why would I sell a good asset that has the potential to make me a fortune - without much effort, with a high degree of probability and best of all - without even using much of my own money.

Absolutely must keep the solid performers.

So - I lock in my profits. Unlike with shares we cant sell off little bits of a property - its kind of all or nothing. So I will just top up my loans every year. Whenever an IP has appreciated, I lock it in.

And drain the equity and place money with Navrainvest maybe.

Good post TomL just thought id add my thoughts.

 

[markpatric]

Independent from what?

'independent thinking' is an oxymoron to me.

All our thinking is dependent on something. Most people spend most of their lives not actively thinking but simply reacting based on learnt or innate patterns. Living unconsciously as it's sometimes called.

Unless if you can define precisely what the thought should be independent of - and what it should be dependent on - there's no intrinsic value in labelling it.

I prefer to consider investing as an act of creativity, creative thought if you will.

Where many people see simply a house, an idea or a consumable product, good investors have a vision of what the asset can be used to achieve and mould the universe to match their vision.

That's why most people say 'oh you're so lucky' and do not see the work involved in creating wealth. They are simply not creative in that way. They see 'what it', not 'what could be'.

Like most art forms it's possible to learn to be quite good at it regardless of your background, but some people have a natural talent in taking the output of human labour and transforming it into wealth.

Exit strategies, leverage, administration and other niggling little factors are the outcomes of having your mind in the correct creative framework and are used by entities that do not possess creativity - such as large corporations - to simulate, mirror and constrain the creativity of individuals.

In other words, all the checklists for investing that state 'define goals, research market, select an approach that will most efficiently reach your goal, define strategy, set exit targets, invest' are simply paint-by-numbers guidelines for people who are yet to open themselves to their creativity within, or are crutches for people who simply do not possess this creative thought in large measure.

Cheers,

Aceyducey

Good points Acey, but I was talking about from the standpoint of an investor with vast experience and the fact that when you overanalyse you can yourself begin to doubt what you have learned and what has worked before, maybe because someone who appears to have more success does things differently or has a completely different veiw.
I have found myself many times listening and taking in strategies and all of a sudden realised I`m am falling into a trap which my MEMORY had failed to recognise and perhaps some strategy which I have seen come unstuck but is presented in a different light or manner.
You really need to think on your feet and listen to your gut!, not an easy thing to do!.
I suppose a lot comes down to where you started and where you want to go and how much risk you are prepared to take to get there!.

 

[redwing]

So - I lock in my profits. Unlike with shares we cant sell off little bits of a property - its kind of all or nothing. So I will just top up my loans every year. Whenever an IP has appreciated, I lock it in. My current IP LVR is at 86.3%. It would be more except Im not yet comfortable with second mortgages, private lending etc. Of course I do this with the provisio that I can fund the loans no matter what. Which I can.

I make this money available for my next IP purchase. If the market falls by 30% then FANTASTIC. I will be dancing in the street. All of a sudden all of my LOCKED IN equity (which does NOT disappear in a bust) is available to purchase bargains while the proverbial sheep line up for the slaughter. Everyone liquidating their great IP portfolio because IPs are so baaaad is selling themselves out. I'll be leveraging myself to the hilt. What a ride. Bite it all off and chew like crazy.

T.

Just wondering what you mean by "Top Up" your Loans Tom..and "Locking In" your equity?

REDWING

 

[alwayscurious]

Absolutely!

Just wondering what you mean by "Top Up" your Loans Tom..and "Locking In" your equity?

REDWING

I would like to know the answer to this also Tom.

Would you be so kind as to spell out how you structure your loans so as to "top up" the loans?

This would be of great interest and perhaps should be the start of a new thread "topping up loans" or "stealing bits of equity"

Kindest regards
A/c

 

[JIT]

Top-up loans

Isn't Tom just referring to getting your properties revalued at regular intervals and then, for instance, getting a new LOC in place, or increasing the limit on your exisiting LOC - based on the new valuation??? And, of course, getting these valuations done before prices decline due to market conditions or the stage of the cycle etc...

GSJ

 

[WillG]

Isn't Tom just referring to getting your properties revalued at regular intervals and then, for instance, getting a new LOC in place, or increasing the limit on your exisiting LOC - based on the new valuation??? And, of course, getting these valuations done before prices decline due to market conditions or the stage of the cycle etc...

GSJ

I think you you are probably on the right track GSJ - at least that is my assumption based on various threads in the past. There are other loans besides a LOC that can achieve the same thing - I am sure the mortgage brokers that frequent this forum are up to speed on the kinds of loans that make equity available through a redraw facilities (secured againist IP's)

Cheers

 

[redwing]

I was thinking of "Topping Up" as in making additional payments or a lump sum, thereby reducing the loan (I must be on the wrong bus..?)

I can see where "Locking in your Equity" comes with getting a revaluation done, probably worth doing in WA/NT with CG of late

REDWING

 

[DavidMc]

Isn't Tom just referring to getting your properties revalued at regular intervals and then, for instance, getting a new LOC in place, or increasing the limit on your exisiting LOC - based on the new valuation??? And, of course, getting these valuations done before prices decline due to market conditions or the stage of the cycle etc...

GSJ

Spot on. Topping up is reffering to increasing the size of your loan. It is the lingo Westpac (and other banks probably) use.

I do this once per year (which is about as often as they'll let me do it).