From: Mike .
Hi Everyone,
Before I get into TWTW, it seems from your kind remarks that the new AM Guide conference is being well received. Thanks for the encouragement.
A bumper week of posts sets a new record of 52 posts beating the old mark by 3. Some good length threads and plenty of Classic Post contenders.
Topics Included: CGT, Getting Started, Loan Structure, Display Home, New or Old?, Estate Agents, Where to Buy?.
Quotable Quotes:
From DSS: "Of course there are thousands of different roads to take but I am completely overwhelmed by them all. Not only that but the calculations and maths you all have shared seem to just spin around in my head and I can't quite grasp it. I'm not fantastic with numbers so need some reliable guidance. Oh Help!!!!!"
Me: Dial 000 and ask for Les.
From DSS: "I am a single mum, early 40's, tall, blonde, gorgeous (no you don't need that stuff). Am I totally off the planet?"
From Les in reply: "Let me guess - Venus? I've heard they are tall, blonde, fair to gaze upon - and speak a different language from Martians ;^)"
From Gee Cee: "My view is that your project at anywhere near $1.8m or anything near that amount for a starter property is like trying to run a marathon before you can walk."
From Les: "I can now stand alongside Warren Buffett when he says "There are 3 kinds of people in this world - those that can add, and those that can't ..." ;^)"
Me: Hope you don't do the grocery shopping, Les. $120K LMI for first IP would definitely make the Guinness Book of Records.
From Les: "G'day DSS, Just came across something last night "out of the blue" - it could suit your situation, I'd like to take it offline, though. In case you're worried - this IS all above board. Hope to hear from you soon."
Me: I dunno, Les. Sounds sus to me.
From Les: "And it is property we are talking here."
Me: Whew, I'm glad you said that. Wouldn't want to turn this into a dating forum, right?
From Jules: "You need a close relationship with a good estate agent to help find potential properties in the beginning."
From Sue1: "If you read Kiyosaki, buying IP's through the ads is pretty naive. In USA at least, it seems that most of the "bargains" are sold behind closed doors by lawyers/bankers and bankruptcy receiver's offices long before they could ever appear in the papers.
I don't think this sort of thing happens here (but maybe I am still a bit innocent) and if knowing a "good" real estate contact is the only way to get to them first..."
From Les: "I tend to think of RE growth as similar to a pimple (doesn't sound nice, but think of it ...) - an area (CBD, if you like) rises in value until few can afford it, so they move outward until they can - this lifts the value of the "next" suburb until it becomes too high-priced, etc., etc."
From Andrew G: "I have a mentor who keeps on reminding me that most people don't make money so to do what they do will mean you will get what they get. This, for me, is one of the most powerful driving statements I have ever heard. Very threatening but so true, life is never comfortable after it sinks in. Even my mother thinks I've lost the plot "what do you mean you don't want a JOB" "Oh you can't make money doing that, I know such and such who....." You get the picture."
Books:
From DSS: "With regard to good books, another one to add to the list is Steven Covey's "7 Habits of Highly Effective People" - fantastic - truly life changing but certainly not a quick fix / feel good book. Have also read Men from Mars etc. I feel so at home with all you people."
From Les: "If you can ferret out a book titled "Investing in Real Estate on a Budget" by Alan J Falkson, I found it FASCINATING reading. He has filled it with snippets of information, largely based on buying pre-existing property then CHANGING its parameters to provide great opportunities for an investor. His story is Perth based - but the tenets would hold true for most any place. In a nutshell, he buys and adds value, sometimes sells - mostly in the Kiyosaki/Monopoly fashion "Buy four green houses, then trade them in on a hotel!!
In this book, he pays HUGE tribute to an American (Mark Haroldson) - so MH's books might be worth a look too. I haven't read any of his (if they are still selling - it is nearly 10 years ago...). He has also written another in 1993 - title "Make money and be your own boss without much capital".
From Gee Cee: "The book you mention was written by Allan J Falkson in 1990. Firstly as "Investing in real estate using other peoples money" then re-printed in 1991 as Investing in real estate on a budget.
It was published by Elephas Books Pty Ltd @ 361 Orrong Rd , Kewdale WA 6105. PO Box 7007 Cloisters Square, Perth. WA 6000. Ph 09 370 1461 or it' latest equivalent."
Links:
From Dasi Govender: "The best is that I get back $750 from the broker who did all the work. The company is called FreeOl. Their web page is http://www.freeol.com.au/
From Les: "I like Buffett - he has an off-beat sense of humour that appeals to me. If you are into "surfing", check out http://www.berkshirehathaway.com and read a couple of the Chairman's reports."
Classic Post:
The toughest week, so far, to choose a CP. Shortlisted were Wishus, Gee Cee, Les, DSS, Andrew G, Kym, and Sue1. What a pity many of these great posters are no longer active on the forum. After plenty of head-scratching Kym and Sue1 sneak in ahead of the others.
Grace's question:
Hi, everyone, I am a new member to the forum. My hub & I read all articles from this forum. We think it is fantastic. I sent two messages through in the beginning of this year, but they didn't appear in the forum. I do not know where they went.
Anyway, I need some advice from you about IP finance. We want to enter this IP market now, we are doing a lot of research. My scenario is:
We have residential property in Sydney which is worth about $350,000 now, and still owing $88,000 on the mortgage. We are both earning around $55,000 per year (I have retainer plus commission, My hub has a contract work, contract is only for half year at the moment, but possible extension). I know we can use our equity to purchase IP.
We compared all mortgage lending, we approached Wizard, because they do not have fees (except application fee $695) and have flexible conditions. We want to get pre-approved. The problem is I am not sure how to structure the loan. Should I go Property power (line of credit) or individual loan ( refinance home loan and have a IP loan). How can I borrow 106%? Should I use 20% deposit to purchase IP or not? Or just using equity as a deposit? How to? I am not very clear on this point. Any comments will be appreciated.
PLL's question:
My thoughts on buying median property is that it should be a category of approx 4-5 out of 10 in the particular suburb. Eg. a beach suburb category of 5 is obviously more expensive than outer western suburbs.
My main point is that when buying an investment property there are more significant advantages in buying a brand new property. Though a brand new property ( a UNIT or HOUSE ) in a beach suburb is well and truly above the "MEDIAN PRICE" Rentals for these properties would only attract a small market and interest.
Is it then correct to say, to buy brand new you must buy out west. You could almost buy two in comparison!!
Is one old (good condition) house in a beach suburb the better option considering values over 10 years but no great tax advantages as a new property?
I'm still very confused what selection criteria to use when purchasing property. Median price properties as a new property seems to only work in new subdivisions/estates! Please advise - Thankyou.
Hi Everyone,
Before I get into TWTW, it seems from your kind remarks that the new AM Guide conference is being well received. Thanks for the encouragement.
A bumper week of posts sets a new record of 52 posts beating the old mark by 3. Some good length threads and plenty of Classic Post contenders.
Topics Included: CGT, Getting Started, Loan Structure, Display Home, New or Old?, Estate Agents, Where to Buy?.
Quotable Quotes:
From DSS: "Of course there are thousands of different roads to take but I am completely overwhelmed by them all. Not only that but the calculations and maths you all have shared seem to just spin around in my head and I can't quite grasp it. I'm not fantastic with numbers so need some reliable guidance. Oh Help!!!!!"
Me: Dial 000 and ask for Les.
From DSS: "I am a single mum, early 40's, tall, blonde, gorgeous (no you don't need that stuff). Am I totally off the planet?"
From Les in reply: "Let me guess - Venus? I've heard they are tall, blonde, fair to gaze upon - and speak a different language from Martians ;^)"
From Gee Cee: "My view is that your project at anywhere near $1.8m or anything near that amount for a starter property is like trying to run a marathon before you can walk."
From Les: "I can now stand alongside Warren Buffett when he says "There are 3 kinds of people in this world - those that can add, and those that can't ..." ;^)"
Me: Hope you don't do the grocery shopping, Les. $120K LMI for first IP would definitely make the Guinness Book of Records.
From Les: "G'day DSS, Just came across something last night "out of the blue" - it could suit your situation, I'd like to take it offline, though. In case you're worried - this IS all above board. Hope to hear from you soon."
Me: I dunno, Les. Sounds sus to me.
From Les: "And it is property we are talking here."
Me: Whew, I'm glad you said that. Wouldn't want to turn this into a dating forum, right?
From Jules: "You need a close relationship with a good estate agent to help find potential properties in the beginning."
From Sue1: "If you read Kiyosaki, buying IP's through the ads is pretty naive. In USA at least, it seems that most of the "bargains" are sold behind closed doors by lawyers/bankers and bankruptcy receiver's offices long before they could ever appear in the papers.
I don't think this sort of thing happens here (but maybe I am still a bit innocent) and if knowing a "good" real estate contact is the only way to get to them first..."
From Les: "I tend to think of RE growth as similar to a pimple (doesn't sound nice, but think of it ...) - an area (CBD, if you like) rises in value until few can afford it, so they move outward until they can - this lifts the value of the "next" suburb until it becomes too high-priced, etc., etc."
From Andrew G: "I have a mentor who keeps on reminding me that most people don't make money so to do what they do will mean you will get what they get. This, for me, is one of the most powerful driving statements I have ever heard. Very threatening but so true, life is never comfortable after it sinks in. Even my mother thinks I've lost the plot "what do you mean you don't want a JOB" "Oh you can't make money doing that, I know such and such who....." You get the picture."
Books:
From DSS: "With regard to good books, another one to add to the list is Steven Covey's "7 Habits of Highly Effective People" - fantastic - truly life changing but certainly not a quick fix / feel good book. Have also read Men from Mars etc. I feel so at home with all you people."
From Les: "If you can ferret out a book titled "Investing in Real Estate on a Budget" by Alan J Falkson, I found it FASCINATING reading. He has filled it with snippets of information, largely based on buying pre-existing property then CHANGING its parameters to provide great opportunities for an investor. His story is Perth based - but the tenets would hold true for most any place. In a nutshell, he buys and adds value, sometimes sells - mostly in the Kiyosaki/Monopoly fashion "Buy four green houses, then trade them in on a hotel!!
In this book, he pays HUGE tribute to an American (Mark Haroldson) - so MH's books might be worth a look too. I haven't read any of his (if they are still selling - it is nearly 10 years ago...). He has also written another in 1993 - title "Make money and be your own boss without much capital".
From Gee Cee: "The book you mention was written by Allan J Falkson in 1990. Firstly as "Investing in real estate using other peoples money" then re-printed in 1991 as Investing in real estate on a budget.
It was published by Elephas Books Pty Ltd @ 361 Orrong Rd , Kewdale WA 6105. PO Box 7007 Cloisters Square, Perth. WA 6000. Ph 09 370 1461 or it' latest equivalent."
Links:
From Dasi Govender: "The best is that I get back $750 from the broker who did all the work. The company is called FreeOl. Their web page is http://www.freeol.com.au/
From Les: "I like Buffett - he has an off-beat sense of humour that appeals to me. If you are into "surfing", check out http://www.berkshirehathaway.com and read a couple of the Chairman's reports."
Classic Post:
The toughest week, so far, to choose a CP. Shortlisted were Wishus, Gee Cee, Les, DSS, Andrew G, Kym, and Sue1. What a pity many of these great posters are no longer active on the forum. After plenty of head-scratching Kym and Sue1 sneak in ahead of the others.
Grace's question:
Hi, everyone, I am a new member to the forum. My hub & I read all articles from this forum. We think it is fantastic. I sent two messages through in the beginning of this year, but they didn't appear in the forum. I do not know where they went.
Anyway, I need some advice from you about IP finance. We want to enter this IP market now, we are doing a lot of research. My scenario is:
We have residential property in Sydney which is worth about $350,000 now, and still owing $88,000 on the mortgage. We are both earning around $55,000 per year (I have retainer plus commission, My hub has a contract work, contract is only for half year at the moment, but possible extension). I know we can use our equity to purchase IP.
We compared all mortgage lending, we approached Wizard, because they do not have fees (except application fee $695) and have flexible conditions. We want to get pre-approved. The problem is I am not sure how to structure the loan. Should I go Property power (line of credit) or individual loan ( refinance home loan and have a IP loan). How can I borrow 106%? Should I use 20% deposit to purchase IP or not? Or just using equity as a deposit? How to? I am not very clear on this point. Any comments will be appreciated.
PLL's question:
My thoughts on buying median property is that it should be a category of approx 4-5 out of 10 in the particular suburb. Eg. a beach suburb category of 5 is obviously more expensive than outer western suburbs.
My main point is that when buying an investment property there are more significant advantages in buying a brand new property. Though a brand new property ( a UNIT or HOUSE ) in a beach suburb is well and truly above the "MEDIAN PRICE" Rentals for these properties would only attract a small market and interest.
Is it then correct to say, to buy brand new you must buy out west. You could almost buy two in comparison!!
Is one old (good condition) house in a beach suburb the better option considering values over 10 years but no great tax advantages as a new property?
I'm still very confused what selection criteria to use when purchasing property. Median price properties as a new property seems to only work in new subdivisions/estates! Please advise - Thankyou.
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