From: Always Learning
Dear All<p>
(Please excuse me for asking dumb questions)<p>
I have been pondering upon the question of maximizing the gains and minimizing the risks of a "hold for growth IP strategy". That is to say looking at different ways to hold the typical negative geared property. Would it not be better in most cases (if possible) to purchase such properties after a long term "3~7 year" purchase option?
<ol>
<li> Within locations that I believe should see exception capital gains. I need to locate owners (advertise, letter drop etc) who have some sort of problems that can be solved with money. (Should be easy shouldn't it?, which leads to the question, why are options not used more frequently?)<p>
<li> In the case of pensioners, who are cashflow poor but asset rich. Offer them a per week payment eg $50 PW in exchange for an option to purchase their property within in the next 3~7 years at a specified dollar amount eg $600,000.In this case what are the pension ramifications?<p>
<li> In the case of people looking for a chunk of cash now. A standard option of xx,xxx now for the option to purchase in 3~7 years at eg. $600,000<p>
<li> In cases if the property has a small mortgage, can an option be used? Could marketing like "I will pay off your mortgage! - if you give me the option to by at todays market rate in 7 years" work (for cash poor with with small mortgages on large equity holdings). I suppose this is just a lease option in a different perspective.<p>
</ol>
I suppose I am just thinking since my thoughts will not be original ideas, thus why are such strategies being used more frequently?
The positive aspects for me are:
<ol>
<li> I know now what it is going to cost me in the future! I can budget! I dont need to worry about interest rates rises as much.
<li> I can control a much much larger value of IP with my cash. Which is the idea behind "hold for growth".
<li> If it all goes south, I just walk from the option at the end of the agreed period.
<hr width="50%">
</ol>
<p>
<ul>
<li> Unless you change how you are, you'll always have what you've got.
<li>
To have more than you've got, become more than you are.
</ul>
Dear All<p>
(Please excuse me for asking dumb questions)<p>
I have been pondering upon the question of maximizing the gains and minimizing the risks of a "hold for growth IP strategy". That is to say looking at different ways to hold the typical negative geared property. Would it not be better in most cases (if possible) to purchase such properties after a long term "3~7 year" purchase option?
<ol>
<li> Within locations that I believe should see exception capital gains. I need to locate owners (advertise, letter drop etc) who have some sort of problems that can be solved with money. (Should be easy shouldn't it?, which leads to the question, why are options not used more frequently?)<p>
<li> In the case of pensioners, who are cashflow poor but asset rich. Offer them a per week payment eg $50 PW in exchange for an option to purchase their property within in the next 3~7 years at a specified dollar amount eg $600,000.In this case what are the pension ramifications?<p>
<li> In the case of people looking for a chunk of cash now. A standard option of xx,xxx now for the option to purchase in 3~7 years at eg. $600,000<p>
<li> In cases if the property has a small mortgage, can an option be used? Could marketing like "I will pay off your mortgage! - if you give me the option to by at todays market rate in 7 years" work (for cash poor with with small mortgages on large equity holdings). I suppose this is just a lease option in a different perspective.<p>
</ol>
I suppose I am just thinking since my thoughts will not be original ideas, thus why are such strategies being used more frequently?
The positive aspects for me are:
<ol>
<li> I know now what it is going to cost me in the future! I can budget! I dont need to worry about interest rates rises as much.
<li> I can control a much much larger value of IP with my cash. Which is the idea behind "hold for growth".
<li> If it all goes south, I just walk from the option at the end of the agreed period.
<hr width="50%">
</ol>
<p>
<ul>
<li> Unless you change how you are, you'll always have what you've got.
<li>
To have more than you've got, become more than you are.
</ul>
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