We just cannot stop!!!!

From: Marina .

Hi all,

Hands up to those of you who are addicted to property. I know I am, and so is my husband.

We started our journey 2 and a half years ago, and wow what are journey. We cannot stop.
We thought we had purchased our last property, due to the fact that we were close to a million in debt but nope, we had to do it again.
We are addicted!!!!!!!!!!

A couple of months ago we had a bit of fear in us about purchasing another property, but after reading some more inspirational books, and attending the STeve Navra seminar (Thanks so much for the motivation and inspiration) we decided YES WE CAN DO IT AGAIN.

When you can see the growth working, and the compound effect working, and you find you have the serviceability and the finance structure is correct its hard to stop.

Every waking moment is spent learning, reading, digesting and planning.
Don't get me wrong, we do have a life outside property, but it has become a hobby that has so motivated us, inspired us and made us truly happier within ourselves.
It is what drives us, knowing that in the not too distant future we will truly be out of the rat race.

We got out the $15 calculator just the other night and played with the figures of what we have and what we are planning, and the future capital growth, and I tell you what the figures looked scary.
It was hard to believe that we achieved so much in such little time, and when I saw the compounding effect on the calculator it was unbelievable seeing the 7 digits.

We have totally changed our lives around. I mean we are not truly free as such just yet but on the way.

Remember it is not how much you earn, but how you invest your money.

I don't post as much as I used to, but I just want to say thankyou to this forum for all the wonderful information it has given me over the last 2 and a half years.

I have learnt so much from all the wonderful and helpful people on this forum, especially Rolf, Dale, TW. Every post has been a help.
Thankyou to Jan and Ian for such a wonderful site.

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Reply: 1
From: Simon and Julie M

Hi Marina
I agree this forum is great.
I believe investing in real estate has many facets and equally styles and formulas for success.
We have learned through experience that there is an ongoing requirement for balance in ones portfolio with sufficient financial safety nets and escape plans firmly established.
I also believe that it is quality (not just house but also land) not quantity that remains an import element in property investing. Also market demand for ones product helps to keep the boat afloat.
My wife and I share your enthusiasm for property and wish you all the best in the future.
Kind regards
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Reply: 1.1
From: J Parker

I have to agree with you, Marina! I (along with my husband) share your enthusiasm and look forward to the next buy, whether it be a rundown place ripe for renovation or a little house that's going to give us a positive return. Property investment is very exciting and it has been wonderful over the past couple of years to watch that capital growth. Whether or not it can be sustained is another story!

Keep enjoying yourself, as I have, and don't forget to share your successes here at the forum- we'd love to hear them!
Cheers, Jacque :)
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Reply: 2
From: Chris G

>Remember it is not how much
>you earn, but how you invest
>your money.

Hi peoples,

I 100% agree with Marina's statement regarding wealth creation but would like to add a little something to the end....

"Remember it is not how much you earn, but how you invest your money and how much you contribute to society with the wealth that you create"

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Reply: 2.1
From: Simon and Julie M

Hi Chris
Yep that's 100% what it is all about for me too.
Kind regards
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Reply: 2.1.1
From: Anonymous

Marina, congratulations. My uncle was in this same position 13 years ago, he couldn't stop buying and his favourite saying back then was "It's not my money", referring to his loans. 10 years ago, he filed for bankruptcy and today is rebuilding his future. He lost the lot. How people forget......(How about asking a few of the old timers on this site). His advise to people today is "Don't be greedy and reach out only as far as your hands can touch". I don't want to be negative, but unfortunately we need to pinch ourselves once in a while. For example, last week, the papers and the news went on and on about how real estate in general is too expensive and that prices will drop 22% over the next 3 years. I personally believe this, I am already hearing stories of people selling up because they can't rent their properties and keep up payments. So, remember, don't always believe what the calculator tells you. Today may be rosy, but tomorrow? By all means, if you can sustain interest rate hikes, make payments without your properties being rented, lose job, etc... go for it.

PS. It sounds as if you are borrowing as much as you can, DON'T!


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From: Duncan M

>10 years ago,
>he filed for bankruptcy and
>today is rebuilding his
>future. He lost the lot. How
>people forget......(How about
>asking a few of the old timers
>on this site).

Nice sideline.. I'd be interested in hearing from others as well..

I buy (and build) pleasant 3-4bed/1-2BR homes in ordinary Adelaide suburbs. We keep our LVR below 80% and we're cashflow positive up to rates of about 8.72%. We have borrowings well over $1M. Our vacancy rate is almost non-existent, when a Tenant vacates (which is rare) we generally raise the rents and have a new Tenant lined up with the first advertisement we place. We have life, critical illness and income protection insurance. On the properties we have Landlord Insurance.

I also cannot stop :) Should I listen to the doomsayers?, who cares if the values drop (which I frankly cant see in my ordinary Adelaide suburbs). I certainly cant forsee the rental income dropping given the current tight availability of properties, especially if you're prepared to accept pets etc..

It seems everyone is prepared to say "All booms are followed by a bust". But why are so many people blinkered to the fact that all busts are followed by a boom?

Surely our aim should be to acquire as many properties as a we safely can whilst the sun is shining, the banks are lending and the Tenants are renting.

I feel that if you do the following:

- Buy nice homes in ordinary suburbs.
- Aggressively manage your vacancies.
- Analyse your cashflow.
- Insure your risks.
- Be nice to your Tenants.
- Have a good Accountant.
- Keep fastidious financial records.
- Develop great personal money skills. (budgets etc)
- Know your personal suburbs back to front
- Protect your assets with Trusts
- Have a backup plan (company super)

That really your risk is quite minimal.

Countering that risk is the enormous capital gain you'll be exposing yourself to when the next cycle comes around. Even without a boom you'll be making enormous gains in equity from inflation alone.

Certainly if rates go to 17% it would be hard, the Wife would have to go back to work, maybe a property or two might be lost, but by hook or by crook, we'd hang on to as many as possible in the certain knowledge that we'll be paid back in time. I guess the thing that lets me sleep a little easier at night is that 17% isn't going to happen any time soon, our rents will continue to rise over the next few years, perhaps by the time (if ever) we had rates that high again our positive cashflow properties will have a greater positive cashflow giving us a much better chance of hanging onto them.

I've only been doing this for 4 years, and have never experienced high interest rates, so I'd love to hear from the more experienced people who perhaps invested from the late 80's thru to now.


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From: Les .

Good points, Duncan,

If you've covered the proverbial, why be daunted by doomsayers.

I'd be prepared to bet that Anon's uncle was operating in a different environment (Sydney, perhaps?) where, back in the early 90's, the rents got to a massive 80% of AWOTE. I'd also be prepared to bet this DIDN'T happen in Brisbane, Adelaide, Perth, etc.

With such a huge chunk of the average wage going to rent, prices HAD to collapse. But it comes back to knowing the risks, planning your exit strategies, and moving on when it is sensible to do so.

Anon, I do thank you for bringing this to the fore. It IS easy to forget the basics, so having a negative slant on things is not necessarily bad, in my opinion. It does help to "bring us back down to earth" (temporarily, perhaps) as we question where WE are situated in the scheme of things.

And, Duncan, I'm with you when you say 17% is not likely to come around any time soon - it's a great time at the moment to continue to grow, if the stats fit your situation.



- "Eschew Obfuscation" - ;^)
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From: Mark Laszczuk

I don't think Anon's post was meant to be negative, nor a doomsayer's message. I think it was more of a "Hey, just be careful, there are a lot of traps out there.' type message, rather than a 'You are destined to fail the way you are going' thing. Am I correct in this assumption, Anon?

'no hat, some cattle'
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From: Joanna K

On 9/23/02 9:55:00 AM, Duncan M wrote:
>I've only been doing this for
>4 years, and have never
>experienced high interest
>rates, so I'd love to hear
>from the more experienced
>people who perhaps invested
>from the late 80's thru to

I was too young to be investing when interest rates were 17%, but I remember what my father went through during that period. If my memory serves me correctly, his rates went up to about 22%.

Dad, at the time had 3 properties all mortgaged and was building 4 more, had 6 dependant kids, and a dependant wife, so on 1 modest income, he suffered terribly. But he worked like a trojan (did private contracting work on the side), never home at all (which I guess was the price he had to pay), and over his dead body was anything going to happen to his secure future.

He made it unscathed (except for an expensive and messy divorce), and now he's comfortably retired at 50 years old on an annual income of $100k, and absolutely loving it.

Dad's approach has always been quite conservative, P & I loans, minimum payments, self manage, do your own repairs (he's a tradesman so I guess it was easier for him to do that), and watch the spending.

Kind regards

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From: Always Learning

Taking action means taking a risk, this has always been my dilemma:
By failing to plan, you are planning to fail.

By taking action you are exposing yourself to risk and potential failure.

I think of my mother who said "Dont invest, if you invest you could loose it all, your grandfather had many properties but lost them all during the great depression...bla bla bla". My mother now lives on a pension and worries about the costs of making phone calls to her children! My father-in-law also is a huge worrier about losing things and possessions, thus avoiding risk and debt, he is over 60 and cannot retire as he cannot afford to do so...he will have to work until he is 70. It is my observation that people who are obsessed with the loss of possessions are doomed to live a limited life, dependant on a unclear and uncertain job and thereafter on a miserly pension.


That being said, I find fear and uncertainty bubbling up inside me at the thought of making my next investment in the current market. When I wrote down all the things that could reasonably go wrong, the worst is that I could loose one of my existing properties. Well that isn't so bad. Naturally a number of multiple disasters hitting me could be a problem: loose my job, interest rates rise to 17%, prices fall 40%, all my tenants move out then the bank calls in the LOC, the day after I commit to a development.


<hr width="50%" color="pink">


<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.

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From: Property Investor

Hi Marina,

Have not spoken to you and hubbie for a while, however CONGRATULATIONS!!!!!
It seems you guys have taken Steve's advice and moved on - Well done!!!!
I'm very happy for you two and hopefully we can catch up again sometime.

In regards to the comments made by Anon - you will find that Marina's structure will very sound taking into consideration many of the pitfalls found in investing in property. You will probably also find that there is room in their budget to allow them to still service their loans without too much complications when times are not so good.

Knowing Marina - she is a mathematical conservative.

Good luck guys!!!

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From: Marina .

Hi anonymous and all,

Thankyou for your concern and warning. We are all here to learn, so I would be grateful if you could explain to us what some of the factors were that contributed to your Uncles downfall.

Also I would be interested to know why the properties you mentioned could not be leased. This obviously contributed to a sale which left a bad impression on the owners and yourself.
Your feedback would be much appreciated.

I remember when we first started out we had a lot of negativity thrust upon us. Thank goodness we did not listen.
We knew if we were to get ahead in life, we had to learn to love Good Debt.

We started buying when interest rates were 8%. Yes it was scary, and they were negatively geared , but since then they have grown in value and the average yield is about 6%.
I have been able to fix the rate for 3 years at 5.99% and yes this does make me sleep better at night.

Our LVR is below 80%. We said to ourselves under no circumstances are we going to pay mortgage insurance and have an LVR of over 80%.

We get huge taxation refunds which cover the shortfalls on the property. I am taking advantage of the negative gearing laws and hence we only pay 2% tax.

We keep excellent records of our finances, budget using quicken, our tax returns are spot on, and we are constantly monitoring our LVR and DSR and doing our figure work.

If your are going to be a serious property investor, you need to learn from people who have done it, read lots of books, and don't be afraid to ask for help or advice. I am constantly learning and asking for advice.

Anonymous, I am sorry but everything is rosy, contrary to what you are saying.
If prices drop, as long as I don't sell I will not realise a loss.
I have purchased well located, new, unique properties, that have never been vacant. If I cannot let it out I will drop the rent, no problem.. The capital growth has been fantastic, and things are going well.

We are covered by income protection, life, disability, trauma, landlord insurance.

I have a great interest rate for the next 3 years.

The biggest risk to us is not to keep investing.

I have alleviated all the major risks i feel and yes we can sleep at night.
I truly cannot see us losing our properties or going bankrupt.

Also please do not assume people with multiple properties are greedy. This is so far from the truth.

Anyway thanks for posting. I do appreciate your feedback and look forward to another post from you.

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From: Anonymous


My post was in no way meant to be negative and most definitely not personal. It was meant to make people aware of the pitfalls, especially newbies. It looks as if you have your finances well under control and are a very "experienced" investor. You probably make up about 20% of this forum in terms of the experienced, all others, beginners and still learning.

My point is that people will almost buy anything these days at any price, just to become investors and hope to make a quick buck.

My biggest point really - Do you think you could make the same capital gains "today"? Do you honestly believe property will double in the next 4 years like it did the last 4? Therefore, even if you have done well in the past(everyone has in the last 5 years), it doesn't mean you will do so well in the next 5 years(I hope you do). Get my point? ie. If I bought my first investment property "today", where would I be "tomorrow"?

The last 5 years have been extraordinary in terms of performance, everyone did well, without even trying. They just sat back and watched their properties double\triple in price and just bought more properties because of the equity build up. Try doing that in the next 5 years? If you can, you should start up your own seminars.

Hope I didn't offend anyone.

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From: Jakk Bass - The SLUM LORD

G'Day all,

Tis been a while since I last posted but I felt that this thread needed comment from the Slum Lord himself.

Anon talks about his uncle losing all 13 years ago, well I know exactly how he must have felt. 1989 - 1990 were disastrous years for me also.

In a period of less than 12 months I too nearly lost it all. Net Assets of $650,000 reduced to less than $100,000.

As Joanna posted, interest rates at an all time high, I was personally paying 21.25% on construction development finance.
At that rate, it doesn't take long to eat into any profits that you might have forecasted.

But on a brighter note, one lives and learns and my motto nowadays is "Education Costs", and it cost me plenty back then.

In 1993 I stuck my big toe back in the water to test the temperature and it wasn't too cold, as the song says, I was on the road again.

9 years later and with a net worth approaching $2 million, I have found that the road travelled this time around has been a lot less bumpy, the lessons learnt back then will last a lifetime.

I too now "Cannot Stop", the game seems easier than ever before and playing it is more fun.
Is there a chance of losing it all again? Of course there is although I feel that this time I have better quality safety nets in place.

Do I sleep well at nights? you betcha, I also sleep well in the mornings and sometimes in the afternoons as well.

Do I worry about rising interest rates, deflation of property values and increasing vacancy rates? Maybe a little bit but not enough to make me change my game plan.

The Parato principle is that the top 20% in any profession or occupation are making 80% of the money.

I call myself a "Property Investor" and as such I am continually trying to be the best that I can be in my chosen profession with the ultimate aim of positioning myself in the top 20%.

Will I ever get there? who knows? but one thing I do know, and that is I will never get there unless I keep trying.
Therefore, I too "CANNOT STOP"

regards to all

Jakk Bass the Slum Lord
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From: Marina .

On 9/24/02 10:47:00 PM, Anonymous wrote:
>My point is that people will
>almost buy anything these days
>at any price, just to become
>investors and hope to make a
>quick buck.

Hi anonymous,

I agree with this point. I know someone who purchased a 7 square commercial office for over 200K in Melbourne CBD amongst hundreds of the same, because it had a 3 year Rental guarantee. It has now been vacant for 4 months. Luckily for them it is under rental guarantee. But what worries me in 2 years time is what happens when the guarantee runs out. Commercial in itself is risky, and more likely than not the rental guarantee was built into the purchase price.
Capital growth could be minimal and I would not be surprised if the value will be less than the purchase price.
This to me is a very risky purchase.

>My biggest point really - Do
>you think you could make the
>same capital gains "today"?

I honestly agree with this point. We have been looking for months for another property, and all my returns would be like 4% rental. The property of prices is unbelievably high.
Their was no room for discounts or negotiation, realestate agents were too busy for us, etc.
It certainly is a different market to early 2000.

Thats why our latest purchase had to be well planned and researched.

>Do you honestly believe
>property will double in the
>next 4 years like it did the
>last 4? Therefore, even if
>you have done well in the
>past(everyone has in the last
>5 years), it doesn't mean you
>will do so well in the next 5
>years(I hope you do). Get my
>point? ie. If I bought my
>first investment property
>"today", where would I be

Had I started out today, I admit it would be so much harder.

>The last 5 years have been
>extraordinary in terms of
>performance, everyone did
>well, without even trying.
>They just sat back and watched
>their properties double\triple
>in price and just bought more
>properties because of the
>equity build up. Try doing
>that in the next 5 years? If
>you can, you should start up
>your own seminars.

I don't think so about the seminar business. I guess in a way I was lucky I entered the market when I did.
>Hope I didn't offend anyone.

Just about the greedy part, but thats O.k.

Are you able to answer my 2 questions from my last post.

Its a Beautiful Life

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From: Gee Jay

I have enjoyed along with my wife getting wet up to the knees in the property movement. We have two new townhouses that are currently tenanted and another older property in partnership with my brother.
Getting the finance seems to me to be the problem. The trouble is with all the deductions for depreciation my taxable income level comes way down and the bank must wonder what we live on.
Still I got the name of a ripper finance broker locally so we'll make an appointment and see what gives.
But it's great to read the above posts to see that people are doin well.
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