what business would you invest on with budget upto $1M?

[Sunfish]

Well Sunfish, thanks!

Though not sure if is it applicable for an aussie to operate a pub in Philipines?

Why not? My mate does and is as happy as a pig in mud. The Southern Cross in Manila.

www.thesoutherncrosshotelmanila.com

But I do appologise, I was making a political statement but I wasn't joking. If Rudd is re-elected I'm heading there or across the ditch. This is no longer a land fit for heroes as my Dad thought. We will follow Greece and sink into the mire, weighed down by a fat, lazy public service.

 

[ryan_mel]

I guess the question to ask is is it your i mill or "opm"if you intend to drop i mil into a business and think you will only nedd 14 hours a weeks
and it will run itself then i would think again..willair..

Sort of "yes". basically I'd like to manage and running a business without get self all-the-time involved.

Thanks

Ryan

 

[ryan_mel]

ryan-mel,

I am considering something similar with similar numbers

you would need to include interest on the 20k reno cost (possibly calculating interest on 10k for 3 months assuming it was spent straight-line over time)

You would need to factor in tax...CGT taxable (without the concession of 50% for holding for 12 months or more).

You would need to factor in usual holding costs such as council rates, body corporate levies for 3 months and cost of any insurance taken out.

Also with the loan whether lmi had been paid (and to what extent you could get a refund of lmi).

Got a question about CGT, I remember some threads mentioned before, if we trade property very frequently, then instead of paying CGT, but just pay the 30% business profit tax. Correct me please if I am wrong. Maybe James can help on this as well.

 

[JamesGG]

Maybe James can help on this as well.

I wouldn't usually, on this forum, but you've got the right idea. If you're trading properties as a business then that enterprise may be taxed as one, as well. The tax rate is per the appropriate tax bracket of your trading structure and the 50% discount may not apply even if you hold for over twelve months.

 

[ryan_mel]

Why not? My mate does and is as happy as a pig in mud. The Southern Cross in Manila.

www.thesoutherncrosshotelmanila.com

But I do appologise, I was making a political statement but I wasn't joking. If Rudd is re-elected I'm heading there or across the ditch. This is no longer a land fit for heroes as my Dad thought. We will follow Greece and sink into the mire, weighed down by a fat, lazy public service.

Some services are sometimes too good to be .......?

But hopefully, don't sink ......

Still love this land, especially Mel....

 

[willair]

Sort of "yes". basically I'd like to manage and running a business without get self all-the-time involved.

Thanks

Ryan

Then all it comes back to is risk,and your understanding of it,shorting the banks was good up too a few days ago,imho..willair..

 

[Nathan]

According to the above description, I got following figures:

Buying Cost: $250K + $10K (stamp duty) + $2K (other cost) + $4.4K (interest @ 7% for 3 months) + $6K (agent selling commission) = $272.4K

and also based on every "one dollar spend make two dollar",
Then the selling price shall be: $352.4K on 40K reno cost

or if we can achieve: "one dollar spend make three dollar"
Then the selling price shall be: $332.4K on 20K reno cost

Are they achievable? Where and which suburbs under current market condition?

Only got a quick few mins for this net time.

a) focus on the deal not the area. the numbers are why you invest not the asethics.

b) forget the formulas like 1 for 2 etc... You need to find say a deal for $230-240k which with a kitchen/paint/carpet for under $15k max and have a resale of around $300-310k.

c) dont buy or iinvest in any business until you have a full understanding of your worst cases and exit stratergy.

Hope this gives you more clairty.

Nath.

 

[Bigtone]

why not just hire nathan to run your property reno business as a contractor, he does all the work, u fund it .

u have have the $$$ he has the knowledge, perfect match.

 

[ryan_mel]

Only got a quick few mins for this net time.

a) focus on the deal not the area. the numbers are why you invest not the asethics.

b) forget the formulas like 1 for 2 etc... You need to find say a deal for $230-240k which with a kitchen/paint/carpet for under $15k max and have a resale of around $300-310k.

c) dont buy or iinvest in any business until you have a full understanding of your worst cases and exit stratergy.

Hope this gives you more clairty.

Nath.

Nathan, it does. Thanks very much!

I totally agree your comments "dont buy or iinvest in any business until you have a full understanding of your worst cases and exit stratergy". It's especially so true under the current a little bit cool down market, and uncertainty of the future about the property market. So it's very important to get self fully understand the business.

I did one simple reno before (replaced kitchen and bath room, painting), but definitely I need start from small to grab more experiences to get the necessary expertise to move to the next level.

Once again, thanks for your kind sharing.

 

[ryan_mel]

why not just hire nathan to run your property reno business as a contractor, he does all the work, u fund it .

u have have the $$$ he has the knowledge, perfect match.

I like your suggestion providing I could afford Nathan's expertise in reno within 40K profit margin from a reno.

 

[Bigtone]

Get 4 going at any one time and thats $52k per month.

Or over $600,000pa on a $1,000,000 investment? 60% return....

You stated you wanted 20% return, Nathan says he can do 60%. Surely a deal can be done.

ie, Nathan gets wage for managing projects which is part of the cost, first 20% profit goes to you, after that you get 50/50, both win big time if it works.

On say 50% profit which allows for Nathan's wage then you would get 35% and Nathan 15% sounds sweet to me for both parties.

 

[paul2299]

Hi Forumates!

There is one question staying there for a while recently. I’m wondering what sort of businesses can I/we (I guess there maybe a lot of other forumates having the same question as well) invest under the following backgrounds?

1. Purpose: To get extra income, improve cash flow situation, and improve loan service capability, and to expand property investment portfolio

2. Budget for investing a new business: up to $1M

3. Having a fulltime job already, and for whatever reasons, we still want to keep the routine everyday job (9am-5pm). But can extract 1-2 hours per day to look after the business.

4. Expect return 20%/pa plus after all cost

Anything available? And what special attention shall we pay to do that business?

Any ideas or suggestions would be mostly appreciated?

This has disaster written all over it. If you are going to buy a business expect to be actively involved. That may not go well with a day job. If you want quite passive income then invest it and get a much lower return. High returns and minimal time spent do not go together.

If the only reason for buying that business it to try and increase cash for other areas it sounds like a huge mistake. Successful business generally do well because the people running thme are passionate about the area.

 

[ryan_mel]

If the only reason for buying that business it to try and increase cash for other areas it sounds like a huge mistake. Successful business generally do well because the people running thme are passionate about the area.

Thanks Paul!!!

Your comment triggers my deeper thoughts. I start to ask myself why shall I go to another business instead of focusing on one? And do I have to spread my focus to something else?

Valuable point, paul!

 

[ryan_mel]

You stated you wanted 20% return, Nathan says he can do 60%. Surely a deal can be done.

ie, Nathan gets wage for managing projects which is part of the cost, first 20% profit goes to you, after that you get 50/50, both win big time if it works.

On say 50% profit which allows for Nathan's wage then you would get 35% and Nathan 15% sounds sweet to me for both parties.

Before considering Paul's advice completely, assume doing reno is still close business as what I am mainly doing now. So I think if Nathan is happy, I'd more than happy to try

 

[Bigtone]

Before considering Paul's advice completely, assume doing reno is still close business as what I am mainly doing now. So I think if Nathan is happy, I'd more than happy to try

There is actually a big business in that if it worked, could run syndicate, people invest and get after a year get a monthly annuity that can be used to qualify for and service debt.

Basically using active investment to help hold the buy more passive investments .

As long as the process of buying cheap stuff and quick reno can be done on a larger scale then it would work a treat. Business would get a management or success fee depending on return on investment. Investors get a monthly annuity and Nathan gets a stack of work and a big day day if he delivers the goods.

 

[bene313]

I agree with Paul.

If you're working f/t, running a business IMO will be difficult as that tends to be f/t too. I would put the money into someone elses business(es), someone who had the expertise, motivation and time to make the business work. ie. I'd put the money somewhere more passive, unless you're willing to be active (ie. quit the job and go for it).

Unlisted shares - Seed capital was mentioned. There is some risk here. You'd need the contacts to put you in front of the capital seekers.

Listed shares. All risk/return profiles available. Some will match your 20% figure.

Comm property. You should be able to get 10% yield with 3% growth with a syndicate, or you could look on your own but 1m might not be enough for the high yielders.

 

[grossreal]

first one would be a pub here not the philipines
with 2 mil equity (1 mil cash is a bit short but could be done) you can buy a aust pub and alot of cbds at the moment
there is a few pays on at the moment and either cash or equity can be used.
2nd short term cash if spread is ok at the moment 3 to 5 % per month
3rd deposits for property they gives 22% per annum when in a structure security is the deposit on a property so you are not funding the property you are funding the deposit like a deposit bond except its using cash.
4 blown bonds
must be a min of 1 mil where you buy and refi bonds not used by most in this market they will get you to 20% but you have to alot of work and bonds to get there
5 funding container products from fob to port of call you fund the container to dock this is high risk if you don't know the importer or the product but otherwise is a very health margin done in 4 month blocks.
6 funding the purchase of a property for cash and the owner refi straight after purchasing thru a traditional bank/funder the purchase can be lower then the refi if done correctly ahnd depending on how its paid and structured
thats 6 if I get time will give you another six if you wish
the question for me is not how do you get 20% on your money
the question is have you got the 1 mil because if you have the 1 mil then it depends what you see as risk and how you secure that risk
these question are fine to ask and these are some examples of what you can get if you have the funds
I hope you well

 

[D.T.]

2 points

1) Is the 1mil cash or available servicability? If cash, why not hide 400k in a safety buffer incase cataclysm comes and use the other 600k for 3 x 200k deposits on 3 x 1mil houses. Spruce them up a bit if needbe, but even sitting and waiting for a while should get you more than 20% especially if rezoning occurs.

2) Have you heard of the adage "Good returns, Low Risk, Minimal time spent... choose any 2"

 

[Bigtone]

Buy/reno/resll a property and make $40k clear.

Thats $40k and for project of 3 months. so thefore $13k per month for a $250k purchase.

Get 4 going at any one time and thats $52k per month.

Or over $600,000pa on a $1,000,000 investment? 60% return....

Hi Nathan,

Do u think u could get those type of returns if u had $2m to spend $4m? $6m? $10m? I mean on a yearly basis.

How scaleable do u think it is? How many deals could u find and manage in a one year period? Would scarcity mean you would need to buy properties with lower return on investment just to invest the money? If so at what $$ amount.

Cheers

BT

 

[Francine]

I have a few questions

if i were to buy a pub locally.

1do you think its around the 2 million mark

2and what range of income might it return me

3and how do i find ways to check its a good business

4and what are the websites to find businesses to purchase

5and how would i learn how to improve the business

6I know there are people who consult and ive advice of how to improe businesses . how do i find them what are they called thanks.

7if i wanted to get out of the business how do i plan for an escape

8or if i went into partnership and wanted to plan incase of dissolving the partnership how does one plan for these things

thanks.