Is it possible to buy at 70% of market value?

[Bob Kane]

Oh and Orion you are wasting your time buddy convincing these guys about market value. They just like to debate. Any serious investor knows you can buy under market and sell the next day at market and make money. It just takes being well enough connected and making enough offers.

The debate is around market value which means a willing seller and willing buyer at an arm's length....
This is what happens in most NZ transactions.
Invester is talking about the US distressed market which isn't a willing seller situation so the market value definition doesn't apply.
Waste of time debating it but a handful of PT's have a lot of free time...

[Damap]

No Spacey I just don't care. I have bought and sold many homes and many I have bought and sold at a profit in the same week. I don't need to debate market value I know the answer from my own experience. Graeme is the same as are many other PTers.....

[McDuck]

Oh and Orion you are wasting your time buddy convincing these guys about market value. They just like to debate. Any serious investor knows you can buy under market and sell the next day at market and make money. It just takes being well enough connected and making enough offers.

Yes I agree with you. In the general sense of your question, deals can be found or induced in any market.

In the NZ Auckland market at the moment, it's the Agent's that restrict that opportunity.

In order to get a listing, Agents will promise the seller the highest price limit ...possibly even higher than they really believe they will get.
Often new listings are discussed at agency meetings, so the chances of a new agent getting it wrong are greatly reduced.

That said, house buying isn't a totally rational process, and for that reason price is variable.
The non standard nature of houses also introduces wiggle room.

Agents often will list a house located in a poor area as being in the adjoining rich area. They cleverly are trying to swap the marketplace.

In fact, merchants of old made the modern world by taking a goods from one market to another. Silk from China, where it was abundant, to England, where it was considered high tech.

Our current companies take abundant labour from china and sell it in the tighter New Zealand market, in the form of cheap hand held computers etc.

It's that labour loop that is coming back to bid up the price of some house auctions. Come to think of it, it's possible that the Woodenheads know this and keep taking that opting as a last resort.

[elguapo]

Bankruptcy is a wealth creation strategy in the USA. Thats why Trump and Kiyosaki and all these guys file. You never lose your assets if you do it right you just lose the debt!

You've drunk deeply from the coolaid if you believe that one. Kiyosaki's company filled for bankruptcy because it lost a law suit that resulted in damages that exceed it's total value. There wasn't a scrap of wealth created, he took a bath. If you argued it was a wealth protection strategy, then I would agree with that.

[elguapo]

Oh and Orion you are wasting your time buddy convincing these guys about market value. They just like to debate. Any serious investor knows you can buy under market and sell the next day at market and make money. It just takes being well enough connected and making enough offers.

You can buy under market, I just happen to think it's a relatively rare outside very specific situations. It also generally involves some kind of defect with the property that impacts it's marketability. If your operating in a very thin market like small, rural towns then there will be a lot more scope for it simply because the buy side market can be non-existent for very long periods of time at any price. If you are operating in that kind of market, I think it's very unlikely you can buy a property 'below market' and then sell it for significantly more a day later.

Just to test this, has anyone bought a property for "20% below market" in Auckland in the last 4-5 years?

[elguapo]

The debate is around market value which means a willing seller and willing buyer at an arm's length....
This is what happens in most NZ transactions.
Invester is talking about the US distressed market which isn't a willing seller situation so the market value definition doesn't apply.
Waste of time debating it but a handful of PT's have a lot of free time...

Where would the forum be with a lot of free time!

[Damap]

You are quite wrong El, no one takes a bath unless they are an idiot. And Kiyosaki is no idiot. Having been involved in their systems I can assure you only the impoverished and uneducated get punished.

[Leftette]

Congrats, Damap. Pretentious and condescending in one sentence.

[elguapo]

You are quite wrong El, no one takes a bath unless they are an idiot. And Kiyosaki is no idiot. Having been involved in their systems I can assure you only the impoverished and uneducated get punished.

Idiot or not, I have no doubt Kyosaki is more knowledgeable on asset protection and lawsuits than he is on property investment. Pushing the impoverished and uneducated rather sounds like Kyosaki's business model......

[Damap]

Both are relevant but if you can use bankruptcy to reduce your debt by 75% and keep the asset is a wealth CREATION strategy not protection.
I wasn't even trying lefty it's just a fact. The rich go bankrupt and get richer. The poor go bankrupt to get rid of a $1500 debt because they already have nothing.

[elguapo]

Both are relevant but if you can use bankruptcy to reduce your debt by 75% and keep the asset is a wealth CREATION strategy not protection.
I wasn't even trying lefty it's just a fact. The rich go bankrupt and get richer. The poor go bankrupt to get rid of a $1500 debt because they already have nothing.

I can see you in the get rich quick publishing game, "Wealth through Bankruptcy!", or "Bankruptcy Riches!" perhaps?

I hope the IRS don't buy a copy, they might think that when they bankrupted Robert Allen, it was making him richer rather than getting all the taxes he owed....

In some ways you are correct that bankruptcy is a wealth creation strategy. If you owe millions and get returned to nothing, then that is a net improvement in your wealth. I'm not sure too many will see it that way though.

[Damap]

As I already said you can do a course on it in the USA. Clearly you have no clue how it works over there. It is a great way for dishonest investors to make money, LOTS of money.
And thousands and thousands of them do it every year.

[Davo36]

Got a link to those courses Damap?

"Rich-then-Bankrupt-then-Really-Rich-Dad, Poor Dad"

I'm thinking you mean these people walk away from their debts but don't actually go bankrupt. If they did, surely no one would lend to them again?

[skid]

Well firstly very few of them do go bankrupt. There are not many investors in the USA % wise and they do pretty well. But the real answer, and it is scary, is that bankruptcy is a wealth creation strategy in the USA. I sh*t you not.
2 examples from friends of mine.
Investor with 26 homes leveraged to the hilt. Files chapter (whatever the correct number is). Filing stops the bank from foreclosing and investor keeps collecting rents and stops paying all mortgages.
FOUR YEARS later finally gets into bankruptcy court. Judge orders bank to reduce interest % and write of enough of the mortgages and all arrears to make sure homes are cash positive. Investor keeps all houses now has 2% loans and low gearing. (This is a true story)

2. Developer goes under owing bank north of a hundred mil.
Bank can;t move the subdivision so after 2 years contacts developer and asks if he would take the land back as they can't sell it. They sell it to him for TWO CENTS on the dollar AND 100% finance him back into it.

Bankruptcy is a wealth creation strategy in the USA. Thats why Trump and Kiyosaki and all these guys file. You never lose your assets if you do it right you just lose the debt!

And people wonder how they had the financial meltdown..

[elguapo]

It is a great way for dishonest investors to make money, LOTS of money.

2 examples from friends of mine.

I'll keep that in mind......