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Have any of you out there heard of Blue Chip?
I had a prospective tenant (or claiming to be at least) view one of my properties recently who wasted little time before breaking into a sales pitch. This was soon followed by an invitation to attend one of their seminars.
Some of his claims seemed dangerously too good to be true and we all know the saying if it sounds too good....
Some of these claims contradicted what I have heard in my experience thus far in property. As I am not an accountant (Nor is he) I was not prepared to swear black and white that I was right and he was wrong (even though I bet I could quite happily explain my perspective to an IRD Auditor with fewer worries than he). It seemed to be a fruitless effort.
This is how things went.
He claimed, "We get $25,000 +CF per property p.a."
Due to the fact that he was talking about using existing equity as security, I would assume that they are talking 100% finance.
For an average new home in Auckland, I have my doubts that these numbers are accurate. But hey, I have an open mind and continued to listen.
Who knows they may have the best kept secret in NZ!
Both Kieran and Phill could be out of clients tomorrow!
I asked if these figures were due to the high amount of depreciation on the chattels in these new homes and he said yes. I queried that this would deminish rapidly over the first few years and be all but gone after 9 or 10 yrs. He said thats why we have two plans. "Sell up with in the first three years for maximum capital growth or hold long term for maximum cash flow". By my estimates it would work the other way around if anything. The cashflow would dry up rapidly as the chatels values diminish. And, provided that the properties are brought in growth areas, the long term capital growth would be inevitable.
Properties they sell are on sold to tenants but the investor gets to claim depreciation but pay no costs due to the Commercial leases they use.
Hmmmm sounds to me like anyone buying the property to on sell straight away would be hard pressed to explain to IRD that their intent was to purchase long term income producing property.
From what I have found so far they appear to be a group (11 or so) of companies registered with the Blue Chip name.
The Director of these companies is listed as being John LOWTHER.
Does anyone have anymore info regarding this group?
Regards,
Marcus.
(This group sounds similar to another operating last year called Auckland Property Trust)
I had a prospective tenant (or claiming to be at least) view one of my properties recently who wasted little time before breaking into a sales pitch. This was soon followed by an invitation to attend one of their seminars.
Some of his claims seemed dangerously too good to be true and we all know the saying if it sounds too good....
Some of these claims contradicted what I have heard in my experience thus far in property. As I am not an accountant (Nor is he) I was not prepared to swear black and white that I was right and he was wrong (even though I bet I could quite happily explain my perspective to an IRD Auditor with fewer worries than he). It seemed to be a fruitless effort.
This is how things went.
He claimed, "We get $25,000 +CF per property p.a."
Due to the fact that he was talking about using existing equity as security, I would assume that they are talking 100% finance.
For an average new home in Auckland, I have my doubts that these numbers are accurate. But hey, I have an open mind and continued to listen.
Who knows they may have the best kept secret in NZ!
Both Kieran and Phill could be out of clients tomorrow!
I asked if these figures were due to the high amount of depreciation on the chattels in these new homes and he said yes. I queried that this would deminish rapidly over the first few years and be all but gone after 9 or 10 yrs. He said thats why we have two plans. "Sell up with in the first three years for maximum capital growth or hold long term for maximum cash flow". By my estimates it would work the other way around if anything. The cashflow would dry up rapidly as the chatels values diminish. And, provided that the properties are brought in growth areas, the long term capital growth would be inevitable.
Properties they sell are on sold to tenants but the investor gets to claim depreciation but pay no costs due to the Commercial leases they use.
Hmmmm sounds to me like anyone buying the property to on sell straight away would be hard pressed to explain to IRD that their intent was to purchase long term income producing property.
From what I have found so far they appear to be a group (11 or so) of companies registered with the Blue Chip name.
The Director of these companies is listed as being John LOWTHER.
Does anyone have anymore info regarding this group?
Regards,
Marcus.
(This group sounds similar to another operating last year called Auckland Property Trust)
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