Next Steps Help - Moving from 6 to 50+ properties .... Advise in Wellington

[Eljay1]

Hi Gary, I only mentioned it because your strategy is to buy in Auckland and that is definitely fine. However, buying in central Auckland at 4% yield wouldn't be a strategy that everyone could follow for obvious reasons. I was just raising the fact that for the majority of those starting today there would surely need to be a different strategy.

Personally I have nine properties, none are in Auckland. I've made significant gains and could retire now if I wanted to. If I was to buy an ip in Auckland today it would wipe out my ability to continue buying for quite some time. The Auckland property may not show much cg for a number of years so I'd be missing possibly significant growth elsewhere whilst having to continue working full time for years to service my very long term investment. I'm not saying Auckland is a bad investment choice obviously, but for capital gain and to continue investing it's not going to work for the majority, is it?

[Wayne]

Wayne that has nothing to do with my question. What is incorrect about the lending facts?

I does kind of.
The lending 'facts' are as I remember them pretty much.
I suppose my point was that Graeme went from 0 to 20 (or so) in the thread without using his other equity or income and the banks accept it.
So he has gotten around the 'facts' fine without going to 'slumpy' towns.
So there is more to it than some simple 'facts'.

[Wayne]

Oh well I better check if Len Brown has some cookies for me for promoting Auckland.

You should - though I don't think investors are his favourite people (not sure who he likes - probably only thouse who bow to him).

[Kirwee]

Graeme, The comments you have made on PT are really important to those investors that are looking for guidance.
This is the true reason you are here.
You don't come into PT to learn as you have been in the game for a long time and have the knowledge and practical experience to safely invest.
I strongly advise those reading this forum to take on board what Graeme has to say.
I'm very grateful for Graeme's wisdom and that he gives his time and knowledge so freely to others.

[marklowes]

Certainly seems like a real art and skill balancing both equity and servicability requirements in order to grow a big portfolio quickly.

I wonder if being 'rent reliant' is actually considered by banks? It doesnt seem right if it is as income derived from multiple properties (heavily discounted by banks to 75%) is safer than if all that income was dependent on a single job/company/business that could be lost.

I havent built up a 50+ portfolio so cant really comment other than repeat what Ive learnt from the reading books such as Orions etc and crunching numbers and picking the brains of brokers.

Moving to a place prime for this sort of investing seems to be something that is mentioned as important, wellington has prime suburbs/regions to do something like this, so you've got that box ticked.

Getting 'deals' is what I struggle with most. Buying under value to start with. Seems anything listed by a RA will always get enough interest to see fair value realised in most markets. I am sure some of the pros must have ways of getting deals from agents, and morally I question this, as it is basically the agent being corrupt and not doing the best job for their client.

If a fixed price with a 'buy now' button existed I am sure I could get better deals. Otherwise I really believe you need contacts and dodgy dealings on behalf of agents to get these sorts of deals (i.e the agent not doing everything they can to secure the best possible price for their client, instead getting them to accept an offer from an 'associate' where the agent benefits either from an understanding that the agent will regain the listing on a flick, or other subtle advantages).

[Wayne]

I wonder if being 'rent reliant' is actually considered by banks? It doesnt seem right if it is as income derived from multiple properties (heavily discounted by banks to 75%) is safer than if all that income was dependent on a single job/company/business that could be lost.

You would think wouldn't you.
But it does happen.
Maybe Orion will care to comment based on his experiance.

[Wayne]

2) I'm lazy to drive out of town to do anything else

It doesn't have to be laziness.
It is certainly easier to look after property close to home - if you do maintenance stuff yourself.
If you don't do any of your own maintenance then not a lot of difference.
To get the best deals you need to become an expert and it is easier to be an expert in a smaller area than a large one
So that small area might as well be close to home.
Especially if you want to grow fast which implies looking at a lot of property all the time.

So the Op is in Wellington so an Ak strategy might not work the best for him.

[Damap]

And too rich.......

[orion]

Certainly seems like a real art and skill balancing both equity and servicability requirements in order to grow a big portfolio quickly.

I wonder if being 'rent reliant' is actually considered by banks? It doesnt seem right if it is as income derived from multiple properties (heavily discounted by banks to 75%) is safer than if all that income was dependent on a single job/company/business that could be lost.

I havent built up a 50+ portfolio so cant really comment other than repeat what Ive learnt from the reading books such as Orions etc and crunching numbers and picking the brains of brokers.

Moving to a place prime for this sort of investing seems to be something that is mentioned as important, wellington has prime suburbs/regions to do something like this, so you've got that box ticked.

Getting 'deals' is what I struggle with most. Buying under value to start with. Seems anything listed by a RA will always get enough interest to see fair value realised in most markets. I am sure some of the pros must have ways of getting deals from agents, and morally I question this, as it is basically the agent being corrupt and not doing the best job for their client.

If a fixed price with a 'buy now' button existed I am sure I could get better deals. Otherwise I really believe you need contacts and dodgy dealings on behalf of agents to get these sorts of deals (i.e the agent not doing everything they can to secure the best possible price for their client, instead getting them to accept an offer from an 'associate' where the agent benefits either from an understanding that the agent will regain the listing on a flick, or other subtle advantages).

Hi Mark,

Yes it is a balancing scenario at times. Sometimes you need more equity, sometimes you need more cashflow when building up your portfolio.
It’s not until you have built a good solid foundation and both are 100% handled, that you no need to be concerned about them.

Banks take 75% of rent which I think could be done at 70% rather than 75% and still be fair.
When you take, rates, insurance, maintenance and property management out, you are generally left with about 70 - 75% of your rent. That doesn’t take into account vacancies etc either.

Getting the deals takes a while to consistently get them at good prices. Again as I said to someone else who said a similar comment – if you think people buy them and rip someone off, or the agent does in any way, then you will not find any. Read the “Lucky” article where this is covered.
There are many ways you can buy under market, some with agents and some privately. Negotiation comes into it, terms come into it, sometimes quick settlements, sometimes agents price incorrectly, some are forced sales, some are landlords who want out because the property didn’t go up in value and the tenants haven’t looked after them, 100’s of reasons.
In the last 24 months I’ve bought 50 (16 in the last 3 months) and all would be under what would be considered market value. Some 10% below and some 25% below.

[orion]

Graham Duffy is right about you.

You only think of the way you have invested, but has no flexibility in other markets or other investors with different financial backgrounds.

"try to tell others what to do and false reasoning and logic behind it as well as just outright bullshit."

Can apply to you too you know.

Yes Gary no flexibility at all.
Strange though don't you think that I wrote a book explaining how there are many successful ways to invest, with 10 investors as examples of how you can be successful in locations all over NZ?

[charlotte30]

Rent Reliant
My bank has told me that I am rent reliant now that I have left my job. Therefore interest rate is slightly higher and they require P & I payments. This only affects new borrowings outside of what I currently own. What I have as a revolving credit remains the same. I have 9 properties, 1 of which is a house split into 4-2bdr flats. Next purchase, I will use another bank.
Cheers Charlotte30

[orion]

And yet people don't read it.

PS I was told you blew your chance to give away your books at APIA key note.

People don't read, or you mean you?

It has actually become the number 1 best selling property book in NZ of all time, so again you are full of it.

No idea what you are talking about with APIA??

[Eugene]

Orion didn't bring enough books to Wellington, they all sold. Perhaps you don't need to know anything in Auckland as you have been lucky enough to have a boom, you get rich in spite of yourself.
And that was a spiteful comment

[Wayne]

And yet people don't read it.

PS I was told you blew your chance to give away your books at APIA key note.

Not sure what the point would be of giving away the book - Graeme isn't trying to sell his services so gets nothing out of the books -
other than the hope someone learns something and the little royalties they bring in.

[Eugene]

Get off this thread Gary, you might not have said anything factually wrong but nobody wants you here because it's about Wellington, and you are in Auckland where investors do well regardless of skill.
Because you are in Auckland you don't have the cred for this thread.