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  1. #1
    Join Date
    May 2007
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    Default Property: Buy now or wait? (Andrew King and Dean Letfus)

    Property: Buy now or wait?

    5:00AM Saturday July 12, 2008
    By Anne Gibson


    HOLD OFF
    Bargain-hunters beware: if you're tempted to leap into the rental property business right now - don't.
    That's the advice from Andrew King, Property Investors Federation vice-president and an experienced landlord who is cautious about the market.
    His advice for would-be residential investors wanting to weather the recession is to buy books on investing, school themselves on strategies, join organisations which offer landlords professional advice, arm themselves with knowledge and hone their skills.
    "Most investors should not invest at the moment because it's too risky. They're better to sit on their hands," King said.
    He also advises against attending motivational rallies promoting real estate and buying properties from meeting organisers, saying a conflict of interest should act as a warning to any savvy investor.
    "Don't go to seminars by people selling properties because the information will be completely biased. Get educated, don't be rushed, know the market. Hold on and see what happens because in a year's time, interest rates will be lower."

    Investors hell-bent on buying should aim to buy at bargain-basement prices with an eye on how a property can be improved to generate more rent, King says.
    Buyers cannot bet on rents rising fast to offset the currently high interest rates. King has noticed an influx of rental properties in the last few months, as vendors pull their properties from the market and find tenants to help pay the mortgage. That has meant rents staying relatively static. He has also noticed tenants staying put in a move he attributes to them possibly being fearful of a rapidly changing market.
    This combination of factors means he is taking a wait-and-see-approach and telling others to do the same.

    GET IN NOW
    Buy, buy, buy.
    So says Dean Letfus, a motivational speaker claiming to have accumulated a $20 million portfolio here and in Australia in four years.
    "My advice is to be accumulating property as quickly as possible because there is a major boom coming," Letfus said.
    "Look for cash-flow positive bargains and long-term settlement opportunities.
    "Every slump is followed by a boom.
    "We don't need to panic, we just need to ensure we are comfortable holding property till the recovery hits and sell down then to create wealth."
    The Aucklander said selling now without finding somewhere better to put the money would be counter productive.
    "Property has not stopped being the lowest risk and highest return investment class just because we are in a downturn."
    But he realises some people need to sell if they are stretched.
    "If you are highly geared in this environment, then retiring debt needs to be a priority especially if you are heavily exposed to one funder.
    "For most investors, the commonsense approach is to ride out this phase and wait for the recovery.
    "Own enough property to be able to sell down in the next boom and retire.
    "Selling now is only for those who are in bad financial shape.
    "However if you are pessimistic and believe the doom and gloom merchants then sell down now as things are going to get worse before they get better.
    "I have many peers who are recommending this.
    "Only time will tell.
    "Most long term investors I know are lowish geared so the current situation doesn't concern them at all or they have sold down 18 months ago and are entering the market now with vulture funds."




    Listen to Andrew King, he is experienced and has nothing to sell you.

  2. #2
    Join Date
    Apr 2006
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    4,018

    Default

    Quote Originally Posted by Dean Letfus
    Selling now is only for those who are in bad financial shape.
    In the Herald Homes supplement the weekend before last there was a little piece on investors who were selling.

    Three investors were featured, along with the property they were selling.

    One of those investors was Dean Letfus. It looked as if he was selling a B+H - the little blurb certainly didn't mention that it was a trade/assignment.

    Paul.

  3. #3

    Default

    You've got to be very careful saying things to middle NZ. You'll find a high number of people who will tenaciously believe what they want to hear and then turn on you like a rabid dog when or if it things all turn to fluff. Unfortunately, there's not a lot of independent thinking out there.

  4. #4
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    Wellington
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    Default

    There is very little independent thinking and how could there be as we live in a country ruled by the 'we know best brigade' with their childish controls and orders. All serious property investors need to know what is going on in the World right now, watch CNBC diligently as you will educate yourself and not get caught up in such nonsense these people are teaching!
    Last edited by Commercial Dan; 12-07-2008 at 06:21 PM.

  5. #5
    Join Date
    Sep 2007
    Location
    Auckland
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    8,305

    Default

    I know who I would rather believe.

    Now, I remember Dean Leftus having around $5 million worth of property only 6-12 months ago. And he supposedly made that in around 4 years. Now he's supposed to be worth $20 million and the time fram hasn't changed.

    When the tide goes out, we'll see who's been swimming naked (Warren Buffett).

    David

  6. #6
    Join Date
    Jun 2005
    Location
    auckland New Zealand
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    Default

    Just to correct Davo's appalling memory.

    I have about 20 million worth of property, 50 tenancies spread across around 35 titles.
    I have never said I am "worth" 20 mil. I'm worth somewhere between zero and 10 mil depending on who you believe about the state of the market.

    I started investing in November 04 so it will be 4 years this November.

    And nothing has changed in the last 6 months. I have been busy in Oz for 6 months but nothing has changed much here.

    It's another company that has people upgrading their net worth continually, not me. I have always quoted actual numbers and properties publicly. I think I was the first to do so. When I first started speaking people wouldn't tell you what they had done. I concluded because in many cases they hadn't done much.

    So ignore Davo's comments, they are completely wrong in this case.

  7. #7
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    Wellington
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    Default

    There are so many things that just do not add up, though so many numskulls have fallen for it.
    Last edited by Commercial Dan; 12-07-2008 at 06:24 PM.

  8. #8

    Default

    A lot of what's going on is bleeding obvious but a lot of people are in too deep so they resort to all manner of rationalizing to keep themselves sane. This affects everyone, not just investors or new home buyers. Those who have banked on their homes being worth a certain value as they enter retirement, etc. may find themselves a lot less comfortable than they imagined they would be.

    Predicting a boom in NZ sounds plain daft to me when the downturn has barely started. It's certainly a leftfield perspective but some kind of reasoning would make it more convincing.

  9. #9
    Join Date
    Apr 2006
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    Default

    tanmedia,

    There has beeen a great deal of discussion on this site on the next "boom of all booms". Dean Letfus subscribes to the theory that the next boom, which will be the largest boom ever, will begin in 2010/2011.

    See this thread - it is interesting reading, and explains the reasoning behind Dean's position.

    Paul.
    Last edited by SuperDad; 12-07-2008 at 07:51 PM.

  10. #10
    Join Date
    Jun 2005
    Location
    auckland New Zealand
    Posts
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    Default

    Thanks SD. And might I ad having researched the impact of the boomers in OZ and the governments response to it I am even more convinced that this boom is coming.

    BTW Tanmedia Anne Gibson asked me what I thought so I told her. I wasn't asked to explain why I thought it.

    I speak on the subject all round New Zealand regularly for anybody interested


 

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