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Originally posted by damage View PostFor a start, because laws change and you need to be kept fully aware of what those changes are. While I have no doubt there are many accountants who have no idea about property investment, there are many that do. I suggest you consult these types, rather than the ones that dont.
Dont be silly, of course you need to do more to it than a fresh coat of paint.
Tell that to the many 1000's of mums and dad investors and no doubt a few on here who used the LAQC to minimise their losses, all on the premise of captial gain to offset losses.
Because I dont need too that is why, I will not learn anything from it, so why waste my time?
By the way, dont take my inital comment to seriously, it was tounge n cheek.
??? not sure on this strategy, in particular the capital gain offsetting losses?? Maybe these mums and dads listened to accountants and lawyers who didn't specialise in property??
Not sure what your trying to say here
You said throw paint at it.
That what you learn at a property investment course can be used when purchasing your own home. You mentioned home buyers first...
You're never too old to learn. You just keep buying property using your strategy and be secure in the knowledge that should you be in a position that you have to sell that there will be a student from a property investment course ready to swoop in and bail you out, at a price...
You've got to be careful what you say on here because someone might just take you seriously and follow your advice. Not me though because I did a property course and I know better and follow my own rules.Last edited by Meehole; 09-05-2011, 04:14 PM.
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Originally posted by damage View PostIts hardly rocket science is it, you talk to an accountant / lawyer about your tax position, you buy a property with the banks money, throw some paint on it, put tenants in, and hope the rent covers the mortgage, then wait for capital growth. Then repeat.
Firstly, any Lawyer or Accountant will tell you not to do it. They reason that, if you do go ahead and it works, you won't remember to thank them but if you do go ahead and it fails then you'll blame them. The safest course (in their eyes) is to advise you against any proposal, that way they can never be blamed.The fellow who always follows the advice of his Lawyer will never do anything.
Secondly, a property 'investment' that covers the mortgage only is no bargain. What about rates, insurance, accountants fees, wastewater, maintenance? Even without any allowance for maintenance these costs are substantial and in a modest Auckland suburb can easily reach $60.00 per week. Amazing how many people lob into a deal ignoring the impact of these costs.
The traditional make-enough-money-to-retire property system was dead simple:
Work out how much in todays dollars passive income you would need to retire. Calculate how many rental properties would you need to own to acheive that income.
Then go out and buy twice as many, financing yourself to the maximum.
Work your ass off for ten years or so to retain them in your ownership while the value of these properties doubles.
Then sell half of them and use the money to pay off the mortgages on the other half.
Go lie on the beach.
There you are, that's how it was done in the past. It may still work in the future, I can't guarantee that.
In a nutshell, that's the system hot-gospelling Gurus charged you hundreds of dollars to teach you at seminars in the past.
I've told you for free.
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The traditional make-enough-money-to-retire property system was dead simple:
Work out how much in todays dollars passive income you would need to retire. Calculate how many rental properties would you need to own to acheive that income.
Then go out and buy twice as many, financing yourself to the maximum.
Work your ass off for ten years or so to retain them in your ownership while the value of these properties doubles.
Then sell half of them and use the money to pay off the mortgages on the other half.
Go lie on the beach. There you are, that's how it was done in the past. It may still work in the future, I can't guarantee that.
In a nutshell, that's the system hot-gospelling Gurus charged you hundreds of dollars to teach you at seminars in the past.
I've told you for free.
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The fellow who always follows the advice of his Lawyer will never do anything.
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Originally posted by SwissKiwi View PostNice 'distillation' - and I don't see any reason why this will not work now and in the future - do you?
No-one is arguing that.
It's just that you and I know what type of house to buy. And in what location.
But does a newbie know what to buy and where?
Every newbie needs educating and who would oppose that?
And who better to educate a newbie than an experienced investor?
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Originally posted by Bob Kane View PostAnd who better to educate a newbie than an experienced investor?
The only reason why these guys say buy in area X, is to increase the number of sales and prices within the area they have already invested in. Its akin to a pyramid / ponzi scheme and newbie investors are being duped.
You can see how these newbie investors get sucked in, because they have had easy Capital Growth!Last edited by Perry; 15-05-2011, 07:54 PM.
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Originally posted by sbw View PostThanks for the tips Dean. We're defiantly going to try and get another one before the end of year. The priority now is to just get this first one going (rent coming in ect) we're not on big incomes, so money (cash flow) is still tight. I'm keen to keep this first one as a buy and hold and use the cash flow to pay down our own personal debt. After the reno's we'll reassess and then set-up the right structures for trading (going forward) and then look at the private money investment - do you have any contacts in this error? I'll guess they'll be interested in experience first, so hopefully this first investment will give them confidence.
Be very careful 'trading' property. Due to changes in the associated person rules, you can no longer do this the old way, which was via a trading trust. If you 'trade' property, or sell the property you have just bought quite soon, you will very likely be 'tainted' as a trader as far as IRD are concerned, and from that point on you will have to pay GST and tax on ALL your property sales. Even if you had owned a buy and hold IP for many years and then sold it. This doesnt apply to your own home you live in, but even then if you buy and sell your family home for a profit several times in a short period, they CAN assess you as a trader also, although unlikely.
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Originally posted by damage View PostSee I can understand this view from an educational perspective, but why would an experienced investor share their knowledge with other people to effectively increase the competition within the same market.
The only reason why these guys say buy in area X, is to increase the number of sales and prices within the area they have already invested in. Its akin to a pyramid / ponzi scheme and newbie investors are being duped.
You can see how these newbie investors get sucked in, because they have had easy Capital Growth!
And until you really get to fully understand what "some" investment courses offer, you will just be speculating on possible outcomes.
Those out there currently doing the walking and talking have no time to write on here, they're getting on with it making their own informed decisions.
Why wouldn't an experienced investor share their knowledge? What do people do when they write a book or produce a video?
If I was successful in something and could make money by teaching other people how to do the same, what's wrong with that?
As well as an investor you have now become an educator, another string to your bow.
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Originally posted by Meehole View Post
Why wouldn't an experienced investor share their knowledge?
Answer this, would not see Warren Buffett telling you which shares to invest before he invests in them?
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Originally posted by Meehole View PostWhy wouldn't an experienced investor share their knowledge? What do people do when they write a book or produce a video?
If I was successful in something and could make money by teaching other people how to do the same, what's wrong with that?
If you find you have a talent for something and you can have an almost endless supply of rewards then you don't need to be greedy and keep all the goodies for yourself.
It is quite normal for these people to give to others which is where the real reward is.
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Meehole
The question is why would an investor share their knowledge. If they did, all they would be doing is increasing the competition within the market they are working in.
I would doubt very much, that you would see Warren Buffett telling people where to invest before he does.
The only reason these guys advise where to buy is simply to increase demand within that area they have already invested in. In other words, the ship has already sailed.
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Firstly, any Lawyer or Accountant will tell you not to do it. They reason that, if you do go ahead and it works, you won't remember to thank them but if you do go ahead and it fails then you'll blame them. The safest course (in their eyes) is to advise you against any proposal, that way they can never be blamed.The fellow who always follows the advice of his Lawyer will never do anything.
And as a real estate agent, if you every try and say the advice is incorrect, man, watch out. The buyer will assume you're only saying that because you want the sale and start to tell you how accountants/solicitors are professionals and real estate agents are just idiots etc.
I had this situation crop up a number of times with good people. They would be really nice hard working people with a good solid little business. But every time they looked to move to bigger premises, they'd 'take advice' and be told to stay where they were. So they did. And never really got anywhere.
At other times I've lost deals to clients who have been told a property is overpriced. So someone else buys it and then resells it for like $500k more in a year. So these people were 'advised' out of $500k!!! And sometimes, even in these situations, they would defend their solicitor/accountant too! Nothing you can do with clients like that.Squadly dinky do!
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