Hold or fold ?

[TWT]

Hi Terry,

Interesting information..... thanks for that

I was in Aussie investing and cutting my teeth for nearly 10 years and never struck that issue as I had separate companies with separate banks and separate property pools.... plus I had a successful formula that was in place and a great (solid, proven -business plan)....

That policy will not stay in for long ..... and as I stated.... at some times you will not be able to purchase due to market conditions.... be it lending or values... or demand exceeds demand....

There are other methods this can be done such as my prefered one which is my super leverage instrument = Options..... get heaps of them for only a dollar at a piece ... and at worst no more than 10K ... which is a far cry from the 20% + LVR requirments coming into play right now.

If you buy at 20-30% real discount (below current actual valuation) ... even if you cannot achieve the 10 houses in 10 years (which is not that hard really).... and only achieve a port folio of 5 or 6 ..... you have double the investment portfolio of the average top 2 percent....

If you are buying well .... then perhaps a lender that has higher interest rates and a little more relaxed DSR policy... may be the answer.... my policy is if the banks say no.... then simply move onto anoher lender....

"The Great Mr Sanders of KFC .... went to over a hundred lenders before he hit pay dirt and he was 65 years old and living out of his car.... I bet the other lenders are kicking themselves that they missed his boat of ready made money!"

happy investing

[sarahd]

Hi Central55

Just wondered why you were upset at FPL private messaging you?

I would have thought a confidential PM message from someone who may be able to help you was OK.

I have done it once to someone ...I would be horrified to think i have offended them the way FPL offended you.

I would have thought it a good way to market yourself....

Was it the fact they PM'd you or you didn't like their tone?

Sarah

[tpr2]

Hi Terry,

Interesting information..... thanks for that

I was in Aussie investing and cutting my teeth for nearly 10 years and never struck that issue as I had separate companies with separate banks and separate property pools.... plus I had a successful formula that was in place and a great (solid, proven -business plan)....

That policy will not stay in for long ..... and as I stated.... at some times you will not be able to purchase due to market conditions.... be it lending or values... or demand exceeds demand....

There are other methods this can be done such as my prefered one which is my super leverage instrument = Options..... get heaps of them for only a dollar at a piece ... and at worst no more than 10K ... which is a far cry from the 20% + LVR requirments coming into play right now.

If you buy at 20-30% real discount (below current actual valuation) ... even if you cannot achieve the 10 houses in 10 years (which is not that hard really).... and only achieve a port folio of 5 or 6 ..... you have double the investment portfolio of the average top 2 percent....

If you are buying well .... then perhaps a lender that has higher interest rates and a little more relaxed DSR policy... may be the answer.... my policy is if the banks say no.... then simply move onto anoher lender....

"The Great Mr Sanders of KFC .... went to over a hundred lenders before he hit pay dirt and he was 65 years old and living out of his car.... I bet the other lenders are kicking themselves that they missed his boat of ready made money!"

happy investing

Hi TWT

Thats the biggest difference between your strategy though, central 55 is not self employed.

My suggestion here is not for central to sit back and do nothing however I like to point out that not all strategies are appropriate for all investors.

I high lighted a couple of points that would crash your strategy today.

Self employed will struggle to get funds now unless they truly do have the cashflow to support the lending, i.e there is no more un-verified income lending with the majors.

Hiding your lending in other entities is not an option now either unless your happy not disclosing that information to the second lender in which case you are breaking the law and can be sued by them for fraud if they ever find out.

One of the new requests they are asking for is the ability to be able to delve deeper into a persons financial situation when checking CRA's.

In australia my mortgage broking firm had 600 lenders it could go to so moving on to the next one was always an option. If I included my financial planning practice as well we probably had close to 800 different places we could funding from. NZ does not have that scope.

So I'm not saying your strategy will not work for some people however I believe each person should have an individual strategy worked out for them based on their situation, their risk profile and their goals.

[tpr2]

Hi Central55

Just wondered why you were upset at FPL private messaging you?

I would have thought a confidential PM message from someone who may be able to help you was OK.

I have done it once to someone ...I would be horrified to think i have offended them the way FPL offended you.

I would have thought it a good way to market yourself....

Was it the fact they PM'd you or you didn't like their tone?

Sarah

Hi Sarah

Just my 2 cents worth.....

Some of us on here are professionals in the industry and PT is a great place to showcase our skills however I believe that when someone like Central posts his queries it is incumbent upon us as professionals to not PM him, can you imagine how many people would be driven away from PT if each time a newbie posted a question 30 PM's arrived touting business.

I have posted many times the exact same message that FPL pm'ed the difference is though that I said it in public and I didn't suggest that the poster come and see one of my companies. (nor did FPL I would add)

Of course some one else then suggested it anyway....

[TWT]

So I'm not saying your strategy will not work for some people however I believe each person should have an individual strategy worked out for them based on their situation, their risk profile and their goals.

.

Hi Terry..... I absolutely 100% agree...... I apologise for responding to the thread as I forgot how painful it is with all the literal interpretations etc etc.....

Now I remember why I could not be bothered giving my input to this forum .....

I was not intending someone to follow my "Ideas" to the letter.... but only to take the meat out of the sandwich and apply what works for them from risk and education levels only they can assess.

Good luck out there Guys and gals..... over and out!

[tpr2]

Nothing to apologise about TWT.

The idea of a forum is to encourage idea's to flow and for different perspectives to be viewed.

Graeme Fowler and I have been having a nice debate about the pro's and con's of Interest only vs P&I on another thread.

Healthy testing of ones assumptions and offering new information is what this is all about.

Your comment for example about options is a great one....it's ideas and experiences like that which will help the many people who read this forum.

[CENTRAL55]

Hi Central55

Just wondered why you were upset at FPL private messaging you?

I would have thought a confidential PM message from someone who may be able to help you was OK.

I have done it once to someone ...I would be horrified to think i have offended them the way FPL offended you.

I would have thought it a good way to market yourself....

Was it the fact they PM'd you or you didn't like their tone?

Sarah

Hi Sarah

It was his tone, not the fact of a PM. His words, I quote

"Hi I read your post and was amazed to find it here. What added value do you expect to find here for free from people you’ve never met, have no idea what experience, expertise and qualifications they have?"

made me feel that he was suggesting I was stupid for posting here and for listening to the advice I was being given.

We have since sorted this out (via PM by the way) and I at least (and I'm sure he as well but I can't speak for him obviously) am happy with the outcome. I'm sure that what I read into his PM was not what he really intended, so just a big misunderstanding all round that was quickly sorted. I'm sure if anybody had a problem with a pm from you they'd make sure you knew about it.

Cheers

[tpr2]

Hi Sarah

It was his tone, not the fact of a PM. His words, I quote

"Hi I read your post and was amazed to find it here. What added value do you expect to find here for free from people you’ve never met, have no idea what experience, expertise and qualifications they have?"

made me feel that he was suggesting I was stupid for posting here and for listening to the advice I was being given.

We have since sorted this out (via PM by the way) and I at least (and I'm sure he as well but I can't speak for him obviously) am happy with the outcome. I'm sure that what I read into his PM was not what he really intended, so just a big misunderstanding all round that was quickly sorted. I'm sure if anybody had a problem with a pm from you they'd make sure you knew about it.

Cheers

Ok I recant my previous post. I have certainly never said anything like that

I have suggested seeing a professional adviser....lol

[mortgage broker]

I thought I might throw my 2 cents in to this interesting compilation of opinions and at times heated emotions.

CENTRAL55 you sound like that maybe (and I am not a financial advisor) you are already heading in the right direction. Maybe you do not need to change anything. Keep your properties, focus on getting rid of your debts, with low rates you could knock that principle out faster. After 10 years you could be debt free with a bit of land you sell off or subdvide.

[CENTRAL55]

I thought I might throw my 2 cents in to this interesting compilation of opinions and at times heated emotions.

CENTRAL55 you sound like that maybe (and I am not a financial advisor) you are already heading in the right direction. Maybe you do not need to change anything. Keep your properties, focus on getting rid of your debts, with low rates you could knock that principle out faster. After 10 years you could be debt free with a bit of land you sell off or subdvide.

Thanks for that, it's certainly the simplest option. I guess that it's difficult to just sit and watch as property values depreciate when we're not sure where the "bottom" is or how long it's going to take to come back up (I suspect many years). The one "advantage" we seem to be getting from all this (in our particular case) is that dropping interest rates have been kind to us cos our current mortgage is on a floating rate (we at least foresaw that drop !!).

Cheers