Winners & Losers

[PC]

One of the best articles I've read was in this months NZ Property Magazine.

It's about Win & Trish Kerry from Hamilton and their 40 years of property investing.
It reflected a lot of my own thinking and modus operandi.

Don't need to spend $$ on silly seminars - the guts of the business can be found in two pages.

Anyone else had a read?

PC

"Making haste slowly"

[fudosan]

Just got the magazine but have not read it yet.

However, I first read their story back in early April, probably in NZ Herald. From the April 13 entry in my diary on what Win & Trish said:

- 100 tenancies in 25 years
- all properties within 30 minutes of drive
- buy when market is flat, and wait when when market is hot
- buy with yield greater than interest rate + 2.5%
- buy easy-to-maintain, warm, good size properties with price being bottom half of middle value
- focus on reducing debt by paying off mortgages one by one.

[Dean@Massiveaction]

Win's a bit of a legend. Any type of investing is all about fundamentals really. I found some of the seminars I've attended have been good to challenge my mindset rather than give me info, and that is also necessary to succeed. It wasn't till I did the Richmastery property academy "money games" that I found out I was always guilty about being rich. Once I changed how I felt about money I became more successful very quickly

[The_Dog]

Win is certainly "da Man!"

I now know why it’s so hard to buy anything in Hamilton!!

it's a good 'steady as she goes' approach, and in contrast to all the eager get-rich-quick schemes that seem to abound.

I don't know how many people read the Oz property investor mag. Normally they have really good profiles in there, but this month shocked me. There is a girl profiled with massive borrowing (80% - in the current market!) and a yield of about 5.5% (from memory). The article quotes her saying things like "I just jumped in a car and started looking at everything!" and "I'm not worried about losing my job. I can always work, even if it's in a bar".

I'm just thinking.... what a Ning Nong

[Glenn]

Yes great read.
I then looked down at my navel and wondered if I was a failure.
How come I did not start it all about 30 years ago.
I did acutally make a minor real estate killing that long ago but did not keep it up. I just used the profit to buy the house I am still living in. In fact I distinctly recall having a look at a little one bedroom flat back then. At the time it was just being built and cost $10,000. It is on the market at the moment for $160,000. I guess todays rent would be about $160.

I did wonder why they were not using a property manager or at least employing someone to do that for them. This would permit them to get away from the business from time to time. Perhaps they are doing this.
One of my major problems is the size of our buisness and the difficulty of getting away from it also. So I can identify with them real well.

[Propoholic]

One of the best articles I've read was in this months NZ Property Magazine.

It's about Win & Trish Kerry from Hamilton and their 40 years of property investing.

I totally agree, you learn the most from the types that have the nicks and cuts from seeing twelve rounds through. The very experienced investors like Win are all speaking the same tune at the moment......that extreme caution is needed now (to quote Win).

I purchased the June 6 copy of Fortune magazine for a bit of Holiday weekend reading.
The main article (ten pages) is titled: Real Estate Gold Rush - Inside the hot money world of housing speculators, condo flippers, and get rich quick schemers. (Is it too late to get in?)
I thoroughly recommend reading this article (if only for the entertainment value alone) as it provides a great contrast to Win Kerry's words of wisdom. Locations examined are typically Phoenix, Dallas, Las Vegas etc and highlights the euphoria in a market where all fundamentals are being overlooked and caution is being thrown to the wind.

[essence]

There is usually some incident (late 1990s - Asian crisis) that tends to be overlooked to some degree by NZers investing. When money is repatriated (to whatever country) there is obviously less in NZ and supply/demand becomes an issue.

It will only take a seemingly unrelated incident (ie landslide/minor stock market correction/assassination) to have an effect here six months later.

Local interest rates have dropped making money easier to obtain, but at the same time immigration is dropping and so is the dollar.

If anybody has got a crystal ball about whats going to happen they are going to make A LOT OF MONEY.

[spaceman]

Mine are pink and hairy, not crystal ... unfortunately

Cheers
Spaceman

[David-Suzuki]

“Don't need to spend $$ on silly seminars”

The seminar may be of value to people who may want to achieve what Win and co did, but in 1/7th of the time. Not everyone can afford to take 25-40 years to do it (not having read the article.)

In the time it took them to buy 4 properties, McKnight bought 37.
(130 in 3.5 years.)


“ - the guts of the business can be found in two pages”

Or one sentence: Purchase cashflow positive properties to which you can add value/increase the rent, and repeat indefinitely.

“wait when when market is hot”

Disagree. An investor who does this sits out of the game, say 3 years out of 8. A smart investor can make money in any market – up, down, or sideways.

“Focus on reducing debt by paying off mortgages one by one”

Aha, the weak link. McKnight couldn’t have bought 130 properties in 3.5 years if he had been concentrating on ‘paying off mortgages one by one’.

“It's a good 'steady as she goes' approach, and in contrast to all the eager get-rich-quick schemes that seem to abound.”

In the end, it comes down to the mind-set of the investor. Many are not comfortable thinking of themselves as wealthy with a large portfolio, and their wildest dreams would be to have 2 or 3, paid off.

So they start ‘slow’ and diligently bank their rents in to ‘pay down their mortgages’ and ‘increase their equity’.

Not realising that the more equity they have, the less leverage they have, and so they are not fully utilising the velocity that their money could give them if they put it out to work.

There is no judgement in this, as it is of course the investor’s choice how fast or slow they are comfortable going. Some want a jet, and some want to bicycle. Most want to jet. This is why you’d probably sell more tickets to a seminar teaching people how to achieve financial freedom fairly quickly, than if you said ‘here’s a really slow way to accumulate wealth gradually over 25-40 years.’

“extreme caution is needed now”

Again, they have admitted they don’t know what to do when the market is hot, so they sit out. Obviously they would be advising ‘extreme caution’ – their market position is ‘out’ for the time being.

“When money is repatriated (to whatever country) there is obviously less in NZ and supply/demand becomes an issue. “

True, if it’s a one-way flow. However don’t forget the masses of foreign money coming IN to NZ in the form of investments.

My understanding is that this is partly why the NZ dollar has been so high.

[Glenn]

Well David I would be interested in finding out how what percentage of those people who go through say ECS or similar courses actually achieve anything better.
I personally know several failed property investors who have gone through ECS and other high cost revved up seminars long before ECS came along.
One person I know really got keen. They purchased lots of properties and went to all sorts of wonder wealth creation seminars.
They are now down to a caravan and not feeling very well at all.
I used to have to deal with young enthusiastic engineers who used to come out of university with great ideas on designing telecom projects.
The only ones that were any good where already skilled trades people before entering university.
The young whiss kids had all the right words and some even had suits on.
But it did not make those radio links work. When the going got tough they retreated into buffoonery or blaming someone else for their projects being late or over run on costs. If this was a one off case it could easily be explained.
But it was so prevalent and commonplace it was like a comic opera.

The science of putting new heads onto dumb torsos is not always an exact science. Many just slip off when the blood (money) dries up.

We all love to see people succeed.
Seeing several people do well does not cancel out seeing one person go belly up.
It still makes me feel sick.

[Sapphire]

I used to have to deal with young enthusiastic engineers who used to come out of university with great ideas on designing telecom projects.
The only ones that were any good where already skilled trades people before entering university.
The young whiss kids had all the right words and some even had suits on.
But it did not make those radio links work. When the going got tough they retreated into buffoonery or blaming someone else for their projects being late or over run on costs. If this was a one off case it could easily be explained.
But it was so prevalent and commonplace it was like a comic opera.

This is quite a common occurrence in the IT industry also. 'Young Degrees' with no experience, more interested in the money than the job. My husband often has to pick up the pieces of the tangled mess they leave because a Degree does not equate to experience in industry. A person with 40 yrs of extensive industry and IT knowledge but no 'degree' achieves a more efficient result. But then I'm biased.

Swinburne University, here in Melbourne, uses IBL (industry based learning) for its IT students, where they do 2yrs of the degree, then 1yr in industry with a 'prospective' employer (and they are paid a salary for this time), and then they return to uni for their final year. When they qualify they are often already employed by the 'prospective' employer, thus having the edge on those with no experience.

Knowledge is very important, but practice, experience and support keep it going!

Sapphire

[David-Suzuki]

"It still makes me feel sick."

fair enough, get well soon.

Fearful posts, be careful, you could die, you could go belly up, you could be in a caravan! don't do anything, you could fail! it could be an absolute disaster!

And those that respond 'Yes Glenn, quite right!' are the ones who agree - because that's what they already believe!

People are opinion shopping here, and a lot of them want a little encouragement. Do they get that from me? I hope, yes. Do they get that from you?

Jury's still out, and you're feeling sick. (again.) Wonder why?

[Dean@Massiveaction]

This thread losing its way a bit perhaps??
Remember that NZers are fantastic at putting others down.
I know many many people who have improved their financial positions dramatically after attending ESC events. I went from zero to retirement in under 6 months. More about me http://www.acumen.co.nz/wa.asp?idWeb...;idDetails=117
Yes I'm sure there are horror stories but when you examine them they are nearly always caused by people not sticking to sound buying rules.
I have yet to meet anyone who has been through ESC, who followed their buying rules, who hasn't succeeded.
I however work with people everyday who are in trouble because they either jumped in without knowing what they were doing, or ignored the fundamentals of investing being taught out there.
I say thank you to Phil Jones, Olly Newland, Andrew King, Kieran, Ron Hoy Fong and the many others out there, including myself now, putting good information into investors hands. Their help made me a millionaire in 6 months.

[Sapphire]

Knowledge is very important, but practice, experience and support keep it going!

Courses have their place, but they are only worth their money if attendees practice what they have learned, otherwise it's a total waste of time and money. Success takes knowledge, focus, motivation, practice, consistency, and support and if any one of these is not present then it's easy for someone to lose their footing.

Forums and networking also form an important part of the process of learning ... motivation ... problem solving ... after all, why are we here??

We all come from different circumstances, with different risk profiles, different hurdles to jump, different occupations, different goals, but each person is learning or giving knowledge and hopefully being motivated to take action. Whether we move like a tortoise, a hare, a cheetah or anything else in between, surely the main point is to be improving in our knowledge of investment property and putting it into practise.

Sapphire