NZ 1st homebuyers are ScReWeD...

[Heavy Metal]

quote:Originally posted by duncan macgregor

You should double your property numbers every three years, its that simple.

Now I KNOW you don't follow your own advice! If you started doubling your property numbers every three years in your 20s and you're 60ish now you would have 2000 - 4000 rental properties. With not one cent of capital gain realised.

C'mon, you know it's far more profitable for a builder like yourself to buy, renovate and sell for capital gain (where the real profits are) and not ever have to deal with any tenants.

[Crypto Crude]

Mackdunk... its not ment to be a trick question.... But what are property prices GoInG to do over the next two years?? you understand the cycles much better than this new kid on the block... I feel I have a great chance in two years...

for someone like Mary holm, or Tony radford their Opportunity cost probably would be so high that it would be far more lucurative to do what they do now rather than plod away fixing up a house... I'm Sorry Mack dunk, its all about OC...i will keep dreaming at costing out at $50...
It depends how you look at it... If you think like an accountant then i'm well up...if you think like an economist, and taking into account what my wealth would be had I instead got into the housing market, then im probably down or sideways.....
(only two years been in shares though)
[8D]
.^sc

[duncan macgregor]

SHREW CRUDED, The next two years will see a general election plus numerous other changes that will influence any market. If the worst happens people will only sell if they must, its supply and demand. The cost of building is rising faster than inflation, so the house prices will rise faster than inflation. We have had a period where house prices in most areas have doubled in the last ten years. Take a chart of the historical price spiral in property, if it was a company on the share market would you sell?. Remember your first deposit was your only personal money involved which you loaned yourself for three years. That was an investment that would be worth hundreds of thousands of dollars over the last ten years. My view is the next ten years will be much of a muchness. Most property investors like rises, and falls in the market place, bring it on.
Great drop in any market is buy time, great rise in the market is sell time. You wont pay to much for a good property at anytime, in time it will be a bargain. You work it out as it happens its a numbers game, that will leave your share portfolio for dead. macdunk

[rmbbrave]

What does WRAP stand for?

[JoeKing]

quote:Originally posted by broke
Why did you decide to go into shares after making 3.8 milli on property?

Broke. For the same reason I set out to "make a million" in property.... the challenge.

Shrewdy... why $40k? For no particular reason it was just a number, could have been 20 30 or 60.
Cheers
JK

[trackers]

quote:Originally posted by minimoke

quote:Originally posted by trackers
So, $65,000 less ~$5000 interest/rates less $6000 Real Estate Agent fees less Lawyer fees both ways ~$3000 Less Maintenance/Improvements $3000 = $48,000 profit.

Thanks for the figures Trackers – always useful to see the real thing rather than just theory.

If I could perhaps suggest a slight change in your views. It seems you think you have made a $40 - $70 k profit. I’m not sure you have as you will only gain a profit on the sale of your property – and at that point you are probably going to buy another house to live in which will cost you even more – so all your doing is riding the escalator to ever increasing property values – even if they are funded by ever increasing mortgages.

What you have now achieved is an increase in equity and this is the real value of your property purchase. You’ll find you can now go to the bank and ask them to lend you more money and it is what you do with this money which will help determine your future. Borrow for a new car or holiday and you are doomed. Borrow to buy an asset and you’ll be right.

You’ll also finds it a darn sight easier getting money out of the bank using property equity rather than share equity so well done!

Yep you're bang on, and thats the problem that im bouncing around in my head at the moment.

Situation A. Sell up, invest the proceeds
Situation B. Sell up, buy one rental one 'home'
Situation C. Sell up, buy a business...Go flatting lol
Situation D. Find a bargain and 'upgrade', at no extra cost...
Situation E. Do Nothing
F, like you say borrow more money on the back of the increased value, and do something positive with it

A through C look good, but theres the problem of the missus' view on things

[Crypto Crude]

Auckland property bucks naysayers... The auckland property market has refused to bow to negative commentary, leading to a bumper 2006 for the regions biggest realtor. Barfoot and thompson's figures for the year show the average price of properties increased 4.8%, averaging out at just over 480k. Director Peterr Thompson puts the citys resilience down to the regions rising population Source, teletext

My friend went to ask about a loan for his first house.... they told him 8.5%...
they also said If he was to buy a second house then the interest rates would rise to 12.5%....
he was deemed as high risk... so they slap on a savage interest rate to boot... I guess if he did buy, and if house prices fell by a little over the value of his deposit... then this kid is deemed bankrupt...
I guess housing is a way to get things going if your up for starting in the deepend in the short term...
[8D]
.^sc

[Crypto Crude]

quote: Shrewd Crude Posted - 12/01/2007 : 4:28:00 PM

I guess housing is a way to get things going if your up for starting in the deepend in the short term...

I agree SC... good point...haha

[JoeKing]

quote:Originally posted by rmbbrave

What does WRAP stand for?

The term "wrap" is an anomalie. It refers to a mortgage "wrapped" around an existing mortgage, but in reality there is only one actual mortgage that is held by the original purchaser's bank.
Simply it is vendor finance.
I buy a house and borrow the money from the bank at say 7%. I then sell the house to you and finance you at say 10%. The contract is based on immediate possession, delayed settlement(like 20 years)paid in installments, pretty much like a hire purchase agreement. The contract uses a standard law society agreement form with added special conditions (the tricky bit), is legal and binding. Title is not transferred until final installment is paid which can be at any time.**
Hope this helps
Cheers
JK
edit** the average length of a mortgage in NZ is about 7 years.
My WRAP deals are designed so that the buyer can qualify for a bank loan within 3 years.

[Gofor Broke]

quote:Originally posted by JoeKing
I buy a house and borrow the money from the bank at say 7%. I then sell the house to you and finance you at say 10%.

ok Joe a dumb question. why would I borrow the money from you at 10% if I can get from the bank at 7%