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  1. #2721
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    Meanwhile, in Australia....

    Australia’s central bank chief Philip Lowe signaled a steady series of interest rate increases as he highlighted the difficult road to a soft landing for the economy.

  2. #2722
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    https://www.nzherald.co.nz/nz/auckla...RFSU42FTZ3I6E/

    ‘One Auckland single mum says she had a "panic attack" when opening her new council rates bill this month, while another ratepayer says she plans to leave the city because of its "poor" services.

    Other ratepayers have described receiving new bills up to 30 per cent higher than last year at a time when Auckland's creaking infrastructure is battling to keep up with new housing developments.

    The single mum, who works as a high school teacher while also picking up a second job after hours to make ends meet, told the Herald her bill had not only jumped about $200 a quarter, but that she was also hit with two bills back-to-back totalling almost $1400.

    "I had a panic attack looking at the email from Auckland Council," she told the Herald.

    "I called them and cried, they put me through the credit control team and asked me to pay it monthly."

    The rate hikes come at a time when homeowners are also facing other cost of living pressures and interest rate rises facing homeowners.’

  3. #2723
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    @Logen Ninefingers:

    Only just the tip of an ice berg. Wait for those mortgage foreclosures to come

  4. #2724
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    Although only a brief article. A young man willing to take some risks has done very well for himself.

    https://www.nzherald.co.nz/nz/auckla...JNIOG5ONB24BM/

    He started in 2015.

    Portfolio current market value 20mill
    Debt 9 mill
    Gross rental $1million

    Overall, Brownlee equates 60 per cent of his success to smart structuring of his finances and mortgages, and 40 per cent to buying the right property.

    Makes me look foolish with all my complaining. I remember looking at a property 7 years ago with a 5% gross yield which was well less than 5% net after rates etc and declined to make an offer on that basis. Really regretting that decision now. it would have been significant for me financially. Maybe that is why I am so bitter and angry at the RBNZ.

    He is young but I also wonder how he goes if inflation hangs around. Every 1% increase is $90,000 more interest annually.

    Does he have an implicit guarantee from central banks or is that an explicit gaurantee now that Japan and the US govts will be bankrupt if interest rates rise. That interest rates will not rise too far and Adrian has prepared the financial system for negative rates if needs be. In fact Adrian was appointed head of the RBNZ in 2017 and young Jonathan has never looked back.

    Is that really the central banks job though??
    Last edited by Aaron; 15-08-2022 at 08:23 AM.

  5. #2725
    FEAR n GREED JBmurc's Avatar
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    Quote Originally Posted by Aaron View Post
    Although only a brief article. A young man willing to take some risks has done very well for himself.

    https://www.nzherald.co.nz/nz/auckla...JNIOG5ONB24BM/

    He started in 2015.

    Portfolio current market value 20mill
    Debt 9 mill
    Gross rental $1million

    Overall, Brownlee equates 60 per cent of his success to smart structuring of his finances and mortgages, and 40 per cent to buying the right property.

    Makes me look foolish with all my complaining. I remember looking at a property 7 years ago with a 5% gross yield which was well less than 5% net after rates etc and declined to make an offer on that basis. Really regretting that decision now. it would have been significant for me financially. Maybe that is why I am so bitter and angry at the RBNZ.

    He is young but I also wonder how he goes if inflation hangs around. Every 1% increase is $90,000 more interest annually.

    Does he have an implicit guarantee from central banks or is that an explicit gaurantee now that Japan and the US govts will be bankrupt if interest rates rise. That interest rates will not rise too far and Adrian has prepared the financial system for negative rates if needs be. In fact Adrian was appointed head of the RBNZ in 2017 and young Jonathan has never looked back.

    Is that really the central banks job though??
    I find it hard to comprehend how this young guy secured so much support DEBT from the bank .(anyone with some smarts can become rich if the bank supports you)

    . I've found it a complete grind to get funds after my first couple years spec building where it was very easy to get 70-80% LVR back in the early 2000's... seems like the banks give you way more slack in your 20's but once your much more experienced and have a decent asset base they become very age adverse .. 40yrs+ see you later

    The banks I've dealt with always give me limits I can go, and have strange rules around income supporting ...even now worth much more $$$$ they still give me roughly the same limit I got when I had sub 200k asset base ...big reason I got into the sharemarket

    .. I must be black listed have limit the banks set ... , living in the south ? ... my present LVR less than 20% ... yet no way I could even to 40% LVR ...!!! has always pissed me off all these get rich from banks lending into buying many RES properties ... they seem to have the banks as lapdogs
    Last edited by JBmurc; 15-08-2022 at 11:27 AM.
    "With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu

  6. #2726
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    Quote Originally Posted by JBmurc View Post
    I find it hard to comprehend how this young guy secured so much support DEBT from the bank .(anyone with some smarts can become rich if the bank supports you)

    . I've found it a complete grind to get funds after my first couple years spec building where it was very easy to get 70-80% LVR back in the early 2000's... seems like the banks give you way more slack in your 20's but once your much more experienced and have a decent asset base they become very age adverse .. 40yrs+ see you later

    The banks I've dealt with always give me limits I can go, and have strange rules around income supporting ...even now worth much more $$$$ they still give me roughly the same limit I got when I had sub 200k asset base ...big reason I got into the sharemarket

    .. I must be black listed have limit the banks set ... , living in the south ? ... my present LVR less than 20% ... yet no way I could even to 40% LVR ...!!! has always pissed me off all these get rich from banks lending into buying many RES properties ... they seem to have the banks as lapdogs
    JB unless its second tier they don't asset lend.
    So amount they will lend comes down to your serviceability and how you present this to the bank.

  7. #2727
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    Quote Originally Posted by JBmurc View Post
    I find it hard to comprehend how this young guy secured so much support DEBT from the bank .(anyone with some smarts can become rich if the bank supports you)

    . I've found it a complete grind to get funds after my first couple years spec building where it was very easy to get 70-80% LVR back in the early 2000's... seems like the banks give you way more slack in your 20's but once your much more experienced and have a decent asset base they become very age adverse .. 40yrs+ see you later

    The banks I've dealt with always give me limits I can go, and have strange rules around income supporting ...even now worth much more $$$$ they still give me roughly the same limit I got when I had sub 200k asset base ...big reason I got into the sharemarket

    .. I must be black listed have limit the banks set ... , living in the south ? ... my present LVR less than 20% ... yet no way I could even to 40% LVR ...!!! has always pissed me off all these get rich from banks lending into buying many RES properties ... they seem to have the banks as lapdogs
    His parents are both accountants and guaranteed his debt when he first started out. (Plus lent him money.) They may have had a very good record with the lender too. Maybe he has an eye for a bargain and appeared as a white knight for distressed vendors too.

  8. #2728
    FEAR n GREED JBmurc's Avatar
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    Quote Originally Posted by stoploss View Post
    JB unless its second tier they don't asset lend.
    So amount they will lend comes down to your serviceability and how you present this to the bank.
    Yes and to for fill this serviceability I found the banks won't include income from commercial property ,My companies income (share trading + business income) or the actually income from the commercial property I wanted to buy ..then they even though my personal income could cover the loan + all outgoings they still would only give me a very small limit to lend which for decades has been around 600-700k ..

    I do look forward to seeing if their is a point in time where my overall pa income gets to a point I might get some lending respect maybe $500k to 750k+ pa ??

    I know as most of my wealth is in commercial property+companies(+shares) with only are own home as RES bankable value the banks don't give much value .. they don't even value their own bank giving only 5% value to shares in their company aka Westpac(yet I'm sure if one had Mega millions invested in their bank they might think differently ..

    I guess hindsight I should have followed the young J.Brownlee and tried to purchase on average seven RES properties per year !! I recall talking with bank managers about following the path he took of the buy cheap RES revalue higher take the free equity buy again do the same over and over and they always put across the idea the bank would demand higher LVR 50% deposit to buy + higher lending rates ..

    Parents must certainly have good friends within the bank he gets lending from ..I see he was able to borrow an extra $3m ?? from the banks by getting in early to restructure his mortgages before new tighter loan-to-value restrictions came into effect.... (In talking with my recent business bank manager he stated the bank will allow a percent to be lend to the higher risk investors per month ... I guess who these are depends on contacts and not personal history)

    I do wonder how he would go with a 20-30% reduction in Capital values + 7-8% interest rates ... rentals have ongoing ever inflating costs insurance ,rates ,wear n tear...

    he owes the bank $11mill @ 7% paying off the present debt over 30yrs he would need to be making payments of $73,183 per month

    his gross rental income is 1mill pa - $878k I&P ?? maybe the bank lets him do interest only ? as he states he pays 100k in rental mgmt costs ...his rates /insurance/admin costs would least be another 100-200k !! 51x properties ... thats a lot of rate bills

    he does have 9mill in free equity ... reduction from the bubble valuations say 20% back to 2020 values etc he would have only have around 5mill in free equity ....I'm sure the banks might not be so keen on his debt limits if that happened ....
    Last edited by JBmurc; 15-08-2022 at 06:35 PM.
    "With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu

  9. #2729
    FEAR n GREED JBmurc's Avatar
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    Quote Originally Posted by Bjauck View Post
    His parents are both accountants and guaranteed his debt when he first started out. (Plus lent him money.) They may have had a very good record with the lender too. Maybe he has an eye for a bargain and appeared as a white knight for distressed vendors too.
    Yes for sure but he overall debt loads Vs age --- asset base looks stretched if rates continue higher ..I guess the bank thinks he will be able to just pass on any inflation in costs to hold these 51x Res Properties ..with ever higher rents .. I do wonder how the ever higher costs to rent will lend to some pretty pissed off tenants in time ...you see plenty of angry posts on FB rentals... 2 bed flat Invercargill $480pw etc
    "With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu

  10. #2730
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    @JBMurc, I think you've answered most of your own questions. Borrow enough to buy, tenant that, architect designs the improvements and extensions, borrow more on that, build it and tenant it, borrow on the equity, pay only interest, rinse and repeat. Thing is, you're not just a property developer/landlord, you have other things going on that banks don't like and won't lend while you do. Don't take it personally, just ask them what you're doing that they don't like, they'll tell you and you can decide to become a property magnate or continue doing what you do without them.
    Last edited by Baa_Baa; 15-08-2022 at 07:46 PM.

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