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Hi, Bob Anderson here. Welcome back to the next episode in our series on successful property development. In our last episode we talked about Step 2, which was due diligence and of course financial feasibility or number crunching. So here we are, we’ve found ourselves a site, we’ve done our due diligence, we crunched our numbers, and it looks like it’s a deal. But, we’ve got to finance it. Now how do we do that? I’m just going to talk about the normal way of financing if you look through a financer. In a future episode, I’ll show you how you can use creative financing techniques to actually finance deals with very little or none of your own money. For this episode, we’ll just talk about the conventional way of financing a development project. Now, there’s actually two types of finance that we can use when we’re financing a development project and it’s got a bit to do with the size of the project. Now, what we’re going to use initially is retail finance. For small projects, let’s say projects up to maybe 3 or in some cases even 4 lots for townhouses, you can go to a normal bank. It can be one of the big four or one of the second tier banks. Now, not all banks will finance four; some will only finance maybe two, maybe three townhouses, and a few might go up to four. This is basically the rule that the bank applies. What they’ll do, they will lend up to 80% of the end value of your project. If you go back to last week’s example, the feasibility, remember you’ve got four townhouses, $500 thousand each, total of $2 million. Now 80% of that is $1.6 million so when they lend you 80% of the end value, they’ll lend you 80% in that case of the 2 million dollars which is $1.6. Obviously, you’re borrowing money from a bank, you’ve got to pay interest. Now with this is what I call retail finance. Retail finance is the same sort of finance you use if you’re buying a house or buying an investment unit. Same sort of banks, same sort of criteria. Besides lending 80% of the end value, what you have to do is you have to pay the interest but you have to pay it monthly. It’s a bit like when you’ve got an investment property, you take in a loan and each month you have to pay the interest out of your own pocket. Because you have to pay the interest out of your own pocket, on the way through the deal, now each month you’re drawing more loan because you’re spending more money on costs. So each month, your interest is rising. So just like when you buy a house, the bank wants to check what we call serviceability. They want to be sure that you can afford to pay the interest every month. They want to look at what your income is, what sort of cashflow you’ve got, can you afford to pay this interest… If you can, you’re in the deal. Now the other thing they’ll look at is obviously is you have to put in some money of your own in. We call it equity. Now how much do you have to put in? Well, quite simply, it would be the difference between the amount of money they’ll lend you and the amount of money that you need. The amount of money that you need is all your total cost for the project. There’s a bit of a gap there obviously. Between the loan from the bank and the amount of money you need, that gap is the amount of equity that you’ll have to put in out of your pocket. That can come in cash or you might have a property for instance that doesn’t have any debt on it – an unencumbered property. You can actually use property in lieu of cash. But in any event, you’ll need to put in the gap or the equity to support the finance of that deal. That’s retail finance. The other type of finance – this is the one I use pretty much always use myself – is what we call commercial finance. Commercial finance is lent by the big banks but usually it’s a different division of the bank. It’s not the normal residential or retail lending arm. They have a commercial arm and it’s this commercial arm that lends commercial finance. It’s commercial because it’s mo[...]
Hi, Daniel Kertcher, CEO and founder of Trading Pursuits. Welcome to the monthly market recap for April 2013. Now, before we get started, there’s just a couple of quick things I need to share with you. Number one, what you’ll hear in this presentation is what we call general advice, it’s not individual specific advice. Furthermore, we haven’t taken into consideration your personal financial objectives. Number three, trading involves risks, past returns do not mean we’ll get the same returns in the future. And finally, we hold an Australian financial services license. Ok, now one of the big things to talk about this month is the gold price. As you may have heard, in the last couple of days, the gold price has fallen, one of the biggest two day drops we’ve had in over 30 odd years. In fact, the gold price has fallen about 15%. Now it’s started to rebound in the last day or so. Let’s zoom in now and a have a closer look at the gold price. Here you can clearly see how the gold price has fallen about 15%. I can say that’s one of the biggest drops we’ve seen in 20 years, 30 years in fact. You’ve got to ask yourself why is this happening. In times of high financial uncertainty, when the markets aren’t sure what’s going on, which is definitely the case… I mean, last month we were talking about the cypress scenario, which at that time seemed to be perhaps the reason for the markets to fall back but as it was it didn’t. The market stayed pretty strong. However, there’s still an ongoing uncertainty with Japan, with Europe, with the American economy. So, you would think then that investors would be scrambling to buy gold which is seen as a hedge or a safe haven in times of high financial uncertainty. Instead however, we’ve seen a massive drop in the price of gold. Now, who are the buyers of gold? Well we know around the world that China is one of the biggest buyers of gold in the world. China shut down their exports some years ago. That means all the gold that they mine in China, they keep in China. They don’t export it. On top of that, China has been a net buyer of gold, a net importer of gold now for many, many years. In fact they’re importing hundreds of tons of gold per year. China is stockpiling gold, as is India. India is a huge net importer of gold. With these massive big forces buying the gold, surely China and India didn’t both decide to dump their gold reserves in just a couple of days. No. As it seems to be with the news we’re finding through the market now is it seems that there’s been basically a concerted attack on the price of gold helping to drive the price of gold down. Well, who’s been doing this? Well essentially what we call short traders, people who are selling gold using what we call paper gold or synthetic gold. These are gold scripts that trade on the stock market or in the futures contracts, which don’t actually represent physical gold. It’s a little bit technical to talk about in this particular presentation. However, what we’re seeing though is a concerted effort to try to drive down the gold price. Now who is this helping? Well essentially it’s helping anyone who’s looking to purchase physical gold, because it’s brought the price back down. But it’s also helping the international central banks; those central banks of western countries… namely America, Europe, Japan – particularly these countries that are printing a lot of their own currency at the moment such as America and Japan. America is printing in excess of 80 billion dollars a month. Now, if the demand for the US dollar continues to fall around the world, and the uncertainty continues to climb, then investors are going more and more after gold. Now that’s not a good thing for the American economy. America wants the US dollar to remain strong. So, one way to try to scare off investors from buying gold and drive them back into US dollars would be to try to manipulate the gold price. Now of course I can’t point to any one particular group that[...]
Hi. I want to talk to you today about finding motivated vendors for your property purchases, when you’re investing in property. Now, there are two types of vendors. There are motivated vendors in a down market like this, and there are distressed vendors. Distressed vendors are the ones who have to sell, no matter how bad the market, no matter what the conditions. They have to sell. They cannot hold on. They don’t have the luxury of riding it out. So, divorce situations, mortgages situations, maybe deceased estates, where all the relatives are clambering around and the beneficiaries want their share here and now. They are the ones who are going to put it on the market and just take whatever they get. But there’s another type of vendor who’s just as good for us as property investors – and that’s a motivated vendor. A motivated vendor is one who has tested the market. They already know how bad the market is. They are feeling bad about having their property on the market for a long time, and they are very, very motivated to sell to anyone. So when a property seller first puts their property on the market, they are excited. The agents talk them up. The agents tell them they’re going to get a great price. They’ve invested in a marketing campaign, they’ve cleaned the house, they’ve spruced it all up, and they’re expecting the best. They are probably even exceeding market expectations and thinking their house is so beautiful and it’s entitled to a really good sale price. What happens then is over time, it stays on the market, and stays on the market, and the agent conditions them. Sometimes they have a buyer, and the buyer falls though. Sometimes, that happens several times. And every time, it’s open for inspection, and a buyer falls through, the agent says to them: “You know what? The market’s not there” Because, the agents are taught to make sellers lower their prices. So the agent is pushing them down. In these situations, the agent is your friend. You are wanting to offer a deal that’s perhaps a bit more flexible, and this type of vendor will take it because they know they’re not spoiled for choice. They know that supply exceeds demand, and they’ll be grateful for any offer they can get. So you can have things like longer settlements, smaller deposits, all sorts of flexible terms. The other thing you can do is lower the price, because the agent has been conditioning them for months to take a lower price. So, look for properties that have been on the market for three months or more; the longer, the better. It usually means that the vendor is ready to move and will do anything and you can control the deal better and make an offer that suits you. And be a bit cheeky about it. And don’t worry about it. The worst thing they could do is say no. Happy house hunting! The post Dominique Grubisa: Motivated Vendors = Big Wins for Investors appeared first on Stuart Zadel :: Napoleon Hill » Podcast Feed.The post Dominique Grubisa: Motivated Vendors = Big Wins for Investors appeared first on Stuart Zadel :: Napoleon Hill » Podcast Feed.
Hi! I’m Cherie Barber from Renovating for Profit. Now for exclusive viewers of Stuart Zadel, this month I thought I’d talk to you about granny flats. Now the fact of the matter is that granny flats are invading backyards right across the nation. They’re one of my favorite ways to add value to a property externally. Now if you’re renovating to sell, granny flats are a unique point of difference. Let’s face it, you’ve got housing affordability and rising childcare costs. A lot of people want their in-laws to be close, or babysitters or nannies, whatever it may be, to be close, but families don’t want these people to be living inside their house. This is where granny flats can be perfect. You can have those people close but not living right near you. Now from a renovating to rent perspective, granny flats are highly lucrative. In fact one of my students recently assessed the viability of a granny flat for his renovation. He was renovating the existing house to the front of their property. He was going to subdivide and put a granny flat at the back. Now just to come in and renovate the house is going to give him a rental yield of about 4%, with the granny flat it was almost 9% rental yield – so they are highly lucrative. Now, what does a granny flat cost you? The average cost for a studio granny flat; that’s a granny flat that doesn’t have a separated bedroom, just a big granny flat per say, your fully finished cost are about $50 to $70 thousand.You can obviously get one, two and three bedrooms, with the three bedroom granny flat sort of nudging up in the range of $100 to $120 thousand fully finished. So yes, they are a lot cheaper than a custom or a project home build. The question that I want to leave you with is next time you’re assessing the viability of a block or a potential purchase, ask yourself the question, can I put a granny flat on? Can I get that approved through council? And is it going to make it a lucrative property investment? See you next time. The post Cherie Barber: Granny Flat Gold Mines appeared first on Stuart Zadel :: Napoleon Hill » Podcast Feed.The post Cherie Barber: Granny Flat Gold Mines appeared first on Stuart Zadel :: Napoleon Hill » Podcast Feed.
Hi, this is Stuart Zadel and welcome. Today we’re going to wade into the deep waters of what many people believe to be the ultimate success technique – that is, the art and science of meditation. Now I’m going to attempt in 7 minutes or less to give you a great overview and insight into this deep, powerful, and ancient technique. Now in life and investing, sometimes we need to slow down to speed up. Just like in the Australian game of rugby league, you have to go backwards with the ball in order to move forwards. In life and investing, you don’t need to slow down, what you may need to do is calm down. By far, by numbers and by time and duration the most preferred method by the world’s highest achievers to achieve this has been the practice of meditation. So with that, I’m also going to mention a word here – classical meditation. Because according to one of my great meditation teachers, Michael Rowland, Michael says that meditation has been misunderstood, hijacked, mislabeled and misappropriated over the centuries by various individuals and groups to the point of confusion where most people don’t really know what meditation is. I thought we’d start there right now with what meditation is not. Whack it up here on the board and I’ll tell you what meditation is not. It is not affirmations. It is not visualisations. It’s not anything to do with music. It’s not anything to do with breathing. It’s not about stopping the mind, which many people believe it to be or a whole host and raft of other things that people believe meditation to be. This is a big “what it’s not”. That’s not to say that these aren’t beneficial in their own right and maybe a benefit to different people for different things, but they’re not classical meditation. What exactly is meditation? Meditation is nothing but essentially one word and that is extended concentration. If you’re going to look at this word carefully, concentration is made up of two words. First word con, as in consciousness or to become aware, and the other word centra or centre. You put those two together and concentration is to become conscious of your centre. Do you know, most people don’t even know who or what they really are. I’m reminded of the great animated film The Lion King. If you’ve seen that film, there’s a scene where that monkey has gone in search of Simba, the now adolescent lion that ran away and the lion is talking to the monkey and Simba says, “What do you know?” The monkey says something along these lines, “I know more than you think.” He said, “I know who you are.” He leans forward and he goes, “You’re Mufasa’s boy.” That was the lion king’s father. Now, just as in that, most people don’t know who or what they are. They actually misidentify themselves as their personality and nothing can actually be further from the actual truth. This is why meditation is such a fantastic, exciting, and actually never ending pursuit and journey into the self. But we only have 7 minutes so we’ll save that one and the rest of that for another time. Let’s talk about meditation – who can do it? Well, the truth is – who can do it? The answer is anyone. I know that’s hard to see. Anyone of sound mind can do this. You don’t need to have fantastic intelligence. You don’t need to have a great income. You don’t need to have great confidence. Your color, creed, religion, is absolutely irrelevant. All that’s required is a basic understanding of the principles, a willingness to do it, and I guess ultimately an open mind, so anyone can practice the art of meditation. Now I’d suggest when you get started, 5 to 7 minutes is a great place to start. Many people don’t stop thinking, they’re going to do hours and there’s all these people sitting in monasteries and stuff doing it for years of their lives. That’s the other great thing about meditation; you don’t need to go anywhere. You don’t even need to leave the house. It can be done in the privacy of your own home. You don’t need to go to a monas[...]
Daniel Kertcher – Market Update March 2013 Hi, my name is Daniel Kertcher, CEO and Founder of Trading Pursuits. And, welcome to the monthly market report for March 2013. And, before we get started, there’s just a couple of key things I need to share with you. Number one, what we’re talking about today is what we call General Advice. It’s not individual, specific advice. Furthermore, we haven’t taken into consideration your personal financial objectives. This is simply information about the markets on a general basis. Number three, trading involves risk. Should you choose to trade, that is your decision and you take full responsibility for the outcomes. And finally, our company, Trading Pursuits, we hold an Australian financial services license. Okay now, one of the big news items that I wish to discuss today is Cyprus. And, no doubt that you’ve probably heard of Cyprus in the media. Cyprus of course is one of the countries that makes up the Euro. And, unfortunately Greece, Portugal, Spain and Italy and Ireland: it also is in financial difficulty. So in order to receive a bailout from both the European Central Bank and the International Monetary Fund, the IMF- they have to agree to some very strict conditions. One of those conditions being, that they are literally going to deduct from people’s savings accounts with the bank’s money. So, literally charging a tax on people who kept their money in the bank. Now, obviously this has not been very popular among Cyprus’ residents. And as a consequence, there’s been a lot of protesting. However, it’s a key line that the IMF and the ECB want Cyprus to go down in order to get this bailout money, they want and literally go and tax the savers, tax the money in their accounts. Now this of course created a lot of panic, a lot of concern about Cyprus residents, keeping their money in the bank. So to avoid having a bank run, the banks in Cyprus have literally had multiple days of bank holidays. And, they’ve limited their ATM’s to only a few, about Four Hundred Euros at a time, daily maximum. So obviously, you can imagine the frustration felt by these Cyprus residents. Now, what has this done to the market? Well, upon first hearing of this news last week, the DAX Index, this is the German Index – it fell initially. However, you have to remember that most people in the world aren’t even aware of where Cyprus is on the map. And, in the grand scheme of things, it’s actually quite a small amount. They’re looking to raise about 5.6 Billion Euros with this exercise. Now, the Americans put about 5.6 Billion US Dollars or Euro equivalent on to their own national debt in every three hours. So you can appreciate that this is not really a major exercise. It’s a big storm in a tea cup. Obviously for Cyprus residents, it’s a big issue. But from a global point of view, the world is not even noticing. The market has fallen back initially. The S&P 500 for example turned with this news, not because it was Cyprus, more because the media blowing it out of proportions. But also, it could be a harbinger or a sign of what could happen in the future. Now, I don’t suspect that anytime soon we’re going to see the Federal Reserve and America demanding that the banks take money out of people’s bank accounts, or in any other country for that matter. However, it’s absolutely amazing and shocking frankly, to think that any country in the world would actually do this. So this is creating a great deal of uncertainty in the market. And when there’s a lot of uncertainty in the market, investors tend to panic and pull their funds out. So, we’ve seen a drop in the S&P 500 as well. Here we have US Government Bonds. Now US Government Bonds are seen as a safe haven in the market. So again, when there’s a lot of uncertainty in the market, Bonds tend to shoot up in price. And, you can see that that’s exactly what’s happened recently with this news about this Cyprus bank rating. Also th[...]
Bob Andersen, Property Development Expert, uncovers one of the most important steps in property development – the feasibility of a site. Bob talks zoning, size and frontage, amongst other gems of information valuable to any budding developer. Hi! Bob Anderson here; welcome back. Well, in the last episode we talked about Step 1, in our Six-Step process for successful property development. That was finding a site. Today, we’re going to go into more detail about Step 2 which is Due Diligence (what we call) and also the Feasibility, which in simple terms is crunching the numbers. So, we found a site but is it the right site? Are there any problems with this? Is there a reason why we shouldn’t buy? (Or) Is there a reason why we should buy it? So that’s what Step 2 is about. So, I’d just like to run through with you some of the aspects that we look at when doing the Due Diligence on the site. And, it is related also in the greats with Step 1, finding a site. So, one of the things we’re looking at is the right zoning. Now, zoning is simply something that councils, if you like, use to delineate certain uses. So you have certain land within the council area where you can only have a single house on a lot. You have certain areas where you can have maybe townhouses and apartments on a lot. You have other areas where, you know, for industrial use and so forth, for commercial use. So what we want is, we want a residential zoning where we can do, let’s say either subdivide it, or do take units, apartments or townhouses. Now, how do you find that out? Well, it’s in the town plan. You can go to the town council, you can ask the council or you can get a thing called the zoning map. Often, they are available on the internet on the website of the council, and they are often color-coded. So, in your particular council it might be for instance that the areas marked pink, are the areas that you need to look for. The pink areas, let’s say are where you can do townhouses or subdivide a lot into two. So, zoning is important. Now, another aspect would be the size. What usually happens is that with a particular zoning, comes a minimum lot size. In other words, to subdivide a lot, or to build townhouses on a lot, it has to be a minimum size, a minimum area. How do you find out all this information? It’s in the town plan – which you can read. Most town plans in fact, you can download off the council website, or you can go to the council and ask them. Also, you can engage a private town planner to brief you on all these things that you need to know. So, we’ve talked about zoning, we’ve talked about size. Quite often also there’s a minimum frontage- a minimum lot width that we need to ascertain. So, for me, they are the three initial things you need: zoning, size and frontage. I’ll give you a little example. In my part of the world where I live, we have a zoning called LMR. Now, that will be called different things with different councils and it might be called R30 if you are, you know, in Perth, or different things in different states. But, where I come from, the zoning I’m looking for is L.M.R. – Low Medium Residential. Now that means that I can put townhouses or apartments on basically. Now, that’s the zoning. The size, we have a minimum lot size there of 600 square meters. So, I need to find a size that’s at least 600 square meters with LMR zoning. Now, on top of that I need a minimum of a 15-meter width. Because, what we’re trying to do, if we’re doing townhouses, we’ve got a driveway, we’ve got some townhouses, the buildings and we have to have a courtyard. So, basically it’s very hard to work with anything less than 15 meters. So if I was to find a site, zoned let’s say, in my part of the world, zoned LMR, more than 600 (square) metres and more than 15 metres in frontage – I’m onto something. So I guess, the next thing is well, okay I know I can do townhouses, I know I can do apartments. So, is that the product I’m looking fo[...]
Crisis and Opportunity Dominique Grubisa, Australia’s Top Debt Expert, explores crisis and opportunity. Dominique gives us a run down of the GFC and what is happening in the world around us and shows us how in Australia, we are at the tipping point, in the world of opportunity. JFK once pointed out that the Chinese character for crisis is made up of two separate characters. One signifies danger, and the other signifies opportunity. So, JFK said “In a crisis, be aware of the danger, but don’t miss the opportunity.”” Right now, we have just come through a crisis. The Global Financial Crisis – the biggest financial meltdown ever since the Great Depression. Lives have been changed. Fortunes have been won and lost. But, it’s not over yet. We’re still having all sorts of after-shocks and the initial cause, the damage, hasn’t been cleared away. So, we’re tethering on a knife’s edge at the moment. And you may have seen this often in the news, with talk about the European PIGS: Portugal, Italy, (Ireland), Greece, and Spain – Insolvent European countries. And, right now, at the moment, Cyprus is having a crisis. Cyprus – little country near Greece, is technically bankrupt and, it needs a bailout from the rest of the European Economic Community. The only problem is the terms of the bailout are that the Cypriots raise money. And, one of the proposals to do this was to take ten percent from every bank account. Every deposit in the banks, over €20,000 (Twenty Thousand Euros) they were going to take a blanket ten percent off the top and use that to bail themselves out. Now, that’s gone through the Parliament and being rejected. But, you can see we are living in crazy times – times of crisis. Who knows what’s going to happen to Cyprus? Its’ banks are closed at the moment. Not due to open next week… because the government have said, “have to keep everything closed, if we open the banks there will be a run on the banks. People will want a withdrawal on their money and the banks will seize and collapse – and that will resound throughout the whole world. So what they’ve done is by law, they’ve mandated that the banks stay closed. They are not trading, they are just sitting. And so, I want you to be aware that anything could happen. The rules are all topsy turvy at the moment. So remember two things….. crisis means danger and opportunity. There’s massive danger. Guard against your downside. Make sure you’re in control and then a change of laws just like that won’t wipe you out or take ten percent off your bank account. Secondly, look for opportunity. Many of you are into buying distressed real estate and I’m going to be showing you how at a workshop coming up this year. Now, if you’re going to be doing that, and you’re interested in taking advantage of the massive opportunities that are around at this time, because of the crisis and because of the change, then what I want you to do is over Easter, if you get the chance, watch a few movies for me because that will really give you an idea of history in the making. We’re living through history now. First movie to have a look at is called Inside Job a 2010 documentary. Get it at your local video store or online. Second one to have a look at is Too Big to Fail. All about the GFC and who caused it and how it happened. If you know that history, you’ll see what we’re living through and you’ll see the opportunity. And the last one is called Margin Call, new release out now in video shops. Demi Moore is in it and Simon Baker, the guy from The Mentalist. Great movie but it will also show you that what we perceive as the rules, and the laws, and the way that we live our lives – the system – is just very much a game. It’s all a game. So, take risks, take chances, move with the change, guard against your blind side and make massive amounts of cash in this time of crisis. The post Dominique Grubisa – Crisis and Opportunity appeared fi[...]
Cherie Barber, Australia’s Top Renovator, reveals to us a quick, simple and cost effective way to move from novice landscaper to seasoned expert with her one simple tip on raising garden beds to improve the value of her well-regarded TV renovation projects. Hi I’m Cherie from Renovating for Profit Now, for viewers of Stuart Zadel, I thought this month I’d film a quick video about what I do with my garden beds. As many of you know, one of the great ways to add value is to improve the landscaping. The great Australian dream is the BIG backyard. But unfortunately, your front and rear yard tend to be the most neglected area of a property. I want to share with you what I’d do with my garden beds. If you’re renovating a property and it’s a low budget cost renovation, you don’t need to go elaborate landscaping lengths. You can actually get a good look, make your property look neat and tidy without spending much money at all. What I do with my low budget TV renovation is install treated pine sleepers. Now you can pick this up from many of the major hardware stores for anywhere between $ 8-12 for a 2.4 metre length. Now, here’s where a lot of people go wrong. A lot of people buy the treated pine sleepers and they actually install them flat, and that’s perfectly fine. But what it really doesn’t help you with is accomplishing bulk and scale. What I do with my renovation is turn them up on their edge. What I’m doing is, I’m giving the garden beds height which is technically called, adding bulk and scale to your property. Just by turning them up on their side you’re beefing up the property; making it look like it’s more substantial quality than what it really is. And this gives you the ability to back fill it with garden mulch, plants and pebbles as well. So a handy little hint that I find very useful for my low budget cosmetic renovation. I hope you find it valuable too. See you next month. The post Cherie Barber – Adding Value through Garden Beds appeared first on Stuart Zadel :: Napoleon Hill » Podcast Feed.The post Cherie Barber – Adding Value through Garden Beds appeared first on Stuart Zadel :: Napoleon Hill » Podcast Feed.
Stuart Zadel – Setting the Foundations Hi guys, this is Stuart Zadel and I want to welcome you to this month’s video educational piece. Just looking through a magazine, I don’t know if you subscribe to any of the real estate publications but this month’s April edition of Smart Property Investor and on page 74 and 75 is actually a double page spread from yours truly. I was just reading the article and there are some pretty good points in here that I’ve made. I’d like to share some of them with you right now for this month’s educational piece… First up is, I want to share with is in terms of foundations for setting a target or a goal. You can only go as high up in any building as the foundations are deep and solid so I want to give you some of those pieces now, something that you can build on. The first point I actually make in the article is this. There are only two mistakes if you will and I’m doing this up high. There are only two mistakes that people make when it comes to property or building their wealth. First one is this: Not doing the things that increase their wealth. The other mistake, you can guess it, is doing things that decrease their wealth. I know it’s obvious but it’s very simple. If we can simply increase number one, more in the things to increase your success and eliminate number two, the things that decrease your success, you can be twice as successful in half the time. We’re going to look at some of the things that we can do along the way. Now the article here starts off with a section talking about being motivated. I talk about, for any of you there biblical minded, King Solomon in the bible said without vision the people will perish. It’s true that most people do not have a vision for where they want to be and the future in my experience, people know what they don’t want, they know what they don’t like. I don’t like this 9 to 5 job. I don’t like working 8 to 10 hours a day. I don’t like the hour and a half travel each way a day. It’s not enough to know what you don’t want. You need to know what you do want. You need to have a vision for your future. It’s a great place to start. The next thing is it needs to be in writing. Why don’t we just pop that up there, that we need a vision and it needs to be in writing. That’s the place you might want to start. Now the other one talks about making targets or goals achievable. You know it’s a human trait that we way over estimate what we think we can do in one year. I’ll tell you what, you way underestimate what you can achieve in 5 or 10 years. It’s really chalk and cheese and the mind plays some little tricks on us. That’s why if you’ve ever been to one of my events, I’m always telling people this. We’re going to go to three things, we want to: Start small Stay focused Grow strong I’ll just show that to you now. B is we want to start small, stay focused and ultimately we will grow strong. In terms of starting small, you don’t need to pull of the empire state building on your first go do you? Many of you may have seen an interview with my Friends Troy and Anne from Adelaide. They spent two years doing their first small development and they made about $70,000. I couldn’t help but feeling in that interview that they felt a little bit down on themselves that it wasn’t a fantastic result. To do your first development, they’ve done it in two years and made a $70,000 profit. They’ve earned while they learned. That is a phenomenal result. You’ve got to understand that in anything you do, the first one is going to be the steepest learning curve. To build the team, get the education, do the contacts that is going to be the toughest one ever. Your first renovation, your first small development, your first property, whatever it is you’re doing. Your first one is going to be your biggest hurdle. Once you’ve done the first one, it’s quite simple moving along. That leads us to the next point, which is[...]
Bob Andersen, Property Development Expert, reveals to you the six major steps involved in successful property development. In this month’s newsletter, he gives you a quick overview of the six steps, and goes into a lot more detail on the first and significant step – how to find a site. Hi, Bob Anderson back again in our next video on our sessions on successful property development. In the last episode you remember we smashed some of the common myths or lies out there about property development. Things like you’ve got to be really wealthy to do property development or you have to give up your day job to be a property developer or you need decades of experience. Hopefully we’ve smashed those so what I want to do here is to move on in the real nitty gritty of how to put a property development together. Now, quite simply, property development or successful property development consists of six steps. Like everything, there’s a formula to doing things correctly. I’ll just run through those six steps now and what I want to do is spend each session going through in more detail each of the six steps. Okay, so let’s go through those six essential steps. Step one, find a site or a deal. Step two, we need to do our due diligence and look at the feasibility of it. Step three, will be finance. Step four, gain the approvals. Step five is the construction and step six will be our sales. Now they’re the six essential steps. What I’m going to do now is I’m going to into a lot more detail about the first step and in future episodes I’m going to take each step one at a time and go into further detail. Let’s start with step number one, finding a site. When we’re looking for a site or a deal, there’s basically two types or two areas to look at. One is what we call on-market sites and the other one is what we call off-market sites. On-market sites, they’re actually properties that are for sale today on the market. We can find those in a various number of ways, typically, real estate agents; but not just any real estate agent. What we’re looking for here, because we’re looking for a development site, there are certain real estate agents who specialize in selling development sites. Now these are the guys you will often see marketing new projects, they’re opening open houses for new projects. You’ll see them on realestate.com advertising projects. Quite often in an office, you’ll have agents that sell normal second hand stock but then you might have a specialist that sells new stock. Those agents nearly always sell sites as well. Number one, that was real estate agent. You know that you can actually pay somebody to find a site for you. They’re called buyer’s agents. Now it’s a certain type of buyer’s agent that we’re looking for; not the buyer’s agent that might go out and find you a property, an investment property, a home or a unit. There are buyer’s agents that specialize in finding development sites. They understand a bit about property development. They understand about the town planning aspects. These are the guys that you need to locate. Buyer’s agents go out into the marketplace and find sites for developers; certainly, you have to pay them something for it, often about 2% of the land value. It can really cut your time down and really narrow the focus down. I never worry about the little bit of money that you spend on a buyer’s agent. It can be really money well spent. Then of course there’s the internet these days such as realestate.com and the other portals. I’ve actually bought properties, bought sites off realestate.com and you can narrow the fields down as well. And then of course there’s the print media; magazines, local papers, the major papers where agents or even private sellers in some cases are advertising their property. They’re the on-market sorts of deals. They’re the markets that are out there. They’re on the market and you just need to locate them. There’s another type of opportunity that we call off-market. These are ac[...]
Daniel Kertcher, Australia’s Top Share Trading Expert, gives us a comprehensive market update for the month of February 2013. He explains some leading market indicators of the US economy and how they’re likely to affect the Australian economy. Hi, my name is Daniel Kertcher, CEO and Founder of Trading Pursuits. Welcome to the monthly market update for February 2013. Now, before we get started, there’s just a couple of key things I need to share with you. Number one, what we explain today is what we call General Advice. It’s not individual, specific advice. Furthermore, we haven’t taken into consideration your personal financial objectives. Number two ,trading involves risk. Should you choose to trade, you must understand your risks and know how to manage your trades. And finally, our company, Trading Pursuits, we hold an Australian financial services license. Okay, now there’s been quite a few things to talk about over the past month or so. One of the big things to notice is that the US New Homes starts has been surging quite rapidly. In fact, this is a very important point because in order for unemployment to improve in America, and therefore for the global economy to surge, as the United States economy starts to surge;- we need to see new home starts being built. That is, in order to provide employment, people have to have some place to work. If new homes are being built, and we’re also seeing new shops, new schools, new offices, etc. and this provides opportunities and areas for people to work. So one of the key factors for unemployment to fall is new home starts. Now, we’ve been watching this for many many years now. And what we can see is specifically in the last six to twelve months new homes starts have surged now to a point where they are back at the all-time lows from the past forty-fifty years. Now, after the 2008 global financial crisis, new homes start to fall, an all-time low in America. And it’s literally taken five years for them just to recover to the lows of all the previous recessions. And that might not sound so exciting but considering the super low that it came off; from 2008, this is a very very bullish sign. We can also see this in US initial jobless claims. This is new claims for people seeking unemployment benefits. And they have fallen to a five-year low as well. Now, we can also identify this in the earnings announcements. Just recently, the top S&P 500 companies in America have made their earnings announcements. In fact, about 400 of the top 500 companies now made those announcements. What we can see here is that companies earnings (that is) their profits are coming in higher than expected. We also see however, that sales are higher than expected. It’s one thing to have more profit, but it’s an important thing to have greater number of sales. Because companiescanincrease their profits without increasing their sales, sure, they can cut costs, but they can only cut back to the bone. In order to see real growth in the market, we need to see or get sales growth as well as profit growth. And that’s certainly what we’ve had in the past three months. In fact, this one has been one of the best earning seasons we’ve seen in the past three years. Certainly showing us a lot of strengths still coming out of the US top 500 companies. In fact, if we look at the chart of the S&P 500, we can see now that the value of S&P 500 has surged all the way back up now to 1,525 points. That’s only 25 points away from the all-time high of around 1,550 points, hit back in 2007. So, it’s quite feasible that within the next few weeks or even a couple of months, we’re going to recover back to the all-time high of the S&P 500. Now once that occurs, I suspect that the media will start to change its tone from being very negative and bearish to saying: “Hey, look! The entire GFC has now been recovered and the S&P 500 a[...]
Dominique Grubisa, Australia’s Top Debt Expert, shares with you three major items that property investors need to control with each purchase, and how it can be a major balancing act. Dominique gives us some pointers on how we can balance these three areas… Hi, as property investors, we have various things that we have to control and it’s a real balancing act. Whether you’re just sticking a toe in the water for the first time or whether you’re a seasoned veteran, you need to know that there are three things as property entrepreneurs that we’re interested in. First of all, we’re interested in tax, is great tax benefits involved in property and we want to maximise that, and minimise our tax liability. Secondly, there’s borrowing capacity. What entity do we borrow in? It will depend on who’s borrowing the property, is it a company? Is it a trust? Or an individual? Either way, the bank would want to know and banks lend easily to certain entities…. and they have a lot of red tape involved in borrowing in other entities. Finally, we are worried about asset protection. Traditionally, if we own in our own way or some entities that are exposed, then we are sitting ducks. And that’s really important, because most of us store or hoard most of our wealth in property. And our net worth, the bulk of our net worth is made up in property holdings. Let’s face it, property is a great vehicle for wealth and we hold a lot of wealth there. So it’s got to be right, how do we do it right? How do we balance up those three interests? Well, up until now most of us do it by risk reward ratio; I’ll either expose myself and not be properly protected because it costs too much to protect myself, in my own properties in my own name. And I’m sure a lot of you ask if I can transfer it to something safer but you have to pay stamp duty and it is just not worth it. Or else you are paying maximum tax and you are losing a lot of money by having all these complex structuring. That’s unnecessary and doesn’t leave any better protected at the end of the day. So, I’ve seen a lot of people have about 10 structures earning every trust and company for every different property they buy, there’s this entire crisscross structuring, and they have to file ten tax returns each year. And it is a massive, massive expense – they are losing tax benefits and it is really hard for them to borrow because the bank requires all sorts of hoops of fire to be dealt through to be lent the money for all the different entities. So how do we do it quickly and easily and simply to maximise tax, maximise our borrowing capacity and still stay protected, to not have to do the balancing act? I’ve devised a way, it is easy, and it’s quick and cheap. It can work for future properties but it can also fix up your existing properties that are exposed. The way we do it, is we set up a separate trust. Now don’t worry, there’s no tax involved or anything like that; this trust is just a holding trust. It doesn’t earn anything, it doesn’t borrow anything. All it does is sit there and hold your wealth or interest in company as it grows. As the equity grows over time and the property goes up in value, it remains protected and that’s what we’re interested in. Ownership stays the same, or for your properties, you buy any which way you want. You have ultimate flexibility for tax and borrowing requirements. So it is perfect; it’s a win-win situation, it ticks all three boxes, three areas of concern that we have as property investors. Now it is easy to understand when it is broken down, it a trust with a caveat registered on the title of your property. So next time I’m going to break that down for you and I am going to show you with my own little flow chart diagram how it works. The mechanics of it and why it is of interest to you and how you can quickly and easily take control as a property entrepreneur and not have to rely on your lawyers, and your accountants and your other expert team. You will get [...]
Cherie Barber, Australia’s Top Renovator, teaches us how to quickly add massive perceived value to a property. Today she specifically shows all of our budding renovators how to use a specific render to change a fibro house into one that looks like brick dwelling, and how to eliminate the need for external paintwork altogether. Hi, I’m Cherie Barber from Renovating for Profit. Now for exclusive viewers of Stuart Zadel, I’m going to film for you this week, a really great video on how to add a lot of perceived value to your property. In fact, in this strategy, it’s all about camouflaging. What I’ve got here, one of my TV renovations at the moment: and what I’ve got here is a five-door dwelling. We all know that there are lots of fibro houses right across Australia. And, there’s a real opportunity for you, as renovators, to come through and make these old fibro houses look like a brick dwelling. So you can see here, this is the old fibro behind. And, what I’m doing is I’m actually cement-rendering. I’ve actually just applied the base coat of cement render. This is a really great product called “Rock Coat”. And what it is is just a flexible render that goes straight on top of the fibre. The renderers can do a whole house in approximately two to three days at the most. Just to give you an idea of the cost, this whole property is a standard three-bedroom family home: the cost is $5,000 to render the whole house. Now the beautiful thing about Rock Coat, I absolutely love this product, the beautiful thing about it is that the color is actually already in the render. So it totally eliminates the external painting process on your wall. For those renovators who are on the budget, you need to really check out this product, because it’s fantastic. So this is once again really giving me the illusion that this property is much better than it really is. We’re taking an old fibro house, we’re rendering it, and we’re making it look like a brick dwelling – which jacks up the property value. I’m Cherie Barber, see you again next month. The post Cherie Barber – How To Add Value To Your Property appeared first on Stuart Zadel :: Napoleon Hill » Podcast Feed.The post Cherie Barber – How To Add Value To Your Property appeared first on Stuart Zadel :: Napoleon Hill » Podcast Feed.
Stuart Zadel, Australia’s Freshest Wealth Educator, shows us some enlightening facts and figures just published regarding property investing, and the minimum wage/income you need to replace your income. He also reveals 5 specific property investment commodities and how you can use them to your advantage. Hi guys and welcome; this is Stuart. I want to share with you a couple of minutes on this video some education; more about the big picture of creating wealth. Now many people elect to do that through property and being a property investor. So, I’ll start by just putting it up here, is that people want to be a property investor. They think it’s going to give them financial freedom. I want to share with you some of the recent facts I saw in a study that’s published and I’ve got that here. I’ll read it out as I go; it is done by a consultancy firm in Australia called the BDRC Jones Donald Group, and they survey there for 500 Australian residential property investors and they found that just 6% of these people, just 6% of property investors actually earn an income enough to replace their current income. I think it is a great thing or a great goal where you want to replace your current income, so it is a good goal. Yet through this strategy, people buy, hoarding and renting investment properties, and only 6% of them are achieving their goal. Now, what’s even more interesting is to dive into the facts a little bit more of these people. The average value of the property they have to earn to do that was 915,000 dollars, now that is not a cheap piece of property by any stretch of imagination. Not only that, they have to earn four of them for an average of $3.9 million worth of property to earn the rental income, sufficient to replace their income. The interesting thing also says that they have an average household income of $111,000. Now, I don’t know about you but that is well above the average Australian wage. The average Australian wage is about $63,000, yet here it’s saying to make it financially, earn an income sufficient to replace your income from rental properties, you no longer have to be buying another $915,000 out of most peoples’ league, you’ll only need four of them but you need an income, or a household income of $111,000. I think this is a little out of the reach of the average Aussie. Now, true, many of you watching this and certainly our market place and my average customer or clientele is certainly above average. They’re educated, they’re in fairly good money and they’re looking to do some pretty good stuff. I want to suggest to you a different way to look at this and that is not necessary to be a passive investor, we want to be a little bit more active and I believe you can be a property entrepreneur. Don’t get scared; big words; it is very simple; anyone of you can do it. Now I like to demonstrate by having this mindset and I believe you can achieve your dreams a lot quicker than the traditional investment group. So I want to suggest to you as an entrepreneur, there’s a minimum of five specific commodities that you want to be looking to buy in the market place, certainly from a residential real estate point of view, that we’re going to add value and make or achieve your financial freedom a whole lot quicker. So let’s look at them. The first one you want to be looking at is probably the most obvious one. You want to look at buying a commodity with a discount in the market. Now when I say commodity, obviously you’ve got oil, gold, and precious metals and wheat and all, they are just commodities in the market. There are also commodities in the residential real estate market place and one of them is to buy at a discount. If you can buy at a discount, the old saying goes, “you make your money, when you buy”, absolutely. So we want to buy direct from the seller or through an agent, not through a marketing group. Now understand, a marketing group puts a pretty significant commission for their reference, and I belie[...]