澳洲Australia property This months edition of API | Sydney


在澳大利亚 I need some advice regarding a property purchase. Property - semi-detached house Bedrooms - 2 Condition - average needs internal reno to modernise Street - one of the best in suburb Location - excellent Close to schools - yes Transport - 50m The pool at of an IP needs to be resurfaced (or so the pool doctor says), the cost was estimated to be $10K ($10,000), after recoverying from my impresssion of a cat coughing up a fur ball, it just seems far too much. Its just a standard poo


Hi all!

Well I must say, was quite depressed last night when my fresh copy of API arrived in the mail.. The story of the $20M portfolio couple had me feeling like a homeless bum (20M portfolio with $2M equity). And the couple with the $3M portfolio seem like beginners. The medium couple with the $8M portfolio and $4M equity seemed 'about right' in comparison :D

In all seriousness, I'm hoping others have received their copies and would like to discuss how the $20M couple was able to finance all those negatively geared properties. Sure, a few of them are pos now, they have 65 properties or something, I remember them saying they have $450,000p/a of tax deductions.. So it's sounding quite negatively geared. She is a mortgage broker who apparently makes alot of money and I can't remember what he did/does.

Either way, I'm wanting to know: How on earth does anyone no matter what they earn continue to have no problems (with the 3-4 lenders their portfolio is apparently financed with mind you) continue to pick up more property whenever they feel like it when for most people, no lender will look at them once they've reached the 4 property mark. How on earth does this work? Why don't lenders tell them they're too rent reliant, or they cannot possibly service the loans on the income they are earning? Thats what they say to me and I CAN service the debt with my own income.. There's no way these people could be doing this without lenders accepting capitalising interest or similar, right? How can I/we do the same? There has to be an answer for this  

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At a 90% lvr and near half a million of tax losses (even if some are paper losses) would severely screw with my sleep at night factor. Even if they had to only cover half of that - it's still $200k+ a year out of pocket loss.

Nothing to be jealous about (in my opinion). It's not so much the 90% lend but the losses :eek:

How do they do it? Obviously the full facts are not included, and the full picture presented, which is one reason why I don't buy API anymore.

Perhaps they have joint partnerships, or vendor financing going on, or "who knows"

The $8mil on 50% lvr a much more sensible and less risky.  

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well the woman from the $20m couple is a finance broker and has a loan book over $1b that should help with the servicing!!

she would earn around $1.8m per year now after costs

personally i dont think she is a great investor

she has basically just stored her wealth in property and had average growth along the way so she has done well but no genius investor that is for sure

the gladstone buy was a good one but more inspirational investors who create big portfolio's on much lower incomes make better stories imo  

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Aha, yea $1.8Mp/a outt'a do it.
Fair enough, although. WHAT A WAGE..!! Saving some serious tax there, too.
I don't see how she could go too far wrong either way. Just3% growth will give them $600,000, 7% 1.4 Million. Although thats not even a years wage.. :D

Either way you look at it, when groweth is up: The $20M couple are MILES ahead of most. Even the $8M couple.. Size matters  

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What gets me down (possibly) even more is the fact that I sit in a box five days a week and earn INCREDIBLY less than this couple.. It would take me 27 years to earn what this woman alone earns in 1 year.  

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So basically, this is the story of a very wealthy buisness-woman and not replicable for most mere mortals. Makes me feel a little better.  

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What are the names of the couple?  

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investor2009 achieving a portfolio of $20m with only $2m equity is a very rare case. As BigTone said they must have extremely strong income to support this. I certainly wouldn't feel disheartened because there is more than one way to make money in this area.  

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Imagine if property prices dropped by 10% or interest rates rose by a few basis points.  

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I did not see details of the story.
However, if their income is so high, I'd be guessing they have plenty of equity outside of their property portfolio.
The 2 mil equity is just the amount they have put into their property portfolio isn't it?
Why wouldn't you put in the minimum required if you have plenty of cash reserves elsewhere?  

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it is $20m with $6m in equity not $2m,

her business would also be worth $4-6m

i drop of 10% of property values short term does not really hurt them at all, it is the long term that counts, if property went down 20% over next ten years then they have do it all for nothing, if it goes up 50% then they have $16m in equity.

much of her portfolio would have been purchased in the days of easy credit, she used to have assessors from two banks actually sitting in her home office, certainly helps with approval conversion!

i know my portfolio was really built in the low doc glory days where it was easy to get $3m with genworth and $3m with PMI (QBE) as long as you kept buying well and the equity was there. she certainly built hers more in the glory days of easy money.

investor 2009 this limit u talk about 4 properties per lender is not right at all, from ur posts u r clearly frustrated at ur situation but there r many ways to skin a cat , u just need to be more creative and work around the hurdles

and for being jealous of that couple, they took a risk probably earned $30k max in first year and have built up from there, she took a risk, had a crack and is enjoying the rewards, that is an inspiring story from a business perspective, as i said she is no property genius but time will work its magic on her portfolio and they will be very wealthy.  

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Thanks everyone. Yes, I'm frustrated, but my frustration is venting from my current earning capacity I've learned. I'm still doing well and if I sit on a similar wage into the future then I just have to wait. It's all I can do for the moment. Apart from earning more money.  

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Just a general comment regarding all these 'profile' stories in the mags. It is something I've thought about commenting on for a number of years, but have refrained from doing so. I've got every API mag relaxed since Nov '97 so I've read a few 'profiles' in that time.

I like to throw into the mix when reading them - all the undeclared costs & indeed the real costs if things go awry!

Items like rates, insurances, mgt fees etc. and then the big ones.....depreciation add backs, selling costs, mortgage discharge (paying out) & CGT.

Ok, I hear you all saying that these don't matter if you never sell, and 50% CGT relief applies blah blah.....true!

But, if you do have a change in circumstances (such as i am in currently) e.g. relationship breakdown - then the whole picture can be flipped on it's head big time!!!

Suddenly your multi millionaire profile is blown to bits and you're no longer a $MM on paper - you are only worth a couple of hundred thousand cash depending on your asset holdings.

Also consider that the increase in national 'relationship breakdown' figures is significant and that it would be fair to suggest that not all these profiled people will be immune.

So by all means admire and even salivate at the perception of short term 'success & wealth accumulation' if that's what knocks ya rocks, but don't be blinded by it, because it's not always as portrayed!!

I find that YIP Mag is terrible for not portraying other "real costs" in their 'profiles'. API is a tad better and is a better quality of reporting IMHO - in just comparing the two that is.

I still enjoy the API read, but I am far more comfortable and focussed on my own investing & developing; and I am far more comfortable in my own skin - than succumbing in awe of the published feats of others. Investor 2009, you'd be wise to do likewise! Read about 'em, enjoy the story, but don't fall into the comparison trap!

Regards,

Ian.  

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Ian (WA) said: ↑
I like to throw into the mix when reading them - all the undeclared costs & indeed the real costs if things go awry!

Items like rates, insurances, mgt fees etc. and then the big ones.....depreciation add backs, selling costs, mortgage discharge (paying out) & CGT.Click to expand...
Thanks for the post Ian.

That's an item that hardly ever gets mentioned and I'm not sure of the details. Is it where depreciation claimed during the holding of a property gets added back on to the sale price?

There is a lot of talk about the benefits of depreciation but none about this sting in the tail when time comes to sell.  

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G'day Vaughan,

Yep, the building depreciation (capital allowance) for the time that you've held the property as an IP gets added back to (or should I say, 'subtracted' from) the cost base.

As my accountant said to me years ago when I first spoke with her about it, "...it's essentially a bit of tax relief up front, but it ain't free, you pay it back when you sell!!"

Soft furnishings etc just remain as depreciated i.e. they have exceeded their life expectancy and are generally close to zero dollar value. These depreciable items are not included in add backs.

Yep, it can make a big hole in your profit if you don't have it covered.

Cheers!

Ian.  

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Ah - $1.8mil income. Yep - give me a year or so on that income and I'd have a huge negative geared portfolio too.

Sorry - the portfolio doesn't make me jealous. The income would be nice tho.  

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lizzie said: ↑
Ah - $1.8mil income. Yep - give me a year or so on that income and I'd have a huge negative geared portfolio too.

Sorry - the portfolio doesn't make me jealous. The income would be nice tho.Click to expand...
Its only $34,615 per week.  

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Terryw said: ↑
Its only $34,615 per week.Click to expand...
:rolleyes: :cool: :D

An annual (for some) income each week? Good on her! Just not impressed by the highly negative portfolio - but each to their own  

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Depreciation add backs are hardly important in the big scheme of things.

You get cashflow today and next year etc... which keeps you in the market and allows you to buy more.

Then you pay back a fraction of it (but it is deflated over time - so the longer hold the better).

Result: Benefits > Costs  

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investor2009 said: ↑
Thanks everyone. Yes, I'm frustrated, but my frustration is venting from my current earning capacity I've learned. I'm still doing well and if I sit on a similar wage into the future then I just have to wait. It's all I can do for the moment. Apart from earning more money.Click to expand...
be glad you can get that once i get my first IP (second property) i cant service another one and thats about 600k total  

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