Australia Properties Settling Woes - OTP

Murphy is ever present and when Murphy strikes twice, the pocket bleed. Recently, the valuations for 2 properties which are about to settle came in really bad - like 12% off!!! 

What the? 

Update 17/10/2015 - 

Cornerstone got 80% loan with ANZ and is on its way to be settled. 
Carnegie got to $375 after pressing the valuer. 

Lesson learnt is do not despair, there will be a valuer who will value the property at the right price. The only issue is a lot of such lenders do not operate for foreigners.



Update 25/10/2015 -

Cornerstone settled. Well I have to call Netbanking ANZ for link up on monday.

Will be expecting approval for Carnegie on 26th October.

Cheers!


Update 15/11/2015 -

Cornerstone settled and rented for 5% yield with 2 weeks of vacancies, albeit for 6 months term. Professional photography was done and the developers love them so much, they paid for the photos and I get free photos for publicity. The other unit competing units rented out 2-3 weeks after mine. Similar properties could be had at the next stage, don't miss it!

Continuing the OTP woes, ANZ changed its policy of not granting loans to units smaller than 50sqm and hence, I have to fork out extra $20k for NAB's offer. Carnegie was rented out for 4.3% yield for 24 months before settlement.

All is good. Pending settlement from developer. Fridcorp takes care of their buyers.

Both developers were highly recommended, Consolidated Properties and Fridcorp.

Next Step - Developer

There are just so many branches in property business. As a investor, there are already tonnes of information to digest, the ultimate aim of property business is to develop raw land and add value to it and finally able to market this to other people. 

May I suggest the following levels of investing which I have taken.

a. Principal place of residence - subsidised housing

b. Single bedroom Apartment in City Centre - done

c. Hotel Suites in holiday destination - done

d. Single bedroom Apartment in sought after suburb - done

e. 4 Bedroom Townhouse in growing suburb - done

f. What's next?

As you can see, I set a path of stability for myself. Investments are measured with income generation as the key considerations and rentability as the end result. Apartment in city centre would be high sought after by working professionals needing a place to stay during their attachment. It will not have high capital growth - for sure, unless the city grows in tandem. In fact, it will have oversupply issue. Again, its managed risk. If you are able to ride it out with lower rent, you will manage well. Hotel suites are a huge cashflow for operators, why would it do different for owner occupiers. If the price is right, you are able to rent out lower. Again, capital growth is limited. I'm happy with 2-3% gross anaemic growth for very little down payment. They kept me grounded with cashflow til my next purchases. 

Single bedroom in a sought after suburb is bit risky but as the price is out of reach of many, a well designed layout could do better than a 2 bedroom. Again, if I have a choice, a 2 bedroom apartment would be better for a suburb location. 

4 Bedroom Townhouse in growing suburb is the highest risk in my limited exposure to property. Its the most expensive of all and its tenancy depends on growing family. I'm a grand old age of 5.5 years old in property business. This, I'm going for capital growth. This might appeal to owners occupiers market. 

I've always maintained that I would not sell any properties and allow them to grow and support further investment. I've also shared over 3 years, the single bedroom city centre apartment has grown but policy changes in that country does not allow for withdrawal yet due to the changes in LVR. I'm happy it has achieved enough capital growth to cover my initial outgoings. Should I be able to take money out next year, I would have nett zero down with just monthly outgoing fees. Consider it as long term loan at favourable rate. 

Hotel suites have just completed. It did not do so well. I expect it to do better in the next few months as it gain traction. Should it bombed.... I might as well do Air BnB in that sought after location for tourist. 

Patiently awaiting results from australia for the other 2.

Next up... the ultimate dream - to develop my own apartments; but firstly, I have to learn to do duplex or triplex. If there are any resources out there, please point out to me.

thanks!

Australia properties Settling Jitters

Come next month, 2 project would be settling soon. 2 Morton Avenue and Cornerstone Living (valuation 24th Sept).

Cornerstone living is part of the massive 600million regeneration project @ Coopers Plains. The concept for this investment is to buy in early at the early stages of a multi-stage - 10 years regeneration programme, the idea is later stages will definitely cost more and hence it is a sure guaranteed way of capital appreciation (IF market condition holds). Still with the macro environment changing and APRA changing the loan landscape, it still sends me some jitters as I await the valuation report next week. I've also asked to see the next few stages from the agents and he has assured that valuation is no problem for the project. 

2 Morton has also come back with good results (albeit from the agents as well) this means a jittery 1 more month to go and I've got all my 2nd tranche of deposit ready. Morton Avenue project is a strategy to buy within amenities and next to railway station and near Campuses, it should do well with rental. 

I am on an expansionary phase and would not take any chances at all. 

Waiting is horrible. 

Price of Stocks Rise and Price of Stocks Falls

The recent slump of stocks have me rolling on the floor laughing. The fifth person have an article written on this. It was also quite fun seeing friends' post, that they have gone sick from the falling stock prices. Today, stocks have almost recovered from their earlier week fall. So what really happened? Absolutely nothing! 

Here, in Apexproperty, we believe in assets where you have full control and at least, you have control over its price to sell, its cash dividend you want, only then... its an investment, only then its a business. When you buy into a stock, say Starhub, yes, its a fantastic cashflow company with its own economic moats and all but when it comes to controlling the business when it goes down, say you have a brilliant idea to improve revenue, can you? Also, when the management wants to do something, i.e., issue rights, can you?

If you look at great blue chip companies such as telcos, and you say, hey, the NAV, the Valuation and the cashflow is such and such, therefore the investors are willing to trade security with lower yield and lower growth, which is fine. If you look at property as a business, you will find similar valuations and similar yield points. So, I would rate such 'small business' of a buy to let property to a huge business such as telcos with the exception, I have full control. I have no fear of stocks rise and stocks fall. (experienced investors, sorry, I don't mean you, you would continue to accumulate and while I can't)

Without subjecting myself to the market whims and fancy, I definitely sleep better and was having so much fun reading "predictions" from economists. 

Hey, fear sells... and stock market is a casino. Cheers!

Where is Greece?

Market watch published an article on the 13th Aug which showed the world map by market capitalisation. 

Imagine how we used to be spooked by some place called Greece? Lets see if you can find Greece in the map. I can't. I also won't be bothered. When Greece disappears from the financial world map, nobody would even notice Greece has gone. I am certainly not bothered by the Greece Contagion. In fact, when Greece contagion came on, I was happy to see the stock price fall. This means the price is undervalued. Happy investing. 

When Iceland went bankrupt, no one actually cares. So today when China devalues the currency, what do you think will happen compared to when Malaysia devalues the currency? 

Understand the world market, which are the countries that will dent the world economy? when market misjudge, go in hard and make a killing.

By Steve Goldstein

Published: Aug 13, 2015 8:47 a.m. ET

A drug call hopium

I never believe in HOPE. What is it about hope that people hang on to and yet do not want to do anything about it? 

I've met many people who wished they can quit their job, retire comfortably, go on vacation, go volunteer at 3rd world, doing some good, yet when I ask them, how do they do it? they don't know. They just hope. Hooked on Hopium.

I think I've been able to influence some people as I spoke to Colin and Jon today. They are "suffering" from a disease called "flat account". In fact they had started to buy property and are saving every single penny for this purpose. Just like brave heart's rousing speech in front of the people of Scotland as they formed up to fight for freedom... "for freedom!". We too have sacrifices to be made in order to make that transition from current state to the state that you want. Do not get hooked on Hopium. People who are hooked on Hopium takes huge risk in not helping themselves, not saving, not investing and best of ALL... not educating themselves. 

Yes, taking he first step in investing is scary. It is a world full of scams and everyone you spoke to seems to be a scam artist. Keeping the money in the tin under the bed seems to be the safest; tuck yourself under the pillow and inhale Hopium away.... because its so scary outside. I fear for you. Your actions scare me. 

I met Minting, I think thats her name. She had the same mindset as me! fantastic! I think she will be a good investor. She had already worked on her balance transfer. I shared more with her so she may have a bigger market to play with. We discussed investment tips and who are the best investment guru. As I shared with her, still I am grateful to Marco Robinson and the Wealth Revolution Group that I build my knowledge and mindset with and I'm still recommending people to take his course. Caveat Emptor with any investment decision.

Dual Key Ready Layouts

I just discovered a complete makeover of some condo units that are able to covert to dual key and this blog post aims to keep track of such units for future reference. 

1. Northavale - CCK - 3 bedroom unit conversion
    Taken from this blog  

      Original

       Converted

2.