Yes there is an alternative and if you are wondering what I am talking about you will need to go back and read the previous posts. You can click on them here:

http://investinginproperties.com.au/debt-vs-cashflow-property-investing-for-life

http://investinginproperties.com.au/is-property-investing-debt-worth-it

We came up with this idea where we would make chunks of money and then use that to build up a Make it Keep it portfolio – A MIKI.

So for example, let’s say that we buy or build or strata a four-unit development. The plan would be to sell three and keep one. We could continue to replicate this but each time we would keep more units. So the first project would give us 1 and the second project would give us 2 and so on until we could eventually own a whole block of 4 units.

This is a simplistic way of looking at it but you get the concept right? To start off you might want to just do a duplex and slowly work up to a triplex and before you know it you will be pricing up a six pack!

Each deal is relative to your own experience. Buying a six pack of units might seem out of reach to some but you have to climb the ladder to get the view so start at the first rung and work your way up.

Can you see what I am doing here? I am creating a situation where I own the property outright and by doing it with chunks of money, I have more control over how much debt I want to take on.

In addition, in the meantime, it’s a good idea to pay down what debt you do have on your portfolio as quickly as possible.

Have a think about this and I will wrap it all up in the next post.

You would have read in my previous post that years ago we decided to lay out our wealth creation plan and part of that strategy is the make it keep it rule I created – the MIKI.

We worked out that we needed 200 properties in our portfolio to create the income we desired. This also meant 200 tenants and 200 maintenance issues to meet our financial goal.

The tenant issue wasn’t the only concern; with 200 properties comes a lot of risk and we knew that our passive income could very easily be eroded by maintenance issues such as a broken stove; or an air conditioner on the blink’ or if we needed to repair a kitchen or a bathroom or paint the inside of the house.

Another big risk is the debt associated with 200 properties. Let’s just say initially that we bought those 200 houses at $100,000 each, and we mortgaged them at 80 percent.

So 200 houses at 100K at 80 percent, that’s going to be a $20,000,000 portfolio. A 20-million-dollar portfolio sounds great but in this example we’ve also got 80 percent of it mortgaged. So that’s $16 million worth of debt. I don’t know about you, but who wants $16 million worth of debt?  We certainly don’t.  And the reality is that that leaves $4 million worth of equity, which is at the mercy of the market.

Debt is a double edged sword. It’s a fantastic leverage tool to allow you to grow your portfolio but if the market turns and you don’t have a plan B, that debt can hang your entire portfolio.

Let’s say that the market dropped; suddenly your 200 houses are not worth 20 million anymore, they’re worth 18 million. It’s highly likely the bank could reassess your loans and say, “We want you to lower your mortgage to 80 percent of the current worth of 18 million.”

All of a sudden you need to top up your mortgage to keep it at an 80 percent loan to valuation ratio and that can hurt.  In this example, that top up, by the way, is $1.6 million.  (GASP)  Take into consideration that you could sell off a few properties (hopefully they’ve gone up in value), but you still have to keep the whole thing geared at 80% … well, let’s not even go into that mess.

That’s when we really got clear on what we needed to do. There is an alternative and I will tell you about in my next post…..

I’m so excited!  Property Millionaire – the brand new book of which I’m one of the contributing Authors is an instant best seller!  It’s sold over 8,000 copies in its initial release!

In fact I’m so excited I’m going to do something I’ve never done before – I’m going to allow anyone to ask me a question absolutely free!

Normally you’d have to attend one of my seminars or join one of my coaching programs to ask me a question, but as a special one off to celebrate the successful book launch I’m going to run an exclusive Webinar to answer any questions you may have on How to Maximise your Real Estate Investing.

To ask a question all you have to do is post a comment at the end of this Blog post asking me YOUR question – and because you’ve asked a question you can attend the live Webinar, as my guest, absolutely free.  If you don’t receive emails from me already and you want to get access to the Webinar Recording then ask a question or go to www.JennieBrown.com.au and get one of my free gifts so that you can receive access to it.

Remember normally you’d have to attend one of my live events (and there are no public events until March next year) or be one of my paying coaching clients to be able to ask me a question like this – so join in the celebration of this successful book launch by commenting and asking a question NOW.  I look forward to answering your Property Investing questions!

Jennie.

PS  This will be limited to just 20 questions, so GET IN QUICK!

UPDATE: Due to the massive response to this blog post we will be holding a teleconference at 7pm Thurs 2nd December 2010. All those that asked questions will receive an email detailing how to join the teleconference. I look forward to talking with you then! Jennie

I’d like to explain to you my make it, keep it philosophy. I came up with this quite some time ago. I don’t know about you, but I like to make money and I also like to keep it. So I call it the make it, keep it philosophy, or, as I’ve nicknamed it, the MIKI.

Investing in property has a lot of ups and downs so it is critical that you have a really good reason behind what you are doing. I am talking about the “why” behind your investing. Money is a shallow goal so you have to have something that really drives you to succeed.

Something that is just as important as your reason for investing is your strategy to be able to keep the money you make, which is why I created the MIKI.

Quite a number of years ago, we sat down and tried to work out what might be the best way to create a passive income through property and then how we would sustain that wealth and effectively apply the MIKI.

At the time we looked at a number of strategies. Positive gearing was the one being touted the most, so we looked at that first. We did the numbers and figured out that we would need something like 200 properties to create the income we desired at the time.

This all seemed well and good but with that many properties comes a lot of risk and a lot of problems – 200 in fact…. But I will elaborate on that in my next post.

When you are putting together your wealth creation plan make sure you have a strategy in place to keep the wealth once you make it.

What’s your MIKI strategy? I would love to hear your comments below.

Well its Saturday morning which is the perfect day to get out and attend some open for inspections in your local area. Before you go have a look at these property investing strategies that I gave during an interview with Your Mortgage magazine:

5 Cheap Home Staging Ideas When Selling Your Home

If you’re gearing up to sell, give your property the best opportunity to achieve a great sale price by following

these expert home staging tips!

Tip #1: Make an entrance

It’s important that the entrance looks appealing, as this is the first thing that potential buyers will notice. It’s known as “curb appeal”: if your property doesn’t have it, there’s every chance that a prospective buyer will drive straight past your home without even stepping foot inside. “Add simple things like potted plants and a welcome mat at the door,” suggests property expert and educator Jennie Brown. “If you have no distinguishable entrance leading to the front door, you may also want to consider placing a few large pavers in the grass.”

Tip #2: De-personalise your home

Remove personal photos and knick-knacks wherever possible, advises Liz Hayde from Insighted Home and Garden Styling on the Gold Coast. “You want to allow the purchaser to fall in love your home and see themselves and their family living in the space – not you and your family,” she says. Stow these items away in cupboards or draws during inspections and arrange stylish lamps and vases on bench tops and shelves instead.

Tip #3: Refresh or replace old, worn furniture

“Prospective buyers can’t always visualise what a room could potentially look like, so you have to make every room look as good as possible,” Hayde explains. If you want to keep your costs low, consider hiring a few key pieces of furniture and/or accessories throughout your sale campaign. “Attractive furnishings will help present your property to a standard like that found in a display home,” Hayde says. “If the property is vacant, it’s wise to invest in furnishing at least one room, so the property appears more warm and inviting.”

Tip #4: Get cleaning

It sounds like a no-brainer, but many sellers fail to place enough importance in the value of thoroughly cleaning and de-cluttering prior to an open inspection. “Even an older-style home will pick up value if it’s clean, neat and tidy,” Brown says. “You may also want to replace old, worn-out handles on doors and kitchen cupboards with new handles.”

Tip #5: Get a second opinion

If you’ve been living in your home for a long time, you may be blind to its shortcomings. “Many vendors have an exaggerated rosy view of their home’s appeal, and they’ve become so used to the flaws and imperfection of their home that they no longer notice them,” explains buyers agent Frank Valentic, managing director of Melbourne-based Advantage Property Consulting. “You need objectivity when selling a property, so ask someone else to inspect it as a prospective buyer would. That’s the honest sort of input you need.”

Now you have everything you need to make your home or investment property ready to sell! These property investing strategies could literally add thousands to the end value of your property.

What did you think of these property investing tips? Have you tried anything yourself that has worked? Let me know, i would love to hear your comments

Hi everyone

I thought this would be a timely video for you to have a look at now that we have completed the six part series on subdivision. Its a fantastic property investing strategy so click on the video below to view my thoughts on subdivision and then if you haven’t done so already, go back and read the six part series again – there is a stack of information there to help you get started on your subdivision strategy.

To read my six part series on subdivision click on the links below:

Part One – http://investinginproperties.com.au/know-your-subdivision-parameters

Part Two – http://investinginproperties.com.au/finding-a-subdivision-deal

Part Three – http://investinginproperties.com.au/who-do-you-ask-about-subdivision

Part Four – http://investinginproperties.com.au/subdivision-costs

Part Five – http://investinginproperties.com.au/manage-your-subdivision

Part Six – http://investinginproperties.com.au/selling-your-subdivision

We are at the final stage, be sure to read my previous 5 posts on subdivision before reading on. You can view them here : Post 1 Post 2 Post 3 Post 4 Post 5

Finally we get to see the fruits of all our “hard work”. So far we have discussed the parameters of a good subdivision deal, how to locate one, who to ask about how it’s done, what the costs are and the importance of good management.

Now we get to test the market.

Like all property deals it all comes down to the numbers. If you have done your feasibility correctly you should have left plenty of margin for cost and time blow out as well as unfavourable market conditions.

Depending on the type of subdivision you may have ended up with a vacant block, a removable house, or a brand new dwelling.

When preparing your project for sale it’s so important to ensure you know who you are selling to. Getting the marketing right is paramount to your success.

If you have split off a vacant block of land then it can be often difficult to sell to the market given that it will perceived as just a block of dirt. In this situation it is worthwhile considering different options to achieve a quick sale. This could entail packaging the land up with a builder as a house and land package where you provide the land and the buyer negotiates building a home with a builder.

Another option could be to acquire an artist’s impression of a new dwelling on your block of land; this will give the market a great perspective of what is possible with your site rather than just a heap of lawn to mow.

Whenever you sell a property always do your research on finding a real estate agent. Find out what sort of success they have had recently, how their commission structure works and what sort of list they market to.

See the selling process as a structured piece to your puzzle, not just throwing a sign up the day before it goes on the market. Spend a bit of time analysing who you will market to, how you will communicate with it and what timeframes you envisage for the entire campaign.

A lead up to the sale date can generate excitement in the area simply by erecting a “selling soon” sign half way through the subdivision. People are curious and giving them a taster will whet their appetite in anticipation of what’s to come.

Finally, remain realistic and unemotional about the sale. It is human nature to become attached to something that has taken your time and effort but it’s important to stay focussed on your original feasibility and be flexible with the changes in the market.

Don’t get greedy and keep in mind your holding costs; look for the win-win outcome and you will be surprised just how smoothly things may run.

Check out this article from Brisbane Business News quoting my views on how government policy affects investing in retirement villages – are they the new property investment frontier…

The New Investment Frontier

STATISTCS that show seniors are likely to represent almost 30 percent of the population by 2050 has thrown a huge spotlight on the investment potential of the retirement sector.

To explore the viability of investing in the growing sector, Gadens Lawyers is teaming up with the Urban Development Institute of Australia (UDIA) and MacroPlan Australia to present a seminar focusing on whether retirement villages are the new investment frontier.

According to Brisbane-based property investment consultant Jennie Brown, this investment strategy isn’t more widely known or understood today because caring for the aged was traditionally undertaken by not-for-profit groups.

“Organisations like the church, the government and other community-based or focused groups used to run retirement homes as a service to the population,” she says. “However, these days the government has changed direction and encouraged the private sector to become involved.

“I believe this was due largely to the predicted size of the so called ‘grey’ population, which governments all over the world are realising will become too large for the tax-paying public to support.”

Brown says trust-ownership, high rental yields and excellent depreciation benefits mean retirement dwellings ‘make wonderful long-term investments’. The retirement villages investment seminar takes place at Gadens Lawyers Brisbane office on November 24.

What do you think? Pretty interesting stuff isnt it? I would love to hear what you think, just post your comments  below!

Great news everyone!

The all new “Property Millionaire” book as just been released and I am one of the contributing authors!. Its already a bestselling book and explores how ordinary Aussie’s are making stacks of money investing in property.

Check out his fantastic interview i did with one of the co authors that attended one of my Bootcamps this year – its a brilliant story

Pre-order your copy now as demand for this book is very strong and you don’t want to miss out on getting your hands on a copy to reveal the secrets that will help you to make more money in your property investing.

Order Your Copy Today

We are at the pointy end of the project so if you missed the last 3 posts make sure you read them before moving on. You can access them here: Post 1 Post 2 Post 3 Post 4

Managing a subdivision is the key role and it’s important you take responsibility for everything that happens on your site.

As I mentioned previously, your town planner is your first point of contact so make sure you have good communication with them – a simple phone call could save you thousands of dollars in holding costs.

It’s a good idea to draw up a timeline for the project and discuss your aspirations with the town planner so you are both on the same page.

In any subdivision or development there is a lot of waiting time while paperwork is processed by the relevant departments. Always take immediate action on any requests from your council and town planner to ensure your timeframes are minimised and therefore holding costs.

In reality when you break it all down there is not a lot of hours required over the entire project. A simple 1 into 2 lot subdivision could take as little as 6 months with actual time spent by you around 40-80 hours.

This is why I like this strategy – I can leverage my time out to the relevant experts while I keep my finger on the pulse of the project without having to do any actual work.

As with any property investment strategy, management is the thing that will make or break your project. Yes you will make mistakes but it’s how you quickly deal with them and find solutions to ensure your project continues to move forward.

Be proactive, be patient and stay focussed on your outcome!