Born To Be Financially Free - Melbourne 2014 (c) - PDF document

Born To Be Financially Free - Melbourne 2014 (c) PropertyInvesting.com Pty Ltd 1

Born To Be Financially Free - Melbourne 2014 Mr. Earl Nightingale From: The Strangest Secret To Start With… “Is now a good time to be investing?” Some Reality… So It’s Your Job… • You can’t invest yesterday 1. To make the best decision you can • You can’t invest tomorrow , today 2. With the information you have at your disposal • You can only ever make the best decision, here and now 3. That’s congruent with your goals (c) PropertyInvesting.com Pty Ltd 2

Born To Be Financially Free - Melbourne 2014 But… Always Check… • In the absence of • Expertise knowing what to do: • Experience – People do nothing; or • Motives – They rely on others • Responsibility Qualifications • Chartered accountant Session One • Bachelor Business (Acc) • Diploma Financial Services About You • Retired registered company auditor • Taught for ICAA and RMIT This Session • What’s your story? • Where are you on your wealth creation journey? (c) PropertyInvesting.com Pty Ltd 3

Born To Be Financially Free - Melbourne 2014 Questions Questions By what age (in years) How old are you now do you want to have (in years)? achieved your primary wealth goal? Questions Questions How many years How many hours do you have left to per week do you achieve your goal? presently work? (c) PropertyInvesting.com Pty Ltd 4

Born To Be Financially Free - Melbourne 2014 Questions Questions How many hours How many hours per week do you per week do you presently sleep? presently rest? Questions Questions Of those remaining How many hours hours, how many would per week are left? you say are currently ‘idle time’? Questions Questions How much do you How much do you think you would need to earn per annum? $ $ earn per annum (pre-tax) (pre tax) to be financially free? (c) PropertyInvesting.com Pty Ltd 5

Born To Be Financially Free - Melbourne 2014 Questions Questions Using one word, how Using one word, how would you feel being would you describe financially independent your financial situation? of your need to work for money? Questions Questions Who has had the In one word, describe biggest influence on his / her / their the way you think financial situation? or act about money? Questions Questions In ten words or less, In one word, why are describe your primary you here today? wealth goal? (c) PropertyInvesting.com Pty Ltd 6

Born To Be Financially Free - Melbourne 2014 Session Two Steve’s Top Six ‘Mission Critical’ Investing Truths This Session • Mission critical investing lesson • Incredible wisdom for maximum success • Apply the theory to you! Aussie Property • Fundamentals remain strong Truth #1 – Population growth As long as people live – Low unemployment in houses you can make – Proximity to Asia money from property investing – Stable democratic government (c) PropertyInvesting.com Pty Ltd 7

Born To Be Financially Free - Melbourne 2014 Snapshot Shifting Trends Δ POPULATION STATE DWELLING APP Forecast Study Housing Gap NSW 108,067 44,639 VIC 110,537 26,409 2001 Forecast 284,000 WA 76,346 26,744 2013 Revision 76,000 QLD 83,737 30,969 PERIOD: OCT 2012 TO SEPT 2013 | SOURCE: ABS 3101 & ABS 8731 Source: The National Housing Supply Council data Shifting Trends Insights Our job is to: • A housing gap remains 1. Match our supply with • But it has ‘shrunk’ buyer / tenant demand – Larger households 2. As demand changes, – Lower migration we must evolve too – Kids staying home longer (c) PropertyInvesting.com Pty Ltd 8

Born To Be Financially Free - Melbourne 2014 Truth #2 The Pathway To Maximum Profit Pathway To Maximum Profit 1. Make the most money 2. In the quickest time 3. For the least risk 4. With the lowest aggravation Profit Quadrants G I G M Source: The National Housing Supply Council data (c) PropertyInvesting.com Pty Ltd 9

Born To Be Financially Free - Melbourne 2014 Least Risk Insights • Real estate is By what margin usually sold on the does the upside benefit best case scenario • It’s our job to identify outweigh the downside risk ? and quantify the risks Aggravation Aggravation Types Of Aggravation Types Of Aggravation 1. Investment aggravation 2. Personal aggravation (c) PropertyInvesting.com Pty Ltd 10

Born To Be Financially Free - Melbourne 2014 Options Remember The Mantra Cash Potential MOST • ______ money Needed Profit QUICKEST • __________ time Build 2 x townhouses $249,386 $17,686 • _______ risk LEAST Build 3 x townhouses $260,826 $109,103 LOWEST • _________ aggravation 2 Lot Subdivision $142,906 $119,058 Truth #3 INPUT = OUTPUT Four Constraints Application 1. Time How are your constraints limiting 2. Money your wealth potential? 3. Skill 4. Risk Profile (c) PropertyInvesting.com Pty Ltd 11

Born To Be Financially Free - Melbourne 2014 Insights How are you trying to reap a full time outcome but only contributing a part time effort ? Insights If there is no manufactured Truth #4 profit to be made, the only Buy Problems way you can make money is & Sell Solutions via generic market gains. (c) PropertyInvesting.com Pty Ltd 12

Born To Be Financially Free - Melbourne 2014 Remembering Back… Potential Skill Based Profit G I Solution Problem M G Level Of Investor Skill Problem / Solution Matrix Problems 1. People 2. Property Problem / Solution Matrix Problems Solutions 1. People A. Cost 2. Property B. Comfort C. Convenience (c) PropertyInvesting.com Pty Ltd 13

Born To Be Financially Free - Melbourne 2014 Insights Property Trends • Trends are like streams: And to supersize profits… they carry you one way or another Massive profits can be made • Float along in the good times when you position yourself in • Paddle hard in the bad times, just to front of a favourable trend maintain position or even stay in the boat! Rams Plaza, Ft Myers, FL USA Rams Plaza: Key Details 5 shops + 3 warehouses Details + separate building + land Date Acquired 9 September 2013 Land (sq ft) Building (sq ft) Size 108,473 28,794 $667,500 Purchase Price ($23.18 psf) (c) PropertyInvesting.com Pty Ltd 14

Born To Be Financially Free - Melbourne 2014 Problems At Purchase The Solution • Better management • Bank REO – Now fully occupied • 31% occupied • Cured deferred maintenance • Some minor deferred maintenance – Cost $69,500 • Questionable area • Area improvement 108,473 sq ft 52,581 sq ft (c) PropertyInvesting.com Pty Ltd 15

Born To Be Financially Free - Melbourne 2014 The Profit Rams $ Post Reno Price 9/13 $737,000 Revaluation 5/14 $1,150,000 Equity Gain $413,000 Months Owned 8 % Increase 56% Truth #5 Let The Why & When Determine The What & How Investing Approaches Investing Approaches 1. Asset approach 2. Outcome approach – Buy ‘good assets’ – The outcome you desire shapes the assets you acquire – The outcome you achieve is dependent on the assets’ performance (c) PropertyInvesting.com Pty Ltd 16

Born To Be Financially Free - Melbourne 2014 Insights Properties aren’t all the same… some are better for growth , some are better for income , some are just bad . Picking A Winner… Business is most intelligent when it is most businesslike. What’s your approach? Benjamin Graham, The Intelligent Investor Why Why 1. What non-financial outcome(s) 1. What non-financial outcome(s) do you want from your investing? do you want from your investing? – Provides the context for your investing 2. How much is that going to cost? – Gives you the motivation to keep going Annual Income Goal: $ – Gives the money meaning (c) PropertyInvesting.com Pty Ltd 17

Born To Be Financially Free - Melbourne 2014 When What 2. When do you want • What property investing to have achieved that product is most relevant? annual income goal? – Type – Area knowledge – Location / Condition – Savings for deposits Deadline: – Cost – Borrowing ability How • What property investing strategy is most relevant? – Most money – Time – Quickest time – Passivity – Least risk – Skill – Lowest aggravation – Risk tolerance Now repeat the process… For the property you are thinking about buying (c) PropertyInvesting.com Pty Ltd 18

Born To Be Financially Free - Melbourne 2014 Investing Niche • A field of expertise Truth #6 • A problem you can solve better or There Are Riches more cost effectively than anyone else In The Niches • In a location or manner where the trend is your friend Niche Examples Niche Examples • Positive cash flow • Buy & Hold – Regional property – Student accommodation – Sub-letting – Rooming houses – Vendor finance – Period homes – Lease options Niche Examples Niche Examples • Quick Cash • Other possibilities – Strata titling multiplexes – Commercial property – Renovating 1950’s dual living homes – Overseas Investing – Property options / flipping property – Air rights – Mixed use (c) PropertyInvesting.com Pty Ltd 19