Back in 2007 Udo approached his lender to fund the Waterside project, to be built in two stages. Stages one and two first, then stages three and four sometime in the future. His bank agreed to approve the funding of this project subject to pre sales… but only if he built all four stages from the outset. He satisfied the bank’s lending conditions, securing more than the required pre sales, etc. Everything was approved and ready to commence construction right when the GFC came along. Immediately his lender withdrew funding on all projects not started; including Waterside Residential, Seashells and Townsville Waters (even though the funding for all these projects had previously been fully approved). This was pretty much the experience of all developers around the country where construction was yet to begin.

Over the past two or three years, since the GFC, most developers that owe banks money have been given a very hard time… and Udo has been no exception. He has been consistently called upon to reduce his debt… and as other properties he built have settled his bank has taken all of the settlement proceeds – leaving him struggling to find working capital.

Due to this pressure Udo has spent the past year or more negotiating with a Chinese consortium to purchase the Waterside project – as a ‘going concern’. His company, Glencorp was to undertake construction and existing purchasers would have their original contracts honoured.

But sadly, this is no longer to be!

On the 21st January 2011 I received the following update from Glencorp:

“Waterside Residential is due to settle on the 3rd June 2011. So we should have ground work starting a month after that.”

My understanding (noting I am not privy to the ins and outs of the workings of Glencorp) is that there had been some extension requests from the purchaser. Perhaps, I really don’t know, there was yet another extension request in March that triggered the bank to move in. Alternatively there may have been no further extension request and perhaps the bank just decided to move now regardless.

Whatever went on behind the scenes it is very sad to see such a decent Australian man, his business and staff all ‘put out to pasture’. This is an undeserving and tragic outcome that has seen the operations of Glencorp and Glenwood homes in the hands of the receivers being wound up. NB: If you were contracted to purchase in the Waterside or Seashell developments please look out for my separate update to you… tomorrow!

The impact that this could have on you as an investor who has purchased a Glencorp property is the company is no longer there to attend to any defects that may arise. Udo’s projects had a reputation of being very well constructed and so this is unlikely to be of any significant consequence.

On the flip side the GFC fall-out will have a very positive impact on existing Cairns property owners.

Let me explain…

• The three only major property developers that were rolling out the majority of new Cairns projects pre GFC (two public and one private company) have now all gone bust
• There has been no new construction of any significance undertaken there now in three years
• There is no new construction on the horizon
• Supply shortages will drive property prices higher
• Supply shortages will drive rents higher
• Higher rental yields will attract more investors to the market, further adding to the supply shortages

I really do see great times ahead for those who hold Cairns investment property; albeit the tragedy in Japan is likely to defer this for some months.

As I write this in April 2011 I am witnessing clear and tangible early signs of the South East Queensland property market turning!

SEQ has not yet enjoyed a ‘property boom’ in many years. There have been booms in the North Queensland, Perth, Darwin, Canberra, Melbourne and Sydney markets, but SEQ is well overdue. I have been predicting that a correction is coming… and I am now witnessing signs that it is imminent.

WARNING!

• When markets turn they turn suddenly and most people are caught unaware.
• You can hold me to this… the buyer’s market HAS bottomed-out and prices ARE soon to rise.

To discuss your goals and/or opportunities in this current market – including having your mrd property mentor prepare a fresh ‘Retire On Your Equity’ (ROYE) analysis with you simply reply to this email NOW >>>here.

Have a great week,

Nick Lockhart.
Our Customer Care Program works for you… because investing is personal!

But building industry bodies in the region are looking towards the light at the end of the economic downturn, insisting the sector’s fortunes are overdue for an upswing. “The indicators are showing that we may still bounce along the bottom of the market for some time before we see improving trend lines in building approvals,” Housing Industry Association Cairns manager Peter Collins said. “But we believe there’s light at the end of the tunnel and we’d expect to see it in the second half of 2011 when there’s some return of confidence as well as pentup demand and population growth.”

Master Builders Far Northern regional manager Ron Bannah said population growth was likely to trigger a housing shortage in the region unless action was taken soon. “Demand is going to outstrip supply unless somebody starts building units soon.” But the Urban Development Institute of Australia says barriers such as red tape are preventing some developers from breaking ground on new projects. “Infrastructure projects are seen as being so beneficial to our community, and yet we’re subjected to such a bureaucratic process,” UDIA Far Northern president Adam Gowlett said. Mr Gowlett hopes a construction industry forum led by the State Government in February will reduce the bureaucratic burden of seeking building approvals.

Via Cairns Post Dec 2nd 2010

Let me cut straight to the point: “Buy Into Negativity At Your Own Peril”. Self employed most of my working life, rarely has there been a time void of negative press and negative opinions. It’s not what happens that determines your future but your attitude to what happens.

What Are You Hearing?

Please read to this article in its entirety and allow me to challenge and expose the “conventional wisdom” that has influenced our society during the global financial crisis (GFC), deadly bush fires, drought and now devastating floods of the past three years.

Add to that claims that unemployment would bust through 10% as our economy fell into depression with property values losing 40%; like it was all a done deal! Well these didn’t happen, the economy is doing well, property values have strengthened and unemployment is falling sharply. Next were the claims (late last year) by so-called-experts that interest rates would rise in February; again broadcast as an almost given and incorrect!

Back before Christmas I caught up with a mate who is a respected and successful financial adviser. We both agreed that there was a greater chance that the next rate movement would be down rather than up. Guess what, six or seven weeks later and that view is gaining traction. At the time of the last interest rate rise I believed the Reserve Bank (RBA) got it wrong (as in the last two rises in early 2008).

Those who make decisions in reaction to the ever-changing opinion of others are doomed to a life of mediocrity! Why? Because throughout history “the masses” have messed up when it comes to financial security. Sadly this is a fact.

Any Dead Fish Can Swim Downstream

Any dead fish can swim downstream but it takes right knowledge, guts and determination to swim against the tide of popular thinking and opinion.

Laws Are Laws

There is cause and there is effect… the two are inseparable. Every action has an equal and opposite reaction. If you jump off the roof of a building you WILL fall to the ground. We call this the law of gravity. When floods devastate crops, prices WILL rise. We call this the law of supply and demand.

Right knowledge with understanding allows us to accurately predict outcomes. Unforeseen circumstances that alter outcomes reflect new knowledge that we did not have.

Reporting that people can jump off roofs and fly doesn’t make it true. Reporting what the property market or inflation or unemployment or interest rates will do… doesn’t make those true either.

• The vacuum left due to a lack of knowledge and understanding is a fertile patch for sowing seeds of doubt, fear and uncertainty.
• When seeds of doubt, fear and uncertainty are sown the (unwanted) crop that grows is one of failure and missed opportunity.
• Missed opportunity brings with it “opportunity cost”.

Who’s Influencing You?

Please be careful who you listen to; your future depends on it.

During the GFC my team and I went to extraordinary lengths teaching – via these Friday newsletters, DVD’s, one on one appointments and webinars – how to accurately read the true pulse of the property market. Before we can make informed decisions we need to accurately interpret conditions. Given the hype and paranoia  mrd was definitely swimming against the tide (or torrent) of popular opinion!

Some didn’t and some wouldn’t listen, others didn’t understand or were just too scared. Decisions were made according to what the media was saying. Homes and investment properties were fire-sold . Opportunities were passed up and as is always the case, there were winners and losers.

Whether someone bought or sold or stayed put and rode out the GFC storm is not my point! Everybody’s situation was/is uniquely different. 2008/09 were tough years for many as we all navigated “uncharted waters”. Whilst caution and prudence ought always to be exercised… even more so during those years.

My point is that prudence and caution must be based on right knowledge – not the misinformation and sensationalism that is always with us – if we are to  make wise choices. Sadly there are people who inevitably will look back on their decisions with regret.

Diversions & Delays

Predictable outcomes can be temporarily diverted or delayed. The recent flood waters in Brisbane were temporarily slowed or diverted by everything in their path – buildings, levees and terrain. Regardless, flood waters always reach their intended destination… eventually; i.e. the ocean! So too with the GFC. Markets were impacted, prices went sideways or down for a time… the predictable outcomes seemed wrong for a time but ultimately market forces prevailed. The LAW of supply and demand is called a law because it is certain.

Misinformation & Cairns

Over recent years, for many reasons already well documented throughout this website, our research unearthed some exceptional buying opportunities in the Cairns market that we enthusiastically offered to clients with corresponding purchasing profiles. The GFC hit all markets, but the Cairns market particularly hard.

This “pothole in the road” created new opportunities as developers were forced to drop prices to offload stock and keep their lenders off their backs. While looking at exactly the same set of circumstances some saw opportunity yet others could not see past the negativity. Those who saw the opportunity and purchased at heavily discounted prices will be buoyed by an article that appeared in yesterday’s (Canberra based) “The Australian” newspaper. When reading this article you would be forgiven for thinking it was referring to a different city given the way Cairns was completely written off (unfairly mind you) by so many media outlets and commentators whose opinions were not based on the long-term fundamental facts that our research had proven. Of course no-one saw the GFC coming and when it did it had an impact. That doesn’t excuse deviating from sound research and peddling sensationalism on the back of a short-term problem.

What I believe gives the article in “The Australian” credibility is not that it says great things about Cairns and vindicates our position throughout the GFC and beyond… but that it is evidence based. Evidence, mind you, that was there throughout 2008, 9 & 10! While the market took a temporary backwards step we had every confidence that the glowing recovery reported in “The Australian” was always coming… and it will continue on into the future. I hope you are “hearing” me… right knowledge and  understanding will allow anyone to confidently see and take advantage of the opportunities that arise. The Cairns offer is still available at this time but I don’t believe for long. Please read the article and you will understand; the link is below.

Economically, socially and environmentally the challenges of the last three years have been significant. Let’s learn from these times and hold fast only to evidence based facts in all decision-making. Right or wrong the choices we make (seeds sown) produce a harvest; as many are now discovering post GFC.

I sincerely hope that as you journey forward you will not swim with the tide of popular opinion and thinking; but onwards and upwards closer to the realisation of your financial dreams and goals.

Our property mentors (and admin staff) are doers not theorists. Our complimentary mentoring program is geared to bring you to a place where you will make right decisions. The offer is there, all you have to do is ask.

• I would like to speak with a property mentor >>>here
• I am interested in the Cairns opportunity >>>here
• I would like a complimentary financial structure & health check >>>here
• How much can I borrow >>>here

Here’s that link to the article from The Australian; it is a must read to bring together what I have said above:

“Cairns On The Comeback Trail…”

Happy Investing,

Nick Lockhart
Our Customer Care Program works for you… because investing is personal!

HOUSE AND LAND PACKAGES IN HIGH DEMAND LOCATIONS

“A GREAT OPPORTUNITY FOR mrd CLIENTS TO INVEST IN WELL LOCATED HOUSE & LAND PACKAGES CLOSE TO INFRASTRUCTURE
AND WITHIN GROWTH CORRIDORS”

Three locations to choose from – Townsville | Cairns | Gold Coast – Coomera

Call us on (07) 5580 8888 for more information

Marion and I started buying in a 90/10 split because my income was $42k and hers was $18k. Later we ran our own business and income split so property purchases then were made at 50/50. It is important and can save you thousands of dollars a year.

Understand that the term “joint tenants” automatically means 50/50 or equal ownership between purchasers whereas “tenants in common” can be any percentage split.  As joint tenants (50/50) the death of one means the property reverts to the other partner. If tenants in common the death of one means their share is disposed of as dictated by their will (check with your accountant on this). Unfortunately once a property settles the ownership is fixed and mistakes cannot be easily undone, without huge costs in stamp duty.

Let’s look at a fairly typical example of a couple (call them Gary & Jane) buying two Investment Property Purchases; one then the other. Gary’s taxable income is $55k p.a. and Jane’s is $20k p.a.

PURCHASE # 1

After settling purchase number one, “The Wharf” in Robina for $459,000, and assuming you capitalise your expenses (if you are not sure what that means; please ask me to explain – it’s important), the results are as follows:-

50/50 Split

• $20 weekly holding costs
• Taxable incomes now reduced to $40,000 and $10,000

90/10 Split

• $40 a week POSITIVE cashflow and a $60 a week difference to the bottom line!
• Taxable incomes now reduced to $32,000 and $18,000

PURCHASE # 2

After the second settlement; this time using a $335,000 apartment @ “The Beaches” in Cairns as an example. Using Gary & Jane’s NEW reduced taxable incomes to calculate their cashflow position after the second purchase, and again capitalising the expenses.

With a 50/50 Split and using the new taxable incomes of $40k and $10k p.a. Gary & Jane are $53 a week positive cashflow better off!

If they had opted for a 90/10 Split on the first purchase I would then use incomes of $32,000 and $18,000 respectively to calculate the cashflow result after a second investment. Again assuming Gary & Jane purchase as tenants in common and split the ownership 90/10, the positive cashflow outcome improves and becomes $57 a week.

In your circumstances, as you purchase more property you may need to alter the split to favour one person or the other to get maximum tax benefits. We would never suggest you “push the envelope” with the tax office, nor do we offer any of these personal thoughts and experiences as investment advice; just food for thought. It is important that you understand your entitlements and take action to benefit from them.

Happy Investing,

Martin Bell

mrd Customer Care Program… because investing is personal

What Benefits Are There In A Financial Health Check?

Read case studies…

http://investmentmentor.com.au/2009/02/20/property-investor-crash-victims/

Yes please…

I would appreciate a complimentary Financial Health Check

http://www.investmentmentor.com.au/contact.htm

You would have seen the great deals that one of our highly respected developers in Cairns put to us recently. He was desperate to clear his remaining current completed stock before his lender would fund his next  projects.

• He offered our clients reduced prices
• He offered our clients settlement rebates
• He offered our clients rental guarantees
• He offered our clients free management of the properties

He was desperate to clear them out!

Here at mrd we put a lot of time and effort into educating property investors so they are in a position to make informed buying decisions. This last week has seen the evidence of this as many prepared and informed investors leapt on this offer.

• This offer extended to properties in The Sanctuary in Townsville
  Now Sold Out
• The developer offered us properties in City Park in Cairns
  Now Sold Out
• The developer offered us properties in Clifton Waters in Cairns
  Now Sold Out

The developer is smiling as he can see his chance to move forward again.

The next project due to complete is Clifton Views. This one is almost all sold out too; a few 2 & 3 bedroom units only remain.

To view our property page and access various downloadable reports… Click here or http://ypim.com.au//2

NB: These are nearing completion with expectation that they will be available for tenanting within a month.

Finance Structure & Cash Flow Health Check

Our recent offer to complete a complimentary, no obligation Finance Structure & Cash Flow Health Check has been widely taken up. If you would like us to undertake this same service on your behalf please click the link below to send us your contact details.

More Info…

http://ypim.com.au//3

Yes please; I would appreciate a complimentary Financial Health Check

http://ypim.com.au//1

Happy Investing,

Nick Lockhart

mrd Customer Care Program… because investing is personal

How it has come about

The developer has recently released to market those last remaining units that were not made available for sale at the time the project commenced.

The developer behind these properties is one that mrd has worked with in the past. We are confident that the location, build quality and finish will make for an exceptional long term investment.

Banks in general are nervous about the general economy. As such, some are reducing their most recent valuations within this project… from what they were previously valuing them at.

These new bank valuations, in our opinion, do not reflect the state of real market as much as they expose the banks very strong attempts to mitigate their risk… by ensuring that purchasers who borrow 80% (of the valuation) will chip in more than just 20% (of the purchase price).

We have used our relationship and track record as leverage to negotiate with this developer to have him agree to absorb the difference between the market value and recent bank valuations.

This developer has been told by his lender that he must clear ALL his remaining completed stock before they will agree to funding the construction of his newer projects.

This change of attitude from his lender; who had previously said “YES” to his funding request – before the global credit crisis – has incentivised/motivated the vendor to make this limited, attractive offer on those last remaining completed stock items.

Therefore, we are excited to be able to offer a small number of investors, a brand new property at 2005/2006 prices, PLUS a few other sweeteners/incentives as well.

“This presents a tremendous opportunity for mrd clients”

That statement is correct; but it is also a gross understatement! Aside from yesterday’s pricing, mrd clients will still receive all our standard benefits and guarantees.

Each property comes with value added buyer incentives. Some also offer significant savings on the purchase price plus a cash rebate at settlement!

UDO’S PROBLEM JUST BECAME YOUR OPPORTUNITY!

FEATURES

• A never before seen by mrd offer; negotiated and ‘signed off’ on with one of our trusted developers
• A limited number of properties; completed and ready to settle; some already have tenants
• A cash rebate at settlement on Clifton Waters apartments
• Property management fees covered for 2 years on Clifton Waters apartments
• Rents guaranteed at better than a 5% gross return for between 1 year (or 2 years for Clifton Waters)
  

BENEFITS

• If you have cash sitting in a savings account earning less and less interest, this is the opportunity to make it work a lot harder for you
• It has never been cheaper to borrow money. This means your investment will be positively cashflowed from the outset (or if not, soon after). Combine surplus rental income with the mrd Advanced Finance Strategy and we will show you how to potentially pay off your home loan sooner. Many people will save (literally) tens of thousands of dollars with this strategy
• Imagine positive cashflow from day one (or for some, soon afterwards) and a rebate cheque in your pocket as a “rainy day buffer”
• Maximise your disposable income while you minimise your tax liability and set up a bright financial future for your family

INDIVIDUAL PROJECT OFFERS

CLIFTON WATERS @ Clifton Beach, Cairns

Added incentives on offer with this new project include:

• Discounted purchase price of up to $40,000
• A cash rebate at settlement
• 2 bedders reduced from $330,000 to $295,000 PLUS a $5,000 cash rebate @ settlement
• 3 bedders reduced from $340,000 to $329,000 PLUS a $19,000 cash rebate @ settlement
• Two years FREE property management
• Two years rental guarantee @ greater than a 5% gross return
• $1,000 ONLY deposit required

Click here for PDF Property Report

THE SANCTUARY @ Fairway Waters, Townsville

Added incentives on offer with this new project include:

• 2 bedders (ONLY) for $328,500
• NB: Those already settled are renting for $340 a week
• Waiting list of prospective tenants wanting to move in
• 12 months rental guarantee at greater than 5% gross return
• $1,000 ONLY deposit required

Click here for PDF Property Report

CITY PARK APARTMENTS @ Mooroobool, Cairns

Added incentives on offer with this new project include:

• Priced from $195,000 (1 bedroom);  $265,000 (2 bedrooms); $360,000 (3 bedrooms)
• 12 months rental guarantee at greater than 5% gross return
• $1,000 ONLY deposit required

Click here for PDF Property Report

WHAT NEXT?

Step 1 is very simple. Say “YES PLEASE” to a complimentary, no obligation “Finance Structure & Cash Flow Health Check”! The first thing we need to do is ensure that you are in a position where you can (and should) consider an investment purchase right now. We will run a complete personalised analysis of all costs, incomes and so on… to give you full disclosure and complete understanding of the impact a property purchase would have on your situation. Having said that, at these prices/rents… most people will be cashflow positive from the start. So, to take advantage of this part of our Customer Care Program; simply click here and include your best contact number and we will get back to you.

Happy Investing,

Nick Lockhart
mrd Customer Care Program… because investing is personal

Our stocklist includes some fine examples in Queensland, Brisbane and the Gold Coast.

We believe the Gold Coast has exceptional potential and still looks cheap, but some clients find the Gold Coast a little above budget, so we have spent time sourcing some wonderful opportunities further north.

We have unearthed some fantastic opportunities in Northern Queensland – Cairns, Townsville and Hervey Bay – all with affordable prices, generous rental yields and the potential for serious capital growth.

These house and land packages are set in amongst a growing and developing area of residential community suburbs for young families and established Cairns residents. Located on the southern corridor of the Cairns Local Government area, the suburbs Edmonton and White Rock are the largest suburbs in Cairns with a mixture of commercial, residential and recreational amenities. Also available are packages in the very popular Smithfield suburb in the northern suburbs of Cairns.

These quality 4 bedroom/2 bathroom house and land packages are amongst a portfolio of multi award winning homes designed to reflect the environment with their emphasis on an abundance of space and light, maximizing ventilation and the frequent use of courtyard and patios to create a sense of freedom and serene comfort. The builder’s specifications are to design a “tenant‐ready” house and land with no hidden costs for the astute property investor.