Do you remember when the GST was introduced into Australia? It was July 2000. Since then, most working singles and couples could have managed to secure (at least) half a dozen well researched residential investment properties. If you did this; congratulations! No doubt, with falling interest rates and a seriously growing housing shortage… the global slowdown would be delivering you more benefits than challenges right now!

Reaction is all too common! Why wait for drastic times to push us to those “drastic measures” that the politicians keep spruiking?

Doesn’t it make more sense to conduct our financial affairs during the good times in preparation for those drastic times… that always find us sooner or later?

Now while we can’t change the past, it is unwise… perhaps irresponsible… not to learn from it!

• Wealth gives financial options… to work or not; full time or part time
• Wealth allows a family to capitalise their expenses through the leaner times, should that be necessary
• Wealth allows you the luxury to assist an aged parent or take your children travelling and broaden their horizons in life
• Put simply, wealth will allow the construction of a “force field” around your family so that when (not if) financial pressures come your way, they are found to be impotent and ineffective… as far as you and your family are concerned anyway
• Wealth allows you to take advantage of opportunities when they present

No!!! It is not drastic times that call for drastic measures; but life itself!

Sooner or later, LIFE calls for drastic measures. Therefore, until you have created your security and made provision to “pay for the rest of what your life will cost”… you should (1) have a workable plan and (2) be working that plan. So let me ask… are you?

You Have A Duty Of Care!

We get up each day and go through our routine, join the “rat race” and head to work! Why? To earn a living! Let’s not deceive ourselves… earning a living will never on its own deliver us lifestyle.

Unless you are doing something on the side; i.e. separate to your job… like kicking off your part time business, writing the songs that will form your first CD, working on securing a patent for your invention before taking it to market… or perhaps leveraging off what you already have to increase your asset base… you are derelict in your financial “duty of care”… and it is certain that lifestyle with cashflow (as opposed to debt) will never be your experience.

Yes!!! We first need to earn a living, but if that is all we are doing… if we are not simultaneously creating tomorrow’s lifestyle… we (absolutely) will be disappointed! It’s not a matter of if, rather when! Some people’s neglect catches up with them sooner, while others later. Either way, sooner or later our neglect will catch up with us. Hopefully when it does, there will still be time to do something about it.

While we have no choice but to endure pain at some time, we do have a say in which pain we will endure. Which have you decided upon?

1. The pain of discipline now, for a season
2. The pain of regret later, for the remainder of your life

Each and every day; in both the good times and bad… we should be doing something to take us a step closer to the realisation of our dreams and goals.

Don’t wait for ‘your ship to come in’. You began constructing it long ago already, piece by piece… and right beneath your feet. Truly talented musicians and sportspeople endured the pain of discipline for years and years before there ever was a hint that success was heading their way. Day in and day out, little by little… they did “something” to take them closer to their goal. Remember that it takes years to create an “overnight success”.

In an interview, one Australian Olympic swimmer said he never missed a training session. This was so that when he stepped up on the starting block he would know that he had done everything absolutely possible to be the best athlete that he could be. Whether tired or full of energy, whether the water was cold or warm or whether or not he felt like it… he did something towards his goals every day.

Constant and Unrelenting Action

Any worthwhile endeavour will require constant and unrelenting action. Taking great financial care of your family is not all they need from you… but is very, very necessary all the same. Let’s face it… the alternative is not worth considering.

Subprime, Fannie Mae, Freddie Mac, Global Credit Crisis, Recession, unemployment and so on and on! These words are not valid excuses for taking time off. Like the swimmer… rain, hail or shine… he swam. Making forward progress is sometimes quite easy and other times it’s really, really hard… but it’s always necessary.

There are times when it is prudent to conserve your financial resources while you seek out new opportunities… there are times when it is most prudent to step out and take action. For some it is now a time to consolidate. For others it is a time to move forward. Whatever choices we make on a daily basis, they ought to be carefully and responsibly considered responses to both our goals and circumstances… not a reaction to fear, uncertainty and confusion.

The important thing is to constantly do something towards your goals.

• Clearly define your goals
• Be real! If you are not prepared to fight for a goal… it isn’t really one at all
• Know your income(s) and expenditure
• Know where your money is being spent
• Identify wasteful and unnecessary leakage
• Get a financial health check
• Fine tune your cash flow structure
• Have your finances assessed to see what resources you currently have
• Learn all you can about your chosen strategy [did you catch that one?]
• Look for ways to overcome your next hurdle
• Remain focused and don’t get distracted

Remember, the financial “ship” that will keep your family afloat is being built piece by piece beneath you… and by you!

Regardless of where you are on your journey; just getting started or well on your way… discipline yourself daily to make some forward progress.

Walking the Talk

Each of the 8 members of the mrd team are doing just this. Our youngest team member’s daily activity includes learning and saving for a first deposit. Now is not the best time for him to buy, but he is doing something! Every admin person, including our part time bookkeeper has either settled an investment property with mrd or is unconditionally contracted to do so. All are looking beyond their next purchase and planning more.

Then there is Martin’s example. Martin set a goal to become a property multi-millionaire when he was 50. On a daily basis he then steadily progressed towards that end and at 58 years of age he retired (sort of like an Olympic achievement… considering how little he had in his favour at the age of 50). Today Martin works as an mrd Property Mentor on a part time basis… and by choice. He does not need the income as much as the involvement in helping others do likewise. If you have not spoken with Martin and had him tell you of his journey, maybe you should. Doing so would constitute as “doing something“… and cost you nothing.

If small doable, daily actions become a part of your routine… what now appears as a hopeful horizon may soon become your experienced reality! That’s when you will start to hear over and over again… people telling you how “lucky” you are.

Our Customer Care Program will work for you… because investing is personal. Don’t be afraid to ask for our help… thinking it will somehow be taken as a license to sell you something. That is so far from the mrd DNA, it’s laughable. We will assist you on your journey from where you are to where you want to go. We will do so respectfully and responsibly and at all times empowering you to make your own fully informed decisions. Personally, I think you should have a chat with Martin and ask him to assist you with an mrd “Finance Structure and Cashflow Health Check”. This is Step 1; the diagnosis phase… from where changes can be made to possibly assist you to:

• Pay off your mortgage sooner
• Eliminate horrible debt faster
• Legitimately reduce the amount of tax you are paying
• Do away with unnecessary property record keeping
• Keep your accountant’s charges to a minimum
• Set real (and achievable) goals
• Define a track to run on… so you are not derailed along the way

To take advantage of this no obligation, complimentary offer from mrd you will need to complete a Borrowing Capacity Assessment form. NB: While you may not be looking to borrow money at this time, the information gathered on this form is nevertheless essential before we can conduct a “Finance Structure and Cashflow Health Check”.

• To complete the BCA form, please click here
• To send a message to Martin, along with your details to have him contact you, please click here

CONGRATULATIONS; you have now finished reading this article; what next piece of your “ship” are you now going away to construct?

Happy Investing,

Nick Lockhart

mrd customer care program… because investing is personal

While the global financial crisis has wiped at least 45 per cent off the value of equity portfolios in the past year, the value of most residential real estate – excluding top end houses and coastal apartments – has fallen only about 3 per cent……

The ATO’s just released Taxation Statistics 2006-07 show that 1.6 million Australians … – one in every 10 adults in the country – included rental income in their tax returns….. Most – 72.5 per cent – held only one rental property.

…. Two clear groups of investors prefer residential property. One is professionals such as doctors and lawyers, who use negative gearing to manage their tax affairs and benefit from tax sheltered capital growth….. another group of investors was becoming even more important – the “mums and dads” investing for their future…..

Not only have property values generally withstood the financial storm but also the income has kept rising. Melbourne rents increased between 9 and 15 per cent in 2008, according to Victorian government figures released on Thursday. And the outlook in Australia – a housing shortage, low mortgage rates and a sound banking system – remains sound, unlike the situations in the US and UK.

Reserve Bank of Australia head of economic analysis Anthony Richards, in a speech during the week, said that “there are a number of reasons to think that [housing] outcomes here might remain better than elsewhere.”   The Weekend Australian Financial Review

SYDNEY (AFP) – Australia’s parliament narrowly passed a 42 billion dollar (28 billion US) stimulus package Friday in a bid to stave off recession in the face of the global economic crisis.

The parliamentary approval leaves the government free to immediately implement its spending plans, with Prime Minister Kevin Rudd stressing the need for swift action throughout protracted negotiations during the bill’s passage.

Rudd was jubilant after parliament backed the plan, saying the package was in the national interest and would help Australia’s centre-left Labor government fight the global economic recession.

“The most irresponsible thing to do today, with the worst global economic recession since the 1930s staring us in the face, would be to do nothing,” he told parliament.

The package includes spending of 28.8 billion Australian dollars on schools, housing and roads over four years, tax breaks for small businesses and cash handouts of 12.7 billion dollars to eligible workers, farmers and students.

Rudd said the Treasury estimated the plan would boost economic growth by 0.5 percentage points in 2008-09 and 0.75-1.0 points in 2009-10, supporting up to 90,000 jobs.

“Without parliament’s support for this plan, growth would be slower and unemployment would be higher,” he%2

>>>>  Finance, Business and Company News – Yahoo!7.

1. How good will your portfolio be if we have another world war?
2. How good will your portfolio be if we have a worldwide recession or depression?

Well, with regards to Q 1, I still have no concrete answer for, and hopefully never will. With respect to Q 2, however, I can now (i.e. only now) say from experience… “It’s all ok”!

My portfolio now numbers 13 properties. When interest rates were 9% plus it was of some concern. We would have remained OK for a couple of years at those high rates because the equity we have built up provided us with a buffer (safety net).

Now every 1%  rate cut puts an additional $35,000 a year in my pocket. We’ve had 4% slashed from our rates in recent months (less what the banks failed to pass on) and the season of low interest seems set to continue for some time.

I use a separate line of credit for my property expenses (i.e. rates, body corp and so on); only paying interest charges from my cashflow. Interest rates are falling and rents are rising so cashflow is looking better and better. I don’t have to work, so while the world “financial crisis” works its way through the system; affecting us all, I remain content and comfortable holding a large property portfolio.

Increasing Population + Shortage of Rental Properties
= Low Vacancy Rates = Rental Increases

OK; ’so far so good’. With cashflow under control, there’s no stress in us holding a portfolio of 13 properties. BUT, what about growth and the lenders?

Certainly, growth has been flat over recent months but prices have not dropped in most areas. An article in The Australian last month said:

“In fact, the latest RP Data-Rismark Index results show that Australian house prices declined by just 0.8 per cent in the 12 months to October this year, and increased during the most recent three months”.

They are talking about the country as a whole (the good, the bad & the ugly); whereas certain areas have outperformed others. As an investor I discriminate against much property and only accept that which I believe will perform better for me.

I have always accepted that property values travel through cycles. I have every confidence that the short supply of property will mean that the growth in prices will/must kick in again. NB: We were about 80,000 dwellings short for 2008 and the Australian Bureau of Statistics  expect around 100,000 too few to be built this year; with the undersupply continuing around those annual figures till 2018 at least.

The mrd set ‘n’ forget, for busy people TM system that Nick promotes has worked for me personally; in good times and in bad and I have no reason to believe my ongoing confidence will be met with any disappointment! Why? Because I believe the fundamental law of “supply and demand” will ensure any outcome other than that which I expect, will be nothing more than a short term aberration.

For the benefit of those who have not spoken with me, let me explain a little of my personal strategy. It revolves around drawing on equity from my portfolio. For those of us in “retirement”, that means using low-doc or no-doc loans; not easy to secure with competitive rate at the moment.

What next?

My plan; or perhaps “flukish luck” (ha, ha) when Marion and I contracted to buy our 13th investment property; included an “ulterior motive”. We bought a top floor, 3 bedroom apartment adjacent to the Robina Town Centre. We thought we may eventually like to downsize and move into this ourselves.

We are now very close to having a number of our properties revalued so as to clear the security from our owner occupier. This is to allow us to then change the security supporting some of my loans away from my own home onto some of my earlier investment properties. With our own home unencumbered (and debt free), we will sell up, pocket the lot and move into the 3 bedroom apartment.

I accept new valuations at this point in time will not be great; but that’s fine, our goal is to simply clear the security from our owner occupier so when we sell we remain in control of all the cash we receive. We will do this without having to qualify for any new loans. No need to be concerned about the availability of a low-doc or no-doc offers – we won’t need either!

I already have an offset account set up for our 3 bedroom apartment. Therefore, after selling we will have $550,000 clear (conservatively) to put into an offset account that sits against (what will be) our new principal place of residence. NB: Selling is something we encourage you rarely ever do. In this instance, it allows us to fund the retirement we want. Because it has been our principal place of residence there will be no capital gain tax. A tailored solution that works for us, even in the face of the global credit crisis!

Some may ask: “Why don’t you simply pay out the loan on your new apartment instead of keeping the debt and putting what funds you get from the sale into an offset account”?

Good question! “Because to do so would mean that I would immediately lose control of the $550,000. If I wanted to get at any of the equity created in the new unit (by paying it off), I would have to go through the exercise of making a fresh loan application; and risk being knocked back etc, etc.

My strategy to have the existing debt on the unit 100% offset still ensures we have a $ZERO (non tax deductible) interest bill, while still allowing us the freedom to draw on the $550,000 as I need it over the next “however many years”; without the need to prove serviceability! Now when you add to that the two hundred plus thousand dollars we currently have available in other lines of credit, one can begin to see that no matter how tight credit for a retiree may become, we will be pretty much set for a number of years to come.

The “crisis” will pass, however, in the meantime a clever strategy and proper financial structuring will allow us to avert any interruption our retirement plans may have otherwise suffered. Then, when things get back to normal and my property portfolio  AND RENTS double in value again we will revalue the lot, increase our credit lines and continue to enjoy our retirement (with growing asset & income base). I am a month off 59 now. When Marion & I started on this journey I was about to turn 50 and I have been self-funded now for 3 years.

7 years + 13 Properties + A Financial Crisis = Never Work Again!

I can hear the voices screaming from all around cyber space “It’s ok for you! You have a significant property portfolio”. Compared to most maybe, compared to others… I’m crawling! Guess how you get hold of a large property portfolio yourself?

Start with a small one… but START!

Now is a good time to do it. Did I say “good”? I see the current “Perfect Storm” as being a ‘once-in-a-lifetime’ opportunity. Interest rates the lowest in 45 years (and falling); with property prices very affordable AND a rental crisis that’s only going to get worse.

My message to anybody who over the past years, didn’t get started because of their “WHAT IF” questions is: This works; so get started!

If your “WHAT IFS” are still plaguing you then maybe you should do nothing but sit tight for a few years and ask me again. I suspect, however, that I will have the same answer for you then.

* Please note: I am not a financial advisor, accountant or a finance broker – I’m just a very comfortable self funded retiree. The examples and opinions above are a compilation based on my own personal experiences, both in creating a $4.5mil property portfolio, starting with only $50k equity and also in helping a large number of people achieve similar goals of million dollar property portfolios. If unsure then consult your own accountant; hopefully one with some property experience and a personal retirement plan that is working. Financial advisors, in my opinion, rarely understand or recommend property, as their commissions come from other investment products. It should be a case of “don’t believe what people say, believe what they do!”

To ask me any questions or arrange a chat regarding how my chosen retirement plan may work for you, click here

Would you like me to guide you through an mrd complimentary & no obligation “Finance Structure & Cashflow Health Check”? Then simply complete the online secure form and I’ll be in touch with you next week; click here

Happy Investing,

Martin Bell
mrd Customer Care Program… because investing is personal

Latest figures from the Australian Bureau of Statistics show the annual rate of growth in rents across the country has jumped to 8.4 per cent in the year to last month, up 2 per cent from 2007. The statistics also reveal the increase in rents has jumped from 5.4 per cent to 8 per cent in Sydney, 11.2 per cent to 12.2 per cent in Perth and 8.6 per cent to 10.1 per cent in Brisbane. Adelaide also recorded an increase in residential rental growth of 4.7 per cent to 5.4 per cent and Melbourne jumped to 6.6 per cent from 5.4 per cent.

BIS Shrapnel senior economist Jason Anderson said the rental market was only going to get worse as the country’s economy faced a possible recession. He said the roots of the rental crisis before the economic downturn were the significant increase in immigration and high interest rates that left a shortage of about 100,000 houses.

But falling interest rates were yet to have an impact on the rental shortage because construction of much-needed properties had decreased because of worsening economic conditions and higher unemployment. “This means the shortages are going to get worse over the next two years,” Mr Anderson said.

From: The Australian January 29, 2009

Queensland and Western Australia suffered the worst declines in approvals, which fell nearly 13 per cent nationally in November, stunning analysts who had predicted a 1.5 per cent drop.

>>> Slump in building approvals hits Australian economy | The Courier-Mail.

The upbeat view also comes as local auction clearance rates remain poor.

>>>>>  House prices unlikely to collapse, says expert | The Courier-Mail.

I’d like to share with you two of the slides I use in my presentations around the country. These slides emphasise two of the messages I echo… and 2008 has confirmed their validity. They are:

1. “You Need To Do Something”
2. “38 Years Of Economic & Social History: 1974 To 2008″ and property proved itself to be resilient… regardless!

In your household, I hope history continues to repeat itself ONLY IF your are making significant and measurable financial progress… each year that passes.

2008 Has Confirmed The Validity Of These Two Messages (from Nick’s Infomation Session presentation)

1. ”You Need To Do Something”. The uncertainty of the financial health system in the USA is one HUGE reason to do something and

2. ”38 Years Of Economic & Social History: 1974 To 2008″. There will always be a calamity or drama giving rise to “64,000 reasons” why the present is not a good time to be investing in property. My response was (and is) that there will always be a headline or “reason” for inactivity and procrastination; as there have been for 34 years.

The notes below (cut ‘n pasted from my PowerPoint presentation) highlight some of the bigger reason why you may have thought you would have been better off avoiding property since 1974; during which time the median price of a home in Brisbane grew to become 41 times what it was in 1974!

You Need To Do Something

• 75 Million baby boomers  will start to retire in the US in the next few years (cease paying taxes and become dependant on social security and medicare)
  
• $10US Trillion current debt carried by the US Social Security Department. That’s -$10,000,000,000,000 (ahead of all the babyboomers retiring)
  
• $62US Trillion current debt carried by the US Medicare Department. That’s -$62,000,000,000,000  (ahead of all the babyboomers retiring)
  
• $31US Trillion Estimate of the value of all the stocks in the world in the year 2000 (after 2008 it may be a lot less now)
  

With an alarming debt already about to grow significantly as babyboomers exodus cease being taxpaying workers and become social security and medicare dependant… only a fool would not have an individual plan to reach financial independence!

38 Years Of Economic & Social History: 1974 To 2008

• 1974 World Oil Reserves “Running Out”; Prices through the Roof
  
• 1979 Oil Shortage Produces Petrol Rationing & Spiralling Prices
  
• 1982 Discovery of AIDS
  
• 1983 Tax Deductions on Property Depreciation Abolished
  
• 1985 Capital Gains Tax Introduced
  
• 1985 Average Home Loan Rates Hit a Whopping 13%
  
• 1987 Stock Market Collapse
  
• 1988 Pilot Strike – Hawke sacked them
  
• 1989 Interest Rates Hit 17%
  
• 1990 Collapse of the Pyramid Building Society (Geelong)
  
• 1991 1st Gulf War
  
• 1991 Australia Enters Two Year Recession
  
• 1992 Collapse of the State Bank of South Australia
  
• 1992 Interest Rates Fall To 7% 
  
• 1998 Asian economic melt down
  
• 2000 Introduction of GST then 5 Interest Rate Rises
  
• 2001 New Era of War & Terrorism 
• 2002 SARS health epidemic
• 2002 2nd Gulf War
  
• 2002 Bali Bombing
  
• 2004 Tsunami
  
• 2008 Sub prime credit crisis
  
• 2008 12 Interest Rate Rises in a row since 2002
  

In the 34 years between 1974 & 2008, despite interest rate highs & lows, times when inflation is high or low, times when unemployment was high or there were labour shortages. In times of great uncertainty & fear residential real estate (unlike any other type of investment) has insulated itself against any and all external conditions that at the time seemed a threat!

Click here to view Nick’s entire “You Can Live WITHOUT Your Income” Information Session presentation online; recorded  in May 2007; BEFORE we knew what subprime was

2008 was a tumultuous year; but it was also a year that confirmed that exact message mrd has been warnings of for a number of years. We have made some bold predictions over recent years and a number of them are starting to come to pass. Here’s a few others that I would like to remind you of…

• The Official Cash Rate will be down to 4% (or less) by April 2009
• The trend away from the traditional quarter acre block in suburbia and towards higher density apartment & townhouse living close to infrastructure, lifestyle, employment and services will continue to take hold… and those who sell books and seminars teaching why you should only buy house & land and not apartments & townhouses will see their credibility weakened
• The property market in Australia will definitely survive the troubles that Steve Keen and various others have predicted. The notion that your home will drop in value by 40% was and is ludicrous. It will not happen
• The property market will see growth in the early part of 2009 and by the middle of the year I believe we will see strong growth coming back (albeit in some areas more than others)

If you missed being a part of Nick’s Web Seminar “What In The World Is Going On With Property” click here to view online

Our stock market was overheated (and over rated) for far too long. Banks in the USA were giving money away like drunken sailors. I have been a rather lonely voice warning people against the stock market, saying that interest rates would come down and our property market would surge again. I admit that the events of 2008 put the brakes big time on our property market resurging by mid year… but I still believe that the credit crisis has only managed to slow that growth (for about a year) and it will resurge again; in areas subject to the forces of supply and demand.

On a closing note I would like to remind you of the two of the Irrefutable Laws Of Abundance:

1. If you don’t control money; the lack of it will control you
2. Your thought seeds of today are little more than the undeveloped photos in your future scrap book

Have a wonderfully blessed Christmas. We look forward to assisting you to make 2009 your year of financial prosperity!

Merry Christmas,

Nick Lockhart
mrd customer care program… because investing is personal

NB: If you missed out on participating in one these Web Seminars you can now watch it online; click here.

The Global Credit Crisis & Property Investors

As property investors the good that has come out of the recent global turmoil has been a massive reduction in interest rates. I am now so very close to being cashflow positive across my property portfolio… and interest rates are still falling and likely to stay very low for years to come!

The downside for property investors is that lenders have tightened their lending criteria making it harder to secure funding that it was previously, in some instances. With interest rates falling, however, serviceability has been made that much easier creating opportunity for many who previously could not secure funding to now qualify.

The Global Credit Crisis & Property Developers

The impacted on developers has been massive. Companies large and small have all been affected. Many developers have gone broke or just closed up shop, others have shelved projects indefinitely and are waiting until they see evidence of investors returning to the market. Others have soldiered on but have had many new funding hoops to jump through put in front of them.

Banks have been scared to lend to each other, so regardless of whether you are an individual looking to borrow money to buy a property or a developer looking for the funding necessary to complete a project… 2008 has seen a real tightening of lender willingness.

Waterside Residential:

We have received the following update from the developer…

16th December 2008
UJ/jat

Waterside Residential Pty Ltd
ABN: 65 092 231 000

Mr Nick Lockhart
mrd Realty
Suite 4, Gallery Vie
226 Varsity Parade
Varsity Lakes QLD 4227

Dear Nick,

Re: Commencement of Waterside Residential Development – Cairns

Just a short note to keep you informed of the progress of this development.

Currently in this market it has become extremely difficult to obtain development finance. We are currently working with our financial institution to secure adequate funds to commence this project. The banks have indicated their support but at a later stage. We anticipate to hold further talks re this matter with the bank in early February/March 09 where we will have a clearer picture of a starting date.

We will keep you informed as to our progress early in the New Year.

Yours sincerely,

UDO JATTKE
Managing Director

In layman’s terms… Udo had been promised funding and expected to commence this project earlier this year. His lendersubsequently moved the goal posts and said that they would now not release any funding to commence this new project until after he had completed and sold out on some others that he had in the pipe line. Most of these are now sold and Stage 1 of Clifton Views is due to settle in late January, meaning in February or March next Udo will go back and renegotiate the terms of the funding he needs to commence Waterside.

In short, this project has been held up and we hope to have a more concrete update to you in the early part on next year.

Please see the latest mrd Cairns Region Property Report by clicking here and the PRD Nationwide Property Watch: Cairns Market Overview by clicking here

Special Incentive from UDO:

Udo has come up with a special offering to enable him to quickly sell off the last few completed apartments his banks are insisting he sells before releasing new funding to him. This offer is open to anybody interested in purchasing one of the below listed properties or to anybody wanting to transfer from a Waterside Residential purchase onto one of the below listed properties:

1. Cash deposit refund of 10% will be returned to the investors (for those transferring from a “Waterside Residential” contracted purchase)
2. The deposit on new contracts will be only $1,000.00
3. Any extral legal fees incurred up to the value of $1,000 will be paid for, on receipt of invoices from clients solicitors by way of a reimbursement at settlement (for those transferring from a “Waterside Residential” contracted purchase)
4. Management letting fees waived for 12 mths (conditional upon Glencorp Property Management being given the management rights)

The Following 6 ONLY Properties Are Being Offered With Bonus Incentives

City Park (2 only) – Expected settlements in mid February 2009

• 12 mths management letting fee waived (Glencorp Property Management only), plus
• 12 mths rental guarantee ($360 pw)

Clifton Waters (4 only) – completed and ready to settle in 30 to 60 days

• 2 bedroom – price reduced from $325,000 to just $295,000
• 3 bedroom – a rebate letter of $20,000 to be paid at settlement will be attached to the contract but not part of the contract making price $309,000

From all the team @ mrd, we wish you and your family the very best for Christmas and we look forward to partnering with you on your wealth creation journey in 2009.

Merry Christmas,

The mrd Team

mrd Customer Care Program works for you… because investing is personal

NB: If you missed out on participating in one these Web Seminars you can now watch it online; click here.

The Global Credit Crisis & Property Investors

As property investors the good that has come out of the recent global turmoil has been a massive reduction in interest rates. I am now so very close to being cashflow positive across my property portfolio… and interest rates are still falling and likely to stay very low for years to come!

The downside for property investors is that lenders have tightened their lending criteria making it harder to secure funding that it was previously, in some instances. With interest rates falling, however, serviceability has been made that much easier creating opportunity for many who previously could not secure funding to now qualify.

The Global Credit Crisis & Property Developers

The impacted on developers has been massive. Companies large and small have all been affected. Many developers have gone broke or just closed up shop, others have shelved projects indefinitely and are waiting until they see evidence of investors returning to the market. Others have soldiered on but have had many new funding hoops to jump through put in front of them.

Banks have been scared to lend to each other, so regardless of whether you are an individual looking to borrow money to buy a property or a developer looking for the funding necessary to complete a project… 2008 has seen a real tightening of lender willingness.

Seashells @ Clifton

We have received the following update from the developer…

16th December 2008
UJ/jat

Glenwood Homes

Mr Nick Lockhart
mrd Realty
Suite 4, Gallery Vie
226 Varsity Parade
Varsity Lakes QLD 4227

Dear Nick,

Re: Commencement of Seashells Development – Cairns

Just a short note to keep you informed of the progress of this development.

Currently in this market it has become extremely difficult to obtain development finance. We are currently working with our financial institution to secure adequate funds to commence this project. The banks have indicated their support but at a later stage. We anticipate to hold further talks re this matter with the bank in early February/March 09 where we will have a clearer picture of a starting date.

We will keep you informed as to our progress early in the New Year.

Yours sincerely,

UDO JATTKE
Managing Director

What Does This Mean?

In layman’s terms… Udo had been promised funding and commenced earthworks earlier this year. His lender subsequently moved the goal posts and said that they would now not release the funding for this project until after he had completed and sold out on some others that he had in the pipe line. Most of these are now sold and Stage 1 of Clifton Views is due to settle in late January, meaning in February or March next Udo will go back and renegotiate the terms of the funding he needs to commence Seashells @ Clifton.

In short, this project has been held up and we hope to have a more concrete update to you in the early part on next year. NB: In today’s final newsletter for 2008 my feature article is on the topic of “Off the Plan” purchasing… in it I analyse the cost benefits of delays.

Please see the latest mrd Cairns Regional Report  by clicking here and the PRD Nationwide Property Watch: Cairns Market Overview by clicking here

From all the team @ mrd, we wish you and your family the very best for Christmas and we look forward to partnering with you on your wealth creation journey in 2009.

Merry Christmas,

The mrd Team

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