Today’s Real Estate Opportunities

Wow!  What an unbelievable time we are having in the market at the moment.  It has certainly had been a little bit chaotic around the world.  So what I want to do is give you a little bit of an insight as to how I feel about the financial market.

First of all, I think it is interesting that over this period of time that the media has gone way, way, way one sided and that yes, they are reporting on what is going on but they are also giving a very sensationalistic slant on everything.  I am so excited about the market right now.  I mean this is an amazing time.  When you look at core economics and you look at when the most money is made in the markets and when astute investors make absolute millions and millions.  It is now.  It is times like this.  And this is the time to have confidence.  This is the time to have guts.  This is the time to actually be in the market.  You could not be picking a better time.

I think it is funny that the media always takes the sensationalistic approach to things.  They will look, I will admit, superannuation funds that are heavily into the equities market are doing it tough and which means that, you know your superannuation that you might have sitting there, it has gone down in value.  And I have realized that there are a lot of people that depend on those superannuation.  But we got to look back up a little and if you stop thinking about what I have been recommending over this last couple of years, what I have been saying is, is to get out and manufacture growth.  Make that money and pay down debts.  Now if you have been able to do that over the last couple of years then you are going to be in such a strong position.  If you are in the middle of deals right now, it will take you a little bit longer to sell them.

But now is exactly the time that you want to be in the market.  Now is when you want to have confidence.  Now is when you want to be picking up on the deals that are really going to set you up for the future.  You know, there are so many opportunities around that a lot of people have this mold mentality where the market goes down and so they get fearful so they pull out.  Well, first of all, in doing that, what you have actually done is you crystallized your lost.  So, yes sure, you pulled out, you have crystallized your lost and then you will sit in a bank account and then you will wait for the confidence to come back in the market and what stage that that actually happens and you feel confident about the market again.  The moment that averages is putting your money back into the market when the market is at its highest.

Now is exactly the time you want to have your money in the market.  And I am talking about the property market.  Because obviously that is may passion.  That is where I am at.  That is where I can. And whenever you have got control over your asset, you are able to do things with it.  You cannot do that with a stock in one of the banks or in an international company or whatever, you have got not control.  And I am all about control.  The more control you have over your investments the more control you have over your destiny.  The more control you have over your financial future.  Which is why I am saying now is exactly the time you want to start getting excited.

I have had some major announcements recently about the loosening of the financial policies.  The interest rates coming down, the stimulus packages that have been put into place not just in Australia but all around the world.  Now that is pretty exciting because what that means is that you have this window of opportunity and I reckon you have probably three to six months where everyone else is going, oh! I do not know what to do, I have lost confidence, I have done this, I have that.  You can get out there and make some amazing, amazing deals.

You see, at the moment, what you have got is you have had some builder/developers particularly they do it all the time.  They run on turnover.  They are on profit.  They run on turnover.  And when you are running on turnover, they are relying on the next deal, the next deal, the next deal to actually keep their business rolling.  But when you get a slow down in the market like we have got right now, what you find is that those builders and developers, they do not have that next sale coming in quite as quickly.  So, they do not have the money coming in to pay for their next deal.  Now they are hurting.  What they should have been doing is they should have been running on profits not on turnover.  And unfortunately, business school is not something that is taught during an apprenticeship or during as to how to set up your business or to qualify you for a registration of a business name or a company or anything else.  And it should be because if they were looking at their profits not their turnover, then they would not be in a crisis situation.

Unfortunately, that is not the case.  Or should I say, fortunately for those of you who want to cut a deal.  Now, what that means is it is that you have got a lot of builders/developers out there that are anxious for a deal.  They are dropping prices, they are offering to pay things for you, they will pay your stamp duty for you, they will leave money in the deal, they will do then the financing, they will do all sorts of deals just to cut a deal with you.  Now, when you think about what that actually means, this is really, really exciting.  Because that means that you can get into deals that are below the market value.  You can get into deals that are rock bottom prices now that are not ever going to get any cheaper.  You can get into deals where you can manufacture growth.  You can get into deals where you do not have to put any money into the deal.  You can get into deals that are positive cash flow because obviously getting into this kind of deals, it is important to be focusing on cash flow as much as it is on the growth opportunity in a particular deal.

Now, there are actually a number of ways that you can do that, focus on cash flow, I mean.  First of all, you could focus on properties that provides you with a neutral or positively cash flow property from the day you buy it.  And that is what I call a direct cash cow.  You can manufacture a cash cow where you might do things to that property to make it positively cash flow like you might renovate it.  You might add another dwelling to it.  You might add services that you can charge rather high pricing.  You might add a furniture package.  You might do corporate leasing.  You might do all sorts of things that can, you know, I go and I teach this separately but you can do a lot of things to actually create a cash cow.

Alternatively, you may elect to buy a property that may not be quite positively cash flowed but what you do is you build in a buffer.  So that actually creates your cash flow.  It gives you the ability to be able to perhaps borrow a little bit more, for instance you might go out there and buy a property from a builder/developer right now.  Let us say he is anxious to sell it you.  So he might for instance give you a 10% rebate on settlement.  And you go in and you borrow to buy that property.  You might set that 10% rebate on settlement aside just to cover your cash flow for a period of time.  You may elect to make him pay for the stamp thing for you.  He might leave some money in the deal and then to finance the deal and he might even vend upon it and say, 30% or 35% and if you borrow 80% on the deal that leaves you 5% to 10% extra in a buffer.

Now put that money aside, actually keep it as a buffer to service any cash flow for the next one-year or two years.  You know that is a great way to build in a buffer and be able to get in and buy properties right now particularly when you could cut such amazing deals and particularly when you can get into property where the terms and the conditions of your purchase can be so, so, so favorable.  Now is the time to negotiate.  Now is the time to really hone in on your negotiation skills and do not think that just a least price is going to be what things are selling at.  Now is the time to be really cheeky.  Now is the time to be offering prices that if you want a keen price and you have got equity to go into the deal or money to go into the deal, cut it on price.  But if you have not got any money to go on the deal then cut it on terms, cut the deal so that you may perhaps may not even have to put anything into the deal.  Have a buffer to carry you through any short flow and buy property that you can actually manufacture your growth on.

I mean that is just so ideal.  This is your opportunity to change your life.  This is your opportunity to change your destiny.  To have financial flow and have anything you want.  Now is really the time to get excited.  I cannot stress this enough.  This is such an amazing, amazing opportunity for everybody.  You know, over the last few weeks, I have been actually hold up in bed with bronchitis and I have lost my voice so I was totally unable to speak.  And I am just jumping out of my skin.  I wanted to get out there and talk to everybody about it.  The amazing opportunities that are going around and now my voice is almost back to normal.  So I am pleased to be back on the airwaves with you guys and I am talking about what is going on in the market.

You know, we are really, really well placed, Australia is so strong compared to a lot of other countries around the world.  You know, we make up less than 2% of the world market, for goodness sake.  Now we get so head up about what is going on right here but we are so tiny.  We are so insignificant when it comes to the international markets.  This is such an opportunity for us because we are resistant to what is going on.  We do not have to be a little pop it on the string that responds every time America goes in sneezes.  You know, we have a sound banking system.  We do not have the problems that re-exist around the other parts of the world.  We do not have the bad bits internally that exist around the world.  We are in a situation where we do not need to be lacking confidence and it is just a media and the hype and everything else that has gone with it that is giving everybody the geese and that is exactly the thing that you do not want.  This is exactly that time to be in that market.

So guys I hope I have talked you and I am going to be back to talk you again very, very soon because there is so many things I want to tell you about.  What is going on right now and the opportunities so stay tuned and I am going to be with you real soon.  Bye for now.