Archive for August, 2010
Who has the Power?
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Had an interesting morning in the US embassy today.
I guess being American I was expecting an efficient capitalistic machine operating where you would have to be there exactly on time and get ushered into your interview room where a brilliant and officious officer would grill you and make it perfectly clear that if America let you in to visit it would be due to their magnanimous magnificence and not because of any worthiness on my part.
So I get there 20 minutes early to discover that every appointment for today was given at 10:30 so there is standing room only as people wait to be seen by the ONE and ONLY interviewer.
2 hours later I have my turn at the counter, no rooms or privacy to be met by a ovely woman who proceeded to discuss her property investments in the USA.
This almost made me forget the 2 hours it had taken to be seen and she was supremely helpful, although warned me that the USA didn’t care about my travel plans and whether I got my visa in time was entirely a hit and miss affair.
So all my dreams about America were dashed in one event all before 1PM!!
I must say though my biggest impression was the friendliness and helpfulness of the interviewer. She was awesome.
Stay Inspired and Stay Safe ~ Dean Letfus
Brave New World
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Wow what a fascinating time for investors to create wealth.
About 3 years ago I tried to buy a property in Papakura for around 300K. Last night one of my mentoring students emailed me that she had a property under contract and when I saw the pics realised it was the same property.
When I was looking at the property it would have rented for around $350.
Now the rental income is $450 and she has it under contract for $226,000!!
So a “good deal” 3 years ago is a real cash cow now with a truckload of equity.
It is just incredible that you can buy a 4 bedroom home for way less less than the build cost in Auckland city!!
I just don’t know how many people will retire in the next recovery but you can join them if you take some action now. Don’t leave your future in the governments or times hands, as commentators rub their hands in deceived glee over property values declining and how our selfish behaviour is being punished blah blah, today is an incredible time to get going with your future.
I have 2 friends who are both in their late 70′s. One couple invested in property through out their life and treated even their own homes as an investment.
Today they are deciding where to retire to and they have the ability to purchase their final home for cash without selling their current house. They drive around looking at property in their new car and can simply enjoy the fruit of their labours now because they are set for the rest of their lives, (and they have been financially free for some years).
My other friend has worked hard all his life but never did anything about his retirement. As a result he and his wife now own the worst house in the worst street and still have a mortgage. Their dream is to retire tot he beach but this will never happen. The reality of their situation is just hitting home now that they are stuck, really stuck. When they sell they will have to move into the sticks and hope they might be able to find something within walking distance of the beach as they certainly won;t be able to see it with the funds they will have and running a car will be tricky as well.
They have 10, 15 or 20 years of financial difficulty after nearly 60 years of graft.
You will be one of these people yourself one day.
Even 1 good property investment can move you into the top category.
Don’t ignore your own future!!
Stay Inspired and Stay Safe ~ Dean Letfus
Growth before Increase
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I spent yesterday morning with my mentoring students which always makes it a good day. And in listening to one of my students in particular as he excitedly shared how well things were going I was reminded of the importance of understanding today’s title.
We all want increase in our lives right? Increased wealth, increased health, increased success.
But generally we don’t understand that increase must be preceded by growth.
When you plant a fruit tree seedling there is a lot of growth to occur before you ever see any fruit.
My friend had been through a great deal of negative stuff in his life and over the last couple of years working with me had really grown in his capacity to think differently and make decisions that would lead to increase.
And listening to him yesterday was like the fruit was starting to really fall off the tree.
This is so exciting to see because once you have been through the growing pains you are forever bigger, stronger and able to bear more fruit.
So be encouraged, you will have been growing in many areas of your life lately and missed it because your measure of success has been fruit or increase.
Don’t give up.
Keep growing, then the increase is inevitable!
Stay Inspired and Stay Safe ~ Dean Letfus
Talk about weird Trev
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It’s a fascinating time to be in property, that’s for sure.
This week I had a family member, non investor, sell a home for 15% more than they paid just a few months ago and saw a property sell for 45% less than its 2007 purchase price.
So as a trader or investor the big secret to figure out is where is the profit and where is the carnage. Or at least that’s what we think don’t we.
It is such a common question I hear: “Where is the best area to invest?”
So let’s remind ourselves, again 
, that there is no best area to invest. Of course there are areas that have differing rates of capital growth and some areas consistently out perform others so that is one factor to consider. However often those areas also have a higher floor in terms of discount so buying there purely on growth stats is a misnomer.
As always we need to look at the numbers to decide where the best areas might be.
For example if our primary need is cashflow then a property in a low capital growth area paying you a hundred dollars a week is going to “outperform” a high capital growth property with no income.
But the point really about all this is that 2 neighbouring properties in the same street can be bought for widely varying discounts and supply different yields, so there is no such thing as a best area, there is only ever a best next deal for you!
Stay Inspired and Stay Safe ~ Dean Letfus
Tortoise and the Hare
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I was reminded of this story yesterday when talking to a fellow investor. We had both purchased 50 rentals but as he explained his journey I wished I had been more like him!
You see I bought 50 properties in 3.5 years and basically did a life time of learning and mistakes in a highly concentrated period. Whilst I still achieved the result of an investment portfolio my cashflow isn’t anything near what I’d like yet and the stresses of so much “hare” activity takes a significant toll.
My friend on the other hand started buying a property a year in the 80′s and then had a spend up in the early 2000s when he built a portfolio at average yield of “10 to 12%”.
So today his portfolio has more than doubled in value and my guess is it is providing a 15 to 20% plus return.
And that’s the secret of the tortoise strategy.
Less obvious results initially but over time the tortoise get’s the money, gets the growth and gets the girl all without any hyperventilating, grey hair and sleepless nights.
I have for some time taught young people just to buy a property a year for the rest of their lives because I know how stressful it was to build a big portfolio so fast, but it was nice to meet someone who was at the other end of that process, a happy, wealthy retired tortoise.
Anyway gotta hop over to my next deal now
Stay Inspired and Stay Safe ~ Dean Letfus
Mudslingers Unite
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I know more than many what it’s like to be attacked and accused of things falsely. It is both unpleasant and can be very highly destructive to your emotional health and relationships.
So when I heard about Allan Hubbard being done over I felt terribly for him.
Thanks to Kieran Trass it now appears there may be a very sinister side to this whole issue.
Kieran’s recent release is copied below, not so much for your information, but in the hope that some of my readers may be in positions of influence to make sure this is bought out into the open.
Have been watching with interest the developments of the Hubbard/South Canterbury Finance Ltd (SCF) case…
Allan is NZs wealthiest financier (worth @$500M) with an impeccable reputation and record of 60 years in the industry, has supported over 30,000 NZ businesses, donated many millions of $ to charity and it appears his empire is under seige…
Background
A) Hubbard owns most of Sth Canterbury Finance Ltd (SCF)
B) Hubbard also owns several charitable trusts and a company called Aorangi Securities Ltd (AOS). All of the trusts and AOS were recently placed into statutory management by the government after a single investor made a compalint… (AOS has over 400 investors).
The Scandal
It would appear that a group of ‘heavy hitters’ may be attempting to muscle Allans wealth from him… using none other than government authorities to support their cause… possibly for the purposes of eventually folding those assets into the proposed ‘Heartland Bank’.
The basic concept appears to be to muscle Hubbard out of SCF and discredit him.
The Smoking Guns
It appears there are several potential conflicts of interest surrounding the matter including:
1) Simon Botherway of the Securities Commission.
Botherway of the Securities Commission (which recommended Allan and Jean Hubbard) be placed in statutory management is also the brother of a businessman placed in receivership by SCF last year.
A formal complaint has now been made to the Ombudsman in relation to Botherways potential conflict
2) Trevor Thornton of Grant Thornton Accountants
Grant Thornton are the appointed statutory managers of Hubbards charitable trusts and AOS…
Trevor Francis THORNTON of 345 Withells Road, Christchurch is a Shareholder and Director of GRANT THORNTON LTD
Trevor Francis THORNTON of 345 Withells Road, Christchurch also has a shareholding in PROTEUS HOLDINGS LTD which has a shareholding in SECON TECHNOLOGIES LTD which is a shareholder in…
SOUTH CANTERBURY FINANCE LTD
It is likely a complaint will be lodged with the Ombudsman in relation to Thorntons potential conflict
3) Sandy Maier temporary CEO of SCF
Maier stated in a press release on 29th Dec 2009
“Alan’s desire to support the business was not totally altruistic. Alan believes this is a very good business,” Maier said.
WIKIPEDIA DEFINITION OF ALTRUISTIC
Altruism (pronounced /ˈæltruːɪzəm/) is selfless concern for the welfare of others… Altruism is the opposite of selfishness.
It seems odd that the CEO of SCF would utter such words about the cornerstone shareholder…
In contrast just read the glowing testimonials on Allans impeccable reputation at http://www.standbyhubbard.org/?page_id=10
Allan Hubbard has not lost 1c of investors funds in 60 years…
What You Can Do To Help
Please read what REAL people are saying about Allan on the facebook page titled ‘Leave Allan Hubbard Alone’ and please support his cause.
http://www.facebook.com/group.php?gid=126760207363172&v=wall&ref=search”
