Archive for February, 2011
I don’t know how but I seem to attract friends and clients who are just awesome people. None more so than the group of friends who are on tour with us in the USA. To have a large group of people, many of whom don;t know each other, click so well and be so understanding and excited together is impossible to put into words.
And I guess more importantly to have people enjoy the opportunity to create cash flow is exciting. I asked a couple of the attendees today if they were 100% satisfied with what they had seen and what I had said pre trip. “Did I over sell anything?” I asked.
“Oh no, not at all”, was the reply.
“We appreciate that you can only give us your opinion but everything you have quoted is exactly what we are finding ourselves now we are here”.
I can’t ask for more than that!!
I’ll get some pictures up tomorrow of some of our purchases but this is just to express my gratitude that in a world full of angst and difficulty New Zealand is full of wonderful people and it is my privilege to get to know so many of you.
Some of our people have friends and family in Christchurch, (who doesn’t), and our prayers and condolences are with you all. The news coverage here in the USA is quite high profile but we keep seeing the same shots of the cathedral and the Grand Chancellor hotel and not much up to date other info.
Get Going and Stay Safe ~ Dean Letfus
I am sitting in Memphis with a group of friends looking at real estate.
I have just looked at the lowest return property available to buy as a rental and it has a NET return of 9.56%.
Even my wife is smiling .
Understanding this market and learning how to benefit from it is finally giving us a permanent long term solution to cash flow so one can actually retire easily with US diollar income.
In NZ it took me 20 million dollars worth of property to start to develop good passive income and the amount of debt I incurred mens I was very exposed if things went wrong. Here for a total investment of $500,000 I can produce $100,000 truly passive income AND have the entire portfolio completely debt free in ten years.
Just absolutely amazing. Our property manager here has over 400 rentals himself proving that any “normal” person in a “normal” job can achieve great results.
So hands up if you are normal and would like to replace your income passively and safely.
Well why aren’t you here with me and my friends then
Get Going and Stay Safe ~ Dean Letfus
Join us HERE
We judge many things on price rather than value. This is incredibly true where even seasoned investors will often bow out of a market because it is too highly priced. If we learned to reframe our thought with how a market is valued however we would secure many more oppportunities.
For example if someone is selling their house and they want let’s say $300,000 for it, their price and supposedly the value is $300,000 right?
Well right and wrong. If they are shifting cities for example they may have a perceived cost, (value) of that shift that may be as hig as $20,000. I know because I have sr=ttuck thos many times. So if I offer to pay their moving costs I can get a discount potentially of $20,000 off the purchase price because their perceived value of this add on to the sale is high. So if I can supply moving trucks for $2000, actual hard cost and get a $20,000 discount for supplying them then I have just made/saved $18,000.
I have taken a perceived value and used it to shift a supposedly fixed price.
Every single offer you make on property will have a value/price equation that most of us miss. Learn to think: “How can I add value here to reduce the price”. You will become significantly wealthier.
Get Going and Stay Safe ~ Dean Letfus
Rents will keep rising, (in main centres), until our housing shortage really bites and we start to see a recovery, albeit only a temporary one.
One of the things I love about property is that it’s predictable. Attack housing long and hard enough and people will move out of investing, throw in a global recession and stupid tax law and you can guarantee you will have dramatic rent rises in due course.
So what this means for you and I is an opportunity to increase cashflow on existing portfolios and of course makes it easier to enter the market in terms of finding cash flow neutral deals.
And on that subject I often laugh at the comments made by many investors on forums and such bemoaning the fact that cash flow deals can’t be found.
I have in my inbox 3 emails form just 1 finder with net returns in Auckland of 7,5, 8 and 9.2% return. Yes NET returns.
The current rental stress is making yields higher and higher, time to get in if you have been holding off!!
OR of course if you want REAL BIG CASHFLOW, come and join me HERE
Get Going and Stay Safe ~ Dean Letfus
Because I am a quick adopter I understand the risks attached to that personality type but often people jump on board without doing their own homework. I try and structure my business now to force people to do their own homework and be more informed.
Anyway I digress……….
My way of “coping”, (when things go wrong for other people around me), if you like is to try to learn from those mistakes and to do the “right thing” to the best of my ability.
I think that is well, normal behaviour and by being honest and doing my best generally people understand and will even assist.
So I have been stunned this week that the biggest news in property has been about Bryers and Hotchin, property related stories but certainly nothing to do with investing per se.
Bryers it would appear is continuing with exactly the same strategy in Australia as he was here of selling stuff that isn’t built at exorbitant prices and getting paid up front. To hell with his clients as long as it’s good for him.
And Hotchin was on TV last night pointing the finger at Allied over the Hanover failure. You would take Hotchin seriously except for the fact that he needed 5 grand a week to live and continued to build NZ’s most expensive house when everything had gone t*ts up.
The funniest thing about Hotchin was when he said he had no “cash” stashed away. By his body language and eye direction it was obviously a lie but my guess is he was technically telling the truth because he probably has assets stashed not cash. To expect anybody to believe that someone worth hundreds of millions of dollars and working in the finance industry wouldn’t have funds and revenue streams hidden away is frankly ridiculous. He would be an idiot not to do that.
So I guess my point is, how do these guys sleep at night. I have a client with a deal going badly that might be costing them 30 or 50,000 and I feel sick about it.These guys have over a billion in lost funds from mums and dads between them and it appears to not scratch their surfaces.
Do you have to be a pachydermatous prick to be a big time businessman these days??? Is that what it takes?? To have no conscience and be willing to blatantly rub people’s noses in it??
If that is true then I’ll be poor thanks
What do you think??
Get Going and Stay Safe ~ Dean Letfus
I have had a raft of people ask me in the last month or so what they should do with $XXX maturing shortly. It is a sign of the times that even relatively sophisticated investors simply don’t know what to do with the uncertainty in the world. The threat of impending global collapse seems to really push our buttons.
Now of course I am no more qualified or wise than anybody else when it comes to predicting the future but I thought I would share my thoughts with you and ask you what you would do or recommend. There is much greater wisdom in more counsel after all.
So here was my response to this question recently:
Well let’s put aside my bias towards US currently and talk generally first.
I think the USA definitely has more pain coming, how much and how bad is impossible to say.
I think that what affects America will affect the world so no country will be insulated from whatever does happen.
We know the world will survive until Jesus returns and people will be buying and selling etc. till that time so we can take comfort from that certainty.
So what to do as an investor in 2011?
If I had 100K and it was my life savings I would………
1. If I had no need of any income at all from the money and I was very afraid I would buy gold and sit on it for a year or so. There is a very slight risk of gold prices dropping but historically for 2000 years it is the best hedge against inflation and is nice and liquid. (Note: other precious metals would also be ok)
2. If I wanted maximum income and relatively low risk I would buy USA property providing you bought the right property in the right city. The cash flow is unachievable anywhere else and the ability to recycle your money back out means within 2 years you have your money back and still own a house. This is the best thing I have ever seen in my investing career.
3. If offshore was just too scary and I was highly risk averse I would put the 100K into the highest yielding term deposit I could find. I wouldn’t buy property yet, maybe next year. In many ways this is a “dumb” way to handle money but if it means you can sleep well at night do it until we really know the market has finished tanking.
So that is my 2 cents worth, remember this was to a relatively risk averse investor.
So tell me, what would you suggest??
Get Going and Stay Safe ~ Dean Letfus
PS: New tour dates are set for USA, more info at http://www.retirefromproperty.com/
I am feeling very similarly about property right now because I kind of have a foot in 2 camps, New Zealand and the USA.
Now New Zealand isn’t exactly a black dog but people are still very gun-shy and things are still “weird aren’t they?
USA on the other hand, well they have their problems but it is definitely rabbit season in USA.
The investing opportunities are genuine, sustainable and stunning.
Anyway more on that below
PROPERTY UPDATE BY DEAN LETFUS
As I look back over my predicted trends for the last 2 years I am watching them unfold with scary accuracy.
Property values are remaining stagnant. For investors they are actually declining because more and more owners are getting pushed into selling and whilst the stats on mortgagees are levelling out the reality is that people are simply selling at the banks insistence without getting to PLA stage.
Property yields conversely, as I predicted, are increasing thanks to the tax law changes and the net reduction in available rentals. This is not enough to make up for lost depreciation yet but is at least heading north.
NOTE TO LANDLORDS:
You are in a business. Any and every business in New Zealand should be profitable. The unfair and ill thought out tax changes last year have radically affected your profitability. With all that is going on in the rental market right now it is critical that all landlords look at their yields and assess their cash flow due to the tax changes and adjust your rents accordingly.
We all made it clear to government that the people who would pay for the tax gouging would be tenants and that trend is starting. Don’t feel “evil” about it, you have to make money to stay in business and this shift in rents was inevitable. So check your rents. You should be able to move all rents by at least $15 to $20 a week immediately. If all landlords take this professional approach we will get to a fresh, hopefully sustainable level much sooner.
It may be an over reaction but if there is one thing I have learned personally from the last 2 years, (and probably the next three , it is that I never want to be owned by a bank again, EVER!!
This has became one of my life goals, to create wealth and have complete control over it. But how on earth do you build a property portfolio without banks. There are a few solutions of course:
1. Rob Banks. Rapid wealth creation, some serious side effects
2. Win Lotto. Oh you want me to be serious, sorry
3. Take a very long term view. This is of course slow but you can buy a property, get it paid off then buy another one. This is generally considered both unworkable and dumb because it takes too long and has no leverage but truth be told it is one way to achieve a bank free future. In fact a man who is becoming a friend of mine has a portfolio similar to mine and he is very low geared compared to me. His secret was 2 fold, he started a long, long time ago and he was buying when houses were very cheap.
But those days are gone in NZ so what to do.
4. Look for markets where property values are low so we can pay them off faster. Now I know for some of you looking at international investing is just too scary and I understand that, but as I help more and more people solve their cash flow issues through investing in the US I just have to say you should at least have a look at it as a possibility. Here’s why!
You can today in safe predictable markets purchase a property like this one
for $54,000 USD. Total price!! And it rents for around $900 a month. That’s an annual gross return of 20%. And this is in a rental market with 30 years of proven history, like investing in Pakuranga or Central Christchurch.
But the best part is you only need $26,000 deposit, property will be cash flow positive from day one WHILE YOU PAY IT OFF COMPLETELY IN UNDER TEN YEARS!!
And the other best part of all is that within 24 months you can get your $26,000 back and then this property pays you $110 USD per week net return after all expenses for the rest of your life, (plus any rental increases) and you have none of your own money in the deal!!
I don’t believe there is another market like this in the world and kiwis and Aussies are finally “getting it” and investing there in large numbers. This is not a quick adopters, fly by night strategy. Many cities in the USA have been cash cows for decades. We just never thought about it and didn’t know how to do it. Well now we do.
Solving people’s cash flow problems is increasingly my focus these days and simply, this IS the answer.
So what are you going to do about it??
I hope that you would find out more by doing 2 things
Go and listen to my webinar from a week ago and hear from 2 US professionals as well as myself HERE
AND come with me at the end of April on our second Cash Flow research and Buying tour to Phoenix and Memphis INFO HERE
My black and white dog friend was asked which dog won in his life. He replied: “Whichever one I feed the most!”
So feed your white dog today, don’t dwell on the problems, let’s solve them together! The US opportunity just could be the NZ market of 30 years ago we all wish we’d bought in……….
Understanding my market by Curt Davis
Hi there everybody, my name is Curt Davis and I live and work in Tennessee in the USA. It has been my privelege to work with many international investors and get to know a bunch of kiwis and Aussies improving their lives through my association with Dean Letfus.
Here we are with my partner Craig and Dean in Beale St, home of The Blues in Memphis. Dean tells me y’all will think I mean a football team or something by the Blues but I mean BB King Blues, not All Black Blues.
Seeing Dean has mentioned banks and money I thought I’d quickly explain exactly how our funding can work for you and expose the “myth” of high interest being bad.
We can all agree that bank financing for investors is becoming more difficult to get these days. And the complaint often is that private finance is expensive. Well that is because we don’t understand that TIME is your enemy, not interest rates.
For example our company offers private financing for investors. Everyone qualifies and in simple terms it looks like this:
40%-50% down payment
5 year – 7 year amortized notes
Non recourse, no limit to homes currently owned and no limit to homes that qualify
Interest rates from 9.75% – 12%
Now back up the truck, 9.75 to 12% interest I hear you screaming. Well in order to understand how these terms will HELP you as an investor you will first need to understand that time in your enemy.
Its ok to pay higher interest as long as the term of the note is shorter and you buy well!!
Recently an out of state investor purchased a home in Memphis TN for around $50,000 in an area where the home should normally be sold for about $35,000. The vendors were offering owner financing on a 30yr amortized note with interest rates around 5%. You also had to get ” approved ” and you also have to put down 25% of the sale price. Lets see if this is a good deal.
I will use the same home as an example to show you how our Short Term Retirement program works compared to other programs:
As you can see, with our program you have paid the genuine discounted price for the property and sacrificed less than $25 a week in cash-flow to save $28257 in interest and get maximum cash-flow after 7 years instead of 30!!
Understand that long note terms and low interest was not designed for you to win considering interest is almost always front loaded. You will not actually start to attach principal until about year 17. Don’t be fooled by the lower down payment or interest, it is your enemy.
Our private financing was designed with the sole purpose to help you the investor win, that’s it!!
Oh one more thing before I go. I see a worrying trend with a lot of offshore buyers being charged huge fees to learn how to invest in USA and often being charged big fees on their investment purchases.
Well my company, like Dean’s, has a 100% transparent purchasing and property management process. No kickbacks, hidden fees or inflated prices. Anybody purchasing in the USA from overseas should be able to buy the property at the same price a local would pay and enjoy the same levels of positive cash flow.
Don’t pay huge education fees and don’t pay too much for the property. Use professionals like the team at Massive Action and Memphis Investment Properties, we’ll keep the profit in YOUR pocket!!
MINDSET SCIENCE BY DEAN LETFUS
Sometimes it is the simple things that impact us most. I heard a young man preaching at church the other month and he made a statement in passing that has really stuck with and encouraged me. I’d like to share it with you.
We are all designed to be a message. Our life tells a story and communicates many things to anybody we interact with. This doesn’t have ot be spiritual in any way it is simply a truth.
We are all becoming a message of something.
To become an effective message that makes a difference to others we must have some life experience that teaches us wisdom we can share with others.
He put it this way:
“For God to make you a mess-age, first he gives you a mess ”
And I would add that mess may take an age to become a real message.
This is a really healthy way to frame our lives. We stuff things up, we learn and put them right, this becomes a part of our unique message. We try 1000 things that don;t work and finally succeed, this becomes a 1001 stories that are part of our life message.
Simple, profound and strangely “warming” to my heart. Hope it helps you have a great day too!
Now back to feeding those dogs……..
CASHFLOW IN NEW ZEALAND
Now some of you will never invest internationally so you need a cash flow solution here in NZ.
My friend and long time educator Rineke has a new strategy that is making almost any property cash positive in today’s market. She has put together an awesome event called:
so if you aren’t joining me in the USA you need to be getting schooled up to prosper here at home.