Archive for March, 2012
Explaining the Phoenix Strategy and How to research any US property from your own computer in any country:
Previous Webinar explaining more about the fundamentals of the US market:
Interesting to see John Key predicting a boom today HERE and Bill English disagreeing with him. I have become immune to this commentary and prefer the “let’s wait and see what happens next” method as everybody is guessing. One of the interesting things about this though is whether the Prime Minister making that statement could actually influence the market. He has more credibility than anybody else including the Reserve Bank governor so maybe this could actually shift sentiment in the sector and become self fulfilling prophecy.
I guess it is quite likely that Auckland and Christchurch will have a bubble through rebuilding and internal migration but all the coal face evidence remains pretty “normal to depressed” in most parts. We recently saw 2 homes sell in our own street quite quickly but at what sort of prices? In both cases there was pressure to sell so they might become statistics of a market doing OK and increasing sales but I am simply not convinced that this means a recovery is occurring.
The old school strategy of buying expensive homes in nice areas will certainly see a resurgence in this market and the “I told you so’s” will be thick and fast however most investors will never be able to buy those sorts of properties. So for 99% of people who want to buy pure “investment” stock there is a long wait still before we see our markets genuinely recover I believe.
I see the same thing in the USA right now. The bottom end of the market location wise is staying there. In fact some areas are getting worse and fast. The only difference in the USA is one can buy nice homes in great areas for only a teeny bit more than a really bad area so there the bettter home strategy is sound. (Speaking of which join me this Thursday for our next USA webinar HERE)
But in good old NZ I think we are going to be sitting tight for a long time yet, even with Uncle John talking things up
Stay Inspired and Stay Safe ~ Dean
When I was in hospital I had several occasions when I had to tell late night nurses what to do or to stop them doing something wrong. Because I was on a fixed routine I knew when my IV had drugs in it and whether it needed flushing etc. and when I should be taking certain pills.
Now even though I was very sick most of my nurse interaction was pain relief and IV liquid food so the consequences of a minor problem were negligible. But it made me wonder how many times similar mistakes might occur with real serious issues.
Given how hard nurses work and the unbelievably difficult people they have to deal with I am not saying they are the problem.
I guess what I am thinking is this:
Is it realistic to expect a service or system to be “flawless” when it is being operated by imperfect people??
Obviously if someone was given the wrong drugs and they died that would be tragic and I know this does sometimes happen. But just because the consequences are more significant does not change human nature. We all make mistakes and will do as long as we are alive.
So when the recent stats on hospital misadventure was front page news I was reminded that we are trying to run a perfect system with imperfect people perfectly, which will never happen.
We need people who do their best, who are well trained and who are well rested when it comes to nurses.
I don’t know how to make all that happen in a society where nurses are poorly paid and many are raising families as well as working shift work.
One of those unsolvable puzzles I guess………
Stay Inspired and Stay Safe ~ Dean.
I was at Ohope this weekend and it looked like real estate signs were having a convention on the roadside. Given our love affair with property and the beach it was a real “sign of the times” to see house after beachfront house with a for sale sign up.
And something I hadn’t seen before was many of the signs had the asking price emblazoned across them.
I wonder how long it will take for coastal markets to come back, especially in areas like Ohope. Middle of nowhere and on the way to kind of nowhere. Stunning location and beach but will people ever want to pay a million dollars to live/holiday again?
I guess the answer to that is yes of course they will, we are after all kiwis with short memories and a serious sand addiction.
But the last 4 years may mean it’s a long road before we see these markets get anywhere near their 2006/7 heights.
There is always an upside of course. If you’ve been waiting to buy a house cheap at the beach, now is THE time!
Stay Inspired and Stay Safe ~ Dean
Never make permanent decisions based on temporary emotions. We can;t control our emotions, they just happen to us don;t they. And most of the time we are being influenced by them because that is part of being a thinking feeling being.
Yet we often make decisions we later regret because those decisions are permanent and not what we would have done if we were less angry/sad/happy.
Think about it for a minute, from unwanted pregnancies to destroyed marriages and financial ruin. Permanent decisions made under the influence of a temporary emotion.
To stop this damage I am learning how to make temporary decisions so that I can check my emotions out. In stead of !$^&$^%#&$^ and ^%$#*!%&#)* to you too I now say:
“Let’s discuss this later on when I can think more clearly about it”.
Recognising our emotional barometer is a great place to start. None of us are going to make rational decisions in the heat of an emotional meltdown so once we establish that as a fact in our lives we can learn to say to ourselves I must not make any decisions right now until I am calmed down, sober, whatever it may be.
This has been quite a revelation to me today, not sure why.
I guess as I get older I understand the word permanent a bit better
A Championship Team will always beat a team of champions.
Join our championship team HERE
I have spent a lot of my time over the last few years looking for answers. Whether it’s how to help someone maximise their returns or how to dig someone out of a hole it is a constant search for solutions.
The recession pushed me into looking at things that I now regret, trying to solve the cashflow drama. The strategies were not necessarily bad ideas but the people attached to them in some cases were.
The one shining light in all of that however has been the US property market. Many clients and friends are now reinvesting again because the numbers work, the problems are manageable and the results are better than anything to be found elsewhere. 2 years on it simply works!
Recently I discovered a legit way to basically 100% finance ongoing purchases by recycling the initial property purchase money over and over.
And being non guaranteed bank lending with high yield makes it, well as close to risk free as I have ever seen anything.
And the overseas fear of the market is finally giving way to an understanding that the Americans problems are our solution, providing you know what you are doing.
So with my clients it has taken 2 years of education and enough proof from third parties to shift the “culture” if you like. End result is more and more people are solving their cash flow issues.
Now your problem might not be cashflow, but whatever it is, the answer may be found in exposing yourself to something outside your comfort zone.
I have often said you need to get out of your comfort zone because that’s where all the money is but the truth is that answers are often found in areas we have historically avoided.
It has been amazing to see people who would never invest in the US ringing me excitedly to add to their portfolios 2 years later.
So what keeps you awake at night and what have you overlooked/ignored/run away from that may hold the answers to your questions??
Now there’s a question
“A champion team will always beat a team of champions”,
We’d love you to be on our US champion team, next US investing Webinar HERE
Interesting times here in New Zealand. We can see the beginnings of a bubble in Auckland and Christchurch as the Auckland rental market is under supplied, caused in part by so many Mainlanders joining the JAFA brigade.
And in Christchurch the beginning of the rebuild plus all the vultures and speculators looking for how to profit from the rebuild are fueling extraordinary interest there.
Of course this is in stark contrast to the ever deepening recessionary pressures both here and globally which begs the question:
What exactly will happen if one market is so called booming while the country is going backwards. Is it possible for these 2 cities to be leaping ahead property wise defying the rest of the nation?
I guess the simple answer is yes it can happen as we are already seeing it happen in suburbs like Grey Lynn where houses are fetching mad money and competition is fierce at auctions.
But as investors what should we do?
Let’s take a pessimistic view that the country/world is going to be a mess for another 5 to 10 years. If we have a bubble in Auckland and prices increase we can potentially profit by trading in a rising market. That is childs play. But the enormous risk is that the bubble bursts driven by banks not lending to the levels properties are selling for in Auckland or an ever worsening economic outlook causing lending to tighten again.
Most active investors seem to be doing one of the following two:
Running around in Manurewa and Otara and other very low socio economic areas buying and renoing or buying and holding.
I think this will ultimately be a disaster for most of them. We sold out of South Auckland as soon as we could and would never go back there. Maintenance, rental issues and most importantly sliding values make it a very bad idea. (NOTE: I do not include Papakura in South Auckland, that market has consistently performed amazingly well.)
OR they are basically doing nothing. I think this is quite a good strategy right now. Sit out things in NZ or look offshore is not a bad idea. I talk to agents daily and professional finders around the country and the overall outlook is somewhere between muted and terrible so we can’t afford to get bullish yet.
Keep your powder dry!! Don’t be rushing in in New Zealand, there is much uncertainty ahead!
PS: Our next training webinar is going to be “HOW to research a property/area in the USA”. Book HERE