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PROPERTY UPDATE BY DEAN LETFUS

Keep your eyes open over the next 8 to 12 weeks as we are going to see an enormous spike in distressed vendors. Many businesses that have limped through 2009 will be finished off by holiday pay and 50% turnover for 2 months. As nearly all small businesses are secured through home equity the property will be the first thing to go.

Now this is tragic at a personal level and I am deeply saddened that it is true, but true it is. This is going to depress prices and increase supply, especially in Auckland, so for those of you in a position to invest it is going to be a buyers market, on steroids, for the next 3,6, maybe even 12 months.

You have to remember that you didn’t cause the vendors issues, (if they are forced sellers), and you are simply making an offer. Selling their property could save their marriage, their credit and even their business so get out there and get investing.

Remember the rules, main centres only, must have growing population and cashflow neutral or better PRETAX!!

FINANCE UPDATE BY KRIS PEDERSEN

Kris Pedersen Finance Strategist

Don’t get caught by the One Bank Trap

I go on and on about this and need to state it again as I’ve spent a fair junk of the last couple of days trying to organise funding for a developer whose properties are being taken to mortgagee auction tomorrow. Now these are very specialist properties and there is unlikely to be a high turnout of purchasers so there is a very good chance this will result in the bank involved dumping them for as close to the mortgage amount as they can get.

There are actually a couple of good properties involved which if the client had structured themselves correctly they would have been able to be saved.

Whether you are new to investing or are a seasoned pro it is imperative that you structure your debt correctly to minimise the control that the bank has should things turn bad.

Most of you will understand the benefits of using trusts for asset protection but there is no point hooking all your properties in with one lender.

To learn more about avoiding the one bank trap contact me here.

MINDSET SCIENCE BY DEAN LETFUS

Love is a funny thing. In fact tying it down and analyzing it is like trying to get a kind word about Pakeha’s from Hone, but we do tend to equate gifts and food with love, especially at Christmas don’t we?

Now if there was ever a year to get people to rethink this it is this year. Most of us are cash strapped more than normal. Many of us are in really difficult situations, which our family may not be aware of, so we have huge pressure to ensure Christmas is “normal”.

So the last thing you need when you are stressed financially is to enter a season where you need to spend money. The fact is that many people will feed their friends at Christmas and not pay their rent. Or they will take the expensive wine or chocolate to the party and have no way to clear their credit card debt.

So whilst I am not your mum can I metaphorically “give you permission” to break the rules this year.

Here are a few thoughts as to how you can make this Christmas less stressful financially.

• Come up with the novel idea of a pot luck Christmas meal with your usual friends or family. Make it a game with a small prize for the weirdest dish or the most artery clogging dish, whatever would work with your people.
• If you normally go overboard with your own kids etc. sit everybody down and explain that this year they are getting a card on Xmas day and you will take them to the Boxing Day sales to buy their gifts.
• Get more of you together than normal and get several people to bring food. A bigger crowd is actually cheaper to feed and no one would expect you to cater for larger group.
• Don’t supply alcohol!! We don’t need it, ask people to bring their own if they want it
• And the most radical idea of all?? Tell those you love the truth. No one who truly cares about you is going to be angry if you say:

“Look this year has been really hard and we feel really under pressure to spend money we don’t have this Christmas, so could we agree to keep things simple, maybe even not give gifts and help us enjoy you, our friends/family without us having to worry about paying for it”