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The 7 Secrets of Profitable Property Investment FREE eBOOK

Written on the 4 May 2016 by James Cagney

Contents

About the Author

Page 1

Introduction

Page 1

Secret No. 1 - Develop the mindset of the wealthy

Page 2

Secret No. 2 - Using other peoples money ((OPM))

Page 2

Secret No. 3 - Use Gearing

Page 3

Secret No. 4 - Use Leverage

Page 4

Secret No. 5 - Use Compound Growth

Page 5

Secret No. 6 - Understand Property and Cycles and Phases of Employment  

Page 6

Secret No. 7 -Be a good negotiator

Page 8

Conclusion  & Disclaimer

Page 9

ABOUT THE AUTHOR

The author of this eBook, James Cagney, maintains that you should only take advice from people who have experience and have achieved success in a specific field of endeavor.  James says when requesting immigration advice you should ensure that you only take advice only from someone who has successfully immigrated.  Only these immigrants have earned the right to give you advice. James has helped thousands of people to successfully migrate to Australia, Canada, New Zealand, The USA and the UK. James and Shelagh (his spouse) and their five children migrated to Australia from South Africa in 1998.  They have made a success of their lives in Australia. James and Shelagh now have ten grandchildren who were born in Australia. James has the experience and knowledge to help you and your family to do the same. James has the following qualifications:

Certificate IV in Immigration Law for Migration Agents and is a Registered Migration Agent (No: 9900101) and the founder of the International Immigration Alliance.
Certificate IV in Real Estate Agency Practice and a licensed real estate agent (No.3048738) with IRPS Associates Pty Ltd and provides advice and networking for residential properties investors
Certificate IV in Finance and Mortgage Broking and a licensed credit representative with Asset financial Services Pty Ltd (No. 462890). Assets Financial Services sources the most appropriate  loans for your financial situation and refers clients to financial planners, accountants and solicitors within the network

James has writte other eBooks which you can access by clicking below:

  • The 7 Pitfalls to avoid when buying an Investment Property
  • The 7 Pillars of Financial Freedom 
  • The 7 Blunders Immigrants make when arriving in a new country 
  • The 7 Tactics immigrants can use to find the right job in Australia

James can be contacted by mobile:  0416 137 645 or via his website: www.jamescagney.com.au

INTRODUCTION

The rich do not share their secrets easily. The obvious reason for this is that they want the middle classes to pay the income taxes and they do not want everybody to do what they are doing. If too many people start claiming the tax rebates that are available through investment property and too many people jump on the bandwagon and buy investment properties it will take away their bargaining power with vendors. The principles covered herein are obviously not the only SECRETS the wealthy use to make money but if you follow these basic principles you will be on your way to creating wealth through property investment.

Mathematician,  philosopher and author Alfred North Whitehead's philosophical works particularly "Process and Reality" are regarded as the foundational texts of process philosophy. Whitehead wrote:

"In a sense, knowledge shrinks as wisdom grows: for details are swallowed up in principles. The details of knowledge which are important will be picked up ad hoc in each avocation of life, but the habit of utilisation of well understood principles is the final possession of wisdom".

Grasp as much knowledge you can on profitable property investment and internalise them through repetition and visualisation. Use the techniques I covered in my article "Develop The Mindset of the Rich" . Click HERE for more details. 

Once you have internalized they will become they become principles that affect your thinking.  This thinking becomes habitual and you will start making good decisions regarding profitable property investment. Of course, principle thinking can control other areas of your life so consciously use the techniques for every area of your life. 

Unfortunately the real estate industry  is plagued by scammers promising you countless get rich scheme. Seminars advertising how much money they have made with photos of them standing next to Donald Trump, Arnold Swarznigger and Richard Branson , plus flashy cars, private jets, good looking models etc. suck people in like a giant vacuum cleaner. They appeal to the "GREED" in us and we go along to the FREE seminar to be hooked line and sinker for courses , memberships to the VIP clubs and the promise of easy money. Run for your life before you are sucked in. The "Get rich quick" schemes rarely work. I prefer the "Get rich slow" strategy because with property it is about "TIME" in the market. This is a far better strategy so the sooner you get into the market the better. Interest rates are at a 65 year low and NOW  is the time to borrow money. The cost of "Holding " and "Controlling" property (out of pocket expenses is so low) investing  in property is a no brainer. 

 Page 1


SECRET No.1 - DEVELOP THE MINDSET OF THE RICH

This SECRET is paramount if you want to become a profitable property investor. I covered this topic in an article I wrote and published in April 2016. I also made this SECRET available to subscribers of my regular Property Updates. I urge you to read this secret of the Rich because it will turbo-charge your success in Profitable Property Investing. Click >>>> SECRET No. 1. If you do not have the "Mindset of the Rich" you are wasting your time trying to understand the principles I am going to reveal in "The Secrets of Profitable Property Investment":  So don't bother reading any further you need to read this first and then come back to the Secrets below. I am more interested in you becoming the person you can be through your mindset than you being a person who has a head full of knowledge, knows every thing and does not take ACTION because your head is full of doubts, fear and limiting beliefs There is no smoke and mirrors here and I make no apologies for my view on this.

Did your parents say to you "As long as you pay off your home you will be right my child". Well you won't "be right". Money devalues by half approximately every 20 years with inflation and the pension can not keep up with it. That is of course if there is a pension when you retire. Take your Super you have now and divide it by half and see how much that is. You will be saying  that you expect your Super to grow of course Well. keep reading this chapter because you may be very disappointed how far your Super will go and you may have to undertake "Reverse Mortgaging" to subsidise your income. Reverse mortgaging is when the bank lends you money on your equity until they feel that they have lent you enough money. If they have to sell your home on a fire sale the bank wants to be able to recover what they have leaned you. banks are not in the business of taking risks

Worse still your kids may be trading your home for your nursing bed because nursing homes today require hundreds of thousand  of dollars before they admit you. That bond whittles away the longer you remain in the nursing home. Think about it you spend 30 years paying your mortgage off and the nursing home takes it to care for you. What are you paying income tax for? Simple look at the extravagance of our State and Federal government and wastage of public funds and you know why you pay income tax.

Money is not wealth! The more qualified you are, the harder you work the more money you earn - the more income tax you pay! The true test of your wealth is how much in assets you have. Of course cash in a bank is always good for those rainy days. The secrets below will show you how you can acquire assets. They will show you how to reduce the amount of income tax you pay. They will ultimately show you how to make your money work for you instead of working so hard for money. Someone told me that if you work long hard hours year after year the only thing you can guarantee is you will get older quicker. We need to use these secrets of the rich to the max. If you are struggling to shrug off negative thoughts and earful of investing in property right now call James on 0416 137 645 or click >>> HERE .

SECRET No.2 - USE OTHER PEOPLES MONEY (OPM)

Do you only want to be successful in the short term? Why then do we go for "get rich quick schemes"? What about being successful in the long term? Wouldn't that be better? The problem is we want everything NOW!  I am going to show you the "get rich slow strategy".  Sorry I can't help the instant gratification society that we live in today. What  I do what I do to help you help yourself and to invest safely and securely. This said it amazes me when people say that owning investment property is too hard. Frankly, it is easier to own an investment property than own your own home. With you own home you pay for all the costs:

  • The mortgage
  • Rates and taxes
  • Maintenance
  • Water

And, you pay for your home after the tax man has taken his money. In the old days the sheriff used to knock on the door of the cottage and demand tax. If the family or worse still the widow  could not pay then the sheriff and his men would take the cow, the chickens and leave the family destitute. Today they don't have to do that. They just take it off your pay and you accept it without a word. You shrug your shoulders and say to yourself "Well I have no option". Yes you do! By purchasing an investment property the taxman gives you a rebate to help you pay for it.

Why not get Other People's Money (OPM) to pay for the home. When you own an investment property the Tenant and the Taxman pay most of the costs for you. (see: diagram below). If you invest wisely you will pay the smallest amount to "Hold" and "Control" property. And another benefit is that you pay an amount which decreases per year as rents increase.  Isn't this great news?

 

So what you need to do is calculate what the property costs you out of your pocket after the Tenant and the Taxman have contributed to your property.  You can create your own spreadsheet to work this out but the easiest method is to use the Property Investment Analysis from Somersoft. This is a specifically designed computer program that calculates the out of pocket expenses for you. A reputable mortgage company should have this program to calculate this for you. It calculates the tax rebate you get as well which is a great joy for me. If you would like to know more about the Property Investment analysis call James on 0416 137 645 or click >>> HERE.

Imagine getting money back in your pay every week. In Strategy 3 "Increase your Financial IQ and beat the banks we will show you how this tax rebate can help you to turbo-charge the payments on your home. By structuring your finances correctly you pay your home off quicker saving you thousands of dollars in bank interest fees. If you want to beat the banks you need to use your money smartly. James Cagney has a certificate IV in Finance and Mortgage Broking and is a credit representative (No.462890) with Asset Financial Services Pty Ltd (No. 389402) and is able to give you sound advice with regard to your personal situation. Frankly, if you have not reviewed your loan in the last 6 months you need to do it right away. Contact James Cagney NOW and he will show you how to turbo-charge your mortgage payments by purchasing investment property. 

Page 2


SECRET No. 2 - USE GEARING

Most people talk about "Negative" and "Positive Gearing" and lose the principle behind the term. "Gearing" is like gears on a bicycle. You use a small cog the propel a large weight on two wheels.Gearing helps you move forward quickly towards your goals.  I hope that gives you a clue why it is one of the SECRETS of the rich. What you are doing is claiming losses against your income. When folk invest in real estate any losses incurred as a result of the losses being greater than the income are claimed back from your current income tax. The amount that can be claimed is dependent on the investors' nominal tax rate in the year that the losses are incurred. 

The same rules apply with investing in the stock market. The difference is that the losses incurred can only be claimed against the actual value of your shares in the market. So in order to claim a rebate from the taxman your shares have to be valued at less than you paid for them. This is some conciliation but who wants to invest to make a loss. With investment property you are simply  claiming effective losses on running costs, even though the property value has increased.  This is called "Negative Gearing" and there is nothing wrong with that. Obviously with "Neutral Gearing" and "Positive Gearing" you are still claiming the cost of running the property from the Taxman but at the end of that you have a "Neutral" or "Positive" cash flow.

Negative Gearing

Obviously the end goal is to have positive geared properties but that is often not possible when you are claiming all the expenses included bank interest, maintenance, rates and taxes, insurance etc. The rich borrow the cost of purchasing the property including stamp duty, legal costs, bank costs, Lenders mortgage insurance and that way you can claim the maximum tax rebate. Some of these costs are written off over 5 to 10 years and that gives you the cash flow to extend your property portfolio.

You are still 'gearing' and that is the SECRET of the wealthy so do not get hung up by the word 'Negative". There are many property spreukers out there using this to persuade people to buy their education programs, the properties they have listed, because they claim they are positively geared. Gearing is not the be all and end all. You need to look at other factors like potential for sustainable capital growth. For example property developers and builders desperate to sell their stock offer rental guarantees which are generally way over the median rental for  an area. They claim their properties are positively geared but they certainly will not be after the rental guarantee period is over.

With negative gearing you are maximising the tax rebates from the ATO but you need to be able to pay the holding costs. The lender will be checking your ability to pay the loan because they take all your living expenses into consideration before they give you the loan. If this is what you have to do to get into the market you do it. If you buy in a decent area rents will increase and the potential to positively gear exists. Notice I said good area. You get the tenant you deserve if you buy in sub economic areas because the property was cheap and you love a bargain. Always be wary when an real estate agent advertises "cheap", "bargain", "owners have to sell" because you could be buying trouble. 

Neutral and Positive Gearing

This arises when the costs and expenses of the property are being met by the combined rental and the tax rebate. This is not possible In most capital cities today unless you pay a large deposit which will reduce the interest payment you pay the bank. This way you are not claiming the maximum tax rebate and not being smart. Some claim they get the positive gearing from the exceptionally high rental yield. Most of the wealthy in Australia have made their money from capital growth and rental yield is a secondary consideration. Always keep the end goal in mind which is to have sufficient money to enjoy a good lifestyle in retirement. 

Too many people get caught up with the "Negative" versus "Positive Gearing" terminology. Gearing is there to get you where you want to go. You need to find out what the best strategy for your situation right now. For example, if you are starting off on your investment journey you have to look for an area that has growth potential.because you need to have more equity to buy the next property.  That property might be negatively geared but it suits your strategy and you can afford the shortfall. As you buy more properties you may find that you cannot afford another shortfall. Then you look for properties that can give you positive cash flow. You may have to sacrifice growth but once again it suits your personal situation.

A universal law is the law of "Cause" and "Effect".  Interest rates are the lowest in over 60 years. When When interest rates go down (Cause) do you think more people will be able to afford to buy investment property (Effect). Yes!  Opportunities come to those who dare to attack and not to those who sit back and wait.   If you would like more explanation on how you can make gearing work for you call James on 0416 137 645 or click >>> HERE .

 

Page 3


SECRET No.3 - USE LEVERAGE

The best way to think of using leverage to make money is to give you a simple example. Don't get caught up in too much detail in the example below - try and understand  the principle of leverage. Leverage is using a small amount of money to hold and control a bigger amount of money (see diagram). 

 

 For example, you purchase a property for $350,000. The unit goes up by 5% in the 1st year so you have made $17,500 (forget about costs, interest, taxes etc. for the exercise). Lets' say you put 10% deposit down on the property i.e. $35,000.

Now if you had put that $35,000 into a high yielding investment which gave you 5% return you would make only $ on your $40,000 (simple interest). So the question you must ask yourself is do you want to make $1794.36 using compound interest or $17,500. Of course you need to take interest on the $370,000 loan into account and on the deposit and the income taxed at your marginal rate but the end of the day do the sums - you make more money using Leverage.

If the property lost value over the 10 years then Leverage is of no benefit to you. However, since 1980 property in Australia has on average more than doubled in value each decade. You must also take into account your rental yield on your money in the equation. If you get $350 net (after all expenses) on your property that is another 52% return per year on your $35,000 deposit you put down on your property ($350 x 52 weeks= $18,200).

Now I know all the readers who look at the glass half empty and not half full - will argue that capital growth and rental return only happens in a perfect world. They argue that if the property value may go down?  May be vacant? What if the tenant absconds without paying rent? These 'Doom Sayers' are called the "What if's" - always trying to make an excuse rather than make an effort. Many just them have "analysis paralysis" and will never make a decision to invest. There is always an excuse as to why they can't invest now. They are all marching to the same drum and headed to an impoverished retirement.

Let's look at it another way. Let's say the property costs you $85 per week out of your pocket as explained in "Strategy 1 - Other Peoples Money". That $4,420 per year (52 weeks x $85) holds and controls a property worth $400, 000. That is leverage and of course you are going to hold and control that property for as long as you can.

People are too worried about what the taxman will take from them when they sell their investment property. If you hold an investment property for longer than a year the capital gains reduces to 50% of the profit you make after you have taken all your initial purchasing cost off including the real estate agents commission. This reduces the amount of capital gains you pay especially if you sell when you are retired and your income is the lowest. If you would like more information in this regard click >>>> HERE.

Would it be the best use of your money if you had $100, 000 and you put it under your mattress and slept on it every night  for the next five years . No, you are losing money by not making your money work for you. However many people I speak to you have equity in their home and you hide it under their mattress instead of using leverage and investing it in property. Well  all I can say is they are not financially smart. Are you sleeping on your money? Use leverage to give you the returns you need to enjoy a comfortable lifestyle now and into retirement. If you would like us to explain how you can use leverage to increase your property portfolio call James on 0416 137 645 or click >>> HERE .

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SECRET No. 5 - USE COMPOUND GROWTH

The banks make millions of dollars per year using the principle of "Compound Interest". Albert Einstein called "Compound Interest" the 8th wonder of the world. Unless you have structured your mortgage correctly you will pay more than double the amount you borrowed in interest to the bank. Most home and mortgage holders are oblivious to this. That is why the home loan is called a 'Mortgage" which is French and translated means "A contract to Death". The professional who takes care of the dead bodies is called a "Mortician".  I cover more about the cost of money in the Strategy 3 "Increase you Financial IQ and beat the banks" which will be released in the next Property Update  It is time that we use the principle called Compound Growth. In the table below you can easily see that compound growth will make you rich. I am saying you have to be diligent and prudent with your money and if you sit on the railway line you are going to get run over by the train.  You can't just sit and do nothing. You need to invest and use compound growth to increase your wealth.

In the diagram below we assume you have two investment properties. For simplicity we have not added the purchase cost because we want you to understand the principle of compound growth. You have two properties worth $350,000 and you borrow 100%. We will show you how this works in "Increase your Financial IQ and beat the Banks". You therefore start up with zero equity. We assume a 7% growth which means the property doubles every 10 years. In actual fact property has done better than this over the past 30 years growing by 8.3% on average every decade. Therefore the value of the two  properties is $700, 000 each which gives you $700,000 in equity. In 20 years your equity is $2.1 million which is what you are going to need to fund your retirement.

 

Knowing this - why is it that only 10 % of Australians' own investment properties? Of the 10% investors only 80 % of them have more than 1 property. Then only 10% of those who own investment properties have more than 4 investment properties. The only way to become wealthy is to hold multiple properties and not just one investment property.
Most people think the wealthy own lots of properties. Most of the rich understand the principle of "hold and control" and not ownership. They leverage themselves and borrow money to buy their multiple properties and get maximum tax rebates. They take out "Interest Only" loans not "Principal and Interest" loans for their investment properties because that gives them the opportunity to get more income relief to fund their investments.

If you you have following the media you may well have been convinced that there is a "Property Bubble in Australia" and the market is about to crash. Well some suburbs in Sydney and Melbourne are overpriced but look at the rest of the country there certainly is no bubble. Property prices in Perth are falling. Property prices in Regional Queensland have fallen. However if you understand that property is a long term investment when property prices will grow, fall and stay stagnant for periods you have the right strategy. Therefore Profitable Property Investment is more about TIME in the market rather than TIMING the market. The property market is controlled by SUPPLY and DEMAND and this is subject to local, State and Federal monetary policy and economic climate. Take Canberra as an example. Every 3 years the market goes into hold as people are fearful about a change of government. However have a look at how property has done over the last 80 years and you will see over time property prices double approximately every 10 years.

If you say that this is all good for other areas but it has not double every 10 years in my area! Then buy an investment property in a growth area. Sometimes lifestyle properties do take longer to double. Also consider what you paid for your first properly and compare it to what it is worth now. Better still ask your parents how much they paid for their first property and compare it to today. Einstein said "We are boxed in by the boundary conditions of our thinking". We sometimes need to take the horse blinkers off and have a broader view of what is happening in the property market and not only in what is happening to our family home or investment property.

Have you ever sold a property to find that the prices went up shortly afterward? How did that make you feel? Well I have done that and you feel you could kick yourself. It is water under the bridge and learn from it. Think about it as leaving money on the table for somebody else. A gift. Don't beat yourself up about it there are other opportunities out there, Besides there normally is enough people beating you up already you don't have to add to it!

Who would like to be a millionaire? Simple own three investment properties worth $334 000 and you are a millionaire!.

Knowing this I am staggered when a client says they are waiting for the property to grow before they will invest again. It would be like raising a family and you say to your spouse after you have has your first child "Let's wait 18 years until Johnny is grown up and when we have the experience we will have another child". Would you do that? No we have one child, then in a year or so we have another and then maybe another. You want your kids to grow up together. You don't wait until you know everything about child rearing before you have another. Exactly the same with property investment. You don't wait for 5 to 10 years before you invest again. Invest as soon as you can. With the interest rates as low as they are today you have a great opportunity to invest. So do not wait start building your portfolio. If you would like to speak to James about your investment plans call 0416 137 646 or click >>> HERE .

Page 5


SECRET No. 6 - THE PROPERTY CYCLE AND PHASES OF EMPLOYMENT

Contrary to popular belief the property market cycle is not a smooth curve. There are three separate and distinctive phases in the property market i.e. The "Rapid Growth", the "Correction" and the "Stabilisation" phase.  When you merge my model of the "Property Cycle" and the "Cycle of Market Emotions" published by the Russell Group (see Diagram 2) and you will find a model that gives you greater insight into property investment (Diagram 1). When you understand and apply this principle and use reliable historic data it is the "Best kept Secret". It is so effective that I have only shared this secret for over the past two years with my property investing clients. Many have used this and have purchased value for money property with excellent prospects for capital growth.

 

For example, the last "Rapid Growth" phase in the actual property Cycle ended on the Gold Coast Australia in 2007/2008. Many property owners who purchased on the Gold Coast from 2002 to 2008 have been for waiting 10 years and more for the market to come out of the "Correction" and "Stabilisation" phases and move back into the "Rapid Growth" phase again. Most property investors do not understand how the actual property cycle works and this is your opportunity to discover the secret.  I have not published this model previously because I only wanted to share this with my property investors. However, in keeping with the objectives of the Australian Investment Property Network (AIPN) of "Sharing" and "Mentoring" I have decided to release it to the public.

The model may look complicated but you need to understand that property moves along the cycle. Properties go through all three phases over a 7 to 15 year period depending if they are located in cities or in regional areas. The big mistake most people make is they buy property in the same area where they live so they can "feel and touch it". Unfortunately, if they have bought their properties in the same property cycle, and if the market is in "Stabilisation" you may have to wait for years to get any growth. In addition - when you go to the bank for a loan do not be surprised if the bank says you are "over- exposed" and decline your loan.  Banks are not in the business of risk so make sure you give yourself the best chance to expand your portfolio.

People buy through "Emotion" and attempt to justify it "Logically" and thereby end up justifying their good or bad decisions.  The old adage "You never put all your eggs in one basket" is especially true with property. You need to diversify and have properties spread though out the cycles in order to have a well balanced portfolio. If you buy property when the market is in "Excitement, Thrill and Euphoria" (when everyone else is buying and making money) you may have to wait 7 to 12 years for the market to progress to the "Rapid Growth" phase.  I advise my clients to buy property when the market is coming out of the "Depression" period and to look where there is "Hope" on the horizon in the market place. The Gold Coast for example will host the Commonwealth Games in 2018 and the construction phase for this is underway. In addition, many of the Developers of high-rise apartments stopped building on the Gold Coast between from 2007 to 2009. This fact was not good for employment and growth at the time but it is the reason why the market is now starting to boom. There is a lack of supply of existing property (law of supply vs demand) and now is a good time to buy or sell property on the Gold Coast. However, if you are selling and buying a property in the same market you will pay premium prices.

Page 6


Another important part of the property cycle is to be aware of where the area is in the "Employment Cycle". It is great to have large construction and  infrastructure projects in a area. More jobs mean that the demand for more rental accommodation and houses

to buy increases. Businesses do well because of the influx of people and jobs are plentiful and money is being spent in hospitality. Everything is going great and then the inevitable happens and few people anticipate the effect it has on the area and the people. The old saying that "You can't see the wood for the trees" is so true. The projects end people are laid off, leave the area, houses become empty, rents drop, business close down and people lose their homes. This happened in Gladstone in Queensland over the last few years. The gas plants on Curtis Island brought in thousand s of workers. Many were "Fly In Fly Out"  (FIFO) workers. Many of these workers decided to bring their families to Gladstone and rented or bought property. Developers and builder could not keep up with the housing demand. I was in Gladstone in 2013 when one of the three gas plants on the Island was completed and the project company laid off thousands of workers who had hoped they would be employed on the next gas plant. The company handed back to local real estate agents over 400 homes they had leased for workers. The town was shocked and thousands of workers who were not absorbed into the new gas plant which was being built by a different company left the area. Many property investors have had to drop their rents to attract tenants. business have closed. The services sector has shrunk as people could not afford them anymore. I thought about this and came to the realisation that there were two distinctive phases of employment shown below. During the "Construction" phase lots of workers, managers and administrators are employed. Demand for housing, food, services increases dramatically. Prices of property and rents rapidly grow. However, in the "Maintenance" phase fewer workers are needed to maintain the facility and demand for houses declines and the the property market goes into "Correction". Developers and builders leave the area for greener pastures and property investors are left "holding the can" as rents start to fall and property prices drop. Then the above "Property cycle and the Cycle of Market Emotions" comes into the picture. This is what happened in Gladstone and in many of the mining towns around Australia. However,  over time the property market goes into  "Stabilisation" and prices and rents remain stable for years.  It is about "supply" and "demand" . "Hindsight" is always much easier than "Foresight" and nobody has a crystal ball that is totally reliable in the property market. However being aware

Using the "Properly Cycle & Cycle of Emotions" and understanding the "Phases of Employment " both buyers and vendors can within reason predict where the market is in the cycle and where the market is likely to go so that they can value a property accordingly.  Vendors and buyers are now in control - not the real estate agents who can take advantage of naive buyers and sellers. Study these principles above and formulate a strategy so you do not lose your hard earned money.  If you want to know about the tactics and games real estate agents play to get you to list your property, sell and buy property click>>>>HERE .

Capital cities and holiday destinations like the Gold Coast and Sunshine Coast in Queensland are subject to frequent oversupply of high rise units. These units are a favorite amongst interstate and foreign investors as unscrupulous real estate agents promise high capital growth and rents. Think about it when these high rise units are finally completed the owners are competing with hundreds of other landlords for renters. To sell a high rise unit when there is an oversupply at a profit is virtually impossible.

To top it all investors buy in the wrong area because they do not have the financial resources to buy sufficient research. They trust what other people say. When everybody is saying you should buy in an area buy somewhere else. So when the taxi drivers are saying buy in an area don't listen they are making conversation. On the other hand they may not purchase a property because they listened to the doom-sayers that say its the wrong time to buy or say the property market is about to burst. Follow sound advice from specialists who have your interests at heart.  Would you tell your adult children that they should not buy a property because property prices may go down and they should wait another few years. Of course not because they are going to live in it and over time the property market will increase.  And, when it has gone up they will be moving in with you because they can't afford to buy or to rent. That may be motivation enough to get your kids into the market as soon as they can.

Find a real estate company which specializes in investment property and ask for sound research before you buy.   Do not rely on newspaper articles. Newspapers need advertisers and property developers have influence over the articles they publish. Regional newspapers are notorious for 'talking up' the market when developers and builders throw money at them. I know that journalists will say that you are independent of the advertisers and I am not questioning their integrity. It is the editor who decides what articles gets published and one of the reasons that person is the editor is because they are business minded and the publication under their control must make profit or they go out of business.

Besides the media make me confused. First they tell me that Cholesterol is bad. Then they tell me there is good Cholesterol. Then they tell me that Carbohydrates are bad. Then they tell me that there are good carbs. They tell me that alcohol is bad for me then they tell me that red wine is good for me. It's fear mongering that gets them readership.

Some of my clients believe they have graduated and they should move into commercial property. That is OK for the experienced investors. However i believe you need to have a stable full of work horses before you go and buy the racehorse. Others have chased after the big returns because their mates and colleagues are making a killing. When a racehorse gets sick you are going to have to pay big time because you can't afford to lose it. You paid too much. You put too much into it. Too late. You won't get your money back. Stick to residential property around capital cities and you can't go wrong. People want to be near their jobs and the capital cities are the places where people find jobs. mining towns are racehorses. don't buy them you will pay in the long run.

If I had known how the property market actually worked I would have made much more money as an investor over the past 12 years. Of course hind-sight is 20 /20 vision and now you have the benefit my experience and knowledge.  So if you want to know when to buy and sell property by using the Property Cycles and Market Emotions model click >>>>HERE or call James on 0416 137 645.

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SECRET No. 7 - BE A GOOD NEGOTIATOR

One of the major reasons that many property investors are successful is they a great negotiators. I have read numerous books, attended seminars and studied negotiation through the MBA series at Heriot Watt university. However, I know that I still have a lot to learn about this great art. I call it "Art" because it encompasses everything I have learned over the years about human behavior, NLP, sales techniques and leadership. Donald Trump wrote the book "The Art of the Deal" which is a'must read'. Many people think that to be a good negotiator you need to be assertive and even aggressive. nothing can be further from the truth. I have met many and negotiated with many a gentle negotiator over the years. They can be so "gently persuasive" it was almost as if I fell into a trance and they got what they wanted. Another great book and best seller is "Getting to Yes: Negotiating Agreement Without Giving In" by Roger Fisher, William Ury.  Getting Past No: Negotiating With Difficult People is another book by William Ury that is worth reading.

A prolific writer on the subject of Negotiation is Gavin Kennedy. He has over 20 books on the subject. I have read a number of his books and have learned a great deal from him. Another good author on the subject is Gary Karras who wrote "Negotiate to Close" which is essential reading. I also read auto biographies and the books about great entrepreneurs like Donald Trump, Richard Branson, Warren Buffet, Kerry Packer,  Mark Bouris because these books give insight into the character of good negotiators. I am not going to cover negotiation in great detail because there is enough information about this available. As you will be mostly dealing with real estate agents when you build your property portfolio you need to be aware of the tactics and games REAL ESTATE AGENTS play click >>>> HERE .

There are many ethical and respectable real estate agencies in Australia but the games that some real estate agents play and prey on unsuspecting vendors from time to time must be EXPOSED.  Do not be conned by unscrupulous real estate agents who use the tactics mentioned above and obviously do not have your best interests at heart.

I have dealt with a number of slick con artists in my time but it still amazes me how many are drawn into property marketing.  Possibly because they believe that there is a "fast buck" to be made. The cost of property is high and the "big ticket" commissions seem to draw these people into the business. I have never personally heard a real estate agent say "I am in the business because I want to make people happy by buying a lovely home that they will love together with their family to enjoy".  It's all about the money they make on the sale.  

That is why most real estate agents do not last in the business past the first year. The statistics are that 80% of real estate agents fail in the first year.  Of those who remain, a further 80% leave the industry within the next 5 years.

The majority of real estate agents deal in the owner occupier market. They do not think long term because you are probably going to live in the house for many years so there is limited repeat business to be had. Once the client signs the contract the service they get from the agent dissipates because they have to keep looking for new listings and sales to make money. 

If you phone to complain that there is no one in the real estate agency who is prepared to help you they blame that very bad sales agent who has disappeared without trace for your problem.  Sometimes I think the agent is hiding under the desk. You need to be aware of the games some real estate agents play and you will be the loser every time.  I am going to let you into the secrets that many real estate agents use to enrich themselves at your expense and you always end up losing money. If you would like to read more about the tactics and the games real estate agents play Click>>>> HERE .

Finally, there are few "Get rich quick" schemes that do work. Rather concentrate on "Get rich slow" strategies and you will steadily increase your wealth. James Cagney will be happy to explain how these also affect the property market by clicking >>>>> HERE or give him a call on 0416 137 645.

At the end of the day we recommend you always consult experienced investors and specialists. Would you have a plumber rewire your home or would you want an experienced electrician. get the help from someone who has been trained to give you financial and property advice. Some people do not trust anybody and want to do it the hard way. They want to do their own property research and spend countless hours going in circles. Always procrastinating and develop "Analysis Paralysis". They end up broke. Specialist property investment companies can afford to pay for research because they amortize the cost over all the clients. You simply cannot afford the research we have. Besides trying to get through the research is trying to get through the jungle with a machete. it's lot's of hard work and frustration. We can afford a chain saw and we get there faster and more efficiently.  

James Cagney is an investor and the founder of the "Australian Investment Property Network" (AIPN). This is a group of people who grow their property portfolio by:

  • Sharing
  • Learning
  • Experience
  • Mentoring

Click >>> HERE to find out more about the AIPN and how you can benefit by joining.

 

 

 

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CONCLUSION AND DISCLAIMER

Now you have read Strategy 2 above you need to ask yourself some tough questions i.e.  "Why aren't we rich already" and "What is keeping me back" . Write this down on a piece of paper. Before you can devise a strategy to create wealth you have to know where you are now.  Then write down a deadline when you want to buy your next property. and keep it in a place you look at often.

There are three types of people:

  • Those who make things happen
  • Those who watch things happen
  • Those who wonder what happened

We will guide you over the next few chapters of "The 7 Strategies you need to create wealth" to set a sustainable strategy to create wealth. Rome was not built in one day so don't get impatient. The next Strategy "Increase your Financial IQ and beat the banks" will be emailed to you within the next two weeks. We want you to be the person that "Makes things happen" .

These Strategies have evolved through the knowledge and experience that James Cagney has gained over the years. Most of f the information in this eBook he has learned from other successful inventors. Some of the information has come from blood, sweat and tears after years of experience That was much harder to bear William Hazlitt said "Prosperity is a great teacher; adversity is a greater one".  What you now do with the information is entirely up to you. I urge you to take action and invest because you will blink and the years will be gone before you know it. My biggest regret is having to find the secrets of the rich later in life. I purchased my first property in Australia when i was 52 years old. For health reasons my spouse and I moved to the Gold Coast in Queensland. Because I did not know the secrets of the rich  I sold my property in Sydney. That property is worth three times what i paid for it in just over 12 years. I did not know about "hold" and "control". I did not know about the secrets of the wealthy. I was ignorant. You have the benefit of my knowledge and experience. I had an excuse. You have no where to hide because I have given you more knowledge in this eBook than i had when i started on my investment journey. If I had known what I have given you in this eBook I would have made much more money.

I have another eBooks "The 7 Pitfalls to avoid when buying an investment property"  that will be of benefit to you in your journey towards profitable property Investing which you can download:>>>> HERE .

James is presently writing "The 7 Strategies you need to create Wealth"  and many of the principles in this eBook will be included in his book to be published in September 2016. I wish you every success in your quest to take charge of your financial goals. Being able to adequately provide for your family and be in the financial position to donate to charity.is a great achievement enjoyed by so few in Australia. If you would like to speak to James give him a call on 0416 137 645 or click >>> HERE .

This is not financial advice. You should not act solely on the basis of the material contained in this eBook for your investment strategies. Changes in government and legislation occur frequently and without prior notice and financial markets are unpredictable. Please note that the information herein is of a general nature only and is not intended as specific advice for any particular person or entity.

This information was written and compiled by James Cagney.  The opinions expressed herein do not necessarily represent the views and opinions of his associates including Asset Financial Services Pty Ltd.

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Author: James Cagney
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