Canterbury Property Services

Discussion in 'The Buying & Selling Process' started by BlueShark, 1st Jul, 2015.

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  1. BlueShark

    BlueShark Member

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    Hi all,
    I am looking for advice from anyone with experience buying property with this company. How was the experience? I am considering using their services to purchase a new build in the Brisbane area which they will source (along with providing broker & solicitor services). This will be an investment rental which should be cash flow positive/neutral.
    There was an old thread on Somersoft however recent experience would be useful.
    Particularly, I am interested to see if the price they put on the new build is fair and if there is likely to be capital growth on their properties in the early years.
    Any other comments and advice re the company much appreciated.
    Cheers
     
  2. Roosterman

    Roosterman Well-Known Member

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    I can't comment on the company. But I would suggest that it is generally a good idea to separate the obtaining of the property and the obtaining of the finance and the obtaining of the legal advice.

    I cannot see how having the same company provide these services is any benefit to you - on the contrary it would seem to benefit the company who provides a one-stop shop.
     
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  3. Big Will

    Big Will Well-Known Member

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    Weblink for people http://www.canterburyservices.com.au/

    Like @Roosterman be wary of people offering you a one stop shop, remember how we are always told to get independent advice, how is their legal, finance and sales advice independent?
     
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  4. Big Red

    Big Red Well-Known Member

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    Do your own DD before buying something like a property which is a large investment.
     
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  5. BlueShark

    BlueShark Member

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    Thanks for the replies. Clarification: they provide the broker services and find the property, however they have a recommended company to provide the legal services (its no in house). Can anyone clarify how the in house broker services are an issue? I understand they make there money from the developer (commission) and broker services (from the bank).
     
  6. S.T

    S.T Well-Known Member

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  7. Excalibur1

    Excalibur1 Well-Known Member

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    I believe Canterbury work on caplitalising interest. So that rent from all investments go into non deductible loan (PPOR). I have been approached by them as well and told them I would rather source my own property in the same areas they suggested (not from their developers i assume). They all of a sudden lost interest.

    There are rulings from ATO that prohibit capitalising interest, however you should obtain individual ruling to see if you are exempt. Perhaps one of the Tax guys on here can inform you better of this.

    + there is big thread on them on InvestEd.

    As others suggested avoid one stop shop .... You are better off getting a buyers agent to source you properties and all things considered you will probably end up paying the buyers agent less than what the one stop shot will get out of you (most of it you wont see).

    My brother in law works for a developer and he says they pay anywhere between 5%-15% of the sales price to the one stop shops they use.
     
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  8. BlueShark

    BlueShark Member

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    Thanks for this. Do you know if the payment to the one shop is the same difference in price between a property sold to an individual buyer? Can you ask how this relates?
     
  9. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Brisbane Area...........

    that scares me

    ta
    rolf
     
  10. Excalibur1

    Excalibur1 Well-Known Member

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    Hey Peter,

    If you have been around this site and SS you will see that people on here are encouraging and not trolls. Sure you might find one or two, but they get dealt with quickly. I based my opinion on Canterbury from the conversation I had with their sales representative.

    The only reason I spoke to them is because of the longevity they have in the business. However when I started asking more and more, the more irritated the sales representative became. This could be because of the inexperience of that particular person or their lack of knowledge to answer my questions. The main questions I asked them was around capitalizing the interest. it seems the bulk of the strategy is based on that. If that didn't work all the other concepts after capitalisation of interest then become like any other one stop shop agency. That is what they are using to claim that you can knock off years of your mortgage. While this strategy might have been possible years ago, ATO is cracking on people using this now. There are even rulings prohibiting this. However there are few exceptions (health, sudden family difficulties etc.). When I asked them do they get private rulings on matters he told me yes and that there is no need to do it anymore as precedents was set and to trust what they are doing as they have been doing it for xx years.

    This was based on my own experience with them, no hear say or friend said this or friend said that...

    while my experience was not good. i'm not dismissing them or saying there is anything wrong with them. I'm saying that I don't like how they do things, this also means other might like it.

    Thanks for sharing your experience and its good to have a balanced discussion.

    Blueshark - It does relate. They don't change the margin they want to get. They build this commission/marketing cost into the price of the property and then their margin on top of that. They only use them when they cant sell the properties themselves. For their last project around 70% were international buyers and they didn't have to use one stop shop.
     
  11. S.T

    S.T Well-Known Member

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    Hey Peter, could you let us know how this works? e.g if price is below X after 5 years we will pay the difference or something? I always get suspicious with guarantees. The investment shouldn't need a guarantee and should stand on its own.
     
  12. Big Will

    Big Will Well-Known Member

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    I have learnt in life there is no such thing as a free lunch.

    Same as a development selling OTP of 10 units saying you have a 1 in 10 chance of winning a BMW, all they have done is increase the price of the units by 10k (not much) for a 100k car.

    So, who pays for the difference if a person sells and gets less? What are the conditions, I would assume it must be a public auction that has been advertised otherwise what if I sold the 500k house to my sister for 300k and then claim 200k from Canterbury?
     
  13. Excalibur1

    Excalibur1 Well-Known Member

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    Thanks for clarifying that. Wish the representative I spoke with was as clear.

    I had a look at the website and watched the video. The concept is good, my question is what happens to the interest on the investment property. Don't you have to pay that? I saw their disclaimer saying that you cant claim a deduction on that interest. Which makes sense. But it seems all you are doing is delaying that payment? Instead of paying the interest (which cant be deducted) you are paying down your PPOR interest (which is also not deductible) I don't see how are you making any difference. Well difference is that you can cut down your PPOR loan down to 2 years, but you are increasing the time needed to repay the IP loan by the same amount.
    Can you clarify that or am I misunderstanding it?
     
  14. euro73

    euro73 Well-Known Member Business Member

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    Ive just watched a few of the Youtube videos... besides the obviously American content , right down to the accent and the terminology used to discuss mortgages, repayments and the like... the concept clearly relies on interest capitalisation, which is most kindly described as worrying. It also assumes massive compounding growth and inflation to drive the $$$$ train, which may have had some merit pre APRA, but is now flawed....and as for the manufactured additional income the videos claim to be achievable.... ie 50K generating 3K per month; those claims are are at best , hopeful....

    I mean, 3K per month after tax is 36K per annum after tax, right? That's what the video claims would be available to be deployed onto a mortgage, right??? So it must be after tax, right??? All from just 50K invested???? You realise that's claiming to be a 72% fully franked dividend, right???? Please....

    I suspect that like many Qld based marketers, whose models have been able to prosper in an expansionary credit environment for 20-30 years, the post APRA era will likely bring extreme challenges for Canterbury.
     
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  15. poderoso

    poderoso Member

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    The idea is solid I believe.... cross collateralize all properties but only make one loan repayment.... to me... it is recession proof... as long as rent is coming in, salaries are paid and you only have to pay ONE loan repayment associated with the non deductible asset, then I do not see why you would sell.... I would not care if it was negative growth.... as I only make loss if sold....

    Renters rent 3 bedrooms, 1 garage etc as you have described.... yes.. that pays the rent.... and allows the rent to be affordable to them... you are not trying to rent to owner occupiers unless your friends want to sell it but stuck?
     
  16. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Terrible idea, one of the worst things you can possible do to your property portfolio.

    This topic gets brought up frequently, so there's no point in repeating why it's so bad. This thread explains it.

    Cross collateralisation - 10 reasons to avoid
     
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  17. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    I.second Peters view. From a legal perspective this is not a good idea to have cross collateralised securities and one big loan. It would be detrimental to your wealth
     
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  18. Switchtronics

    Switchtronics Well-Known Member

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    Cross collateralizing definately is not the best way to go to ensure future lending capacity. The comments aren't intended to be harsh, they were simply stated from experiences. In regards to rogue very unlikely as properties were stated as best selected as a boost to grow the stated portfolio, and chosen by a senior member.

    Yes the buyer should always do their due-diligence, to ensure future capital growth. I was simply stating past experiences, and how the portfolio has changed since purchase.
     
  19. poderoso

    poderoso Member

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    Cross collateralizing is not the best way for the novice.. no... but it does give you the additional capacity to borrow to put you in the next level... without it... one would either have to win Lotto or have cash for 20% deposit on each property purchase... which most people do not have. Others go through the route of mortgage insurance to get into the market or to expand their portfolios.

    I never put reliance on anyone when it come to choosing a property and have a set criteria. Yes.... smaller blocks are the norm in some suburbs... in others they are not. When building or renovating a property for investment, I always do it with me in mind to live there. So I add the points of differences to each property and they do not stay vacant for long after going on the market. Many of my tenants signed 2-3 year leases with rental increases simply because they love the house I have created for them.
     
  20. poderoso

    poderoso Member

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    Yep, terrible idea for the novice. Brilliant for the investor to take them to the next level. I agree it has many disadvantages .. again for the novice investor. I have read your other thread and will make comments there. Thanks
     
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