Chris Gray ?

In fairness he has made good money on that Murcielago .
Bought it just at the right time and values have skyrocketed.
You were able to get one shy of $200k and now the cheapest one on the market is $325k.
Values have been creeping back down slowly over the last 12 odd months (based in part I suspect to credit availability and people having to confront the reality that credit isn't as liquid anymore as per prior points).
I suspect a decent decline in the equities market would flush a few people out and create some great buying opportunities. Sentiment probably goes for more than just Lamborghini's to be honest...

 

I don't know anything about him, but at least he puts the specifics of some recent purchases on his website (although I wonder if this feature will be removed as the downturn continues).

Most BA's I see only summarise (publicly) the *amazing deals* they have secured for clients rather than providing specifics such as purchase price and address.

 

Latest update from him via email. BORROW MORE !!!!




Hi xxx,

Here’s a personal email I sent to our current clients last month that explains more about strategy. It had great feedback from the people that received it - let us know your thoughts.

I wanted to send a personal note to all those clients that we’ve bought property for over the last 10+ years to give them my current thoughts on the property market and to pass on a few strategy ideas of what they could be doing.

The General Property Market

The media has gone into it’s doom and gloom phase and all properties and markets are being tarred with the same brush but that is definitely not the case as there’s multiple markets, split geographically and by type and price.

We covered this on Sky on 28 May and these are the auction clearance results – as you can see the blue-chip markets perform completely differently to the ones further out. And then even within those blue-chip suburbs, there’s some properties with a 100% clearance rate and others at 50%, giving an average on 75%.

​

Strategy 1 – Be a contrarian and buy when everyone else is selling

I bought half my current portfolio in the GFC. Everyone thought I was mad and said ‘Why would you buy property now and pay the $10-20k cash flow loss for years when there’s no growth on the horizon?

The reality was though, that I could buy much better property, that ticked all the boxes, at a much better price and without all the competition that was around for the previous few years.

Sure I had to pay the cash flow loss for a few years but in reality the market was still rising for those properties by 1-3% each year which more than covered that loss, but it wasn’t enough growth to hit the headlines. And then when the market did recover it literally burst overnight with everyone following the herd mentality. Suddenly you couldn’t buy what you wanted and with everyone else trying to get in at the same time, prices jumped 10-20% overnight

My golden rule is that I buy when (1) I have the cash to buy and (2) when I have the cash to cover any shortfall for the short term.

If you want to follow this strategy you will

• Either have to keep quiet from your friends/colleagues or be prepared for a bit of stick from them as ‘they know best' and they have a crystal ball to see the future better than anyone else
• Be a long term investor that understands the concept of dollar cost averaging
• Realise that there’s no real bargains in blue chip suburbs even in a downturn and it’s still worth paying for quality

Strategy 2 – Extract whatever equity you can and invest your cash elsewhere for safe keeping

APRA, the Royal Commission into banking and the lenders themselves have put massive pressure on the serviceability calculators and investors can’t borrow what they could a year or so ago. There’s a very good chance that it’s going to get worse before it gets better. So what can you do if you’re more of a cautious investor and want to ensure you have cash to cover any losses or future interest rate rises?

If you have an overdraft facility, it often gets renewed every year and lenders have been known to retract the facilities almost overnight. Whilst this is less likely to happen on a mortgage facility, it’s still possible.

One of the tactics I’ve recently used is to fully extend all my facilities and to extract all the equity I can. I’ve then put it on term deposit across multiple banks so I fall within the government guarantee scheme.

I asked a few financial planners for some advice before doing this and they said I was mad. Why borrow money at 4-5% and invest it at 2-2.5% as then I would be losing 2-3% per million dollars = $20k - $30k per year? They could invest it for me at 5 – 7% and then I would be making money on it.

This strategy is for someone that thinks things might get tough and they want an insurance policy to cover themselves. If things really do get tough in the economy then whatever they’ve put me into at 5% - 7% is likely to be affected too and that’s the one time I don’t want to risk my cash. If my cash buffer is my lifeline, that’s when I don’t want any risk at all. So I’d much rather it costs me $20k per year for almost zero risk then to make $20k and have all my money at risk.

I then went to see some more experienced financial planners as well as a few of my accounting friends that are avid property investors and they concurred – it’s not what the average person would do, but it is what more sophisticated investors would do.

Strategy 3 – If you’re that worried then sell

I personally don’t believe in selling property unless you really have to as I do honestly believe that well-chosen property (median priced, blue-chip) will nearly always be worth more tomorrow than it is today, especially if you’re looking over the long term. Often you can extract your profit by refinancing and still get to keep the appreciating asset.

However I also realise that debt isn’t for everyone and if you can’t sleep at night, it’s not worth the risk. Also many people can’t refinance their equity out these days. So we do get the odd client coming to us every year, saying they’ve made a healthy profit on the property we bought them and it’s time for them to sell. My advice to them is always the same and that is:

My suggestion is to keep holding as we believe that property will continue to grow over the long term and you can often extract the equity through refinancing to continue building your portfolio or to put it to other uses.

If you do want to sell then your best chance of getting top dollar is to hire the best agent, invest in a good marketing campaign and take it to auction. Depending on how your tenants keep the property, you might want to wait until they exit. A good agent would charge a standard fee of 2% + GST to sell + advertising and auction costs.

If you want a quick result at a fair price (neither high nor low) then we can get the same firm to value the property who valued it originally. We would then normally have a client on our list who would be happy to purchase at valuation price and take over any tenant. There would be no cost to this beyond your normal conveyancing fees.

Summary

So as usual, there’s no one single strategy that suits everyone and each person will have a different view on the market and how their personal circumstances for that.

I’d like to reach out and say that I am happy to chat over your current situation any time you want, if you would like my thoughts on what options might be available to you.

If you would like to buy some more property then we can certainly help with that and currently have offices in Sydney, Melbourne and Brisbane.

If you would like to extract what equity you can and sit on your cash then we can talk you through that.

And if you would like to sell, we can either assist with a valuation and propose it to one of our clients above, or we can introduce you to the best agents in your area to make sure you get looked after and get some personal service from an agent that will do the right thing by you.

Our skill is in giving you practical ideas that are often completely contrarian to the average person in the market and it all comes from my personal experience with my own portfolio. We don’t think you should just take my word for it though and always recommend you seek professional advice from suitably qualified experts before making any financial decision. Either use the ones that you currently use, or if you don’t think they’re on the right wavelength we can always introduce you to ones that we know think a bit differently.

Feel free to call me on my mobile anytime on 0400 80 60 01 or drop me a line and we can catch up for a coffee. A number of you should also know my business partner Luis who might have been in touch with some Corelogic reports that track your current property performance / current valuation. If you haven’t heard from him and want one of those reports, drop him a line at [email protected] or call 0456 556 052

Best regards

Chris

 

As it's getting further from what already been discussed, he's basically encouraging buying, extract more equity, solving the problem of debt by....selling through him (new service!!)
"Hey man, wanna sell, I have clients waiting and waiving"

Wondering if it's conflicting with each other's interests

 

Interesting to see that they are busy following up with me on the course after a quick question I had !

Tough times ahead with LOE strategy ...

 

There was never a magic pill to begin with. Only lazy ppl holding delusional beliefs wanting the world tomorrow .

 

From what I read, he never espoused selling through his own company. Where did you read that?

 

I might misunderstand that part when reading from "Strategy 3 – If you’re that worried then sell"

Maybe he's just convincing to "kept holding"

 

Can you take his number out? I don’t know the guy (other than his books/media appearances) but opening him up to spammers is a bit rough (probably not intentional on your behalf)

 

If someone tells you they are worth $100 million then first ask them:

• 'Why are you still working?'-Likely response will be 'I like helping other people'.
• Then you say 'that's great, so how come I have to pay a fee for your service if you are doing what you like & are worth $100 million'.

You can also try 'the number' question from Wall Street 2 on them, and my personal favourite is talking about their marital situation if they give unconvincing answers abut them doing 'what they really like as a job'.