Metropole

Hi all, first post here (so please be kind), I'm an Aussie currently living and working overseas, but have been reading up on IP for a while now. Being overseas I thought the best way is to use a BA, and I came across Metropole, and had a free consult with them last week.

I have seem a few posts on here about them, and read some post on LOE (I only came across this forum on the weekend), but I would love to hear from anyone who has actually engaged and paid for their services, and are using their strategy.

I have a few concerns about their strategy (which they will only fully explain once/if I become a paid member), LOE (there was a good post on here somewhere about it) etc. in the current environment, including (i) tougher lending on investors, (ii) tougher restrictions on overseas wages by Aussie banks, (iii) (potential) softening of markets & CG (iv) wages reduction (it almost halves if I move back to Australia) and being over exposed with only NG properties.

 

A good BA could be very useful to you if you live overseas but I think your first step should be to chat to a few brokers who specialize in property investment so you can see how you could structure a portfolio. A broker explaining LOE to you isn't going to be a secret.
There are plenty of knowleable brokers on the forum

 

Living off equity is problematic simply because you're relying on bank policy to live. If they decide they won't cash out of your property you're suddenly stuck.

Also, personally I'd prefer to not be increasing debt in retirement.

 

You will hear their strategy in more detail at their seminars. I went to one of their seminars in early 2015. It is mainly focused on buying "below intrinsic value" in the inner-ring of major metropolitan areas (essentially for capital growth). They also include a strategy of manufacturing equity downstream through renovation or redevelopment. It's all set up in such a way to use their accountants, brokers, solicitors and other advisers for which they are undoubtedly getting a cut.

In the current lending environment you will definately put servicability at risk if you focus too much on negatively-geared properties for capital growth.

I've also used a different BA to buy in Brisbane. I suggest you find a fully independent one. They have an association:

REBAA Member Directory | Real Estate Buyers Agents Association of Australia (REBAA) Inc

Even if engaging a BA, I also highly recommend that you do your own research trips of 2-3 days duration to build your own suburb knowledge for the areas you decide to target. It helps provide confidence in a decision to buy in a particular area. For me the use of a BA provided an advantage in a hot investor market to snap up a well-located property mid-week ( would have been difficult for me to achieve remotely from Sydney ).

 

Your advisors should be friendly but not friends. Avoid a "one stop shop" as everybody will cover each other's mistakes.

A local buyers agent will do the same job (or better) for a lower price.

 

Living Off Equity (LOE) is a strategy that hasn't been practical for most investors since prior to the GFC in 2008. Many of those who did employ it back then found their property portfolios collapse under mountains of debt which they were unable to refinance when the market turned against them. It was a disaster with the only winners being those who had sold the strategy to the investors.

In 2011 a number of laws were passed that virtually destroyed most people's lending strategy behind LOE. This pales next to the current regulation going through the lending environment.

If someone can make a LOE strategy work at this point, their financial position is probably one where a small amount of rationalisation would mean they don't need the LOE strategy.


As for BA services, I've had a few clients use Metropole and others who have used smaller more specialised and local BAs. Based on my observations of performance of the properties and their suitability to the clients circumstances, I'd recommend the later.

 

Thanks

 

Im with @Peter_Tersteeg ... LOE in this current lending market good luck.

 

I agree
when they abolished lo doc/no doc in 2007/8 they pretty much killed this strategy.

I am yet to meet any investor who has successfully used this strategy, you are reliant no way too many variables such as properties continuing to rise??? not always, sometimes we get major corrections??? let alone finance, oh yes that old chestnut.

 

See
5 Living Off Equity Strategies to Speed up Retirement https://propertychat.com.au/communi...quity-strategies-to-speed-up-retirement.7409/

 

I have dealt with them from my role as being a valuer (called an appraiser in USA) and doing the bank finance valuation after they purchased on behalf their client. In some instances they bought at market value, in one recent one they significantly overpaid for an apartment for their client and the valuation came in less than what they signed the contract for. There was a comparable sale in the same block for SIGNIFICANTLY less and many other sales in the area that didnt support the price they paid. So do your homework.

Happy to help further if you need anything.

 

Gday Phill,

I have mates who have used Mtrple with ok outcomes for their inner ring Sydney and Bris apartment purchases but ALL of your concerns listed I 100% agree with in current market. I was in a room with John Edwards (Head of Residex a big data research firm) last night he confirmed the next few yrs likely to be tougher for finance rather than easier. Surely a blend including some higher cash flow properties and a better equity position that actually creates a living wage from residual rent is 10x safer in any tough market? Consider good local independent BA's, do your research depending on your chosen markets. If you want to PM or email about any particular areas that you are considering I can fill you in on the reputation of good BA's in a few patches.

 

Question - (for anyone)

As a property valuer (in Melbourne) I often get asked for property purchase advice. It's gotten to the point where I have considered dabbling in the buyers advocacy space. If I'm doing all the due diligence and helping clients purchase good property, I figured I may as well charge like an advocate would.

It appears that most BA's are past selling agents. What are your thoughts on a buyers advocate who is a property valuer?

 

I think you have one handy skill set for a BA, but could potentially be lacking the required negotiation skills - of course, like anything this can be learned so not a deal breaker by any means.

 

@Moish Ekman I think the most value that a BA brings to the table is the detailed understanding of the market and matching advice the clients needs within the scope of what the market can offer. I think a valuer is probably better suited to being a BA than a sales agent would be.

There's also a lot of other skills that a good BA will employ. Negotiation ability is obvious but can be learned and does lead very well from understanding the value in a property. Great BAs also do a lot more than locate and negotiate, they co-ordinate with other parties (brokers, property managers, conveyancers, etc), organise B&P inspections and depreciation, etc. Most of this is simply having a check list and logistics.

 

You may need a real estate agent license.