Nathan Birch defaulting on IP mortgages...

Hilarious, we must think alike..... I used to use Kamahl's line all the time....we are showing our age.... but who cares.... we have knowledge, experience on our side

"Schadenfreude"

 

I remember seeing Kamahl as a kid driving down the M4 motorway heading west around Parramatta.

He was in a Bently I think and we got right along side of him. We tried to get his attention but he just looked straight ahead and appeared to be singing with his mouth going gang busters lol.

 

This is nothing new.... investors use this strategy in a booming market, this is savvy smart and a good way to capitalise on strong markets.

I believe everyone is accountable for their own investing strategies.

This is not directed personally at you.....
The elephant in the room, no one mentioning the properties he purchased in Syd and NSW that made pots of money for his investors.

Not a balanced thread, that is why I say its very twisted.
Anything to do with NB ends this way, people love to hate winners, just the Aussie way unfortunately.

MTR

 

The growth in Sydney is perhaps the saving grace for his clients. If the same method had been used in Perth at the same time his clients would all be bankrupt.

Not many investors had the ability to use the same method so I'm not sure you're aware of what was happening.

Example. Client A wants a BMV IP. They would told to purchase IP1, a 1970s 2 bedroom villa at X price (may well be listed price). Mortgage would be done by a certain bank that had a certain bank manager. After settlement to keep the accumulation of properties going a valuation would be arranged for equity release to see if IP2 could happen. Bank Manager would hand pick the comparables (ie a new build 2 bedroom villa that was superior but say it was comparable) and that increased the paper valuation of IP1. It really wasn't worth anything more than what was paid for. Client would be stoked (not knowing that it wasn't real) and would have enough deposit for another. Another similar deal would be present for IP2 and they would buy it. IP1 would be cross collatoralised to IP2. And so on and so on.

If they bought in Sydney they have probably come out unscathed if they held long enough. If they didn't hold as they needed to sell for some reason as soon as they tried to unravel the xcoll they may have had negative equity that was completely unrelated to the market.

This scheme wasn't around at the beginning and APRA pretty much killed since. Prior to this I had full respect for the hard yards and buys that were happening.

So I suppose there is a touch of schadenfraude from my side in a sort of karma way. But really I just hope all his clients are ok and not in some negative equity hole than will become a hell hole when they have to go P&I and the cashflow dries up.

 

Where are the negative threads about Jan Somers, Warren Buffet, Richard Branson, Elon Musk, Dick Smith (prior to supporting One Nation anyway), etc then?
There aren't any because they're by enlarge, benevolent and ethical people.

The issue with NB isn't just about success, but success at the expense of less well off people, a lot of the time people that trusted him.

If you treat people purely as a commodity that's to be exploited then you can't expect just good will towards you.

 

If you want to talk ethics there is shady businesses going around in EVERY single industry and its ironic because I have personally seen and witnessed on several occasions now whereby builders are getting $100k or at most I saw $140k cash kickbacks to award building contracts and works to certain people. Overquoting jobs, modifying tenders, false statements -- **** me the list is huge.

Get real here. The responsibility is not only on the lenders/middle man but also the investors as well. I've said it a hundred times now if your a naive investor and go on the word of anyone else without doing due diligence INCLUDING your ability to repay monies without catering for future rises and you put yourself in that situation - well ultimately your the dumb ass that hasn't done your due diligence properly and it might be harsh but you deserve whats coming.

Real estate and investing is not easy and to get where Nathan has got you think anyone can do it? Definitely no - there is much respect just on that merit alone.

 

You do honestly think NB is the first and only one doing anything slightly untruthful? LMFAO. Pull our head out mate - I personally have gotten some recommendations from the big 4 banks to "do" things a certain way that didn't sit right with me which in turn would allow me to borrow a few more hundred K and it would be sweet no issues at all. Your kidding yourselves if you think this smudging of the truth is not rampant.

 

Many would consider the following a recent example of this:

 

Untruthful and unethical aren't exactly the same, but NB is guilty of both.
Do I think that he's the only one that does it or that he's the worst? No obviously I don't, but just because other people are bad, doesn't mean that you should be. The reason that I'm only talking about NB is because this thread is about him, if I was posting in an Alan Bond or Salim Mehajer, I'd express my displeasure about them in there.

I'm much more comfortable being in the position that I'm in, knowing that I haven't screwed anyone over then having "ten or 100 times as many IPs" (as NB apparently does) at the expense of other people.

I don't follow the biblical ten commandments, I really only live my life by one commandment: "Try and not be a dick." Looking back, I don't always succeed, but at least I try.

 

As far as strategies NB uses, this is nothing new... I have read many threads on PC where reputable MB use clayton valuations to release equity and not necessarily in booming markets. I don't have an issue with this whatsoever, whatever works IMO

Once again very common. Yet no one is calling this practice as dodgy.... even though we know the property valuation may come in much higher than actual value and therefore perhaps higher risk??

As far as NB buying in Syd/NSW, its really a mute point, it happened he chose a booming market. You just cant take that back. Those investors did well, they made money.

Damn.... I told myself not to get involved in this thread, its the same old same, another 200 posts for sure

 

Kamahl was the first concert I went to when about 9. Sydney Opera House with Mum - we loved him. He lived near us too.

 

Can't agree more, crossing an ethical line on the belief that your not the only one doing it, or not to the extreme of others is not a justification. People that prey on the naive or less educated to make there way in life are of ill character, and i like to think karma has a way of biting them on the ass.

 

I'm ok with it, if it's self instigated. Many a more mature investor has done it personally, if they had the chance, and took the personal risk. Most of these desktop val equity releases were more vanilla crime than a systemic abuse of power by a bank manager to release equity to convince buyers that they had bought BMV and to get them into another loan for another negative equity buy. There was a clear conflict of interest where 2 parties were profiting from naive new investors who weren't aware of what was happening.

Anyway. I need to get off my moral horse. I can't change what happened but I can illuminate that it wasn't just a squeaky clean angelic hard working bogan boy that he started out to be.

 

But were the Sydney valuations dodgy - or just forward thinking? The outcome shows they were spot on, even conservative.

 

"Forward thinking valuations"?
I'll have some of those, for 2100 please and bang, I'm a billionaire!

 

when markets are rising so quickly its typical that valuations can actually lag behind as they are using last 3 months.

I was talking more the desk top vals that investors use to squeeze money out of their property, they are clayton valuations. No one actually enters the property.
Good luck to those that have done OK using these. Never had a need to do this, but never say never.

 

Maybe we could start a tax-free entity together - I've been trying to live my life by that ethos for a while, keeping it simple.

cheers,
Inertia

 

"Church of Don't-be-a-dick"

 

Be a Rich-ar* instead!

 

@55m worth.. lets say LVR 50%.. 27.5m cash.. i dont think he can buy certain people out here by 100x.. not even 10x i would say.. some might even buy him 10x over.
you under estimate some of the trollers we have around here