Nathan Birch "dumping" properties according to Macrobusiness

Mr IQ begins dumping properties - MacroBusiness

Source link: Nathan Birch Is Selling His Properties?
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For a long time now, I’ve been collecting properties like kids collect action figurines in a happy meal. I never like to see one go.

But recently, the finance environment has changed…

It’s a bitter pill to swallow for a buy and hold investor – but I need to optimize to suite the times we are in by letting go.

Just to be perfectly clear this doesn’t mean that I’ve stopped buying! Far from it, last year alone I did $10 M in new property purchases. This year I am looking at spending $6 – 7 M on new properties.

However, I see this stage in my investment journey as graduating from my ‘foundation’ portfolio into a development phase.

Personally, I am interested in buying anything that I can develop into a bigger property in the future.

Now, I’m not selling up because my grand plan has failed, vindicating the ‘negative Norman’s’ out there.

Not at all! I can sit on this portfolio and ride these finance changes out without breaking a sweat, but that doesn’t sit well with me. I want more!

I want to keep moving in a market where almost every investor is stuck in quick sand – even if that means selling.

For years now I have been channeling equity into deposits for new properties, but it’s no secret that equity is very hard to release these days – even if you have millions of dollars of it!

The reason behind this is serviceability restrictions. Anytime you withdraw equity, you need to show income to service that new loan. Sadly, the banks don’t value rental income as highly as they once did.

The fail-safe way to access equity today for anyone with a large portfolio is plain old-fashioned selling.

The cash can be used to buy up new properties better suited to the current market. For me that’s anything I can develop and flip for a chunky cash profit.

 

Smart savvy, reduce debt, market conditions changing, finance tightening.

could also be a few duds in this lot?

 

I wonder if he will flog them off to his clients. Would be easy for him to do.

 

So, we have heaps of people here and you would have to assume elsewhere, or everywhere, that are now turning against buy and hold in what seems to be the start of a panic to me...

How did the name Mr IQ come about ?

 

I think it's a front/excuse to get rid of duds. I know of at least a couple in his portfolio!

 

And sell his OTP properties

 

Makes sense. By 2013 he had 72 properties. I wonder how many in Sydney and how much they are worth now? It would make sense to offload some and buy better performing properties...

as long as he doesn't offload the duds to his clients.

Not necessarily. We don't know how many properties he has or what they are worth. All I know is if I bought properties in Sydney in 2013 and held them until now, I would be looking at cashing in some of my portfolio too.

It's a macrobusiness thing. They don't like property investors. Note this comment by TheRedEconomist on macrobusiness.

Double page thread in the Saturday Telegraph in Sydney.

http://www.dailytelegraph.com.au/news/empire-built-on-dreams-and-toil/story-e6freuy9-1226562190614

Quite an interesting read.

There is no mention of how much he owes the bank, but if he has $5m equity in 72 prooperties he would have roughly $70K equity in each place.

Some would have more and some would have less or none at all.

If the average property is worth $400K, I would suggest he would owe the banks around $15-$20m.

I’d like to see a follow up story in 12-24 months to see if it is still all rosy.

I doubt we will see that.​

Weekend links: 26 & 27 January 2013 - MacroBusiness

This was article was talking about NB buying properties in Western Sydney in 2013. Then what happened to prices in Western Sydney from 2013 to 2017? Seems to me like NB would have generated a lot of profit from those properties.

In contrast, it would be interesting to know how TheRedEconomist fared in comparison?

 

He gets bashed when he accumulates a lot, then he gets bashed by some when he sells down, LOL

You couldn't make this **** up I tell ya.

 

@Perthguy I was more saying, the tide has turned for all, he gives same reasons many here do to do other things rather than buy and hold.

Not really talking about him.

on the name, so it is an insult more or less ?

 

As I wrote in the comments at MB he's probably seen the writing on the wall with regards to rolling over his interest only loans. $500k positive cash flow could be reduced to nothing or even negative with recent rate rises and shift to P&I repayments on $20m worth of debt.

It was a jab at his 'low intelligence', implied in a previous article. Ironic considering how much NB has made. Love him, hate him or indifferent, you have to admit he's done well for himself.

 

of course

 

low intelligence he may be but hes weallthier then 99.999999% of aussies and probably 99% on Property chat

and its all self made!

kudos to him

 

You sound like you know exactly what you are doing and what an awesome position to be in.

 

What is MB ?

Re seeing the writing, maybe a fall out with the finance dept too Loans may have come easy in the past - real easy.

I am not sure about low intelligence, a dis regard for others maybe and an odd way of speaking at people in videos.

I admit he seems to have done well for himself, but I have not looked that close, only know what he has said on other forum etc, no forensic accounting & I know he has bought some shockers, you may even recall some of them, they were sold quietly it seems after making lot of noise.

I still see all this, from him and others as major signals for what may be coming, you would have to assume supply will increase. He is not Robinson Crusoe.

 

MacroBusiness, site linked in the OP (original post ).

 

Oh, ok, it could have been NB's other half



‘I’m not selling up because my grand plan has failed’

 

I don't know much about NB but I thought his strategy was to buy lots of cheapies with high yield in order to have a high CF+ portfolio (where CG was a second priority).

Now it looks like he is selling some of those CF+ cheapies (which might have some CG?) to buy development sites. To me, he is now making CG his top priority and CF a second priority.

I had a friend who accumulated tens and tens of CF+ properties, mainly in regional Queensland and on the coast in central Queensland.

About 10 to 15 years ago, she dumped a lot of them. She said she was making good income, paying tax but not getting rich as fast as she would like.

But I am guessing it is probably different this time with NB .

 

Is there a "not" missing? Otherwise, why dump them?

 

Thanks.

Yeah, I noticed that when I reviewed my post and have now fixed it.

Just goes to show that one shouldn't post in bed

... especially on their mobile.

 

I'm always posting from my phone... and right now I'm doing that from my bed... I fix my typos as a secondary action