Real Estate Sell Down

Thanks for very insightful information and I do agree with you and the story is funny, but you realize you can take 100% control of your SMSF, so you can actually also invest into RE. I actually do not pay or have paid any FA/FP fees, ever.
We did that we setup our SMSF, I rolled over funds I invested directly into what I chose, at least I thought if I lose it will be as a result of my decision making rather than the company. I heard when Enron such large company went bankrupt in US, employees lost their jobs and all the super and I thought I need to take Super into my hands for total control.
I also worked for AMP and one of my past projects was to automate their processing systems. I remember I had to learn all about managed funds, the upfront 4% fee, the switching, withdrawing, exit fees, even the management fee was charged if the client had a negative return. Thought to myself privately no thanks, I rather invest directly as they will always charge a fee (please note this is just a personal choice it may suit other passive investors for long term).
So no discredit to FA or FP but I just chose to take my SMSF investments totally into my own personal hands. Hence most money generated there were the result of our risk taking and action and accomplishments. Not all smooth sailing, some lessons learnt there too but once made on stock 30 times, so decided to sell and then bought 3 IPs for cash in SMSF, as then I think you could not borrow in SMSF (maybe you could but my team of advisors were not very knowledgeable and helpful - hence also needed to change them over the years).
So while most lost 30-40% during GFC we actually made 200%, some by luck some by risk some by taking opportunity and action elsewhere, but not as a result of giving the control to some else to manage. Even now we still manage all our SMSF investments...
This was just alternative entity to invest in once we had also invested outside.
I agree with you hence for our young adult kids we guide them now to invest outside Super first as it should be up to them when then wish to retire if they can be self generating income not just based on their age.
When you are young I think one should invest first outside of Super as you don't know how the rules will change and you have no access to it for many years, and I am all about taking personal responsibility and control but that takes some time, education and experience too.
I think both our paths we took in life show, as my mentor JR said "Formal education will make you a living; self-education will make you a fortune."

 

Builders engaged for CIP, all should soon be ready for the machinery to start rolling in and start digging.
Had a yarn to a local REA, he seems very optimisitic on price. About 1000m2 more than my calcs.
I'll take it with a grain of salt, and at least it's better than "ya dreamin mate".

Building a big rectangular room with prefabs just seems so relatively simple.

 

Why?

 

Cause you will be paying 65k in tax otherwise.

 

I assume you're referring to maximizing concessional contributions to superannuation in accumulation accounts. How does an SMSF help with that vs utilising a Pooled Superannuation Trust?

 

Start a thread and document some the milestones in the CIP development if you're inclined to share. It would be of value to the forum.

I am also thinking of a largish shed or a six pack of smaller industrial units once I've offloaded a few resi IP's over the next few years.

 

Good idea. ATM its just a paddock and some plans. A shevell hasn't yet hit the ground.
As always I'll be very generic on a public forum. The whole process may be 2-3 yrs from start to finish.
And still working on strategy atm. I'm not sure if I will sell/hold all, some or none.
It will all depend on costs, returns, market outlook and my mood at the time.

 

I live in a nice quiet, leafy area with very wide streets and no much riff raff. Way under utilized in every aspect. REAs always promote it in their listings as "premium".
Well a couple weeks ago I found out that a couple years ago(!!) it was rezoned to R3.

Obviously the powers that be cannot have this situation for too long and need to cram as much as they can, where they can.

"R3 zoning or Medium Density Residential zones provides for medium density houses such as townhouses".

And so my next project is replacing my PPOR with 4 or 5 townhouses.
And the best part is I don't need a banks, brokers or any loans.

Many many years ago I remember reading a interview with Harry T where he states word along the lines "Nothing made me happier than not needing the beg the banks for money".
After a couple decades, I think I get it.
I will in practice get some loans as I still have an LOC which can cover around 50% of the build.

Check your zoning folks.

 

Perfect

 

Good point, nice one!

 

After seeking some counsel I must report back the reply:


Looks like I'll only get 3 townhouses. Times are tough indeed.
I did offer to pay cash now, that didn't work.
I was already toying with the idea of buildding a duplex, just did'nt seem worth it atm.
So after the CIP project this is on the list for 2022.

 

Nothing much happening as it all seems to be going slow motion.
But a couple more months with no interest payment makes me feel like this duck.


Until the tax bill comes.

 

The RE sites data is occasionally wrong and often does'nt show the full picture of what happened.
As this one

May look good, but the real numbers are way off, and in this case much better.
The "reality" can make growth seem both above and below what actually happened.
And this is the data that is used for valuations.
Conclusion is that knowing this and how to spot it, combined with lots of local knowledge, may lead to much larger growth or profits.

 

Well I am no longer owner of any RIPs.
With all the craziness around all I can say is I'm happy with my position of zero RIPs, one CIP and a CIP in development. Fortunately the cost base still seems low and there is not much available for sale or rent atm.
I still hold a ppor in an r3 zone which could eventually hold 2 or 4 townhouses but given the current situation that will have to be reconsidered 2023/24.

The next few years may be challenging property owners.
Rent controls and regulations will be coming in, can't see owners getting a good deal on that.
Eventually things will sort themselves out, in the meantime good luck to those holding RIPs.

Next step is Internationalisation.

 

Congratulations

cash flow must be looking good

 

Actually there isn't much cashflow at all. Not much coming in and not much going out.
The CIP is in a seperate entity and bank account, I've written before about forgetting I even owned it.
After years of constant DA dramas this year I got a +ve, the council said i can make the building higher with possible 2 storey office/warehouse. Plans are done, who knows when approval will be coming. Holding costs so far about 5k mostly rates.

And given the lockdown it's hard to even spend money. Can't go anywhere or do anything.
Kinda strange situation of neutrality.

Be interesting to see how things will pan out in the US.

 

That's a big positive, congrats on that!

 

‘Enjoying your posts Piston Broke.

Dumping rip’s and setting yourself up for the next stage. I can see rent control coming to Vic soon on the back of recent changes to tenancy laws.

I’ve been selling some rip’s, reducing debt and investing in shares. Be interested in your cip and town house developments as they continue to evolve.

What will your ‘internationalisation’ involve?

 

I agree with the pita changes in tenancy laws coming in. I now have two houses I share time between and just 1 rip left. It may also go later this year. One house is now zoned medium density and council said I could build 16 townhouses on the block or subdivide and do smaller development. Currently I love the space and can easily find stuff to waste time on if we go into lockdown at some point. Have never tried cip as always worried about vacancy rates for such a big investment. With lockdown it could be a pita as well. For now looking to add more to my share/ ETF portfolio. Returns are more even theb the re spike like now but I am liking that I don't really ever need a bank unless it's my choosing.

 

A shed like this new development or is it too small for you
Take a look inside Foodstuffs' new storehouse, the size of eight rugby fields