Magalog Draft

Issue 1 | 2013 Editionwww.SmartPropertyAdviser.com.au

The 9 Simple Steps to Avoid Property Investment Sharks & Spruikers

Australian property investors naive to invest in Mining Towns

Expert tips for first time home buyers

Magazine

Kevin LeeProperty Investment & Finance Adviser

FEATURING

5PROPERTY INVESTMENT MYTHS THAT WILL STEAL YOUR HARD-EARNED CASH

http://www.SmartPropertyAdviser.com.au


Hi, it's Kevin Lee here.

As a young boy my dad taught me that it takes a lifetime to build a reputation & three minutes to destroy it. "People do business with people they like and trust" he used to say. I joined ANZ Bank with this knowledge and in 1999, made a 'life changing' decision to acquire a franchise in Smartline – an impressive ‘start up’ that I knew would help me, help my clients better.

Since 1995 I’ve helped more than 2500 people with property related finance - many of them two, three, five or more times. And I've never once advertised. When we did the calculations for this publication I was surprised to learn that I've written over $800 million during that time. That's a lot of property. Many of those transactions were for the purchase of an investment property - as a multi-property investor I'm naturally drawn to the investors out there.

Over the years I've seen hundreds of people achieve great success with property; however I've also seen more people lose. The recent GFC was a great leveller: more supposedly intelligent or well educated people lost much - or all - of their wealth than 'the average Joe.' An even greater number achieved mediocrity – they didn’t even know their outcome or how to change it - because they lacked the basics of a 'financial education'. Anyone can ‘fluke it’; however to achieve lasting success you must invest first in your financial education.

But without doubt the most important thing I learned during the past 18 years was that most property investment ‘strategies’ are founded on history & views that may never be repeated. In February 2012 we launched Smart Property Adviser as a separate property mentoring & advice service. I'm proud to say, it's grown on the back of client referrals & the various print media who’ve featured our alternate viewpoint.

Smart Property Adviser is an investment property education & mentoring solution for people who don't know where to start, don't have the knowledge, don't have the time to do it themselves or who have a fear of failure. If this sounds like you - all is not lost! We'll teach you to invest for cashflow, not capital growth, and show you a relatively 'safe' way to invest in property.

Smart Property Adviser is as important to individuals who want to start investing as we are to the jaded negatively geared investors and Self Managed Super Funds (SMSF’s). We are creating a community of successful property investors who understand it’s their future they're creating.

Table Of Contents

COVER STORY:5 Investing Myths That Will Steal Your Hard Earned Cash... pg 13

The 9 Simple Steps To Avoid Property Investment Sharks & Spruikers... pg 2

Flash Back - Kevin’s February 2012 Seminar... pg 4

From Young Rebel To Property Millionaire In Just 5 Years... pg 8

Kevin’s Story... pg 9

Keep Your Tenants, Keep Your Income... pg 11

Cashflow Versus Capital Growth Investing... pg 15

Expert Tips For First Home Buyers... pg 16

From Nothing To 3 Positively Geared Properties In Less Than 12 Months... pg 16

We’ve Raised $1 Million For Charity... pg 17

Australians Naive To Invest In Mining Towns... pg 19

I could go on for hours; the good news is that you're going to meet a few of our clients inside this edition of Smart Property Adviser magazine. You'll also read some 'off the cuff' comments from quite a few other clients.

And here's the really exciting part - if you're not already a Smart Property Adviser client there could be an opportunity for you to learn more about what you can achieve. Already a client? Thank you. The best way to thank me is to share this magazine with someone you think needs our help. Property advice you can trust. That's our motto & it’s why we're in business!

Here's to your success.

Kevin LeeProperty & Financial Adviser Smart Property Adviser

Dear Property Investors,

OK, let’s face one thing right now!

The property investment industry has always attracted more than its fair share of people looking to make their fortune by advising others – you - on how to ‘get rich quick’ by investing in property.

Property crooks, sharks, spruikers – call them what you will, these people generally prosper by targeting people looking for a ‘quick fix’.

However, quick fixes don’t work; except for the person offering the quick fix.

Whether you like it or not, creating real wealth through investing in property takes time. Please accept that, in relation to investing in property successfully there’s simply no magic bullet or quick fix.

You should never outsource certain elements of your education process.

Over the many years I’ve been an investor, as well during my sixteen years in the finance industry - it’s sad to say that the people I’ve seen who did not follow these guidelines were invariably the ones who became victims.

This is why I’ve taken everything I know and everything I’ve seen happen in the property investment industry and wrote a 9 step guideline – to help property investors like yourself make

the right choices and take the right steps in relation to who you choose as a trusted adviser.

Beware the adviser or company trying to sell you

a specific property or location, rather than

provide you with objective advice?

Be extremely wary about seeking information from people who use the provision of advice as a means to pressure you to buy a property.

These people are not trusted advisers - let’s make it clear

“Whether you like it or not, creating real wealth

takes time.”

Smart Property Adviser Magazine | www.SmartPropertyAdviser.com.au 3

The 9 Simple Steps To Avoid Property Investment Sharks &

Spruikers...

Roger & Amy Ranfti, Sydney

Step #1

“Never outsource elements of your

education process”

Case Study

“Sydney Couple Buy Three Positively Geared Investment Properties!”

“I’m sure I’ve heard Kevin say ‘negative gearing is a

thing of the past’, ”says Roger.

“So, here’s Amy and I as non investors: just two years after

our first meeting we now have three investment

properties in Sydney’s west all quite similar to that first

property. And we’re currently negotiating on our fourth

investment property”.

“Over the years Kevin’s advice has been great; we now have investments that

have grown in value but have not affected our

lifestyle.

My only advice to people who are thinking about

investing, is to search out the right people/advisers and get

the right advice. Thanks Kevin & team for all your

help”.



from the outset - these people are property salespeople, and their only goal is to get your signature on a contract.

Educating yourself is critical to achieving success with your property investment strategy. This is one area that should not be outsourced.

Those people who are prepared to learn – before they venture into the marketplace - will be much more in control of the sales process. It’s this group of people who will best mitigate their chances of being ripped off or taken advantage of by the property spruikers, sharks & crooks.

It’s safe to say that education provides the confidence to move forward and make the right decisions that will help you build real wealth for you and your family.

This education process should involve reading books and magazines on property and investment, joining online forums where you can talk openly with other investors, and attending relevant courses and seminars on property and investment.

TIP – never sign anything at a course or seminar; and never take your credit card!

TIP - ‘Caveat Emptor’ is a Latin expression or saying that literally translates into “let the buyer beware”. When venturing into the world of real estate investments, this is worthy of repeating often – and ensuring you take advice from the most appropriate sources.

“Educating yourself is critical to achieving

success...”

TIP - unfortunately there are many people who hold themselves out as persons who can be trusted – glossy brochures, fancy adverts and sexy websites don’t necessarily or automatically confer trust.

Beware the adviser who suggests that you should buy a property interstate.

Unfortunately for many people over the past 30 years or so, the ‘modus operandi’ of many property crooks has been to promote properties interstate at grossly inflated prices, usually to unsuspecting first time investors.

There is nothing inherently wrong with investing in properties outside of your own area or state, but you must do your homework first.

You need to know what you’re buying, why you’re considering the location and what it’s really worth. Too many people allow themselves to be pressured into the sale without doing the required research themselves.

In 2010 I assisted a Sydney based person who had to sell the investment property they purchased in a Brisbane suburb through a high profile property investment adviser –

with a resultant $185k loss.

This investment adviser pretty much holds themselves out as ‘holier than thou’ – unfortunately I suspect that their very extensive and very slick advertising catches out many unsuspecting Australians.

TIP - it wasn’t a nice story and it certainly didn’t have a happy ending, primarily because this client trusted the person and company she purchased through – without first checking their credentials.

Beware the adviser or company that offers you a ‘one-stop shop’ solution.

Be very cautious when dealing with advisers or companies that have a one stop shop.

I refer here of course to those ‘well-oiled machines’ that have everyone from the real estate agent, property valuer, property conveyancer and/or solicitor, accountant, banker and/or mortgage broker ‘on tap’.

The reason for this concern? In the ‘one stop’ business model each person has a vested interest in providing you with the advice that will get the property sale over the line, rather than the advice that is best for you and your individual situation.


Step #2

Step #3

“You need to know what you’re buying, why

you’re considering the location and what it’s

really worth.”




YOUR AD HERE



In a ‘one stop’ environment one thing is absolutely certain – and almost guaranteed: none of these people are going to be impartial and they will work with each other to ensure they all get their piece of the pie.

Ask plenty of questions if their business success appears to be based on selling products, rather

than investing in property themselves.

Be extra cautious with those people whose business appears to be about flogging seminars, DVDs and books .... rather than investing in property themselves.

For example, you might go to an initial seminar – possibly free or for a nominal fee - only to then find yourself offered the ‘advanced course’, or membership to an ‘elite’ investors group, coaching program, study-at-home kits or DVD/software programs.

Be aware that some of the ‘experts’ you could encounter are very polished, extremely professional and ever-so-volatile if you challenge their reason for being. Caveat Emptor!

TIP - if you do go to a seminar, leave your credit card at home so you can’t be tempted to sign up for additional items.

TIP - if their offer/book/DVD/advanced seminar or other products are that good, believe me they’ll let you spend your money with them the next day, or the next day or even the next day.

“Be very cautious when dealing with advisers or companies that have a

one stop shop”


Flash Back...

Kevin shared his positive Cashflow strategy with the audience and explained the importance of holding investment properties long term.

If you missed out on this FREE live seminar, you canwatch the video recordings at our website:www.smartpropertyadviser.com.au

If you were one of the 97 lucky people to register for Kevin’s "New Rules Of Property Investing" event in February 2012, you would have discovered...

• How to create positive Cashflow income - with this little-known property investing strategy (used by some of Australia’s wealthiest investors).

• How to buy property without a deposit - and little of your own money

• Why negative gearing and often "buying off the plan" real estate are almost guaranteed ways to lose money ...

• How to turn a "negatively geared" property that is costing you thousands every year ... into a positively geared income-generating asset.

Step #4



http://www.smartpropertyadviser.com.au

http://www.smartpropertyadviser.com.au

Be extremely wary of the adviser or company that offers you finance that is

considerably more expensive than you can get

elsewhere.

As part of the ‘one-stop shop’ approach, the sales person will be overly keen to ensure you have the finance ‘solutions’ you they need - in order for you to purchase the property they are promoting.

On top of ensuring they have your finance requirements wrapped up before you leave their premises, the finance component is at times another [often undisclosed] way that some of these sales people and their companies make even more money from unsuspecting clients.

In the actual case I mentioned earlier [$185k net loss] the client who purchased a property through one of these ‘reputable property businesses’ was locked into a 5yr fixed rate loan at 9.9% and a Line of Credit at over 10%.

Some banks and lending institutions – in order to gain a greater share of the market - allow ‘intermediaries’ to add an extra margin to the lender’s wholesale rate, thereby creating a delivery rate.

Unfortunately though for unsuspecting investors, some of these intermediaries should not have this ability to add a margin, as not all of them are on your side!

In contrast, as we were undoing as much of the damage as possible in that earlier case I was able to get our client a variable rate of around 7.00% with the same lender they were already with.

Beware the adviser or company that promotes

complex investment strategies especially when

they’re reluctant to document these in writing.

Successful property investing isn’t rocket science. To a large degree, your success hinges on the following key points:

• Taking responsibility for your own education,

• Doing some legwork to understand what you’re doing,

• Developing a strategy that’s right for you,

• Focusing on a few fundamental principles,

• Using some common sense and,

• Keeping both your greed and ego in check,

• and above all else stay within your comfort zone.

However, some property crooks & spruikers will have weird, wonderful and of course complex strategies that are generally based on the idea that you’ll be able to make a

‘killing’ in a relatively short period of time.

In some instances these complex strategies are primarily created so they can overcome your resistance – especially if you’ve addressed the key points above. Caveat Emptor!

Invariably when people make rash decisions and step outside of their own comfort zone, they often pay too much for a property.

These advisers and companies are often reluctant to document their strategies, making it difficult for you to seek a second opinion. If this sounds scary to you right now – it’s for good reason.

Beware the adviser or company who is reluctant

to provide you with the names and contact details

of clients they have successfully assisted.

You will often find ‘testimonials’ from “dozens of delighted clients” in the marketing material of some of the better property spruikers or crooks.

However see how much success you have when you ask for the contact details of some of these satisfied clients – at random - to verify their satisfaction with the services

“Some property crooks & spruikers will have weird, wonderful and complex courses...”


Step #5

“Kevin was awesome, very honest and straight down the line with us.He made us feel comfortable and assured the whole process. Hisknowledge assisted us in making a great choice on a property and theright loan. Thanks Kevin!”

Dave & Kendall Hayes

Feedback

“Kevin Helped Us Make The Right Choices...”

Step #6

“Successful property investing isn’t rocket

science.”

Step #7



of the company in question.

Step #8

So now that you’re aware of the types of people and

companies you should avoid, what type of person

should you trust?

Once you’ve weeded out the crooks and spruikers, you should really be looking for someone that you like, someone that you trust and someone who is prepared to ‘mentor’ you in your property investment journey.

If your chosen adviser ticks these boxes then you’re off to a good start. See the next and final step for a few tips.

Step #9

So what does a mentor look like?

Novice investors need someone to guide & mentor them, otherwise they run the very real risk of making some costly mistakes. He or she should preferably be a reliable, experienced investor who is happy to field questions the novice may be embarrassed to ask other people. In many instances the mentor becomes an integral part of your 'team'.

Now at this moment you may be asking yourself an important question...

That’s a reasonable question because not all advice is equal, and like you, I always want to know about the person I am learning from and the results they have achieved themselves.

I’m not your typical “guru”. You will never hear me make outrageous "get rich quick" claims about making millions of dollars in real estate, without ever lifting a finger. Not only is that impossible for most average people, the "gurus"

who make those claims could end up in Gaol.

Unlike many property "gurus", I'm actually a qualified finance consultant, property adviser, licensed Buyers Agent and a successful ‘multi property’ investor.

I’m a trusted finance & property adviser to 560 clients around the world, and I’ve helped many achieve their goal of owning multiple Cashflow properties. My clients include M.P.’s, doctors, police, teachers, lawyers, single mothers, and more. I’ve helped people with little money or savings buy investment properties, too!

I have been successfully investing in property since 1995 and my wife and I now

own 11 properties with a value of $4.98 million. And each property is CASHFLOW POSITIVE, meaning they produce income for me each month, instead of draining my bank account.

I do NOT sell real estate, ‘off the plan’ investments, or get a commission or kick back from recommending property deals. The focus at Smart Property Adviser is on providing honest and independent financial education and advice - NOT selling real estate!

But what I’m MOST proud of is this...

I’ve built a business based on two often neglected words, no, they’re much more than words – they’re two concepts often neglected in business today. Those words? TRUST & CARE.

We’ve never advertised our business once in 13

years.

Our clients are so satisfied with our education, guidance, strategy, care and advice, they become raving fans and recommend us to their family, friends and colleagues, who become clients too!

Every single one of my 560 clients have come in through word-of-mouth

referral ONLY!


Feedback

“Speaking To Kevin Is Like Speaking To Your

Father Or Uncle...”

“I really appreciate your advice, which is more like sharing your life experience as a father or uncle. I will keep you posted and for any decision I would make, I will consult you first.”

Susan Lin

Who Is Kevin Lee & How Do I know He’s Not Another Property Spruiker?



Why am I telling you all this? Because nowadays, it’s so EASY for anyone to put up a website and call themselves a property "expert" without actually being one. I’m listing my achievements and qualifications to show you that I’m the REAL deal.

How I Bought Our First Investment Property

While Being $160,000 In Debt

In the early 90‘s, my wife and I came close to losing everything after buying a business that turned out to be fraudulent. We lost $160,000 and our home, and fell deeply into debt.

After being broke and depressed for months, I finally came home one day and told my wife that "I’d had enough". We needed to find a way to crawl out of the financial hole we were in, and start making some REAL money.

I wasn’t happy with "just getting by" I wanted to create real wealth, live a fantastic lifestyle, and take my wife and kids on lots of holidays.

I knew that some of the world’s richest people made their fortunes through property investing, so I began researching and studying their methods.

However, after speaking with ANZ who I now worked for, I quickly realized that I didn’t earn enough money to become a "real" property investor! My income wasn’t enough to cover the shortfall in the mortgage repayments and we couldn’t scrape together a larger deposit.

Why Being Rejected By The Banks Was The Best Thing That Happened To Us!

Because instead of "following the herd" and buying negatively geared properties (which is almost a guaranteed way of losing money)...


Six years ago, one of my clients - an accountant on Sydney’s northern beaches - called me to ask if I could come and sit down with his then 22yr old son Justin, because he was concerned Justin wasn’t ‘listening to him’, and wasn’t taking advantage of both the income he was earning and the property opportunities that were around at the time.

I agreed, and met with Justin in his dad’s office a week or so later.

After spending about 90 minutes ‘educating Justin about the financial side of life’, he had grasped the basic concepts of ‘property investment’ and agreed to commence his financial education by reading, studying and learning as much as he could about investing over the next six months ... with a focus on residential real estate. He was a terrific student and ‘checked in’ with me often - improving his knowledge of both property investing and a few of the many ‘markets’ along the way.

“My Friends Are Amazed...”

“As a single northern beaches 22 year old male, it was always a risk that investing would take a back seat, however the advice, guidance and strategy Kevin has provided has allowed me to comfortably build a portfolio of six properties to date. All my friends are amazed.”

Justin Polgar,

Allambie Heights, NSW

“From Young Rebel To Property Millionaire In Just 6 Years!”

Case Study

In January 2013, this 28yr old single northern beaches ‘Gen Y’ male has bucked the trend and owns seven investment properties worth over $1.5 million dollars, generating a healthy rental income of more than $100k per annum. At the time of printing, Justin was negotiating his eighth property. Outstanding!!



I was forced to discover a SMARTER and more profitable way of investing in real estate!

I’m talking about "positively geared" investing.

Where your property generates a monthly income higher than it’s expenses. So instead of losing money every week and praying the property appreciates in value some day ... you’re earning income from day one. Doesn’t that sound like a better way to invest?

Today, we own 11 properties valued at $5.1 million (and have shares in another 10). Each property is positively geared and generates POSITIVE Cashflow every week ... allowing my family and I to live a fantastic lifestyle today ... instead of losing money every month and waiting years for the value to "maybe" increase.

According to a late 2012 RP Data report, in hundreds of locations across Australia - especially those in the wider regions of Brisbane and Sydney – it’s cheaper to buy a property than to rent. Woe is me; what does this mean for investors? Absolutely nothing.

This report may have scared investors into thinking that tenants will stop renting and buy their own properties. But this will not happen. People rent for many different reasons.

If a tenant purchased a property based purely on this report and the hype surrounding it, they would soon realise that the results extracted from the analysis did not include the additional costs of acquiring a property such as council rates, insurance, stamp duty or legal and conveyancing fees. And then there’s the ongoing property maintenance. RP Data’s report alarmingly states that in 388 suburbs it is cheaper to buy property than rent, but in reality that only represents

approximately 7% of suburbs nationwide.

The pure facts are that most people find it cheaper to rent than buy, especially those who desire to reside in prestige locations. When you buy a property in a prestige area [although you may own a lovely house] you will have to pay more for mostthings, including strata levies, council rates and property maintenance. Many people rent where they want to live because they know that renting is cheaper than if they were to buy the property; paying a mortgage repayment and all the associated fees &


Kevin’s story was also featured in:

Kevin’s is featured in:

Keep Your Tenants, Keep Your Income

Kevin & the Team at Smart Property Adviser are ready to help you secure your financial

future. Call (02) 9980 1311 TODAY!

Kevin and his team provide us with support, knowledge and excellent communication. He has become my investment mentor and I credit him with starting my investment journey.

Pauline Klemm

I Credit Kevin...Feedback



charges that come with the ‘Great Australian Dream’. Every tenant knows that if any maintenance issues arise – it’s the landlord’s problem, not theirs. What they don’t know however is that mostly its’ a tax deductible expense for thelandlord, just like just about everything else!

So where should you buyproperty? Although there seems to be as many ‘investment strategies’ asthere are ‘property gurus’ I stand by my well-worn strategy of buying investment properties where 80% of the market can afford to rent them.

And that’s why I encourage my clients to invest in residential property in the middle to lower end of the property market – that’s the 80%.

Why? Simple really - you have less chance of your property being vacant for long periods of time.... And an empty investment property is pretty much like an empty promise -heartbreaking.

Now, we know there are thousands of investors who prefer to ‘gamble’ by investing in mining towns - but in my opinion these people are naive if they believe it will last forever.

As an example, I saw a brand new 4 b/r house and land package in a WA mining town. It was a smallish square box and looked like the exterior walls were constructed from pre-cast concrete.

WOW – it was already pre-leased for 3 years to a mining

“...I stand by my well-worn strategy of buying investment properties

where 80% of the market can afford to rent them.”

company for $3000 per week. How much were they asking for this average sized home in a ‘one horse’ town? $1.15m.

Do the math for yourself – a small parcel of land in a remote area of the WA coastline could maybe have a ‘real’ worth of say $250k. And construction of a 160m2 house @ $2000 per m2 is $320k. Total = $570k.

So the investor has scored an amazing $468k in rent over three years, for a property that could be worth only $250k when the mining boom fades, and which may struggle to get $300 a week rent – but the worst is yet to come.

If that investor put down 20% deposit and paid the stamp duty and other purchase costs from their savings or equity estimated at $283.7k [$230k + $50.7k + $3k] and borrowed the $920k to finance this great investment – who do you think will be the loser when the mining boom fades? Things get very ordinary for overexposed investors; very quickly.

As an investor, your #1 job is to keep your propertytenanted - so that you keep your income flowing. Buy your investment properties where most people can afford to pay the rent. As a professional investor, you need to be sensible and know that:

a) tenants are humans - so provide them with a good living standard and they’ll usually look after the property

b) always have landlords insurance; always have landlords insurance, always have landlords insurance. and,

c) always ensure your rents match the market.

Think of it this way: If you own a 2 bedroom ‘hovel’ that looks & smells like a pigsty, where the cockroaches have to be removed from the front door to get in when the tenant inspects it… But you want $300 a week rent and I own the unit next door that has been freshly painted, has new carpet, new light fittings and blinds - and I want $320, which one do you think the tenant will choose?

And, if it’s a little quiet on the “tenant front” I can drop my rent to $300 and still beat you.

It’s about keeping your tenants to keep your income. The aim of the investing game is to generate surplus income every day.


Well On Our Way To Our 1st Investment Property...

Feedback

“Just thought I would send a quick message to say that all is well at this end & as you would be aware, we are nearly owners of our 1st investment property. Many thanks to you & your wonderful team.”

Mark & Janet

“...an empty investment property is pretty much like an empty promise -

heartbreaking.”

“As an investor, your #1 job is to keep your

property tenanted - so that you keep your income flowing.”

Kevin & the Team at Smart Property Adviser are ready

to help you secure your financial future.

Call (02) 9980 1311 TODAY!



There a strategies that work and strategies that are nothing more than myths that can do property investors a great disservice.

Negatively geared properties save tax

Negative gearing will send the average family broke, it is something high income earners do to save some tax, but it’s not a smart property strategy and it’s not a good way for most people to build wealth.”

Rather than focusing on getting the taxman to help you pay for your property, investors should be buying property where the tenant is helping to pay for it.

That makes a lot more sense.If your property is negatively geared it means you’re funding your tenant’s lifestyle, because they are not paying the true cost of living inthat property. Investors shouldn’t be funding their tenant’s lifestyle – it should be the other way around.

The long-term capital growth on your investment property will compensate for the fact it is negatively

geared and requires ongoing additional funds

I believe it is getting harder and harder to justify the

“dream” of strong capital growth, particularly with properties in the higher price brackets. My view is that in the coming years, property investors could be disappointed by the capital growth of their properties.

If you buy a property that is neutrally geared from day one, it doesn’t matter whether there’s any capital growth. Why? Because rents will

continue to rise in the fullness of time and you can then turn those rents into paying down the principal on that loan and eventually you actually own all of it or a large percentage of it outright.

There could still be some capital growth, so you’re still miles in front than the investor who is betting solely on capital growth.

It’s virtually impossible to buy neutral or positively

geared properties in Australia today

At the heart of my property investment strategy is a focus on buying neutral or positively geared properties with cash deposits, with the income (in the form of rent) equalling or

even exceeding the associated costs.

When I explain this, many people tell me that it can’t be done in Australia today or they say it can only be done in remote regional areas and they don’t want to invest there. Well that’s just not the case – I

could go to any city in Australiaand find properties where it can be done.

The key is to invest in affordable properties in lower socio-economicareas, where at least 80% of the population can afford to rent.

These types of property can be neutrally geared from day one.

Myth #4

You should only ever have an interest only loan on

your investment property

While interest only loans have their place in property investing as a tool to manage Cashflow, they are only part of the strategy.

“Interest only loans” go hand-in-hand with negative gearing because you need to reduce your outgoing as much as possible, and that is also the case to a degree in the early days of owning a neutral or positively geared property.


5 Property Investment Myths That Will Steal Your Hard-Earned Cash

Myth #1

Myth #2Myth #3

“Negative gearing will send the average family

broke...”




YOUR AD HERE



However, after a couple of years of ownership and increases in the rent you are receiving, the aim should be to start paying off the principal so you can increase the amount of equity you have in the property.

Building wealth through property can be done quickly if I follow the

advice of this off-the-plan apartment salesperson/

developer/real estate agent/ property spruiker

Looking for a quick fix in property is “dangerous” as the person buying the quick fix is quite likely to get ripped off – generally, only the person selling the fix makes money.

We need to be prepared to do the hard yards and educate ourselves about investing in property. If you’re prepared to go out and learn you will mitigate your chance of being ripped off because you’re in control.

You need to accept that achieving what you want will not happen overnight – it’s more likely going totake something like 10 years. But it will be worth it and it will give you the result you were looking for.

At the “New Rules Of Property Investing” seminar, Kevin revealed to the audience how Cashflow investing is safer than investing for Capital Growth.

You see, Smart Property Investors know that if you prepare for bad times, you will only know good times.

Kevin strongly believes in his property investment strategy that focuses on generating Positive Cashflow.

Kevin describes the

difference between Cashflow Investing and Capital Growth by using an analogy of a bus ride; “If you’re investing for Capital Growth; you’re on the bus, but you’re a passenger. If you’re investing for Cashflow;

you’re on the bus, but you’re up front; you’redriving.” Cashflow Investing allows you to have more control of your financial future.

“When you buy for CapitalGrowth and you take advantage of negative gearing, if and when you sell the property, you will probably only


“Thanks for your advice and input into our investment property strategies over the past year Kevin. Since meeting you, we have moved from a position of being “stuck” on the negative gearing treadmill to one where we are building a productive group of properties that are delivering sound, positively geared results...

It certainly would not have been possible had we not been introduced to you when we were. We look forward to working with you in the future to help us grow our portfolio.”

Gary & Annette MossWestleigh, NSW

“...focus on buying neutral or positively geared properties...”

“The key is to invest in affordable properties...”

Myth #5

Feedback

“Kevin Helped Us Secure A Positively Geared Portfolio!”

Cashflow Versus Capital Growth

Investing

Kevin & the Team at Smart Property Adviser are ready to

help you secure your financial future.

Call (02) 9980 1311 TODAY!



be left with $50 000 - $100, 000.

Kevin explains that “greed and easy money can interfere with becoming a rich and financially wise man. More than often, it may seem easier to make more money with Capital Growth than it is to find investments that generate Cashflow.”

But when you invest for Cashflow, you will not find yourself wiped out in boom and bust markets”.

According to the Australian Bureau of Statistics (ABS), first home buyers accounted for almost 19% of all owner occupier housing finance in Australia in 2012.

Much of this increased activity was due to the impending end of government first home incentives last year - everyone who could, brought their purchase forward so they could get their piece of the action.

Now is a better time to buy your first property because

there’s less competition. After all, you can only buy your first property… once!

Tip – your first property will not be your last, so don’t be so ambitious – you’re not going to live there forever. Smart first timers can soon become property investors if theyuse some initiative & forward planning.

With some diligence in paying down that loan coupled with improving the value of their home, they could be able to

use that equity to assist with the purchase oftheir next property.

You may be thinking “I just want to get into my own home; that’s hard enough to save for”. However, if you’re smart about it, this first home has the potential to become a valuable asset and in time generate passive income for you and your family.

Here’s the strategy for first home buyers who want their first home to become an


“If you prepare for bad times, you will only know good times.”

Expert Tips For First Time Home Buyers



investment, thus helping secure their financial future:

Have a budget and savings plan

It takes the average couple 4.1 years to save a 20 per cent deposit for their first home, if they save 20 per cent of their joint income. So you need to create the habit of saving; and a savings plan if you want to buy your first home sooner - not later.

The best way to develop a savings plan is to allocate two weeks to keeping a detailed record of what and how you spend. Lay out all your receipts, regular bills & bank statements from those two weeks, grab a coffee from the kitchen and sit down – now let’s sort out your budget.

A budget will show you exactly where your money is going, where it should be going & where you cancut back and save. It will help you to work out what you want, need… and can afford.

Alternatively you can always consult a finance or budget expert to assist you with your budget plan.

Avoid other consumer debt

Consumer debt is bad debt. It’s easily explained by this - whatever you purchased that drops in value over time, provides no income and no

tax benefits, is bad debt.

In other words avoid buying a new car if your old car still works and gets you from A to B.

There’s no prize for keeping up appearances by using bad debt!

Have a goal – in writing

You don’t start driving without some idea of where you want to go & how you’re going to get there – that’s why we have street directories & GPS systems. Having clearly identified goals is the single most important step.

The second most important step is having the ‘road map’ to help you get there. If you know why you’re saving and what you want to buy, you’ll find it easier to get there.

Seek expert and trustworthy

advice

The real estate sector attracts it’s fair share of people looking to make their fortune by advising you on how to get rich quick by ‘investing in property’.

Whether you like it or not, creating real wealth through property takes time. Please accept that, in relation to property there’s simply no magic bullet. You should never outsource certain elements of your education process.

Over the many years I’ve been an investor, as well during my sixteen years in the finance industry - it’s sad to say that the people I’ve seen who did not seek expert advice were invariably the ones who became victims.

Tip #5

Know your finance options

As a first home buyer you will most likely find the finance area a ‘maze’; a hundred or


In 2011 Sydney Fashion photographer, Duane Robinson had a dream. That dream was to get into the property market, so in June one of his mates referred him to Kevin Lee to help him get started.

Duane is now the proud owner of 3 positively geared investment properties that are remarkable both for the strategy he employed and also the result.

“Now is a better time to buy your first property...”

Tip #1

“...your first property will not be your last...”

Tip #2

From Nothing To 3 Positively Geared Properties In Less Than 12 Months...

Case Study

Tip #3

Tip #4



more lenders and thousands of loan products.

Be aware that there is help available, just search the MFAA website for a reliable, reputable broker who can assist you.

Purchase a property below your means

The smart way to buy your first property is to focus on affordability; affordability is one of the most important considerations for property investors. Up there with rental demand and interest rates.

Affordable properties are those where 80% of people can afford to rent from you,

and where 80% of the population can afford to buy if you ever wanted to sell (which you don’t).

Tip - affordable properties are found in the lower socio-economic areas and they are only dubbed lower socio-economic because they are further away from the city.

However, these areas are well serviced, have good public transport, good shopping facilities, other essential services & in many instances great lifestyle benefits as well.Instead of looking at the facts however, most people let their ego control their decision making and pay too much attention to a suburb’s reputation and what their friends would say.

The savvy first home takes their ego out of the decision making and takes notice of the research

Maintain your property

Over time this will involve fixing leaks and toilets or even replacing faulty switches, and all of this will cost you (the owner) money. So the smartest thing you can

do is ensure you have some savings that is ready for when these times arrive.

Repeat the process

Start saving and repeat steps 2-8 over, ensuring that your budget and savings plan is still effective and watch your portfolio and wealth grow...


We’ve Raised $1 Million For Charity...

Kevin Lee is very passionate about how he can help others. He strongly believes that it's what we can do for 'others' that makes the difference in life – this is one of the most valuable lessons Kevin learnt after more than thirty five years in the business world.

Today Kevin and his team at both Smartline Pennant Hills and Smart Property Adviser are proud supporters of children’s charities and causes such as 'Hands Across The Water' and 'Sunrise Children’s Village’.

“We support causes and charities that benefit children wherever we can because they are the future of the world” says Kevin.

Twelve years ago a small group of Smartline people decided to put in place a seemingly insignificant charity policy that has now reached an amazing milestone. Since that initial meeting we have had a fund raising policy that generates an automatic $10 donation for every loan that we arrange. Earlier this year Smartline topped the $1 million mark and weare so proud.

Tip #6

“...in relation to property there’s no magic bullet.”

Tip #7

Tip #8

“...you will most likely find the finance area a

‘maze’...”



The reality for many property investors in those far flung Australian outback mining towns is that once the mineral or ore etc has been extracted from the surrounding countryside or if the mineral prices crash, then “it’s all over for the towns that boomed because of it” says Lee.

The attractiveness of the mining boom is not a recent phenomenon. Australians have a 200 year old habit of gambling on that next big thing. And the downward spiral is about to take effect again.

The party will soon be over and the mining companies will cut their costs, hut the mines, terminate staff and tear up contracts in record time. These people will leave immediately chasing the ‘next big thing,’ and leave the town with a population decline and a lot of vacant properties.

In the Queensland town of Moranbah there are currently more than 50 mines in the district and Moranbah itself has experienced a population growth of more than 8% per annum and has a current permanent population of around 9000 - plus 7000 Fly-In-Fly-Out.

Moranbah is a classic example of a two-speed economy. It's 'real' population is a passionate tight knit group frustrated by the outrageous rents created by the mines and their employees. Until recently many homes were advertised for $2,000 or more per week. Earlier this year a

four bedroom weatherboard home sold for a staggering $920,000 and rented on a 2yr lease for $3,200 per week.

In 2011 a similar home across the road sold for $680,000. Three and four bedroom weatherboard homes for around the million-dollar mark were the norm in 2011. Things have changed though - but not in favor of the townspeople.

But there are plenty of long forgotten towns littering Australia - and across the globe - whose claim to fame in their heyday was a population explosion due to a mining boom, timber milling, pearling, or even shipping ports that were established on the back of the mining boom.

And there are towns like Broken Hill and Cobar in NSW who never really 'died' when their mining boom became a bust - but they sure aren't going forward. Cobar once boasted a population of over 10,000 people and its own stock exchange. But, a few years later just 1,000 people still call Cobar home.

As for Broken Hill, at its peak ithad 30,000 residents in 1960. However its population has been going backwards since and now fewer than 19,000 people live in this far flung outpost. It’s clear that the wages on offer in every other industry just can't compete with what's on offer in the mines.

And none of those other industries can afford to subsidise rents for their workers.“It’s a Catch-22 and it can't last forever” says Lee.


Australians Naive To Invest In Mining Towns

“Kevin Is A Beacon Of Intelligence...”

Feedback

“We would especially like to ensure that our

kids have an opportunity to be

involved and even though he made no

mention of costs I would have us all

attend, irrespective of the price. It is very rare for me to have respect for anyone involved in the financial industry,

but Kevin and the team have been an

outstanding beacon of intelligence and reason

in the money market wilderness.”

Russell & Linda WilliamsRyde, NSW

Kevin & the Team at Smart Property Adviser are ready

to help you secure your financial future.

Call (02) 9880 1311 TODAY!




We Can Help You Secure An Investment Property For Less Than $40KKevin Lee is an Australian Award Winning Property Investment Adviser with over 16 years experience in finance and property investing.

Every single one of Kevin’s 560 clients have come in through word-of-mouth referral ONLY. He has built a business based on two often neglected words, no, they’re much more than words – they’re two concepts often neglected in business today. Those words are: TRUST & CARE.

“Over the years Kevin’s advice has been great; we now have investments that have grown in value but have not affected our lifestyle. My only advice to people who are thinking about investing, is to search out the right people/advisers and get the right advice. Thanks Kevin & team for all your help”.

Roger & Amy Rantfi, Sydney

(02) 9980 [email protected]



mailto:[email protected]

mailto:[email protected]


YES KEVIN, With Your Help & Expertise, I’m Ready To ‘Future

Proof My Financial Future’ & Invest In Positive Cashflow Properties

Call Our Team On (02) 9980 1311 TODAY!



Magalog Draft

Documents

Transcript of Magalog Draft