Desperate situation..please help

This kind of attitude makes investing harder for the rest of us. Bank lending gets harder, you will require legal advice prior to every move, real estate agents will become less helpful in fear of being taken to court. I completely disagree with your advice to pursue everyone else. The risk in these purchases should have been obvious to all involved.

Risk and return, you cant expect to earn 15%+ return on a rental in the middle of nowhere without some kind of associated risk.

Good old fashioned personal responsibility is required. An expensive and difficult lesson has no doubt been learnt, use that and move on.

Absolutely agree here!

Take responsibility for your own actions, as ultimately it's your decision you make when you sign the dotted line.

Kudos.


pinkboy
 
Hi MRO,

I can cover the $7Ok loss on Mackay. My thoughts are refinancing my PPOR and covering the loss this way, as both properties are with the same bank.

Is this a good strategy?

Check if they are crossed loans if you planning to sell. You wont want them to revalue the blackwater property at this time when selling mackay.
 
Of course personal responsibility is important but there are reasons why there are rules and regulations in place to protect unsophisticated investors.

These include the NCCP, ASIC and other rules and regulations as well as common law.

You only have to look at the NAB and CBA scandals to see how otherwise inteligent people can be duped out of their lifetime savings.

The property market is full of charlatans such as Henry Kay only too keen to swindle the uninformed.

My suggestion to Andrew is to consider all avenues to recover his losses.
 
My suggestion to Andrew is to consider all avenues to recover his losses.

Sorry, but your suggestion looks like a dressed up way to find and lay blame on someone else for the OP's financial situation if they can find one.

Buying in Mackay or Blackwater at those times would not have been envisaged as unreasonable, to the OP or a lender or anone else.


pinkboy
 
Stomper - you're entirely whats wrong with this country. Lay blame everywhere except internally. Call lawyers if someone looks at you differently.
 
Pinkboy - wouldnt want you as my advisor then.

Leveraging into a cyclical property market with poor liquidity - recipe for disaster.
 
Pinkboy - wouldnt want you as my advisor then.

Leveraging into a cyclical property market with poor liquidity - recipe for disaster.

Lucky Im not an advisor hey?

But I do practice personal responsibility 101, and apply it to every decision I make.


pinkboy
 
If you can afford to hold out for 2 years + I would do that.
mining is a cycle.

But it's a cycle. You get plenty of idiots that claim it's dead forever. But it isn't. We have new clients signing 30+ year coal supply contracts regularly.

James

I suppose that one of the options you could consider is actually moving there yourself? You could get a job or two? Could be fun. Rent out the Baulkham Hills property - will always be a healthy market there. Would be sad to sell it (but do it if you have to).
I'd seriously look at the numbers in regards to moving. Don't need as much money out of the cities and what a great climate :)
 
Don't need as much money out of the cities and what a great climate :)

Dont be fooled by this belief. Mackay is a different beast, and 'Miners Tax' is still alive and well here.

Some businesses would still rather charge the guts out of the consumer and risk going bust, than lowering prices to more sustainable levels.

As for climate, pretty hard to beat 35oC and 101% humidity like the last few days! :eek:


pinkboy
 
Andrew, IMO and I am not providing financial advise the decision you take will come down to your personal circumstances and ability to service the debts.

Will the residential property markets recover in the short term in Blackwater and Mackay? Again, IMO very very unlikely - Coal mining investment is ex-growth and supply is likely to exceed demand for now and anytime in my lifetime.

Frankly your position is a poor indictment on the financial advisory and property market in general and it is inexplicable how you arrived in this position.

I would be questioning the following:

1. How the bank valuations supported your investment loans?
2. How the mortgage brokers or bank assessed the risks and your financial position?
3. How your financial advisor (if you had one) could recommend leveraging into a single asset class beholden to commodity prices and whether they clearly outlined the risks associated with this class of investment?
4. How the real estate agent represented the investment potential and risks associated with the property?
5. Wether the councils were complicit in limiting supply and driving up short term rental returns in favour of asset price increases and whether there were any conflicts of interests associated with these policies?
6. Who was spruiking this investment and were there representations of risk / return accurate?

Ask your solicitor whether you have any recourse to any or all of these parties - perhaps see whether there are others in the same boat to determine the merits of a class action against one or all of the above.

Alternatively you can roll over without a fight and start again.

Best of luck with your outcome.

Disgusting. As others have mentioned, this is every thing that is wrong with society these days.

As a person willing to put themselves into hundreds of thousands of dollars, if not millions of debt, would you not look at all the possible scenarios? Would you not go 'If A, B, or C happens, then I will be presented with X,Y,Z scenario. How will I cope with each of these situations?'

I'm sorry, if you voluntarily (which in this case it is 100%. No one is forced to buy a property) put yourself in a situation like this and don't have contingency plans in place then you have no one to blame but yourself.


It's funny, people with this mindset wouldn't give credit to the mortgage broker, the financial planner, accountant or the real estate agent when the times are going great. No no, they would be thinking things like 'wow, how smart was I deciding to get this property. I'm glad I MADE THIS CHOICE'. But then soon as it all goes to poo it's 'This is not right. I can't believe Agent/Broker/Planner advised me to do this.'



Anyway, that's my rant for the day. :p
 
Andrew, so sorry to hear about your situation.

I ask myself what would I do if I was in your situation.

What's the break fee on the fixed rates? With your portfolio you should be able to negotiate a variable rate of 4.3%.

Would you consider self-managing Mackay and Blackwater? I know it's hard given youre in Sydney but it would save you some money in the short term.

Insurances, again try to look around. So many choices these days, you're bound to find a cheaper rate.

Do some maths and see if a combination of these measures will help you see through this lull.

If you have a high income, I'd consider trying to just keep everything for now for a few years. You will get a lot of tax back coz of the negative gearing.

I would definitely try to hold onto Baulkham Hills if you can. It's good quality stock in good quality suburb. It's your PPOR. If you sell it, you'll still need to buy another PPOR at some stage. It's hard to get something for sub 1 mill in Sydney now that's comparable to BH. You will pay $50k in stamp duty on new purchase. By holding onto BH, the money you've lost in Blackwater and Mackay is made up by the rising equity in BH.

Good luck.
 
Some help please...

A background, foolishly I bought in Blackwater and Mackay when rents were crazy and out look was bright. Now rents in Blackwater have gone from $950pw, purchase price $495k to now $350pw and an agent told me today if I sold now I would expect $200k as there is zero interest in a property like mine. Mackay is a similar story, rent $700pw, PP $485k to $300pw and a $380k expected sale price. I am currently on a fixed rate for the next few years of 4.89%.

Will this get worse???

I have a house in Sydney that has about $500k equity. My mum lives with my family who has contributed into this purchase so selling this property is not an option.

I am looking for some exit strategies or advice on what to do , where to go or a plan moving forward. I am thinking of going to the bank and asking for help. Is this a good idea? Can they foreclose on me if they learn of this situation?


Any ideas or suggested life lines would be hugely appreciated.

Thanks

Andrew

You're only a mill in the red. Could be worse man.

Sounds like you bought in at the peak into a one trick area. i.e., no other drivers to support growth.

Cut your loses now and be left with a few 100k to pay off? Personally I would be inclined to hold onto them (if that's an option). You need to give them at least 10 years to reach their potential.

Anyway, I'll be following this thread with interest to see how it pans out for you and good luck.

D
 
I would seriously look at downsizing, move into a unit and liquidate the IP's . Hope that the PPOR is not cross collateralized. Cheers6
 
What about renting out BH PPOR and move to rental property somewhere cheaper? It gives you some cashflow and breathing space.
 
Not sure about your personal income/salary situation.

If you are at high income, potentially, you will have some tax deduction.

Sydney property is booming, don't sell it.

Refinance your Sydney property pull out some equity buy yourself some times to ride out Blackwater property, sell your Mackay property with vendor finance so you will not lose money or lose little.
 
Not sure about your personal income/salary situation.

If you are at high income, potentially, you will have some tax deduction.

Sydney property is booming, don't sell it.

Refinance your Sydney property pull out some equity buy yourself some times to ride out Blackwater property, sell your Mackay property with vendor finance so you will not lose money or lose little.

You can't be serious? Surely? This is dangerous and absurd advice.

You're asking the OP, who is bleeding funds to gear up more, to take on a VF deal, in a town where sales are down an people are tight and/or bleeding themselves, most likely with failing credit themselves?

I suggest you continue with your day job of picking up median house 'bargains', because what you are suggesting is frought with danger!

pinkboy
 
The gas news out that way is not good at the moment. Refinance to have some money available to draw down on, but only draw it as a last resort. Tighten your personal budget. Then see if you can get other income. Maybe you can get a salary increase, maybe you need to work a second job or set up a small business.

The problem with Blackwater, like many mining towns, is the high proportion of renters. If the jobs aren't there, they will move away. Even if prices of commodities improve, confidence will lag behind in the real estate market.

Put your surplus into an offset against your PPOR loan.
 
legal advice

Stomper has the right idea here, get copies of all your mortgage docs. from banks, mortgage brokers RE agents etc. including e-mails etc., what your looking for is for written evidence like "property prices double every 7 to 10 years" "property prices never go down" "risk free" that sort of thing of you not understanding risk, as clearly you didn't understand the risk you were taking.
THEN once you understand how you got into this mess see a lawyer, [most lawyers will give you the first visit for free] and you may have to research the right lawyer, don't be put off if the first lawyer isn't keen, this will be a growth area over the next few years so see how you go.
Good luck and remember if the risk wasn't explained to you particularly by your mortgage broker who should have been acting in your interests then you may have grounds for recourse from other parties.

AND those properties in Qld. may not have bottomed yet, they may have further to fall, I haven't seen that mentioned here yet,
 
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