POSITIVE CASHFLOW WHERE R U?????

Derek,

Just had a squizz at about 7 or 8 props on Collins or Queens St (I think) right smack bang in the middle of the Melbourne CBD. Out of those 4 were very positive….

What can I say – they are there, but the people asking either aren’t looking in the right spot, don’t have sufficient knowledge or more likely don’t have sufficient funds.

If you want to get +CF deals, either (in this order) ;

1. Get big – yourself or with others.
2. Get looking.
3. Get knowledgable.

All of the constant questions about where are these +CF deals only address # 2….which won’t help one bit unless # 1 is satisfied first.

Cheers,

Dazzling

“No point having a cake if you can’t eat it.”

Hi dazzling..without posting your contacts or addresses..how about posting the numbers of these + CF deals for all in the forum to see?

“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow Calculator

No worries Redwing,

We are out of the buying market just at present so happy to share some figures of some of the deals I was looking at (some since sold) ;

Deal 1 : Cheapy for 89K list price. Nett rent 12K. Tenant pays all outgoings. 2 yr lease with a 2 yr option. Posted this deal before on here.

Deal 2 : State Govt block for $ 3.7MM list price. Nett rent of 377K. Govt pays all outgoings. 6 yr lease…didn’t go down this track so didn’t find out about options.

Deal 3 : National tenant on a green title prop for 2.3MM. Nett rent 243K, with an escalation to 256K in 18 months time. Tenant pays all outgoings. 3 yrs left on a 15 year lease (came close to taking this one).

Deal 4 : Fully tenanted office block – list price $65MM. Nett rent 9MM. Tenants pay all outgoings. Various lease terms. Too big for me but nice to dream I suppose. Maybe in a couple of years…the figures seem to get better the higher up you go…I’m told the air is pretty thin up there and the competition is even thinner.

Deal 5 : Sole tenanted warehouse with national tenant on excellent 3/4 acre block very close to CBD. Rent 524K p.a. with a 4% escalation clause over the next 10 yrs. 705K p.a. rent in yr ten. EOI (hate that method of sale, as does my banker). It sold I’m told but no idea what for

Deal 6 : Bank branch. $ 1.55MM list price. Rent 140K p.a. 5 yr lease with 3%p.a. escalation clause. We joked about the bank refusing finance due to the tenant (themselves) being a bad risk.

Deal 7 : Fed. Govt tenant…(don’t like those Solicitor General standard leases). $3MM list price. $ 301K p.a. rent. Tenant pays all outgoings…which were steep at 92K p.a. Shortish lease on a good block…scared off by the shortish lease.

Deal 8 : Childcare centre…970K list price. Brand spanking new lease of 82.5K p.a. rent with a CPI or 3% p.a. escalation clause. Lease ’til Jan ’15. Set and forget…no problems – developer getting the cream but easy on the dramas and the wallet.

This is less than half the list that I was looking at a couple of months ago….as I’ve said many times before…alot of these deals are available to every Tom, Dick and Harry…if you have the funds.

I gather however, the big money is not buying the above though, instead getting the big blocks cheaply, developing something attractive and then signing up a tenant under really great terms.

Anyway, take from it what you will…but forumites please stop banging on about not being able to find any +CF deals off the shelf, they are literally everywhere as long as you are looking in the right cupboard.

Note ; none of the above are way out in Whoop-whoop, rather all are in mainland cap. cities.

Happy days.

Cheers,

Dazzling

“No point having a cake if you can’t eat it.”

Hi Dazzling,

Cashflow positive they may be – but from a quick glance it appears they are all commercial or industrial.

Generally speaking most people who come here and ask where are the cf+ properties are usually confining their search to residential properties. Hence my response.

Whether or not they are prepared to consider other than residential is up to them as there are additional factors to be considered – maybe they need to carrot dangled as per your finds I am not sure.

Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958

I just came back from the Property Expo in Sydney and there was a buyers agent there who offers to find cashflow posiitve property for people for a fee. I can dig thru my bag of info and find the name if you need it.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

hi Terryw – I would be interested to hear who that is. I know Postive Real Estate promote some properties very heavily on the basis of being CF+ but when you look athe numbers I really don’t know how they can make that claim… most of them just appear to be typical negative geared style properties. I was curious as I know richmastery who they are tied up with work on a fee basis as well.

Extensive list of ‘Off The Plan’ property available for sale in Perth.

John – 0419 198 856

Notwithstanding the fact that you and i probably pay more tax than Packer and Co..
Oh well no sense getting older if you’re not getting smarter [cigar]

The Land in Burswood is worth a mint..and it was an old dump originaly…hmmmmm
[grad]

Here’s an interesting read..

here are eight rules that all good commercial
property investors should consider:

1.
Investing in commercial property is a totally different game
When you invest in residential property, you deal with people. With commercial property you deal with contracts. This requires a different level of advice and compliance in order to protect both you and the tenant. It requires that you become better educated. It requires that you have a good team of professionals around you. Your financiers and your legal team will be very important to your success as will your real estate agent.

2. Fall in love with the deal, not the property
One of the biggest mistakes investors make when they buy into an investment property (whether it’s commercial or residential) is that they fall in love with the property. When it comes to a commercial property, in most cases, the property is only as good as the tenant and the lease. Without a tenant, the property could be useless – or it could be an amazing opportunity. It all depends on your education and experience.

3. Look beyond what the current use of the property is -Know your market. What else could the property be used for? For example, could you pick up a warehouse with little structure and build offices. Is the area zoned for some residential and could you therefore redevelop the property and get a greater return. The rent you can get on a commercial terrace house in Sydney’s Paddington is likely to far outweigh what a residential tenant will pay to rent the same property.

4. Be counter-cyclical
Don’t do what everyone else does! The most successful property investors buy when everyone else is selling, and bide their time when everyone else is buying. Right now, many residential real estate investors are starting to look at commercial, that papers are hinting that while residential property prices are down, returns on commercial are likely to remain healthy – so if you want to get into the market, don’t wait until the market is flooded with newcomers. The Commercial Real Estate cycle is NOT THE SAME as the residential one.

5. Always try to buy with zero or little down
For years we have been told by our parents to “pay off your debt”. We have this natural inclination to want to get rid of our mortgages. Putting in a lot of cash does not make good investment sense. Educated investors know how to secure deals with little or no outlay. Obviously your rate of return will be affected by how much you have to outlay.

6. Seldom Sell
In general, people who sell their properties never do as well as people who just keep hanging on to them.

7. Always buy from a motivated seller
The more motivated (read desperate!) the seller, the better the deal will be. Often properties passed in at auction can be a good deal – especially if the owner desperately needs to move the property. Remember there are far fewer potential buyers for a commercial property compared to a residential one.

8. The Deal of the Decade comes along about once a week
If you believe that great deals do not really happen, then you will not see one even if you fall over it. The more good deals you see the more you believe they exist. But, you need to know what you’re looking for. You need to have access to finance, be able to accurately analyse the property and know what the market is doing.

“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow Calculator