Advice for a noob

Hi Cino

I agree with Duckster – subscribe to Australian Property Investor magazine.
Keep an eye on newspapers for infrastructure stories.  Govt / council websites for regional plans, infrastructure spending etc.  Big business websites – see where they are spending money.  Don't limit yourself to property knowledge, get a grasp of ecomonics, tax and business as well

Steve McKnight's tip "the more removed you are from the problem, the longer it will take to make a profit"  This is so so true !

Borrow property / wealth / business books from the library – Margaret Lomas, Steve McKnight, Michael Yardney, Ed Chan, Peter Spann, Reno Kings, Dymphna Boholt, Jan Somers, Noel Whittaker (financial adviser), John Fitzgerald – there are so many out there (listed in the back of API) and shortly when you have read a few, you will start to identify what strategies you like and dislike – only you can decide for you.

Of course the standard reads are Richest Man in Babylon;      Rich dad, Poor Dad;   Think and Grow Rich

Be wary of those selling mentoring – along with property  purchased using "their" specialists.

Spend time getting to know all the different property investment strategies – buy and hold, flip, value add etc etc.

Have an exit plan and based on that plan, structure your purchases ie say – at age 60, you don't want to sell any properties, you want to pass them on to your children. or say – you want to buy, reno & sell and keep repeating this process, each time on higher priced property, until you get $XYZ, then you give it all to charity. Whatever your thinking is, then should you buy in your own name, or trust structures.  Have the end in mind when you start buying.

Know yourself and write down your goals.   This doesn't have to stay the same, it may change as you get more and more experienced.

Use forums like this, get a feel for the members ie Richard Taylor is a mortgage broker in Brisbane (all his details are in his signature block) …. read his posts, if your in the market for a broker from Qld, and you like his talk and knowledge – seek him out.  Build you team in advance – you might not get the right accountant on the first go, but then you might – make sure your team know what you want, practice what you want and are available to you to help you get there.  No point having your best friend who is a lawyer as your solicitor – if their specialty is criminal law. 

My personal lesson – be market ready for the next opportunity.   ie if asset protection and structuring is important to you, then set it up, draw out equity into Lines of Credits, see my broker   THEN start trying to find the property.  Pretty costly to transfer from individual names to Trusts after the fact.

Go to every free seminar event that you can – you never know what information you will pick up.  The developer of a marina might just let it slip that there is also a deep sea port for coal exporting approved and about to kick off.  Who knows.

Then test the waters.   Most people make a monumental mistake or two in life, it is how you deal with that mistake that will seal your fate.  

I will send you an email with a lot more detail, but this is it.

2009.   The house was listed for $550,000 in a seaside suburb in Queensland.  It could have dual income.  It was independently valued at $475,000, I offered $405,000 – I got it for $420,000.    The place had termites, it was being advertised as separately metered, but this was not the case on inspection so we tried for money off but the sellers wouldn’t budge as they said we robbed them.  We wanted early access to commence a reno – they said NO.    The sellers ended up having settlement problems (delayed by 5 weeks) so we agreed to extensions on the basis that we had early access. We gutted the place and rebuilt – spent $30,000 to do that.Settled and completed reno the same week.One week later, a storm wiped out a good bit of the reno via roof damage.   Insurance would not pick up the tab for the roof repair (even though the building report was evidence nothing was wrong with the roof), or loss of rent as the tenants that were about to move in couldn’t because the building was now unsafe.  There were arguments over the floor replacement etc, and what I had to fix, I had completed in 2 weeks – all new floors and a roof repair.   What the insurance coughed up for – electrical and painting took 2 months.All up the storm cost us another $18,000 for loss of rent, roof and flooring. Place is tenanted for $670 a week.

Because of earlier financial mistakes, it took 3 years from when we decided to commence investing.  In that 3 years while we could not get funds, I starting my quest for knowledge (having ABSOLUTELY NONE prior to that and no people around me that were investors) and I paid down a bucket load of money on our PPOR, so that I could eventually re-set my PPOR mortgage at a lower limit and get an additional line of credit as a deposit on an investment.  Don't mix them up.

It is 6months on from our first IP purchase, and I have not got another property, because I cannot get finance.  While I have equity in my house and IP, and hubby and I have good salaries – it is just not possible at the moment because of our legacy mistake – APPARENTLY.  So again I commence the process, keep learning, keep paying down our PPOR, and this time, I will be truly market ready by having the structure in place that I need for my exit strategy.

AND my goals have very much changed this years as a result of the income I receive on our first IP.

1995 Cranbourne Victoria 3 bedroom house – $76,000 . Research was not much. How long did I wait two weekends.
Currently worth $240,000 I owe about $20,000 only due to upgrading the cooling and heating at $8000 and also re-borrowed $12,000 to invest in share market.

2001 Cranbourne Victoria 3 bedroom house – $100,000 . Research was not much. How long did I wait one weekend.
Sold in late 2004 for $170,000- wish I could have held on to it as worth $240,000 now ! but did not have a job and couldn't keep covering the negative gearing. If I had a job I would be buying another one. Its in my blood so I can't help myself that I am itching to get another property.

Books I have read are about 80% of the investing books out in the market .
They are a cheap way to gain knowledge.