Hi orion

we are swapping responses to posts! I have a terrific system that I think actually works better than a wrap, and is managed externally… awesome returns and really clear to both investor & tenant-buyer.

Happy to show you how it works

I have just emailed you my contact details

freed@last

Property investing is certainly easier at the right time in the cycle, but if it was always easy, then more people would be around to grab the great deals that are out there… even now.

Depending on your skill base, you have several options.

1. Around Aust. there is nearly always somewhere that is in a good place in the cycle… if you can`t find a deal in Sydney, try another state.

2 If you have handyman skills, find a place that needs work or can generate more rent by basic improvements. (turning a 2 bed house with a large lounge into a 3 bed house is a good trick.

3 If you have project management skills, try looking for a small duplex development. you basically get two houses wholesale, or you can sell one to help fund the other. (If the market is down, be careful about projecting generous profits, plus you would need your own legal and tax advice before proceeding though) Longer process too… maybe 18 months!

4 If you have deal making skills, you can find an opportunity and a third party to “take-out” the bits you dont want, which can often leave you with the bits you do want at wholesale prices. Tread very carefully though, do your figures, and no matter how good your friend on the take-out is, get a contract!

Ever played a game for the first time and learned the rules as you went… all the way thru, people are doing things you didn`t know you could do cause you didnt know the rules…

Property investing is basically playing a game, and right now, the only rules you know appear to be aware of is buy a property and try to get the rent to match or exceed your loan repayments. So you are limited to operate within those rules.

If you learn a few more rules, you can learn how to manipulate those rules. The investors who play at the highest levels know the rules more intimately than any of us, and they reap the rewards accordingly

Keep on the hunt for answers and never give up!

Freed@last

Hi Delboy

Commercial property, unlike residential, is valued based on its rent return. Most investors “buy at a 7-8% return” which means a calculation of its value based on an annual return on investment.

So, loosely speaking, if a commercial property is returning $70K p.a. buying it at 7% would value the property at $1M.

Why is that important??? your best friend in commecial investing is a property valuer. They have rather more complicated means of determining commercial property values. They can also help you to renegotiate a more appropriate rental if it is not up to par.

Why is that important??? well, if you want to find a way to buy commercial property with lower deposit, you have to find a way to instantly increase the value of the property.

There are a few ways to potentially do this, but a good place to start is ask your Valuer to review the lease and the rent for you, if there is room to increase, then you will probably increase its value too.

Dont forget, it will more often than not be a valuers figures that help your financier make his decision. get in their heads, play the game using their rules, and find out how to manipulate the rules to help you win the game.

Eventually you should set some criteria and get out there and have a coffee with some commercial real estate agents. Educate them as to exactly what you are looking for (end of lease, unused yard space, specific zoning, held in the family for many years, can go to second storey etc etc) and the agents will bring opportunities to you.

Other creative ways to increase the value can be found in most good investing books.. enjoy your research.

freed@last

Hi cashpoor

Listen to all those northern non-believers… I absolutely LOVE Melbourne… and it is a great place to invest (particularly as the Northern States are predicting somewhat lax growth in the coming period!)

I know the Mornington Peninsula very well and can identify a number of opportunities.

The State Govt are spending $800M on a freeway from the north eastern suburbs to the Peninsula. This will end at Carrum Downs/Seaford. For the first time ever, travel time will be reduced to less than half, therefore, with hundreds of acrers of Industrial zones paddocks waiting to be developed, business will be choosing to base themselves there, which means jobs, which means families, which means retiring parents nearer to the coast, which means booming local economies and real estate demand. It is due to open in 2008. Well purchased and positioned property (I believe) will be a good investment in the next 3-5 years,

Secondly, Safety Beach, once a sleepy little coastal district, has commenced a $600M marina. Prices in the marina are already $1.1M plus, when 2 years ago adjacent properties could be bought in the $200K s. Stage 3 of the marina will see a wonderful new commercial precinct, with cafes, shops, restaurants, boating etc and a luxury hotel. There is a steep hill overlooking the marina, with lots of run down properties (now in the $600K plus range, but with views of the marina and wonderful views of the bay. My guess is within 3-5 years, they will all be $1M plus properties. Not exaxtly CF+, but great market for CG. Homes on the lower areas will naturally continue to be swept up in an overall growth of the Safety Beach Market, and are more affordable. They are also able to be developed (STCA) into townhouses.

Basically, the Peninsula has these two factors and a growing demand for quality coastal (often prestigeous) housing for Melbournes 55+ citizens who are cashed up and wanting to retire by the water, wineries and golf courses.

(should have been a RE salesman!…. I`m not though!)

Happy hunting

Rob