Please be very careful buying your first investment as a new apartment! You cannot control the entry price or add any instant value – which are two of the best reasons to invest in property. Also given your post it would appear you are not a local or overly familiar with the GC market. I am NOT bagging out the gold coast or south east QLD market, but its very risky buying new developments when you don’t understand what drives markets. The law of supply and demand is the key and learning how to measure and understand this is what separates successful investors from people who guess, pick something random and get their fingers burnt. I hate seeing that happen. Take your time, read as much as you can on the forums, there are plenty of good books out there. Education will improve your return.

Matusik is a fairly straight shooter as far as I can tell regarding his research, and he is far from the worst of the scammers and spruikers out there but remember I am pretty sure he is getting a commission on those recommendations so conflict of interest issues must be considered.

PHP wrote:

…How soon can you save up for another $4-5k? There are certainly some unconventional ways to do this. One is the way knightm did during his early investing days, the credit card option. Not really advisable but if this is the only way for you to get into the property market, and the returns outweights the potential loss in a short amount of time then you can consider these options. I would be very careful though with the property to buy and ensure thorough due diligence is done.

Yep as per above its not normal or advisable but just an example of how I did it when I was particularly impatient.

The other ways include overtime, family loans/gifts, other 2nd job like night fill at the local supermarket, ask the boss for an advance (if they like you) lemonade stalls (or any other small cashflow business). The list goes on – where there is a will there is a way. Or just wait a bit longer that works too (eventually)

Of course another option is to buy a cheaper property for the first one. Reducing the purchase price reduces the deposit and stamp duty required.

• This reply was modified 10 years ago by  BuyersAgent.

Dean wrote:

the apartment is ending up costing them $17k a year because the developer they brought it off overvalued by a couple of hundred $k.I dare say I will have more questions but will wait until I have read your recommendations.

This is the fundamental problem with marketing firms that flog new stock for developers, they are not working for you but the seller. Either learn how to recognise a good deal yourself or engage someone to help with that (who you are paying solely) and then you will avoid those gross overvaluations.

Sherlock – sounds good and its an honest question and valid problem. In my business I see the good the bad and the ugly of how selling agents work, sounds like you want to be in the good category.

So….if I was in your shoes lookign to build a name and find investors. I would start with an online presence, a website building my brand as helpful, knowledgable, offering free tips that help without expecting a sale upfront. Put those tips in a blog format, build a fb page following by offering free articles, or checklists or ebooks. Link it all up to linkedin profile and get your posts shared via buffer or hootsuite will make it easier. Once I had a bit of traction growing online through my existing networks I would invest some $ into paid advertising in a range of targeted local offline media (local paper, local letterbox drops, etc) and also some paid online marketing (boosting fb posts, ppc on google etc).

Along the way you need to be helpful to each client and go over and above to serve them well. Towards the end of each transaction ask each client (sellers and buyers) for a short testimonial. Start to put those testimonials in blog posts, in your ads etc. Social proof is a big deal, the more you offer a culture of excellence, backed but a normal friendly request for people to share your story, you will get the vibe growing. Referral business is the cheapest most effective form of advertising. Its how my business built before I had spend a $ on ads.

For an example of a selling agent who does all this quite well check out http://www.penskiproperty.com/#!blog/c16dx Penelope Nicholls she has a blog, posts to linkedin etc. She is helpful during the transaction but has a sense of the bigger picture and is always growing her “fan” base.

Great response from JacM. My hurdles with these usually arise with insurance. Can you insure as 2 dwellngs (let to 2 parties) without fire rating etc. You don’t want to be sued and found uninsured and negligent in case of say a fatal fire. Jacqui have you had any insurers consistently willing to cover these properties? I have found them patchy so dont really pursue them but if I had a reliable source would def do more of these types of deals.

Well done Tony! This is a great outcome if you have the capital and can handle the costs and timeframe. As such its not for everyone but the rewards are there. I have seen a few folk do very well indeed with this style of deal when a boom comes around and everything doubles. Kudos!

Tony wrote:

We are entering our second Rural Res subdivision.
We buy a home and live in it, land 30,000 to 50,000 sq meters around $750,000.00
After the subdivision the home on 8000 sq meters is worth about $580,000.00 plus extra blocks sold 2-4 @ $300,000 ea.
Raw Land cost $175000.00
Our last one we created 3 extra lots, the Total development costs were $365,000.00
Cash Flow was about $100,000, with development approvals in place ready to go and blocks in a completed state within our boudries.
The expensive stuff is external to your boundries, Street widening, Power, council contributions, surveying.

We got one block under contract then we did the street widening council contributions etc. it took another 3-4 months and really only had the finance the majority of the costs for 3-10 weeks. As soon as we had title and everything completed the other blocks sold within 3 months.

I think the go is….timing of the market spend the big dollars when things are moving up.

Land sales $960,000.00 less $365,000 costs profit $595,000 less land costs.
The ATO gave us a tax ruling that 50% Capital gains tax was applicable being our home….they might change their mind on the 2nd one.
We started the process in 2011 completed it april 2014 due to a depressed property market, but that did not worry us as the holding costs were not applicable because its our home capital.

bruynjustin wrote:

What are the things that you should keep in mind while buying property in Sydney?

Not to buy at the end of a boom unless you really really want to.

In my experience GF’s can add great cash flow, but they don’t always generate great revals or impress banks regarding equity. Every case is different of course, but in the burbs this is a common issue.

Re the hunter if you are trying to find the bottom of the market you might well be close. But just be aware it might be a loooong road back. Buying into a market catching a wave of capital growth right now might increase the speed with which you can do your next refinance and purchase again.