Forum Replies Created
Tip #8
Team up with people. Find people to leverage with – whether that be sharing or swapping for eachother’s knowledge, time, access to money.
Teams can kick much more lucrative goals than thee individuals alone that make up those teams.
This might mean you can do different deals as a team than you can as an individual. Think about how that applies to you in NZ – because it’s a biggie.!NZ Investor and Bird Dog
kerwyn, sorry to hear about all that.
yes, the dreaded cash-clause. I never accept it because of what you said!now my only comments are: the cheapest properties are cheap for a reason. lots of work needed, bad street, etc
and also that Invercargill, complete with a 12 year history of population decline and a horrible climate, is not the only town in NZ.
NZ Investor and Bird Dog
Tip #7
Look at building options as well, whether that be adding another bedroom, relocating or building a minor dwelling onto the site, a granny flat, moving a bach onto the site, building a unit on the back, and things like that.
This strategy can work really well in a growth area where houses are say more than 100-130k each.
You may be able to make 20-40k by ‘creating’ a 100-130k dwelling rather than just buying one ready done.
NZ Investor and Bird Dog
drop the rent, get someone in quicksmart, better than vacant. Things will change within 6 months, you’ll be OK!
NZ Investor and Bird Dog
Tip #6
The less you know the market, the more locals you need to enlist to bounce ideas off. Ask the girl or boy at council (i.e.) what she thinks are the good streets, the bad streets. Ask your building inspector what they reckon. Talk to a rental manager NOT connected with the sale of the property. Ring up the cops.
The more you can keep people talking, the more information you’ll get. The more personable, pleasant and amusing you are, the more they’ll want to keep on chatting and telling you stuff. And the less they’ll think of you as ‘just another Australian investor buying off the internet’. At least (if you still are that) you’ll be percieved as a SMART one who people find a pleasure to deal with.NZ Investor and Bird Dog
yes re internet telephony, SKYPE is another one
skype.com
Tip #5
Talk to a rental manager in the town about what lets well – what they can’t get enough of – and what they have a surplus of, good streets, bad streets, BEFORE you go and look to buy.
NZ Investor and Bird Dog
Tip # 4
This has saved me $$$$$$
Often when purchasing CF+ve houses in NZ, they don’t have curtains – you will even see tenants putting nails and pieces of material up!- or they have scrappy ones half falling down which you need to fix up especially if you have painted etc. So my tip is – which my partner and I invented ourselves one day at Mitre 10 rummaging around – instead of paying top dollar for ‘proper’ made curtains I buy tab curtains (the sort with the fabric loops) from the Warehouse for approx. 10-12 per curtain, and I use….plastic or metal towel rails and mounts instead of curtain rods!
It is so much cheaper, more like $8 per window to mount them rather than $40. And it looks great!
Just cut them to size.Now these days I don’t actually ‘do’ this myself, but this is what I instruct my decorators to use and they think it’s a brilliant idea too!
NZ Investor and Bird Dog
yes exactly wilandel, a new old people’s home has gone in, private sales, houses for rent, special on curtains, talks of the Warehouse opening up, jobs on offer, just to get a vibe on how the town is doing, etc.
Sometimes you can respond to information in the local paper by investing!
Some of the information might not necessarily make it to the national papers or even news websites, but they are also good to check.
NZ Investor and Bird Dog
Tip # 3
Network with like-minded people who are sucessfully doing what you want to be doing.
And the flipside of that is, don’t take on board comments from people who don’t understand what you are doing, or aren’t doing it, however well-meaning, especially at the beginning or until you are really sure of yourself.NZ Investor and Bird Dog
Queenstowner, I would agree with that, good advice – don’t buy without checking council in some shape or form – BUT I am surprised that you found something in the council file that was NOT in the LIM – can you disclose what that was, even if in general terms?
cheers-
MiniNZ Investor and Bird Dog
Lucifer, I agree with everything you say.
I have actually also used a bird dog myself in Australia to purchase a property in an area I was unfamiliar with. He wasn’t “qualified” then,
except by being a millionaire property investor who specialised in a particular area I wanted to buy in. (but that’s not a ‘qualification’ by whasshisface’s definition of course) – and besides it’s unseemly to talk about how much money we have other than behind closed doors with other investors – certainly not online!but anyway, he is these days a ‘qualified’ financial planner. I think it took him 2 weeks and 10k to get the qualification. He did it (I believe) because there are quite a few people out there that are impressed by qualifications and it puts their fears to rest. *whispers and points to the corner*
However I have to say that if I used this guy qualified or not, I would be sussing the local market knowledge, not the qualification.
He didn’t actually broker a deal as such for me, I put a contract on the property directly, but basically I leveraged off his inside knowledge of what was happening in the area, tradespeople at a discount who work on his portfolio, his vast amount of research which I went to see when we met up (and spent an entire day together) – not to mention an indepth knowledge of rents, costs, prices in the actual street and in the actual block I was buying in.
Priceless.
As a bird dog myself that is the sort of thing I am trying to offer to my clients. I keep a constant look out for any articles on any of the towns and look out for things like ‘factory set to expand, opens in 2007 with 500 new jobs’ and I clip that out, and (for example) go check it out and (to cut a long story short) then immediately go try and find some CF+ve deals there, and include the new announcement with the deal, that kind of thing.I can’t see that any qualification would make any difference, it’s just putting two and two together and providing documentary evidence of the two and the two. The decision is still the investor’s of course.
Anyway, how did I get here, and what’s my name again? And what were we discussing?
NZ Investor and Bird Dog
> I consult professionals such as solicitors and accountants and financial
> planners when I need their advice.
same here, solicitors and accountants, but I don’t consult financial planners, for reasons already discussed.> If I want a property, I go to real estate agents.
same! (um, duh….)
I also go to find private sales. Either through word of mouth or through advertisements.>I certainly don’t depend on
> people who call themselves “bird dogs” unless they hold a qualification to do
> what they do.Thank God for small mercies.
> I also do a LOT of research and learn things I am interested in or contact the
> source and discuss the ins and outs with them before I consider what position
> I may want to take.same, same, same, same, and same
> Regarding making my decision, I do that myself.
same
>All I seek from professionals
> is information.same
>If I make a mistake based on the information I collected, I
> cannot blame anyone else.same
> The ‘sheep’ don’t usually consult any professionals. They do things that they
> read in a paper or on a property website or a friend or unqualified person
> told them.Ahm, well this is your story, so the answer is ‘and So Be It!’
So therefore, by your paradigm, as long as you don’t do anything you read on a website or that an unqualified person tells you, you’ll be OK, and able to safely distinguish yourself as a savvy and sophisticated investor who has happily found a paradigm in which he can differentiate himself as vastly superior to the despised ‘sheep’.
So what are you doing reading this then?
NZ Investor and Bird Dog
Hux,
“I suppose if we are buying run down houses, doing them up and just asking a fair rent in return “
Indeed. That’s exactly what I’ve done, apart from one when I got lazy and didn’t do a sot to it!
Believe me, I have been in tears at a loved one telling me I was ‘ripping off the poor’ – this loved one earns several hundred K a year, and has a holiday home and an ‘own home’ but is not an investor.
I did it anyway.
I will never forget the agent actually got all misty in the eyes when I invited him over to see the house after the renovation.What was needed in these towns was investors to come in and SPEND. The people had no money to do the houses up, Housing NZ was selling up like mad, so the onus was on the private sector to come in and take over. Many many many properties on the market in these towns had long overdue maintnance issues – rooves, gutters, leaks, rot, paint, decor, the lot.
My tenants love living in my properties. all I did was try to bring a little city style and standards into the small town rental house. It has been not only enjoyable but also extremely profitable and I feel a bit like an expat ‘local’ in my towns where I have parked some money.
How the local businesses have profited, how the towns have profited from people like me who each went in and bought houses, renovated them and spent 10, 20k with local tradespeople and suppliers.
You can see it in the main streets, and you can tell in other ways (like when you can’t get a tradesperson cause they are flat out!)
cheers-
MiniNZ Investor and Bird Dog
Before you dig the disagreeing hole too deeply,
let me put it another way:what ‘professionals’ do you consult (if any) to make your investment decisions? (with the assumption from your post that you consider yourself a “sophisticated investor” – and apologies in advance if I am out of line with this assumption)
also, what ‘professionals’ do the ‘sheep’ (sic) consult to make their investment decisions?
(if different from yours)NZ Investor and Bird Dog
Qualify, schmollify.
Tell that to Bob Dylan, the beatles, Jimi Hendrix, and, uhm, Jessica Simpson.“where’s your music degree, Bob?’
Steve, death by disclaimer! I geddit though.
Qualifications are for EMPLOYEES remember, not entrepreneurs and investors.
Sure, use an accountant, a lawyer, a building inspector, but don’t get investment advice from them. And financial advisors? They only know what they know and they will probably ‘advise’ you to invest in something where they can make a big commission.
So… in the end there is no advice, because YOU are the investor, not your advisors. it’s your job to make your investments fruitful so you can EMPLOY your advisors. (now do you geddit?)
NZ Investor and Bird Dog
Tip # 1:
You can often ‘sneak’ the information in the LIM for free by going to the council and viewing the file.Tip # 2:
It is often what is NOT in the LIM or council records that is as important than what is in it.OK, you have your building line restrictions etc, but is that garage/fireplace/extension permitted?
If not, what are the safety and insurance implications? My advice, when starting out, get a LIM for the extra $150 odd bucks. If you can’t afford a LIM, hey, you can’t afford a property!
Later on when you have done many deals and looked at many properties and read many building inspections and LIMS, you will be able to get the experience to know how to spot a potential LIM issue.
email me if you want a Pdf I have on LIMs. I was looking for the link to post it but I think it’s gone.
NZ Investor and Bird Dog
I can also recommend DD as a spotter in Queensland. He is a legendary investor in his own right, and I have been privileged to spend the day with DD and his investing partner, where we compared notes on spotting, deals, and so on!
I can also confirm that he is a qualified financial advisor, extremely knowledgeable about the areas he spots in, and very nice.
Yes, there will always be people who say ‘that can’t be done here’ when you are proving that it can, by doing it, but hey – it happened to Kiyosaki too – it is mainly said out of ignorance, fear or greed.
“What has interested me is that there are people out there known as Bird Dogs who source property for you. This sounds awesome!”
Yes, it is truly awesome, if I do say so myself. hehe!
difficult question: “Firstly, how do you find a bird dog (especially one that sticks to Steve’s rules, eg. the 11 second rule)?”
word of mouth! I recommend Westan and DD. I’d recommend Castle Dreamer, but she’s my business partner, so that would be weird!
“Thirdly, Are companies that advertise in magazines (ie property investor), rorts or are they genuine companies that really do find cashflow positive property?”
I know richmastery are genuine, however they are extremely expensive and we have a few clients that have used them and said the service was shocking, but that the information was good.
Basically, any bird dog that supplies a valuation or builder’s report is going to charge you double for it in their fee. Also I am slightly iffy about bird dogs getting valuations prior to getting a client a deal. There is no guarantee that the bird dog has not ‘influenced’ the valuer to come up with a figure that makes their deal easier to sell. “20 percent under valuation!”
There is a potential window of opportunity for dodginess there. “Loads of business for you, Mr and Mrs Valuer, provided we can get a good working relationship.”
Am I cynical? Perhaps.
“For example, Cameron Bird.”
I would personally stay away from highly marketed glossy brochure investments, as the person that’s making the money is the one who paid for the brochure, in my humble opinion.
NZ Investor and Bird Dog
“3. The rent returns were not great in Queenstown – about 4% and house prices were high.”
Yes, and you’d say the same about Byron bay, if you get my drift – which is, yes, beautiful, yes, desirable, yes, demand, yes, capital gains, yes, lifestyles of the rich and famous, and yes, negative gearing.
but if you want that kind of investment you don’t have to cross the Tasman to get it. (although there is no Queenstown equivalent in Aus!)
The investments that are still available in NZ which Aus does not have is CF+ve properties in decent towns within cooee of larger towns, at at a very low price compared to Aus. Yes, of course there is still capital gains potential all over NZ.
Buy now for CF+ve where future demand is expected to grow, i.e. a town where a huge factory is being built, where a major business is expanding, etc.
To find this sort of stuff out, you will either have to keep your ear to the ground for a while (NZ news sources, magazines, etc) or else leverage off someone who has that information.
joy to the world
In a NZ town where the average income is 13,500 per annum, can you still today find a decent 3 bedroom house on a freehold section for 5 years income? YES!
In Sydney, where the average income is 45k, (I think) can you find a decent 3 bedroom house on a freehold section for 5 years income? No way! you wouldn’t even get a decent unit for that much – and even then you’d have to go way out to the crap suburbs.
Can the locals in these kind of towns buy a house for less than they are paying to rent? YES!
Do they? NO! – I mean, some do, but the sort that rent for life don’t seem to.
Why? Possibly education, bad money management, can’t get finance (because of bad money management)
There are 90 percent and 95 percent mortgages for locals in NZ. So I reckon there’s no excuse!
They could if they put their minds to it, they always have been able to, and they still can.In towns where we are finding positive cashflow, all that means in reverse is that it would be cheaper for the tenant to buy the property than to rent it.
When I was a kid I remember asking my Dad how come there was a house advertised for sale for 1 dollar? the answer was, probably you’d pick up some unpaid rates, and have to do a fortune in maintenance. But still!
Then say about ten years ago you’d see houses advertised for sale for 4 k, 12k.
Two years ago you could buy in Oamaru for 27k close to town and nothing to do. (and believe me, I wish I had!)
Now, it’s still affordable – just that it’s not as relatively affordable as it was before.
What does that mean to me as an investor?
well, i’ll be concentrating on the lower priced properties as I think there will be continued demand for them, no matter what the middle and top of the range properties are doing (which of course skew the ‘data’)cheers-
minijoy to the world
Has anyone done this before?
-yes, me, I’ve written quite a few posts on it on various bird dog threads, have a search using the search function
-Are there any legal obligations?
yes, I’ve explained elsewhere how I do it, but others say it is illegal here without a licence, etc etc depending on how you define what a ‘bird dog’ does. I define it as someone who finds and presents deals to investors for a fee.
-How is the transaction of cash for information -done?
two consenting adults who agree, basically! you find someone who wants to pay you for the ‘information’ you have, and invoice them, then they pay you in the normal ways (bank transfer is how we prefer it, because it’s the quickest to confirm)
Your problems might be, how will they know if they want to buy the information until they’ve seen it? If they see it ‘on spec’ will they then be able to find the deal and cut you out of it?
-What is a reasonable fee for finding property?
It so depends – depends on what you are offering for your service compared to what others in the market are offering for theirs.richmastery charge 3995 – 4995 but offer a lot of due diligence for their trouble.
cheers-
Minijoy to the world
