Hi ladybug

I’m in the mp area. My Hubby may be able to assist you – he is a Solicitor. If you would like some help send me an email at
[email protected]
with your Ph. No. and I’ll get him to give you a call.

Cheers
Nessie

Hi Jstuart

Welcome to the forum.
When I bought my first real estate property I struggled with the debt level. Couldn’t sleep – worried about repaying the loan quicker to save paying interest.
Now some 20 years later and with debt 40 times that of my first real estate purchase I don’t care about my debt level now. Why? Because I have the cashflow to support the debt and any substantial increase in interest rates. I have learnt to live with the high level of debt, can “hold my nerve” and can control the emotional side of investing.

The change didn’t happen overnight though – it took me 6/7 years to change my thinking about debt. All my debt is 80% LVR and I can live with this even though the $ are 7 figures.

Cheers
Nessie

Hi Doogs

I always get a Pest Inspection Report on a property before buying it. If the report is bad then I walk away from the purchase.

Are to saying that you have acquired a property with a termite problem?

I haven’t got my copy of Steve’s book yet. So am unsure what you mean by rising above this “Plateau”.

Cheers
Nessie

Beancounter, you should not just rely on the 11 sec. solution. You must think beyond this and look at other methods. MiniMogul is right by saying “There are a zillion ways to make negative cashflow houses positive..”

I use the 11 Sec Solution as a starting point. If the property doesn’t fit the 11 seconds then I have several fall back solutions to look at.

You have to work hard and travel many a mile to achieve your goals.
This is not an easy game to play. Here, here Richmond – real money, real debt, scarry stuff and you need nerves of steel. No weak knees when your debt level rises to 7 or 8 figures.

On average I would find and review info on 30/40 properties per month – might put offers in 3/6 per month because the numbers work – so far this year only bought 4. Been out bid on offers by other crazy Property Investors who are paying more than asking price for property.

Cheers
Nessie

Hi Delight,

I think you should walk away from this.
A 55 yr old Weatherboard house with 20+ points on a Building Report would be a no-no in my book. Too many problems. Sounds like a bulldozer is the best thing that could happen to this place.
Morwell – well my research several months ago was not good. There were many vacant shops in the main streets and discussions with locals said that Morwell was “dead”. However, the Latrobe City Council had plans to relocate their offices to Morwell from Traralgon in an attempt to boost the town. But when this was to occur – nobody could give me a date – just sometime in the future.

My 2 cents worth.

Cheers
Nessie

Hi Andrew

Great reading. I thought I was actually reading my property investing life so far – everything you said has happened to me. Many a time have aimed high (the bullseye) and not hit it. Got the outside rings or totally missed, but have learnt a lot and also learnt not to make the same mistake next time round.

Time is such an important factor. There is never enough time but with a little patience and time out for reflection it is easy to hit the bullseyes. Once you hit the first bullseye they keep coming thereafter providing you don’t stray and you keep control of your destiny. A rushed decision is usually not a bullseye.

Cheers
Nessie

Hi Freedom

Banks/Financiers will only lend 70% LVR on commercial property plus the term is usually only for 10 years.(Residential is 80% LVR and 25 or 30 year terms) So this means a much greater monthly loan repayment.
Also they like at least a 5 year lease with an option. That is a 5 year term with the option of a further 5 year term.
There are lots of commercial properties available (a lot without tenants) but getting one which will be acceptable to your Bank/Financier is usually the hold back factor. Speak to them and find out what their lending criteria is with respect to Commercial property and then you can find the property that will fit into this.

I believe that you should buy commercial properties where you shop yourself. That way you know what is happening in the local area. You get to know what businesses are long term businesses. Majority of small businesses don’t survive more than 5 years.
When shopping I always ask questions like “how long has this shop been here” etc. It is amazing what you can find out about that particular show and the area in general. Location is important. Small shopping strips near the large shopping centres are, I believe, not a good investment. But a small shopping strip that is further away are better. They service the needs of the local houses, are usually a good investment and get long term tenants.

Hope this helps.

Cheers
Nessie

Hi Cremin

Yes a line of credit is the best option. I find that by having this type of facility it can give you more bargining power when submitting offers for IP’s. You don’t have to buy subject to finance, you can pay cash, you can do a quick settlement. Then finance the property after you have touched it up – you can get 80% LVR of a higher valuation. The 80% then goes back into line of finance account to start all over again with your next deal.

Cheers
Nessie

Hi Sooshie

I read a similar article in yesterday’s edition of the Australian.

The Media hype about investors creating high prices is just exactly that. Investors are such a small percentage of the overall market and I believe that they are not responsible for the increases.

Good Investors (not all investors) have their limit and will stick to it.

The Investors, and others for that matter,who let their emotions take over with the hype of the auction and up their limit because “they want the property” are crazy.

I went to an auction of a warehouse in North Melb. last week. Was interested because it could be developed into 18-20 apartments for University Students. The Agent said that it would sell for around $800K – 850K based on the $ per sq metre for the sale of land across the street.
Bidding started at $900K, was on the market at $1m and I was stunned when the hammer was knocked down at $1.35m. It was very obvious from the body language of the winning bidder that he had paid too much for the property. He actually pulled out of the bidding (which was probably his limit – $1.15m) but then went back in with enticement from the Agent. Emotion took over.
Absolutely Crazy.
Mind you the Vendor in the back corner was rubbing his hands and grinning with delight.

The Bendigo Bank site in Geelong was sold yesterday for $825K. I was told the purchaser wanted it at any cost because the Bank was the Lessor. Don’t know what the reserve was but it was well below the knock down price.

It’s these sales that are giving investors a bad reputation and blame being laid on them for the increase in property prices.

I believe that we have to look beyond the hype and these sorts of silly investors who are buying on emotion and small or break even returns. They are the ones that will have a bust problem.

All of us on this forum know we can do our deals without the hype and emotion can’t we []

Cheers
Nessie

Yes, I too must check out the forum first thing every day – I have to have my daily dose to get me kick started. No Coffee for me – The forum is chemical free. []

But like AD, I find that time spent on the forum is time not spent on finding new property deals and so not as many contributions of late.