Hi Jamie

The biggest problem is that in most cases the value of the property is determined by the return. So if you had a property renting for $20,000 a year on a 10% yield then the value would be $200,000. The problem is what is the building worth if you loose the tenant. In 1990 I worked for a commercial developer and saw what happened when the commercial markets collapsed. Many people lost there life savings.

Certainly Blue chip are great but the entry point is a lot higher. So you could put your money together and buy a larger commercial product.

I also deal in the United States and specialize in commercial properties there. Because the price points are lower there are some great buys there at present with the markets now in recovery.

Also keep in mind if you buy an apartment complex with more than 5 apartments it is considered to be a commercial property. With commercial we can borrow 60% of the price at a rate of around 5% on a non recourse loan meaning that the loan is only against the asset.

Everything comes down to due diligence.

yes in fact Hedge funds are paying full price for properties as high as 50 Million. What that tells us is that the US markets have bottomed. I still find that we can get god deals in Florida. But markets like Texas are now booming and it is good idea to stay out of them. So if you are interested in US investing you need to look now for good deals.

Regardless of size, however don't buy small apartments. There are around 4000 apartments coming out of the ground in the cbd, docklands and Southbank. What this means is that we are likely to see values fall over the next few years. Plus with an over supply we cold see rents also reduce. The other side of this is that if you buy an off the plan apartments you may well find that the valuations also come in low.

Mot of the growth will be in inner city areas but not in the CBD.

I see steady solid growth in Melboure and strong growth in Brisbane but stay out of the city.

You want to look at the pricing carefully and make sure that you are not paying a premium for it.

You also want to make sure that a bank will fund it as a home loan. They may say that i is a commercial loan. However you would be best to check that out with a good mortgage broker.

The important think is that if they recommend a property to you do your own research. At least do a search on similar properties in the area to make sure that you are not paying well over retail price for the property. If you are still unsure you can pay to get a bank valuation which is not expensive. If is important to remember that you are dealing with businesses that are often making large commissions. You at least want to know that they are not paying more than the retail price.

If you are really uncomfortable with who you are dealing with you may be better to loose $1000 that $100,000.

The problem is that people do less due diligence on an investment property than hey would a blue ray player. If you buy something and regret it because you have not done your own due diligence then you only have yourself to blame.

We look for larger projects but the real problem is making them stack up

I find that if they have permits then they are overpriced, or they are badly designed, or small. I tend to look at property that will appeal to owner occupiers, because these will not only make great investments but will also have stronger capital growth.

If you look at sites that are not permitted then you need to look at where they are, because some councils means that you will have to appeal a negative ruling which in itself could take 18 months. Then is the site close to shops and public transport. All of these things will make a huge difference to how easy the project will be to do.

You will find that these companies sell house and lad packages because they are making at least $30,000 per deal if they are in poor areas then it can be more. it is important to buy property with strong capital growth. Generally you will not get that through house and land packags

Hi yes I agree

The US market will continue to offer opportunities as the economy continues to recovers.

Especially as finance is now also coming back

However I still believe there are good opportunities in Australia especially in Brisbane, that has been undervalued for a number of years