I agree with Catalyst about meetup.com and finding a property investing networking group. These things are fantastic! That is how we found our broker. He is local and has been the difference between a deal getting over the line, or not. Interesting to note that the last purchase was completed completely over the phone/email so maybe I’m a hypocrite in some way.. But then again my point was about the importance of building a professional relationship to begin with, and that is assisted through a physical face-to-face meeting. Would you trust a buyers agent to purchase a property for you without a physical meeting? Same goes with finance as they are equally important and can cost you thousands in the long run.

A question for the professionals and experienced investors on this forum. Would you part with your money on a deal without meeting someone face-to-face?

And for the record @qlds007, my advice or website has never come with a pricetag. Building a community of like minded individuals and sharing information is what it’s all about.

Good luck

Ahh ok, I’m with you. Firstly I would suggest not borrowing for a renovation if at all possible. You don’t want to have to be paying loans back for value-add on top of the regular mortgage. The less risk the better and this will put you a step backwards in your property journey. Saying that, it depends on the situation. People have been very successful flipping properties quickly after borrowing the renovation costs.

The usual process we take is as follows.

We have a solid picture of our target property type before we start looking. This information is relayed to all real-estate agents servicing our target area. This game is all about relationships. Network and treat people well and most of the time the good buys will come to you.

Usually we are looking for people who fail to look after their property cosmetically, but the bones are still ok.

First inspection. I-pad in hand I take a hundred or so photos. Go nuts! The 20 minutes you may have in a property is never enough and it’s great to have your own reference photos to work off. The real-estate photos are deceiving and use-less. Anything that catches your eye as a possible flaw or renovation target, capture it.

We then review photos and plan out the needs in terms of priority. Ask yourself questions like…What will provide more comfortable living for the tenants? What will increase the rental demand in your target area? What is not a necessity and can be avoided? What needs to be fixed to ensure a well maintained property? Are there hidden costs like water damage, termite evidence, asbestos etc.

We then will seek quotes, but this all depends on time. For our last purchase we had to move very quickly so there was no time to act and have tradies attend the property. All quotes were completed during the BPI and finance clauses. This time is invaluable as if the quotes start to sky-rocket you will have an exit available from the contract. 21 days if possible.

If you’re interested in getting professionals in to help I’ve heard of companies like ‘hotspace’ that do a complete renovation evaluation schedule to suit your target market for around $1500. Everything from paint colour to tile choice. This may save you money in the long run but it’s not something that is needed for the cheap renovations.

I’ll see what I can dig up re spreadsheets. The following is an example schedule for a previous renovation we completed.

http://sciencesurf.wordpress.com/2014/06/24/renovation-schedule-5k-special/

I’m sure there are spreadsheets lurking in the depths of this forum. Can anyone help?

We do most of the work ourselves accept for the laying of the carpet. Get yourself 3-4 quotes and play companies against each other. I find the prices almost always have margin for a considerable decrease based on the first quote. Another handy hint is to re-use the underlay if it’s in ok condition, which I find has been the case 90% of the time. It’s amazing how much they’ll try sting you for the stuff. We also buy the rock bottom cheap carpet. This suits our target market nicely but obviously alter the standard depending on the quality of home and area.

We tend to go with vertical blinds. Functional and clean. You can get them made up cheap or purchase from a place like spotlight. They’re fairly easy to install.

Getting to know what your renovation needs tends to come from experience and a little vision. I’ll get quotes from builders for stuff like roofing or carpentry that don’t have time to, or can’t do, myself. Mostly these quotes can be used as a bargaining tool during the BPI clause. For one purchase we got $3000 of the purchase price for a leaky roof, that ended costing us $300 to fix!

Do up a budget plan and include a time frame for delivery. Some people use a Gant chart but I find a spreadsheet table works fine. Most of all read up on what has worked for others in the past. Look at you-tube clips, google images, read forums and create a board with all your ideas. Get stuck in and give it a go. If your adaptable and willing to change plans at a moments notice it’s amazing what you can pull off. Good luck.

• This reply was modified 10 years ago by  sciencesurf.

Ok got it working, just needed the commas in the address!

TaylorChang wrote:

Hi Engelo,

Honestly, I prefer the camera and video you are doing right now !!

Too many agents and marketers focus on pretty video and camera, they forgot about a real deal is the property&number itself !

Focus on deals, don’t worry about the expensive camera.

Rock on ! young man !

Problem is scha9799, this video is not about the numbers. There was no mention of figures (Although I think we would all like to know). This was produced to highlight the condition of the property and the renovation that will be completed to bring it up to rental quality. Video’s must be produced to target your aims.

“Rock on, young man” No offence but that’s something an embarrassing dad would say! :)

Engelo – your presenting is awesome. Well spoken, clear and confident. You’re not far off nailing it.

Why not get the Hollywood camera and shut us all up! haha

Bight the bullet and invest some money in a decent video camera.. Second hand if you need. Your excuses about saving the money make no sense?? Business brings more money in. You could be potentially turning people away by producing cheap videos..

What gets me is the lighting. Dark patches when you’re trying to see the house is extremely frustrating!

Wow, sorry to be so negative.. Maybe we could start a ‘Get Engelo a decent camera fund’

I’m willing to invest a few dollars in return for your advice and expertise in property :)

http://www.bloomberg.com/news/2014-06-25/the-riskiest-housing-markets-in-the-u-s-.html

jayhinrichs wrote:

So what this does is create demand from a true RETAIL owner occ market were in the Mid west there is a HUGE dividing line from where todays home owner is going to buy and where that inventory is… The reality is those that can afford to own and buy a home even in the Mid west will be buying at the median and above not lower end… The lower end is cash flow and will continue to be cash flow rental type markets. So to make the assumption that you can buy a lower end home in any place in the US and it will cash flow AND go up in value 10% a year is just pure speculation and wishful thinking and not truly knowing he market place. The only way a cash flow rental goes up in value is based on rental returns.. NOt on markets moving north.. If the rents go up substantially values will rise but these markets are very stable in rent rates.. and really do not move and have not moved more than 10 to 20% in the last 20 years.

Interesting perspectives Jay. Thanks for your thoughts.

The ‘hypothetical’ speculation was written purely to contrast the fact there is no point hoping to make money in some US real-estate off capital appreciation. If there was to be a 3 year boom in Mid-west real-estate you would make next to nothing compared to the average growth in Australian real-estate. I realise speculative comments are pointless.

Do you think there is a similar divide between demographics for real-estate in Australia? Are owner occupied areas more sort after and therefore have a greater chance of capital growth? Seems like there is a big line in the sand between the ‘haves’ and have nots’ in the US – worsened by the plays made after the GFC.

Awesome cash flow Engelo!

It got me thinking though.

Assuming initial purchase cost $12000 + $10000 Reno = $22000

Revalue $40000 upon completion.

Lets say the Toledo property goes up 10% per year for the next 3 years, compounded. You make around $15k in unrealised capital gain on top of the $18k after the reno.

Is this worth all the time and risk? Be interesting to know the gross yield on this one to see if you’re making up for it in positive cash flow.

Would you say compounding is more effective on Australian properties selling for much larger figures? I know if i made $15 grand for three years in the market I would be less than impressed.

Next week I begin my next reno project on the Sunshine Coast. 1 week – in and out. Total spend $5000 with projections of capital increase of 4 to the dollar. Your’s is barely gonna hit 1:2.

I havn’t got my head around US realestate yet. Please let me know if i’m completely off the mark and missing something.

Cheers

• This reply was modified 10 years, 5 months ago by  sciencesurf.