Forum Replies Created
There is no greater lesson than exposure to the elements. If you cant purchase immediately .. try a couple of properties and do the figures and costings. It might sound rushed to start with hypotheticals .. but the other side .. you'll be dealing with real dollars.
So train yourself. You'll gradually learn whats good .. whats bad .. whats a risk .. what remains a long term hold and what will be a quick sell. How the market affects things .. and how to make money by buying right.
The important thing is to become an expert in the market you deal in. It allows you to make better judgement calls and take less vulnerable risk positions.
ummester wrote:Well, it's 2012 now. Let's see what happens. I think, of all things that could happen, growth like has been seen for the last 15 odd years (that property doubles every 7 years tripe) is the least likely. Flat is a safe bet because it also covers little bits up and down if spun correctly. Down 15% or more is a riskier bet but, I feel, more likely than up.And your basis for either suggestion is .. what?
We got two main pressures on us now. One is the big overbloated debt scene overseas. If we think it wont affect us in the hip pocket .. we are mistaken. The other is encroaching inflationary pressure .. brought on by feeding stimulus money into a depressed economy. It does nothing but revalue money. Thats going to pan out as inflationary pressure reflected in increased prices for housing materials .. tiling .. bathroom accessories .. etc etc.
Do we have the desperation of NEED TO SELL yet? Thats the type of thing where prices plummet. Outside of that .. people just hold on .. property gets harder to get hold of at any price. So the people out there looking for a property are prepared to PAY more to get it.
There is no magic bullet that will stroke this market. The market is .. a market. The same as if you went out to the local grocers market and asked for beans and peas. If there is ready supply you get a good price. If there are issues with supply you may pay a different price to what you are USED to paying. The leader will be rentals. If people decide to stop renting and move into property due to low rates .. the whole property cycle takes off again. With less demand for rentals .. and less rental pressure. But .. more demand on existing housing supply.
It really is that simple. No need for wafty analysis .. or trying to use the paths of the stars to judge where we will be in 2020. If there is demand and customers .. you can sell your peas.
Investing is a mix of an effective lifestyle choice vs time in life. In theory .. its purist capitalism at its best. If you want your money to work harder quicker .. then you have to gear your investment schemes to suit this. Small timeframes to do your deals and minimum timeframes to create maximum profit. However as always .. smaller timeframes for profit usually come with greater risk components.
You have to gear your investment strategy to what you feel you can cope with. The first thing i would suggest is deal with numbers you can approach. Most people in reality cant cope with numbers beyond a certain amount. I know personally i get a bit headstrung with figures over 20k. Its beyond my ability to visualise and cope with. Even though i juggle amounts up to twenty times that a year.
You have to work out what choices are the onces you feel ok with. Even go to the extent of mapping out LIKELY returns on your property based on existing figures. It will give you a better insight on what you are doing .. where you are going. An investment strategy SHOULD be a continuous remapping of existing assets and reassessments of their utility value in that scheme.
The best three examples of that i can give you are from my fathers investment patterns. He has had a block of units .. and every time he needed to sell it was for a decent reason.
The first time he sold the property was getting old and was developing rotting windowsils. For the suburb it was in .. it was a great deal for a developer to revamp. At the time it would have cost my father too much to renovate. So he sold it into a good market. AND REINVESTED. (Held 28yrs)
The second time the road he had the property on became a main road instead of a side street in the suburb. That meant peak hour traffic outside the door and no parking for visitors. The property had become unattractive. (Held 15 yrs)
The third property was bought cheap .. became a cash cow (returns of 14% sound good to you?). And yet there was a time when the property was no longer able to meet the needs of fussier and better paying tenancies .. it had poor parking solutions on the property. So DESPITE the fact it was a cash cow .. it was sold off as individual units. (Held 12 yrs)
The point is .. each of these properties worked over time .. and did their part to act as an investment. There was a time when the income / maintainence / useful asset equation failed in each of these cases .. and it was time to sell.
The other point i should approach is to judge your oncoming market. You arent going to be a fortune teller .. but with a reasonable ear to the agents in the area and the ability to judge for yourself the existing suburb conditions .. you should be looking for markets which are changing for the better and are on the way up. Learn what an improving suburb looks like. Thats where you'll find your best value deals.
Make an investment choice that will be easy for you to live with. Make an investment choice that challenges you .. and improves your knowledge of an investment base. The second time around .. this knowledge will make investing in that areas MUCH easier and your ability to pick winners will be much improved.
Taking a moment to read all your thoughts and your 11 posts (to date) .. i can only leave you with this line ….
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The mantra of the 1% is repeated again and again in the media as if its some sort of statistical gospel and a fact that we should be recognising as a leader fact to the statements that follow from it. So if there are 1% that hold all the wealth .. are the 99% all that miserable? Are the 1% all deserving? DOES IT MATTER IF THERE ARE POSTS FROM ASTROTURFERS ON A BLOG.
Do you really think its necessary to hold up what is a SOCIALIST MANTRA without any reality check as a reason for condemning the 1%. The 1% click in at a certain level … and both America and Australia have some very wealthy contenders in that area. But to call it a corrupt non-functional index of static accounts making up the 1% .. <moderator: delete language>.
The wealthy are like everyone else .. there is a jump to get there .. and its just as easy to fall off the rich rung too. Thats called a societal dynamic .. its a moving class structure thats continually revised. They fight hard to get there and they fight even harder to keep it. And sometimes if that means rules need to be bent to hold onto power .. so be it. Read up on the Medicis to understand how important moulding their affluence around solid claims to power was. It still applies to today. If you arent watching your money and making sure the government isnt getting more than its fair share .. the govt will take you for every penny you can possibly owe them.
And as far as Astroturfing goes .. its the old village mentality again. There has to be a consipiracy otherwise the truth is right. And the truth NOT being right gives me power. Despite the fact it can be easily proven wrong. I will continue to repeat my mantra until it bores everyone around me <moderator: delete language>. Its a yawn. Its boring .. and repeating it again and again just isolates you into that crazy pocket.
You arent alone .. all this downturn has brought out the crazies. It still doesnt mean you are right. Unproven and unprovable nonsense remains just that .. until you come up with a shred of definable proof. And I'd be glad to see more of it. It would actually give you some degree of credibility. Which at the moment you are sorely lacking.
Just a note for the spontenaety of the OCCUPY movement. If the group was so spontaneous .. why in every country concerned did it attract the SAME basic types of members? Surely if it was spontaneous it would have attracted a wider section of the general community and gradually filtered DOWN to the specific sectional branches???
On the internet .. everyone is a typing poodle. Until proven otherwise.
simple wrote:moxi10 Joined: 06/11/2010 EPI_Den Joined: 13/11/2010 xdrew Joined: 20/11/2010 Funny that, three persons all joined fairly recently, few days apart from each other and have similar view on the subject. Nick-names are not very creative to. I make no conclusion, let time and posters decide
Funny that .. i just happened to join on that date two years ago. Which was when I finished reading the book number 2 260+ properties .. that Steve wrote. My nickname remains the name that i chose on Hotmail 15 years ago. Its not very constructive … my name is Andrew .. i lopped off the An part .. stuck an X at the front .. and got an address at hotmail. No numbers .. no underscores .. and its been in use for 15 years. Check it out .. you've got my hotmail address now .. i expect some abuse and junk mail.
My Interest in Property goes back to when I was 14. I'm now 39. That leaves me with a HECK of a lot of time and experience in the property investment .. construction and renovations areas. I've been a business analyst .. computer expert and finally a real estate sales agent in the South Eastern Suburbs of Melbourne Australia. I've been a successful investor and with a regular interest in the property market .. a good guide to my family and friends as to how the market performs at any given time. I have successfully made the RIGHT recommendations for family members and friends who needed the correct information for their given circumstances and investment strategies.
You .. sir .. are a wilderbeast.
A conspiracy junkie. The type of person who trolls forums with a possibility that everything that goes on around money must be sinister and conspiratorial. The type of person who says I am going to do what I think is best for myself and bugger everyone else around me .. they are in my way. The person who snivels at investors in ANY market and then cries foul when they actually produce good results. The person who when seeing other people achieve good results .. really hopes they fail.
In all .. you are irrelevent to my future postings and I will continue to refute any backwards claims you have with these crazy things called facts. And I will continue enjoying my success .. my hotmail box .. my investment strategies while you call foul on the world and wonder why a weak willed doomsayer as yourself ever struck out on such bad luck.
Its because you never gave yourself half a chance.
And I will let time and the posters continue to decide on what reality they prefer. Its their choice.
Regardless of how good it looks … I'd say there is one aspect which it falls short on.
Your ability to keep in touch with it.
Unless you have a fabulous property manager (I have a couple) the distances involved will mean you'll have to book things in and schedule them precisely. From 300kms away. And if anything goes wrong (which they do) you'll end up chasing your tail to get things done by phone over a great distance.
Thats what a good property manager CAN do. Pity about that.
FHOG should never sway you from the option of purchasing a good deal. Whether its a good deal or not is really up to your good hard work in investigating its potential. And that wont be influenced by a FHOG decision. If you've done your homework you'll get more than a 7k deal back into your pocket.
If you are genuinely earning over 150k you should be looking at a much greater offset for your taxable income. It doesnt have to be negatively geared .. but with that sort of income .. why not? The less you pay in tax is the more you get in your pocket. How much tax will you pay? LOTS. How much could you offset? With a quick calc you could offset at least 40k in tax with a decent invest. That doesnt mean go out and MAX that to the hilt. But it does mean you could allocate 15k into improving something with a 25k IO loan expense borrowing roughly 300k (or a similar plan). Necessary improvements .. rates .. water bills .. almost anything connected with the upkeep of a property can be offset against your taxable income for the year. So why not pursue that?
First couple of years you pay that. After 3 to 5 years it should already be paying for itself .. should you have purchased well.
With the way you are working things now .. Richard Taylor's number 4 above me is what you need to pursue. A discretionary Family Trust with a Corporate Trustee will satisfy your long term requirements.
The other thing I should mention is that you are breaking my expense rule on investing. A property can be allocated 4% of its total property price per year for investing in improvements. Sure its a guideline, but thats a years realistic increase (in any market condition). Despite all the hype you hear about rapid movements .. budgetting for 4% expense per year usually is a good guide to prevent you from overdoing a renovation. So, on a 200k property valuation you could budget 8k for a single years renovation. Its really just designed to stop you pumping too much into a reno and not getting it back when you take it to sale.
Make sure you are 100% with the state rules you purchase in. The hidden difference between what you are used to and what you get exposed to in a new state can sometimes bring unwelcome surprises.
You are talking AFTER the GFC now JPcashflow,
Ready credit is still dealt out based on MUCH higher standards than was applicable before the credit squeeze.
90% is quite attainable, 95% for most people barring an extremely good and ongoing credit history is very much an uphill struggle.
Most people think its all quietened down and its back to business. Its not. Its still very much that the banks are handing out money to very good clients and very reasonable risks. And anything that smirks of greater risk is now almost frowned upon. They tend to be doling out for 'more security' if they feel you are any slightest aspect of a risk component. Especially the banks. I have been with one conservative bank (for discretionary purposes its left un-named) as a regular client for just on 28 years. And despite my large asset backing and my sizeable cashflows and giving them reasonable security … they came back to me on a recent deal and asked for significantly more security. I told them where to go.
Setting up a trust at this stage? Too early and an unnecessary expense. You forfeit the tax benefits of direct ownership which means you'll be paying a higher bracket of tax on any earning you get through the trust .. and you cant offset earned income directly against your income properly. YES a trust is a great idea .. but you are cutting off your toes and telling yourself the shoes still fit. The tax offsets available to direct ownership rather than a trust far outweigh the initial benefits of having it in a trust structure.
Investigate it further. There IS a place for a trust .. and there will be a reason for setting one up. You've got to learn WHY .. and then when. But at this stage you'll be cramping your income into a taxable box and getting it taxed at a much higher rate. Which stops you from getting to where you want to .. as fast as possible.
The markets are locking up. Thats an upward movement whether you like it or not.
What happens when a market locks up?
The 'ready sellers' in the suburb disappear totally off the market. The high end vanishes.
What you are left with usually is the ones that cant sell .. the off the plans (they just continue to sell on until sold), the hard to sells and the overpriceds.
And the only thing that recorrects that .. is people coming out and offering MORE for properties. To get the stock thats available.
Thats an upward price movement.
Take a look at any suburb in Melbourne (i've taken a ready snapshot of twenty two that i follow on a regular basis) and thats now the case.
I dont know how Sydney is doing .. but its definitely locking up now in Melbourne.
I'm sorry if i'm going to sound like a skeptic until proven otherwise.
Traditionally the Nigerian money scam (also known as the 4-1-5 advance fee money scam) is to offer a substatial large amount of money for a goods or service. The amount is tendered and all it takes is a 'gesture of goodwill', an 'amount to bribe officials', a 'deposit for the security office'.
The early schemes were to pretend to be a prince .. a king .. a dictator's son or wife in financial difficulty. Recent such schemes prey on the current situation and work climate .. offering substantial loans with 'fee payment' to service the loan, and a 'certain' job where a small fee is required to setup the papers.
Hence the name advance fee scheme. There is no money, only people who get suckered in to the tune of 2 – 3 Billion a year. Most of the offenses go unreported due to the nature of the circumstances being hard to prove.
I would love to think there is really someone out there who has 11-13 million who actually needs proper investment advice. But i'm more inclined since its happened more than once on this forum .. that you are otherwise.
You have one post. Ever. And its asking for money ideas.
If you are genuine .. you can be assured that a starting capital of 13 mllion wont even get you a financial society or unity club as far as borrowings go. Its a great start .. but a lousy beginning. Since most lenders dont even have the money they lend out anyway and act as wholesale brokers, you may want to investigate those paths. However since most now lead back to banks anyway .. there is little point in launching out on this sort of enterprise in the current financial climate. There IS a position for a non-bank lender still .. its just there is no FINANCE for a non-bank lender. Traditional non-bank lending sources have dried up .. sold out .. amalgamated or redesigned their business. There is a reason.
saqib
Dont settle for what isnt right in the first place.
Studios and 1br have a high turnover rate of tenancies (unless you get incredibly lucky with your tenants). Thats going to affect your bottom line as that means additional property fees (letting and reletting) that cost you and get deducted from your rents.
Good property investing remains the idea of purchasing something which someone else will find desirable in two or three years time. Otherwise you are just riding the property against inflation. And for that you will be waiting a while …..
You can only afford 150k-180? Good. Then the rules STILL apply .. regardless of how small the startup capital is.
I have a five year snapshot on a deal i made in 2006. I lined up a series of 6 possible purchases and made what I thought would be the right long term choice. To sum it up quickly .. it was. The other purchases would all have gone up between 60k-100k in the five year period. As to my purchase .. its gone up 280k in that same five year period. And i've borrowed against that already.
Amount borrowed for purchase???? 208k Estimated resale now @500kWas it a once off? Since i have done it MANY times since .. the answer is no. But here is the same advice I use again and again. Buy value. Buy position. Buy as much property as you possibly can for your dollar. And make sure you keep what the property will cost you on a weekly basis in perspective.
Dont let an inital low borrowing figure lead to you making a bad purchase simply because thats ALL YOU CAN AFFORD. Thats rubbish. Bad purchases happen because good people make uninformed and uneducated decisions. If you need to learn what the right decisions are .. investigate that. There are lots of good books (insert Steve's book promo here) that you can grab to find out whats right to do. Or just follow the links in the forum to get an ounce of good advice.
Also if you are feeling that your initial borrow capacity stifles your chances of buying what u want … grab a friend and go in with him. Increase your buying power by either increasing your work cashflow or finding creative ways to put a solution together. Dont let a low startup and borrowing scenario stifle your investing creative genius. Think smart.
Jpcashflow wrote:Hi Xdrew,You have some very valid points to!!
There are so many deals to be made out there but one thing i cant get my head around is the numbers they seem not to add up can i shoot you an example of what i am looking at?By all means. If there is anything I can assist with i'll help out. Use my email here its open for receiving messages.
Rory Breaker wrote:I recently sold 7.5 arcres of land on the NE coast of Tassie (poor location) after trying to find a buyer sinse 2007. The land sold under a lease option contract (vendor finance) and attracted no buyers for a straight forward sale. The lengthy timeframe did not stop me from finding a solution, and in the meantime, I experienced first hand vendor financing.
Enjoy.This is a common mistake Rory and one you have to learn from experience. If the deal is out there .. its usually where there is existing demand. In other words there's gotta be the possibility of a buyer at the other end.
Poor location DOES have a buyer. But at a poor location price. People just arent fighting over it like they might if it was CBD prime time location. And therefore it doesnt have the price.
I've got an agent in Albury who wants me to buy a 3br WB in a reasonable location under 200k and subdivide the backyard. Its a deal .. there is money to be made in it. But there is absolutely NO demand for subdivided backyards .. or new townhouses or even OTP in that area. So despite there being a definitive deal there .. i'm not purchasing. I'm a lot happier doing things in up and coming areas where if not immediate demand .. there is pressure for further demand in the near future.
For the record .. returns in Albury range from 6.5% to 7.8% gross on property. This does make them look attractive. But at the moment there are too few buyers and lots of property to choose from. In other words .. no pressure.
following on that same path of thought ….
gmh454 wrote:A client who I had advised against buying an investment property in his SMSF 18 months ago, said to me last week … ït's only giving a 2.5% return !!!!, and has gone down 7.5% . !!!!!!CONGRATULATIONS ! You have just had a client who has won the booby prize for property investing ! Invest in a solid area with a return that goes nowhere near being able to pay the interest leaving at least a 4% margin coming out of the pocket GROSS (yes guys that doesnt include the actual expenses). Pay top dollar for the property at the height of the market so you've got at least 2 to 3 years for the market to recover to a point where you'll be able to just break even on the deal .. all that lovely equity sitting there like a bank paying 0.2% interest on an account .. kinda pointless .. huh? And finally .. you are DEPENDANT on capital growth to fix any or all of these situations for you to save you from a fate worse than bad investing !
I'm being harsh .. i'm being critical .. because at the end of the day its people who walk away burned from doing stupid deals like this that give property investing a bad name. They havent done their research .. they havent minimised their initial expenses and they certainly havent watched where the market actually was before they invested. Kinda like aiming for a dartboard blindfolded .. there remains a significant chance of you missing the dartboard entirely.
I'm optimistic.
I've seen our country weather the existing financial pressures better than most western countries. To answer that one incredibly easily all you need to do is look at our exports and exposures. We are incredibly exposed to the Asian countries in our neighbourhood and with a low exposure to western exports and western debt .. the upside for the 21st century is very much in our favour.
If the banks lock up again and finance goes tight .. then the logical answer is for borrowers to RAISE their figure they are prepared to pay. In other words .. expect a rate hike to extract the existing money from the markets. And that would need to be filtered down to the consumer in one way or another.
Money remains tight because we've had an existing inflationary rate on consumer goods of about 8-9% for the last 5 yrs at least and a broadcast inflationary rate allowing for depreciating IT goods reverted to around 2%. The rates may be low, but the buying power of money has also deteriorated. And as long as governments keep fudging the figures on that … the commuity will get poorer on dollars that buy less. That remains something to be concerned about.
As far as purchasing property goes … i'm doing what anyone does in tougher times. Purchasing six month renovation jobs and tarting them up at minimal cost. Doing them together allows me to bargain for better prices on deals. Doing them together allows me to purchase tiles carpets ovens and kitchen kits in bulk .. reducing my overall expense sheet. And coming out the other side of a recession that is already starting to clear up .. they will be ready to sell in 6 months time. And if not for sale .. at reasonable rents for refurbished properties. Either way out of the deal its a win-win. Thats the only way I like to write my deals.
The market is still there .. its still quite healthy. Its just not taking offers at the high end anymore. Properties are still selling. Its when you have a weekend with 20% sales you should be panicking. 20% means 80% of vendors dont know their prices and neither do their agents. And thats something to be worried about.
To put it in the venacular you started this thread on .. the S#%t has hit the fan. The mess has been made. And they are just about finished cleaning it up. You have to get in before people realise that a nice cleaned fan is almost as good as a new one without any s#%t in the works.
I'm from Melbourne and I know that Sydney is about 15% more expensive across the board with property than Melbourne's prices.
However I can tell you two things. The days of 400k 2br units in Melbourne are just about over. Unless they are absolutely below standard .. they are now mid 400s to mid 500s depending on quality. Reno jobs tend to hover around the early 400s but they get snapped up at that level by eager beaver renovators ready to make that jump to turning them into quality.
Will the market fall back to a point once demand is saturated?
Unlikely. As I said .. there are lots of people who put their hand up for the reno jobs. That means that at the lower levels .. they are just picked up as the opportunities they are.
With a steady movement in inflationary pressures over the past year, its going to put pressure on both wages and rents. That in turn will re-establish pressure on market prices to move ever yet further upwards.
Cant contemplate a world where million dollar flats are the norm?
Then feel for my father.
His ideal for retirement when he started work was to retire on 10,000 pounds. Yes .. he wanted to retire and live it up on what is now $20,000 dollars. And then the world changed around him.
Your exchange of money will change. Your purchase price will change depending and linked to the availability of free credit for the purchase of property. And as long as the government allows you to keep a bit after capital gains .. that pricing scenario will continue to move forward.
In other words .. you can keep dreaming about 400k prices … or you can work out how to get the existing price. And from life experience the dreamers continue to dream.
Its been a slowing thats necessary.
If you have x dollars to buy a house and someone injects x+FHO Grant .. then the purchasers of property will extend themselves to whatever x plus the FHO Grant allows them to buy. However on the same note .. the new vendor of the property gets extra cash in his pocket due to the FHO buyer giving him more cash. So HE can buy more now too.
Its a domino effect that really pushes prices up.
You just dont remove something like that from the market overnight either. You have to do it with notice and gradually. Otherwise people go into panic mode and try to get in selling before it all disappears.
So removing the grant does nicely in making sure the market doesnt get collateral damage. And doesnt face a drastic drop either.
Regardless of what you see on a brochure or computer screen … grab local knowledge.
Spend some time talking to a realtor about the area you wish to invest in. Ask the questions.
There wont be anything that tells you a property budgeted at 150k isnt right next to welfare morons who will harass your tenancies .. and when your tenants dont want to live there anymore .. strip the property of any valuables. That .. you will have to find out on your own.
The good the bad and the ugly of a property can only be determined by walking the street .. and talking to the locals.
Priceless advice and yet most people dont even ask for it.
Time is on your side.
Keen entrepreneurial spirit needs to be matched by thought .. creativity and impetus. There is no point in having either thought or creativity if you are a 'gunner'.
My minimum for throwing onto a deposit would be 20k. Thats just me and my safety limit. However you can find ways to achieve your property expectations sooner by doing one of the next few things.
Vendor wrapping (sale and packaging for someone who cant deal with the banks properly).
Deal enhancement. A revamp on an old house at minimal cost that creates maximum value.
Combined ownership (know a friend?). Lots of Cambodians do that for the first couple years here. Split costs down the middle to reduce arguments.
Repackaging an existing property. Thats turning something that had one use into something that now has another. And sticking a house on top of a block of land is doing just that. Or splitting a block into 2 or more units with permits. The creativity is up to you.
Creative settlement terms. This allows you to do your enhancement and marketing while preparing for an onsell already.If few or none of these terms mean anything to you yet .. then its time for you to plug in and do your research on what you are capable to do.
And for that I wish you the best of luck.
This is the type of situation where the legal eagles step in and earn their money.
If you want the contract to be dealt and finished by a certain date .. you can include that as matching termination conditions in most contracts regardless of what is stated on the paper in printed format. Its just a nice way of saying .. do it by this date or we go elsewhere. And thats totally ok in most states.
But the overall picture is .. once you start playing with extended deadlines or delays on either side .. something is shonky in the deal thats not being properly admitted. Tread with caution. Not always is the vendor honest about the events surrounding his ownership or rights to the property.
Seek legal advice where necessary. And if you really want to follow through with the deal at any cost .. stick with it. Some deals can be made sticky by joint ownership and unconsenting partners. If its still a good deal just run with it. However if you feel you are being mucked around with no potential for a finalising deadline .. apply a termination clause for any further dates rendered. It will get the deal settled one way or the other.
Adiskay, there are always cashflow positive properties out there.
You just have to know where the deal is.
Consistantly .. there will be properties poorly managed and maintained and you can make your money on knowing what the REAL achievable rental price is (validate this with market guides) and what is possible WITHOUT MAJOR EXPENSE to get the property to achieve that standard.
Outside of that .. its just a matter of gearing a property to a positive cashflow status. I'm now at the stage where i view any fully furnished ads with great suspicion. But that just comes from knowing they've already tried to add extra value to the deal. I like there being value existant in the deal pre-purchase. Because to make my money i need to drive the property to another level.
Its all a creative mix of flipping .. financing .. revaluing .. relending.
Depending on how competant and real your values are .. there isnt any reason why you cant exchange half a dozen properties within 6 months of the initial purchase. Outside of how the banks deal with you.
The competency lies in RECOGNISING the value.
Then .. accurately CALCULATING all expenses.
Next .. a good NEGOTIATION may again save you a couple of thousand off your pricing.
You must also be able to observe the TRENDING happening in the area.
RENOVATION works if you bring the costs in-house and do as much as possible yourself. Its a great way to save money on the right stuff.
Know your costs and know whats a bargain and whats a liability. I just bought a whole garage of Fuschia tiles 10cm x 10cm at a ridiculous $5 per sqm (previous retail was $60). Why? because I know i can re-use them on various jobs. The other colors offered at the place were sub-standard. But the fuschia colored ones end up looking quite satisfactory and modern. I'll combine them with glass tiles in the middle .. and no-one will notice. They'll end up looking quite modern. Italian tiles .. from Como, Italy.
Work out where the DEAL lies. Be creative in both your financing and marketing and you'll be able to work a deal easily.
Plan out where you expect the market to be when its finished. Usually you'll be wrong. But if you've observed trends one way or the other .. plan for it. Dont be caught napping.
Finally, work out with creative measure your margins on the deal for feasibility. Too many times people look for a single figure when they might only come close to that figure. Work out best outcome .. worst outcome. And a clean exit from the deal should it be necessary. DONT GET BURNT.
Oh yes .. whatever you do .. DO YOUR BLOODY RESEARCH ON THE AREA.
API had a wonderful article about a prospective investor who invested in Moree 'because the figures were great'.
As anyone will tell you in recent days .. Moree just recently spent 3 days underwater thanks to intense flooding.
She'll be praying her insurance covers flood protection .. and she might be able to rebuild and renovate. Losses .. lack of tenancy and expense … all because it looked like a deal AND SHE DIDNT DO HER HOMEWORK.HINT : The locals will often open their mouths a lot better than the Sales Agents will.
