Hi,
I am a young person (24) currently working as a programmer for the government. I made a few financial mistakes over the last couple of years while I wasn’t working and now my credit record is a bit blotched with things I’m trying to clear up now. I’m doing a good job, though, and I’ve cleared quite a few things up already. At the moment I could seem to save about $50-$150/week depending on bills, but since discovering the opportunities available in the property market, I’m so excited and keen to get off to a quick start.I would really appreciate some advice on where a good place to start would be. I have been educating myself, and will continue to do so. I bought “The Australian Lease Option Handbook” by Andrew Gray, and it has some great stuff in it, but I’m still trying to work it out. I also bought “More Wealth from Property” by Jan Somers, but the information seems quite tailored towards the slow and sluggish way of doing things when I have learned that there is no need to wait so long to make money from property.
Do you think lease options are the best way to get started in my case? Are there any other avenues you think someone in my situation could also take to get off to a quick start? Anyone want to mentor me?
I’d be happy to do some bird-dogging for some experience/training in what to do. I am so excited and motivated to get going on this, I’ll be a little disappointed if noone responds Oh yeah, and I’m based in Canberra. According to allhomes.com.au property report for the last 12 years, Canberra seems to have enjoyed consistent growth in property value, especially over the last few years, in practically all areas. Units seem more level (although they have small growth) but houses seem like a good investment. Seems like a good area to start in?
Edited by – [email protected] on 07/01/2003 08:24:26 AM
Hi Nathan,
Thanks for your post and welcome to the PropertyInvesting.com community.
In respect of tips for beginning I certainly want to encourage you to continue working on clearing up any past financial glitches.
The essence of successful property investing begins with successful personal finance management.
In this respect I’d spend some time analysing what went wrong and in doing so trying to identify the specific mistakes you made. Once you know this then you can avoid making the same error in the future.
I have not read either of the resources you mentiond, although I feel it is wise to read widely to educate yourself about the different investment possibilities.
It seems you have taken lease options as a chosen strategy. OK, that’s a good place to start. The next thing is you need to put a deal together. I’d imagine the product you purchased outlines this?
Mentoring? Sure… post your questions here and I’ll certainly lend my experience to your problems.
I’ll even give you some homework to begin with… I want you to find an area within an hour where you live that would provide a positive cashflow outcome.
Might I suggest that you look for properties priced $90,000 and less… and where you could seek a rent return of say $150 per week plus. This is outside the 11 Sec. solution, but it will be a good starting point for you.
Might I also suggest two more resources… if you haven’t already done so, invest the $25 odd dollars for Fast Track.
Also, check out the outline of the different investing strategies, beginning with Lease Options.
Thanks again for your post and for having the courage to make a start.
Regards,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
thanks for the advice / homework! I’ll get right on it
I’m actually at work right now, so it’ll probably be tonight or tomorrow… but stay tuned anyway As for the tape, I already plan on buying it as soon as I get my pay, ugh.. next Thursday, so long to wait!! If only I didn’t have such a tight budget at the moment Steve,
Quick question: obviously finding a 3 bedroom house at around $90k you would have to go ‘rural’. Once you found such a property, would you then need to then take in to consideration the demographics of the area (eg. population, industry, growth)?
Cheers,
RobOk, I did a little bit of investigating by using allhomes.com.au which is a really good resource for the ACT and surrounding areas. It has past sales information for practically every property in the ACT for the last 12 years plus growth charts, etc.
I made a spreadsheet to do some calculating (Excel 2000) and have uploaded it to http://www.hep10.com/internal/dealcalc.xls. I am sure there are lots of gaping holes or things that are wrong, but hey, that’s why I’m posting it here!
I discovered the following:
1) Pretty much EVERYTHING in Canberra/Queanbeyan at under $90,000 is a low-quality 1 bedroom unit.
2) Rent for these places seems too low to cover the mortgage in the cases I could see.
3) There were houses for sale under $90,000 in Adaminaby, which is 100km south of canberra, but there were quite a few of them, plus it seemed that quite a few businesses were for sale there too. I wasn’t sure where to ascertain the population of Adaminaby, but it seemed that it may be a sign that people are moving away from there. On the other hand, according to a real estate agency in that area, a new water system is going in there next year, due to be finished by 2004. Maybe that will make the area more attractive?
4) allhomes.com.au has its own partnered money lending business, so my mortgage calculations in my spreadsheet are based on that.
I have 3 properties punched into the spreadsheet, although I tried a few more than that, and got similar results as what you can see there now.
Your comments would be much appreciated!
Oh, also, two other questions:
1. I am interested in getting my own home but obviously I do not have a deposit. What do you think of the idea of me buying my own home via a lease option, thereby getting experience as the tenant side of the deal, plus seeing how a deal is worked out?
2. In a lease option, according to some material I’ve been reading, the option price (deposit) is put toward the final deposit on the property and so is usually part of the rent. Does the seller put this money aside in a bank account or something else? I’m a touch hazy on this…
Edited by – [email protected] on 07/01/2003 8:33:57 PM
Hi Nathan
I had a quick look at your spreedsheet and you have done a great job there are a few area’s that need attention in it though
1) the rates of $800 are recurring each year
2) You will need to factor in repairs & property management fees say approx 8% Each of total rent
3) being a unit does the complex have body corp?
4) Is your mortgage repayments based on P&I, I only, what interest rate and over what term did you use? as this figure for a 77950 loan seems low.
5) You will also need insurance yearlyI don’t want to stiffle your enthusiasm but just be aware of the little yearly costs as they usually add up to bite you in the pocket!
Regards
PaulOS
no enthusiasm stifling here, I just want to make sure I understand wht I’m doing! Thanks for taking a look at what I did, though. The loan interest rate on the allhomes site was about 6.7% I think, and me, not knowing the difference between a P&I loan and an interest only loan, chose the lower of the two. I assume the P&I loan simply means a loan with a deposit? If so, why would the site quote a minimum deposit of $x and then display the P&I mortgage monthly repayment AND the interest-only mortgage repayment? I’m very eager to work all this stuff out, as I want to know how people manage to incur all these fees and still come out with positive cashflow on properties like these.
Hi Nathan,
I am new to this as well, but I have one little tip. It is important to keep the end in mind. That is, set goals. For example do you want to own 1 million worth of property in 10 yrs time or do you want $100,00 worth of income each year? Once you set the bigger goals you can break it down into smaller goals and you will have more confidence knowing you are making the right decision when the choices come up. You need to choose a strategy. Buy & hold, wrap, lease, renovate etc. Once you work out which strategy you want to use, it then becomes easier to choose what kind of finance you want – P & I (principal and interest) – paying the loan down or IO (interest only) paying the interest only. You have lots of choices to make (for example is it important for you to own your own home before you buy your first IP). So just my little tip – keep the end in mind.Hi Tara, thanks for the tips. My main concern is that I don’t think I can get a loan right now, as I have credit card I’m paying off that got cancelled last year after I was unable to pay the repayments for a while during a period of unemployment (actually I was self employed but my workload disappeared and eventually I had to go and find a job, but not until it was too late!). I am thinking that with a black spot like that on my credit record, and no stable savings history, I’m going to find it hard to get a loan. Does anyone have any suggestions regarding this? Obviously I’m back on track now, but it’d be nice to not have wait until those spots clear up.
David O’Brien at Affordable Mortgage Finance(broker) is a good guy who can look at your situation – employment and default history – and will find a lender who can help you. Your history will determine the interest rate – may be a bit higher – but it will be a start. Try him on 02 66 243777. [
]Thanks Hilary! I’ll give him a call
Hi,
Robert K:
I would certainly look at the demographics of an area before blindly investing there. The idea is to use price to find an area and then to allocate the time to researching the area.
Nathan:
OK – so now you have begun looking for an area. Where / how did you look? How much time have you spent? Did you actually hit the streets? The key is to look to buy someone else’s problem and then solve it.
Positive cashflow property requires effort for which you are well paid for down the track.
No criticism of you, but lot’s of people mistake passive income for being paid to do nothing (to quote from the Grizzly Bear).
Bye
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Nathan, you’re incredible. I wish I was half as motivated. I’ve been “going to start” for a while now. I have a thousand excuses (anyone wanna hear them?)… [
]Keep it up.
Hello Nathan,
Give us a call on 0895505292Thanks
PaulHey Nathan…..Great to see you powering along. Find those answers and never feel bad a bout asking the question.
One thought for you is as Tara said. Decide what you want to achieve (big picture) and then decide how you are going to achieve that goal (little pictures). I will say though that insteade of choosing one particular approch only I see Property as a problem and the more tools I have available to me to approach the problem the better. I suggest familiarise yourself with one approach and try it but never limit yourself from another approach because you haven’t been there.
I will use all my tools as long as they take me closer to my goal of $150,000 passive income per year. What is your goal ???
Enjoy
AD [:0)]A great deal of talent is lost to the world for want of a little courage. Every day sends to their graves obscure men whose timidity prevented them from making a first effort.
-Sydney SmithHi Steve, yep I hear you. of course, i work long hours at my job during the week so i’m trying to squeez in whatever time I have to do this. last night’s effort was just a poke of my toe in the water! I intend to spend a decent amount of time on the weekend getting into this. Of course, I’m still spending whatever time I can spare after work researching.
Louise:
thanks actually I guess it’s just a case of how content you are. I’m just simply not happy spending 60+ hours per week at work when I could be spending all my time snowboarding the world, relaxing in my mountain-top luxury lodge and running my own computer game development company That’s my motivation/goal.AD:
Yep, gotta get those goals written down! My only hesitation is, because I know so little about what I’m doing and my finance options and stuff, I find it hard to know what my limitations are. But, with every post I read and each day that goes by, I’m getting a little more confident. I’m going to call that mortgage person mentioned in a previous reply tomorrow and get some info on what my options are, finance-wise. And I’m about to call Paul, above, although I don’t know what to expectBut you know what? I think I’m going to write myself some basic goals (in relation to property control/ownbership) right now, even if I don’t know how to achieve them! Tell me if I’m being too ambitious or if you think I can do better! I’ll figure it out.
1. 1 property by the end of february
2. 2 properties by the end of march
3. 4 properties by the end of april
4. 4 properties by the end of maythat’s like 7 weeks to secure my first property. do you think that’s not enough time, given my present situation?
Any time you want to have a chat Nathan let me know.
Enjoy
AD [:0)]A great deal of talent is lost to the world for want of a little courage. Every day sends to their graves obscure men whose timidity prevented them from making a first effort.
-Sydney SmithAD, I’d love to have a chat whenever is good for you. My number is as per my signature, or I can call you if you prefer. I only have internet at work at the moment, unfortunately, and it’s heavily firewalled, so I can’t chat online yet. Not until mid-february once I move house and can get my broadband connection on.
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098
I’d be happy to do some bird-dogging for some experience/training in what to do. I am so excited and motivated to get going on this, I’ll be a little disappointed if noone responds 
As for the tape, I already plan on buying it as soon as I get my pay, ugh.. next Thursday, so long to wait!! If only I didn’t have such a tight budget at the moment 
The topic ‘Some tips on getting started?’ is closed to new replies.
