i was wondering what PI stratergies people on this site choose to use, ie who uses wraps, who does renos, who flips, who buys and holds etc etc
obviously most of you guys dont stick to one strategy, but which one do you look for and like to use the most.
thanks luke
hi youngie
my usual stategy is buy and hold. only buy cash positive properties that will put cash in my pocket, like to aim for $30 a week. i also like to buy run down props that can be painted and fixed up that will add a lot to the value. given that there are so many ways to make money in property i would look at all ways but relying on capital growth is too risky for me at the moment.
westanwe buy subdivision potential properties, potential for great cap gain in one or two years, but it also takes a lot of effort to source them and go through the procedures.
We have 2 cash pos. properties, approx 8%.Hey Youngie,
I do a little bitof anything though I must admit to not having done a wrap for 6 months. I currently mainly do Buy and holds and also a smattering of renovating (though the market is getting harder for these). We have also done two quick cash deals of late which we have been fortunate to find.Enjoy
AD [:0)]
(Andrew)“Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved.”
thats interesting guys,
i have just been doing the numbers on some diffierent strategies, to see what would be best for my to use in my area, lately i have been swaying towards going after some wraps, but believe it would be a bit hard to do on the gold coast, most likely have to look at outer suburbs of brisbane for this kind of thing.its just very hard to find a ‘cheap’ positive cashflow property on the gold coast (note i said hard not impossible! [
]) i guess when i find the right property my decision of strategy will be made for me.Hey Youngie.
Don’t discount the wrapping thing on the coast. I was contacted about 5 months ago to do a wrap in GC for a house around the $250K mark. Didn’t come off but there were people interested. Stick an ad in the local rag and see what turns up……cheap market survey to see if there is demand.
Enjoy
AD [:0)]
(Andrew)“Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved.”
hi andrew,
but theres a problem, when trying to find a prospective ip in the coast, you looking at houses from 250+ minimum (especially if your trying to find something suitable and decent enough for someone to fall in love with and call their home.) this is where the problem starts trying to get 250g+ hopme loan off an institute at 21yrs old , its tough to persuade them no matter how good the deal looks on paper!all i can do is keep looking and keep trying… soon my empire wil start to take shape [
]Have you talked to a good broker to see how much money you could borrow so you knwo where to look ?
It would be handy to budget and you never know how much until you ask.Enjoy
AD [:0)]
(Andrew)“Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved.”
yeah i have asked and im looking at no more that around the 190 – 200 mark
which rules most of the gold coast out (unless i want to head out with the cowboys out west)
this is why im thinking more the gold coast – brisbane corridor as its an expanding area and there are still some affordable cashflow + properties around, it just means that i dont get to look at as many compared to driving around the coast.
Youngie,
Just to let you know I am very much in the same position as you. 22, confused about which stratergy/s to go for and how to implement them. I was also looking to borrow $250k and have been told I am resticted to $190. I have one property under my belt, nothing brilliant.
I feel reading this forum is a great place to ask for and find advice, but I fall victim of information overload most of the time. Which is much better then not getting any responce.
I’m going to sit down soon and decide what I want to acheive in the next couple of years, and try to go from there. Even though I seem to figure out some new plan or aspiration every day.
We have time, and as confucing as it is, i’m sure we’ll figure this investing thing out. I’ve learn to drive, and shave without cutting myself, so I’m sure I can learn what I have to.
Good luck.
Sorry this post didn’t give any ‘buy here’ type info.
Wildhey wild,
well reading that post sounded like deja vu’ (except for the shaving part,[] i hope im not on the road when you doing that!) i too get information overload, one week i’ll think i’ll focus on this style strategy, then i change my mind to something else…. i guess time is on our side, but it does get frustrating after a while, i think sometimes you get too many point of views on a certain topics and end up shying away from certain investments, this is where i think having a mentor to give you that ‘single’ proven point of view would sometimes help.thanks luke
Hey Youngie (and wild nothing). I’m slightly older than you guys (like, nearly double) and the information overload thing still affects me too, so dont worry. Thats probably a good thing as it shows you guys are researching, researching and more researching. I only started property investing 5-6 years ago and there is so much more info “out there” now in such a short time. It is good to see younger people thinking about their future. I personally like buy and hold as it suits me, so my advice to you would be to find a strategy you like and feel comfortable with. I think you can make mistakes along the way (which will cost you) but still come out in front of those who do nothing.
All the very best
MartyHi everyone,
I guess my “strategy” is buy something just under cashflow pos. do a reno, and bring it up to return 10%.
That was my strategy, but now that I know how to do that, I am going to the wrap seminar to learn how to do that. After that who knows????
My opinion, for what it’s worth: is at first don’t think that you have to have any sort of “strategy”, just try a few different things and you will fall into something that you feel you enjoy and can do well. You have to get out there, starting small and then working up to bigger things. This will build up your confidence, experience and knowledge.
The best person to tell you what to do is YOU!![
]Have a great day,
DelYoungie/Wildthing
Don’t worry guys, you are both on the right track
just by part of this forum and willing to learn. Don’t rush anything.The next few years will see a bit of a slow down in investment activity and growth ,so any urgency to buy into a rising market will be less.
But, this only highlights how the market is constantly evolving.A good stratergy today might be a loser down the track.
Don’t try and be toooo clever and gamble too much on future trends, but stick to basic fundementals.Plenty of time for speculation when you have grown your portfolio and are more financially secure.
But now that you have asked,I will put forward some thoughts from what i have learnt.1.At this stage stay away from IPs that are marketed as great investments.Somebody else will be making money from it before you and you are paying for it.
2.Think about staying around the rental market that attracts people on the average wage.EG.In Melbourne 150 – 200 pw.This is by far the most stable segment of the market and price of these types of ip’s makes it easier to add more and easier to sell.
3.Buy with your head not your heart.Good rentals attract families who are usually much more stable than singles.The following are on my check list when looking at props.
A.House:3 bedroom /heating / rumpus room/ garage/ front fence and gate / security doors /low maintenence garden/ big the better back yard.( the actual condition of the house goes without saying)Never buy anything out of the ordinary or too different,as this will limit your potential customers.
B. Look for a prop already tenated.This has become almost a must for me these days.The main reason for this(apart from the obvious financial benifits) is that you can check it’s rental history and take some of the guess work out of the decision process.
C.Area:This is the hard one.again research will tell an it will depend on the mix of capital gain /rental return/price ratio you decide on.But look for schools/public transport/parks / shops.
4.When you are looking at a prop go to another agent in the same area and ask for their rental list of available houses in the same immediate area.This helps evaluate rental prices and potential vacancy rates.
5.The numbers in the deal MUST stack up now.Dont accept promises or predictions from interested parties.If you have to think about for too long, it is probally a bad deal.
I am not pretending to know it all and still have a lot to learn, but I hve found that there are some principles that remain constant.
I gotta go to some thing or other now and hope some of this has been of assistance.Hang in there and it will happen
Joffthanks joff,
they are some great points to keep in mind, ive decided to just get out there and start seriously looking, the longer i read and procrastinate, the more i just keep changing my mind, so ive decided just to go look hard at properties in my price range until i find something that is right for me. like you say if the numbers add up, the deal is there to be made.
sometimes i think TOO much, and therefore keep waiting and waiting. i have a friend who knew nothing about pi, shes my age and bought an 80g unit in burleigh, lived in it for 6 months, and has now gone overseas with it rented out $30 positive a week, already gone up 50g in cg. i was learning about pi back then , and still now havent done anything…..i think too much [
]thanks guys
Hi Youngie – maybe the problem is more the style of thinking, rather than the fact that you’re thinking (which IMHO is good)? Could you be ruminating on the negatives too much and letting these put you off?
Maybe spend 25% of your thinking time justifying all the positives of a particular area/property/deal. Talk to lots of people, visit the area and get as many stats as you can. Imagine if YOU were trying to sell this property/area to an investor.
Then spend another 25% thinking what could go wrong/why not buy it, etc. Use information gathered from the above.
Spend the next 25% on the consequences of it going wrong. A calculator and spreadsheet will be OK here.
Then spend the final 25% working out how you can overcome ill consequences, reduce risks, etc.
Balance the pros and cons and decide whether the area/property/deal is OK for you. If it is, do it! If not, find another area/property/deal that you can be comfortable with.
No choice will be 100% (you will always find conflicting stats, and a better offer afterwards etc), but if you’ve done sound research, and 80% is OK, you should be able to defend your educated decision within yourself and not regret anything!
Peter
your right peter, i do focus on the negatives too much, its just a habit. i guess im too cautious aswell. i tend to look at the negatives on a deal and then put it in the ‘to hard basket’ rather than looking at ways to overcame them and turn them into postives…..
i love that 25% suggestion, i will definitly try that when looking into the next few deals…
thanks lukeHey all,
Thanks for all the advice and imput. I like the 25% idea, and the idea put forward about buying near cash flow positive properties, and then reno for yeilds. I think it’s right that you don’t need to stick to one stratergy, or follow any one stratergy exactly. It’s good just to have a place to get questions answered here.Robert Kiyosaki says something like mistakes are only mistakes if we don’t take soemthing away from them. We have to make mistakes, and they proberly will cost us cash, but if we get the lesson out of it, then it can save/make us much more cash in the future. I think it was Robert Kiyosaki, or Jesus. Either way I think it makes sense.
Wild Nothing.
]) i guess when i find the right property my decision of strategy will be made for me.
]
] i hope im not on the road when you doing that!) i too get information overload, one week i’ll think i’ll focus on this style strategy, then i change my mind to something else…. i guess time is on our side, but it does get frustrating after a while, i think sometimes you get too many point of views on a certain topics and end up shying away from certain investments, this is where i think having a mentor to give you that ‘single’ proven point of view would sometimes help.
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