Hi everyone,
Thanks to those who responded to me regarding my first investment adventure.
Here it is two – or is it three days later? and I’ve already contacted many real estate agents in regional areas, looked at properties on the net and am heading off to a rural area tomorrow to see some propertis. What I am writing about is the amount of negative comments I receive from RE agents if I mention positive cash flow. Does anyone else have this response? They all tell me that it is impossible in todays climate. I am not deterred but find it interesting.don’t tell them, just ask how much rent you could get, and work it out yourself.
most agents are too busy, or too lazy, or too stupid too know this sort of stuff.
i have had the same experiences with salespeople.
Agree with Investron – keep you investment plan to yourself.
A few suggestions
– go to a few RE’s asking what they have to rent, then go and have a look at them. That will give you the best idea of what actual rents are in the area.
– try to look like you are a local or at best that your moving into the area soon. Most RE’s eyes light up a soon as they know your from the big smoke.
– drive your own car when looking at properties. RE’s will often take you the long way around past all the best homes, carefully avoiding the housing commission areas.
– Dress down
– Talk to the locals. Find out what they think are the good and bad areas.Most of this is in Steve’s book so use these basics and develop your own techniques.
Oh and make sure you keep a checlist of the properties you’ve seen – otherwise you’ll never remeber what you’ve seen.
Good luck!!!!
Thanks for the advice, especially the tip about checking out rental properties.I’m thrilled about ‘dressing down’ as well.
hi cheryl
just one more tip when you go on your search especially in regional or rural areas.
GO TO THE LOCAL PUB.good place to get lunch and believe me there will be someone in there that will give you all the local info.they will probably know who is and who wants to sell and why.
cheers lynnemdressing down – totally!!
i was ‘clueless happy go lucky ex-pat on holiday fallen in love with the place all over again hippie chick’ and I think it might have worked….the low-status thing – in whatever way that works for you – tends to make people open up to you rather than fold their arms and look you up and down.
for this reason i wouldn’t go mentioning the ‘i’m a sophisticated investor using analysis software to project my cash on cash return for the next 18.5 years, which is when NASA predicts interest rates will stabilise” stuff – no wonder RE agents roll their eyes when they no doubt get many calls ‘hi there, i’m wondering if you have any properties that fulfill the 11-second solution, are cashflow-positive before and after tax, and have a minimum yield of 14.5 percent?’
believe me, if they have any, they’ll be advertising them as follows: “add this to your portfolio! Currently tenanted and showing an 11 percent return, yadda yadda”…..
in the current market (aussie) it would be snapped up before they even finished typing the ad.When looking at an area to buy in there are a few good ways to get local knowledge (1) local police station and contact the neighborhood watch coordinator, (2) service station that are 24 HRs and talk to the console operators that work at night. They’re generally know all the local gangs in the area and what goes on at night time. (3) Pubs (4) Security companies.
C2
“Is it true the more you owe the more you grow until the bank steps in?”
Interesting variations between what we do.
Everyone agrees with dressing down.
Acting naive might be fun to catch out shifty agents, but isn’t it better to convey a professional approach? But professional must equate to ‘hard nosed and knows the market’ rather than ‘lots of money from the big smoke’.
So no analysis software, but a calculator and some property checklists might do the trick.
On one hand I like the idea of stating up-front that I’m buying for an investment and if it’s too expensive (read doesn’t make money for me), I won’t buy.
But that is a dead giveaway that 1. you’re out of town and 2. have limited time. If you’re not careful there’s a risk they could be used against you.
Peter
hi peter p,
“Acting naive might be fun to catch out shifty agents, but isn’t it better to convey a professional approach? “
I *was* pretty naive (give or take two seminars and a calculator!) when I was looking to buy my first IP so it wasn’t that much of an act!! And as far as a professional approach goes….after overhearing me on the phone, my Dad said I should be more ‘business-like’ , which – if he’d done it, i bet the phone calls would have been brief, and to the point. Very ‘board of directors’. MY style was different – and I was *really* learning that real estate is a people-industry – which was to chat as long as possible in order to get maximum information.
Any bonding kinda stuff you do gets you closer to getting info you otherwise wouldn’t have. Really, you want the RE agent to want that you get the property! I know investors aren’t supposed to get emotionally involved, and we don’t, no matter how ’emotionally attached’ we seem (hehe) – but neither are RE agents – but owner-occupiers selling houses are usually kinda severely emotionally attached!! I think I did say a lot of times how much I ‘loved the house’ to the owner. I guess I didn’t want to appear – to the cute little old lady going blind and into a home – a savvy investor with a calculator seeing how much yield i could squeeze out of a property which just happened to be her home for the last 40 years, where she raised her kids, lost her husband – complete with the walnut tree she grew from a seed.
I just felt – without thinking about it, just kinda doing it – that expressing admiration for the property didn’t make me a soft touch or more likely to pay too much – (which the agent was later to discover back at her office -!!) -it wasn’t for my benefit, but out of respect for the owner.“But professional must equate to ‘hard nosed and knows the market’ rather than ‘lots of money from the big smoke’. “
I certainly felt that in small-town NZ, someone coming over from Australia with Sydney dollars to buy a little house for a fraction of a year’s wage as an investment does look…can look….kinda exploitational. I *felt* that as a vibe.
The way I downplayed it is by using the dress down hippie card, the ‘i wanna be close to my parents but i can’t afford the city’, the ‘i’m a muso’ card….>So no analysis software, but a calculator and some property >checklists might do the trick.
I had the checklists, the calculator only came out back home at the end of the day, figuring out how much I was prepared to offer for the property, and what the yield would be at this price, that price. but i have to say looking back on things makes me realise that I played my cards differently to the agent, and in front of the vendor.
Times I’ve just dealt with the agent and where the vendor was an investor, i didn’t have to do any of that other stuff at all.
Again, it’s a people industry,,,it sooo is.“On one hand I like the idea of stating up-front that I’m buying for an investment and if it’s too expensive (read doesn’t make money for me), I won’t buy. “
I do that in the negotiation phase, basically, I put an offer in lower than what I’m prepared to pay, and then justify it by lots of research I’ve done and print outs of figures of other sales in the area. I walk away from a deal if the vendor doesn’t go for what I think is a fair offer. If there’s another person willing to pay more lined up, they get the deal. if not, i walk away and sure enough after a few days or even 2 weeks, the deal comes back and I get it at the price I want. if I still want it then!
>But that is a dead giveaway that 1. you’re out of town and 2. >have limited time. If you’re not careful there’s a risk they could >be used against you.
I agree that looking in person gives a sense of urgency to things and i have to say i much prefer not being on the spot.
I.e. buying remotely. getting photos and a building inspection and I can do the rest on the phone. OK then they have to know I’m an out of town investor but they don’t get to see the muso dreadlock hippie bridgette jones-style part, so again, I guess that’s a third character I can get away – ‘suave corporate financial genius’. if they can’t see me that is!! the only thing wrong is that my voice sounds really really young on the phone. *note to self: must lower pitch of voice and speak less excitedly.*cheers all –
mini
Hi Mini – heaps of ideas!
My purchases have all been when the vendor has been elsewhere, so I’ve only ever seen their agent, so it’s all been on dry stuff like yields, tenantability, location, etc.
But you’ve taught me that it’s the vendor selling, and that there’s a need to connect with them if you are going to get what you want. If the vendor (who is not necessarily a hard businenessman) doesn’t like you for some reason, maybe they’ll be less accomodating re your offer?
‘*note to self: must lower pitch of voice and speak less excitedly.* ‘
Or even go through old books, movies and use phrases that date you as coming from the 60s or earlier!
Peter
Yesterday hubby was talking with an acquaintance who has worked in the industry, R/E sales for 30 years. Hadn’t seen her for quite a while, mentioned all our properties and what we we are doing with investing, and she asked ‘why’. He couldn’t believe it. I have found the same response before so like others, I don’t say much. Where I work casual, the sales staff have no investments and again I don’t think they really understand. I have often asked agents if they have investments themselves. Most times they’re a bit hesitant to answer.
AnnaKnow what you mean Anna. None of my friends are in to investing, they’re all relying on tattslotto. My best friend got herself a credit card for emergencies only… the first emergency was that she needed a Playstation 2! Good to be on here reading about other people who are actually making realistic plans to create money.
Sophie
You must be logged in to reply to this topic. If you don't have an account, you can register here.
