Greetings all..
After attending Steve’s last event and finally knuckling down and applying Steve’s basic strategies in conjunction with his Due dilligence templates, I’ve concluded that there are LOTS of positive cashflow properties in SA.
Many are in rural localities, which for some reason tends to turn many investors off. I ask you this however: If you can buy a positive cashflow property for 50 to 60 thousand, wouldn’t this be a great place to start?Consider:
20% deposit (on 60K) : $12 000.00
Stamp Duty : $1775.00
Legal fees (conveyancing etc) : $1000.00
Building & Pest Inspection : $500.00
Professional Valuation (if req): $1000.00Initial maitenance : $2000 to $3000
Total : $18275 or $19275
Consider that! less than 20K to get into your first positive cashflow property!
Now consider your strategy:
Either:
1) Buy & Hold
2) Buy, low deposit, long settlement, add value, re-value property and redraw against new value
e.g. buy at 60k, spend 5k, revalued at 75k, now borrow up to 80% of 75k rather than 60k.
Take this TAX FREE equity and leverage yourself into your next property!
3) Lease Option the property. This is basically like a WRAP, though the only legal way of doing it in SA (according to personal legal advice).
My preference is for the second strategy, with a Lease Option as a potential back-up.
I’ll finish by stating again: There are 60k positive cash-flow properties out there, you just need to hone your skills in identifying them.
Regards Adrian.
Want to chat more? [email protected]
Originally posted by Adofunk:I’ll finish by stating again: There are 60k positive cash-flow properties out there, you just need to hone your skills in identifying them.
Excellent! You’ve demonstrated that those sorts of deals exist, which you can count as an achievement.
But the real skill is finding decent cashflows in towns that haven’t had years or decades of falling populations.
How do your favoured areas of SA stack up as far as population trends, vacancies and a sustainable long-term future go?
If those figures aren’t good, maybe it’s wise to build in a risk margin – eg for your $120pw rental, pay only $40k max, not $60k?
Regards, Peter
I too have found cash+ properties here in SA, but are unsure if the rural towns i’ve looked at are good to invest in or not.. any advice?
I’ve looked at a couple of towns, but people seem to be moving away, or the town relies on one major company staying there..??
Do you know of a good town to invest in?
Consider the following when analysing a town:
South Australian rural locality analysis.
What information do I require to make an informed decision about a particular rural locality as a potential residential real estate investment location?
· Town Name
· Population
· Immigration/ emigration; within last five years, ten years, and also forecast for next ten years.
· City council strategic planning report.
· Economic base industries
o Is the area reliant on one base industry? E.g. farming, mining, a factory?
· Facilities
o Hospital
o High-schools
o TAFE
o Shopping centres
o Banks (how many?) have banks come to the are or left the area?
o Fast food restaurants.
· Nearest major centre.
· Is town on the way to somewhere else more desirable? E.g. highway, railway.
· Airport? Flights to where? How often?Real Estate Specific:
Real Estate agents.
· How many?
· List their contact details.
· Are they rental managers also?
o How many properties do they manage?
· Therefore, how many properties are managed in the area total?Rental Demand
· Obtain a copy of each agent’s present rental sheet.
· What are different kinds of properties renting for?Recent Sales History
Many agents seem to like to display a list of their recent sales successes. Once these have been closed, not just put under contract, the sales data goes onto public records. The agent can then release the final sale price achieved.
here’s a steve mc knight tip – if Harvey Norman are going in there, then it’s a good town to invest in. Apparently they do major research when they figure out where to put their stores.
cheers-
miniHi all,
Just a quick post to say that I wouldn’t necessarily take the Harvey Norman rule as gospel. One of their two regional SA stores is performing pretty poorly – they sunk a bucket load of money into a new building (although is was somewhat subsidised by the local council and traders, much to the disgust of the local electrical & furniture store only a few shops down the road, but that’s another story).
Great for the first few weeks, employed lots of young locals. But then reality set in and the store is pretty much deserted and many jobs went. Plenty of rumors around the town that they are planning to close down and cut losses, or move into a smaller premisis at the shopping hub at the other side of town.
So, yeah, in general, it’s probably a good rule but don’t take it as gospel, but rather a guideline to assist your decision. I’m not saying that this is a bad town to invest in general – but it’s a typically blue collar and unemployed population so investing in low cost housing is sensible – investing in a retail business selling big screen TVs and leather lounges probably isn’t too clever. [
]That’s my 2cents.
Cheers,
Mike.Dear All,
I also found a large number of +ve cash flow in SA. This is base on the introduction by friend. I believe some people would not want to touch where I will be buying but some will do. It is depend on their criteria.
Good luck with your investing…
Warm Regards
ChanDollars
[Keep going, you’re on your way to financial freedom]Hi Adofunk & Chan$,
Thank you for your tips, I may need a U turn to SA.Regards [:X]
THERE IS ALWAYS A BETTER WAY!
I’m happy to flip the details of some properties I’ve found onto other interested parties.
Now when I say “flip” I mean I’d be happy to pass on the details for FREE. This helps me in that I gain more experience analysing both individual properties and towns.
I figure that if I’m able to convice some better educated fellow investors of the worth of a deal, then I’m improving myself.
If they ARE as good as I say, I can use an “And or Nominee contract” here in SA to secure my interest then put someone elses name on the contract…
Now that would be for a fee of course.[]Regards, Adrian.
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