Hello All,
Have read Steve’s book, for the first time (Will read it many time yet)
Have limted funds but pleased to have found, on paper at least, a few opportunities that fit the 11 sec rule.
These properties are relatively cheap, sub 100k, and are in remote areas like country Tasmania, Country WA and Western Queensland.
Some of them look a little “rough” but with longish term tenants in place.
My focus is income generation only, capital gain is not a real big concern for me. At this stage anyway. (I am also trading in foreign currencies and for now, I hope to make this my capital creation vehicle), so Forex = capital gain, property = income supplement, then job creation.
Am I on the wrong track looking at these little, but occupied, places in remote locations? They seem like good opportunities to ultimately offer back to the tenants and let them get on their feet (Vendor finance) once my equity is in good shape.
One problem I face is “buying over the internet” but If I find enough opportunities then a trip to view might be a reasonable investment and mitigation plan.
Would love to hear (read) from anyone who has advice, warnings, and/or encouragement.
I am excited about the prospect of beginning to make some headway.
Regards to all,
Andrew
Hi Andrew,
Welcome to the forum and please take what I say with a grain of salt as I am more orientated towards growth but for me there are too many risks associated with ‘remote’ properties located in small towns or towns with an over reliance on single industries.
My take on the push for remote properties is that the growth experienced out bush oft quoted is a result of cashflow investors only considering this side of the equation without paying proper regard for the long term sustainability of the property.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Thanks for the advice Derek, I need all the help and advice I can get.
It is interesting that I was not aware of a push towards the remote market. My interest was drawn as a result of my last 18 hours or more trawling the net and only finding 11 second properties in these markets.
Thanks again Derek for responding.
Andrew
Hi Andrew,
The general consensus of the forum seems to be that the 11 sec properties are few and far between hence the reason many people are looking in NZ or buying in more remote areas.
Some more experienced people with good research networks and processes are still finding them in less remote areas.
But for certainly steer away from ‘remote’ areas – but bear in mind my definition of remote is based on a number of years working 100’s and in one case 1000’s of kms from the metro area.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Andrew,
Have to agree with Derek on this one; I would steer as far from these “remote” properties as the word suggests!!! They may well be cashflow positive and hence generate income, but for such small returns, IMO it is hardly worth the headache, especially considering that you are not concerned with growth potential!!!
I still find it difficult to come to terms with people who say they are not concerned with CG, mainly because, as far as I see it, without same, any dollar you earn today, will be worth far less tomorrow as the result of inflation and so on. A good balance of cashflow and growth not only makes for a healthy portfolio, but helps alleviate risk and minimise one’s stress level!!!
But at the end of the day; whatever works for you I guess!!!
Cheers,
Jo
Hi
It’s important to look at the whole picture, just because a property is in a country area (remote) doesn’t mean it isn’t a viable IP.
You have to review each area and what supports the area (community & industry).
Cash flow is the main incentive for these areas but remember just because one area is experiencing slow growth it doesn’t mean another area isn’t experiencing good growth. This phenomenon is common in city areas too.
Everyone has different criteria they require to meet their investment needs, the key is to do a lot of research and build contacts so you can reach an educated answer to your question.
I live in Karratha and for a fee find quality cash positive deals there, email me at [email protected] to join our database
Hi there,
I like both, whatever works. I go for mix of CG and cashflow (positive), cant ignore either. Just look at what suits your circumstances at the time of purchasing.
From experience, they both can work. Many people on forum have done well purchasing both. At the end of the day it is what you are comfortable with.
Cheers.Thanks to everyone who has responded.
I don’t mean to give the impression that I intend to “ignore” CG for ever. Taking the advice from Steve’s Book, I thought it important to concentrate on one strategy first and try to get it right before branching out. Right now I “need” income support more than CG, plus I am faced with only a modest start up capital fund.
It seems to me, at this early stage of my career, that spotting a CG opportunity takes a lot more skill than spotting an income opportunity. Is this correct?
Regards and thanks again,
Andrew
Hi Andrew,
Firstly I need to clarify that I am not against cashflow or income primarily, only that CG is important to sustain long term wealth, which inflation and other factors can chip away at.
As for your question re skill in establishing what has or hasn’t got CG potential; it is true that alot of this is reliant on the market, and what is a “hot spot” one minute, soon becomes a stagnant area the next.
The key is simple; always look for properties which are close to all (or as many) amenities as possible. These include: parks, beaches, city/town centres, transport, shops/centres and schools, or that at least have solid infrastructure plans in the pipeline. This will help immensely in determining what sort of future the location of your property will be faced with.
All the best,
Jo
Hey Phil,
I don’t know if your question is aimed at Andrew or me, but for the sake of curiousity, what is RPGC??? [blink]
Cheers,
Jo
Sorry Mono Ryde Parramatta Golf Club [happy3]
No problem [specool] thanks for that Phil, but errr [eh] still not sure if you’re asking me or Andrew, but as far as I am concerned, sadly no I’m not (my husband in the golf pro in the family) [biggrin]
Cheers, [tongue]
Jo
It seems to me you know where you are going and what you want.
Right now I would focus my efforts on one (property) or the other (stocks/options).
It seems people who specialise tend to do better than people who diversify (for example I know one person who owns two houses, sacrifices their salary into super and then goes occasionally and picks stocks. I don’t – I focus on RE, that’s why I don’t have to work and their still dabbling (and the insanity of it is that they could easily retire!).
For stocks I would recommend you pick up Safe Strategies for Financial Freedom or if you would rather trade, Trade your way to Financial Freedom. This book is all about risk control (R multipliers, etc which is more important than the trading methodology). Both are written by Dr Van Tharp.
For income producing RE, there are a few ways to go about this. One is to try and buy CF+ through Buy & Hold. This is difficult and you probably won’t make allot per week. Another way is to wrap the property. This is where you simply become a bank (and basically charge the new buyers a slightly higher interest rate than what you get charged by the bank). Wraps provide much higher cashflow than just CF+ Buy & Hold generally speaking (though we picked up a little beauty for 16% CoCR, which is set to rise to something like 96% CoCR within 16 months.
Another way is to find twists in property that you can exploit (for example renovating cheaply to get higher income, etc). This can be quite lucrative.
Hope this helps a tad.
Rgds.
Lucifer_auThanks everyone for your help and advice. Am feeling very motivated and my search is begining to look up. Attitude, persistance and elbow grease is the order of the day.
Lucifer_u, thanks for the advice re stocks et al. I have the book you mentioned.Looking forward to sharing some success stories with you soon.
PS Not a memeber of any golf club, prefer Rugby
Regards,
Andrew
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