- Originally posted by foundation:
No but most people could have maximised their capital gains by selling mid to lat 2003. I was also inferring that somebody who had only ever ‘invested’ during Australia’s biggest ever housing bubble is not really in a position to give sound financial advice, particularly at this point in time…
It has hardly taken a genius to make a fast (paper) dollar recently. However, it would take a pretty savvy investor to make good money during the biggest downturn in Australian history.
All property in all geographic locations do not peak at the same time. There were still many bargains to be had in 2003 and still potential for further growth.
It’s also pretty naiive to assume paper profits and losses are the same as realised profits and losses.
Spoken like a UK property investor in 1988…
In both cases the evidence was freely available, yet the ‘investors’ continued to behave with the same ‘irrational exhuberance’ that enabled the bubbles to form. Remember, when the only fundamental that counts is yesterday’s capital gain, that is the very essence of a speculative bubble.This comment sounds like you’ve read some case history. There were still bargains to be had before, during and after this period.
I don’t think anybody who has a clear understanding of investment fundamentals and the current economic risks would be answering this post with comments such as:“I don’t think” This is exactly an opinion and that of a contrarian. Economic risk can be minimised. If you make a mistake in property it tends to be more forgiving than most other investments. Time and inflation resolve this but then you wouldn’t have yet had the time to know would you?
Cheers
JeffHi
Yes I am in the same sad position as your good self. Everyone telling me constantly I must be mad to go into property. I have read all I can get my hands on and have been preparing for this for some years really (when i think about the time that I have been reading investment books). But damn it, I am now impervious to any negatives that anyone heaps on me. I am extremely confident that I can find the right property to start me off. Then by gum I am going to go for it.So ignore the negative stuff. Just educate yourself as much as possible, and save, and then go out and do it, damned well do it.
Every success
cheers
Jules
[biggrin]JULES1
Email MeI purchased my first property when I was 19. Actually it was a block of land and as my brother in law was a builder I saved $30k by having him build a house for me. This was my start, it also helped that my older brothers and sisters were all into property investment. I used to always get negative comments from my friends who were always telling me that I should be enjoying myself and spending whatever I earnt to have fun.
I made plenty of sacrifices, worked 3 jobs from the age of 17 until I was 22. All my friends had the overseas trips, the new cars etc. Which didn’t really matter to me as by the time I was 23, I had 3 properties, and a great career as a Mobile Lender with one of the banks.
These days my friends tell me that I’m so lucky.My reply to them is that it wasn’t luck, I was being sensible with what I earned and not wasting it.
At this present time I have 15 properties(I lost3 in a divorce settlement) I have never sold a property.
I try to surround myself with positive people. I find that most people who are negative about investing,do not understand it or they do not want to understand it.
So for all you people who haven’t started to invest yet, this is what I suggest.
Make a plan for the next 5/10 years.
Set goals for what you want to achieve in the future.
Surround yourself with people that are positive about investing and have experience.
Try not to listen to negative people.
Learn as much as you can and keep on learning as you can never have too much knowledge.
Never rush into anything. There is always another deal round the corner.
Surround yourself with a professional team (Solicitors, Accountants, Finance Brokers)
And RESEARCH, RESEARCH AND RESEARCH.Best of luck to everyone. Happy investing.
Financial Wellbeing Coach
W: http://www.pfsfinance.com.au
E:[email protected]
E:[email protected]Development Finance Specialist
Originally posted by JULES1:So ignore the negative stuff. J
[biggrin]Well there are two types of negative.
“Negative negative” and “positive negative”.
While you can safely ignore the negative negative, I would never ignore the positive negative.
Positive nagative would say something like: If someone was about to go holus bolus into manufacturing video tapes…”Did you know they just invented DVD!”
Yin & Yang!
Cheers
Thank you one and all for your comments which I have found very interesting. I have been amazed at the replies and have enjoyed reading people’s stories in where they have come from and what they have achieved. It’s nice to know you are not alone and that there are plenty of others in exactly your position. This web site is very informative and a great idea to share tips and knowhow.
As individuals we are all entitled to our own opinions, ideas and way of doing things. What works for some may not necessarily be right for another. It depends on what we each want to achieve. As I commented from the start there are plenty of knockers out there that will tell you you can’t do it, blah blah blah and because of this I think we should focus on the positive and not pull each other down. In saying that however one shouldn’t disregard or not worry about the bad side to investing (if not looked after properly). There were many valid points mentioned and one shouldn’t rush into a deal, not do their research, check finances, look at statistics etc. Since posting my original message a couple of weeks ago I am continuing my reading, have spoke with friends who have invested to hear their stories, taken on board multiple points mentioned in this forum and have continued my committment to myself to achieve (that I still sometimes find challenging). Lets continue to be helpful to each other and provide advice and our own opinions. At the end of the day it will be up to the individual as to what they do with that information!! [biggrin]
Just wanted to share my experience.
In 2002 I made an offer for 3 bdr house on approx 700 m2 block in the location I believed would go up in value as it was close to CBD and in very convenient location close to major shopping and trasport. The house was tenanted @$160 pw. My offer of $140K was accepted. I have done a good research and was quite confident that it was a good deal. I shared my excitement with a close friend who happend to be a real estate agent.
My friend told me that I was stupid buying “at the peak of the real estate boom”: in 2001 similar houses in this area were selling around $100K (40% increase!!!).
And I was stupid enough to pull out of the contract (cooling off) believing that real estate agents know a bit more than average person about property cycles.
Guess what? Similar houses in this area are selling for $280 – 310K now and the rent has increased to $250 pw.
It is easy to work out my losses.
Do your homework and be confident in what you do.
Gamay
anyone trying rural properties. Have had great success there over the last 3 years. Banks have finally recognised that rural land has some value. Scottish bloke that worked for me said his father kept buying littlefarms outside a major town in his younger days. As the town grew he would subdivide. Has made him very wealthy man. Have to pick places where people like to live and once a town goes over a certain number it starts to generate its own industries which creates a demand for more houses. Regional Australian towns also can get a good flow from people selling out in the capitals and coast and retiring to a less stressful/safer feeling town.
Sorry did not know I was on the Nads page. Anyway Nads maybe change where you are looking. 95% of decisions are emotional so take yuor wife to the country where there is a little stream flowing and the land is above the flood marks. As Henry Ford was qouted, If you think you can or you think you can’t, you are right.Hi all, this finding confidence forum is cool, its great to see all these people succeeding, however i dont even know if my problem is a lack of confidence, but than it could be without me even knowing it.
i’m 21 and i’ve been researching property investing since i was eighteen but was never in a position to do anything, however i didnt let that deter, stumbling upon Steve’s first book really opened up my mind and supported my own ideas about retiring early and being financially free at 30 not 70. and i knew property was the only thing that made sense to me.i’m looking to start investing with my mum, we have access to over 100k in equity, i feel that i have all the knowledge i need to get started and i know i can do it but there’s something holding me back. i even have a great mortgage broker who understand my desire to retire early as well as a good accountant. i’m always looking for property on the net but than i never go inspect anything, i’ve seen some great opportunities but i always seem to let them go. i dont know how to take the first step? any ideas??? how did everyone else take that first step to their first investment property? was it difficult?
k.radzki
kasia
i understand where u r coming from. i remember after my first seminar on ip being ready to take on the world then and there!!!!! well… it took another three years b4 i finally built up the confidence to go out and do it. the fear factor always seemed to get in the way. for me everything became alot easier (after reading many books)once i had set some goals. let them be realistic, for me it was to have over a mil. dollars in assets within five years. at that stage we had a house worth about 140k and little else.on paper now we are at about 900-950k in assets.we are on our way but still alot of work to be done.
to me (,once i had set my goals) things started to happen, fears became challenges not problems because i never lost sight of my goals, and i knew it was just another stepping stone taking me to a more prosperous life.
i remember buying my first ip. my heart was racing at 100 miles an hour,my hands were shaking that much i could not sign the paperwork. u ask yourself” what if its overpriced?” “can i really afford it?”etc etc. whilst i had done my homework on this ip the thoughts still want to creap in and create doubt.
be confident, be positive set your goals read heaps ask questions and treat every obstacle as a challenge not a problem.
happy hunting[biggrin][exhappy]g. granland
Kasia,
nothing beats actually going in and doing it! If you find great deals, bring them to the forum (minus address details) and people here will help you assess the real numbers of the prospective IP!Make sure that your mothers plans are reflecting your plans (don’t want her to pull out at a crucial stage) and then have a go! My wife and I had four goes before we actually won a house we wanted. There are far more interesting emotions to come and you wont ever get anywhere without having a go first!
Mistaches happen to most of us at some time or another. What you do with those mistaches is what will make or break your investment future.
Good luck, but have a go!
Cheers
C@34
Wow!![singer] What a fantastic forum to be involved in and what great positive feed back to someone who needs their confidence restored!
Your all winners out there and I love reading all the posts. Here’s to a positive future.
[thumbsupanim]Yasna & Simon
‘Remember, if the author offers an expensive seminar, put the book back on the shelf.”
Probably the best advice so far
Hi there. Don’t really understand what they are on about. The fact is that YOU CAN do it and there are many many people doing it as we speak. I would highly recommend you go to Steve McKnight’s Masterclass. It’s just a matter of finding problems to solve.
javascript:insertsmilie(‘[angry2]’)
Angry [angry2]Don’t let the negative people deter you.Regards
TigerHi,
We are in the same situation as you basically. However, we are going into business with family and setting up a company as a trust to offset tax etc. We are into looking at renovations/ and pcf. We are very nervous but have taken a big step on going into a joint venture with a family member. We provided all the capital and they do all the property management and reaping a 50% split on the profit. Now we are ready to go alone so basically looking at properties in our area and follow the Check lists on what not to buy (a lemon). We are very nervous but have the confidence that we can achieve this. There are 4 of us in the company and we all compliment each other in terms of skills. Both the woman will work full time for a while to keep the Men and us clothed and fed. The men will work 3 days a week initially and then work towards full time investing. We are saving money by renting a granny flat from our business partners which works in well for both parties. Wish us well, and watch this space[biggrin]Dian Edmondson
I like to rememember a famous stockmarket(my other investing love) saying:
‘Never confuse brains with a bull market’
and that applies to property as well.Im sure i dont need to explain it.
As for Nads dilemna. The situation is if you buy pos cashlow property you need to buy a lot to make any decent money and with no cap growth, $50 a week extra doesnt do much for your net worth and makes it hard to borrow for further investing.Also if a property is cashflow pos at this stage of the cycle (right after the biggest boom in history it doesnt say much for the long term cap growth does it, and cap growth is where the real wealth is)
Negative gearing is really only useful in a rising market and when you are on a high wage to take advantage of the tax benefits so neg gearing is an absolute last resort at the moment.
So, the situation is pos cashflow property is out and neg gearing is out. Both are out because of the state of the property market, not because there is anything inherently wrong with either strategy.When the market bottoms and starts to turn around (this usually happens when yields are high enough to interest investors to enter the market again in large numbers), then-and only then- look to buy as much property as you can at neutral or pos. cashflow and hold on to get rich and i mean rich. This is how to make serious money in property and is how the mega wealthy do it. Time the market to your advantage.
As for your confidence, well education is the key there. If you dont feel confident enough to invest in property its only because you dont know enough. So educate yourself fully in the time while waiting for the market turnaround.
Look for things like:
Increasing volumes of sales.
Decreasing time required to sell a property from listing.
Decreasing discount from asking price to selling price of property.(in a boom the selling price can be above the asking price and by then you are probabaly too late, depending on yield)
Rental yields peaked or starting to fall.
Auction clearance rates rising.
Increasing median prices.
When you see the above indicators occuring for 3-6-9 consecutive months you’ll know a positive upswing in the market is happening and then -and only then- is the time to buy big time.But you’ll only be able to see it all if you are fully educated to the ways of property investing and the market. If you dont want to take the effort to educate your self fully (to the point where you know its the correct time and you’ll feel totally confident in buying 10 properties at once, not just one) then you will never become really wealthy.
There are more indicators you can use to detect the turning of the market, but i dont have time right now, taking my kids to the beach.
Good Luck.
Hi Nads
The first time I went to a bank to ask the loans manager for a home loan (2001), he said to me “hmmm, I really think you should go and talk to your father about this before you do anything”I left the bank feeling a bit deflated as I thought I’d picked out a great investment that was well within my means. I went to another bank and the woman I dealt with there was very professional and positive and I went ahead with the deal. I quit my job within days of settling that deal and haven’t taken another one since.
My dad is still telling me to “get a job” everytime i talk to him. My brothers seem to have some grudging admiration for me and I am now surrounded by friends who are very supportive of whatever i do.
The advice I would give, which is probably not new to you is:
1. beleive in yourself and
2. only surround yourself with others who beleive in you.That means ditching that accountant and just not telling any of your family and friends what you’re up to until after the fact.
Oshen, can you give us a run down of how you did it? Being able to ditch the job after one deal is something that most of us only dream about. Can you inspire us with your story?
Regards,
eeshole
Hi Ees
It’s not that spectacular. I’ve always lived within my means. I actually saved 90% of my income for the year before buying my first property. Buying and selling property (and shares) is my job. It’s not passive income really. My income is capital gains and I live very cheaply. I’m single and the things I like doing don’t cost much. I’m gradually increasing my net worth but I can’t buy and hold every property like you can when you have an income. I would be much more wealthy now if I kept working, but i’d also be miserable. As it is, I’ve had a few years of doing exactly what i wanted while generating a reasonable amount of money without doing too much work.Oshen well done for travelling against the flow. Just Over Broke(job) isnt the way to go so find new friends that have portfolios ans support where you are at. You do loose friends and the “you must have done something immoral or illegal” crowd can simply disappear.
Be happy for at least in here most of the people are happy to encourage others.
Happy hunting
DD
PS146 Certified Financial Planner and Buyers Agent
Don’t sweat the small stuff,and it’s all small stuff!!Hi Nads,
Time for some honesty. Its not up to your accountant to give you the confidence or advice to determine wether or not you can pos. gear. Its up to you to educate yourself enough so that you do not have to ask anyone else to confirm your beleif that you can pos. gear.
All an accountant is for is to formulate a strategy to make you more money and/or save you tax and give advice in that particular area. They are not advisors on property investing.In fact you should ask your potential accountant what their investing track record is like, particulalry property investing.
I would say just about every successful property investor has at one time got over the confidence hump and then prosepered, albeit its much harder and needs more confidence in this market than in the previous 5 years. If you are going to succeed at this game you need to eduacte and research so much that you dont have to ask anyone, you’ll know your self and probably be advising other people. If you cant get to that level, then i would suggest not to invest in this market with its low yields and poor cap. growth prospects. You would be better off putting you hard earned money elsewhere until you are eduacted fully to make decisions on your own and/or the market looks better. (including yields).
Also, if you stuff up you wont be able to go back to your accountant and blame them for giving you bad advice, (they arent qualified to give property advice. ikewise if you make a great decision you can praise yourself. That feels great
My final point on investing self education is that you will have that knowledge for the rest of your life. Thats much more valuable than any good accountant and you can use that knowledge whenever you want to make money in property at any time in your life. Just keep learning and researching and dont buy til you are confident in your own right. Good Luck.
Originally posted by Nads73:I am very new to property investing however arming myself with several good books and starting to attend investmnt seminars I can see the tremendous possibilities available for passive income. I am currently sourcing a good accountant and met with one yesterday who tells me that positive cash flow properties are not possible and that if you take out a loan for 70 – 80% of the cost you will have to negative gear it until it rises in value or you have paid for a large part of the mortgage. That, combined with my partner who is keen for me to do this but just doesn’t understand that property investing isn’t just about negative gearing, it is starting to take a toll on my confidence. Can someone please tell me, someone who has been in the position – starting out, that it can be done, I can find positive cash flow properties and that I should just keep looking for a good accountant who is willing to work with me and not tell me the oppositie to everything I have read. I really do believe I can do this and that I’m smart enough (well like to think so) to do this but I’m afraid my confidence is wavering. I would love to hear of anyone who has been in my shoes, succeeded and showed the world that they could do it!
Thanks, NLW
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