Advice sought on first property purchase

I purchased Steve’s first book a couple of months ago and I was suprised at the common sense approach and the 11 second second solution. I felt this was the strength of the book and its property investing philosophy. However, in practice, locating properties using the 11 second formula has ended up in remote mining towns such as Mount Isa and Kalgoolie. Being from Melbourne, this is far away and somewhat risky according to my accountant and lender in what has revealed overheated mining towns driven by the resources boom.

Common opinion in recent months is that buying an off the shelf, ready to settle property that meets the 11 sec rule is now less achievable in Australia. Obviously as you indicate they can be found in more distant locations.

Whether these make good investments or not is up to the individual – I for one would question the long term viability and sustainability of such investments. Try selling a $50K house in a town that is dying without doing your money.

One question I would ask of you – are your advisers (accountants/brokers) property investors. Without them being property investors too you may find they will hold you back through their possible ignorance. As a broadbrushed statement you will be better off, long term, with advisers who also invest.

I also have noted in the forum that references are now being made to Steve’s latest book and probably looking beyond our shores to New Zealand. Steve’s latest newsletter also discusses the possibility of selling property due to rising interest rates and cashing in rather than buying property altogether. Also, the latest book seems have lost the simplicity of the first book and is now proposing more complicated theories probably suited to a select few that have the time, prior knowledge and experience and cash flow to explore this.

Has the 11 second solution run out of puff and had its course?

The second book seeks to highlight that ‘good’ investments can be created out of something that no-one else wants, Or out of something if you approach it a little more creatively.

In essence this gets back to the initial point I was making – off the shelf cashflow investments in quality locations are hard to come by. So approach your finding from a different angle.

I am now a confused prospective investor and alittle sceptical.

Welcome to the world of property investment. A lot of people find that the initial stages are somewhat confusing and go through precisely the same stage you are.

I suggest a step back – think about what it is you are trying to achieve and then work from there.

You may also find that reading other material by the likes of Peter Spann and Jan Somers to be of benefit. These two author provide a different perspective on property investment.