Answers to “Where to Find CF+ Deals”

Sorry foundation.

Thanks to you too!

Hi guys, just wanted to put my 2c worth in particulary because I was in leewizza’s situation (early 20’s little money) six months ago. By the way this is my first property (yay). I don’t earn that much so I could only borrow somewhere around $150,000 + deposit. Houses deffinately cost more than that where I live.

So I used what in my opinion is the best source of creative finance for someone my age, my parents. I did all the ground work, found the house, dealt with building inspection, talked to brokers etc etc etc. My parents bought the house and I live in it. The plan was for me to do some renovations, painting etc. Sell the house, my parents would get their deposit back and I would have the CG for a deposit on a new place. Of course it didn’t work that way, we had only had the house a few weeks when my parents decided that they liked it and wanted to keep it *sigh*, so that plan was down the tubes. However my parents are happy to refinance.

My brother moved in, which was great because we had 3 incomes covering the mortgage so we all had plenty of spare income.

Its 5 months later now and due to work and me being a bit slack, I haven’t finished the renovations. However yesterday I decided to do a little looking around, I found four different properties worth looking closer at. One a block of land in a good position, two a cashflow nuetral flat, three a house selling below market value (owner selling), and four a house that needs renovation.

Dont just go to realestate.com.au or domain.com.au also check out owner.com.au and the individual realestate agents home pages eg prdnationwide.com.au etc.

These possible deals have inspired me to get back to it. Spent 3 + hours last night after work painting (I’m stuffed!!!!). Only need to paint the bedrooms + kitchen, and get tiling done and I’m finished.

I’m not sure if people will agree with me here, but I think if you are young and don’t have a lot of money you should be looking for houses that you can renovate and make money from. If I bought a CF+ property at the moment then I would not be able to afford a second IP until I have saved up (slowly!) a new deposit. Renovating and selling (hopefully gives me enough money after a few renovations to buy multiple properties (one of them CF+).

Some numbers on my current deal. The house I purchased was about 10K below lowest price in the area. It needs/needed 5K – 10K renovations to get it up to average. Prices have increased in the area and with the renovations we should come out of the deal 40K up. Worst case we come out 20K up, best case 70K.

Oh and I chose a house where I could do around half the reno myself to save money eg, painting, minor repairs etc, etc, etc. I am going to get proffessional help with tiling for this house but I plan on learning how to tile for the next one.

Anyway Just thought I’d explain what I am up to, I know it can be hard to start for someone my age but use your family thats what they are there for!!!!!

james

I am a newbie so bear with me.
I am just starting out on the property investing journey and by looking through these forums I have picked up a lot of good stuff.
When a more experienced investor is doing their DD on a town before investing in an +CF property (I have started to pick up on the lingo too [biggrin] ) what types of info do you consider and where do you get it?
I have been looking in the forums but have not come along these questions so far, they might have been asked before but here goes.

1. Is population of the town important and whether it’s population is expanding, shrinking or static (I’m guessing shrinking is a big no-brainer to stay away)?
2. The percentage of rental properties in the community, does this signify whether people are more inclined to rent or buy?
3. The vacancy rate, is there an oversupply or undersupply of units which is driving demand?
4. Are there any capital/infrastructure works scheduled for the town or surrounding areas, this would provide employment and attract more business/people (and possibly provide capital growth)?
Is any of this information important and if so where to source it?
Opinions anyone?
Cheers

Any tips on how to get this info?
What has your experience been Jarrah?
I could get the population from the ABS I guess but how would I get info about vacancy rates or planned works?
Cheers,

Hi there GAzman1976,

Ring the council and ask them questions ie: what has building approvals been like (gives an indication of whether population is increasing). Ask them what infrastructure is planned or any zoning changes in the pipeline etc.

Also for population, remember that the ABS stats are now a few years out of date. Another option is to look at the Dept of Eduation and Training site – they have school census stat’s that are done at least yearly. If you see student numbers increasing in the area, that’s a good incation that population (or at least families with kids) have increased and if it’s a family type home you intend to buy then this is a good thing. It may not be a good thing if you want to purchase a one bedroom flat. Basically the figures might help you decide if you’re buying the right type of housing required for the area you are looking.

Also do a Google search on the area, it’s amazing what info that sometimes brings up.

Often the local newsagent has an idea of whats going on too, ie: he knows if he now orders more papers or less papers than he did 12 months ago. If he now orders less, ask him why he thinks that is, if he says everyone’s moving out of town, well, be cautious, investigate further before investing.

If you’re investing in a town rather than a suburb then arrange with the newsagent for them to post the local paper out to you each week or month or however often it comes out. You can then watch the number of houses for rent each week, the type of housing being advertised both for rent and sale and the prices that both are attracting. You can also read the editors page where locals have their grumble about things they don’t like (often they don’t like progress, so don’t be concerned about all grumbles, but follow up on things that may affect an investment, find out if it could be postiive for you ie: the new gravel mine that was approved that the locals grumble about becasue they are concerned about dust, may actually provide employment for many people which may bring people into town whether for the employment or whether they are passing through doing business with the mine, but then need to buy lunch etc, boosting the local trade which in turn boosts the towns ecomony). The local paper also tends to have info on events coming or other things occurring wihc you can assess whether you then need to obtain further info or not.

In my experience newsagents have been more than willing to post the local paper for a fee and in genenral I’ve found the fee well spent.

Hope this helps on where to look for info.

Regards
PK

A topic l really get into in browsing realestate and just looking at what can be done with a property . Unfortunately at the moment l guess l’d be considered all talk in the lP area as l decided to focus on only one right now which is combined with my own home.
But , l think lP and opportunity to increase all within the one purchase are everywhere and in any climate. l only wish l could act on everything l would like to right now and have had to pass up 1/2 a dozen this year alone without looking .
For me personally anything goes if your open and it’s amazing what you find . So many things have opportunity that so many people won’t see as someone said earlier in this thread . 100’s of people looked at that property 500 mtrs from the water , no one saw . My place now was one of those , it’s doubled in 6 mths , my last place they couldn’t give away but the good’s were staring you in the face we cleaned it up and doubled our money .
There’s one near me right now $120 on an acre and corner block zoned res . l mean than damn thing rents for 200 and would go into 4 with nothing to spend except a few driveways because it’s on a corner with power ,phone the lot . There are 100s of these places around with scanning but l guess most people are looking at a house as a home not as what can they make out of it which is great for investors .
Industrials , huge potential , often on big blocks and rent well .
Big blocks anything , again a huge avenue for maybe an extra rental on the new block and often the chance of being left with more to sell or build on and all under basically the one find .
Just my tastes and everyone has their area but !
Cheers

Dazzling and Adam

Very well said. Thanks

Hi Lee,
I think you are certainly on the wrong tram to bucket Steve and his methods. I wish I had read his book 20 years ago. In the last 2 weeks I purchased a duplex for $236k showing 9.9% return and with a $10k makeover to one of them the return will increase to 11.09% ( and I already have a tenant agreeing to pay an extra $75 per week). When the other tenant moves out I will do a makeover to that unit and increase the rent on it by $75 per week which will lift the return again to 12.18%.
I have also observed plenty of other properties at or near 10%. they are not in the metropolitan area but what do you expect?
I am now combining Steve’s methods with those of the Reno Kings and looking for properties to value add to obtain the required return.
These are not easy to find but who said it would be easy. However they are available. Just keep looking.
Barry M.