I think there is a huge misunderstanding about what CF+ really are. I’m currently reading Margaret Lomas book about Positive Geared Props and a lot of it makes heaps sense. I suggest this as a great start. The good thing is that the book is only 6 months old as well…..
Good luck
What are we misunderstanding, can you divulg any information?
It’s really not impossible if you willing to look in areas that other people ignore.
Mining towns are great for cash +… but don’t expect there to be significant capital gains (outside of large towns).
In or around captial areas in Australia it’s possible to find places that can be turned into cash +. It’s nothing more exciting than the worst house in the best street. Tart it up a bit (solve a simple problem like no parking, one bedroom short, bad cladding material) and you can reach the cash + position.
Personally I think the second possibility is better, because if you’re lucky you can _also_ win the capital gains that the negative gearing crowd are after. Why not at least put yourself in a position to get those (your bank will like you more too).
How can you find places that will work? A good place to start is places where rent is cheap. No one in Australia earns below a certain amount thanks to welfare. However, in poor suburbs (or regional towns) house prices vary a lot. Have a look at taking something in Nowra / Bathurst / Newcastle and moving it up a couple of rungs from the standard $200 a week rental. There are certainly opportunities for that.
If you dont want to leave your city you can start to look at areas of disparity. In Sydney there are certainly a few bargains to be had at the moment thanks to over committed investors who are selling down after a couple of interest rate rises. This is particularly true in markets dominated by overseas investment. Have a look in places like Chatswood, Carlingford etc… and there are starting to be some apartments that are close to meeting the cash + criteria. [Your scope to increase value is very limited in an apartment of course].
You’re never going to find a cash+ property by going to realestate.com and just searching suburb name after suburb name, it requires a little more patience than that… which is why most people are still in the cash- game.
Quote:Originally posted by adambc:Hi mumofthree,……
A good post, and a good question. What I would suggest you do now (if you’re still keen on this deal) is to put in an offer on the property, with some good solid release clauses in there so you can pull out if you find anything you don’t like during your due diligence.
Quote:Hi adambc, what would be typical “good solid release clauses”? Thanks!Adan, This is a good thread to get going.
Many, many times my friends and I have been asked “where can we start where are the bargains what do we look for”.I am not on the forums much as i dont get the time and find i have to take time out to visit.
With the knowledge my friends and i have developed over the years (i am not complaining about my progress) we still find getting/ working out positive flow deals not easy. but agree that the lower 1/3 of the real estate is the better area, but also agree about the “exceptions to the rule”. I have found that on occasion a house in the middle to upper price bracket comes out in a good financial position. This being that it may only be negative or neutral cash wise for 1 to 2 years then starts to pay for itself, but in the mean time the value has risen reasonably (compareing apples to apples).
I find looking at areas that will come under pressure from redevelopment helpful, near but not beside rail stations and bus ways helpfulSuccessful investing all
[biggrin]I always find the mathematical equation of 10.4% amusing. 10.4% of what? Am i the only person that reads this and laughs?
e.g 10.4% x $100K = $10.4K
and…
10.4% x $400K = $41.6K
The reason it is irrelevant is the expenses and not relative to buy price. Rates of $1200p.a is over 1% for the $100K property and less than 0.25% for the $400K property , also the hot water service costs no more in the more expensive property, the plumbing maintenance etc.
My point being you can’t base your numbers on a percentage, it should always be calculated to a dollar per week. Dont assume a property is CF+ because of the percentage, also always consider the age of the property and the local demographics. A low demographic area will trnslate to higher maintenance on your property , ia m speaking from personal experience
Happy investing[exhappy]
Wholesale Property Brokers
http://www.wpb.com.au
Australia*Hong Kong*Singapore*India*MalaysiaI have seven cf+ rpoperties for sale in Q. if ur interested email me on csduty at yahoo.com
[grad]Church of The Holy Smokers
[email protected]I have seven cf+ rpoperties for sale in Q. if ur interested email me on csduty at yahoo.com
[grad]Church of The Holy Smokers
[email protected]Hi Adam
Thanks- that was very helpful
Margaret
Hi All
I believe you will find from what Steve is saying is that 10.4% is the figure that will give you the returns without taking cash out of your pocket.There is more to building wealth through property than relying on either the 11.sec solution that gives us the 10.4% return or for that matter relying on “the unknown” Capital Growth.
I also believe that to concentrate on the $ per week vs the % from a general wealth creation perspective is also flawed. Everything I have been learning about this stuff over the last few years has me believe it is much more important to concentrate on the %.
Sure there are those out there that promote, negative gearing, buy new, buy in the best areas and get the depreciation. What most of them doon;t tell you is that if you claim depreciation then sell, there is a countback effect on the capital gain. So I hear you say, don’t sell, well then by following such strategies, there is the risk of “lazy equity” “lost opportunity cost” “lack of porfolio management” etc, etc. To my mind EVERY property I buy is for sale at the right price and I won’t buy properties to buy and hold UNLESS they are positive cash flow.
The questions we all need to ask are:
. What are we trying to achieve with our property investing? Growth ( not talking capital growth here) or Income.. What strategies can I employ to achieve my goals?
. How do I put these strategies into place?
. Is my property portfolio realising my goals (ie ongoing regular review of the portfolio)?
. Of the properties I have on my books today, how many would I buy again?
. Have I got lazy equity in my property portfolio?
Just a few thoughts
SueMIT | Owen Real Estate
Email MeThese are excellent thoughts Sue
Hi Bridgebuff
Thanks for the support, I really have come to these conclusions from my past experiences with the “property floggers” ie the Qld developers that have received such bad press in the past and having had a negatively geared property that did not realise the initial potential touted. Along with the learnings I have gained whilst spending time on the Premium RESULTS program over the last 14 months or so.So much of what Steve imparts makes sense when you look at it in depth.
I also have a strong belief in his ethics and capacity to teach this stuff to others.
Warm Regards
SueMIT | Owen Real Estate
Email MeSue,
I can still see properties that can produce a profit, but I have not seen any high % yields.I have found nothing in the residental market and only a few dodgy ones in the commercial sector.
I think without a lot of experience I am hesitant to venture into the commercial market, being unsure of how to attract good lessees. I just understand that vacancies in commercial properties can be a lot harder to fill.
I seem to notice that you are also from Adelaide. Do you look locally or do you get properties from interstate/overseas?
Hi Bridgebuff
Yes I’m from Adelaide. If you are too, PM me if you like to do coffee sometime?
SueMIT | Owen Real Estate
Email MeHi Again
sorry forgot to answer your question, I am only looking in the Adelaide Market at the moment.
I have one devel on the go and am looking for renos
SueMIT | Owen Real Estate
Email MeHello
I am just new to the property investing, have read quite a few books (including Steve’s 0-130 properties and just starting his latest one).
Just working out our positive cash flow calculation – can someone please advise if costs such as property management fees and repairs and maint also should be included along with the interest, rates and insce?
Sorry if this sounds a really basic question but trying to ensure we get the financial figures stacking up from the very beginning.
A very excited new investor[blush2]
Hi Grit
I think you should take all expence into consideration as it all comes out of your pocket. I have a few negative gearded properties which i am now working on to covert to CF+, it’s all real money going out.
PS is there a new version of the 10 second rule as it seems to be way out in WA at the moment?[blink]Hi all
I agree with all the recent posts on this on how to make it all work.
One thing struck me in reading some of the posts from the people who are struggling with all this.
It is all about mindset, if you think it can be done or if you think it can’t be done you are right on both counts.
To suggest that people like Steve and others just pluck this stuff off the shelf is crazy, there is no such thing as a free lunch and these guys have all built a plan and worked the plan to succeed where others find it too hard, too time consuming, feel they need to concentrate more on their J.O.B. s etc.
As someone here said. Have a vision and a goal and a purpose, work out the strategies needed to get there and then jsut work the strategies. If you follow what Steve and others are doing and use some inititive to think outside the box then it will happen for you too.
But one thing I can promise you it that if you don’t do any of the above and start to take baby steps towards it, guess where you guys will be in 10 years time.
You need to do the legwok.
Hopefully one day we will see you all on this path we tread.
Warm Regards
SueMIT | Owen Real Estate
Email MeI found these guys recently that may be of interest for CF+ properties. They’re a buyers agent that find properties all around the country & also US & NZ. Higher than average returns, & in addition they have a mortgage product whereby you can borrow money at less than 4% if you qualify. The interest gets deferred till a later date, but still, it could be a good investment strategy for the right people.
Best do your own research & talk to them if your interested.
http://www.cashflowcapital.com.au/
KR
I found these guys recently that may be of interest for CF+ properties. They’re a buyers agent that find properties all around the country & also US & NZ. Higher than average returns, & in addition they have a mortgage product whereby you can borrow money at less than 4% if you qualify. The interest gets deferred till a later date, but still, it could be a good investment strategy for the right people.
Best do your own research & talk to them if your interested.
http://www.cashflowcapital.com.au/
KR
Originally posted by KR:I found these guys recently that may be of interest for CF+ properties. They’re a buyers agent that find properties all around the country & also US & NZ. Higher than average returns, & in addition they have a mortgage product whereby you can borrow money at less than 4% if you qualify. The interest gets deferred till a later date, but still, it could be a good investment strategy for the right people.
Best do your own research & talk to them if your interested.
http://www.cashflowcapital.com.au/
KR
have you used cashflowcapital before?
Has anyone?
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