Hi everyone!
I’m just got back from oversea and my husband and I are starting everything from scatch. That’s mean we are living with my parent to save on rent and personal expenses. Just under a year we manage to save up 20k, and we have been looking high and low for the positive cash flow property but the only one seen to fit our budget is semi-detact housing or units(and they don’t even have PCF either). My question is “Is it better to invest in semi or units?” cause these are the only opinion I can afford right due to our circumstance.
How do I go about building my portfolio from here. Pls help I am so inexperience….
thanks[glum]Aleta,
I have some positive cashflow property information coming out soon. There will information on both houses, units and even commercial deals. You can go to my website to register to get the information when it is released.
I suggest that you need to be VERY careful with selecting the first property because you don’t seem to be in a position of having much in the way of cash or assests to fall back on if anything goes wrong. Having said that, you have done well to save $20K.
Todd Burns
http://www.freepropertyhelp.com.au…. can I just offer a comment on this – and it can be ignored if you feel it does not add value!!
I was also feeling that there are no CF+ deals around and had been looking for a long time…..then I realised I had not been doing my research hard enough. Some properties that seem to be negative were in fact so close to CF+ that I nearly let them go.
The lesson I learnt was that it pays to talk to the real estate agent and ask the question – is this property currently receiving market rent and if not, what would it take to increase it. You often find stories like mine – the owner was a negative gearer who had no interest in putting the rent up and did not for years. One tenant has been there 21 years and he is still paying around $50 a week below market rent with the others not far behind.
The current owner put in air conditioning and a garage and put up a fence as has wanted to spend money for tax reasons – so spent it on the peoperty without raising rents!
We did the sums and what do you know – we could come close to CF+ with just increasing rents but with renovations then major rent increases – this property will be CF+. We did some DD and found the area will support the rent we want to achieve from these properties!
I only found this out after drilling the agent, but boy – was it worth it. If all goes well, we will exchange contracts after Easter then await the banks valuation and should be in there in 30 days with renos starting soon after.
My advice to anyone is that on first look it may not seem like the right property but I ask that you look further into it to see if you cant make it CF+……you dont always find these out there already CF+ – you make the deal into CF+ so you need to do your research and crunch the numbers to see if it could be CF+ at all…..dont walk away until you find out. You may be surprised how easy it is to make the mark.
I hope this helps some …… I did not find a CF+ property – I made it into one! It is not easy in the current climate but dont give up too easily – they are still out there – just harder to find….
Good luck – and dont give up! [blush2]
Lee
Good post from Lee,
Many properties are not CF+ if you accept them as they are advertised. You really need to do a lot of negotiation and put in a lot of offers to end up with the property that will be CF+ for you.
You may have to negoatiate hard on the price and be prepared to walk away if the financials do not stack up or you may have to accept that you need to do some value adding.
In this climate it is difficult (but not impossible) to find an ‘off the shelf’ CF+ property. The thing is if you find one you better be quick because there so many others out there looking and if the deal is half decent it will be snapped up by someone else before you can say “where’s my building and pest inspection” [biggrin]
Todd Burns
http://www.freepropertyhelp.com.auThanks for your reply and advice guys, currently we just had a deal…a 2br unit in a growing suburb, close to all amenities; price at $110,000 and we manage to get it at $103,000 > could rent for $150 p/wk. After doing all the sum I figure we still have to pay some from our pocket, not exactly cf+ yet. But its the closest deal we came across. I guess since its our first time it scary and with no based asset its hard to play big so we decided to play small, even if we make mistake we can still learn and grow from experience…
Cheer….[blush2]
[strum] …. hi aleta, it sounds like you did OK….. is there a chance you could do some minor cosmetic updates and increase the rent – that may push it closer to CF+? Not to worry if that is not possible – as it sounds like you may get some capital growth anyway! good luck with it all [exhappy]
Lee
Thanks for your reply leebee1,
The unit we are getting is in very good condition. Its doesn’t require any major comestic reno but I might take up your idea and see if we can improve it better. [happy3]
The unit next to us is also up for sale, not as good as our (inside) and price at 115k. I am thinking of getting the unit revalued once we got all the paper work done. If the unit is worth $115k and we already put in 20k for deposit, we may have 35k in equity…is that enough to start something else….?[cowboy2] … sounds like a plan! 35k would surely help out I am sure for your next venture – especially if you are buying around the same $ mark.
Maybe the unit you have just purchased could do with some extras that people may pay nicely for? It never hurts to look at what may add value and research if the demand would be there for it in that area!
My suggestion would be to look at all rentals in your area, go inspect them to get ideas then try to increase your property worth by adding a few of the extras – as long as it does not cost too much. Otherwise – just sit and accumulate Capital Growth……not a bad alternative!
Lee [headphone]
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