I’m a newbie to this field having just read Steve’s books plus a few others I would like to get off to a good start. I aspire to be self employed and successful and I find prop investing as an interesting challenge that can help me reach my goal.
Initially I thought I’d concentrate in CF+ properties. Upon researching I see that this is still possible, yet in today’s market I feel you need to have prior experience and a trained eye to find these deals. I’m thinking baby steps, get the first few deals under my belt, learn as I go, before I start twisting taxes & crunching numbers to turn CF- into CF+.
A little background before I go on: My girlfriend and I plan to get married soonish but would like to try prop investing before we blow all our money on a wedding. We hope to have kids in 5 years, so that doesn’t leave us too long before we have to settle down a little. Banks say we can borrow between $440,000 & $500,000. We rent in Brisbane and hope to buy here.
So the plan: Buy, move in (claim 1st home grant), renovate & sell for profit. Do this 3 or 4 times to build equity, buy a nice place to start a family, put the investing on hold till the kids are older then get back into it later on.
This plan was shot down a bit when I listened to Steve’s webinar with Martin Ayles. Martin claimed for the time & effort this form of investing wasn’t worth it. He went on to talk about property development. This is one avenue I haven’t researched yet though I find it very interesting, but, do I have money to do this? Can anyone recommend someone who’s successful in this field (especially in Bris) that I can learn from? Property developing doesn’t sound like “baby-steps†– can someone with no prior knowledge in real estate dive in?
Any thoughts, arguments, advice into my position would be greatly appreciated!
Luke.
Hi Luke’
Similar to you I’ve decided to learn the development strategy. Learning is the key term here, I also read widely yet still needed to develop my own formula, with a reno on the front the formula in the Reno toolbox was a good start, it seems to me and others might want to educate me, it basically comes down to land value and finding the right location, which is perhaps the same thing.
How much does it cost to build a unit? Many phone calls will yeild answers, depending on your targets and locations. You need examples etc.
I know from direct experience how much it costs in Perth to build one unit, but in the Melb market prices and build times are very different.
My rough formula works on the basis that after reno-resale land is either at best free or costing 20% of land value and that is still calculating 10% profit on the front reno.
Probably not much help but at least another forum to my tally.
good luck. [hair2]
Luke
Based in Chapel Hill we have done more than our fair share of development in Brissie including the Nundah Bowls Club / Tenerife Fire Station etc etc.
Be happy to offer any tips i can.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New 100% Shared Equity scheme coming soon – Email us for details.Richard Taylor | Australia's leading private lender
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