Hi Everyone,
I currently have 2 investment properties in the South East suburbs of Melbourne. I have been investing in property for a few years now and after some intial mistakes I have a strategy to renovate and sell properties which is working well.
I am out every weekend looking at properties and I have seen over 500 in my chosen area in the last 18 months. I feel I know a lot about the area and agents have started asking me what properties are worth. I get calls from agents when propeties come on the market. Some are good opportunities and some are terrible.
My issue is I have no equity left and I have no income left to buy anymore properties. I currently have used a couple of investors on 50/50 deals which are ongoing. I have a couple of opportunities that are too good to pass up and I need to work out how to purchase them. I have been unable to find anyone else like minded to invest with me.
The deals in the past have involved JV agreements. I supplied the investors with project proposals, project plans and weekly spend updates during the renovations. I also have a detailed plan of what will be spend and what the end product will be.
The two properties I have are looking at profits of around 60 – 80K. The renovations are purely cosmetic and the work will be completed in 3-6 weeks. The deal would be 50/50 of the profit with no physical or time input required from the investor. I have a project manager on site at the properties every day monitoring the tradesmen and ensuring the deadlines are met. These propeties are to be turned over as fast as possible.
I know there are a lot of finance people on this forum and a lot of people with creative ideas. What should I do to find people to invest in these properties with me, or is there a way to do it without investors?
cheers
Marty
I get the feeling you're try to rush it a bit. Building a stable of investors takes time as you build credibility. My thinking is to be a little more patient during this growth phase.
I suggest you sit down and look at this as purely a business and build a business plan around what you're doing. You don't seem to have a clear business development path mapped out yet hence your current situation.
Part of early stage business development is acquiring the components you need (investors, credibility, experience, knowledge, strategic relationships, network relationships etc) and assembling them into a cohesive entity.
You really need to sit down and figure out what you need, when you need it, how much you need at various stages etc and plan in advance how to meet these demands. You're currently operating back to front, finding the opportunities then try to marshal the resources to take advantage.
In business you position to take advantage on a prior basis. You don't reposition or restructure (after discovering) to capture an opportunity as a rule.
Hi Marty
All depends on the deal itself.
I get referred a dozen or so a week and must admit i pick and choose which ones i do.
Would need to know more before i committed to consider such a relationship.
Do you have any details of actual deals.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Investors are fine, but there is also the 'private lending' route if all others are tapped out. You will likely pay considerably higher interest, and may or may not need to put up some security still (depending on what you can negotiate with the lender), but can carry on working. If the numbers stack up, that is.
As with anything though, you should get advice and do appropriate due diligence on that option before committing to anything.
I have already been doing this. It can work however finding projects that work well can be difficult even in this market.
Location is important
How close is it to shops public transport
How large are the apartments- I will not touch one bedroom apartments under 50 square meters and two bedrooms under 70 square meters. To me whatever you build most also appeal to owner occupiers not just investors.
To many people get involved in development when they do not know what they are doing. It is extremely important that you also have a team of experienced operators on your side.
Without doing the above you will be doomed to fail.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
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Hi Marty,
Freckle is right, you appear to be rushing things a little bit.
Ensure that you/your project manager have the capacity to manage these deals in a timely manner.
If you fail to deliver on promises/proposals made to your JV partners, you'll burn the relationship for future.
I have travelled down this road, and have still yet to meet a timeline.
I work full time attached to a handful of peanuts in a bell jar.
This really restricts my capacity to site manage, inspect and meet my subbies so as to discuss/prioritise work required.
Currently I am project managing four renovations and three sub divisions.
I have four Joint venture partners.
My funding is sourced from friends who at my age >50 are at the peak of their income earning capacity.
They have come on board due to personal relationships going back 30 to 40 years and some credibility that I have earnt in property from a number of previous successful projects.
My guarantee is that my JV partners will recover all of their investment including interest on funds that were borrowed.
Profit is only a guess, as the buyer (if you get one) actually determines the market price of your product on the date of sale.
I provide them a discounted (and discounted again for the unknown) profit margin that they could expect.
They get to sit back and enjoy the stress of being a partner in a property venture that escalates their education to a new level.
I would suggest that if you are not enrolled in Steve's Certificate IV in Property Investing, do your self a favour and get to it.
This course covers all aspects of how to make a buck out of property without the risk and believe me there are a lot more ways to it, then skinning a cat.
You will also get the opportunity of meeting and greeting like minded individuals who may well come on and join your JV's.
I currently have two friends who are looking to invest again.
Please leave your contact number with Jason Heatherington, office Manager of Steve's McKnights Property Investing & I'll give you a ring to discuss further.
LUVING PROPERTY
Regards
Concur with Les,
Steve's Property Apprenticeship is something we're doing at the moment and we're learning lots! Highly recommend.
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