Where to buy, Buyers Agent, Structure, Research, Accountants, Conveyancing, etc

Latest Update:

1. My offer to a flat in Bulimba was accepted at $430k, 2 bed 2 bath and 1 parking flat, currently tenanted.
Strata is roughly $3300 pa, rental income is $21,840 pa.

The flat was built in 2002, sales history:
Oct 2002 sold for $265k
Oct 2004 sold for $290k
Jul 2009 sold for $400k
Sep 2015 sold for $430k

I think I get a good bargain because:
a. The current owner bought it for 6 years ago at $400k – which means only 7.5% increase in 6 years as compared to:
• the previous owner (held it for 5 years and got 37.9% increase)
• the Bulimba market annual growth is averaged 3.06% (according to RE.com.au) and 3.5% (according to Domain) for the last 6 years (the current owner gets only 1.25% each year).
b. This is the better property from the last one I offered (2 bed, 1 bath, 1 park asking price $420k, built in 1999).
c. At LVR 80%, this flat is positively geared or at least break even. But I want to make it negative gearing and hence borrowing the full purchase price at $430k

2. Buyer’s agent – still don’t think I need one. Still think it is not worth the money… well, I am not in a financial position where I can throw away 2.5% of purchase price / $10k.

3. Lawyer, found one. Youngish, his profile says good integrity. I mean, he might not have the experience but so long as he does not make grave mistakes, I am happy. That’s the nature of business partnership, isn’t it. People make mistakes, so long as they are honest mistakes… oh well, you live and learn. It seems like lawyers are control freaks. He just ‘told me off’ because he thought I ignored his advice – but he had looked in the wrong page.

4. ANZ says financing of the full $430k is ok and I am to pay for other expenses. Cool, no dramas.

5. What now: The lawyer is now doing all the due diligence searches. Depending how things work, I probably keep him for longer term and do other stuff as well.

Fingers crossed, hopefully all goes well.

Lesson learned thus far:
1. Best to take interest in my investments (everybody naturally look after number 1, and therefore naturally I am the best person to monitor my own investments)
2. Never be too busy to understand my investments. Do the legwork myself as much as possible.
3. Be brave. If the numbers stack up, go for it. But also listen to the experts such as Bank, Lawyer and building inspectors.

Cattleya
Here to learn the ropes of property investing and hopefully help others along the way. Not trying to sell anything.

Final updates re. the purchase.
Settlement was done and dusted on 9 Oct 2015. My first property ever in Brisbane.

Signed the contract on 2 Sep – so the deadlines were:
a. 5% deposit due in 5 working days – this is because ANZ imposes a limit of $10k daily transfer.

b. Building and Pest within 1 week – I missed this date because of miscommunication with my lawyer. I thought he was organising all the searches and it was actually written on the form that he suggested the buyer (me) to organise this one. So asked for an extension until 23 Sep, along with other searches.

c. All other searches and finances due on 23rd. Met this deadline no sweat. The searches were all the recommended ones plus pre-purchase valuation. I wanted to know whether an independent valuation expert would have vastly different view from the agreed price. The report came back at the agreed offer of $430k.

d. Settlement on 2 Oct. Missed this one because the loan docs did not arrive on time – I should have checked that the mail was express. Instead I was pre-occupied with tracked or signed for mail. Anyway, lucky the vendor did not mind to extend till 9 Oct and the loan docs arrived on Fri 2 Oct leaving enough time for ANZ to prepare for settlement.

Lessons learned:
1. Very very lucky to have a team of excellent professionals: lawyer, RE Agent, ANZ, valuers and building + pest inspection.

2. Buying a property is like playing jigsaw puzzle with a lot of pieces. There is assessing market, get the right price, the right property, finances, legal matters, etc. I can try to fit all the pieces together or I can get somebody to do it for me ie. using buyers agent, mortgage brokers. But some ‘helpers’ are not necessary – I just need to make time and actually do it.

3. Everybody naturally looks after No. 1. Therefore, I only trust them if their interests are the same or at least not against mine. For example, lawyers / building inspectors – the fees are fixed and they are not linked to the vendor. I can trust them. Buyers Agents however, they naturally want to get as much money as possible, as fast as possible. So anybody who agrees to tie their fees to purchase price is blatantly stupid because the higher the purchase price the more money they get especially if they are buying properties the Buyers Agents themselves are selling.

4. Have to be very critical when looking at these people – a lot of them have no qualifications what so ever. This industry is highly unregulated – even ASIC cannot do anything.
– Given that membership to this website is open to all, it is easy to create ‘bogus’ customers and colleagues who then provide recommendations.
– Question everything they say. For example somebody says: Don’t do this and that because they are dangerous. But they do not explain why those are dangerous and yet at the same time you see successful people like Steve do these things all the time. Answer is, that somebody is out of their depth, doesn’t know what they are talking about. Why hire somebody who doesn’t know what they are doing?

Anyway… good luck to all investors, hope you all get to financial independence safely.

Cattleya
On this website to learn the ropes of property investing and hopefully help other fellow investors along the way. Not trying to sell anything.