Hi all
Not sure if this is right or not, but my observations here seems to suggest the title…
As some suggested here: Better to teach someone how to fish rather than simply providing them fish. While I totally 100% agree with that, but I think in many cases, the “teaching” part can be refined.
I will use a metaphor to explain my point. Imagine in a math class, the math teacher is teaching students on how to calculate area of triangle. However, if the teacher simply tells the students “here is the formula: base * height / 2”, then I am sure chances are 80% of the students will not understand. So to help students to learn, the best thing for teacher to do is use an example or case study.
The problem is, if the teacher simply say: because base is 6, height is 5, so area of triangle is 6*5/2=15. Because this is half cooked information and somewhat “generic”. In order for students to properly understand, the math teacher usually does something like this:
step 1: Draw a triangle, label its base as 6 and height as 5.
step 2: Draw a parallelogram, label its base as 6 and height as 5
step 3: link the 2 pictures together to show that the base of triangle has same length as base of parallelogram, and the height of triangle has same length as height of parallelogram. Then clearly students can see the parallelogram is made of 2 same sized triangles that is cut in half in the middle.
step 4： as such, multiply the base 6 with height 5, and we get 30, which is area of parallelogram
step 5: finally, cut the parallelogram in 2 to get 2 identical triangles, so 30/2=15.This way, pretty much 100% students will end up understanding how to do such a calculation rather than trying to “remember” base * height / 2 without real understanding, and they then have the confidence to start doing their homework because they have “seen the process with their eyes” and the information “sinks into their brain properly”
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I would say similar case here.
I see in many occasions, a few experienced investors would showcase their successful purchase of a wonderful deal by posting their results here: recently I purchased a property for X price when the median price is Y in this great area and I am getting Z weekly rental income so it is close to 10% ROI.
That’s wonderful, but I think for us young investors, what we are looking for is perhaps a “case study” on the process that is used. Not in too much details, but enough information to make the process sound “non-generic” or “non-vague”. Something that is systematically listed down like:
step 1: my budget is X amount, so I used website A (paste a link here) to locate suburbs within STATE 1 that fits my buying power
step 2: out of all those suburbs, I picked Suburb Y and Z, and the reason why I picked those 2 suburb out of all other suburb is because according to Tool ABC in Website B (post a link to that tool here, or multiple links of there are multiple tools used), I can see statistically the population is going in “blah” direction which fits my strategy and infrastructures i that suburb are “blah” which I believe are all positive for future growth
Step 3: I also checked other government statistics sites (paste link here) to used tools on that site further verify is historical trends and future projections
Step 4: (list tools and paste links to those tools where necessary)
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Step N: I contacted agents within that area, defined my criteria and strike offers with them.You know… not so much details that it becomes a 5-8 hours discussion, but enough for us to “play around” and “experiment” with… and that way, it helps us so much to understand and “see the process with our eyes” rather than trying to “decode generic advises”.
Hi Steven,
I totally agree that for those people starting out on their investment journey it can be overwhelming the amount of information/strategies available. When I started out I read forums like this one and took particular notice of topics and threads that were specific to my needs/goals and experiences. Everyone has a different story and approach to property investment whereas the end goal for most is the same………$$$.
In your proposed example above, in Step 1 you identify your budget and then try to fit that to a location. I would advocate that somewhere in Step 1 you need to identify your desired outcome. Once you know what you want to achieve you can start to identify what type of investment strategy can get you there. This process will then point you to a location/region for further analysis.
Sorry its not the checklist you are after but I have found every investor to have different needs.
Creative Investment Coach | Creative Investment Solutions
http://www.creativeinvestmentsolutions.com.au
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Hi there.
I agree that everybody’s strategy is different, so there is no “universal checklist” as such.
However, the idea I am getting at is for 1 person to use 1 “case study”. Yes, we are all aware that such a “case study” is specific to that person’s circumstances, but by listing out such a “case study” together with a check list of all the steps taken…. that way, young investors who are just starting out can see something that is “visual” and it is easier for them to have the information “sink into their brain” and then we can go from there..
If the checklist outlined fits into my strategy, then great, I can replicate such a process for my own.
Even if it is different to what I am looking for, that’s also great because it provided a “framework with some real data” rather than “generic advice”, as well as the tools used for each step (whether those tools used are free tools or paid services is a different story). So not only can I “adjust” or “twick” the framework according to my own circumstance, I also gained information on how to use some of the tools (which I may not be aware of before).
For example, the person providing the “case study” might have shown us a particular tool that he used to search for small units because that person is investing in an area where people are mostly single and not interested in getting married… but by just listing out such a tool, I can go to that tool website and apply my own filtering (such as I might be more interested in investing in properties are suits young couples rather than people who are not interested in getting married). Chances are I have never heard of such a tool before and by listing out the steps, I learn a new tool and I can play around with that tool myself.
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I make a promise here.
Next time I purchase an investment property, I will provide a concise step-by-step process on where I go from “looking for a property from all over Australia” to “finally nailed onto the particular property that I am looking for”. Unfortunately, at this stage, I don’t know when my next purchase will be, as I am still learning myself…. but I promise that once I do go out and make a purchase, I will compile such a process that I personally used.
I won’t write a huge essay that takes 2-3 hour to read, but I will list them down in bullet points and provide reasoning and rationals behind why I applied such a filter and why my process is ordered that way (ie: why a certain filter is applied at step 1 but not step 2, etc…), as well as for each step, which website did I go to in order to perform my research and any other tools I used. I expect such an “case study” to take no more than 5 minutes or so to read through, so it is not so detailed and long but enough for new investors to clap their hands and say “aha! So that’s what I am missing in my research”
I will provide such as check list whether my purchase is considered a “good purchase” or “bad purchase”. If it is a good purchase, then great, new investors can leverage my process and try out on their own… if it is a bad purchase, then that also provides an opportunities for feedback as others experienced investors can approach me and point out the flaws in my process and I can adjust it.
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To use another metaphor to explain my point. Think of in terms of IT. Companies such as Microsoft would publish some sort of “best practice guide” or something like that. But you will find lots of companies don’t always follow “best practice” because their specific situation is different and “best practice” isn’t always followed due to all sorts of reasons, ranging from political reasons to financial reasons to any reasons that you can imagine…
But companies such as Microsoft doesn’t stop publish “best practice guide” on the basis that “everybody’s IT is different and they implement their IT solutions differently to our guide”… instead, they keep publish the guide (and the guide has specific examples) year and year, release after release knowing that the guide may or may not be suitable for their customs specific circumstance…
As for other companies who need to make use of IT, they don’t have to “search blind on their own”, because they can leverage the guide published and make adjustments in accordance to their own unique IT environment, or they can even assess the difference between Best Practice guide circumstances vs their down and use the guide as a “benchmark” while developing their own IT practice.
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This reply was modified 7 years, 3 months ago by
Steven.
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