PropertyInvesting.com - Help Needed!

Answers to "Where to Find CF+ Deals"

adambc — Sun, 26 Feb 2006 21:36:18 +1100

Hi everyone,

I, like most other forumites who have visited the forum once or twice, sometimes get a little bored with the good old stock standard question "where can I find CF+ deals?". So I decided to start a thread with suggestions for the people who ask this question, so in future this thread can be the "one stop shop" for this question.

My intent is certainly not to give town names, postcodes or geographical areas, but rather to assist these people to make a start so they can get out there and look for themselves.

I have a couple of pointers, and then if anyone else has anything to add please feel free. This way, the next time a new forumite asks this question, we can refer them here.

So here goes...

- Start by narrowing down your search, as follows:
- Look for properties under $200K in your region (eg. SE Qld, NE Vic, Western NSW, etc etc). CF+ deals CAN be found in any price range (apparently), but for those just starting out it's generally best to "start small" and work your way up. Also, if you are concentrating purely on residential property (as I would imagine most people do when just starting out), you are far more likely to find yields of 10% plus in the less expensive end of the market. As a general rule, the higher the price, the lower the yield (having said that - this rule is kind of like learning English spelling and grammar. There are more exceptions to the rule than there are abiding by the rule! But it's a good start...). Another reason to start here is because this is the lower end of the market. There will never be a shortage of tenants in the lower third of the price demographic. When times are tough, people tend to "downsize". And where do they go? The lower third of the market.
- Look for properties within the above price range within 10km of a regional centre. You may be able to find lots of high yielding properties in the middle of nowhere, but if the current tenants leave then you may be faced with long periods of vacancy. Also, you may find it difficult to get finance for these places. So a good rule of thumb is to look for regional centres and concentrate your search around them.

- Now that you've narrowed your search down to a particular area or areas, get to know those areas. Every chance you get, drive around them. Learn the streets in your areas. Learn where the schools are, the parks, the pigfarms (!), the good streets and the bad streets.

- Visit every Real Estate Agent in the area, and tell them what you're looking for. Get to know them. Establish a relationship. Develop it so that they start calling you first, before they go public, when they get a listing that sounds like what you're after.

- Keep a look out for "For Sale By Owner" signs. Check them out - sometimes they can be more flexible on price or terms than those dealing through a REA.

- Inspect lots of houses. Lots of them. And then even more. Each one you inspect you will learn more. And don't just wonder through them with the agent. Develop a checklist of things to look for when you are inspecting them (advertisement - Steve's "Buyer Beware" templates are great!).

- Each time you find a potential property, think to yourself "what can I do to this house to improve the cashflow or add value?" Or to borrow Steve's formula from his new book "Problem + Solution = Profit". So ask "what is the problem here, and how can I solve it?"

- To elaborate on the above point - LOOK for problems. Ask the agent "what is the property you've had on your books the longest?" "Who is your most difficult vendor?" "What listings do you have that you think will be hard to sell?" And then ask "why" when they show you the property. That will be the problem. Then ask yourself (silently, not aloud - the agent might think you're strange otherwise!) "how can I solve this problem?" If you can come up with an answer, do something about it - more research, confirmation on various points, etc etc. Then if you're still happy that you can solve it - make an offer!

Okay - that's a couple of suggestions from me. As I said before - please feel free to add to this. I certainly haven't covered everything I'm sure! If we can make this a good comprehensive resource for the new forumites who ask this question, we will definitely be doing them a service I think.

Cheers,

Adam

Oasis Finance
for your Vendor Finance solutions
Achieve the Dream!
oasisfinance@optusnet.com.au

Posts in this Help Needed forum

Administrator — Thu, 29 Apr 2004 08:36:19 +1000

Please note: Posts is this forum are made by investors of varying experience and ability.

It is strongly recommended that investors seek the services of a professional paid adviser when seeking specific advice to their circumstances.

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