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 the 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.

First Property seminar....hmmmm not that impressed.

booge — Sat, 11 Feb 2012 13:28:20 +1100

Attended my first property investment seminar this morning. It was the Reno Kings 7 Killer deals presentation. I was aware that it wasn't going to be a one stop shop to learn all you need to know, but honestly i can say i came away with pretty much nothing except being $97 poorer.

Property Investment help, PERTH, WA

some1unoe — Sat, 11 Feb 2012 12:00:06 +1100

Hi to all. I am a 24 old guy and my cousin is 26. We both have a good job and earn very good money however we're tired of the 9-5 lifestyle and by our early/mid 30's really just want to get out of the grind because there are just too many things to try in life and too many places to visit in life so looking into property investment. Me and my cousin are thinking of saving 50k each to put down a total 100k deposit and find a loan for 400-500k in which we can buy land and build a house in an upcoming area in Perth. my parents for example bought land in Southern River and built our house for really cheap in about 2003-04 (250k got them a 4x2 house built on land around 600sqm) and our property was worth around 600k at one point because of the sheer development that went on in and around southern river/canningvale. I was wondering if there are any other suburbs in Perth that are developing similarly? I was driving up Nicholson Road and I saw lots of houses being built in Henron Park(i think that was the name), shopping centre and library etc being built there and the house and land packages were 350k. so what other suburbs are good to buy land and build a property on it (4x2) that would see a boom within the next 5-10 years. What I intend to do is get the loan for a period of 5-10 years pay the house off own it fully and then make it an IP and either build a new house again or buy an existing property. Or would it be better to buy established properties in not so great conditions in areas close to the city and then renovate? Or is it the wrong idea to pay off one property fully and buy another? I've been reading a lot about IO loans with 100% offsets and their tax benefits etc. I am not too familiar with them so if someone could explain in detail what those actually are (i.e. what interest only loans are and what offset accounts are what they do etc) it would be great

Caveats + Mortgagee Sale, How solid is the contract of sale.

jazz77 — Fri, 10 Feb 2012 23:17:36 +1100

A property is coming up for mortgagee auction, it also has three caveats on the title and the mortgage. Although I think one caveat may have expired as the date on it is more than 6 months old.

I know most would steer clear of purchasing with a caveat on title, but the property is a good one.

Tips for evaluating foreclosures

Pat007 — Thu, 09 Feb 2012 23:42:01 +1100

Hi everyone,I found a good video series containing some tips on what to look out for when buying a foreclosed home.
http://www.youtube.com/watch?v=g0Dsi6ti8ww&feature=related

Bowen Basin

JDJL — Thu, 09 Feb 2012 21:05:08 +1100

I know its discussed often, but what are peoples current views on the bowen basin? Which suburbs/towns? Longevity of the market etc. Obviously the rental returns are great, but does it compensate for the risk?

Splitting exsisting Duplex?

g0biin — Thu, 09 Feb 2012 18:20:55 +1100

Hi Guys,
I did a search but could not see an answer to my question.

I own both sides of a duplex and I wanted to sell one side and pay down the loan.

Does anyone know what i need to do to achieve this?

Steve McKnight's Market Update

cabramatt — Thu, 09 Feb 2012 13:27:45 +1100

Hi there!

Can someone please advise when Steve's market update will be held in Sydney again? I went last year in November (I think) and he mentioned another one being held in March this year - 2012. However, i cant seem to find information anywhere on this event...

Is this a safe and smart first buy?

DMB — Thu, 09 Feb 2012 03:14:42 +1100

I'm looking at getting my first investment property and found furnished apartment in Adelaide CBD. It's exactly the same to this other one http://www.realestate.com.au/property-apartment-sa-adelaide-109020316 (same size, building) but I can purchase it at $95k and it also has a weekly rent of $190. Fees - Strata fees (Whittles Strata Mgmt) $444 pa. Council Rates $703 pa. SA Water $191.50 pq. Revenue SA and ESL $120 pa. So all up, after all fees and everything, it should be about $130 gain. After interest repayments it will also be slightly positively geared.