Forum Replies Created
I am very surprised no one suggested this: How about selling one or both of your properties on either a lease option or installment contract? They will become positive cashflow properties, and you will get a higher price for them. It will cost $1K to $3K to educate yourself on it, but it would be well worth it. Try Rick Otton's courses, either brand new, or if you are lucky, on Ebay. Or there is the boot camp as well, which costs $3K, or $900 per month for four months. Or maybe someone who knows these things can do a joint venture with you, and you split the profits.
As Robert Kiyosaki says in his book "Rich Dad, Poor Dad", you should invest in your financial education first. I recommend buying Carly Crutchfield's property development home study courses if you want to do property development, or Rick Otton's Massive Passive pack if you want to do lease options, or the Ultimate Cashflow system or the Wrap Pack if you want to do installment contracts. These occasionally appear on Ebay if you want to get them cheaper – just type in the author's name to search. Or you can buy them brand new, but they cost $3000 or so.
I am in Queensland, but I still don't see a problem. The negotiations I do with a seller revolves around the option fee, length of the lease, price of the property if I decide to buy (which I won't), how much the rent will be, etc. The negotiations do not involve me buying the property, just controlling it under a lease and an option to buy. I will then offer the property to someone else under a lease and an option to buy. If that person does want to buy, and there is only a 50% chance they will, they will exercise the option to buy directly from the seller, not from me.
Well I will be doing a rent to own on any property that the bird dog brings me, and then selling on a rent to own, so I won't actually be buying the property myself at any time. Unlike installment contracts (wraps), I don't need a credit license to do rent to owns, and since I am not buying the properties, neither I, nor my bird dogs need a real estate agents license. All my bird dogs will do is let me know of someone who wants to sell their property – they don't do any research, or negotiations with the seller – I do that. I don't see what the problem is.
I think it is useful to know what a vendor paid for a house, especially if it was a recent purchase (ie in the last five years), because it is a good negotiation tool. If they paid 200K two years ago, and they want $450K now, you know the property may be overpriced. If you didnt have that information, you would have a less accurate estimate of its value. Knowledge is power in negotiation.
Captain_Picard
Hi Investment starter,
RP Data is about the best thing you can get for this purpose, but unless you have a real estate agent license, or are a salesperson, or otherwise involved in real estate, you wont be allowed access to it. The alternative if you are in QLD is QVAS (Queensland Valuations and Sales) which is the no frills version of RP Data, which is available to the public for something like $3000 per year. Expensive, but worth it if you want to invest in real estate full time. I dont know what the alternative is in other states – look around. I would try Natural Resources and Mines, or the Australian Bureau of Statistics.
Captain_Picard
Hi, thefirstbruce,
I found yields to be not that great an indicator of a house’s value; a better one in my opinion would be cash on cash return. However, this property, along with the others I found, and still find regularly, are negative cash flow, so even that does not apply. $220 per week for rent is probably more than what I would get, even after I replaced the kitchen and polished the floors, so you are correct – it looks like not that great a deal by looking at the yield alone.
I know it is a good deal, not just by the UCV (which is respected by any valuer, and the contract price of the house is very close to the UCV) but also by my own observations of similar houses in the area. They are $20K to $50K higher, and most of them need renovations as well. Keep in mind the original asking price was $239K, and I got them down to $198K.
Daniel.
Hi Redwing,
What is VGO? I use Queensland Valuations and sales to get information on a property.
Daniel.
Hi Jah,
To answer your question, I know these houses are good value, because the unimproved land value is close to the asking price of the home. The land value figures are accurate because I use the same database as Natural Resources and Mines, Australian Business Research and RP Data use. Comparable house sales in the area also gives me an indication. For example, the house I signed a contract for at Banyo is $198K, while the vast majority of houses in the area are in the high $200K’s or low $300K’s. That, combined with the high land value ($170K) tells me that I have a good deal, particularly when the difference between the contract price and the land value is only $28K. I am quite sure the house is worth more than that, having inspected it, and seen it is in fair condition.
As to bird dogging, yes you are basically correct. I understand from reading previous posts that you need a buyers agent licence to do bird dogging, which I am willing to get before I do this.
Daniel.
I bought the Hans Jakobi pack about one and half years ago, and it was reasonably good. It wasnt really for me though, so I sent it back and got a full refund. At least his money back guarantee is genuine, and he seems pretty down to earth.
Daniel
I am happy to bird dog deals to you, as I come across them quite regularly. There is no way I can take advantage of them all myself. If I knew undervalued property deals were in demand, I will go out of my way to find them. I could easily find three or four good deals like the ones I described earlier every day here in Brisbane, as I have plenty of time to pursue it. I was taught how to find good deals when I was working for a property investor, and it is only now I have the opportunity and the time to be a bird dog.
If you want to contact me, my email address is [email protected]
Regards,
Daniel.
(Captain_Picard)
In the pack, there are 6 CDs devoted to real estate that is meant to be used with the handbook, and 15 DVDs that feature Hans interviewing professionals in real estate, real estate agents, tax professionals and many others. Apart from real estate, he talks about superannuation, tax breaks and how to protect your assets from lawyers and litigators through trusts. The CDs were informative, but unfortunately on many occasions when someone asked him a question, I could hardly hear what was asked, and could only hear Hans’ response. I did learn some stuff from the pack, but about 70% I already knew.
Daniel.
Well, I actually talked to Hans Jakobi himself on the phone when I rang “Super Secrets to Real Estate Wealth” recently, which was unexpected. There was no problem with the refund; I got it fine. I had one payment of $1000, which was refunded as soon as they received the returned package, and further payments were cancelled. He is on the level; seems like a nice guy, and down to earth.
Daniel.
Hi guys,
Thanks very much for your contributions. The good thing is that I can look for properties two days per week solid, and I also have access to QVAS (Queensland Valuations and Sales) at http://www.abr.com, so I am confident I can find a good flip deal every 1-2 months. Obviously, I will get thorough advice from a solicitor – in fact I will try and find one who is familiar with what flips are, and has seen them done before. I’m not fazed by capital gains tax and double stamp duty, because it’s the process I want to learn, out there in the field. Even if only break even, or lose money, it will be an invaluable lesson for the future. I’m just tired of losing time by being scared to start.
Daniel.
Hi everyone,
I have read the long webpage at http://www.realestatesecrets.com.au no less than three times thoroughly. I was very impressed by Hans Jakobi’s promises, especially on how thorough the real estate investing course was to be. My plan is to print out the page, purchase the course, and then tick off each of the points that he promises to explain in detail, as they are covered. $3,600 is big bucks for me, as it is all I have saved at the present, but I need specific training in how to invest in real estate. No offence to anyone on the forum, but I find it interesting that no one has actually bought it so far (myself included). I eagerly read this thread, and every other one I could find on Hans Jakobi, hoping to find guidance on how effective the course was before I bought it. I was a little disappointed that only one person had actually bought the course, and that person gave little information on its quality, except to say that it had gone well. As a result, I am still more or less in the dark, and will have to take a leap of faith. It is good that there is a money back guarantee though. If he keeps his promises on the content of the course, and how in-depth it is, and all the stuff it covers, it will be well worth the money.
I will post the forums once I have the pack, to let you know what I think.
Regards,
Captain_Picard.
Thanks for your comments guys. It looks like my deposit will take a while longer to save up, as I have no equity.
Captain Picard
I didnt get the book from the library, because the lady at the desk estimated it would take several months before a copy became available, and I dont want to wait that long to start my journey towards financial freedom!
I did like the book – Steve is very open and honest in his experiences. It was beneficial to me as it kickstarted my brain to start thinking things like “How can I afford it” rather than “I can’t afford it”. I thought however that he could have put a bit more detail into the five main ways to profit from property (buy and hold, wraps, renos, lease options and flips). It was very good as an overview, but more detail was needed. The only thing that actually disappointed me was the chapter “Finding the Money to begin Investing”, as I can find good deals readily enough, but how to raise the capital is another matter. Assuming I get an 80% loan, how do I find a private lender to lend most of the money for the deposit? I have $2000 in the bank right now, and I’m saving about $500 per month, but I dont want to wait a year to save up a deposit on a property (has to be positive cashflow). I cant use the First Home Owners Grant (FHOG) as I dont want to live in the property, only rent it out.
Ive done the numbers, and a property that obeys the 11 second rule will still be positive cash flow even if I borrow 80% of the price from the bank at 6.5%and 20% of the price from a private lender at, say 8-9% per annum. I have found several of these 11 second rule properties routinely, every week. My question is, how do I find private lenders who lend $5K to $20K at these sorts of rates? Another question I would like answered is where do I find investors who pay for bird dogs to bring them deals? I heard a recommendation somewhere for http://www.richmastery.com.au, and went there, but could not find anything like bird dogging opportunities.
I suppose I shouldn’t have expected Steve’s book to have all the answers for $30, but he did give me some much needed motivation. I just need to know how to find the needed finance, and I hope the people on the forum can point me in the right direction.
Regards,
Daniel.
Quote:Hi taylah111Don’t look at the obvious either, I found a block of units for sale in Armidale far north NSW, 13 units and 5 storage sheds.
On the surface the deal looked like this
13 x (approx) 110pw = $1430/2×1000= $715k
Asking price $675k not bad so far, the 5 storgae sheds were also renting for $150pw each
So now we have 1430 + (150×5) 750=2180/2×1000 = $1,090,000. now thats a deal.Properties can have value other than rent, I am buying my 3rd property in 4 months this week, they all meet the 11 sec sol exactly. They are out there.
I pick my towns by doing a general search on Realestate.com for the cheapest houses and see where they are … then I research the town to see if it meets my criteria. It would be nice if they were all in huge towns with no risk but reality is always different.
Good luck
Leigh K[
]Hi Leigh,
I dont understand part of your calculations. Where does the 2*1000 come from? I understand everything else, I just dont understand why you would divide the total rent by (2*1000) Its probably something basic I overlooked, so apologies in advance.
Regards,
Daniel.
]
