[BuyersAgentParticipant@knightmJoin Date: 2005Post Count: 338]

November 9, 2014 - 7:42 pm

PHP wrote:

But by doing this way, this has helped you get where you are now, right?. So it end up to be a very good decision at the time for you.

…

As what most investors say “Its about time in the market and not timing the market.”

Some great points in your post.

1 – Yep it got me where I am. Property was cheap but with reno it doubled in a very short space of time in the last Brisbane cycle (03-04). The equity growth put me into two more properties within a year. FAR more powerful and speedy than saving in my case, but cant say that is typical, hence my caution with any advice.

2 – I believe its about “time in” AND “timing.” Getting timing wrong can mean years of zero capital gains even if everything else is done ok. Huge opportunity cost. Getting cycle timing right speeds up a plan to access equity for multiple purchases and as such is very important.

• This reply was modified 9 years, 6 months ago by  BuyersAgent.
• This reply was modified 9 years, 6 months ago by  BuyersAgent.

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November 9, 2014 - 7:58 am

Please be very careful buying your first investment as a new apartment! You cannot control the entry price or add any instant value – which are two of the best reasons to invest in property. Also given your post it would appear you are not a local or overly familiar with the GC market. I am NOT bagging out the gold coast or south east QLD market, but its very risky buying new developments when you don’t understand what drives markets. The law of supply and demand is the key and learning how to measure and understand this is what separates successful investors from people who guess, pick something random and get their fingers burnt. I hate seeing that happen. Take your time, read as much as you can on the forums, there are plenty of good books out there. Education will improve your return.

Matusik is a fairly straight shooter as far as I can tell regarding his research, and he is far from the worst of the scammers and spruikers out there but remember I am pretty sure he is getting a commission on those recommendations so conflict of interest issues must be considered.

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November 9, 2014 - 7:48 am

I have heard of cases where business owners financed as much as 90% of the sale of their business to the purchaser via vendor finance but these didn’t involve property assets. Its quite common to use business profits over a few yrs to pay out the balance of any vendor finance on a business purchase loan. They would need to get the business valued, including real estate, stock, and other business value. Then you need to work out which parts can be financed and how.

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November 9, 2014 - 7:05 am

PHP wrote:

…How soon can you save up for another $4-5k? There are certainly some unconventional ways to do this. One is the way knightm did during his early investing days, the credit card option. Not really advisable but if this is the only way for you to get into the property market, and the returns outweights the potential loss in a short amount of time then you can consider these options. I would be very careful though with the property to buy and ensure thorough due diligence is done.

Yep as per above its not normal or advisable but just an example of how I did it when I was particularly impatient.

The other ways include overtime, family loans/gifts, other 2nd job like night fill at the local supermarket, ask the boss for an advance (if they like you) lemonade stalls (or any other small cashflow business). The list goes on – where there is a will there is a way. Or just wait a bit longer that works too (eventually)

Of course another option is to buy a cheaper property for the first one. Reducing the purchase price reduces the deposit and stamp duty required.

• This reply was modified 9 years, 6 months ago by  BuyersAgent.

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November 8, 2014 - 10:33 pm

Hi TJay,

First up congrats on getting prepared to take action! Many folk never even get to that stage.

Have you got a fixed idea of what you want to purchase? Or where? And more importantly what your long and short term goals are in property? These things will all impact upon what to buy for that first property. The best way to to start with your long term goal, work backwards from there with decisions that are likely to get you to that place.

Im not a broker but 95% loans exist but are rare these days and the extra LMI eats in so the sweet spot seems to be 88-90%.

If you are really close to the amount you need for that first and worried the market will run away from you you can get cheeky and use a personal loan or credit card to cover the last minute costs (I did for my first one many moons ago) the extra couple of $k came in handy (plus allowed me to do an immediate minor cosmetic reno which added value and increased my rent) these were paid off in the 3 months after settlement. Make sure your IP loan approvals are formally in place before your take on any high interest debt as these would impact serviceability, and make sure you aren’t over extending yourself. If you have a good salary and live in the lap of luxury for next to nix and mum and dads then you can probably tighten your belt and make some extra repayments for a little while to get it done.

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November 8, 2014 - 10:05 pm

itsandrew can you pm me how to paste the image into the post? As you can see from my first post I mangled it! Thanks mate.

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November 8, 2014 - 10:04 pm

Thanks Chris for the encouraging words!

“Illawarra” is listed as a separate area to “Southern Highlands and Shoalhaven” it is sitting at number 12 just above half way up.
Illawarra employment appears to have firmed up in recent years if my memory of older data serves me correctly. Good sign for the local economy down my way…its been due for an improve

All the best using it anyway.

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October 23, 2014 - 3:35 pm

Dean wrote:

the apartment is ending up costing them $17k a year because the developer they brought it off overvalued by a couple of hundred $k.I dare say I will have more questions but will wait until I have read your recommendations.

This is the fundamental problem with marketing firms that flog new stock for developers, they are not working for you but the seller. Either learn how to recognise a good deal yourself or engage someone to help with that (who you are paying solely) and then you will avoid those gross overvaluations.

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October 23, 2014 - 8:34 am

… and I would also agree with Corey that being helpful and getting to know brokers and accountants will be a great lead source. Combined with the above, you can grow.

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October 23, 2014 - 8:13 am

Sherlock – sounds good and its an honest question and valid problem. In my business I see the good the bad and the ugly of how selling agents work, sounds like you want to be in the good category.

So….if I was in your shoes lookign to build a name and find investors. I would start with an online presence, a website building my brand as helpful, knowledgable, offering free tips that help without expecting a sale upfront. Put those tips in a blog format, build a fb page following by offering free articles, or checklists or ebooks. Link it all up to linkedin profile and get your posts shared via buffer or hootsuite will make it easier. Once I had a bit of traction growing online through my existing networks I would invest some $ into paid advertising in a range of targeted local offline media (local paper, local letterbox drops, etc) and also some paid online marketing (boosting fb posts, ppc on google etc).

Along the way you need to be helpful to each client and go over and above to serve them well. Towards the end of each transaction ask each client (sellers and buyers) for a short testimonial. Start to put those testimonials in blog posts, in your ads etc. Social proof is a big deal, the more you offer a culture of excellence, backed but a normal friendly request for people to share your story, you will get the vibe growing. Referral business is the cheapest most effective form of advertising. Its how my business built before I had spend a $ on ads.

For an example of a selling agent who does all this quite well check out http://www.penskiproperty.com/#!blog/c16dx Penelope Nicholls she has a blog, posts to linkedin etc. She is helpful during the transaction but has a sense of the bigger picture and is always growing her “fan” base.

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October 22, 2014 - 8:16 pm

http://www.abkj.com.au/contact-us.html on gold coast are excellent but not cheap. Ask for Vivien Foote (conveyancing manager) tell her Matt sent you (I get no commissions just like to create a happy lawyer, never know when I might need one!)

cheaper options that are fairly reliable in Beenleigh include http://www.yellowpages.com.au/qld/beenleigh/csm-conveyancing-12157528-listing.html

• This reply was modified 9 years, 6 months ago by  BuyersAgent.

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October 22, 2014 - 8:13 pm

Great response from JacM. My hurdles with these usually arise with insurance. Can you insure as 2 dwellngs (let to 2 parties) without fire rating etc. You don’t want to be sued and found uninsured and negligent in case of say a fatal fire. Jacqui have you had any insurers consistently willing to cover these properties? I have found them patchy so dont really pursue them but if I had a reliable source would def do more of these types of deals.

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October 20, 2014 - 6:31 am

In that situation my pick would be for a renovator in a growing area on a block that has dev potential. You can buy, reno, rent, then spend the next 12 months attempting the development. While you are doing that its growing with the market. CG is easier money than straight reno flipping in my view. You can certainly try fipping as a volume business but its pretty time consuming. With a reno/dev project you get to add value both ways and your deal volume is smaller so your time invested is less overall. I would allow around 18 months to get it all done. If you want to keep or sell at the end its up to you, also whether to sell raw land or go all the way and build the new dwelling. More profit if you do built (in most cases) but this is also where a lot of the effort is. With the Sydney ripple moving outwards there are some great markets you could get into that are affordable and have plenty of potential. IF you hold for more than a year you should also be elligible for capital gains tax 50% reduction which will reduce your costs when selling. (if you start doing it regularly as a business then I think the ATO will have concerns with this but in my experience doing it once or twice is ok)

The tricky parts to get this right:
1 – Choosing the right area
2 – Choosing the right zoned land
3 – Choosing the right block slope/shape
4 – Choosing the right house to reno
5 – Being disciplined enough to see it through
6 – Not getting pregnant right now even though thats probably what you want

But its all possible. If you have a few years you might be able to pull this off a couple of times and have either lots of property, or sell some and and have less property but with plenty of equity and some cash in the bank before you have kids. MY wife and I did basically this with some buy, reno, hold, and some buy, reno, sell, and 1 buy, reno, develop, sell before we had kids. Property profits paid for 9 yrs of her not working and gave us the deposit to buy the land we then built our PPOR on. Its great planning ahead if you can, most don’t.

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October 19, 2014 - 8:53 pm

Well done Tony! This is a great outcome if you have the capital and can handle the costs and timeframe. As such its not for everyone but the rewards are there. I have seen a few folk do very well indeed with this style of deal when a boom comes around and everything doubles. Kudos!

Tony wrote:

We are entering our second Rural Res subdivision.
We buy a home and live in it, land 30,000 to 50,000 sq meters around $750,000.00
After the subdivision the home on 8000 sq meters is worth about $580,000.00 plus extra blocks sold 2-4 @ $300,000 ea.
Raw Land cost $175000.00
Our last one we created 3 extra lots, the Total development costs were $365,000.00
Cash Flow was about $100,000, with development approvals in place ready to go and blocks in a completed state within our boudries.
The expensive stuff is external to your boundries, Street widening, Power, council contributions, surveying.

We got one block under contract then we did the street widening council contributions etc. it took another 3-4 months and really only had the finance the majority of the costs for 3-10 weeks. As soon as we had title and everything completed the other blocks sold within 3 months.

I think the go is….timing of the market spend the big dollars when things are moving up.

Land sales $960,000.00 less $365,000 costs profit $595,000 less land costs.
The ATO gave us a tax ruling that 50% Capital gains tax was applicable being our home….they might change their mind on the 2nd one.
We started the process in 2011 completed it april 2014 due to a depressed property market, but that did not worry us as the holding costs were not applicable because its our home capital.

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October 19, 2014 - 8:50 pm

Holbrook wrote:

I already have a house in Gold Coast and thinking to buy a another property in Brisbane. So Can you please share tips for that market. Because don’t have much information about Brisbane market and also not enough experience in relevant field. Thanks

As Jamie said above re Sydney Brisbane is a big place. If you want affordability and to be close enough to the GC then consider Logan or Beenleigh areas. They will be last to get major growth in the current cycle but are well priced currently with good yields if you buy well.

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October 19, 2014 - 8:48 pm

bruynjustin wrote:

What are the things that you should keep in mind while buying property in Sydney?

Not to buy at the end of a boom unless you really really want to.

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October 18, 2014 - 4:08 pm

This is a public thank you for Woohah76 who promptly posted as discussed. Thanks W.

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October 16, 2014 - 10:26 am

Ok i give up here is a copy paste of the link, perhaps it will hyperlink and perhaps not. Any technical folks are welcome to school me up on the finer points of getting that to work in here.

https://www.facebook.com/precium/photos/a.158346187707733.1073741828.157567224452296/283010215241329/?type=1&theater

Thanks

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October 16, 2014 - 10:14 am

Oops I can’t see the image – any tips other than trying both “link” and “ing” buttons?

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October 14, 2014 - 10:23 pm

In my experience GF’s can add great cash flow, but they don’t always generate great revals or impress banks regarding equity. Every case is different of course, but in the burbs this is a common issue.

Re the hunter if you are trying to find the bottom of the market you might well be close. But just be aware it might be a loooong road back. Buying into a market catching a wave of capital growth right now might increase the speed with which you can do your next refinance and purchase again.

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