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Hey Bruce, in reply to your request ‘trends from other investors’ I think the most significant similarities that were showing up were mainly concerning the individual, and their approach to investing.
Firstly, most of the people I have been in contact with who are successful investors have known from an early point in their investing what they wanted to achieve. There were some that do not follow a written plan, however it became obvious those who have. Most seemed to me to be conservative sorts of people, which was a bit of a surprise as some of their most recent projects didn’t look that conservative! They all emphasised to begin small though.
Knowing the market your investing in was another key point which came across in all of their high recommendations. Of course, they said the only way to do this was to actually be out there as much as possible.
Investing for the ‘long term’ was another similarity between them all. They all started with small, secure growth assets, and although that’s not what they primarily deal in now, it seemed a key factor in building the foundations. Most of them started with positive cash flow properties, and roughly half of them still only invest in positives. None of them said they got into property with the idea that they would make their millions overnight, they all had that long term focus, yet they all seemed to snowball their investments after a couple years when they knew what they were doing.
The trend in what they are doing now – ‘what they enjoy’. This seemed to be the only trend which attributed to their current success. I went looking for a sure-fire way to wealth through real estate and this seems be it. There was no exact way of investing which any of these investors had in common, rather they had all discovered their own way of doing things, and they all said ‘I (develop, Wrap, trade, renovate etc.) because that’s what I love doing’.
Great site guys [
]MV in your question refers to the individual property. So as to buy below MV, it’s below the valuation of THAT property [
]Not at all trying to make you re-think the purchase, given the capital increase it sounds promising (providing it isn’t highly negative cashflow!). I am trying to open your mind to other finance possibilities.
For example, if you purchased below MV or the property increases in value over a short period you can refinance your deposit out (with a bank which co-operates with your plan). Most banks have what is called a stand off period (usually 4 months I think) in which you can’t do this, but after that time as long as you keep to the banks LVR and they are happy with your financial position you should be fine.
If you have equity somewhere else you may also consider talking to your bank in how you can use that. If the property has increased in value you could simpily put a temporary mortgage over another property (or car) to bring the LVR to 90%. Then once the stand down period is over transfere entire mortgage to investment as the LVR will be 90% on improved value. You may even be able to add some renovations to increase the value.
If it was positive cashflow you may have considered a money partner (who would put up the entire deposit!).
Good luck [
]I agree with the comments regarding changing times and many different approaches.
I have recently had the opportunity to interview many investors on what it is they have done.
Two different investors, two different strategies.
1) Investor in Surfers Paradise told me how he purchased 2 apartments in the Versace Resort ‘off the plan’ for $600k each on deposit bonds of 10%. He was fortunate enough to have these properties double in value before completion and sold these for a $1.2 million profit! Cash into the deal was around $10k to secure the deposit bonds.
2) Investor in Warrnambool told me how he purchased 10 ex-commission homes at around $100k each several years ago (all + cashflow). In the last 3 years these have also doubled in value meaning he has an increase of $1 million in equity. Now, he mentioned he could sell 5, pay off the mortgage on the other 5 and retire on the cashflow from those remaining… but do you think he has!!
There are many strategies out there and from what I have found in my personal research it’s a matter of
a) establishing where you are now and what YOUR finances will allow (if you have a limited finance capacity you may set about obtaining the knowledge to attract OP’s money!)
b) setting your own goals to where you want to be, and when you want to be there
c) realising a way in which you can achieve these goals
d) put your plan to work
e) stick to your path (unless for the better!)Happy investing [
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