Hi there Cabo Wabo,

Welcome to the forum and thanks for your post!

What you’ve outlined is commonly known as buying wholesale, that is, (usually) before an agent is engaged and a commission payable. The reverse side of things, where the vendor sells privately, is called ‘For Sale By Owner’ (FSBO).

I have tried this in the past to mixed success. My first point would be to suggest being careful about the wording you use as my attempt nearly had me being sued for defamation by the local real estate agents who thought my words about avoiding agent’s commission were a little strong.

Another knock-out factor in my case was the increasingly hot r/e market. I mean, why would someone sell to me for < market price when properties were selling themselves for top dollar?

The way around this problem is not to focus on what you can’t do, but to instead focus on what you can do. For exmaple, you may be able to settle very fast, provide a higher deposit etc. In business terms, what is your sustainable competitive advantage?

The masters of the system that you are seeking to adopt are without doubt based in the US. Do a search in google for ‘We Buy Houses’ and get some ideas from the wording on other sites.

Finally, a good book I can recommend is from Ron Le Grand. It seems the latest version looks like this. You will probably need to pick it up from Amazon.

Hope this has helped!

Cheers,

Steve McKnight

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Hi,

Perhaps if you could provide some sketchy numbers I could help you with the analysis. Things such as purchase price, likely rent, likely costs etc. The more you can give me the less I have to assume and the more accurate your answer will be.

Cheers,

Steve McKnight

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Hi,

I think the best research is done on the ground rather than on the internet.

By that I mean that it can be useful to look at postcode profiles to gain a basic understanding of an area, but beyond this the best research is done in person on the ground.

For example, recently Dave and I have begun investing in the US (little cheap houses that are high yielding). However, before we invested $1 we decided to go and have a look for ourselves as we knew that the house advertised on the internet may look good at first glance, but you can’t see the other houses around it nor gain a feel for the area.

Sure, later down the track you can form a system to buy property sight-unseen, but in the meantime be sure to invest time and money gaining an accurate feel for an area by pounding the pavements.

Thanks for your post and all the best with your investing!

Steve McKnight

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Hi Luke,

Thanks for your post. I am regularly asked to what extent I use research services, so I’m sure your question is a common one.

Personally, I think that research can be beneficial to gain a context for an area. In particular, to gain a snapshot of the demographics and to then compare it to recent trends.

For example, factors I do pay attention to include:

1. Population movements in that I look to invest in areas with increasing population as this adds to housing pressure (i.e. capital appreciation)

2. Rental vacancies / statistics… what I’m looking for is how much rental demand there is in the area. This data can be found from the REIA (for a fee) or by doing some on the ground research by going into real estate agent’s offices and looking at how many properties are currently for rent.

What I do not pay much attention to is what a potential property sold for several years ago as I see this as largely irrelevant. If you think you can make money then that’s the important issue, not what the previous purchaser bought it for in a different market.

The danger in all this is to avoid, at all costs, analysis-paralysis as this will only lead to confusion and difficulty in pulling the investment trigger.

I’d be interested to know what data do you look at and how you use the information you collect.

Have a great day.

Steve McKnight

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Hi JaJa,

I’m not sure if your were at yesterday’s seminar or not…

In any event, I’ve ready through approx a third of the feedback forms and there were a few comments where people mentioned that the content was straightforward.

On the other hand though, others mentioned that the ‘nuts and bolts’ detail that was presented about the system Dave and I used to buy real estate was the missing link of information that had not previously been explained in my books or seminars.

For my experience, the steps that appear simple or basic are often those investors ignore or forget which can undermine their profits.

I believe that the key to controlling and managing (from the investment rather than the property perspective) a multiple property portfolio involves a system that:

1. Removes emotion from the investing decision as emotion can cause investors to act irrationally.

2. Allows time-leverage. In short, time is an investors most important asset so in order to maximise it, investors need to delegate. The only way this can be done is via a system where the result is guided by internal controls derived from a knowledge of the process.

3. Uses templates to ensure accuracy, completeness and time management.

4. Allows an investor to focus on the small number of potential leads that do fall within a pre-defined search criteria, rather than the large number of leads that might be appropriate.

etc etc

So, all in all, the idea for the seminar was to share the nitty gritty detail of the system we use behind the way we find, qualify and buy property. In fact the beauty of that system is in its ease of application as, as someone wise once said, anything doable needs to be easily understandable.

While there are certainly risks to be mitigated, at a conceptual level there isn’t anything too difficult about the way we invest; we buy cheap houses that make money.

The system that supports this process therefore needs to:

1. Find appropriate potential houses
2. Qualify those potential houses so that we focus on quality houses that are most likely to deliver the investing outcome we desire
3. Control the buying process given that we often have multiple offers (20+) in progress

I hope this has helped provide more information about the seminar, it’s objectives and some of the content that was discussed.

Have a great day,

Steve McKnight

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Remember that success comes from doing things differently.
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Sounds like wise words to me, if only to complete the exercise as a worst-case scenario.

Regards,

Steve McKnight

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Hi Tom1000000,

Actually, I feel that I have built enough wealth and certainly don’t want to hoard it.

My main goal in investing now is to continue to raise money to contribute into philanthropic activities which we have begun.

This all started when my books sold well, and now has become quite a focus.

Also, there is a certain amount of enjoyment that we get from investing. As such, we do it not because we have to, but because it is something we enjoy.

For example, does someone who loves their job quit when they attain financial independence? Or does simply the nature of the relationship become different as now they do it because they can rather than because they have to?

I also like sharing information about what works in property investing, and I feel that to do this with any credibility, I should remain an active investor.

As for how much is enough… I have rather large philanthropic dreams.

Regards,

Steve McKnight

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Hi,

I think this topic has reached its logical conclusion. Issues with Neil Jenman should be taken up with him in person rather than posted here.

Regards,

Steve McKnight

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Hi,

Let’s be sure to differentiate fact from opinion here.

FACT: The website is down.

OPINION: Why it happened

The victims here were those who went ahead with purchases on the basis that they could get the loan. To the extent that representations were made, I’m sure legal advice will be sought.

BTW, moderators of this are, of course, fully entitled to express their independent thoughts.

I thought this was a good post (no interest in no interest… lol). Let’s just keep the discussion away from personalities and focus on issues.

Cheers,

Steve McKnight

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