Hello,
I have just finished reading Steve’s book ‘0-130’ properties. I am very interested in his concept. I am wondering whether there is any experienced investor would like to mentor me, i live in Brisbane. Where can you buy properties these days that would deliver a positive cash flow without laying out too much money. The only place that i have found is in Western Australia. The purchase price around 50k or upwards. However, i am a bit scpetical as it is in a rural town. Can anyone please advise me if im looking in the right direction or is there other areas in Australia which would deliver better positive cashflows? Is there any more positive cash flow property today? I am young & as and it is very hard to save money. Therefor i can only purchase cheap properties. You help & guidance will be appreciated.
Cheers
PaulRead Steves 2nd book as it is more up to date and reflects the changes to the market since 0-130 was written.
Rgds.
Lucifer_auHi Paul,
Thanks for your post and welcome to the forums!
The eternal question… “Where are the deals?”
The second book may shed some more light on the issue, but here are some thoughts:
1. In the current market, deals are made rather than bought. Find problems and solve them!
2. The best deals are not necessarily advertised, because problem properties are usually silent or old listings. Real estate brochures have the glossy marketing hype which is based on emotion. I prefer the ‘ugly sister’ houses that are held in less esteem.
3. Finding deals requires effort, which in turn is a matter of leaving your comfort zone and getting out there in the market place and looking with your own eyes.
For example, Dave was in NZ last week doing some property portfolio management when he stumbled across a great opportunity. He would not have found out about the deal unless he was on the ground.
You have heard ‘be in the right place and the right time’… well, rarely is the right place where you are most comfortable.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
G’Day team,
Speaking for myself, If I quit my job and live off a little bit of released equity that I hopefully will make (waiting for ‘unconditional’),
I believe I’ll be able to spot the hidden gems that are lying around the place and take the initiative. I now have learnt that this game is a people game so if I can help find a solution to someones prob then I’ll win financially and help that person too.- Im still learning this one.
To do this I really need to be out there in my little car scouting potential properties that fit my criteria around my neighbourhood, in the next town and even 1000km’s away. I s’pose I’ve got to rough it a bit, but hey Im willing to camp out somewhere, 500km’s away from home (oops wheres home if I’ve just sold it?) whilst in hot pursuit of an undervalued cottage/unit, in some town that shows huge growth potential, that when rented will pay for itself and put
$30 in my pocket (bank). Now having said this if I can organise my admin(lenders, conveyancing, rental managers etc) and put a plan of attack together(locations to check, networks, potential bargains etc.) I believe I can own a few $+ve IP’s before I jet off somewhere for a little bit.
I think this is getting out of the comfort zone. Getting out of the cosy bed/tent/ or ute even!,when its pissing down to go speak to the council about urban renewl in a town you’re doing due diligence on, is getting out of the comfort zone – I think.
What do you think?..[cigar][cigar][cigar]Adding to Steve’s second point, I just sold a cf+ property in country NSW. I sold it through a buyer’s agent – there are a few on this site (including MiniMogul who is great). It wasn’t advertised. I’d say I’ll shortly be selling a cf+ block of flats in Tasmania the same way, too.
Good luck
Tax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auDanga,
Nothing wrong with rural western australia….I have a couple of +cf properties here!! Just make sure you do your research on the particular town. There are still some good bargains to be had, not only cf+ but potential growth if you choose wisely.
sq
I’m aware of one right now that’s for sale for $25,000 thousand. Will require another $30,000 to make it viable, if it goes ahead? But I can’t tell you to much about it. Because my Dad’s looking at buying it!
But put the post in more to get your confidence up.
***********************
Footsteps in the sands of time weren’t made sitting down.
Positive Cashflow Financial Analysis Calculator OnlineNot sure I should do this but what the heck.
Try SA. Some areas of SA are the most affordable homes I have ever seen and I think the area will improve over time. You have to research the suburbs and pick one worthwhile, but there are large populations of middle – low income earners there and they have to live somewhere. Try areas like Smithfield Plains or Elizabeth.
I just purchased a 3br brick 200m from primary school and kindergarten. 100m from local shops. Less then 1KM from train station. 2km from large shopping complex. Bus stops nearby.
If you are poor then you need these ammenities close and eventually when the population demographics change these poor suburbs will become very sought after because the infrstructure will already be there.
Cost – $122 500. Rent – $160pw with nothing to do. Basic home but it has nice street appeal compared to some of the others.
Asking price? $130000 – $140000
Hope this helps.
Remember – do research. There are some terrible areas you do not want to buy in aswell.
I am a firm believer about teaching a man to fish so he can catch many rather than just giving give him one fish but I also believe in God. I have been blessed in my life and would like to share that with others
You will always miss 100% of the shots you don’t take!
Try looking at Cairns. 1 bed room units are selling for $86,000-$95,000 and renting at $130-160 p/w. Not making the 11 second rule but not far from it. Alot of these 1 bedders are just under 50m2 (46-49m2) but you will find the odd one over.
Last week it was stated on the local news that Cairns area will grow faster in the next 20 years than South East Queensland.[smiling]
Like everyone says steve’s second book will help you a lot more as it’s up to date with the current market.
I purchased and read it about two months ago and have since then bouught a property that meets the 11 second rule in S.A. It cost me $40k and the same 50 year old gentleman and his 90 year old mother have been renting it since 1994 (they currently pay $100 PW). Naturally I hope his mother keeps kicking for a couple of years.Try realestate.com.au to find the few properties that meet the 11 second rule but remember the rule is not enough to go by. Do the due dilegence and research the area before making any rushed decisions.
To start you off if you’re from queensland try researching Mount Morgan. You can pick up property for $45 000 neg paying $80 pw. This could be a good place to start, I wouldn’t know as I haven’t researched the area, so make sure that you do regardless of where you decide to purchase.
easymoney
Paul,
In short, to your questions – yes there is plenty around.
Having just exchanged contracts on a deal two days ago, we are now out of the market for a while whilst we consolidate our position and expand our core of expertise.
I have 16 props left on my research list that are all +CF, given a 100% loan with stamp duty thrown in as well.
I suspect you are looking in the wrong patch…
Cheers,
Dazzling
“Go hard or go home”
Hi Dazzling,
I don’t suppose you’d like to share with us where the other 16 are since you’re consolidating at the moment? Please feel free to PM me.
Thanks
LandtPaul,
I am unsure if WA is a good place to start if you are in Brisbane. I am sure there would be an opportunity closer to home. Generally regional areas will provide deals worth looking at if you are after +`ve cashflow. Pick a couple of country towns (10,000 k pop + ) around Brissy and keep an eye on them.Regards , Terry
Hi Danga,
Some very good advice once again from the other forum members.
.
There are plenty of cash positive properties around but as the others have said they may not be in the same shape and form as you are looking for.
.
Because of this each individual investors needs to be very certain what their risk tolerence is and what amount of work they are willing to put into each investment before the returns are positive.
.
Long term goal planning is probably the most important thing ( hope this is not off the track). The reason I say that is because you really need to know where is property fits into your long term plan. What are the potentials and weaknesses of each? What is your exit strategy? Are there any opportunities to add value?
.
Try being realistic about how much time and cash you have for each project. Get plenty of quotes for repairs before you start.
.
Good LuckDon Nicolussi | Mortgage Broker - Home Loan Warehouse
http://homeloanwarehouse.com.au
Email Me | Phone Me"I think of finance as a technology, a way of getting things done." Robert Shiller
[cap]
Hi All,
I say tomorrow’s gone ,today is almost over so what are you doing tomorrow?.I think ,like Steve and a lot of people on the forum,the only way to make it is to go for it.
We also quit our jobs and have spent 12 months researching everything we could to make a successful living out of property.
I think to be serious you have to put 100% of your energy into investing ,and for me now I can find a cashflow positive property on any day of the week.Thats the easy part.The hardest part is to fund your expences until the profit start’s to show ,which could be 6-12 mths.
While researching properties I became a fan of ROBERT ALLEN, the author of one minute millionaire.
I have now learnt all about residual income (money that goes in my bank for doing nothing even while I sleep) The rate we are going from what we have set up, within months we will be earning $20k A month and it keeps increasing. Now I can focus on real estate as the saying goes money makes money!!!!!Who wants to know what I have learnt !YOU WOULD NOT BELEIVE HOW EASY IT IS!!!! IF you are interested let me know …
Steve’s Mcnight’s first book really opened my eyes and have me the guts to go for it!!.Regards
LISA
[email protected]L Lammers
Originally posted by first class:I say tomorrow’s gone ,today is almost over so what are you doing tomorrow?.I think ,like Steve and a lot of people on the forum,the only way to make it is to go for it.I thought Steve had made it clear that he was largely waiting for the market to fall before making significant further property purchases?
Cheers, F.[cowboy2]Foundation, with the right research you can always find good properties. The fact we are looking at slightly increased interest rates is goodie goodie in my books because those thinking of selling will start to panic a bit and the bargains will be there.
Waiting for the market to move is silly because unless you have your finger on the pulse you will miss the initial changes and loose those deals that may not be repeated once the wave of change moves on.
We buy, we sell, we constantly update our info.
Today I found out that 85 new townhouses were being built and sold in Logan Central for $230k each. What do you think that means to me. More interest in those properties in the area still worth $120k. Given a 24 month build/sell cycle for the new ones, I expect this “tip” from a local agent only on the 6 townhouse we now own in the area will make me $300k in the next 2 years . We have houses there too.
So maybe a hold off until the movement happens isnt quite what Steve really meant.
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!Hi DD, I was just making the point that First Class was making innaccurate assumptions (‘I think ,like Steve and a lot of people’) about somebody else’s strategy and passing them on as fact.
From the ‘horse’s mouth’:Although we (my business partner and I) have purchased over 180 properties, we
currently (at September 2004) own around 100 income producing dwellings as we have recently sold to take profits under the belief that the real estate market is likely to fall and hence now is a good time to hold cash.But as you have questioned my point, I would say it is a very bad time for somebody to buy their first IP in a distant country town when property prices are either falling or about to fall pretty well across the board. The chance of a first time investor falling into negative equity and being unable to take advantage of lower prices in the future is very high, even if they buy a property ‘well below CMV’.
Waiting for the market to move is silly because unless you have your finger on the pulse you will miss the initial changes and loose those deals that may not be repeated once the wave of change moves on.1) If you do have your finger on the pulse, the market is very easy to read, and can make you very wealthy. Trust me, it’s not that hard to do.
2) In a falling market, those ‘initial deals’ will soon look like yesterday’s folly.
I’d bet a fiver against your reading of the Logan futures. The fact that a developer is making a quick buck flogging $250k apartments to southerners for ‘investment’ does not change the fundamental value of the surrounding $120k houses.
And finally, I agree with this:
those thinking of selling will start to panic a bitBut it will be just the beginning. The way I read it this has already started in many areas. Check numbers of properties for sale vs mortgage approvals. One is rising and the other falling.
The areas still inflating (mostly QLD & WA) are primarily being driven by amateur investors. Most of the big guns have consolidated a cash position in preparation buy in again for (much) cheaper prices as is Steve.Cheers, F.[cowboy2]
Foundation
interesting comments, thanks.
I am a newbie with a little equity in my house. I am looking to buy in Canberra after moving from the coast where our house is currently rented out.
Prices have stabilised in the ACT, and after watching prices for the past few months I have noticed them beginning to drop.
If I stay renting I will never get out of the rat race.
Everyone states that research is important, so my question is – when do I know is the right time to step in and buy?
Astral
Newbie – no idea but willing to learn
Originally posted by astraltao:
when do I know is the right time to step in and buy?When the numbers add up – when renting is not cheaper than buying. Incidentally that’s also a good time to be buying RE investments, as defined by the 11 Second Rule ™, Rental Reality ™, CF+ etc.
Cheers, F.[cowboy2]
You must be logged in to reply to this topic. If you don't have an account, you can register here.
