beancounterParticipant@beancounterJoin Date: 2003Post Count: 10
Just making my way through Steve’s Book and it makes for interesting reading. Like most people wishing to purchase investment properties , my concern is that currently it is close to impossible, particularly in my regional centre to find even 1 property that meets “The 11 Second Solution. Most properties in my area rent between $150.00 to $250.oo per week, which equates to cost price of $75,000 to $125,000. Actual prices are nearly double this.
I am curious if anyone else is having the same problems in finding such properties.
Thanks to Steve for a thought provoking book.
Unfortunately market forces in my area require a negative gearing situation, which I can only expect capital gains as oppossed to income gains.
trying to think of a way of saying this without sounding like a “w a n k e r”, so here goes.
get out of your comfort zone beancounter, you have to look harder, and if you’re fair dinkum about going down this avenue, you will look far and wide, you will fly or drive somewhere, you will not neccesarily find the deals in your back yard… you might end up buying 2000km away… this “game” as so many people like to call it, is not for everyone… by the way, it ain’t no game, those dollars are real, so is the risk…
cheers and all the best,
rwestanMember@westanJoin Date: 2002Post Count: 1,950
Yes we are all having the same propblem. Its no longer just a matter of driving into any regional center and choising which property you want. if you want to buy in a town say over 10,000 population in Victoria or SA then i think you may be too late. There were some properties in Tas a few months ago but they are in short supply. Perhaps look at smaller towns but these too are getting pricey. Don’t give up there are still good buy out there but as Richmond said be prepared to travel. 8 months ago my brother who decided he had to get into this, Said “the window of opportunity is closing” i though he was pannicking a bit as he went flat out to buy 6 properties, sadly he was right.
regards westanPathfinderMember@pathfinderJoin Date: 2003Post Count: 1
I too am in the same situation as beancounter, using the ’11 second solution’ I cant even find anything close to what I need for a positive cashflow investment. Steve talks in the book about investments for as low as $55,000 (and lower) I’d like to see them  – maybe we have missed the boat.
Houses will never be this cheap again – get in the game now rather than waiting for them to go up some more!
I could be wrong though…then again if you’re waiting for house prices to go down AKA ‘the bubble to burst’ – then good luck, see you back here then, which is maybe never…..
One of my fave sayings is ‘keep up, or be left behind.’ How many have you actually looked at?
Read ‘real estate riches’ – Dolf de Roos says look at 100, put offers in on 3, buy one. Read it for sure.
There are a zillion ways to make negative cashflow houses positive – anything from subdividing, adding rooms, renovating and increasing the rent, relocating, splitting into two flats, etc etc not to mention financially creative things like wraps and lease-options.
MiniNessieMember@nessieJoin Date: 2001Post Count: 73
Beancounter, you should not just rely on the 11 sec. solution. You must think beyond this and look at other methods. MiniMogul is right by saying “There are a zillion ways to make negative cashflow houses positive..”
I use the 11 Sec Solution as a starting point. If the property doesn’t fit the 11 seconds then I have several fall back solutions to look at.
You have to work hard and travel many a mile to achieve your goals.
This is not an easy game to play. Here, here Richmond – real money, real debt, scarry stuff and you need nerves of steel. No weak knees when your debt level rises to 7 or 8 figures.
On average I would find and review info on 30/40 properties per month – might put offers in 3/6 per month because the numbers work – so far this year only bought 4. Been out bid on offers by other crazy Property Investors who are paying more than asking price for property.
NessiekaydeeMember@kaydeeJoin Date: 2003Post Count: 29
Although I am also new to the investing area – I have managed to find (with only a few hours work) 3 properties that are worth checking out in my local area (brisbane). I would reinterate what others have said and simply say you need to look harder the good deals are still out there. They are just a little more obscure.trishaMember@trishaJoin Date: 2003Post Count: 15
You said if the 11 sec method doesnt work you have other fall back things you do ,
I hope I’m not being too presumptuous by asking what some of those other things may be.
I’ve yet to buy my 1 st IP so I’m learning heaps from all the posts, so much to learn
TrishNative_MetaLMember@native_metalJoin Date: 2003Post Count: 47
Im in the same Boat as you Trisha thats a good Question.
i would also like to know where other site members are finding there possitive cash flow propertys are they Searching on http://www.realestate.com.au or some other method
Also im starting to think that maybe buy and rent
positive cash flow type of investments are going to dry up over the next couple of years because as prices rise so do the opportunitys for IP investing.
Am i right ?
I would really like to get Steves McKights opinion on this matter as this Great Idea he has been Preaching may be a pipe dream to newbies like my self.
Are you listerning Steve Please Tell me im Wrong
Hi native metal.
I’ve met Steve twice, and he doesn’t strike me as the type of bloke who sells pipe dreams.
If you spend time reading back through previous threads, you’ll find that looking at realestate.com.au is not the only way to find positive cashflow properties. In fact, it’s only a useful tool for getting an idea on areas, because the properties are often out of date. Use the search function and do some research. Different people have different methods depending on how much time they have available etc.
Yes, you are right that these properties are becoming more scarce, which is even more of a reason that I wouldn’t expect other people to all of a sudden say “here is the magic solution”… if only it were that easy. It’s not easy… not much is. Put in some more work, lots of it, and you’ll get some rewards.
cheers mate and good luck
rwilandelMember@wilandelJoin Date: 2003Post Count: 761
Hi Beancounter & others,
Yes, finding properties that meet the 11 second solution is VERY DIFFICULT at the moment.
There are A LOT of properties out there that ALMOST meet the 11 second solution.
Why not do a quick reno? You don’t have do go to the same extent as on “The Block”. Perhaps just a quick paint, new floor coverings & tidy the garden etc. and you can sometimes bring the rent up $30-$40 per week.
It’s not that hard to find them if you are serious.
I’ll try to answer your question for Steve, co’s I know how busy he is at the moment.
It definately is getting harder, however, there will always be opportunities. You have to be ready to TAKE ACTION, and perhaps when interest rates increase a bit, there may be LOTS OF OPPORTUNITIES that arise, from people who can no longer service their loans etc… You will then be in a more bargaining position. BUY AT THE RIGHT PRICE. Don’t give up. Real Estate comes & goes in cycles. Just be prepared to try different areas and approaches to find that property.
actually wilandel, you raise a good point… I reckon a lot of people think “the block”-like thoughts as soon as they hear the word renovation…
by the way, I recall someone offering you to help out with a reno (from sydney if i remember correctly)… I wouldn’t mind getting some more hands on experience… I’m in Vic, near Kilmore.
yeh, re renos, if you want the bargain properties, they are often the yuckiest ones. Once I leverage my way up the food chain to buy ones that are totally good to go as is, I might leverage my time that way and stop doing renos, but as i am just starting out, I can maximise my $$$ better if I buy a place for cheap and fix it up rather than buy one that’s already been fixed up at a premium.
although one of the places I got was beautifully maintained by the owner occupiers, the other two have been rental properties for years, and basically have had no maintenance done for 15 years. And as far as time goes I’m a really busy person and can only spend a long weekend doing it. So for the first one my boyfriend and I painted for four days with two labourers helping, tradesmen did everything else. With the second one my boyfriend is doing it for 5 days with one labourer and a friend, tradesmen for everything except painting. Not spending a fortune like the block, everything second hand where possible (benchtops, basins) – new where necessary (bathroom seratone walls) – more of a ‘reno kings’ type renovation. Maybe a 5K renovation all up.
Makes a huge difference.
MiniwilandelMember@wilandelJoin Date: 2003Post Count: 761
Hi Richmond & Mini & Gang,
Richmond, you’re on. We’ll be tied up with our farm until Xmas, but then it’ll be full steam ahead with more reno’s. An extra pair of hands would be great. It’s very satisfying work, but heaps of fun.
Mini, to get a property at a great price, you have to find someone elses problem, (UGLY DUCKLING) and then find a solution, (TURN IT INTO A SWAN) don’t you agree??
Have a great day all, and NEVER GIVE UP.
I agree that if you can turn an ugly duckling into a swan you can make money. And that you can get the ducklings for a song if they don’t appeal to the market – i.e. if the first homeowners aren’t biting then there’s 92 of the competition knocked out!!!
Are my places ugly ducklings? I don’t know. Maybe not.
Possibly just ordinary. Plain. Neglected or run down rather than ugly, as such. I never set out to buy ugly ducklings or do renovations – I’m a ‘punter’ as well as a landlord – however the places needed them. i.e. the one described as ‘reasonable’ by the agent was the dump, the and one called ‘tidy’ was reasonable, and the one called ‘immaculate’ was very tidy, but in a very granny style. So I basically either needed to spend more/go up a price-range per house, or else bite the bullet and buy cheap but fix them up. Also when you went up the market a bit you didn’t necessarily get proportionately more rent. However the type of tenant you attracted was better, maybe.
Even my ‘immaculate’ granny house – one day that beige stripe wallpaper, orange glass lampshades, and brown-fleck carpet just has to go. do you know the look i’m describing? 30’s i think. But because it’s rented as is and was quite ‘genteel’ I didn’t feel I had to reno it just yet.
MiniHousesOnlyParticipant@housesonlyJoin Date: 2003Post Count: 167
Yip it does seem that it is near impossible to find these little gems! Sure if you spend much more effort looking in every nook and cranny then you will probably find something. These properties that you will find are the few which are being sold under market value because the vendors are probably not aware of the current state of the market or just want out fast. These often don’t last longer than a few days though.
With respect to the bubble busting. It is logical that because the long term (350 years or more) trend for residential property is to yield a return below 10% and many areas have yielded more than twice that for between 6 and 8 years it is obvious that the situation is out of balance. This along with a huge amount of other anecdotal evidence which I won’t go into now requires the situation to return to the long-term trend. It is no accident that people like the Governor of the Reserve Bank, Treasurer and many others are very concerned at the moment. The situation will be brought back to equilibrium sometime soon and many predict price drops of between 20 and 30%. I feel that this is being conservative because the last 6 years have caused prices to increase by more than 100% more than the long-term trend. This may have been possible where the property industry performed below the long-term trend for many years before the boom, but sadly this is not the case in most of Australia. People only have to look back at Melbourne 10 years ago to remember the correction that the property market went through there. It was in the order of 20 to 30% as well.
The long and the short of it is that prices cannot continue to increase at this rate and in fact must decrease sometime soon to bring the much needed correction which the market requires to put it in a sustainable state. Just when this correction will occur is up for debate but I would not be surprised if it was to happen in the next 12 months. Too many factors are pointing to it now.
Hang on for a while and you will be able to get into the market. So many mommy and daddy investors are going to be burned that they will just want out. Be ready for this to happened and then buy buy buy!madeinozMember@madeinozJoin Date: 2003Post Count: 11
Until 4 days ago I thought I had missed the boat and it was impossible to find…until I looked wider and after a days worth of driving I now have three properties all +ve geared under 50K.
The driving is a real pain (hence my question posted seperately on buying and managing remotely on the forum) I have located two properties showing about 20% return on cashflow alone, but it’s too far for me to drive at the moment
So yes it is achievable, for how much longer I don’t know, as speaking to the realestate agents they are getting worried that they are getting less and less listing for sale (all the out of town investors I suspect)westanMember@westanJoin Date: 2002Post Count: 1,950
Here you go, crashy quoted a completely ridiculous figure a few week ago and you’ve picked it up as some sort of fact.
“It is logical that because the long term (350 years or more) trend for residential property is to yield a return below 10% and many areas have yielded more than twice that for between 6 and 8 years it is obvious that the situation is out of balance.”
Firstly, Australia was settled in 1788 before this time there was no property market. Even if these figures are accurate for overseas it is not for OZ. There is not one property market but many. following your logic some regional centers are about to boom. Because for many years they have not risen at 10% but have risen at a very low rate. The reason for growth is supply and demand. Usually to do with jobs. So it is logical that some areas will grow by more than 10% because the local economy is robust for example Sydney as compared to Broken Hill.
Secondly lets look at this so called figure of 10% PA over 350 yrs. if you are familiar with the rule of 72 you will know that at 10% prices double every 7 years and therefore they were half the price 7 yrs ago. So let do some sums The Melbourne Median price in Mar 2003 was 347,000. Following your 10% figure it should have been half that in 1995 (173,500), in 1988 (86,750), in 81 (43,375), in 74 (21,687), in 1967 (10,843), in 1953 it was 2,710, in 1933 it was $338, in 1898 it was $10.50. do i need to keep going, why not in 1870 it was 66cents. These figures don’t make sense its far more acurate to use modern figure say the last 20 to 30 yrs if you need to quote anything at all. You may be right the market may drop but i can’t follow your logic. Its like saying a stocksay ABC corp has grown at 20% PA for the past 10 yrs therefore it will crash because the stockmarket only rises at 10% PA.
Please correct me if i’m wrong
Regards westanADParticipant@adJoin Date: 2002Post Count: 636
I like your way of thinking here Westan. Good points made. All I can say is ditto.
“Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved.”
just random soundbites from this thread –
“close to impossible”
“going to dry up”
“investors are going to be burned”
” maybe we have missed the boat”
“may be a pipe dream”
(limiting beliefs, fear, lack, inactivity, stuck, not thinking)
“think beyond this and look at other methods”
“look far and wide”
” find and review info on 30/40 properties per month”
“do some research”
“Put in some more work, lots of it, and you’ll get some rewards.”
“there will always be opportunities”
“try different areas and approaches “
“You have to be ready to TAKE ACTION”
“after a days worth of driving I now have three properties all +ve geared under 50K”
‘unlimited’ beliefs, action, abundance, thinking, activity
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