Forumites, [
]I am having trouble convincing the other half that the 11 second rule is achievable. [
]I tried to explain, that if the expected rental was $200pw, then the acquistion of the property must be around $100,000K (using the 11 second rule.) [^]
But she is saying that is impossible, you can expect to pickup a cheap house and rent it out for much more than what the area is worth. [
]We have been scanning through the property web sites, and I can find an example to give her to boost her confidence. She is looking at cheap houses, but with no thought about the rental returns, so in theory this would be a -ve cash flow, which I dont want to do. As I would like to become detached from my job not dependent to it.
Please help, by posting “actual stories” of properties that you have acquired that is +ve cash flow in recent times.
If I can prove its possible, then my soul mate in life with also be my buddy in real estate.
[][]Regards,
Arty.[
]
“Why work to the age where you cant enjoy
what you have worked for !.” (Author: Me)G’day Arty,
Convincing the “other half”, not the easiest task in life…[
]I signed a contract on a 3 bedroom property last week, purchase price $88k and will return $160 p/w as is. Ahh, I hear grumbles out there “but this doesnt fit the 11 sec rule”
But wait thee’s more!
One of the bedrooms is a long room, with an entry door at either end. Spoke to the builder that did the building inspection, and he said cost approx $1000 to put a wall in. Now once its a 4 bedroom I will achieve $190 – $200 p/w, as this area had a lot of familys and a real shortage of 4 bed homes. So Cost to me is $1000 yet i receive $1560 in extra income (assume $30 extra p/w x 52) which is a 65% return p/a
But wait there’s more….
The house has no A/C, and installing it will cost about $6000. THis will add $20 p/w in rental income. Producing a return of 17% pa, not as good as the wall return, but still good.
But wait there is more….
I purchased the house approx $12,000 below market value (in the opinion of the building inspector) because the house never actually hit the market (hence BEST deals aren’t found on realestate.com site)
So House is worth about $100,000 at time of purchase, but with 4th bedroom and A/C value is closer to $130,000
Total debt is $88,000 (purchase price) plus 4th bedroom $1000 plus A/C $6000 = $95,000 (plus costs)
Cost $95,000
Rental return $200 – $225 (passes 11 sec “rule”)
Valuation $125k – $130,000Positive cashflow + about $20,000 in “free” equity
Very exciting times…
And have to thank Mel for all her help in assisting with Finance. [
]Cheers,
Battz
Hi Arty, I have found a couple – one commercial and one a retirement village that I didn’t proceed with. And have just found a house which i’m investigating that is for sale at 98,000 renting for 220 pw, its taken me 4 months of searching to find them, so don’t give up. [
] HGBattz,
Great job, very inspiring.
Arty, they are out there. But they’re certainly harder to find and you may have to go further afield. I’ve got offers in on a couple at the moment (no, I’m not going to tell you where [
])Rod.
Hgwells,
Sounds like good numbers, $98k and $220 p/w. Just goes to show they are out there.
I should have added with my story that it took me 2 months, approx 80 hours of internet research and viewed 70 houses.
But I think you’d agree its worth it.
Cheers,
Battz
Piers and I just bought one.
Purchase Price: 70K
Rental: $165Beats the 11 second rules by quite a bit!
The part of your post that is factually inaccurate is the assumption that these houses are renting for more than they are worth. The example I gave you there is a standard rent! Nothing special for that area. Keep in mind that the yield on city areas is much less and will hardly even meet the 11 second rule.
Cheers!
SherylThis is fantastic!…
Keep them coming !![
]
I need fuel for the fire..LOLExcellent detail battz71 and Hula..
Im even feeling better about it.[8D]
Regards,
Arty.[
]
“Why work to the age where you cant enjoy
what you have worked for !.” (Author: Me)Hey Arty does your boss know you spend so much time on this forum site instead of doing something more constructive?
Our last two properties cost $75000 and rent $155 and $55000 and will rent for $140.
Two flats in Napier on leasehold land cost $65000 each and are rented for $160 per week each.
Keep up the bedtime discussions. You have a riveted audience waiting for the next instalment.
Regards
Muppet,
I spend most of the day in front of my PC, writing programs, etc. Theres 4 of us “Implementation Analysts”, and a dozen or so other programmers. Im lucky enough to have a desk which doesnt face the boss, so I can see him coming a mile away… Then I just switch to another of my 20 or so windows, (Alt=Tab) and its gone. Im quick at what I do, so when a job is quoted, ive usually got spare time to chat in here, surf the net etc…[]It always looks like im hard at work, because im in here so much LOL..[
]Regards,
Arty.[
]
“Why work to the age where you cant enjoy
what you have worked for !.” (Author: Me)Hi Arty
Thanks for the reply.
I was reading an earlier posting of yours in Forum fun. You had clocked up 100 postings on about the 4th Sept. Now you are up to 264 postings so you are averaging about 8 per day. At that rate you should reach 1000 sometime in December.Keep the questions and answers coming.
Go the Warriors
Regards
He Arty I am in a similar position
My office is far removed from the boss in fact its right next to the kitchen [
]so I see everyone coming.
I’m a network administrator so sometimes its busy but mostly I am writing VBA macros for others or even reasearching on the net for the boss (yes I love my job [8D] ).
do you remember the old games and the boss key F12 [
]ah memories
Cam.
Muppet…100 posts on the 4th Sept ?.. I could see 27ish.. [?]
I have this window running all day, so as things are posted im always reading them…[
]Camviv, yes the Boss key, that shows an Excel Spreadsheet so it looked like you were working on that ..LOL.. [
]The good ole days… the company has a Firewall and web page filter, so some sites are banned, due to content, etc. I’ll be buggered when they ban this site due to the number of hits from the PCs here… I have forwarded this site to about 3 people here that are also interested in investing.
[]Wheres my commission !! [
]Regards,
Arty.[
]
“Why work to the age where you cant enjoy
what you have worked for !.” (Author: Me)Must admit that I’m also finding it difficult to find properties which even come CLOSE to meeting the 11 second rule. Admittedly I’ve only been looking in the general Brisbane area for about a month….
Thanks for reassuring us newbies that it can be done.
Bandit,
It certainly can be done, but I don’t think you’ll find them in Brisbane (or any of the capital cities) unless you can get very creative.
Rod.
I agree with Rod forget the capital cities especially Brisbane.
2 deals we purchased last week were $45,000 renting at $125 / week and $67,000 renting at $165 / week. Needless to say both in regional Qld and in both cases we are holding a registered valuation well in excess of purchase price. We will rent out and wrap at a later stage to maximise return.
Keep looking there are plenty of deals out there if you look outside the square.
Cheers Richard
richardatfhog.com.auThere is no such thing as a problem.
Just a solution waiting to be foundRichard Taylor | Australia's leading private lender
16,000 + 9000 reno/maintenance rented 95 per week
27,300 rented 110 per week
19,000 + 7000 reno/maintenance rented 115 per weekall purchased since April this year
Great to see the figures and the value adding ideas .
Thats it Im going shopping.[]Go you good things
I think too… we are looking in the web sites for real estate, and nothing seems to fit the 11 second rule.
Either the property is to high, which makes the rent too high for the area, or the property is low, but for the area the rent would be too high. etc.
[
][]Regards,
Arty.[
]
“Why work to the age where you cant enjoy
what you have worked for !.” (Author: Me)Arty,
New to this whole thing, just read the book.
In three weeks i have found 3 properties, all beat the 11 second rule but as my name implies i’m an 18 year old student and a fully financed loan (100%) turns the profits into losses (…almost). Maybe you all knew this but outside canberra is beautiful! Goulburn, cooma… Thats all i’m telling.Something to kep in mind – most properties NEVER HIT THE WEB SITES! And alot of what’s on the web sites is months old (left there to bring in business).
We even met one agent that only advertized his expensive ones, all the <115K properties were by word of mouth.
Talk to agents and keep looking. They are there!
Sheryl
]
]
]
]
]
] HG
]
The topic ‘Real Deals ? – 11 second rule’ is closed to new replies.
