Found cashflow +ve

hi sophsi
congrats on finding a +cashflow property. due diligence takes the form of among other things, organising a building inspection, getting a pest inspection, talking to local real estate agents (not the one the property is listed with) to see if the property is priced fairly and to find out if you will be able to secure a tenant easily. it is also helpful to talk to locals, eg the post master or the lady at the local shop.( assuming it a smallish town)
i would also be doing a thorough walk thru the property, room by room taking notes. it is also handy to carry a digital camera, as often you forget what things “really” look like.
i am sure there are other things to be a undertaken before purchase, but there’s a few to get you started.[]
rie

Why not do some quick research on the town and if it’s OK, put in an offer on the property subject to building & pest inspections, etc? If you’re brave, maybe putting in a low offer that you know they won’t accept buy you a little more time to do DD?

Your question raises some interesting ideas on the order that we should do things.

I have done my due diligence in the following order (only move onto next step after previous one is OK):

1. Town (future prospects, vacancies, growth, etc)
2. Acceptable suburbs (amenity, convenience, affordability, quality etc)
3. Specific properties earn required yield

The strength of this is that it provides some protection against getting something in a no-hope part of a declining town. As you know the town, you can use this info to help in subsequent purchases, ideally eventually owning clusters of properties in several towns. Once you know the area, the only extra due diligence required is on the property itself.

The main risk with the above order might mean that you are missing the highest returns as your search criteria are narrow.

What if we tried the opposite order:

1. Specific properties that earn required yield (11 sec solution etc)
2. Is it in an acceptable suburb (amenities, etc)?
3. Does the town have a good future?

Thus we are starting with the best deals and eliminating those in the no-hope towns.

On reflection, I think this last approach might provide higher yields than the first one. But it is risky as it’s less fussy with towns. If you find a great deal, it’s tempting to rush in and put in an offer, even if 2 & 3 are not ideal. But if you have a good background knowledge about an area then you will avoid the worst mistakes.

any thoughts?

Peter

actually sophsi, i was gonna ask that does any body want a spotter. Well i guess since we are talkin about it, would anybody be interested in a spotter if so i think a fair price would be anything under $100,000.00 at $2000.00 fee and anything over $100,000.00 at 2% of the selling price.

This could be negotiated by both our solicitors were they can make the direct change or swap over of cash to information to each other.

Drop me a line if you are interested

Thanks still_in_school

hey Sophsi, yeah i was advertisin myself… lol but i dont think i did a good job of it, but

seriously sophsi, i think you should charge people anything under $100,000.00 at $2000.00 fee and anything over $100,000.00 at 2% of the selling price.

I think thats about average across the board but if i was you make a new post and head the topic as something like, “Property found for investor spotter fees priced.” and see if anyone would be interested, i mean its good in here to talk about it, but i think making a seperate topic you will get much better respone and maybe someone would be interested straight away and doing so you will have access to some quick cash quickly

Wish you good luck.

Making Money is Some Ones Losses…

Hi

i would think that there are a number of things a person would want to know if they are going to pay for a service.

the town
population
job propspects
growth if any
demographics
population movements
any developments in the pipeline
any new stores or businesses coming in
rentals
general house prices in the town
why the area chosen vs another
rates
etc

regards
alf

Hey sophie []

Well i agree with alf…

I operate as a finder/spotter myself however i question still in schools logic as far as his method is concerned.If he/she reads this it would be great if still in school emails me at [email protected] regarding your method perhaps if we compare logic we can create a system of finding positive cashflow allmost a template.

Regards Josh