I notice that some of the members are complaining about the lack of good P.C.F properties but am wondering if they are only talking about residential.
To me investing is about making money, retiring debt, using equity, leveraging and repeating with more purchases. Do some home work on small commersial office suites because if you read the papers returns in the order of 12% plus are not uncommon.
Over the last few years I have developed a ripper of a system that is returning me over 12% and have not been focusing on resi for some time except developing in Queensland which is the hottest market in Aus.[email protected] [suave]
Might be time for a nick change to “commercialwealth”, residentialwealth
)So, do you htink there will be capital growth in this market, rw? Or is the aim to just receive the returns? How do you think the commercial market is positioned for 2004 and beyond, in terms of growth?
kay henry
Thanks KH, isnt that the same questions people ask about purchasing positive cash flow properties in country towns?? very interesting …
I believe cash flow is cryitical on a number of issues covered in Steves book, especially on reducing debt to build further equity which gives me better purchasing power in the future.
I believe that the right type of commersial like the right type of residential achieves growth, it just depends how good you are in analayising property and the demand it has to the purchaser should you decide to sell.
I also know it is easier to sell a CBD commersial property showing 12% than a country town property showing 8% in a hard market as I have experienced both. Commersial has other dynamics which differ from residential houses that I personally enjoy playing but that is just my opinion.
I love +ve $flow and high yields and so does my bank manager and accountant, if I own the right type of commersial v’s residential my tennant pays for the out goings and repairs while the other doesnt, but I enjoy both games of investing.
commersialwealth ah no thanks it doesnt sound as good but thaks for the suggestion mate …
Sorry KH didn’t finish, yes I believe that there is great growth opportunities in 2004 and beyond, the secret is the conversion of the floor space costings. I also enjoy onselling and wrapping commersial, I have many purchasers looking for 10% returns and pay me dearly for the trouble.
Residential has changed and many are scared of commersial because they dont understand it, like driving a car for the first time.I don’t care one way or the other as long as I get high returns and positive results I would invest in cockroaches if their yeild was good, its all investing to me.
residentialwealth,
Frankly I’d regard 12% for commercial as pretty poor if it’s gross, OK if net.
But it also depends on the CG potential.
Weapping commercial sounds like a good idea – can you expand on this more Phillip….
Cheers,
Aceyducey
In theory, there is no difference between theory and practice. But, in practice, there is.– Jan L.A. van de Snepscheut
Thanks Acey… 12% is consertative, if I told you many of my commersial deals are achieving over 18% you probably wouldn’t believe me so I won’t.
I do not bet on capitol gains as so many people do on this site, I believe CG is luck in timing the market hence so much panic lately because the market has changed. Over time since the war CG moves in cycles of 8-10 years, flat for 4-5 years then moves sharply for about 3 just as we have experienced.
I love residential in CBD locations as a personal preference to buying in remote areas, this is just from my observations over 16 years of investing. In 1989 I sold 4500 acres of waterfront land with a DA for resort facalities today that land is known as Laguna Quays Resort. http://www.lagunawhitsundays.info if you are interested.
I’ve read all the books done all the courses as well as my own and believe that all theory and opinions will be recorded in history. Who is right and who is wrong doesnt matter its the results that prove if the opinions are correct.
I believe that the right type of commersial will give fantastic CG but you can also do your dollars if you don’t know what you are doing – same as residential. Any body can make money in a rising market but how many do it in a falling market. The questions people ask on this site give me indication to what people are thinking and I commend Steve And David for it.
I aim my net yields to be 2-3% above the interest rate its worked for me.
If you think it will or your think it wont you are probably right, cheers.
Philip,
I agree with you about CG being generally a timing matter. Past performance is no indicator of future performance, and all markets perform differently, so I have a bearish attitude towards future CG.
I asked about the CG prospects of commercial because noone’s really discussed it for a while around here, and I was interested to know what you thought about the prospects. I remember there was an “office boom” about 6 months ago as people looked for markets other than the vanilla residential market, but I wasn;t sure how it’s going now in practice.
I am also interested in hearing how people manage a falling market. anyone can say how much money they made in the last few years- who didn’t? But responses to a new climate… that’s what interests me. I’d like to see someone write a book “Buying Real Estate in 2004: Making Money in a Flat Market” or something.
I’m more interested in the future than in the past.
kay henry
KH ditto,
lets write the book, my experience with commersial is to pick KEY hot spots in the CBD (hunter street, martin place, etc) and value add, Norwest Business center is also a key area. I have spots in Bris CBD and South Port on the Gold Coast which are noted as high growth areas.
Successful bussiness’s go for (address) location and prestige and will pay a premium – I also include an option to purchase (lease/purchase) I offer short term lease with no penalities on vacating – why – because nobody else is doing it.
I build the reception area (branding) to help them with their immage, etc etc
I can only say it works don’t tell anybody!!
regards [email protected]
Kay/Residentialwealth,
From my limited experience in property (commercial and/or residential) there is little money to be made in a flat property market, anyone who argues differently is dellusional. Sure commercial properties may well, and indeed do, return higher rental yields than your average residential, but then your initial outlay (capital) is much steeper also.
If ongoing money-making is your goal, then you need to have your hand in every pie; property (commerical and residential), shares and cash. This is so to counter balance the differences between one’s boom and the other’s gloom times!!!
So I guess ultimately, my view on the matter is, don’t hold your breath for anyone to write a book about how they are making money through property investing in 2004, because in reality most savvy investors will use this time to buy opportunities (or future money-makers) as opposed to trying to reinvent the wheel!!!
But hey, if you can tell me otherwise; bring it on baby….I’m all ears…..[biggrin]
Jo
I’ll be looking forward to reading posts by RE investors throughout the coming years about how they are continuing to make money. I really think anyone who had bought RE in the last few years made money- and no particular skill was required. The market did the trick. I am not talking multimillionaires here- I am talking about your average joe- like me- who just bought a couple of places- and voila- CG just occurred- I had nothing to do with it.
Making money in a flatter market- on RE alone (I have no interest in shares or other markets), now they’re the stories I wanna see
)“Real Estate: Making Money in 2004-2007” … residentialwealth- if you start writing now, you can publish in 2008- and it will probably be the only RE book on the market in that time, so you’ll have the entire market share
kay henry
Kay,
Of course there was a level of skill required. I don’t believe for a moment that the properties you acquired over the last few years just fell into your lap. You obviously chose them carefully and with much forethought, and in return, one would expect provided you adequately did your homework (which I am sure you did) you will inevitably reap the rewards for your efforts (and skill) in the next few years.
Hence, get out the pen and paper, and start writing!!! For one day, others will be looking to you for the same answers you seek of those before you!!!
Jo
Jo,
Nope- I knew nothing of RE when i began, and I had read only Jan Somers’ book, and had some ideas. I bought in a market which was entirely flat, and which got flatter as the years went on. The location was suffering negative equity, and I would have lost money had I sold for 4 years after I bought. The only reason I didn’t sell into that negative market was because I was too lazy- there was no skill there.
I don’t see myself as having any skill when i bought- I learned after I bought generally- and forums such as this one were not around. Certainly RE was on the nose for the general public- we were all losing money during the slump- I didn’t care though- because I knew one day I’d have it paid off- CG was not the issue for me then- I had no idea about it, but knew I’d always loved RE since I was a child.
I just htink it’s important to look forward- not into the past- when we’re thinking about investing now. There’ll always be new investors into RE- buying in to the 2004 market as their first purchase. That’s what I’m interested in now. The past is, as they say, history.
kay henry
shocked2] Wow Kay, shocked2]
If I told you that I had to pick myself off the floor after reading your reply post, you’d probably think I was being my usual sarcastic self, when in fact, I am overwhelmed, and that’s just because (for the first time EVER) you have called me by my name!!! Many thanks!!!
Nonetheless, back to the issue at hand. Well, be it skill or not, you did well, and no doubt when the tide turns again you’ll be (as many others) set to ride yet another huge wave!!! At that time, I expect many will be writing their “I did it my way” type books!!![grin]
Cheers,
Jo
P.S. I too agree, the past is history, not to be forgotten but to serve as a reminder of where we came from, but mostly it is best left where it is (in the past) therefore as they say……..onward bound!!! [biggrin]
Hi Jo, I must agree with KH most of my best deals and results are flukes, well sort of, what I do see is too many people getting over technical and suffering from analysis/ paralysis.
Any market can change over night without warning, in 1998 we sold our land (now Laguna Quays) next thing Chris Schase , the Golf War, recession (paul keeting), 19% interest rates and a crap period till 1995, my mother said it was character building but i told mum i didn’t need my character built like that.
I have three books sooooon to be released via http://www.assetcorp.com.au will send you a free copy … cheers
Hey residentialwealth,
That’s cool, and congrats on the flukes!!! Yes they do happen, and must admit I have had a few myself, but mostly they have been very carefully calculated moves.
As for the character building…well what can I say???
Will look at the link, and look forward to reading the book(s)!!!
Well done!!! [medieval]
Jo
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