Forums / Property Investing / Help Needed! / Answers to “Where to Find CF+ Deals”

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  • Profile photo of James24James24
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    @james24
    Join Date: 2006
    Post Count: 6

    Thanks to both Jarrah and Dazzling for all your contributions.

    Very inspiring and motivating

    Profile photo of James24James24
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    @james24
    Join Date: 2006
    Post Count: 6

    Sorry foundation.

    Thanks to you too!

    Profile photo of wealthangelwealthangel
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    @wealthangel
    Join Date: 2006
    Post Count: 12

    Hi Guys,
    Just thought i would add that i have recently purchased a great property in a very good area 500 metres to the beach and about 200 metres to town. This property was on the market for over a year – nobody saw it or wanted it. The asking price was $395,000 but i ended up getting it for $300,000.
    It returns approx $560 per week in rental income. It comprises of a shop front, a three bedroom unit and a 2 bedroom unit all under the one roof.
    We had to do alot of renovations to get it up to scratch but now it is worth just over $450,000 and we just settled on it one week ago. (reno costs were limited to $15,000) but we now have a totally renovated building with new bathrooms, kitchens, carpets, paint etc.
    You know there were so many people that looked at this property and thought it was too much like hard work to fix it up but thank you to all of them as i just made $150,000 in 30 days not to mention the fact that my cash flow postive return is a little over $100 per week.
    [baaa]

    Wealth Angel

    Profile photo of adambcadambc
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    @adambc
    Join Date: 2003
    Post Count: 145

    Wealthy,

    Great work! Well done.

    They ARE still out there!

    All the best,

    Adam

    Oasis Finance
    for your Vendor Finance solutions
    Achieve the Dream!
    oasisfinance@optusnet.com.au

    Profile photo of mapleleafmapleleaf
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    @mapleleaf
    Join Date: 2005
    Post Count: 51

    Wealth Angel,

    I think your example proves yet again (as described by Dazzling etc) that you most likely will NOT find +CF properties sitting around. They are created!

    Well done on your hard work and for putting in the effort required to make this a real gem for you!

    Good Luck,

    Mapleleaf

    Achieve the Dream!

    Profile photo of kermitkermit
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    @kermit
    Join Date: 2005
    Post Count: 8

    Hi guys, just wanted to put my 2c worth in particulary because I was in leewizza’s situation (early 20’s little money) six months ago. By the way this is my first property (yay). I don’t earn that much so I could only borrow somewhere around $150,000 + deposit. Houses deffinately cost more than that where I live.

    So I used what in my opinion is the best source of creative finance for someone my age, my parents. I did all the ground work, found the house, dealt with building inspection, talked to brokers etc etc etc. My parents bought the house and I live in it. The plan was for me to do some renovations, painting etc. Sell the house, my parents would get their deposit back and I would have the CG for a deposit on a new place. Of course it didn’t work that way, we had only had the house a few weeks when my parents decided that they liked it and wanted to keep it *sigh*, so that plan was down the tubes. However my parents are happy to refinance.

    My brother moved in, which was great because we had 3 incomes covering the mortgage so we all had plenty of spare income.

    Its 5 months later now and due to work and me being a bit slack, I haven’t finished the renovations. However yesterday I decided to do a little looking around, I found four different properties worth looking closer at. One a block of land in a good position, two a cashflow nuetral flat, three a house selling below market value (owner selling), and four a house that needs renovation.

    Dont just go to realestate.com.au or domain.com.au also check out owner.com.au and the individual realestate agents home pages eg prdnationwide.com.au etc.

    These possible deals have inspired me to get back to it. Spent 3 + hours last night after work painting (I’m stuffed!!!!). Only need to paint the bedrooms + kitchen, and get tiling done and I’m finished.

    I’m not sure if people will agree with me here, but I think if you are young and don’t have a lot of money you should be looking for houses that you can renovate and make money from. If I bought a CF+ property at the moment then I would not be able to afford a second IP until I have saved up (slowly!) a new deposit. Renovating and selling (hopefully =) gives me enough money after a few renovations to buy multiple properties (one of them CF+).

    Some numbers on my current deal. The house I purchased was about 10K below lowest price in the area. It needs/needed 5K – 10K renovations to get it up to average. Prices have increased in the area and with the renovations we should come out of the deal 40K up. Worst case we come out 20K up, best case 70K.

    Oh and I chose a house where I could do around half the reno myself to save money eg, painting, minor repairs etc, etc, etc. I am going to get proffessional help with tiling for this house but I plan on learning how to tile for the next one.

    Anyway Just thought I’d explain what I am up to, I know it can be hard to start for someone my age but use your family thats what they are there for!!!!! =)

    james

    Profile photo of The ContrarianThe Contrarian
    Member
    @the-contrarian
    Join Date: 2005
    Post Count: 97

    All securities come with a risk.
    However if you wanna take a risk and find 9% or 10%
    then here’s an example

    http://www.realestate.com.au/cgi-bin/rsearch?a=o&s=nsw&cc=&c=54870149&tm=1142591348&id=102732220&f=0&p=10&t=res&ty=&snf=ras&ag=&cu=&fmt=&header=

    Sorry guys, but this one’s taken.

    BTW, my personal opinion would be to balance your portfolio with a mixture of eggs… (ie. not just CF properties) Steve does… He must of forgot to mention [cigar]

    anthony.campbell@citigroup.com

    “There is nothing scarier than ignorance in action”

    Profile photo of gazman1976gazman1976
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    @gazman1976
    Join Date: 2006
    Post Count: 7

    I am a newbie so bear with me.
    I am just starting out on the property investing journey and by looking through these forums I have picked up a lot of good stuff.
    When a more experienced investor is doing their DD on a town before investing in an +CF property (I have started to pick up on the lingo too [biggrin] ) what types of info do you consider and where do you get it?
    I have been looking in the forums but have not come along these questions so far, they might have been asked before but here goes.

    1. Is population of the town important and whether it’s population is expanding, shrinking or static (I’m guessing shrinking is a big no-brainer to stay away)?
    2. The percentage of rental properties in the community, does this signify whether people are more inclined to rent or buy?
    3. The vacancy rate, is there an oversupply or undersupply of units which is driving demand?
    4. Are there any capital/infrastructure works scheduled for the town or surrounding areas, this would provide employment and attract more business/people (and possibly provide capital growth)?
    Is any of this information important and if so where to source it?
    Opinions anyone?
    Cheers

    Profile photo of JarrahJarrah
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    @jarrah
    Join Date: 2005
    Post Count: 99

    YES YES AND YES!

    And if you are incredibly astute you will devise a way to see intrest being generated in an area or approach Govt or Council or Business and propose ideas to them thats how this country was built and how it will continue to be built and if you dont get out there and do it someone else will…

    “ask and you shall recieve”

    Sincerely, Jarrah

    ++CASH FLOW PROPERTY HUNTER
    (your not hunting if your not hungry)

    arboralliance@hotmail.com
    Climbing & Consulting
    Arboricultural Services
    0431433288
    http://friendlyfarms.org.au/
    “be ye angels?”,
    “nay we are but MEN!”

    Profile photo of gazman1976gazman1976
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    @gazman1976
    Join Date: 2006
    Post Count: 7

    Any tips on how to get this info?
    What has your experience been Jarrah?
    I could get the population from the ABS I guess but how would I get info about vacancy rates or planned works?
    Cheers,

    Profile photo of JarrahJarrah
    Member
    @jarrah
    Join Date: 2005
    Post Count: 99
    Originally posted by gazman1976:

    Any tips on how to get this info?
    What has your experience been Jarrah?
    I could get the population from the ABS I guess but how would I get info about vacancy rates or planned works?
    Cheers,

    Mate call six people in that town and find out. But remeber everyone is trying to “soft sell” their own town…[inlove](Hot gossip is always a keen way to find out whats going on)

    Believe it or not I just ask a realestate agent, I tell them I have $1B to invest and where do they want it then i go about sourcing the $1B whilst quietly buying up the hovels…[strum]

    Google the town, go camp in the town for a couple of nights or weeks in the area (camp in tents not “camp” as in a dress or pink shirt)…[guilty]

    Start a business in that town or 4 or encourage others to do the same…[cap]

    Re-locate a few hundred homeless or poor or any other disafected or downtroden into the town and watch the publicity go through your roof and it will get so much media exposure everyone will want “in” to your town…[buz2]

    Start some crazy wacky rumor about the town that some guy is running around sourcing $1B in investments for the town…[lmao]

    Mate its all been done before and very succesfully…[sleepyanim]

    How do you think the world was discovered if blokes/chics couldn’t make wild and crazy projections about the future prospects of relatively unknown lands…[medieval]

    I mean take that other thread for example, I’m surprised Steve hasn’t asked me for shares in it? [tongue]

    They all start off like us and end up where their dreams take them, set your goals and your entry exit strategies, write down your dreams, make the calls, dont be looking down on that bum in the ex melbourne yellow taxi who just cut you off, he aint no loser he’s your next $M deal… (its me actually…) [wacko]

    Just make some phone calls dude, if you dont start getting out and doing it when will you?[thumbsupanim]

    “ask and you shall recieve”

    Sincerely, Jarrah

    ++CASH FLOW PROPERTY HUNTER
    (your not hunting if your not hungry)

    arboralliance@hotmail.com
    Climbing & Consulting
    Arboricultural Services
    0431433288
    http://friendlyfarms.org.au/
    “be ye angels?”,
    “nay we are but MEN!”

    Profile photo of PurpleKissPurpleKiss
    Participant
    @purplekiss
    Join Date: 2003
    Post Count: 580

    Hi there GAzman1976,

    Ring the council and ask them questions ie: what has building approvals been like (gives an indication of whether population is increasing). Ask them what infrastructure is planned or any zoning changes in the pipeline etc.

    Also for population, remember that the ABS stats are now a few years out of date. Another option is to look at the Dept of Eduation and Training site – they have school census stat’s that are done at least yearly. If you see student numbers increasing in the area, that’s a good incation that population (or at least families with kids) have increased and if it’s a family type home you intend to buy then this is a good thing. It may not be a good thing if you want to purchase a one bedroom flat. Basically the figures might help you decide if you’re buying the right type of housing required for the area you are looking.

    Also do a Google search on the area, it’s amazing what info that sometimes brings up.

    Often the local newsagent has an idea of whats going on too, ie: he knows if he now orders more papers or less papers than he did 12 months ago. If he now orders less, ask him why he thinks that is, if he says everyone’s moving out of town, well, be cautious, investigate further before investing.

    If you’re investing in a town rather than a suburb then arrange with the newsagent for them to post the local paper out to you each week or month or however often it comes out. You can then watch the number of houses for rent each week, the type of housing being advertised both for rent and sale and the prices that both are attracting. You can also read the editors page where locals have their grumble about things they don’t like (often they don’t like progress, so don’t be concerned about all grumbles, but follow up on things that may affect an investment, find out if it could be postiive for you ie: the new gravel mine that was approved that the locals grumble about becasue they are concerned about dust, may actually provide employment for many people which may bring people into town whether for the employment or whether they are passing through doing business with the mine, but then need to buy lunch etc, boosting the local trade which in turn boosts the towns ecomony). The local paper also tends to have info on events coming or other things occurring wihc you can assess whether you then need to obtain further info or not.

    In my experience newsagents have been more than willing to post the local paper for a fee and in genenral I’ve found the fee well spent.

    Hope this helps on where to look for info.

    Regards
    PK

    Profile photo of gazman1976gazman1976
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    @gazman1976
    Join Date: 2006
    Post Count: 7

    Thanks for that PK, they are some good tips.
    Cheers,

    Profile photo of kdhnkdhn
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    @kdhn
    Join Date: 2005
    Post Count: 68

    A topic l really get into in browsing realestate and just looking at what can be done with a property . Unfortunately at the moment l guess l’d be considered all talk in the lP area as l decided to focus on only one right now which is combined with my own home.
    But , l think lP and opportunity to increase all within the one purchase are everywhere and in any climate. l only wish l could act on everything l would like to right now and have had to pass up 1/2 a dozen this year alone without looking .
    For me personally anything goes if your open and it’s amazing what you find . So many things have opportunity that so many people won’t see as someone said earlier in this thread . 100’s of people looked at that property 500 mtrs from the water , no one saw . My place now was one of those , it’s doubled in 6 mths , my last place they couldn’t give away but the good’s were staring you in the face we cleaned it up and doubled our money .
    There’s one near me right now $120 on an acre and corner block zoned res . l mean than damn thing rents for 200 and would go into 4 with nothing to spend except a few driveways because it’s on a corner with power ,phone the lot . There are 100s of these places around with scanning but l guess most people are looking at a house as a home not as what can they make out of it which is great for investors .
    Industrials , huge potential , often on big blocks and rent well .
    Big blocks anything , again a huge avenue for maybe an extra rental on the new block and often the chance of being left with more to sell or build on and all under basically the one find .
    Just my tastes and everyone has their area but !
    Cheers

    Profile photo of ForkliftForklift
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    @forklift
    Join Date: 2003
    Post Count: 21

    Been away a little while and haven’t been able to log in. Just read this posting tonight. I haven’t got past the first few posts. Adam’s is a very, very good one even if you have been “in the game” for a while. Bit like a ‘refresher’.
    But our dear Mr Dazzling. While most of your posts are good to read too, in this one you seem to suffer from a little foot’n’mouth disease. I resent strongly, being classified as “elderly”. At only 53, and fit & healthy & active I certainly do not class myself as elderly. I was a paramedic for just on 23 years and from experience (& training) elderly does not even start until 70, possibly 75.
    But classifying anyone from 40 onwards as “elderly” is only you demonstrating your immaturity, at least in this subject and will only help to make a lot of enemies for you.
    So please take extreme care when ‘classifying’ anything, especially when it comes to people. And as far as I am concerned, when talking of classifying people, there are actually only two (2) “classes”: Good people and Bad people.
    If someone has already picked you up on this then I will apologise now. I was so annoyed that I had to reply immediately and have not read past your post.
    I also don’t mean this as an attack on you but more as a little instruction/advice.
    Regards,
    Forklift

    Profile photo of danandangdanandang
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    Dazzling and Adam

    Very well said. Thanks

    Profile photo of michael76michael76
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    @michael76
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    very informative tips and suggestions here, thank you to all, i agree for the most part about getting out there and researching as opposed to just looking on the net, what i have come to realise though visitng sites like domain.com.au and re.com.au and any other realestate website you can get a good idea of where are some interesting areas, then its simply a matter of finding more info on that area (via the net again) then ringing around and as Jarrah said do a little bit of creative thinking, talk yourself up hell the RE doesnt know you from a bar of soap so how is he/she to know you are full of it ;) get listings of the areas you are interested in (i am doing that on monday) and go from there, plan a trip or even find out from people on the net if they know much about a particular area, the net has quite a few places to find out just about anything on anyone/thing/place.

    Profile photo of fiestamotelfiestamotel
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    @fiestamotel
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    Hi Lee,
    I think you are certainly on the wrong tram to bucket Steve and his methods. I wish I had read his book 20 years ago. In the last 2 weeks I purchased a duplex for $236k showing 9.9% return and with a $10k makeover to one of them the return will increase to 11.09% ( and I already have a tenant agreeing to pay an extra $75 per week). When the other tenant moves out I will do a makeover to that unit and increase the rent on it by $75 per week which will lift the return again to 12.18%.
    I have also observed plenty of other properties at or near 10%. they are not in the metropolitan area but what do you expect?
    I am now combining Steve’s methods with those of the Reno Kings and looking for properties to value add to obtain the required return.
    These are not easy to find but who said it would be easy. However they are available. Just keep looking.
    Barry M.

    Profile photo of mumofthreemumofthree
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    @mumofthree
    Join Date: 2006
    Post Count: 16

    hello,
    “…cosy 2-3 bedroom home walking distance to CBD, all in original condition, a little tlc and you have yourself a good rental property. Rental expectation is $130 per week, rates approx $900 p.a. … $65,000 “

    Is this a good invsetment in terms of fitting the 11 second solution? And a CF+ Deal? Would anyone purchase such a place for investment? How much deposit would YOU place and how much would YOU budget for a reno? Just curious…

    Profile photo of adambcadambc
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    @adambc
    Join Date: 2003
    Post Count: 145

    Hi mumofthree,

    A good post, and a good question. This is something that Steve tries to get across quite often – YES this looks good from an 11 second solution point of view. But the point Steve keeps making is that this equation is simply a FILTERING device – it just narrows down the field of potential properties to those which MAY return a positive CF. So the 11 second solution is simply THE FIRST STEP! And I’m certainly not trying to downplay what you’ve found here, because in the current climate it’s not too easy even getting this far!

    Once you have filtered out the 99.99% of properties that DON’T pass this equation, you are then left with a small number of properties which you can then go on and do your DUE DILIGENCE on – and this includes answering all the questions you have asked, and more:

    – What is the area like? Will this property achieve reasonable CGs?
    – What are the vacancy rates in the area? How difficult will it be to get new tenants when the current ones leave?
    – The Advert says “rental EXPECTATION is $130pw” – where does the agent get that figure from? Are they simply putting that in to try and snag the +CF investors who have read Steve’s book?! Or is that actually based on realistic figures?
    – The Ad also mentions “a little TLC” – just how much TLC does that mean in dollar terms?! Remember – the agent wrote this ad to try and sell the property! They are not by any stretch of the imagination unbiased!
    – Etc etc etc – the list goes on.

    Once again – I say all of the above NOT to frighten you away. Far from it! I highly commend you for finding this potential deal, and now strongly encourage you to go about doing your due diligence on it! I sincerely hope it passes with flying colours, and you snag yourself a good +CF property out of all of this!

    What I would suggest you do now (if you’re still keen on this deal) is to put in an offer on the property, with some good solid release clauses in there so you can pull out if you find anything you don’t like during your due diligence. That way, you’re securing the property for yourself while you do your research, whilst not obligating you to purchase if you’re not happy with it. Nothing worse than putting in a lot of time and effort into something, only for it to be plucked out from under your nose by someone else because you weren’t quick enough!

    I hope that’s helped a bit.

    All the best,

    Adam B-C

    Oasis Finance
    for your Vendor Finance solutions
    Achieve the Dream!
    oasisfinance@optusnet.com.au

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