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

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  • Profile photo of wilkie0611wilkie0611
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    @wilkie0611
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    ok lol cheers freckle

    Profile photo of USInvest-RyanUSInvest-Ryan
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    @usinvest-ryan
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    Sebastian and Adrian are on form. You need to be looking at something which has more than just a single employer. The smallest change to commodities or business environment for a minor can have a huge, even leveraged impact on your property if it all goes pear shaped. There's companies in the US trying to flog properties in North Dakota based on a similar principal except they are trying to advertise 30% yields. Absolutely crazy because they are only talking about the upside and not mentioning anything about what your investment will be worth should all the big business leave town. I don't care whether you're buying in Australia, US Invest or even Africa. Investment fundamentals remain the same.

    Let your commonsense prevail and expose yourself to a diversified industry base… Unless you want to put it all on red that is…

    Ryan http://www.usinvest.com.au

    Profile photo of MolleeyMayMolleeyMay
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    Sticky: Answers to "Where to Find CF+ Deals". Answers to "Where to Find CF+ Deals" Comments: 479. Hi everyone, I, like most other forumites who have visited …

    regards,


    http://www.loopnet.com/lid/14331064

    Profile photo of Chris WhiteChris White
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    @chris-white
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    Guys, in NSW now, you can easily 'create' a cash-flow positive deal – in any location, it just depends how much you want to spend.

    See a case study of one that we did – Cash flow positive property deal 

    You don't have to invest in mining towns and very remote areas (and I am recommend you don't)

    The market here is also in the growth phrase – Sydney property cycle   so we are getting income plus growth at the moment.

    No gimmicks here.

    Chris White | Pillar Property
    http://www.pillarproperty.com.au/
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    The Property Investment Specialists

    Profile photo of MosquiMosqui
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    I don't agree. There are mining towns with more than one industry, like Karratha, where you have LNG, Fertilisers, Dampier salt, Iron ore and all the support services for the Oil srigs around. So if all these industries collapse, doesn't really matter where you are because all Australia goes down. Karrtha also has all the government offices for the Pilbara.

    You don't get much appreciation in Karratha, but the return is more than 10%.

    Port Hedland or Newman are very different, you only have Iron Ore, so some mining towns are not a bad investment; in my opinion.

     

    Profile photo of Property watcherProperty watcher
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    @property-watcher
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    Mining towns = Self Managed Ponzi Scheme.

    Profile photo of Adrian CahillAdrian Cahill
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    Hi guys, Anyone have a Spread sheet for crunching the numbers. I have been out of the game for a few years and getting back.

    Hoping someone would be able to share their spread sheets with the Maths.

    Im looking at Townsville and Brisbane. In my opinion, Brisbane better growth, Townsville better Cashflow & at a lower buy in, manufactured growth should be easier.

    Adrian Cahill | AdrianCahill.com Personal Development Expert
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    Here since 2002, however things have evolved over the years.

    Profile photo of HarpalHarpal
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    Hi,

    I agree, stay away from mining towns. They can shut down overnight and you are left with a useless investment.

    Remember the old saying: "Positively Geared can be Positively Dangerous!" 

    Profile photo of BoughtWithEquityBoughtWithEquity
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    @boughtwithequity
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    The beautiful thing about real estate investing is that there are so many different paths that can be pursued succcessfully…….the key is finding a niche that works for you and sticking with it.  Reading through this thread, you can pick up on strategies that works in 2006 that wouldn't work in today's markets.  Over the years, many of us were able to buy negatively geared properties that continued to appreciate in value in a hot market, ultimately providing a positive return.  Today, I view appreciation as simply a bonus….don't count on it and if the property doesn't cashflow, I'm simply moving on to something else.  Finding the thorn on a rosebush, is and has always been the best way to buy real estate.  It still is.  Find a property where value and rents and can be enhanced with simple improvements like updating, adding new countertops, light fixtures, designer paints or converting space to an additional bedroom….my all time favorite as with my shared housing program, it's all about rents and cashflow.

    We recently took over an Aussie's investment property in Atlanta.  He paid $140k for it 4 years ago and saw about a 3% return on it over that period.  He rented it out through a manager and ended up with 3 awful renters over that period.  Each renter either ended up breaking their lease, getting evicted or causing significant damages.  In the states, we don't have a tenant bonding program like you do.  After accounting for vacancy costs & repairs costs, his true return was less than 2%.  In frustration, he brought the property to us to repair with a plan to just dump out of it and recoup his capital.  We suggested he try a shared housing concept using our MyRENTEDroom program.  He agreed to give us 90 days to turn the property around.  His net rent, not accounting for vacancy & tenant damages, was about $500 a month….when it was rented!  We finished off an area in the basement, turning the house from a 3bed/2ba into a 4bed/2ba.  Over the next 60 days, we rented each of these rooms on a 6-month lease at $650 for the master, $550 for corner bedroom, $500 for smaller bedroom & $600 for the formerly unused space in the basement.  The net rent, after utilities and expenses, has grown to $1,500 a month.  With a 10% cap rate, which is our expected return, rented the old way, his $140k property was worth about $60k ($500 x 12 /.10) but grows to $180k with our program ($1500 x 12 / .10)  I understand that shared housing might not be allowed in your market….check into it an see…..but it works here in the US and the results speak for themselves.  He went from a gross 4% return on investment to a net 12% return using a shared housing model.  Here's a marketing video we used for one of the rooms:  http://youtu.be/CG0C6RzRuW0

    He will now sell this property to an investor seeking passive income for around $170k to free up capital which he will reinvest with us to buy foreclosed houses around metro Atlanta.  We will then make repairs and rent them as shared housing before selling the off to passive investors.  You can create a similar model in your part of the world if you wish.  He will create a 10% return plus half the profits on the sale to create an expected 15% to 30% return over 6 to 12 months.  Remember, these results are achieved for us using our shared housing model.  The passive investors can be financed up to 50% and they are guaranteed a 10% net return for 18 months which creates a steady line of back-end buyers for us.  

    Look to be diversified in your real estate investing activities.  The returns to be had in shared housing make it worth a look.  I'd look for investment partners & models where the marketers are actually involved in the model….not just collecting fees on sales.  Our model is successful because I really don't make much money until my group sells the renovated & rented property.  Look for models where you are secured either on title or as a lienholder otherwise, you are at the mercy of your investment partner.  I'd also be very cautious with the mining town deals…..if the oil, gold or gas goes bust….where are you?  Who will buy it from you and at what price?  Fun stuff……happy investing!

    Profile photo of mattstamattsta
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    I don't tink mining towns are all that bad, in my opinion. The criticism seems to be that mines can shut down quickly and leave your property rental income in the dust. That's true, and to avoid that potential risk, I'd suggest to find mining towns that have other industries that are significant in the town. Also check that the regular population is large enough so that if the temporary mining worker population leaves, you will still have demand for your rentals.

    Profile photo of BoughtWithEquityBoughtWithEquity
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    @boughtwithequity
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    We currently have a similar rush on oil towns in the Dakotas in the US.  Without the oil, there's nothing there and there's a rush of builders throwing up hotel/condo deals.  It's like the college towns….even if the mine or oil/gas project is successful, every 5 years or so, they'll build something newer and the rents for you unit will decline with age.  It's one of those niches where the real money is made by the promoters and not by the ultimate owners.  I agree with mattsa…..take a good look at the surrounding area before you invest and make sure there are other things about the local area & economy that make it a viable option if the mine goes bust.  Happy Investing!

    Profile photo of manadeepmanadeep
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    Thanks Adam for starting such a valuable thread and the rest for contributing so heavily !

    Do you guys have a particular preference of units vs houses when you look for CF+ deals?

    I've used Adam's advice and narrowed down to an area in Western Sydney where I see potential CF+ deals, but wondering if I should target units rather than houses .. ?

    Mani

    Profile photo of PROPERTYHOTSPOTPROPERTYHOTSPOT
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    Hyson Green offers higher rental yields than other locations in the UK, according to a new survey.
    The best rental level in the country is in Hyson Green Nottingham where average yields this year are 10.9%, up 1.13% year on year , according to a poll.
    The UK average of 6.4% for other buy-to-let properties.
    With house prices falling, now is a great time for cash rich investors to snap up a deal. However, investors should look at Hyson Green as a long-term investment based on high rental returns rather than capital growth.

    Investors may think that they are buying into a weak market, but as research shows rental yields are on the increase and buy-to-let investors have a great opportunity to capitalise on the increasing demand for accommodation, whilst taking advantage of lower house prices,

    Hyson Green house prices will increase by 40% by 2018 as predicted by latest national data

    Hyson Green is an area of Nottingham, England. It is the second most popular shopping area after the city centre and is now home to a variety of cultures with a thriving local economy. Hyson Green has the largest ethnic minority population in the city with many multicultural shops and supermarkets offering foods from West Africa and Southern Africa, Arabia, Eastern Europe, Iran, India, Pakistan and Russia. Since 2006 Hyson Green has seen a larger rise in development and direct international investment than any other area of Nottingham. According to new research Hyson Green has the fastest GDP growth in Nottingham

    market capitalisation with high yield potential at low entry point

    Profile photo of Richard TaylorRichard Taylor
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    PHS not sure what bible you are reading from but my properties in the UK (South) are increasing in value by the day and i would be concerned putting my clients into areas where "house prices are falling'.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $26M. Ask me for a copy of my API Interview.

    Profile photo of Tony FlemingTony Fleming
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    Hi, After hours of writing a complain to ASIC I figured I should come on here and also share my story. I’ve been a repeat client of binvested since late 2012. I initially paid $7700 but my last few were $9900 per deal. As you all know their strategy is to buy under market value, reval and buy the next one. Which is how I assume most of his clients reach 10 properties in one year. I bought my first investment in cairns late 2012, early 2013 Nathan Birch approached me with a new property, having not saved enough deposit he referred me to his bank manager at westpac. I got a reval done, it came back at $200k which was $90k over the purchase price. I pulled that equity out and bought the next one/paid nathan his fee. The process went on and on.. Recently I was approached by a former client of Nathan’s who tells me his bank manager at westpac has the authority to approve a reval if a property in the surrounding streets has sold for the same amount. So my older 2 bedroom unit, got reval’d at the same price of a modern 2 bedroom unit. I found this a little difficult to believe. However better being safe than sorry. I went to CBA and ordered a reval on my initial purchase, it came back at only $145k rather than the $200k it came back at in early 2013. I followed by the rest of my investments and it was pretty much the same story. Not sure what to do from here, I have reported to ASIC, the other guy has too. Sitting here with more debt than assets and losing sleep. Has any other client of Daniel and Nathan had this issue.. What did you do? Also, I checked my buyers agency agreements and it mentions that they get commissions on every loan they send over to Westpac. [/quote

    Sorry to hear about your situation. Are you cash flow positive though? What’s your portfolios LVR with the CBA valuations? You should probably report the Westpac guy as well.

    Tony Fleming | Triumphant Property Group
    http://www.triumphantpropertygroup.com.au
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    NSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury

    Profile photo of superAndrewsuperAndrew
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    Would anyone be interested in an online tool that can find positive cashflow properties (provide you with the address) and identify suburbs/regions that are positive cashflow throughout Australia?

    I developed a prototype just for fun and it seems to be working. It won’t guarantee that the property will be +CF but it will narrow the list of +400,000 properties that are currently for sale.

    If there would be a demand for something like this please let me know and I will continue working on it and put something online for people to test.

    Thanks

    superAndrew | Property Analyser and Finder Tool
    https://property-analyser.com.au

    Profile photo of Jimmy86Jimmy86
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    I have found Ryan at Onproperty pretty handy. provides good education on how to find your own CF+ properties.

    http://onproperty.com.au/free

    Jimmy86 | Future Assist SMSF Specialists - Bris | Melb | Syd
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    Self-managed super specialist administrators and advisers

    Profile photo of u36mau36ma
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    it came back at only $145k rather than the $200k it came back at in early 2013.

    Hi Dark Knight,

    That’s a really interesting story about BInvested. I always wondered how their clients achieved so many rapid property purchases.
    On the whole though, are the properties still cashflow positive? I imagine it will only be an issue for you if you came to sell in the near term future. Is there any other downside to your holding them?

    Profile photo of Tony FlemingTony Fleming
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    @the-dark-knight
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    Hi u36ma,
    This didn’t happen to me I think I quoted someones post and they deleted it, my response started from the sorry to hear bit

    Tony Fleming | Triumphant Property Group
    http://www.triumphantpropertygroup.com.au
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    NSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury

    Profile photo of Tony FlemingTony Fleming
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    @the-dark-knight
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    Yeah they definitely deleted their post and my quoting abilities aren’t very clear might have been a competitor trying to stir up trouble.

    Tony Fleming | Triumphant Property Group
    http://www.triumphantpropertygroup.com.au
    Email Me | Phone Me

    NSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury

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