For the last 3 to 4 months I have read so much about PI including all of Steve's books and have also bought some of his analysing products.
The result is that I think I'm suffering from information overload and I feel more confused and undecided about things than when I was in "blissful ignorance"!!
I'm like a bit of a "stunned mullet" and wondering what to do next! I find I drift between feeling confident because I've read and educated myself about a lot of things over the past few months….to feeling worried and tentative about the whole thing because I know more about what's involved than I did before!
Sounds ridiculous I know….but has anyone else out there had the same experience. Maybe I'm one of those that "over research and analyse" things!
Anyway….I'm continuing on the IP path even though mentally exhausted and undecided about what strategy etc etc etc!
Hi Richardgr,
I think a lot of us go through that phase
I've even been in the situation of about to place a deposit the next day and almost talked myself out of it because I got cold feet. No matter how much you read, how many courses you do you will always learn more when you start doing it yourself. Always make sure that you know what you are getting yourself into financially, whether you are going for positive cash flow or negative gearing.
And of course you always have this forum to ask questions.
Hi Kaz/Karen,
Thanks for responding…..really appreciate your encouragement. It's kind of reassuring that I'm not the only one who goes through several stages of "fright" !!!
Here's hoping you do….and are doing really well…. and you're right about always having this forum to come to for advice and support.
Thanks again.
Richard
Hi Richard,
We're not doing badly – 3 IP's in the UK and 2 here in Australia. And of course we are on the lookout for more now.
Good luck to you.
Hi Richard,
what you described is exactly how i felt. Seems to be very common. I can only say i felt this way because i was doing everything else except actually buying any property. i was a serial spectator not a competitor. Well i took the plunge and bought my first one last month and thanks to all that info that was sitting in my mind i had the knowledge and confidence to buy another one just last week.
Set yourself some goals and go from there, the right time is different for everyone.
I wish you success and please let us know how you go.
Cheers
losite
Hi again Karen,
Hey! 'That's not bad at all with 3IP's in the UK and 2 in Aus!
International investing must take some courage and knowledge…well done!!
Richard.
Hi Lostie,
Thanks for your response. I think I'm exactly as you described yourself at one stage….."a serial spectator/researcher"…..LOL! You're right about setting some goals but the goals have to be set around a strategy and I'm confused about choosing or deciding on a strategy!!! Sorry state to be in isn't it!! LOL!
Everytime I get to deciding on a strategy, the mind starts this …"but what if." game! Confusion/frustration etc sets in and I get up and walk away from it all for a day or two.
I know my time is NOW…I'm just trying to figure where to "shoot the arrow'' so to speak!
Think I have to just take the plunge as you did and learn to swim. Thanks for the advice and yes, I will let you know how I go when I become a competitor! Thanks again Lotsie for the support and ecncouragement.
Richard
Hi Richard. 'Buyers remorse' and 'analysis paralysis' are two very real things when buying or commtitting to anything that costs a bit of money. That said, you do need to 'take the plunge' as soon as you can if you have a reasonable understanding of how basic property investment works. ie. Gearing, capital growth, initerest only loans and the purpose behind them etc. And having a goal or two helps. Got any written down? Don't have to show anyone. AND something many investors may disagree with, but I think is a genuine option in the current economic climate……..start small. No major renno's, and no 300k plus propertys. There is plenty of sub $200k (or even 150k) stuff around in our fine country still, (without buying in outback areas) and buying something like this in a reasonable area, with a tennant already in place that requires very little if any work, and is close to 'paying for itself. (ie – If rent covers your loan interest and management rates, all you have to allow for out of pocket is rates, iinsurance and repairs) it will really boost your confidence, and get you some 'runs on the board' as they say. Youll wonder what all the fuss was about ….'Trust me'….. All the best with your 'journey'.
Hey Richard
I'm one of those people, that if you want to get to the top of the mountain the first, don't walk or run, use a friggin helicopter.
I too read those books and came away thinking 'man what a truck load of work that is'. Successful sure, but not for me. I didn't want property cause I loved it. Nor did I want to deal with the tenants. I had enough dealing with people when I owned a Newsagency. I wanted property for the ability to leverage off, and buy more and more property. And I wanted capital growth, because equity has been my friend for 25 years or more. It BUY'S TIME!…………………But how to make it safe? Ha!…like newsagencies use to be!
Anyway, to cut a long investing story short, someone sent me a copy of Wealth for Life by Tony Melvin and Ed Chan. Turns out, I have been using 70% of this strategy anyway. Buy and Hold good quality properties, and never ever sell. Unless you need to for a life threatening illness. Definitely not for a recession or depression. I actually bought 3 properties in the last recession in the 80's. Best time to buy usually. For every property, I have bought since 1980, every single one has risen, by 10% pa some more, in capital growth. I am only speaking for myself here, and there are plenty of DIY's here having a fine old time, up to their eyeballs in every little detail. Which is fine by me, keeps em off the waterways. I want to enjoy life, as it is very finite.Sorry to waflle, but if I was starting out again from scratch, I would say get yeself to an accountant that knows his/her stuff, in the Property stakes. Someone with a passion for helping you get a great team together for your wealth building future. The fees you pay are returned many times over, not to mention peace of mind.
Hi v8ghia and Pendo,
Man! I am so amazed at the response from people like yoursleves who actually take the time and trouble to reply to someone like myself who is in a way "whinging" about not knowing what to do!!
All I can say is thank you for expressing an opinion on my state of mind and situation. I have since taken a vow that once I become a "competitor" I am going to to do my utmost in this forum to offer advice and guidance to anyone else who is starting out on the "IP" thing!
Hey Pendo! I fell of the chair at your comment about using a friggin helicopter! Bugger climbing! LOL! News agencies as far as I know are a lot of real hard work and loooooooong hours. I looked at it a few years ago, but when I got into the nitty gritty of it…..I was not that keen.
I will take your advice about firstly finding an accountant who knows what they are doing when it comes to IP's. I have started asking around but I'm amazed at "blank" responses I get! Maybe I'm asking the wrong people!!!
Thanks for your advice Pendo.
Hi v8ghia……I feel pretty comfortable with "starting small" and maybe not using the helicopter! ( with all respect to Pendo). No I haven't got any goals written down and after your question……I will be doing just that! I like the approach of nothing over 300k for a first time round, especially during the current market conditions and a very uncertain future.
I have a theoretical understanding of PI and the financial side of things ( definitely no guru here!)…..enough I think to ask the right questions. I was seriously thinking of an opportunity that would involve a major reno but after your thoughts….maybe not as a first timer.
Well….back to the drawing board and these reponses have given me renewed vigour! Thank you very much!
Richard.
Hi Richard
I think we all beat up on ourselves looking for the "perfect" investment, but like life in general it just doesn't happen. If you have been reading and researching then it is hard to go too wrong so long as you intend to hold for at least 10 years.
Time works its magic and your investment becomes more valuable with the passing years. We have lived in our PPOR for 28 years – cost $49,500, now worth approx $500K. Even if we had paid $60,000 (which we could NEVER have afforded) it would still have proved to be a good deal.
In the end, "just do it". Find a good property, in a good area, that you can afford without stretching too far (always keep money or borrowing power in reserve for the "what ifs"). Absorb the upfront costs, over the years do any improvements that are cost effective, attend to maintenance and you can't go too far wrong.
Otherwise you will still be asking the same questions in 5 years time when everything is so much more expensive.
MargRichard,
I've got 3 PIs yet I still agonised over each one. In fact I found the first was easier than the 2nd and so on, because as you increase your portfolio the risks can increase.
I find that the best approach is to take a worst-case scenario view, e.g. what if interest rates go up by 2%, what if I'm without a tenant for a sustained period of time, what if there are serious repairs etc. If you can factor in some educated guesses about such scenarios and see that on paper you can cope, then I find that provides me with peace of mind and the confidence to go ahead.
Certainly do not have a "blue sky" attitude towards investing as I would regard that as gambling, but if the numbers stack up and you have factored in a contingency, then the rest is down to your own level of comfort. That said, I do not think it's for everyone. There no point getting involved if it’s going to cause you sleepless nights and stress.
Hi Badgers,
Thanks for your views and very sound ones at that!
I think you're right about outlining the worst case scenario and deciding if you could weather that storm……so to speak.
Thanks again for your advice and taking the time to respond.Richard.
Hi Marg,
Yeah…if I carry on like I have been , I definitely will still be asking the same questions 5 years from now.
When you say absorb up front costs……you mean don't use equity to fund buying costs?
Thanks for your response Marg.
Richard.
I'm a big procrastinator & always think things through alot. I talk myself out of alot of things because of this. I'm learning though that the quicker you do something the less you have doubts or ask yourself this & that, what if & but… Don't get me wrong, you should do your research, that's the easy part, but once you've done your research & your initial gut feeling is "YES" then take a deep breath, ignore whatever else your mind says, & go for it! You procrastinate, you lose. Don't miss the opportunity of a life time because you couldn't decide quick enough.
Macros
Hi Richardgr
Almost all the "systems" out there in the books work… But not all at once!
So decide on the one that gets you what you want (have you written those goals for yourself yet?
…then have your checklist to make sure the property under consideration meets your criteria
… then consider your "worst case scenario"s for comfort level
…and just do it.
After a couple you will probably wonder what all the fuss was about. We have purchased 34 properties since 2003 and currently hold 13. Although we did not make as much on some as we would have liked (our poorest was "only" a 19% return on money invested), we have never LOST money. Even now when we have reached the point where we are looking at buy-n-hold properties using the profits from VF and wholesaling houses to fund them, they are only slightly negative-geared.
* The tip about smaller and less spectacular deals is a good one. Just this year we starting to buy over 200k. IMHO there is a greater profit percentage in the smaller deals, and they are less stress.
Hope this helps you along a little.
Hi Richard
It looks like you have had some excellent advice in this posting but I thought I would throw in my two cents' worth.
Take all the information you have heard and strip it back to basics.
1. Do you want to buy +cashflow or -cashflow? +cashflow will put money in your pocket (apart from the inital outlay) but are not so easy to find these days. They are usually in small towns which carry their own risk or require work such as value adding. Negative cashflow will cost you money for the first few years, but if you can wear the costs early on, you will increase your equity. In general, property doubles in value every 7 years.
2. What is your risk profile? You wil find quizzes on the internet. If you prefer low risk then you will be better off sticking to areas with proven growth and using the "buy and hold" strategy. YOu will probably also be better off in an area close to you so you can keep an eye on your investment. If you are not risk averse, you can branch out to areas you think will show good growth in the future (read API every month to get an idea of what is going on around the country).
3. Once you have found an area you like the look of, research, research research. Again, read the Australian Property Investor. I will probably get a caning for this but I think companies like the Investors Club are not a bad idea if you are just starting out. Clubs like these research areas that have good potential and they try to get as close to positive cashflow as possible. If you do decide to use a club like this I would also advise:
– don't use their recommended accountants or mortgage brokers. Always get independant help– ALWAYS get an independent valuation. In fact, do this with any property you buy. For $500 you could save thousands.
4. Once you have an idea of what you want, just do it. Whatever you buy will be worth twice as much as you have paid for it in 7 – 10 years. You will look back and think that it was a bargain.
5. If you are suffering from information overload, stop taking in information for a while. I think that education is a very important part of property investing, but if you are getting confused, step back, let what you have learned sink in, buy some property and then start learning more.
Cheers
K
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