Forums / Property Investing / General Property / Where did you go wrong?

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  • Profile photo of grantos_champosgrantos_champos
    Member
    @grantos_champos
    Join Date: 2009
    Post Count: 106

    Gday everyone,

    This forum has plenty of success stories that are always great to read about. There are also plenty of tales of dodgey contractors and bad tenants etc which are also interesting reads.

    Im wondering if any one is willing to share some stories of problems they had as a result of purely their own doing? Were you not disciplined enough? Did you get yourself into too much debt? etc etc. And finally what lessons have you learnt from your own mistakes?

    I will understand if no one replys this but if you can spare the ego.

    Cheers

    Profile photo of fredo_4305fredo_4305
    Participant
    @fredo_4305
    Join Date: 2009
    Post Count: 336

    I think this is a great topic if egos can be put aside. 

    I have only been investing in property since 2007 and have enjoyed the ride.  I have only really educated myself properly in the last year.

    I have made some mistakes like anyone and a few of them are as follows.:

    My finance was not set up properly at the start.  I always did what the banks told me and now I am paying for it.  I never new about offsets and taking equity out to dump in there and having stand alone mortgages.  This undoubtedly was my biggest mistake.  I would also like to pass on my thanks to NAB for setting it up like this and telling me cross collateralisation was great and the way to to it

    I focused in one area at the start but am now open to investing in other than areas surrounding where I live.

    Not intially investing in blue chip areas due to where I was living.

    I didn't take advantage of the interest rates when they were at their lowest.

    Not initially using a Mortgage Broker.

    I have learnt so much over the past year mostly from this forum and somewhat books and magazines.  These resources give you the courage and self belief to invest further and explore the different options.  It makes you believe you know you can do somthing rather than thinking you can!!!!!!

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    Never lend anyone money!

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of devo76devo76
    Member
    @devo76
    Join Date: 2007
    Post Count: 542

    I have a few

    Bought first IP because i would like to live there.
    Listened to bank manager when he said crossing was cool.
    Didnt jump on my PM hard when my property condition started to slide.
    Didnt jump on my pm when rent started to slip.
    Told my IP neigbours of my intentions to sub divide.
    Underestimated how slow and useless the council could be.

    Profile photo of slipperslipper
    Member
    @slipper
    Join Date: 2009
    Post Count: 19

    Listend to bank manager and crossed first couple – and they tried hard to talk me out of not doing it with our last IP. Will be talking to mortgage broker for next one.
    Probably paid a bit too much for our first IP (and maybe for second) but thats life  –  probably $15K all up so in grand scheme of things not a killer.

    Profile photo of BrisbaneAndyBrisbaneAndy
    Participant
    @brisbaneandy
    Join Date: 2009
    Post Count: 45

    Saving a house deposit four times and losing them before finally buying a property!

    1st time – 17yo and had been working and saving for yrs and saw a 4brm QLDer on 1200m2 in my town for $65k and rented for $200pwk!  Worked out even at that age that I could buy through a trust with my folks.  Dads answer… "No, it's obviously too good to be true".  So I used the money instead to get a pilots licence.

    2nd time – Saved a heap of money again and at 19yo but it ALL into tech stocks.  12mths later, no savings, no stocks!

    3rd time – Bit older at 21 and thought I was a bit smarter.  Pooled my money with two mates and bought a unit off the plan from a developer mate in Auckland.  28 months later, no unit, no developer and we were lucky to get our cash back.

    4th time – 24yr old and squirreled and saved but then got adventurous and started my own business.  Within months those savings had been poured into the business and wouldn't be seen again for three years.

    So my mistakes were;
    1 – listening to other people's "helpful advice".
    2 – Investing in something I knew nothing about.
    3 – Investing in something we had no 'control' of.
    4 – Thinking a new business would throw off cash AND grow at the same time.

    So many regrets, but so many good hard lessons that have all paid off now.

    Anyways, that's me,
    Andy

    Profile photo of KoozKooz
    Member
    @kooz
    Join Date: 2006
    Post Count: 39

    Finding out there is a delay in approving finance as the contract states the purchaser as:

    Smith Corporation Pty Ltd ATF The Smith Family Trust

    when in fact the trust name is Smith Family Trust…..omitting the 'The' .

    Guess I should be a bit more careful when throwing the 'The' word around.

    Technically the bank is correct…but OMG !   

    Profile photo of itsandrewitsandrew
    Participant
    @itsandrew
    Join Date: 2007
    Post Count: 294

    I bought the right property (i missed some better ones but that's life), in the right place, with the right strategy.

    I didn't:
    Negotiate hard enough at time of purchase and probably paid about 10k above what I should have even though the numbers worked.

    Set up the property in the financially best way for taxation.

    I did:
    cross collaterlise my IP with my PPOR so had a few headaches at time of settlement.  I also placed an unnecessary risk with my PPOR.

    Andrew

    itsandrew

    Go as far as you can see and you will see further.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    I got rejected for my first loan, and never approached another lender, just giving up.

    I wonder what that property would have been worth now.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    This thread reminds me of a proverb:

    Only a fool learns from their own mistakes, a wise person learns from the mistakes of others.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of ducksterduckster
    Participant
    @duckster
    Join Date: 2004
    Post Count: 1,674

    I believed the university and government that I would get employed and earn a big wage by going to university
    and soar like an eagle.
    When I entered university I had a negatively geared property that I calculated I could afford the cash short fall for 4 years .
    When I realised I had been massively misled and failed to gain a graduate position for 6 years I had to sell the property or go broke when I left university after 18 months without employment success.

    I missed out on 2001 – 2004 growth as I couldn't borrow money due to no income during university.
    The $100,000 property I sold in 2004 for $170,000 but now in 2010 it would be worth $280,000 if I could have held on to it.

    I did a hospitality course and have gained employment part time within 2 months

     where as university was a waste of my time.
    and the HECS debt,  I still have to pay even though no employment eventuated from it.

    Profile photo of grantos_champosgrantos_champos
    Member
    @grantos_champos
    Join Date: 2009
    Post Count: 106

    Terry
    That was exactly my train of thought when posting this

    Profile photo of petronapetrona
    Member
    @petrona
    Join Date: 2008
    Post Count: 35

    Okay, where we went wrong….
    1. Buying one bedroom units which were smaller than 50m2;
    2. Getting a friend to help us with the renovations on one of those units (took ten months and nearly sent us to the financial edge due to lost rental income over that time);
    3.  Buying one of those units in a really bad complex – no upkeep/maintenance done, dodgy strata manager, etc;
    4.  Buying one of those units at too high a price for what it was.

    We've done pretty well with our follow up properties (these were our first two IPs) so at least we're learning from our mistakes!!!

    Profile photo of casanovawacasanovawa
    Participant
    @casanovawa
    Join Date: 2010
    Post Count: 63

    Hmmm, biggest mistake, we bought a block in 2001 in East Victoria Park, Perth for $110,000, put a nice 4 bed house on it for $110,000 and a year a half later in mid 2003 sold it for $385,000, which was quite a tidy profit…   last year i think it was that house was on the market for $800,000, not sure what they got for it…

    Had we held it and sold we could have been in a decent position (although in Perth everything else has gone up pretty crazily as well, but could have bought into a $5-600k place and had spare money over to invest….)   Had we taken our nice little profit and put it straight into some new property a decent portfolio could have been accumulated…   we did get a couple of round the world trips out of it and i then went and bought the wrong type of shares and we had a child and all…   at least debt free now….

    But just looking to get back into the market and buy my second place now and start from scratch….

    So while life hasn't been to bad and i'm hardly complaining about it all, there are a few lessons there, the biggest with 20/20 hindsight that after selling that place and making the decent profit that i didn't buy Fortescue Mining shares (that were mentioned in an email that came to me from a friend's broker with the company that i did eventually buy into that went to nothing)…  Fortescue only went up about 3000% or so, but there you go….

    Profile photo of maree_bradrossmaree_bradross
    Member
    @maree_bradross
    Join Date: 2007
    Post Count: 401

    Don’t self managed and don’t give the keys until you have the bond – hard lesson learnt, still playing catch up with bills because of this

    Profile photo of bouncecfbouncecf
    Participant
    @bouncecf
    Join Date: 2010
    Post Count: 14

    Hi,

    I've been reading these forums for some time and have finally decided to join to throw my 2 cents in ;)

    My partner and I have finally started on our IP journey this year having so far acquired a 2 bedroom house in NSW and currently building what will be our ppor then rent or sell after 1-2 yrs which is when we plan to move on from this town. Needless to say the property investing lessons have come thick and fast this year!!!

    One mistake I would say is getting caught up emotionally in our first purchase. Had we not been so panicked about having to get in to the market (at the start of the year it felt like house prices were going to go up, up, up in 2010) I think we could have bought something a bit more substantial for a similar purchase price.

    2nd mistake was to buy a property with no off street parking. As far as CG goes I think this will really limit the property in future.

    The third is not so much a mistake as hindsight – we live in a mining town and have been here now for about 18 months, when we first moved here house prices were at about 500-550k  for a decent house. We had the capacity to get into the market then but having not owned property before it just seemed like too much money for something in a dusty town in the middle of nowhere! Now the same properties are selling like hot cakes for 7-800k or more! Oh well you live and learn…

    Profile photo of goldiesgoldies
    Member
    @goldies
    Join Date: 2010
    Post Count: 115

    i am starting to feel that my biggest mistake was using St George 3 years ago to buy my PPOR.

    Went and saw the 'loan lady' on Saturday morning, to refinance and look at pre approval for an IP, with my hopes and dreams ready to begin… left there feeling like i was told i was too young to bother with IP's and i cannot do a, b, c etc – this after 5 minutes and she didnt even ask how much money i had in the bank (not with st george).

    So with minimal questioning, a obvious lack of care and much more pressing priorities (she answered a personal call from her son who wanted to tell her he had a girlfriend and asked whats for dinner) i walked out of there thinking i will not be using St George for the large amount of $ i would like to borrow.

    But one thing i have learned from these forums and books is that there is always a way if you want something bad enough…
    St George just clearly didnt want the business bad enough

    Profile photo of karen.karen.
    Member
    @karen.
    Join Date: 2009
    Post Count: 196

    my mistake was buying a house that we couldnt really afford at the time.  i bought it because i was GOING to be returning to work 6 months later.  i learnt that you cant buy property based on what you plan on earning in the future … cos u never know if that plan is going to actually happen or not.

    i fell pregnant 8 weeks after settlement so the plans of having two incomes diminished.  we struggled (really really really struggled) to hold onto the house for 12 months so we could avoid the full CGT.  its now under contract.

    but its not all bad – we still made a hefty profit out of it.  just not as much as we had planned to make if we had the money to do all the renos we had planned to do.  we dont regret it though.  we have another lil bubba girl so we cant be bitter about anything to do with her unexpected arrival :)

    Profile photo of SurrealistSurrealist
    Member
    @surrealist
    Join Date: 2010
    Post Count: 30

    My biggest mistake was a I bought a property.

    My other big mistake was I got a uni degree.

    My other big mistake is I got a job.  

    Nothing has paid off and I now look back to the days when I was unemployed and living with the folks, apparently I was going nowhere but at least I was happy. 

     

    Profile photo of Marie123Marie123
    Participant
    @marie123
    Join Date: 2009
    Post Count: 176

    My 1st mistake?

    Not realising property potential before now.

    My 2nd mistake?

    Sitting on my hands waiting for everything to line up before going and doing anything.

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