Hi everyone,
I am new to this site and new the concept of investing, particularly property investing.
I have just finished reading Steve’s book, “0 to 130 properties in 3.5 years”, and thoroughly enjoyed it. I am now at the point of feeling overwhelmed and not sure what my next move should be.
I’ve developed a plan that I want to own $1125000 worth of debt-free commercial property to generate passive income within the next 10 years. This goal seems like it could be achievable if I work hard on making it happen.
I feel like I want to get to that goal buy buying cheap property, flipping it and re-investing the profit into more property.
The problem I have is that I have no idea an how tell what the market is doing and where to buy properties.
I only have a small amount of capital to get started.
Anyone out there with experience that could possibly guide me in the right direction to get started?
I would appreciate the help immensely.
Cheers
Tom
Hi Tom and welcome to the forum. So your current plan is to buy residential property and flip it to than buy commercial property as a buy and hold long term strategy?
Flipping residential property is very risky in the current market, so be careful if that is your main plan.
Your best bet would be to see a financial advisor(make sure he is pro property) and let him help you create a strategic plan to get there. Talk to a broker(plenty on this forum) work out how much you can borrow and than begin researching the areas for the growth/cash flow you want.
Plenty of information on this forum. Keep us updated with your progress and happy to help if you have any questions.
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This reply was modified 7 years, 4 months ago by
Tony Fleming. -
This reply was modified 7 years, 4 months ago by Tony Fleming.
Tony Fleming | Triumphant Property Group
http://www.triumphantpropertygroup.com.au
Email MeNSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury
Hey Tom, welcome to the forum.
In terms of if you wanted to start with commercial from Day 1:
First port of call is to work out the feasibility of your financial situation – what can you work with in terms of deposit, capacity, structure. This will dictate the types of properties you can buy, minimum lease lengths, minimum yields etc. One you have this basic foundation setup, you then have a profile of the minimum acceptable parameters for a purchase.
From there is a few options – you can either self educate OR leverage some of your capital to a buyers agent who is experienced in commercial property to ensure you make the most effective buy possible.
Alternatively if you were looking to start with residential property and build towards commercial – you would want to work out the cost/benefit of flipping in Australia. In general after purchase, sale and taxes flipping is barely profitable to consider the time spent, in comparison to doing something such as a renovation-revaluation strategy which will enable you to build a portfolio faster, lose less to tax and transaction costs – Ive written about this here: http://www.precisionfunding.com.au/11366/. From there long term you can then consolidate your portfolio – whether thats through partial sell down of your portfolio etc.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Thanks Tony,
I really appreciate the feedback.
If you feel that flipping property is risky, do you feel that a buy/hold positively geared strategy can help me achieve my goal?
Also, what mediums are the best in order to do research for growth suburbs?
Cheers,
Hi Corey,
Thanks a lot for the reply.
I guess when I said “flip” property I wasn’t really aware of what I was saying.
I guess the vision I have is buying residential property and renovating to create profit.
The other vision that I have is to buy cheap land, sub-divide, build cheap units and sell at a profit to re-invest.
Which of these strategies do you feel is better?
Tom
Hi Corey,
Thanks a lot for the reply.
I guess when I said “flip” property I wasn’t really aware of what I was saying.
I guess the vision I have is buying residential property and renovating to create profit.
The other vision that I have is to buy cheap land, sub-divide, build cheap units and sell at a profit to re-invest.
Which of these strategies do you feel is better?
TomWhat’s the best? kind of like walking into a doctor asking what’s the best medicine when you haven’t given them any of your health information, symptoms etc. ;)
What’s best will depend on your personal knowledge and financial capability. And more importantly, what opportunities the market presents. No point saying you will develop if you do not have the financials behind you to do this, or there’s no properties available which will provide sufficient return. Likewise sticking purely to buying renovation projects but there is nothing available for you to work with.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Thanks Tony,
I really appreciate the feedback.
If you feel that flipping property is risky, do you feel that a buy/hold positively geared strategy can help me achieve my goal?
Also, what mediums are the best in order to do research for growth suburbs?
Cheers,Buy/renovate/hold is a strategy I used which helped me build my portfolio. It’s an effective strategy as it creates equity, lowers vacancy rates and boosts rental returns.
If you are looking for growth suburbs its best to look at planned infrastructure, job growth, market trends, past cycles and talking to investors on the ground in the suburb. Did you have any areas in mind?
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This reply was modified 7 years, 4 months ago by Tony Fleming.
Tony Fleming | Triumphant Property Group
http://www.triumphantpropertygroup.com.au
Email MeNSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury
I’m potentially moving to the Hunter Valley in the next 12 months and I have been looking online around the Singleton/Cessnock area.
When you say buy/renovate/hold – does that mean you buy it, renovate it and rent it out positively geared? If you did it this way do you use the mortgage you have on the property and refinance it to reinvest?
Just be careful of those towns for investments. Some of them rely heavily on mining and have already seen there day.
That’s right it needs to be heavy on the cash flow. You can do that if it suits your strategy. That’s where a broker can help massively.
Tony Fleming | Triumphant Property Group
http://www.triumphantpropertygroup.com.au
Email MeNSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury
Hm. Don’t forget to take stamp duty into account. A Queensland fellow I spoke to in a pub likes to buy a property about once/year, live in it for a year to get the relevant (reasonably substantial) stamp duty concession, tidy it up whilst in it, and then either sell it or rent the property out whilst buying another one and doing the same thing. Maybe not what you have in mind. You might be interested to check out the Gold Coast; still relatively cheap and a bit seems to be happening there. I think that subdivisions, building units etc. might be a bit ambitious to start on, particularly if you have limited capital, but I could be wrong. Good luck!
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This reply was modified 7 years, 4 months ago by
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