- HarleySParticipant@harley89Join Date: 2018Post Count: 3
Hi all i am seeking some advice, coaching or even just some intellectual opinions on a topic that i don’t have a wealth of knowledge in.
Disclaimer: i apologize in advance for the lengthy post, i am excited to transition from first property owner to property invester and would love to discuss some of my current plans with you all.
As we all know in the world of investing knowledge is s main key to success, i understand that there are many, many users on this platform that have much more experience than i in property investing and i have come to pick your brain.
Late last year my partner and i brought our first property (primary residence). We are looking at buying an investment property somewhere in between now and two years from now, right at this moment we are not “ready” to take on more debt, we do qualify for the loans we want but most of ou r cash flow is going to home improves and renovations, with the surplus going toward paying down the loan early and offseting the interested (the budget allows for all three simultaneously) so we don’t have much of a deposit saved and really wanted to limit borrowing from our equity.
Anyway to cut it short and get arround the nity gritty (i will post the finer details at the end and allow the time poor readers see my point before becoming bored) recently during all this pandemic scare i have broadened my horizons with my hobby of scanning the property market daily for deals, instead of just searching for properties in the blue chip suburbs of my current regional city i have expanded searches in suburbs i like in Melbourne, Sydney and Adelaide.
Adelaide because my mother lives there, she could inspect properties for me, become my property portfolio manager and give me regular updates on tenants, damages and so on. Melbourne because it’s only one hours drive from my residence and Sydney just for curiosity and knowledge.
While searching i narrowed my search in Melbourne to a few suburbs i know to be good investments (opinion) that fit my criteria and satudy of the type of property i would want to invest in within Melbourne, namely they need to meet three main characteristics on my radar #1 long term blue chip status and well know top tier suburbs. #2 high average household wage and high employment to unemployment ratio. #3 large job hubs with suburb, know careers that do not travel to the CBD for work. I also look gor other critical data like quality of life, renting vs owning so on and so on. This naturally brought my search to Black rock, Brighton, Sandringham, Hawthorn, Hampton, Canterbury and Toorak for my current budget / borrowing ability i was able to find several two bedroom apartments in all the suburbs l ilsted, some at the top of the budget and some under.
The problem is i don’t have a wealth of knowledge in the Melbourne property market, i understand my regional cities property market fairly well and i have kept up to date with a medium understanding of Melbourne suburbs and houses but apartments our a little out of my spectrum.
So i am looking for experts with an exceptional understanding of apartments in some of Melbournes blue chip locales (especially toorak) apart from the suburbs i mentioned i also like Richmond, South Yara and Prahran if looking closer to the city.
Ok as promised the finer details, me and my partner brought our first property December last year successfully offering 515K, in one of Geelongs blue chip subburbs, the property is a Californian bungalow that sits on 830sqrm was built in 1929 (heritage overlay with no current restrictions) and is a 4 bed, 2 bath although unfortunately the vendor was forced to sell as a 3 bed, 1 bath due to one bedroom having three entry doors (to accommodate for wheelchair access without destroying the beautiful heritage facade) and one bathroom being “uninhabitable” (basically ready to go but not all plumbed in) since moving in we have been heavily involved in DIY projects and slowly getting what we can done to the property in the current lock down, core logic and the banks have valued the property at arround 565K so combine the current valuation and the fact that we went to 128 open houses, 8 Auctions and 3 “off the market” inspections during the four years it took us to save the deposit so we had the knowledge to snag a deal, we were also very intentional about particular market pockets and budget, we have just over $170K in LVR equity, redraw facility of about 2K, offset 1K, about 15 in investments we are happy to sell and another roughly 15 in investments we would rather not sell.
The exact property i am most interested in right now is a 2 bed 1980s apartment in Toorak listed right in my budget, although the listing agent and i think the vendor will accept mid 5s. It appears due to the listed price, timing and other factors that the vendor is forced to sell from loss of tenants, loss of Job or both. I would love to hear your thoughts on 2 bed apartments in Toorak and other insights.
In short conclusion my original investment plan is to continue renovations on my residence increasing equity in my property while paying down the loan and saving a new deposit in my offset account all the while scaning property deals near home in blue chip Geelong suburbs like Newtown, East Geelong and Geelong West and buy our first investment in 1.5 – 2 years with an actual deposit and cash flow, not using equity so we can continue to invest in the following years. My new plan is freak out like everyone else during this epidemic and buy a Toorak property asap for basically the same value it was wshen it last sold in 2009 even though two months ago it was valued just under 1million and hope I’m smiling at the other end of this.
Thanks so much for your contributions, looking forward to the discussion.
HarleySteve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763
It sounds like you might be better off with the services of a buyer’s advocate to find you something, but I must say I am not very enthusiastic with the strategy behind your investment. It looks like you are trying to buy, rather than make, your profit.
If that is the case, you are relying on the area more or less alone to drive your profits, and given you are then relying on someone to find you a deal, and presumably managing the deal once acquired, you are not so much investing as you are buying.
Investing is where the money is really made. Buying something is only the beginning, and in the current market, buying rather than investing is pretty high risk, in my opinion.
You’ve prompted me to consider running a ‘Investing for Beginners’ webinar to run through all the basics, and to pinpoint some of the common mistakes that are made when buying and investing.
If you, or others think that would be helpful, reply to this post and I’ll put in the effort. I’ll need 100+ replies for it to be free :-)
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
Success comes from doing things differentlyKnightmareParticipant@knightmareJoin Date: 2020Post Count: 0
I’m keen Steve.
Would be perfect for me as a first time buyer in any capacity hoping to buy cashflow positive and/or neutral investment properties.drushworParticipant@drushworJoin Date: 2009Post Count: 0
I’d be interested in the webinar especially in this market. Thanks.Cheuk Sun 40Participant@cheuk-sun-40Join Date: 2012Post Count: 0
yes please Steve i am intersted ‘Investing for Beginners’ webinar.lakParticipant@lakJoin Date: 2012Post Count: 4
Please count me in too Steve. Thanks.s_fitzyParticipant@s_fitzyJoin Date: 2007Post Count: 0
I always like to ensure the foundations I am building off are the right ones after a few false starts. Very keen Steve and a generous offer.evanbradParticipant@evanbradshawJoin Date: 2005Post Count: 1