Finding the bargain

[investor]

Hello to everybody.

I have read alot of info in this and other forums and constantly talk property with friend and other investors alike but we always tend to shy away from the one and only important issue in property investing and thats buying cheap.

If you buy well then everything else comes on its own thats capital gains rental returns etc.

Surely if a property is seen in the local paper or even worse in the Wentworth, Inner West or Southern courrier (local papers in sydney) its too late to even consider these properties.

Yes I am talking about finding a property before its advertised.
I have made it in the Sun Herald and Sunday Telegraph 3 times. Once for buying too high:p and twice buying and selling in a short period of time with a good prophit all at auction, but by far the big bucks which i have made came from a property which I aquired off the market.

Do any of you guys do bulk mail outs in the area that you like ?
or go door knoking asking if people want to sell their property ?
Do any of you use RP Data effectively to see who owns the property u like ?
or even have put an add in the local paper to buy property ?
do you buddy up with an agent who finds you a bargain for a finders fee ?
How many of you have left work to concentrate totally on property ?

If so I would appreciate some feedback on how you went and which method proved more lucrative.

These may sound like the tactics a real estate agent employs, But aren't the agents the ones who always find the bargain first ?
:(

[Michael Yardney]

That's a great question, because you are right - you makeyour priofit when you buy your property.
Firstly I disagree that a property is overpriced when it is in the papers or in the local paper.
I must admit it is rare to find a bargain in the local paper, but I did find one 3 weeks ago. It was priced fairly but when I inspected it I found out a little about the circumstances of the vendor, found out that they suddenly became a motivated and made a ridiculous offer it was accepted ( to my surprise!)
I must admit it's the first time in all the years I have been buying property that I found one in the local papers.
Each Staurday I scour the Age (Melbourne) and we regularly find baragins there. You jsut have to recognise one when you see it.
As you suggest, finding a few good agents who let you know of properties early in the piece helps. We have a whole heap of agents who ring us or email us with all their new listings. To get to this point is not easy because everyone tels agents to call them first. It's probably a bit easier for us as we have built a track record over the years and we are known as real players who are in the market all the time as we buy at least 2 properties each month.
Finding out about new listings isn't always that useful as most properties come on to the market overpriced and if you make a low offer in the first few weeks that a property is on the market it is usually not accepted. The vendors often need to be conditioned by the market and their agents to be more realistic.
I'm not sure that door knocking or ads help becuase what you are looking for is motivated vendor, you just have to recognise them when you find them.
I don't think you'll find them with letter box drops. Most vendors are pretty well eductaed and know the price of their properties today becuase they are continually bombarded with agents literature and they read the local papers

[investor]

Originally posted by Michael Yardney
I'm not sure that door knocking or ads help becuase what you are looking for is motivated vendor, you just have to recognise them when you find them.
I don't think you'll find them with letter box drops. Most vendors are pretty well eductaed and know the price of their properties today becuase they are continually bombarded with agents literature and they read the local papers

Hi Michael

I know of two partners here in sydney who scour 3 or 4 suburbs in the inner city looking for houses that have a frontage of 12metres or more then knock on the doors and give the owner an offer. Thats their occupation.
The mentality is that on that block you can build 3 + terraces ( 4m = 1 terrace) for eg
He recently purchased a house with a 12 m frontage for 670K and before he settled he onsold it for 1.2M as a development site to build 3 terraces to a developer. He didn't even bother getting a DA.
If they don't sell as a development site at a good price then they build the terraces and then sell.

Also have you heard of the Mondell property group. Here in Sydney they are the guys who put those annoying adds in the Investment Property section of the Sydney Morning Herald
" Blocks of units wanted strata or unstrata any condition quick decision"
They have made millions from purchasing blocks off the market refurbishing and selling.

If you get picky it's hard but not impossible to find a bargain from the newspapers but they are very rare and then again you are still competing with hundreds of investors.