Good job LeoT. I always enjoy reading the interviews here and seeing the paths other people have taken
An Interview with LeoT
- Thread starter The Y-man
- Start date
"7. What criteria do you use when selecting an area to purchase in?
When I used to buy IPs, I would always follow some basic rules which I feel have served me well over the years.
1. Buy in the state that is on the climb (7-9 oclock). (I never buy at the peak of a boom market. Ever.)"
Leo,
How do you find out or derive the type of market a particular state/city/suburb is in?
When I used to buy IPs, I would always follow some basic rules which I feel have served me well over the years.
1. Buy in the state that is on the climb (7-9 oclock). (I never buy at the peak of a boom market. Ever.)"
Leo,
How do you find out or derive the type of market a particular state/city/suburb is in?
Leo,
Which are your favourite sites for doing your macro DD?
And before that happens, what methods do you use to find the areas to start your research? Do you do it like Lomas: start with the whole country and drill down progressively?
How many areas do you shortlist at any one time?
Do you keep this data on a spreadsheet?
Is RP Data Professional tax deductible?
What do you use to do your pre-selection financials? Your own spreadsheet? Somers' software? Back of envelope
Thanks, Leo
HI J_aco,
[QUOTEJ_aco;1245334]Hey Leo!
Thought I'll post a msg to let you know that I've enjoyed many of your prev posts and you've "made a difference" to someone. So glad to know that mate 1. You were always big on mindset.
2. You had a post about "treating LMI as a form of doing business". I was sort of leaning towards that anyway BUT your post convinced me. I'm in the process of acquiring IP1 and even at 90% the initial cash outlay is wayyy more than I expected. If I put down 20% depo it probably ain't the best use of cash.
I'm glad thats worked out mate! Good on you. I think the concept of paying LMI is largely misunderstood by a lot of investors. If they really did a cost/benefit analysis, a lot of investors who when starting to build their portfolio pay 20% would think twice. I believe there are a handful of fundimental investment principles that are SO IMPORTANT to really understand, and LMI is one of them. Anyway good on you mate. 3.
Really liked your post, somewhere along the line meaning "developing is for someone more advanced, who's got all the property basics".
I'd be lying if I say I'm not jealous of all these people making bucket loads with developing. But I told myself I need to educate myself first, know the basics, know how to do DD to pick a suburb, growth etc etc, know the process of buying and selling, maybe try buy and reno 1st, then buy and subdiv, before I even think about developing. Mate i think you have the right idea. Start to get decent understanding of the basics, then get your feet wet with maybe a small reno project or subdivision. Then you can move onto developent if you think its a good strategy that meets your risk profile and goals. Anyway, thanks again mate![/QUOTE] No problem. Good luck mate!
Leo
[QUOTEJ_aco;1245334]Hey Leo!
Thought I'll post a msg to let you know that I've enjoyed many of your prev posts and you've "made a difference" to someone. So glad to know that mate
1. You were always big on mindset.2. You had a post about "treating LMI as a form of doing business". I was sort of leaning towards that anyway BUT your post convinced me. I'm in the process of acquiring IP1 and even at 90% the initial cash outlay is wayyy more than I expected. If I put down 20% depo it probably ain't the best use of cash.
I'm glad thats worked out mate! Good on you. I think the concept of paying LMI is largely misunderstood by a lot of investors. If they really did a cost/benefit analysis, a lot of investors who when starting to build their portfolio pay 20% would think twice. I believe there are a handful of fundimental investment principles that are SO IMPORTANT to really understand, and LMI is one of them. Anyway good on you mate. 3.
Really liked your post, somewhere along the line meaning "developing is for someone more advanced, who's got all the property basics".
I'd be lying if I say I'm not jealous of all these people making bucket loads with developing. But I told myself I need to educate myself first, know the basics, know how to do DD to pick a suburb, growth etc etc, know the process of buying and selling, maybe try buy and reno 1st, then buy and subdiv, before I even think about developing. Mate i think you have the right idea. Start to get decent understanding of the basics, then get your feet wet with maybe a small reno project or subdivision. Then you can move onto developent if you think its a good strategy that meets your risk profile and goals. Anyway, thanks again mate![/QUOTE] No problem. Good luck mate!
Leo
Thanks Gingerbeer! Thats an awesome book! Think and Grow Rich. It was one of the books i read awhile back too GB.... brings back memories.. i would listen to it on a CD at night while i slept and just let it play for the whole night...
did that for months..Do you, or are you thinking of using property as a vehicle to achieveing your goals?
Cheers
Leo
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Hey Leo,
Great read! I have also been enjoying reading your posts, you have really drummed the mindset thing in, I went out and bought another 10 books today!
HI SK Investment, I'm glad you have enjoyed some of my posts. COngrats on your new book purchases! Just curious some of the books you bought ?
Couple of questions;
1. Can you be my mentor?
2. Does your wife have a sister?
Keith[/QUOE]
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Great interview Leo!! Your posts are always inspirational and helpful!Thank you for sharing your experience!!
NP, glad you found it helpful!
I am also only starting with properties, working on mindset and reading, reading, reading.... books, internet, somersoft, magazines, anything really I can find...
Awesome! I have always long believed that ppl who are really serious about their investment goals will be hungry to learn everything about property investing in the beginning. Good on you! Have you started building your portfolio yet?
You mentioned mentoring colleagues and friends so if you ever decide to mentor somersoft friends let me know, I would be in
hehe no worries, To be honest i dont do much 1:1 mentoring anymore, but like i said to SK Invesmtents, there is more than enough info out there, as well as a fantastic forum here to ask questions to some very experienced folk who are always happy to help.
Thanks again, well worth read![/QUOE]
Cheer
Leo
Waiting to read your story, Westminster
Yes, so am i!! Y-man, i think its time to get on to her for it!
Leo
Have you heard of 'notional estate orders' under the Succession Act in NSW?
Trust assets can be divied up on death if an eligible person makes a claim on your estate and your personal assets are not enough to satisfy the claim.
Also you have to consider protection from beneficiary attack. What if you die leaving one trust with 2 children?
Hi Catalyst,
I am not sure if i understand what you mean by "type of market" , but i think your refering to where each state/city is in, on the property clock?
Assuming thats what you mean, its not really an easy thing to do. You will sometimes hear "timing the market is not as important as time in the market". Whenever I read/hear that i just laugh as IMO timing the market is important but doesnt have to be perfect. Its almost impossible to exactly time any market, but with some commonsense its not that hard to get it more or less right. Eg, if you were to believe that time in the market is most important then it should be fine to buy in Sydney now at quite inflated prices and not worry about it, right? well, depends. For investors who want to build a large portfolio (and im just guessing quite a few on here do) and build it ASAP, then obviously its important to be able to try and extract some equity as soon as you can to then reinvest in your next IP. Buying at inflated prices will most likely not allow you to extract equity for quite a while. (sorry i just realised im getting side tracked) but also this is why 'adding value' is important. OK back to your question. argh.
Ok so in order to try and determine where each state is...realy its not much of a secret. Everyone knows sydney is now over with, Melbourne also has had significnat growth, Perth is slowing down, Canberra is going no where... if you just keep track of the comments on SS and also i think API has a table at the end of the magazine where they think each state/city is at in the cycle. I have actually found it to be generally not too bad however it usually lags abit. (but still worth having a peek). Personally I have found, the more connected/involved/engaging you are in the property world, the more the infomation will flow past you. I went to a seminar by rpdata about 1 year ago and it was about Sydney market, but the presenters couldnt help but mention Brisbane and within 12km of Brisbane cbd and present a whole bunch of reasons/data and rashionale for why they suspect Brisbane etc. I found it very interesting that on a Syd focued talk they couldnt help but mention Brisbane over and over. I actually didnt want to waste time, I left the seminar pretty much there and then to go home and start researching development sites in Brisbane, the market, looked at stats, did all my DD and then after 1-2 months got some dev sites. Today the Brisbane market is growing steadily and quite a few suburbs are experiencing very good growth, and i suspect its the next city to have good-excellent growth over the next few years.
There are also some good indicators I have found. When SOM is going down, Discounting rates are starting to decrease, general market sentiment is changing.. media start talking very positive about a state etc.. (not that i ever care what the media says, BUT what they say does change market sentiment and that is important to note and make use of).
Sorry for the long post.. but some of these questions can just be answered in 2 lines...
Leo
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Leo,
Which are your favourite sites for doing your macro DD?
I dont really pay much attention to the macro stuff. I stay away from the obvious places of high unemployment, high crime rate, stagnant population growth but thats mostly about it.
And before that happens, what methods do you use to find the areas to start your research? Do you do it like Lomas: start with the whole country and drill down progressively?
1. Choose state. Personally i stay within 45km for syd cbd, 15km for Brisbane cbd, 30km for melbourne cbd, 5km for Adeliade. Canberra, NT and tassie not on my radar.
2. Choose suburbs that fit my buying critera.
3. Choose deals/sites that i am interested in according to my finance ability.
How many areas do you shortlist at any one time?
3-5.
Do you keep this data on a spreadsheet?
No my wife does that.. im more a visiual person so for example if im looking at Brisbane, I will blow up a map, stick it on a cardboard, and use a compass to draw a radius of 5km, 10km, 15km etc from the cbd. It helps me a lot to see it this way and put it in perspective. Then i just stick things on the map. When im in the researching/buying phase of an acquisition, my office/room floor is a warzone
Is RP Data Professional tax deductible?
Yes.
What do you use to do your pre-selection financials? Your own spreadsheet? Somers' software? Back of envelope
Brilliant finance brokers. IMHO a serious investor wont waste time trying to do the finance him/herself. The benefits of finding and using a great broker far outweigh any reason to chase the finance yourself IMO. Thanks, Leo
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Thanks Terry. Well i plan to have kids one day mate..but i'll probably leave most of whatever we have to charity when we die. I think kids need to be responsible and learn how to fish for themselves. I am happy to teach them how to fish, but not gonna just give them all the fish on a platter.
Cheers
Leo
Good stuff Leo, great read currently embarking on my first development.
Would be great to hear more on the development side of things if you ever get free time
Awesome Soulfly3! Thats exciting! What kind of development your looking at?
Cheers
leo
That's why you want to set it all up early to avoid the 3 year threshold. It's interesting that 'failure to act' comes under the same heading.
Regarding the 2 children. I suspect that the problem is the other 2 spouses. I I would feel that as long as there is more than enough income then the beneficiaries shouldn't want to break up the assets. Having said that look at what is happening Gina Rinehart and you would think there is more than enough 'income' available to satisfy the whole family.
Cheers
All serious investors/developers i know organise the finance themselves. Then again, it depends on what your definition of serious is.
Oscar
Thanks, Leo, for your informative answers.
1. Choose state. Personally i stay within 45km for syd cbd, 15km for Brisbane cbd, 30km for melbourne cbd, 5km for Adeliade. Canberra, NT and tassie not on my radar.
2. Choose suburbs that fit my buying critera.
.
Perth is not on your radar either?
Now that your IP strategy has evolved, are you still doing buy-and-holds or just developments?
No my wife does that.. im more a visiual person so for example if im looking at Brisbane, I will blow up a map, stick it on a cardboard, and use a compass to draw a radius of 5km, 10km, 15km etc from the cbd. It helps me a lot to see it this way and put it in perspective. Then i just stick things on the map. When im in the researching/buying phase of an acquisition, my office/room floor is a warzone
Very cool. Like those TV shows when the cops strategise on their maps to catch the baddies
What do you use to do your pre-selection financials? Your own spreadsheet? Somers' software? Back of envelope
Brilliant finance brokers. IMHO a serious investor wont waste time trying to do the finance him/herself. The benefits of finding and using a great broker far outweigh any reason to chase the finance yourself IMO.
I like that. My head was not built for maths
Leo, I meant the calculation to assess whether a property was viable. What tool do you use to do the financials?
