Are we doing something wrong?

Discussion in 'Property Investment - Other' started by Red Star, 1st Dec, 2007.

  1. Red Star

    Red Star Member

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    Brisbane, Qld
    Hi everyone,
    Thanks in advance for reading this but I am starting to feel desperate...

    I started reading on this forum almost 6 months ago and I have posted a few things in that time. In that time i have also learned so much. Anyway, I am now at the stage where I have put in offers on 6 houses and not got any of them. There have been a couple of actions, several dutch auctions (where we seem to always come second) and 1 where they would only take asking price and in hindsight that is what we should have done but while we were trying to raise more money, someone else went in with an offer, so we lost that too.

    I am starting to feel like we must be doing something wrong and it is taking us forever to get our first IP. I have friends with IPs who either bougth the first one they saw or something similar.

    Im sure there is no right or wrong way to buy IPs but does anyone have any kind of advice for what we can do? I call REAs and look on RE.com every other day. Are we just unlucky or can anyone see something I cannot as I am too close to the situation.

    Thanks in advcance and hope I dont sound too needy!
     
  2. Rolf Latham

    Rolf Latham Member

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    Hiya Red

    the brissie market is warm, so it wont be easy to secure what you want............it might taking a look and offering on 30 or more properties.

    ta
    rolf
     
  3. ianvestor

    ianvestor Future Middleman

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    Hi Red Star,

    How are you finding out about these places? Are you finding them on the net or in the newspaper? If so, by the time you've seen it so have a lot of other people.

    You really need to be active to get ahead of the pack and make sure you let your real estate agents know that you want to find out about these places *before* they go on the net. Not all agents will do this for you, and those that do will also have had other people ask them the same thing, so it's not a 100% perfect solution, but the more you ask this of agents, the better positioned you will be against other buyers.

    All of my properties were bought a few days ahead of their respective open-house. (I like to go to the open house anyway just to see how many people turn up and it's usually a lot). It's a great feeling over-hearing the agent tell people 'it's under contract' knowing that I'm the one who has it under contract :)

    So, if you call an agent about a house and he/she says "It's open this Saturday", try to convince the agent to let you see it *before* the open-house (i.e. ASAP). Then if you like it and are ready, go back to the agent's office and put in an offer that same afternoon.

    Often a good time to see a property is when the agent is going there anyway to take photos for the net. Ask if you can tag along.

    -Ian
     
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  4. NedKelly

    NedKelly Member

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    Doesn't everyone apart from the winner come second in a dutch auction?
     
  5. Jontxu

    Jontxu Member

    Joined:
    1st Mar, 2006
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    Location:
    Sydney
    Keep it up

    Hi Red Star

    In hotter markets is harder to buy at discount. When I buy in hot markets, sometimes I do meet listing price, however negotiate on terms, 90 to 120 days settlement. This way you secure the property and capitalise on the growth over the next 3 months (or the period you negotiate). The fact that you haven’t had your offer accepted is not so bad, it means you are aiming to buy with your head and not your heart. Keep it up.

    It also helps trying to beat the agents, target those houses that you think fit your criteria and do what agents do, put a letter/flyer saying you would be interest in buying the property, etc, etc. It’s a bit more work, however all you need is 1 to say yes.

    Happy Investing

    Jon Salvador
    www.headinghome.com.au
    For investors … from investors
     
  6. Emily_Zac

    Emily_Zac Member

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    Which area of Brisbane are you intrested in ?
     
  7. evand

    evand Member

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    If you think the property market where you are looking to buy is pretty warm you wont be able to buy at a discount. (under the listing price). You will constantly miss the properties as savvy buyers realise the market sentiment and offer listing price (or close) to secure the property.

    Imagine a scale of a cold, dead market where there are a lot more sellers than buyers (mid 90s). You will be able to offer a fair way below the asking price and probably negotiate a big discount.

    In the middle is where buyers and sellers are roughly equal and properties will sell at or close to the asking price.

    And on the other end of the scale is a hot market (boom time 2001 - 2003) where plenty of properties were selling above the listing price as the scramble to secure them forced higher bids.(mostly from investors trying to secure decent yield)

    Its simple economics. You have to ask yourself where on the scale is the market you are making offers and adjust your tactics accordingly.
     
  8. buzzlightyear

    buzzlightyear Member

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    I have alluded to this in other posts, but going to my fair share of auctions (in Melbourne, however from what people are saying here, Brisbane doesn't seem much different) recently.

    I can appreciate your frustration. With so many bidders, who have the ability to pay significantly higher prices, then you are up against it. My only comment is that make sure you pick the right property in the right area or for the area, that you can possibly add some value to in the future.

    As for auctions, we hardly had any auctions post 2003, with the change of auction rules (in Vic) and the state of the market. Most seeling was through private sale. As the market has turned up, more cashed up bidders, more demand, then auctions become a great way to sell you property. Just don't expect to get a discount at auction though.

    Good luck, and don't get too despondent, I see young couples trying to buy at the auctions that I have been going to and hearing their comments. You are not alone. Let us know how you go....
     
  9. HandyAndy888

    HandyAndy888 Member

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    Just bite the bullet and buy at advertised price...Brissie is a bit like that ATM.
     
  10. marg4000

    marg4000 Member

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    We bought an IP in Brisbane in August - most frustrating purchase process we had ever experienced.

    Anything decent was snapped up in 2-3 days, agents were not interested at all, had a "take it or leave it" attitude which was understandable as if we did not offer then there were plenty more purchasers out there who would.

    Very few properties in our target suburbs, vendors not interested AT ALL in negotiating.

    We finally bought what we considered was value for money. We only bought it because we looked through its obvious shortcomings.

    We have since spend approximately 6 weeks and around $2,000 repainting, basic improvements and alterations and consider we have added at least $10K in value.

    Hints?

    At the moment you won't have much room for negotiation.

    If you find a property that you like and can afford, then you will probably have to offer close to full price.

    Don't rely on the previously successful strategy of leaving your details with agents, they will simply put any property on the internet and sit back and wait for people to come to them.

    Check realestate.com several times a day, sorting properties by "latest listing".

    Be ready to put in an offer on first inspection, and be prepared to offer close to your maximum for that property. You need to get it signed up quickly, preferably before a weekend.

    Good luck!
    Marg
     
  11. Angelissa

    Angelissa Member

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    What has worked well for me previously is discussing with agents whether they have any properties where the contract is likely to fall through, usually usually through finance issues with the original buyers.

    This is better if you have a decent deposit as the finance issue is often that the valuation doesn't come to the purchase price and the buyers who are borrowing 90% or 95% can't get enough finance.

    Call the agent the morning after the contract is due to become unconditional and get ready to put in an offer right away.
     
  12. Michael Yardney

    Michael Yardney Member

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    We all understand that you make your money when you buy your property.

    But that doesn't mean you buy cheaply or beow the asking price. It means you buy the right propery - the sort that will outperform in the long and the short term.

    And if that's the case -it doesn't matter if you pay a few thousnad more for the right property.

    I have explained this in much more and better detail in this article - To buy or not to buy -check it out.
     
  13. asdf

    asdf Member

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    Interesting times. I feel for you guys. Don't be in such a hurry to buy. Your hard earned equity will just be chewed up when this market stalls on your negative carry. You are competing with home buyers who will always be able to bid over you when they can use 40-60% of their disposal income on the mortgage when you can probably only squeeze out 5%-10% of yours. After 2 or 3 IPs, it gets tougher to maintain the serviceability. No one ever said this stuff was money for jam. Stick with it though, you should get there eventually.