Best questions to ask to ensure success?

knightm

knightm

I have been intrigued for a while by this quote:

"Successful people ask better questions, and as a result, they get better answers."
Tony Robbins

I have been applying it to several areas of my life.

What questions do you think are really good ones to ask in real estate, to maximise one's chances of success? Either pertaining to specific deals or building a portfolio overall.

I will go first:

Q: How do you get paid? (so many people take advice on property from sales agents, this one is a no brainer for me to eliminate getting screwed)
Q: How does this property get me closer to my long term goals?
Q: What is the cash flow of this property?
etc
etc
etc
 
On top of my head, very generic questions:

Does spending x on y gives me significant advantages (rent, value, etc)?
Why do they say what they say, they way they say it? (Detecting BS)
Can you help me with x or can you refer me to someone who can help?
 
IMHO one of the best questions to ask yourself is:

Is my current strategy/approach to property investing in line with my goals, risk profile, financial capabilities?

My point is that there are a lot of people (the majority imo) who don't understand their own capabilities with property investing. They think they have to buy a positive CF house in regional Tasmania etc without realising that their risk profile is actually much higher, their borrowing power is very strong ( I know so many ppl on 150k incomes investing in regional unit in woop woop), and they have many options available to them that will actually get them to their goals much faster and even surpass them.

So really, ask yourself (work out) what is your actual risk tolerance, borrowing power (financial capabilities), and goals. Then match the best strategies to suit those goals.

Leo
 
LeoT said:
IMHO one of the best questions to ask yourself is:

Is my current strategy/approach to property investing in line with my goals, risk profile, financial capabilities?

My point is that there are a lot of people (the majority imo) who don't understand their own capabilities with property investing. They think they have to buy a positive CF house in regional Tasmania etc without realising that their risk profile is actually much higher, their borrowing power is very strong ( I know so many ppl on 150k incomes investing in regional unit in woop woop), and they have many options available to them that will actually get them to their goals much faster and even surpass them.

So really, ask yourself (work out) what is your actual risk tolerance, borrowing power (financial capabilities), and goals. Then match the best strategies to suit those goals.

Leo
Click to expand...

Good answer.


The question/s I've often asked myself in the past before entering property or business type deal is:

1. How can I utilise my experience to gain an edge/advantage here.
2. How can I use my resources to gain an edge/advantage.
3. How can I use my cash flow and equity position to gain an edge/advantage and maximise returns.
4. How can I use my current and future circumstances to gain an edge/advantage.

That's the way I've always approached it, gaining and edge over the market or others, and it has worked very well to date to get above average results.
There no point competing way out of your league or you will get destroyed.
But no point playing in the kiddies pool if you want to get anywhere.
I follow the 4 points above then commit as deep as possible stretching to the limit, (high risk profile), then work back into the safety zone after a period, then stretch again.
This cycle produces both personal and financial growth.
 
Ace in the Hole said:
1. How can I utilise my experience to gain an edge/advantage here.
2. How can I use my resources to gain an edge/advantage.
3. How can I use my cash flow and equity position to gain an edge/advantage and maximise returns.
4. How can I use my current and future circumstances to gain an edge/advantage.

.
Click to expand...

Ace mate I love it. I think its awesome. I'm going to adjust my thinking to try to include an 'edge grabbing advantage' like you look for.

Love it!! :D

Leo
 
It's the gambler within me :)

Compared to grinding out a fraction of a percentage edge over the house, business and property is easy to make healthy gains.
 
Does this have to be about specific investment decisions? A good general one to ask is: How do I become better?
 
The questions I've been asking lately are very specific to buying, since that's what my minds been on. Not very high level, but it's what I've been doing and this excludes suburb research, selecting the area etc..

How much will a valuer peg this purchase for in 6 months and am I paying below that?

What are the comparable sales and am I paying enough margin below them?

If it is above the median price for #bedrooms and suburb, why is it so and is it justified and would a valuer agree?

What is the potential for improvement, i.e. can I add another bedroom, renovate, subdivide or replace with duplexes or add a granny flat in 10 years time?

What are the true outgoings and what is my net cashflow per month for this purchase after settlement and is it justified?

Why is this property so cheap, what's going on here is it too good to be true? (when I've found one!)

How much deferred maintenance is there, is it justified by the price, and can I even be bothered dealing with it at all without affecting my day job?

Have I done everything on my due diligence checklist, have I forgotten something?

Where is my next deposit coming from after this?
 
danwatto said:
The questions I've been asking lately are very specific to buying, since that's what my minds been on. Not very high level, but it's what I've been doing and this excludes suburb research, selecting the area etc..

How much will a valuer peg this purchase for in 6 months and am I paying below that?

What are the comparable sales and am I paying enough margin below them?

If it is above the median price for #bedrooms and suburb, why is it so and is it justified and would a valuer agree?

What is the potential for improvement, i.e. can I add another bedroom, renovate, subdivide or replace with duplexes or add a granny flat in 10 years time?

What are the true outgoings and what is my net cashflow per month for this purchase after settlement and is it justified?

Why is this property so cheap, what's going on here is it too good to be true? (when I've found one!)

How much deferred maintenance is there, is it justified by the price, and can I even be bothered dealing with it at all without affecting my day job?

Have I done everything on my due diligence checklist, have I forgotten something?

Where is my next deposit coming from after this?
Click to expand...

Hi Danwatto,

I think those are all very good questions to ask and answer. Nice one!

Leo
 
Cards said:
Agree - The single most important question to ask the REA!
Click to expand...

Aren't they legally obliged to disclose anything serious or newly known without having to ask?

And if there is any information they don't legally have to pass on, would you expect them to admit to knowing anything about it?
 
Ace in the Hole said:
Aren't they legally obliged to disclose anything serious or newly known without having to ask?

And if there is any information they don't legally have to pass on, would you expect them to admit to knowing anything about it?
Click to expand...

Depends on the state, some states they are required to disclose "specific" things that are in the legislation, other states some but not all of these items are the responsibility of the buyer to search.

But I think what he's saying is that if you ask them for example "does this property have termites?" and they know it does, they have to tell what they know. A general question I don't know how much they would give you - but you'd be surprised. Some agents just blurt out the reason they're selling is a divorce, they are on bridging finance from building, or "they are desperate".. crazy.
 
Fantastic!

I was offline all day and coming back to this is inspiring.

All good responses, so far my favs would be Peter T with "How will I make money on this?" and Redom with "How do I become better" obviously great answers from others too, Danwatto and Ace, so good.

I will add another question based on my experiences negotiating today:

What is the potential cost of divulging, or withholding the following info during my negotiations?
 
...perhaps a summary risk question for all those micro risk questions could be "What am I missing here?" or else "where is the downside I might have missed?"
 
I always try and consider:

- What is the win-win for this situation
- What are the options - how many ways can this work
- What is the exit strategy
 
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