I agree with MXia, this process/strategy can work very well and I know a few ppl who have benefitted this way, myself included
Very nice post MXia.
Buying "Under market value" and giving low ball offers
- Thread starter Achimy
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I agree with MXia, this process/strategy can work very well and I know a few ppl who have benefitted this way, myself included
Very nice post MXia.
Can you recommend some good negotiation books?
I would be keen to brush up a few skills here, not only for investing but with relationships as well
Can you recommend some good negotiation books?
I would be keen to brush up a few skills here, not only for investing but with relationships as well
Hi Dan & Nan,
These are two books that I would start with and I think are not bad.
Property Investor's Guide to Negotiating --- John Potter
Trump style Negotiation --- George ross
Good luck mate!
Leo
p.s can I also suggest you read/watch some material on mindset development. Les brown and Jim rohn are some of the best. Also Jeff Olson (The slight edge) is a good book. Its repetitive but that's because ppl need to be 'brainwashed' (in a positive sense) into BELIEVING that they can truly achieve greatness, before they actually can. If you further develop your mindset, your potential for greater success, will be magnified beyond belief.
I harp a lot about mindset development on the forum but its essential for great success. Its really very, very limiting on your success to have heaps of property knowledge, equity etc but not a sophisticated mindset to go with it. trust me on this one mate p.s can I also suggest you read/watch some material on mindset development. Les brown and Jim rohn are some of the best. Also Jeff Olson (The slight edge) is a good book. Its repetitive but that's because ppl need to be 'brainwashed' (in a positive sense) into BELIEVING that they can truly achieve greatness, before they actually can. If you further develop your mindset, your potential for greater success, will be magnified beyond belief.
Thanks Leo,
I will certainly look into this.
Hi Dan and nan,
Another good book on negotiation - Getting to Yes by Roger Fisher and William L. Ury
http://en.wikipedia.org/wiki/Getting_to_Yes
Another good book on negotiation - Getting to Yes by Roger Fisher and William L. Ury
http://en.wikipedia.org/wiki/Getting_to_Yes
Given my age, I have decided my best course of action is to be a buy and hold long term growth strategy (my long term is considered 7-10 years). I do want to target high growth + at minimal neutral to positive cash flow properties. I would be happy with negative provided the property gave me a huge instant equity boost.
I'm a local of Sydney, and I don't even bother with the Sydney market as it has it is an unaffordable top of the cycle piece of crap at the moment (even if I could afford it, I wouldn't really go out and buy stuff as I know I'd be overpaying, and who knows how much steam it's got left i.e. until interest rates rise?).
I've been studying the Brisbane market given it's upside potential for growth in the near future (Commonwealth games, infrastructure, CSG, growing population, good stage of the cycle etc.). And I don't do basic research, I do grid analysis, looking at zoning maps, yield variances, demand and supply factors, and where in the cycle a suburb is. Like I've said, I didn't just think of this "I want to invest in property yesterday, hence I'm going to buy tomorrow". I have been reading everything I can get my hands on, from books to articles, to advice.
I have gotten a pre-approval, and I know how much I can afford, and I've gone half of that so I can strategically move forward should anything go against me (basic rule of never over-extending yourself). I also work for a Bank, and enjoy pretty good benefits in getting an investment loan (potential to even waive LMI).
For my first property, I feel structure isn't so important, provided the property is leveraged up - but will still reconsider based on a professional solicitors' advice. Interest only because a successful business can only continue over the short term if it holds cash reserves/has strong cash flow (yes treat your investing like a business).
These are all basic things that any investor should know, which I do. But beyond that, I'm struggling with is building relationships, I'm pretty scared to even talk to agents on phones because I feel I might offend them by low balling or not committing/wasting their time. So hence I need people's advice regarding how to strategically ask agents or look for below market value properties.
This is great :O
But prepare thyself for a barrage of nooby questions :S
Would you mind recommending me a/the solicitor ? Do you go on weekends? What do you do for your job?
Did you first call agents to find out about the area or just hop on the plane and fly up?
How much time do you feel is necessary for me to fully understand the values of property, or a better question, how many times did it take you?
Did you take into consideration the solds you saw on realestate, domain, onthehouse and were your inspections giving similar values? Do you get the values from the agents there to understand how much it would sell for? What was the bias?
Did you go by yourself or with a partner? Or friend?
Where did you stay when you flew up for a weekend (hotel? friend's house?)?
And how much can I expect to pay for a round trip so I may budget?
Also, how old are you? (I'm 21 nearly turning 22)
I really appreciate your help already.
I just turned 30yo. I wish I was as switched on as you when I was 21. You are way ahead of the curve! Recommend searching for some posts from Nixba, believe he is around your age and has bought quite well in the Brisbane area. Some good content there.
PM me for the solicitor details. I normally just go for one day, so fly in the morning and come back that night. Saves me hotel costs. Mostly on Saturday as that's when the open homes are.
Day job is online marketing. No relation to property investing, I learnt everything I know from Somersoft.
First trip up, I had no idea - blew some airfares. Second time up, I researched more, spoke to more forumites and generally had a better idea. Third time I knew what I was looking for.
I have a good example on this. I took a good friend up to purchase a property. He hadn't been to Logan before and didn't really know the prices. Before we saw the property we spent the day viewing about 8 open homes. By the time we got to his one, which was the last inspection he saw how good of a deal it was and snapped it up. So really, nothing beats on the ground research and it only took him one day to get a feel for the market.
Yes, I do as much research as I can. The websites, I normally use are realestate.com - sold prices are a great indication too, onthehouse, Investar (property research tool) & Google Maps.
Network with agents, this is so important. Sometimes I go to open homes with no intention of buying the place but just to say hi to the agent, tell them I am still in the market, what the recent market has been like, do they have anything in the pipeline etc
I normally go with Dad. So normally I talk to the agent and he looks through the property in more detail. When he can't, I normally just go by myself or friends.
Flights vary, have a look online for prices.
Car hire, roughly $40 per day
Petrol, $20
Toll $10
I park at Blue Emu parking at Sydney airport, that's another $28
So pending flights $300-400 is usually enough.
You get below market value when the market is rubbish and someone is forced to sell quick.
I would say I've gotten below market value for two of the four properties I've purchased.
You do need to know what something is worth off the top of your head though. For my suburb I know prices better than the real estate agents.
Now as for those public trustee houses. I've always been tempted by the really run down ones. Do they actually go cheap at auction or is there a heap of demand?
I would say I've gotten below market value for two of the four properties I've purchased.
You do need to know what something is worth off the top of your head though. For my suburb I know prices better than the real estate agents.
Now as for those public trustee houses. I've always been tempted by the really run down ones. Do they actually go cheap at auction or is there a heap of demand?
What about places like Perth? with a big mining downturn after so many high income earners bought properties they can no longer keep?
Achimy mate I'm impressed with your approach and level of research/commitment especially for your age. IMHO your definitely on your way for massive success if you keep this up.
Given my age, I have decided my best course of action is to be a buy and hold long term growth strategy (my long term is considered 7-10 years). I do want to target high growth + at minimal neutral to positive cash flow properties. I would be happy with negative provided the property gave me a huge instant equity boost.
Everyone wants high growth at neutral or positive cash flow straight away (not easy IMO). And you want huge instant equity boost..you got your work cut out for you mate
I'm a local of Sydney, and I don't even bother with the Sydney market as it has it is an unaffordable top of the cycle piece of crap at the moment (even if I could afford it, I wouldn't really go out and buy stuff as I know I'd be overpaying, and who knows how much steam it's got left i.e. until interest rates rise?). Absolutely right move IMO.
I've been studying the Brisbane market given it's upside potential for growth in the near future (Commonwealth games, infrastructure, CSG, growing population, good stage of the cycle etc.). And I don't do basic research, I do grid analysis, looking at zoning maps, yield variances, demand and supply factors, and where in the cycle a suburb is. All very good mate.
I have gotten a pre-approval, and I know how much I can afford, and I've gone half of that so I can strategically move forward should anything go against me (basic rule of never over-extending yourself). I also work for a Bank, and enjoy pretty good benefits in getting an investment loan (potential to even waive LMI). Awesome and good preparation.
For my first property, I feel structure isn't so important, provided the property is leveraged up - but will still reconsider based on a professional solicitors' advice. OK makes sense. Probably your own name for this but talk to your solicitor. Its also a personal decision.
Interest only because a successful business can only continue over the short term if it holds cash reserves/has strong cash flow (yes treat your investing like a business). Smart man! I like the thinking.
These are all basic things that any investor should know, which I do. But beyond that, I'm struggling with is building relationships, I'm pretty scared to even talk to agents on phones because I feel I might offend them by low balling or not committing/wasting their time. So hence I need people's advice regarding how to strategically ask agents or look for below market value properties.
OK so with regards to talking to agents/low balling/negotiating etc you are going to have to get out of your comfort zone and just start doing it. You will get more comfortable with it over time and it will eventually become second nature. It might help you to prepare a strategy before you ring them to know what you will say and if they answer in a certain way, then how you respond. Sometimes having it written down eases the nerves. Also some good negotiation books will help a lot IMO. And for someone as serious as you seem to be, its worth having and learning anyway. Try to find some evidence to support your lower offers eg similar house/size sold for less or even if its same size, the one your looking at might be in worse condition then the higher priced one. You can use all this to support your negotiation. If you get to a B&P stage, you can use the report (any negative thing) to further strengthen your case for price reduction etc. Also generally once you are in a cooling off period and doing b and P etc, psychologically the vendor is hoping you buy it etc. Puts you again (usually not always) in a stronger position to negotiate. You have nothing to lose really, worst case you just pull out on your clauses, but the vendor has to go through the process again, which takes its toll.
All these small things make a huge difference at times. Ideally a perceived win-win is best, I wouldn't try to make enemies with everyone, but that doesn't mean you shouldn't be tough. trump always says "aim to be fair, but very tough". Personally I wouldn't try to decimate the vendor and get everything I want 100%, I know some ppl who do. that's their decision, I wouldn't. But definitely be smart and tough and try to give them what they want while getting what you need as well. Im so impressed with your overall attitude/approach for someone as young as you. Awesome! I know so many ppl who invest in property and they don't have even half your knowledge/approach/commitment.
Well done mate.
Leo
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OK so with regards to talking to agents/low balling/negotiating etc you are going to have to get out of your comfort zone and just start doing it. You will get more comfortable with it over time and it will eventually become second nature. It might help you to prepare a strategy before you ring them to know what you will say and if they answer in a certain way, then how you respond. Sometimes having it written down eases the nerves. Also some good negotiation books will help a lot IMO. And for someone as serious as you seem to be, its worth having and learning anyway. Try to find some evidence to support your lower offers eg similar house/size sold for less or even if its same size, the one your looking at might be in worse condition then the higher priced one. You can use all this to support your negotiation. If you get to a B&P stage, you can use the report (any negative thing) to further strengthen your case for price reduction etc. Also generally once you are in a cooling off period and doing b and P etc, psychologically the vendor is hoping you buy it etc. Puts you again (usually not always) in a stronger position to negotiate. You have nothing to lose really, worst case you just pull out on your clauses, but the vendor has to go through the process again, which takes its toll.
Im so impressed with your overall attitude/approach for someone as young as you. Awesome! I know so many ppl who invest in property and they don't have even half your knowledge/approach/commitment.
Well done mate.
Leo
!!! You're too helpful mate, thank you so much. I guess it will come down to persistence and time. Thanks for the advice and help :S Will keep you posted as I progress. Need a bit of kick up the backside to get moving in terms of talking to people. These forums are a godsend, had I joined 6 months ago who knows how much further knowledge I could've had!
No worries mate. Just keep it up and in time you will be amazed at the life you can create for yourself
p.s Invest in some Jim Rohn material. Developing your mindset whilst developing your investment knowledge/actually investing will make you unstoppable and powerful beyond belief. Good on you mate.
Leo
Too early for Perth just yet! Still lots of buyers and sellers with high expectations. Maybe second half of next year?
Achimy you might find some of the contents in this thread interesting mate.
http://somersoft.com/forums/showthread.php?t=102696&highlight=love+rpdata
Leo
http://somersoft.com/forums/showthread.php?t=102696&highlight=love+rpdata
Leo
I will give my 2 cents.
In the current market, for listed properties, the only realistic way to get a bargain is to give an unconditional offer ie no blg and pest and finance conditions, plus favourable settlement terms.
To do that you either need a preapproval or good cash reserve or equity, or a bit of all.
Snapping properties pre-listing is not practical as agents now have a buyers database (which builds up with inquiries in this market), and they give a sneak preview to more buyers pre-listing.
Yes if something is marked for auction, you can buy it before auction by giving an unconditional offer. Sellers would like certainty, and not have to worry about keeping the property shining in the lead up to the auction, plus the numerous inspections if already occupied.
In a perfect market, there is no bargain, except if you have the bargaining power (ie. can take risk of finance and bldg and pest).
The other sly way unscrupulous buyers do it is to enter into a contract at market price subject to conditions, and use the bldg and pest report to negotiate (sometimes for cosmetic issues). Desperate sellers might agree, but if nothing of significance is in the report, you are stuffed! Or if sellers can sustain a long listing, they will tell you to get stuffed.
In the current market, for listed properties, the only realistic way to get a bargain is to give an unconditional offer ie no blg and pest and finance conditions, plus favourable settlement terms.
To do that you either need a preapproval or good cash reserve or equity, or a bit of all.
Snapping properties pre-listing is not practical as agents now have a buyers database (which builds up with inquiries in this market), and they give a sneak preview to more buyers pre-listing.
Yes if something is marked for auction, you can buy it before auction by giving an unconditional offer. Sellers would like certainty, and not have to worry about keeping the property shining in the lead up to the auction, plus the numerous inspections if already occupied.
In a perfect market, there is no bargain, except if you have the bargaining power (ie. can take risk of finance and bldg and pest).
The other sly way unscrupulous buyers do it is to enter into a contract at market price subject to conditions, and use the bldg and pest report to negotiate (sometimes for cosmetic issues). Desperate sellers might agree, but if nothing of significance is in the report, you are stuffed! Or if sellers can sustain a long listing, they will tell you to get stuffed.
This thread is fun!
Good questions and answers.
Here is the record of my romance with Beenleigh as a youngster! Ah the memories.
http://somersoft.com/forums/showthread.php?t=12752&highlight=beenleigh
This was before I had access to CMA's on tap and all the data, I purchased a suburb sales report for about $87, printed it out, drove around looking at places, checked the sales for the street, ran a basic excel cashflow - and made my decision.
Good questions and answers.
Here is the record of my romance with Beenleigh as a youngster! Ah the memories.
http://somersoft.com/forums/showthread.php?t=12752&highlight=beenleigh
This was before I had access to CMA's on tap and all the data, I purchased a suburb sales report for about $87
, printed it out, drove around looking at places, checked the sales for the street, ran a basic excel cashflow - and made my decision.
