Buying "Under market value" and giving low ball offers

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 :eek:, printed it out, drove around looking at places, checked the sales for the street, ran a basic excel cashflow - and made my decision.

Golden I tell ya! What are CMA's?
 
Golden I tell ya! What are CMA's?

Sorry "comparative market analysis" its what my paid data services spit out as computer based "valuations" but I rarely use the word valuation because they aren't a sworn val from a valuer. Autoval is the other phrase that gets bandied around.
 
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.

Hi Achimy,

This is an awesome thread and I've read through this with keen eyes.

Since this post was done a few months back, I was curious about your progress and if you would be happy to share your journey?

I'm just starting out as well and I'm learning a lot from reading these posts.

Thanks,
 
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.


Hi guys n gals,

This is my first post so I hope I am doing this right. Please realise this is just my opinion and if someone wants to educate me on where I might be wrong I am always up for leaning.

It seems it has been a while Achimy since you have posted so hopefully that means you have worked up the courage to take some action.

I would suggest to anyone that is having trouble talking to agents etc and wants to buy interstate to do some on the ground work in a local area for a couple of months. This will let you get a feel for what it is like talking to the agents and inspecting properties before you spend the money traveling to a destination and will give you more confidence once you are there.

Also, don't worry about wasting the agents time, they have to be at the open homes anyway and will probably be happy to hear your opinions on the property and get your feedback. Sometimes you can give them a better overview of the market at a given time as you visit multiple agents listed properties.

Good luck,

Brodie
 
Too early for Perth just yet! Still lots of buyers and sellers with high expectations. Maybe second half of next year?

On the ground I'm seeing a split market. Villas, new properties and locations 25km+ out of the CBD are seeing price reduction activity and vendors considering negotiation. Properties sub $500k with a good land size within 20km+ of the CBD and development sites all over are still seeing healthy competition with multiple offers. I placed an offer last week with 15 people at the first home open, and 3 other competing offers.

My educated guess is that this dichotomy in the market will continue to accentuate itself as Perth pushes for increased density within the existing metropolitan footprint.
 
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Yes it is possible, but not in Sydney at the moment.

You will need to also wait until the interest rate is increased to more than 2.5% from the current rate OR you can also look for a rundown house / property which is not maintained well by the previous owner or renter.

The ultimate goal is to redevelop or subdivide for the maximum property.
 
Yes it is possible, but not in Sydney at the moment.

You will need to also wait until the interest rate is increased to more than 2.5% from the current rate OR you can also look for a rundown house / property which is not maintained well by the previous owner or renter.

The ultimate goal is to redevelop or subdivide for the maximum property.

I am familiar with the "maximum" property

For many years I held onto one like a wild white Arabian stallion

The power of cg from a "maximum" property made me the "extraordinary BA" I am today

One day you too may be able feel what I felt, Jesus once moved a rock, that rock was on the maximum property
 
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