First time investors

[Mark&Fifi]

Hi there guys

First up post after a guy at work recommoned we look at this forum.

My wife and I built our home just over 3 years ago, North Western Sydney. We now have around $120,000 of equity in our home. We both work (wife is a Temp teacher) I am full time and joint income is around 140,000 pa. We have been talking about IP for a few months and feel it's a good time to get into the market.

There was a guy who came to my wifes work place and an investment consulatant and he mentioned investing in property. So the wife made a time for this guy to visit us as we have been talking about this for ages.

Wifes and I views

Western Sydney as we know the area, shortage of rentals and a good chance of getting a tenant. We also seem to feel that this is around as low as market will get and might be a really good idea to jump on our first IP.

Investment Consultant -

Western Sydney bad choice, due to low capital growth.

He mentioned

SE Queensland on the Sunshine coast, and 2 suburbs on the Gold Coast. 4 bedroom homes 600m2 blocks for $450,000 upwards. Rental return $420 a week.

Melbourne Western Suburbs (West of Deer Park/East of Bacush Marsh) - $330 - 350,000 for a 4 bedroom double garage 600m2 block. rental around $320 a week. (having been in the area and having friends down there it seems excessive)

On looking at Realestate.com/Domain.com these prices do seem excessive and the rentals are not as we have been quoted.

Also the amount of rentals avaliable in these areas seem currently excessive. We found 54, 4 bedroom, double garage home for rent in 1 suburb alone.

I feel the consultant has tried the hard sell on us and any mention of price, rentals avaliable, + difference between his figures on weekly rent and what we found via the internet, were meet with - We have had not problems getting tenants, and look at the long term capital growth in these areas.

Also warned us off DHA, which we both think would be a sound long term, easy investment, good to first time cautious investors.

At the moment we are really keen to get into the market, but I am a little wary on what is good and what maybe is dodgy.

I personally feel that DHA would be a good first up investment, maybe in Sydney or Canberra and this is where my head is taking me.

Question is who would be a good person to bounce these ideas off?

We really feel the other investment consulant has a vested interested in the direction he is pointing us towards and we are really conerned about getting burnt.

Sorry if this is to long, my wifes and My head are all over the place at the moment.

Any help/advise would be great

Cheers
Mark and Fifi

 

[Nathan]

Welcome aboard.

West Syd has been very good to myself and assciates with cap growth. Sounds like the investment consultant is a sales person not an investor.

Before you make decision do your research. I would be warey of those numbers. Also the numbers you speack of a very neg geared considering the current market.

With $140k you should be able to turn that into 6-12 properties of $200k each in next 12-18 months, which are neutral geard to say the least.

Goodluck.

 

[Peter Parker]

Of the options presented, your wife and your 'gut reaction' of somewhere local appear the best.

As you say Melton does sound expensive and the Sunshine Coast is further from a major employment centre than somewhere in Western Sydney.

Compared to the outer suburbs of other capital cities parts of Western Sydney is relatively cheap and you know the area, so why go further afield for somewhat higher risk and likely no better return?

 

[Perp]

I'm with Nathan; I think this guy isn't truly an investment consultant, but a real estate agent, or at the very least some kind of commission-based salesperson.

What's the name of the company? Are they recommending newly built homes? (I'm willing to bet yes, and he's getting paid by the developer to flog off their stock.)

 

[Mark&Fifi]

Guys

Thanks for the quick response.

I have to admit to being very excited when this was put forward to us, but something set off alarms bells and my thought were the same as Nathan's with "investment consultant is a sales person not an investor"

Maybe we are being over cautious on our first, but my feeling is go in easy first up, get a feel, get confident and then move up.


This is something we are looking at to fund our retirement, just like everyone else.

We want to be smart investors and not silly ones.


Cheers
Mark & Fifi

 

[Mark&Fifi]

Ozperp

Yep they are brand new homes off the plan, waiting to be built. There seems to be a heaps of vacant lots in and around the area our lot was supposed to be. Google maps and street view showed the area to be baron.

Funny thing on one of the Gold Coast places, we were told to hurry as the last one was to be sold. Wife had an email saying another has popped up, amazing

I can PM you the builders. I have never heard of them.


Cheers
Fifi & Mark

 

[Nathan]

I would NOT be buying, they are making a profit by sellinbg you a solution as Steve McKnight would say.

Personally and I give same advice as I do, I buy things well below market value so I can have instant wealth/equity, along with cashflow.

My mother always says to me I cant have cake and eat it too, but I feel no point having cake if you watch it go stale and not eat it.

 

[Mark&Fifi]

Cheers Nathan


We both decided last week were we not going to touch this with a 10 foot pole.

Still I feel we need to find someone to talk to, without a vested interest in selling us something, with great capital growth, no worries about getting tenants, and wonderful figures.


Can anyone, recommend someone is Sydney/Western Sydney.


Cheers
Mark & Fifi

 

[Qlds007]

Yes Alan Fox who is an established member here and goes by the handle Propertunity would be a great place to start.

I am sure Alan wont mind me posting his contact details below.

Alan Fox
Real Estate Buyers Agent
Propertunity Pty Ltd

"Investigating Opportunity In Property"
E: [email protected]
P: 0407 933 500
W: www.propertunity.com.au
275 Tuggerawong Road, TUGGERAWONG NSW 2259

 

[Nathan]

I could say come along to our fortnightly catchups, however I dont want to come across as a spruiker.

I know many forum members come along to migle from all stages of start up portfolios, to very seasoned investors whom just come along and see whats being done in current market, and our current run sheet of projects we buy/reno. This is @ Parramatta.

In short there are many people on this forum who will guide you and give you the answers you may need.

N.

 

[WillG]

With $140k you should be able to turn that into 6-12 properties of $200k each in next 12-18 months, which are neutral geard to say the least.

Goodluck.

Can you elaborate on the kinds of properties @ $200k each - locations etc. PM me if you prefer

Cheers

 

[Nathan]

Can you elaborate on the kinds of properties @ $200k each - locations etc. PM me if you prefer

Cheers

Maybe just the west suburb joints, or perhaps like the units closer in 2 beds $160-180k range rent $250+pw.

These properties are running scarce at present, and becoming harder to find.

 

[Mark&Fifi]

Thanks Nathan

I am a shift worker, so I am all over the place for time off. The catch ups are in Parramatta? Sounds like a good idea, to come along and maybe ask a few questions and take as much in as possible.

I was thinking at one stage a 2/ Bedroom unit in and around Parramatta might be a good choice as well.

Kingswood and Penrith you could pick up units around a $140,000 + mark.

I guess with UWC at Kingswood it could be ok. Still having grown up in Penrith South, Kingswood would not be on my list, as I would not be sure about the tenants.

Qld007, thanks for your advice as well.


Cheers
Mark & Fifi

 

[Nathan]

Yeah Kingswood is alright area. The properties out there which were really cheap are now very scarce at present.

But they come up occasionally. Currently in negotiations on some there at present.

 

[Bon]

you would be right to trust your gut instinct here, the guy trying to sell to you is obviously comission based somehow.

 

[fokas]

...but my feeling is go in easy first up, get a feel, get confident and then move up.

Since you are in no rush...I think this is a good idea.

 

[boods99]

Just in case there are a few people new to investing reading this thread, the best way to get a handle on the motives of the "consultant" is to simply ask the question "how much, and how do you get paid for the work you do in this deal?"
Their answer, if truthful, will tell you all you need to know in regards to the way the deal is structured, and ultimately what you will be indirectly paying for.

Boods

 

[Cashflow]

Mixing with like minded investors is the best way to go. Be like a sponge and absorb much as possible, but don't forget to take the plunge and get started. Why not research a few properties and come onto the forum and ask advice on price, rental, location etc.

Always ensure you get an accredited independent valuer to value your property purchase. This way if you were to fall victim to considering a property which is over priced (like the ones you have been talking about either being introduced to you by a marketeer or directly from a developer) the figures wont lie - it will be blatantly obviously that the property is overpriced. You could also ask for the Council Rate Assessment Notice (issued by the council for rating purposes). This will also show a property valuation.

It can seem to be overwelming at first but once you've made your first purchase your confidence will increase. Will you be an expert and know everything when you first start? No. Will you make mistakes along the way? Yes.

It's all part of the ride and what also makes it enjoyable.

Best of luck and keep us posted with your progress.

Peter
www.cashflowcalculators.com.au
www.privaterealestate.net.au

 

[sash]

If I were you...I would run from this consultant.

By doing some research...you could buy tow properties for the amount the consultant is suggesting.

Bargains in Sydney are hard to come by....try Newcastle or the Central Coast..still some there....