How do you search for IP's ?

[WillG]

I've been investing seriously now for about 7 years and have always used the same approach. There are probably better ways to find and analyse potential properties and I would like to hear how everybody else does it.

How I find properties.
1. Keep an eye on property web sites for suburbs I am interested in (residential & commercial).
2. Keep an eye on the Saturday paper for REA adds and private sale add's
3. REA's SMS new listings to my mobile on Thursdays and Fridays
4. Have a relationship with some agents in areas I am interested in and call regulary for a chat.

Things I look for in a properties
1. Price reductions in listings
2. Good land content
3. Age of property (so I can estimate depreciation)
4. Add's that have a title "Must Sell", "Have bought elsewhere", "Deceased Estate"
5. 2 bedroom houses that were once 3 bedroom houses (these can easily be changed back to 3 bedders to add value)
6. Houses where an ensuite can be easilly added
7. Houses with unkept gardens
8. Properties where a garage or carport could be added

 

[Watermelon Man]

I've been investing seriously now for about 7 years and have always used the same approach. There are probably better ways to find and analyse potential properties and I would like to hear how everybody else does it.

How I find properties.
1. Keep an eye on property web sites for suburbs I am interested in (residential & commercial).
2. Keep an eye on the Saturday paper for REA adds and private sale add's
3. REA's SMS new listings to my mobile on Thursdays and Fridays
4. Have a relationship with some agents in areas I am interested in and call regulary for a chat.

Things I look for in a properties
1. Price reductions in listings
2. Good land content
3. Age of property (so I can estimate depreciation)
4. Add's that have a title "Must Sell", "Have bought elsewhere", "Deceased Estate"
5. 2 bedroom houses that were once 3 bedroom houses (these can easily be changed back to 3 bedders to add value)
6. Houses where an ensuite can be easilly added
7. Houses with unkept gardens
8. Properties where a garage or carport could be added

The 2 IPs I bought this year I saw them on www.realestate.com.au. I look at this website at least twice a day mainly because I love following the real estate market. Both IPs I bought at full asking price or over asking price; however each were bought at 15% below market value. Both IPs I saw on the Internet & bought the 1st within 18 hours & the 2nd within minutes (got lucky I think). I think the good buys are around, but you have to be VERY, VERY FAST off the mark! Within 1 day of each contract being accepted, each REA for each property said they had received around 20-30 buyer enquiries, so I know I had to be very decisive!

 

[Watermelon Man]

I also scan the local RE paper on Saturdays. Personally I think keeping in touch with local REA's is a waste of time unless of course you ALWAYS have money to invest, as you may buy a property this month, & then 2 weeks later a REA rings you with a bargain-priced property & then you're most likely not in a position to buy it, so you miss out.

 

[oc1]

Personally I think keeping in touch with local REA's is a waste of time unless of course you ALWAYS have money to invest, as you may buy a property this month, & then 2 weeks later a REA rings you with a bargain-priced property & then you're most likely not in a position to buy it, so you miss out.

WM you gotta change your attitude there mate. Over the last year all i have bought has been through the close connections of the many agents i know in my area. I have had first crack (other than the developers themselves) at new subdivisionsland blocks and also houses before it has hit the market. Personally, anything that generelly hits realestate.com.au or any other public domain isn't a creacker of a deal. Always prepare yourself for a deal and if you dont have the money I'm sure you will find someone that does. Half a pie is better than none at all.

Cheers

Oscar

 

[Watermelon Man]

WM you gotta change your attitude there mate. Over the last year all i have bought has been through the close connections of the many agents i know in my area. I have had first crack (other than the developers themselves) at new subdivisionsland blocks and also houses before it has hit the market. Personally, anything that generelly hits realestate.com.au or any other public domain isn't a creacker of a deal. Always prepare yourself for a deal and if you dont have the money I'm sure you will find someone that does. Half a pie is better than none at all.

Cheers

Oscar

I'm associated with the real estate industry, so I think I'm a good judge of prices. The properties you're referring to above are most likely different to the properties I have bought (units). I agree with you that development/land subdivision sites or potential development/land subdivision sites are usually not available via the Internet sites; so keeping in close contact with local REA's will yield good results as mentioned above. So each investor to their own method of finding suitable properties. I doubt many investors out there could enjoy a 15% discount off the true market value of properties in today's rising market though; so I think I've done quite well

 

[suzieq]

I use all of the above methods mentioned and when I find an area I like I contact all the real estate agents in the particular area I'm focusing on at the time to check them out to see if I feel that I can do business with them.

Once I have defined if they are the people I want to do business with, I build up a relationship with them and ask them to alert me to anything that looks like its going to be coming on to the market. I then Move VERY QUICKLY once I have done my DD. Have been known to buy the odd "Site Unseen".

Most of my research is done on the internet and I like to Google the location, look at Google Maps, look at local council minutes etc.

suzieq

 

[WillG]

I doubt many investors out there could enjoy a 15% discount off the true market value of properties in today's rising market though; so I think I've done quite well

How do you quantify you got the property at a 15% discount ? Did the bank value the property 15% above what you paid for it ?

 

[Watermelon Man]

How do you quantify you got the property at a 15% discount ? Did the bank value the property 15% above what you paid for it ?

As we all know banks value properties conservatively under TRUE market value to cover their own backs.

IP 1 - Purchase - Settled 3 months ago for $192,500; bank valuation now at $220,000. True market value around $230,000+ (At $225,000 it's around 15% discount)

IP 2 - Purchase - Settled 4 days ago. Purchase Price: $160,000. I own the same unit (PPOR) directly opposite this IP 2 unit - same position, same quality throughout, same features. To purchase IP 2; bank valued my PPOR unit at $200,000; which makes for a 20% discount.

I think the above research & bank valuations justifies my position. Cheers!

 

[oc1]

I'm associated with the real estate industry, so I think I a good judge of prices. The properties you're referring to above are most likely different to the properties I have bought (units). I agree with you that development/land subdivision sites or potential development/land subdivision sites are usually not available via the Internet sites; so keeping in close contact with local REA's will yield good results as mentioned above. So each investor to their own method of finding suitable properties. I doubt many investors out there could enjoy a 15% discount off the true market value of properties in today's rising market though; so I think I've done quite well

I believe you have missed my point completely WM.

Oscar

 

[Watermelon Man]

Personally, anything that generelly hits realestate.com.au or any other public domain isn't a creacker of a deal.

Cheers

Oscar

So you don't think buying a property 15% under market isn't a good deal??? 2 IPs I bought at this discount were found on www.realestate.com.au. With the 2 IPs I bought I saved around $65,000 instead of paying true market value. I don't about you, but I thought the above saving was pretty good!

 

[oc1]

So you don't think buying a property 15% under market isn't a good deal??? 2 IPs I bought at this discount were found on www.realestate.com.au. With the 2 IPs I bought I saved around $65,000 instead of paying true market value. I don't about you, but I thought the above saving was pretty good!

Notice i have used the word GENERALLY.

Well done on your buying.

Oscar

 

[Watermelon Man]

Notice i have used the word GENERALLY.

Well done on your buying.

Oscar

Yes, my apologies Oscar. Yes I would certainly agree that generally most properties on the net aren't fantastic buys!

It's amazing how 1 simple word can make all the difference. Hmm...

 

[want2bewealthy]

realestate.com

I study the area well and look for one that meets my criterea

 

[tigerGT]

I use my time maching to go forward in time and check the prices for particular houses, then I go back in time and buy the houses that displayed highest gain in that time....... Dont I wish!!

I think im just like the bulf of the people here. I also use the main realestate sites such as realestate.com.au and domain however Im only looking for motivated vendors or properties where I can increase the rent by making minor renovations.

However for a change in style I am thinking of investing in the residex rent report that was released in July '07 (this month). The only thing with that is that its soo expensive and im weighing up my options. Its being sold for $275. Does anyone else use this as a guide when looking for location for next IP? Is it illegal to ask people from forum to share in this cost? (i.e 4-5 of us put in and purchase it?).

Also has this report in the past proven useful to anyone when selecting a property?

 

[Pablo]

I think you also have to consider how hot the market is when trying to pick up a bargain on realestate.com. Lately whenever I see a bargain on re.com it is under contract already and I check every day and ring up immediately.
My next purchase I am definitely going to build up a better relationship with the real estate agents in the area I am looking.

Cheers.

 

[sailor]

As we all know banks value properties conservatively under TRUE market value to cover their own backs.

IP 1 - Purchase - Settled 3 months ago for $192,500; bank valuation now at $220,000. True market value around $230,000+ (At $225,000 it's around 15% discount)

IP 2 - Purchase - Settled 4 days ago. Purchase Price: $160,000. I own the same unit (PPOR) directly opposite this IP 2 unit - same position, same quality throughout, same features. To purchase IP 2; bank valued my PPOR unit at $200,000; which makes for a 20% discount.

I think the above research & bank valuations justifies my position. Cheers!

WM...most of the investment guru's say the profit is in the purchase price...so I'm with you on this one...both look like good buys to me. All the best with them.
I'm like a few others and try to establish good relationships with the REA's...they know when my criteria hits the market, and are likely to contact me before the properties are advertised.

 

[Tizzy]

We use a combination of strategies. DD in the areas we like, good relationships with a select few agents plus more recently, that amazing tool the internet...(REIWA.com ,realestate.com + many of the individual agents sites). Can't say we get papers very often any more. Often we'll go to see one of the houses we like on the internet It may even already have an offer on it) and we get shown "the house thats coming up this week".

A previous PPOR that we did well on was on the beachfront road in Yanchep. WE would not have got it if we didn't have a good relationship with the agent who had the listing and the local knowledge.