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Thanks for the questions everyone.
Riding High, what an ongoing shame that you must always derive to this form of small whit on a daily basis.
I will answer your question once and in a direct manner so do not try and twist my words as you do on a daily basis on this forum in every post I make.
The market value is based using the resurces of RpData - Yes this is the same products the banks use for valuation purposes. One can never gaurantee anything and it is always advised to make full inquiries on ther own before making any investing decision. Deal Finder doesnt do anything except for provide the link and the reports generated from Australias #1 source RpData for a buyer to make an educated decision. There are no comissions, or hidden agenda and this is the way I always do business.
As an individual I am always very transperant with my numbers and hold a high level of integrity being a clean slate posting openly my numbers, results. I have been a part of hundreds of transactions and buy properties for myself on a monthly basis below market value.
One question I must pose to you?
How many properties have you purchased below market value? And please disclose all your details of these deals.
I have been upmost transperant by showing all previous deals, devulging to the nitty gritty and also showing all the deals I have been doing this year and last. As a matter of fact I have added 10 buy and holds all using this strategy to my bottom line in last 10 months.
Regards,
Nathan.
Now that is interesting. I assume you have to refinance with that bank? So it works like this:asked for $200,000 assuming that it would come in lower. The val came back at $195,000 and I argued it and got it raised to $205,000
Now that is interesting. I assume you have to refinance with that bank? So it works like this:
PurchasePrice: $137,000
Bank valuation: $205,000
And you can get 90% or $61,200 to spend on.... anything? But choose to spend on another house...
Nice
Yep so a 90% or 80% whatever your LVR is with the bank/lending institution.
It is important you speak to your bank/broker about the options. If yu dont find the answer you want keep looking out there, I have used many brokers and banks and today use the ones which work for me.
In a detailed situation my initial loan was 80% of the $137,000 therefore $109,600 and became $164,000 therefore equity in account of $54,400.
Everyones numbers are different, its just important to understand how yours work better yet make them work for you.
This will look like this…
Purchase price $200,000
Revaluation price $240,000
It doesn't really take that long to do enough research to work out whether something is a good deal or not.
I went to one of those weekend halleluia-brother free seminars a few years back with multiple speakers and came home motivated to buy a cash-flow positive property. Hubby is from regional NSW and I noted the towns he had lived in. I typed the towns into realestate.com.au. Looked at prices for a few days to work out the "worth" of properties there and then looked in the rental section to determine rental yield. After about 9 hours of doing this, the deals just started popping out at me. Found a few properties going to auction the next week, with opens 2 days away. So packed up for a country drive to the opens and bid over the phone at auction 2 days later.
so within 2 weeks of getting serious about buying an investment property, I'd bought 2 properties totalling 210K, made around 70K in instant equity and cash-flow positive.
I have been told I was lucky. I think you create luck by being in the market.
I can't see a house that's on the market at $220K, and sells for $200K to $210K actually being worth $260K with a fresh lick of paint, as the B Invested example shows. Because if it was, why's the owner taking such a loss.
Nathan's recent purchase in Willmott strikes me as falling into that category. The property suffered from vandalism, and is in what sounds like a rough neighbourhood.
I can't see a house that's on the market at $220K, and sells for $200K to $210K actually being worth $260K with a fresh lick of paint, as the B Invested example shows. Because if it was, why's the owner taking such a loss.
That sounds good in theory, but what actually happens is that you get a progression to the outter suburbs. They might not be able to afford to live in Parramatta, but they can out west.My second issue is that I don't see house prices and rents rising ahead of income over the long term. If wages are rising at 3% to 4% and accommodation at twice this, then there will come a point when people simply cannot afford to pay more. Over the long term (and taking into account several studies that have tracked this) property tends to track wages.
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I said it was demand / competition from buyers.
He replied it was the vendor's circumstances.
Spot on! There can be plenty of reasons why people do things which we consider "irrational". You see people selling on "Selling Houses Australia" all the time who don't tidy up their house, even when the agent tells them that their mess is detracting $100K from the sale price. Or who simply won't remove their horribly old-fashioned furniture, because "I like it and it's my home and I have to live here", or because they "don't have anywhere to store their own furniture", and when the words "storage shed" are mentioned, baulk at the few hundred it would cost. It astonishes me how many reasons people will throw away heaps of potential income by an unwillingness to do a bit of work, or put up with a bit of inconvenience.As for the question about owners taking a loss (ie not doing simple things to add value like tidying and painting - though a $40k gain for simple painting sounds a bit high) I think the answer is not all have the luxury of being as calcuating as we are - especially if there are other life circumstances (eg family issues, health, job change) that take more priority than maximising money. Investors might consider that irrational, but it's their life and we might behave the same if we were in their shoes.
Easy! Don't buy down there.
The good thing about property is that it is located in all States, even all towns, large and small. YOu are not confined to purchase something on your doorstep, so if there is nothing near where you live that makes a good investment, look elsewhere.
I was talking to an auctioneer about this recently (this is in a non-auction outer Melbourne suburb - regional areas would likely be similar).
The property being discussed attracted only a slightly higher than usual yield. However it sold at auction for exactly the same price as a nearby concrete ex-commission house an hour prior, despite it (i). being on a much larger (subdividable) block, (ii) the house being 50% bigger, newer and brick and (iii) it being in a better street with more owner occupiers. So it was obviously a fairly good buy (though not in the same league as the higher yielding places in similar suburbs others have bought).
He asked me what determines the sale price of a property.
I said it was demand / competition from buyers.
He replied it was the vendor's circumstances.
Eg if the owner really had to sell (maybe financial difficulties) he'd likely accept an unconditional but low auction price, especially if it's sufficient to cover his mortgage (plus a bit more) so he can walk away. No house, no debts and hopefully a bit of money to start afresh.