Investment property Mentoring

Hi there,

New member to the forum, my partner and I are both looking to purchase our first investment property and also develop a plan for the next few years on how to grow a portfolio.

We currently don't own any property but have about 55k in savings available to put towards the first purchase. We enjoy renting inner city at the moment and are not interested in our own home at this stage in our lives.

What we are really looking for is a educator/mentor/buyers agent of such as we are both time poor plus have no friends or family that are in the investment property market.

From what we have read no one seems to encourage the idea and there seems to be a lot of cowboys out there. We are looking into two companies that both have been at the Melbourne property expo a few years and also seem to be featured in magazines etc.

Has anyone had any dealings with Alliance Corp and Open Wealth Creation? If so how did you find them and would you recommend them.

We are aware that they will charge a fee, plus a fee on buying properties however it is something we are prepared to pay for if its the right price/service/reputable company.

Both offer free consultations and we have sat down with one of them however interested in hearing other peoples opinions.
 
Outsourcing your wealth creation is a bit of an invitation to be taken advantage of. It's something you've got to take responsiblity for yourself. There's thousands of stories about people who sat down for a consultation, ended up buying an over priced property which set them back years.

Never, ever deal with a group that offers to help you source a property at no cost to you. They build their fees into to purchase cost and they're usually incredibly exorbitant. You pay for it many times over.

A genuine buyers agent will charge a fee for their services. They'll then locate and negotiate a property based on the parameters outlined in your discussions. They won't take payment from the vendor or developer.

Keep reading these forums. You won't find a place that has more accumulated knowledge anywhere. There's lots of good books out there as well.

Keep an eye on the 'Meeting Point' sub-forum. Every second Tuesday people get together in Melbourne to discuss what they're doing. There's no sales, no agendas, just an exchange of information. I don't think it's been posted yet, but the next meeting is due next week.
 
I agree with Peter - the best person to take advice from regarding your financial future is yourself.

There are very many different opinions and view points to consider. In investing and wealth creation there is not one rule that says one thing works better than another - it is up to you to consider what will work best for you.
 
Speak and learn from them but keep your wallets at home.

Reading and participating these forums is a great way to learn and go along to the meet ups. All investors speaking from their own experiences, you can't beat that for genuine advice.
 
The paradox is that you can learn from these property groups even if its what not to do.

But I stress you need to be self educated in order to spot the genuine from the non genuine article.

If you have taken the time and effort to educate then you wont need them. Thats the paradox.
 
Hi there,

New member to the forum, my partner and I are both looking to purchase our first investment property and also develop a plan for the next few years on how to grow a portfolio.

We currently don't own any property but have about 55k in savings available to put towards the first purchase. We enjoy renting inner city at the moment and are not interested in our own home at this stage in our lives.

What we are really looking for is a educator/mentor/buyers agent of such as we are both time poor plus have no friends or family that are in the investment property market.

From what we have read no one seems to encourage the idea and there seems to be a lot of cowboys out there. We are looking into two companies that both have been at the Melbourne property expo a few years and also seem to be featured in magazines etc.

Has anyone had any dealings with Alliance Corp and Open Wealth Creation? If so how did you find them and would you recommend them.

We are aware that they will charge a fee, plus a fee on buying properties however it is something we are prepared to pay for if its the right price/service/reputable company.

Both offer free consultations and we have sat down with one of them however interested in hearing other peoples opinions.

My problem with organisations that provide this service is not just the potential to overpay, I actually think the bigger problem is the narrow perspective they bring. In other words, if they only recommend properties that give them the best commission, you are not seeing all of the other alternatives out there. This clearly demonstrates a conflicted business model that you need to keep a watch out for.

Another warning sign is the sausage machine model;
1) identify investor
2) identify purchasing / borrowing capacity
3) match investor to properties that maximise commission
4) provide recommendations in a fancy binder with lots of colourful renders and financial modelling with optimistic (possibly completely unrealistic) CG and Rental Growth projections. Include a page of warnings about risks that you will need to accept.
5) provide engagement letter for conveyance
6) connect investor to affiliated finance / insurance broker
7) collect signatures
8) pocket kickbacks from 3), 5) and 6)
9) repeat

This keeps the investor on a straight line and under control. No laws are broken, no code of conduct is breached, all questions are answered with enough detail to sound plausible. The risk is that no one is looking after your best interests and won't warn you or provide answers that are holistic (consider your circumstances, your objectives and your emotional state).

For example, if you choose your own Lawyer, they might draw your attention to an unreasonable/unusual term in the contract for sale. In the sausage machine model the goal is to keep you moving from prospect to sale as quickly as possible, maximising commissions and avoiding breaking any laws.

Sorry to be so negative about this, but I almost fell into the same trap, but managed to extract myself from it. Reading the information on this forum has no doubt saved me thousands (probably 10s of thousands of $).

I subsequently did my own research and due diligence and am happy with the IPs I bought. At least I'll never have the doubt in my mind that I was taken for a ride.

If you are so time poor that you are unable to educate yourself you are taking a significant risk of purchasing over priced and under performing assets. Stick your money in a term deposit instead!

By all means use a genuine buyers agent, but educate yourself as well.

This forum is the best source of information I have found, so it is a great place to start.
 
I agree with everyone.

Personally I am not a fan of paying someone else to do the homework I should be doing myself. I am a firm believer that before I buy into an area, I know the local area surroundings, potential issues in the area, demographics, major source of employment like a local would.

You can literally spend days reading through all the information in this wonderful forum!!! I have also talked to locals, real estate agents and etc when I am in an area to see what its like. I remember I was once in an area and had a chat with a mature age man for hours on end about the area!!!
 
Firstly I think it's great that you've managed to save a decent deposit and are looking at investing at a young age. Most people will never own an IP and to work it out young you're already ahead of the pack again.

Secondly, I actually disagree with some of the points others have left.

I don't see a problem at all with paying for education / information or buying a new property though an advisor or planner. Yes they're making money and are entitled to for a service, just as a mechanic is who fixes your car. Suggesting that no one is more qualified than you to plan your financial future is folly. There are lot of people who have had years in the industry, many who are tertiary educated and most who spend 60 hours a week living it. This is the power of leveraging. I agree though that this forum is also a wonderful source of information and leverage but this forum will never take into account all of your personal financial circumstances before you purchase. Would you spend $400,000 on a share portfolio without seeking financial advice? ... No?... So why is it ok to do that on a property?

The trouble is, as you mentioned in your question, that there are a lot of cowboys out there. This is where it's incumbent on you to wade through the noise and find a group / company / person you resonate with and has the level of integrity needed to look after customer first, them second. Google them, youtube them, see what kind of presence they have and what kind of information is out there on them.

With a formulated plan (not just a buy this property, see you in 2 years plan) you'll actually be able to step through processes and use leverage and targeted growth to grow your portfolio faster. We're all time poor so leveraging is smart and yes, you will pay for it - either up front or in commissions (or yes, even both) but if you get the result then they've done their job and earn't their fee.

An off the plan property isn't right for everyone but they are right for some and they are a legitimate strategy. You may be better buying an existing house and renovating, or buying near new and trying to get a discount. Lots of options but they may not be best for you right now. Only you know that.

That's my two cents anyway.
 
No laws are broken, no code of conduct is breached, all questions are answered with enough detail to sound plausible..

well

no

Kickback by definition is an undisclosed comm.

In all of the scenarios outlined, the provider of the comm would need to disclose same to the "one stop shopee"


ta
rolf
 
Celery,

Welcome.

As others have said, avoid the slick sales presentations if they are getting paid by the vendor or developer then you are not the client you are the patsy.

This forum has worlds of information, just spend a few weeks or months reading and you will learn a ton. There are also book lists and reviews of investing courses so any paid material out there you can quality check here then go get the good stuff. For me books are the cheapest way and I like to read so its a fit. Others prefer dvds or live events but these are a little pricier.

Independent BA's are expensive but you will generally get a much better purchase result compared to not knowing what you are doing (as long as they are good).

The two in Melbourne with a decent rep I know of are Jake Milne from Qura and Metropole.

Both are a bit heavy into inner ring cbd and inner to middle ring suburbs, probably metropole moreso Jake can comment on his locations.

Metropole do the whole mentoring thing as a system, its expensive, but I have a friend who is doing it and it appears to actually have some quality content.

Other BA's can advise how much mentoring they do, I do a little bit but its really informal. My patches are Wollongong/Illawarra, South Coast NSW, some Regional NSW property, etc. So if Albury is interesting to you I could help, otherwise try those mentioned above or as stated in the beginning, READ!!!

All the best
 
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