Reply: 2.1.1
From: RM .
Michael,
Firstly let me get the apologies out of the way for the length of this post. Now.....
As a newbie investor, what I would like to know, like many other newbie investors on this forum, is how many props did you look at, review, do the numbers on, before you finally agreed to purchase that property?
Did the numbers work out straight away to get you that $80 per week positive cashflow?
What about other properties you looked at? What were the prevailing market conditions when you purchased? Did you have it in mind to purchase that very one?
I guess there is a little analysis paralysis in most newbie investors. The current market conditions don't help either. In the current market, what does one do? Line up a number of agents and say, hey I have x to spend but don't show me anything that doesn't show a 8%, 9% 10% return. I tried this with one agent and after he picked himself up off the floor from laughing so much, he said "Good Luck" and went on his way....
So is the current market not conducive to this type of negotiating or is it simply a case of not only looking at a ratio of hundreds??? of properties to find the one that will bring those elusive 8, 9, 10% returns, do you also need to do the same with agents?
That is, keep trying agents till one doesn't laugh and comes back and says, "sure, I know what you want, I will call you when one comes along??? Seriously, how strong are the odds that you will ever hear from that agent again when there are many? investors coming onto the market that think negative gearing is the best invention the tax man ever thought of, even if it does mean that you have to pay for it out of your pocket each week?
Or do you also dispense with that approach? If you are in the land of the living and you don't have every waking hour to be slogging the tarmac looking for positively geared, positive cashflow properties, do you pay someone who is willing to do the legwork in return for mutually acceptable compensation?
Looking through Caveat Emptor, there doesn't appear to be a flood of either "flippers" advertising their "services" or potential props for sale.
I am hoping that some of the learned experts on this site will share some of their experiences in the hope that it may alleviate (some of) the analysis paralysis we newbies face.
Hey, we may even try some of those expert techniques and find we too can achieve what you have.
Thanks RM.