Pls Help Should I or Not...

Hi, I am keen to start buying an investment property so I had a guy come out the other day for a chat. He was from a company in Sydney and without going into too much details, he provides me with a report which I have to pay $49 for, this tells me the hot spots to buy an investment. He is suggesting that there is a Hot spot in Brisbane in a new estate (new built home) when the figures are worked out it will cost me no more than $200 a week. He is off preparing the report and comes back to me with the details and my partner and I have to fly to Brisbane to look at properties which will cost us $225 in total. If there is one we decide to buy we have to put down a deposit. He advised us that his fee is approx 2% for finding a property..
Look what I am asking here is, is he for real??? Did anyone buy an investment this way? As we are inexperienced we are not sure what to do. Your help will be greatly appreciated.
 
Carolyn, i think you are about to be sucker punched, they did all this in the 90's and the agents recieved kick backs, etc, etc,
No not many buy IP 's like this they usually read investigate, areas usually local, folks do this for about 2 years or so untill they are convinced they have found the right one,
the more you learn the more you earn, so start posting, and reading the massive amount is lit posted on this furum, free for all!!!
purchase books , and some monthly publications, this will get your mind set right too!;)
 
Hiya

I have many a client that bought one or a few properties this way. As already mentioned, it may not be the best way, depending on your time and patience, but it does suit some people.

If you do go that way, I would recommend that you do your own conveyancing and your own finance, that way you can be relatively sure of the value of the property.

ta
rolf
 
Don't do it until you've done a lot more research.

If he's also setting you up with a mortgage broker and solicitor, I'd be very, very wary. These types of outfits typically make their money by selling property substantially above market value to out-of-towners who don't have a good grip on their real value. (This is why they were referred to as "two-tier marketing schemes".)

Congratulations on having the smarts to post and ask about this here, before going ahead.

That $225 trip to QLD may end up being very, very expensive.
 
Carolynn, some alarm bells are ringing for me when I read your post.

Hi, I am keen to start buying an investment property so I had a guy come out the other day for a chat.
3 bells

He was from a company in Sydney and.... tells me the hot spots to buy an investment.
2 bells

in .... in a new estate (new built home)
3 bells

when the figures are worked out it will cost me no more than $200 a week.
5 bells - put on your running shoes and prepare to run not walk away very fast!

... and my partner and I have to fly to....
Yep, I was right - run NOW.

Did anyone buy an investment this way?
Some people bought properties that way, yes I'm sure. :eek: Did they buy a good investment? Well that's another Q altogether

As we are inexperienced
5 bells

we are not sure what to do.
1. Do nothing just now - except run from this 'opportunity'
2. Get a financial / investment education first before committing any of your own or borrowed funds
3. Do develop a plan and a strategy to start investing

Hang around and have a read here in the forums, read some good books, go to some free seminars - lots of them - but don't spend any money or sign up for anything
 
Hi, I am keen to start buying an investment property so I had a guy come out the other day for a chat. He was from a company in Sydney and without going into too much details, he provides me with a report which I have to pay $49 for, this tells me the hot spots to buy an investment. He is suggesting that there is a Hot spot in Brisbane in a new estate (new built home) when the figures are worked out it will cost me no more than $200 a week. He is off preparing the report and comes back to me with the details and my partner and I have to fly to Brisbane to look at properties which will cost us $225 in total. If there is one we decide to buy we have to put down a deposit. He advised us that his fee is approx 2% for finding a property..
Look what I am asking here is, is he for real??? Did anyone buy an investment this way? As we are inexperienced we are not sure what to do. Your help will be greatly appreciated.

Hi Carolynn,

I wouldn't do it.

The alarm bells for me are $200/week and the new estate. It sounds to me like you may be investing in an overpriced property.

Did he give you a Rental Guarantee?

Alot of people have fallen for this type of investing, which may suit you if you are not happy to do the research yourself and don't mind paying in most cases over 30k market value more for your property. I am only guessing but research will give you your answers.

Go on Realestate.com and find out for yourself what new properties in the area are selling for. Then check the rental section. Do you even know what sort of area you are buying into?

Research yourself and make an informed decision. If you feel comfortable about it, tell us the area. Someone here is bound to know it.:)

Regards JO
 
"He advised us that his fee is approx 2% for finding a property.."

You could find your own property via www.realestate.com.au or www.domain.com.au and save yourself 2% of the purchase cost. If you want to know sales prices for last 12 months in a particular suburb buy a residex postcode explorer...www.residex.com.au

Will cost you $90...a mortgage broker on this forum was even offering these for free.

Also negatively geared by $200/week is probably not a good investment.
 
I'm waiting for the punch line.

There's no punchline unfortunately. A mate of mine got sucked in last week via a sales call to his home after hours would you believe. The couple in question had been talking about one day purchasing a property for investment purposes and boy did they get sucker punched.

Got sucked into signing up and handing over a $1,000 deposit. Luckily, I prevented him from going any further. The bloke they went and saw did the typical sales job on them. Suits, nice office, well presented and polished. There's a lot of vulnerable people out there...
 
Good on you Bludger,

I once tried to talk a friend out of it and they got their back up and went ahead and flew to QLD with intent to buy.

They didn't buy thank-goodness. I didn't ask why, but I could guess.

She did tell me before she left that if she wasn't going to buy that property then she would buy none at all. So to waste the odd 30k was a small price.:(

Regards JO
 
What to do?

1. Run like hell from this clown. He cares nothing for your situation, only his commission.

2. Hang around this forum for a few months, reading, posting and taking in plenty. You will learn fast.

3. You will then be ready to do your own homework on what is a good or bad investment, and not be reliant upon "experts".

Good luck with it.
 
G'Day Carolynn

A customer of mine contacted me in March, 2007 wanting to increase his existing loan to provide equity release / funds to complete a purchase in Eaglehawk, Bendigo

He had been telephone canvassed by a marketing company about six months earlier and had bought a property off the plan for $226,000 with an estimated market rent of $210 per week.

The marketing company had also 'arranged' finance with a reputable lender but he needed the equity release and the finance company wasn't accredited with his existing lender.

Looking at my records today and doing a quick search on realestate.com.au, the house next door is now for sale, brand new, for $220 - $240,000. Rents in the area are currently about $230 per week.

The property settled in June, 2007.

Since then, there has been a general slide in property values particularly in regional areas which was certainly not the fault of the property developer.

The property is probably worth what my customer paid for it and rents have increased by about 10% in that time.

Was he stupid or foolish to buy through a company which cold called him?

No, I don't think so. Could he have bought better if he had done his own research? Maybe, maybe not.

Would he have done it at all if they hadn't called him? Probably not.

So is he better off to have bought this property? Yes, I would think so. At least he has taken some action for his own future. It galvanised him into action, and nothing happens unless somebody sells something. He sold himself on the idea of buying the investment and by the look of the neighbouring property for sale, he has done as well as can be expected given the circumstances of the market over the past eighteen months.


Marketing companies serve the purpose of getting the message out there. This does not make them all vagabonds and thieves.

Can we more experienced investors do as well or better than an opportunity brought to our attention by a marketing company? Well, we would all like to think that we can, and perhaps we can, but sometimes they know of something which we wouldn't have known about if they hadn't told us.


Carolynn, I would be inclined to do a bit more of my own research before getting on the plane. If, after a bit of poking around, you reckon that what is being offered is the real deal, then go and see it. But have a look around your own backyard, first. The diamonds can be obscured by familiarity, but they are there, and perhaps people are flying to your neighbourhood today to look at a great opportunity in the next street from you.


You have taken a giant step in talking to someone and it has started you off. Keep going and before you know it, you will have the opportunity you have been looking for

Cheers
Kristine
 
Thanks so much everyone for being so helpful. I think what I will do is as I have paid for the report I will get him to come out again and give it to us. I will not proceed as 80% of you suggest that I should not and I think by the sounds of it you all have great experience as I am only starting out. I will read a bit more on this site then will try and find an area to invest in. I Just have to try and find the right property in the right location. Thanks again.
 
My biggest worry would be

a) he charges 2% to find a property on a list he's just handed you.
b) he only deals in "this new estate" - equals a sales comm from selling the land.
c) if it's a house and land package, chances are there's a comm from the builder too.
d) possibility the price is over inflated to line everyone's pocket a little more - which might explain that SHOCKING figure of $200pw neg geared. seriously - i can't get over that.

so there you have it - 2% from you, 3% from the estate, 3% fromt he builder and maybe another 5% in purchase prices = 13% in fees before you're even paying interest.

what a deal - NOT!

glad you had the nouse to seek a second opinion. seriously - thee's a few buyers agents on this forum. i dare say there's a million better deals out there than the one presented.
 
I will read a bit more on this site then will try and find an area to invest in. I Just have to try and find the right property in the right location. Thanks again.

Hi Carolynn,

Most(not all obviously) times beginning investors start out buying 1, 2 or 3 properties near to where they live. It is an area they typically like because they chose to live there and they know it well and where the good & not so good areas are.

There is a lady who is a Buyers Agent that lives very close to you and specialises in the Hills District and is also a member of the fourm here: Jacque Parker http://www.housesearchaustralia.com.au/
I'm sure she'd be happy to have a chat and point you in a direction.

Just a thought.
 
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