Property Investment Mentor Advice Please

[bubbles]

I need some advice - sorry for the essay!

I think I need a property investment mentor to help me grow my property investments. I am desperate to invest more in property, but I am paralysed. I haven't invested since 2008 and I made a decision 18+ months ago that I would re-start my investment journey, but after a lot of due diligence and educating myself, I am still no closer to actually making another investment.

I have been trying to "DIY" my education like many recommend on this forum, but I think this is what is leading to the paralysis as I feel like my checklists are so long that no property can meet my criteria.

Can anyone recommend a good property mentor or a blueprint to DIY to break me past this paralysis phase? I really want to get back on track.

Some background that may help:
- I live overseas, so I can't do anything face-to-face (except 1x/year when I go back) so I would look for a solution that can be done over the phone, email or online
- As I live overseas I get no tax benefit from negatively geared IPs so would look for a solution that is focused on cash flow positive/neutral properties
- I'm not a complete novice, I have read most property books, threads on Somersoft, I read API every month, I am always on Domain, RealEstate.com, up until recently had access to RP Data and used it regularly
- I currently have 3 x IPs which are performing fine, but were purchased when I was young and probably weren't the best investments (hence why I am nervous)
- I have cash savings as a deposit and an ok income so should be fine getting finance
- My overall goal is cashflow, but I am fairly risk adverse so don't want risky areas e.g. mining or areas where I would have trouble offloading the property if my goals change in the future

What I am struggling with is:
- Where? I have my long checklist and all of my research, but I still haven't narrowed down the best area(s) to make my investments
- Structure? Currently the IP's are in mine and my husbands name, not sure if this is the best for future investments?
- The key things to look for in a feasibility check? I think my check is too harsh because after evaluating 150+ properties on paper, I haven't found one that I would be prepared to press go on

Thanks so much in advance!

 

[LeoT]

HI Bubbles,

To me it sounds like you are completely risk averse and therefore your checklists are way too long and no IP is going to 'make the cut' so to speak. I think you need to go back to the beginning and really ask yourself

1. what is the point of investing for you? What are your real goals? and in how many years do you want to achieve those goals?

2. Simplify your checklist so that its actually posible for IP to make the grade.

3. To me your biggest problem is your mindset. I would recommend you read some Jim Rohn, Les brown etc and really evaluate whether your principles you have so far are working for you or not. Evaluate your attitudes to fear, risk etc. I know this sounds a bit airy fairy, but IMHO this is what I see your biggest challenge is. Yourself. And to be honest i think its something most investors struggle with to varying degrees. But its definetly the mindset that we develop that affects 80% of our success, or lack thereoff.

Good luck

 

[bubbles]

Thanks for your reply Leo, I really appreciate it.

I think you're right about my lists, but I think the problem stems back to the "where" part. If I could find an area to focus on I could drop some of the criteria, at the moment I am bouncing all around Australia. I'm prepared to take risk, but I want it to be calculated risk and nothing so far has felt right even when the numbers were a bit off.

1. My goal is to create a passive income of $5000+/month from stable property that will also return capital growth (albeit modest, I recognise it's very difficult to get both). I ideally I would like to achieve this in 3 years, but I need someone to help me work through the calculations to see if this is feasible.

2. More than happy to, but I'm not sure where to simplify - hence why I need someone to walk through it with me. To me they seem reasonable criteria. Most are based around it being a good area (demographic wise proximity to amenities etc.) and then just the numbers - is it going to be cashflow neutral. Most seem to get crossed off just with those which brings me back to the "where".

3. I'll try and get my hands on those books. I agree I am not a massive risk taker, but I am willing to take it as long as I know I am on the right track. Without a blueprint and/or a mentor to verify I'm on the right track I feel as though I am either missing opportunities or holding back too much.

 

[LeoT]

​

HI Bubbles,

"1. My goal is to create a passive income of $5000+/month from stable property that will also return capital growth (albeit modest, I recognise it's very difficult to get both). I ideally I would like to achieve this in 3 years, but I need someone to help me work through the calculations to see if this is feasible."

To achieve $5000 a month passive income you are going to need at least 2 million net assets with a return of 5%. In my opinion cash flow positive or neutral property that according to you also has "modest growth, is definetly not going to get you to your goal of $5000+ passive income a month in 3 years time. This is a major flaw. What you need is property that has great capital growth prospects for medium to long term. Thats the only way your going to build the critical mass amount you need, be it 2m or 5m or whatever to acheve that (eventual) passive income. And I would say forget 3 years. Im just being realsitic. I think you have the wrong strategy/ideas/approach to get that massive passive cash flow your after, especially how risk averse you are.

"2. More than happy to, but I'm not sure where to simplify - hence why I need someone to walk through it with me. To me they seem reasonable criteria. Most are based around it being a good area (demographic wise proximity to amenities etc.) and then just the numbers - is it going to be cashflow neutral. Most seem to get crossed off just with those which brings me back to the "where"."

Once you realise you need to change your strategy, then your list will automatically change. With regards to where.. as for myself and alot of investors i know.. we tend to start with the state that IS NOT in a boom and is at around 7-8 oclock on the cycle, then choose city and suburbs (maybe 2-4) using same criteria. Then do your due diligence on particular properties.

"3. I'll try and get my hands on those books. I agree I am not a massive risk taker, but I am willing to take it as long as I know I am on the right track. Without a blueprint and/or a mentor to verify I'm on the right track I feel as though I am either missing opportunities or holding back too much."

If you wanted "mentorship" you could always pay 8-10k and join a course. To be honest i have always said that the courses are not necessary, but for some people i actually now believe its better to do it, than not. I think some people just get confidence from it. But really i dont think its necessary.


Tweak your mindset and choose the right strategy to achieve your goals and you will be on your way. I think its important to realise that anyone wanting to achieve 5k and more a month passive income is going to take a massive effort/committment. Others may disaggree with my advice, but I tell you what its served me and many other investors/developers very well over the years.

Good luck.

 

[MTR]

I would not recommend a mentor while you are o/seas, it could be costly and you may not get the benefits, I really think you need face to face in your scenario IMO.

You stated your strategy needs to be cash flow positive properties, I see you are located in UK, are there any possibilities of playing in this market for cash flow?? Have you investigated this market? that would be something I would look at in the first instance.

If you are specifically looking at Australian markets, many started rising 2 years ago so you would need to be cautious where/what market you jumped into at this point in time and to understand where the cycle is for each State.

Seems QLD is providing some opportunities at the moment, lower entry level and market has started to rise but early stages?? I have not researched this but just what I have read. You may want to start looking at posts relating to QLD/Brisbane market and just see what you come up with and keep asking questions, keep researching.

MTR

 

[The Y-man]

- I currently have 3 x IPs which are performing fine, but were purchased when I was young and probably weren't the best investments (hence why I am nervous)

Bubbles, can you tell us where and what types of properties they were? I am interested in understanding why you (1) feel these are under-performing, and (2) how this shapes your view of risk in terms of moving forward.

The Y-man

 

[The Y-man]

Bubbles,

What is your disposable income? (plan is much easier if it is like AU$500k after tax....)

PM me if you don't want to disclose.

The Y-man

 

[Jaggannath]

Bubbles, have you considered buying properties in the UK? They seem a fair bit cheaper, and the TV shows I watch often discuss people who do a quick reno to achieve an increase in either yield or equity.

 

[bubbles]

Bubbles, can you tell us where and what types of properties they were? I am interested in understanding why you (1) feel these are under-performing, and (2) how this shapes your view of risk in terms of moving forward.

The Y-man

I'll PM you now )

 

[bubbles]

Bubbles,

What is your disposable income? (plan is much easier if it is like AU$500k after tax....)

PM me if you don't want to disclose.

The Y-man

I'll PM you now )

 

[knightm]

Bubbles,

Best of luck with your journey. Its great to identify how far you have come and also to know when you get a bit "stuck" and this is a great place to get a range of ideas about moving forward.

In terms of LeoT's responses I agree particularly about the books on mindset. These sorts of texts (in particular Working with the Law and The Science of Getting Rich) have helped remove some of my old blocks to wealth creation.

There are plenty of investors on this forum who have lots of different "where" answers. There is no 1 right answer. There are lots of good locations, lots that are not so good, and it really comes down to your individual needs. Some of us have invested across the state or nation and others focus very tightly on 1 patch. Success is actually possible with either approach.

If you are looking for cash neutral standard resi properties in non remote mining locations there are quite a few, particularly with a good negotiation and a minor renovation. These can all be handled with outsourced services if required.

Keep digging you will get your clarity!

 

[knightm]

- The key things to look for in a feasibility check? I think my check is too harsh because after evaluating 150+ properties on paper, I haven't found one that I would be prepared to press go on

I have seen this often. Analysis paralysis. It can be quite crippling. If you read the older books like (for aussie real estate - Jan Somers) or even bibliographies of any entrepreneur or tycoon, they all have one thing in common. They take action.

Some clients who are very intelligent and more than capable of purchasing on their own have said they came to me specifically because they know they get stuck on this one and then procrastinate (some had done for yrs before working together) - which is obviously not a profitable pastime. Using an outside source can sometimes be the catalyst for action. Perhaps you need this, or perhaps not. It might be as simple as setting a goal to purchase your next one before the end of the year? Then stick to it.

 

[bubbles]

​

HI Bubbles,

"1. My goal is to create a passive income of $5000+/month from stable property that will also return capital growth (albeit modest, I recognise it's very difficult to get both). I ideally I would like to achieve this in 3 years, but I need someone to help me work through the calculations to see if this is feasible."

To achieve $5000 a month passive income you are going to need at least 2 million net assets with a return of 5%. In my opinion cash flow positive or neutral property that according to you also has "modest growth, is definetly not going to get you to your goal of $5000+ passive income a month in 3 years time. This is a major flaw. What you need is property that has great capital growth prospects for medium to long term. Thats the only way your going to build the critical mass amount you need, be it 2m or 5m or whatever to acheve that (eventual) passive income. And I would say forget 3 years. Im just being realsitic. I think you have the wrong strategy/ideas/approach to get that massive passive cash flow your after, especially how risk averse you are.

Agree, hence why I'm looking for someone to help me find the right strategy and create a realistic goal/plan

"2. More than happy to, but I'm not sure where to simplify - hence why I need someone to walk through it with me. To me they seem reasonable criteria. Most are based around it being a good area (demographic wise proximity to amenities etc.) and then just the numbers - is it going to be cashflow neutral. Most seem to get crossed off just with those which brings me back to the "where"."

Once you realise you need to change your strategy, then your list will automatically change. With regards to where.. as for myself and alot of investors i know.. we tend to start with the state that IS NOT in a boom and is at around 7-8 oclock on the cycle, then choose city and suburbs (maybe 2-4) using same criteria. Then do your due diligence on particular properties.

What process do you use to identify where the property is in the cycle? I have read a lot of different approaches, so interested in what someone actually does as opposed to in theory

"3. I'll try and get my hands on those books. I agree I am not a massive risk taker, but I am willing to take it as long as I know I am on the right track. Without a blueprint and/or a mentor to verify I'm on the right track I feel as though I am either missing opportunities or holding back too much."

If you wanted "mentorship" you could always pay 8-10k and join a course. To be honest i have always said that the courses are not necessary, but for some people i actually now believe its better to do it, than not. I think some people just get confidence from it. But really i dont think its necessary.

I'm happy to pay, but not looking for one of those big money making courses that will teach me what I already know, I'm looking for someone to chat with, set realistic goals, create a plan and then someone to check in with as I progress towards my plans


Tweak your mindset and choose the right strategy to achieve your goals and you will be on your way. I think its important to realise that anyone wanting to achieve 5k and more a month passive income is going to take a massive effort/committment. Others may disaggree with my advice, but I tell you what its served me and many other investors/developers very well over the years.

Good luck.

Thanks again for all of your advice, I really appreciate it. I am happy to put in the work and stay committed, I just want to make sure I am committed to and working on something that makes sense. Would be terrible to put the time and effort into a stupid plan or a into doing more learning without acting like I have been

 

[bubbles]

I would not recommend a mentor while you are o/seas, it could be costly and you may not get the benefits, I really think you need face to face in your scenario IMO.

Ideally, yes, but I don't want to wait until I return to Australia to continue on my property investing journey. I'm not sure when I will return, but I don't want to return to no nest egg so I need to get creative and find a way for it to work

You stated your strategy needs to be cash flow positive properties, I see you are located in UK, are there any possibilities of playing in this market for cash flow?? Have you investigated this market? that would be something I would look at in the first instance.

I investigated, but I don't intend on being here long term and from the research I did the market seems very volatile, far more unpredictable than Australia. It is also difficult to get a loan here because of the way my contract is structured and because my assets are in Australia, also there are significant tax implications after I leave which is not ideal

If you are specifically looking at Australian markets, many started rising 2 years ago so you would need to be cautious where/what market you jumped into at this point in time and to understand where the cycle is for each State.

Agree, would love some more information on this if you have any experiences you can share

Seems QLD is providing some opportunities at the moment, lower entry level and market has started to rise but early stages?? I have not researched this but just what I have read. You may want to start looking at posts relating to QLD/Brisbane market and just see what you come up with and keep asking questions, keep researching.

QLD, specifically Brisbane has been my main focus area, but I am going to have to start paying land tax as the limit is only $350k for absentees. I have to evaluate if the gains to be made would offset this additional cost

MTR

Thanks so much for your advice

 

[bubbles]

Bubbles, have you considered buying properties in the UK? They seem a fair bit cheaper, and the TV shows I watch often discuss people who do a quick reno to achieve an increase in either yield or equity.

There are a few reasons I don't want to buy in the UK, mainly because the market is not so stable (in my opinion), tax and loan issues. Despite this, I am yet to see any good buys in the UK, I have kept my eyes out in case I saw something worthwhile enough to tackle the other issues for. I also have an easier checklist because I could go and do work on the property myself and project manage as I am located nearby.

I also watch these shows and wonder how they do it, they must find a real niche because it would be just as hard if not harder than doing this in Australia. Labour is cheap, but properties are usually very run down, there are often issues with flooding (ground water) and if you have an easy positive cash flow you get the horrible tenants to go with it and very very average property managers. Obviously my experience and probably a generalisation, but I feel based on my research Australia has greater potential

 

[bubbles]

Bubbles,

Best of luck with your journey. Its great to identify how far you have come and also to know when you get a bit "stuck" and this is a great place to get a range of ideas about moving forward.

In terms of LeoT's responses I agree particularly about the books on mindset. These sorts of texts (in particular Working with the Law and The Science of Getting Rich) have helped remove some of my old blocks to wealth creation.

There are plenty of investors on this forum who have lots of different "where" answers. There is no 1 right answer. There are lots of good locations, lots that are not so good, and it really comes down to your individual needs. Some of us have invested across the state or nation and others focus very tightly on 1 patch. Success is actually possible with either approach.

If you are looking for cash neutral standard resi properties in non remote mining locations there are quite a few, particularly with a good negotiation and a minor renovation. These can all be handled with outsourced services if required.

Keep digging you will get your clarity!

Thanks knightm. I don't like being one of "those people" who come onto the forum with airy fairy "help me" questions, but if I don't do something to move forward I will never achieve any of my goals and will be looking back in 20 years thinking should've, could've, would've... I'm not looking for someone to give me THE answer (I get that this doesn't exist), just some guidance to get me unstuck.

I have been trying to help myself move forward for 18 months without success. It's time to at least have people challenge me and give me their thoughts. For that I am forever grateful.

 

[bubbles]

I have seen this often. Analysis paralysis. It can be quite crippling. If you read the older books like (for aussie real estate - Jan Somers) or even bibliographies of any entrepreneur or tycoon, they all have one thing in common. They take action.

Some clients who are very intelligent and more than capable of purchasing on their own have said they came to me specifically because they know they get stuck on this one and then procrastinate (some had done for yrs before working together) - which is obviously not a profitable pastime. Using an outside source can sometimes be the catalyst for action. Perhaps you need this, or perhaps not. It might be as simple as setting a goal to purchase your next one before the end of the year? Then stick to it.

Thanks again. You're right. I should just rip the bandaid off and do it.

 

[knightm]

Thanks knightm. I don't like being one of "those people" who come onto the forum with airy fairy "help me" questions, but if I don't do something to move forward I will never achieve any of my goals and will be looking back in 20 years thinking should've, could've, would've... I'm not looking for someone to give me THE answer (I get that this doesn't exist), just some guidance to get me unstuck.

I have been trying to help myself move forward for 18 months without success. It's time to at least have people challenge me and give me their thoughts. For that I am forever grateful.

What process do you use to identify where the property is in the cycle? I have read a lot of different approaches, so interested in what someone actually does as opposed to in theory

Don't worry at all about asking for help, that's what the forum is for, and you already know people here will challenge and suggest but no one will do everything for you. It's good to bring in outside input when we get stuck. Part of long term wealth building is always about building a team who will support the journey as we can't do it on our own. To be successful in property most of us need at the very least a good accountant, a good mortgage broker and good solicitors. The mastermind team can obviously be bigger as many do use specific paid advice for parts of the journey - some use help to identify sites if they are busy, research options etc. You sound quite keen and very motivated so I am sure you will achieve your goals.

Property cycle analysis is something that has been evolving over time and there are discussions in the forum and entire books just on that topic. I have a set of measures and indicators I have been working with over the years but while you can list the indicators in a list I usually find it's not that helpful for people as it takes time to develop the strategies to understand the trigger points inside each of those indicators.

 

[LeoT]

" What process do you use to identify where the property is in the cycle? I have read a lot of different approaches, so interested in what someone actually does as opposed to in theory"

I feel its definitely not an exact science and a lot of it is 'near around' is good enough. There are the obvious things I looks for to determine where possibly a market is in a cycle:

1. Discounting rate
2. Average rate on market
3. Auction clearance rate
4. The mood/attitude of media to the market (I don't care 2 cents for their analysis BUT I know a lot of people, the herd followers are influenced by what they say. So this makes it important to me, at least in terms of market sentiment.
5. Attend regular free seminars by rpdata and the like. Often some good data and opinions are presented.

So its really a combination of all those things, and as discounting starts to get less, days on market goes down, clearance rates go up, media become more positive and some 'smart' people generally decide a particular state is the next most likely to have the best growth, then I just jump in when I think im close to 7 or 8 oclock as possible. You'll rarely get the timing exactly perfect, but that's not necessary to build large wealth.

Most importantly DO NOT BUY in a boom. A point a lot of people miss is that yes, if you bought property in all the past booms, most likely today you will stlll have done well. BUT BUT, you need to have the growth as soon as possible if you want to extract the equity and build wealth faster to achieve your goals. So for this reason, its really very, very important not to overpay and not to buy at boom prices. Also, buying at 7-9 oclock gives you tremendous negotiation power. Absolute power really. That's how you get massive discounting, and further buffer yourself from cycle dips and hence reduces risk. This stuff is SO important to 1. Understand and 2. Apply.

I hope all this info helps you.

Leo

 

[knightm]

For me its items 1-4 plus vacancy rates, stock on market, days on market, plus broader economic sentiment measures like consumer confidence, then there is interest rates, unemployment, business credit growth...come to think of it there is a bit to think about!

I guess over the yrs I have formed a view about which of these are lead indicators, which ones follow shortly after as confirmation signs and which ones don't come until its all too late. I also have different weightings for them. Some of it you would just call experience, but the weighting also depends on the buyer, do they need good long term outcomes or rapid growth or is maximum cash-flow the priority.

So much of it has to do with the needs of the buyer. Its very much a case by case thing.