property research

[bundydog]

Hi,
I am trying my hardest to gain all the knowledge I can about buying IP's, I have read 3 x Margaret Lomas books, Peter Spann, Steve Mcknight etc..., subscribe to API, read forums, search RE.com etc.., and now I am stuck for more info. There are so many courses out there that say they will give you the knowledge of how to find the next big thing, but they all seem as if they are selling their own agenda. I was seriously considering the Property School course run by Peter Koulizos, although I live in Sydney so it would be someone else. Has anybody done or know of anybody who has done this course to see if it is worthwhile.
I am ready to buy when I find the right property and even flew done to Adelaide to check it out after buying Hotspots from Terry Ryder. I narrowed it down to Elizabeth and Christies, but both areas, especially Elizabeth were selling practically before the agent even signed them up. Most of the houses I was shown had only come on the market that day and was then informed they had sold the next morning at asking price of $189000. Now it seems they are over $200000 and the rental returns are dropping.
I would like to know how to spot these areas before they heat up.
I am not afraid of paying for the right course but need to narrow down the field. Any Ides? (sorry for the long post)

 

[jasperjue]

don't spend a lot of money on courses. They won't teach you anything you can't get for free and that money could be spent on a deposit.

You will find most of your "learning" is done "on the job".

You;ve read the mainstream books and you will find that most of them pretty much regurgitate the same stuff so you can pretty much stop looking for the holy grail formula for successful property investing.

Read some of the stuff on this forum but mostly look in the papers, and kinda just be "aware and observant at all times".

You;ve previously narrowed down your search to Elizabeth and Christies so why not keep looking in these areas if they previously met your criteria. You might have to readjust your thinking regarding pricing but just because you missed out on a couple of houses doesn;t mean you should give up on the whole suburb.

In summary, you should just go out and get one otherwise you will become paralysed by the analysis and second guessing.

good luck

 

[beachgurl]

The vast majority of speakers will talk about their path to wealth and tend to have a biased view based on what works for them. If you were to go to someone's seminar, focus on people that have a few different strategies, eg, cash-flow positive (good to listen to but a few years too late in reality), capital growth and ways to find these types of properties.

I have been to a few seminars in the past few months. I don't think it really matters who you go to see. It is more about opening your mind to opportunities and having the mindset to invest. I also met some great people at these seminars so am building a network of positive people to spend time with, who are also interested in property investment.

I went to the Sydney meeting for this forum last week and found it just as beneficial (and much cheaper!) than attending the seminars. Is all about listening to other people's experiences and their methods to gaining wealth. Once you hear other people's experiences and ideas it will stimulate your mind to think about what may work for you.

The other way to educate yourself is to throw yourself into investing. We have bought a few properties in the past few weeks and the learning curve has been enormous. Already we have taken on board some ideas and thrown others by the wayside through our dealings with agents, researching and visiting locations of interest.

Sorry for the rambling here but I guess it is a question that can be answered in so many ways and everyone will have differing opinions on this

 

[Andrew_A]

Could be you are stuck for action, and not knowledge based on that resume.

I like the story of Melanie McDonald buying her first IP, she wasn't aware you could offer a lower price than the list price There are some other great stories floating around here about first IP purchases as well.

 

[toony]

My path to learning was to buy a small 2 bed unit in my area. I learnt alot from that experience and it has been the foundation that has allowed me to buy several more.

 

[alexlee]

Hi,
I am trying my hardest to gain all the knowledge I can about buying IP's, I have read 3 x Margaret Lomas books, Peter Spann, Steve Mcknight etc..., subscribe to API, read forums, search RE.com etc.., and now I am stuck for more info. There are so many courses out there that say they will give you the knowledge of how to find the next big thing, but they all seem as if they are selling their own agenda. I was seriously considering the Property School course run by Peter Koulizos, although I live in Sydney so it would be someone else. Has anybody done or know of anybody who has done this course to see if it is worthwhile.
I am ready to buy when I find the right property and even flew done to Adelaide to check it out after buying Hotspots from Terry Ryder. I narrowed it down to Elizabeth and Christies, but both areas, especially Elizabeth were selling practically before the agent even signed them up. Most of the houses I was shown had only come on the market that day and was then informed they had sold the next morning at asking price of $189000. Now it seems they are over $200000 and the rental returns are dropping.
I would like to know how to spot these areas before they heat up.
I am not afraid of paying for the right course but need to narrow down the field. Any Ides? (sorry for the long post)

I think you’re doing too much research, Bundydog. Instead of buying when you find the right property, how about finding a cheap property that’s sort of right, and buy that?

The best course means nothing unless you actually go buy something. You're in Sydney, right? Try something closer to home. 2 bedders around Parramatta or Harris Park, say. Around $200k, you'll get 5% yield (I saw a few just last weekend). It may not necessarily be a hot spot, but better to buy an ordinary place than to keep missing out on hot spots and not buying at all, in my humble opinion.
Alex

 

[Rixter]

Bundy dont try and compete in so called hot spots. These areas may not even provide what you are looking for an investment to do for you.

The property is determined by the investment strategy you have chosen.

The location is then determined by your strategy.

Then once you have the location you look for the property within it.

What is your property investment strategy and describe the property you are looking for?

Most people do not have specific answers to those questions. If they dont know what they are looking for how will they ever know where to find it?

Food for thought.

 

[bundydog]

thanks for replys and the great food for thought.
After reading many books about positive cash flow I thought I wanted to put that strategy to the test, but have now read alot on negative gearing in high growth sections and my views have started to turn. I can afford some negative so I think I will have to just jump in.
I like the advice of starting with something close to home to start with. I think the best learning is to do it and learn as you go, you can only learn so much by reading books i suppose.
Time for action, thanks guys

 

[JIT]

Bundy dont try and compete in so called hot spots. These areas may not even provide what you are looking for an investment to do for you.

The property is determined by the investment strategy you have chosen.

The location is then determined by your strategy.

Then once you have the location you look for the property within it.

What is your property investment strategy and describe the property you are looking for?

Most people do not have specific answers to those questions. If they dont know what they are looking for how will they ever know where to find it?

Food for thought.

I like that, I would just add in between somewhere that your borrowing capacity + serviceability will also impact significantly on the specific location and specific type of property you could potentially buy.

GSJ

 

[tinay]

Hi,
I have been to a free info evening at the property school and was impressed by the info they shared and hands on application. They have regular free evenings so might be worth going along and meeting them. I think Peter does present some of the training sessions.
I also agree that the best way to learn is, just do it!!! buy a place and then the learning and fun begins. No need to wait for the perfect place, as even the "duds" can work out ok in time. In fact one of our "duds" which we thought was not going to grow(made a few classic mistakes) has just doubled in 5 years, so go for it.
I also agree you can learn just as much from networking, the last SIG meeting was great.

 

[Rixter]

I like that, I would just add in between somewhere that your borrowing capacity + serviceability will also impact significantly on the specific location and specific type of property you could potentially buy.

GSJ

Yep thats it...all within your borrowing & affordability budget.

 

[bundydog]

If I purchase in Sydney, I would probably consider Sutherland (as I live near there) maybe Cronulla, and I've heard good things about Kensington, although that would probably be out of my price range. I have consentrated my research in other states until now, but I could be missing deals right under my nose. Any thoughts on units in Sydney? I would consider anywhere. I have about $250k equity in my home and have a decent wage. Have to do a budget first as spending is abit much at the moment, but could probably afford negative up to $200 a week

 

[alexlee]

If you're willing to buy interstate, why would you care whether a Sydney property is near where you live or not?
Alex

 

[Peter Parker]

Become a bookmaker for better odds

I would like to know how to spot these areas before they heat up.
I am not afraid of paying for the right course but need to narrow down the field. Any Ides? (sorry for the long post)

You've done enough reading. Now you need to put them down and do more travel. The only books you need now are the ones you make yourself - to keep records of ads for potentially suitable properties.

Travel does not necessarily need to be interstate - various cheaper parts of your own city would be equally if not more suitable. Advantages of your own city are that you can easily make multiple trips to the area, can stick around longer to know the agents and feel under less pressure to buy.

Very few buyers in places like Sydney or Melbourne have been to all suburbs (or at least all suburbs of a similar type, eg cheaper areas) so you will be at an advantage when making comparisons or seeing value.

I would suggest looking up cheaper areas that no one is talking about on here or in the media. Plan an itinery of likely properties (from RE websites) on Thursday or Friday. Then walk the streets of each weekend, calling in at auctions and home opens on the way.

You don't necessarily want the very very cheapest, since value is more important. Value means getting the least bogan for your budget.

There is a formula, known to very very few, that lays out a method for finding suburbs that could be 'hotspot' candidates.

This can be summarised as BFD, or Bogans, Facilities and Demand.

1. BOGANS

Compare three suburbs, each with $200k houses as follows:

Suburb A.

2 burn-outs
0 smashed phone boxes
5 overgrown lawns
3 sheets as curtains
2 plateless cars
3 holes in external walls
4 bikies
5 graffiti tags

Suburb B
1 burn-out
0 smashed phone boxes
5 overgrown lawns
0 sheets as curtains
1 plateless car
0 holes in external walls
0 bikies
1 graffiti tag

Suburb C
0 burn-outs
2 smashed phone boxes
7 overgrown lawns
2 sheets as curtains
3 plateless cars
5 holes in external walls
1 bikie
3 graffiti tag

Suburb (or street) B is clearly superior to A & C and is thus best value for money.

If you're renovating you'd be better off with a worse house in a posher suburb, but we'll ignore this for now and assume straight buy & hold.

2. FACILITIES

You want the area to have good facilities, transport etc. Everyone needs a place to live in and the population is increasing. Beach living is a luxury (there's millions of Americans, Europeans and Asians who live hundreds of kilometres from one) but nearby shops, schools and transport is a necessity.

Without surrounding services land has no value. So the more services there are the higher worth the land. But this is not always reflected in price and there are suburbs with good services relative to their land prices which represent good value.

Buying within a short distance of services also makes the portfolio resilient to higher fuel prices in the future.

3. DEMAND

You've picked somewhere where there's heaps of demand. Maybe it's because these places are being talked about in the media and feature in so-called 'hotspotting' reports. People who got in before the hype will do well - those who come later won't.

Maybe it's better go for somewhere where things are quieter. Eg properties stay for sale for longer and you're the only one who turns up at auctions or home opens.

Quiet does not automatically mean 'good' since the area might be a remote location that no one wants to live in and will be a poor investment. But if you've satisfied the previous point about facilities then that's not going to be an issue and 'quiet' is an opportunity not a ground for doubt.

But a currently quiet market does provide a scope for more leisurely buying, less pressure to buy before researching fully, and a greater chance that a cheap offer will be accepted etc. And if not there'll always be another property with similar lack of interest and an opportunity to buy.

And if the latter happens and you've got 10-20% capital gain in your first year plus a 6-7% yield (instead of the standard 5%). Which provided it meets the other criteria then not only do you have a first investment, but also a first-class one as well!

 

[kissfan]

Hi bundydog.

Enough of the reading, you'll only get more confused.

Get in the game.

Of course, do your research etc, but it's probably time to "get your hands dirty".

Regards
Marty