Really learn about property

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From: Brett Burt


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I hope this post does not come out all 'funny'. Being nearly computer =illiterate I have little understanding of what happens after I press the =enter button !

In regards to learning about property and getting the really good deals, =I think I have stumbled upon a few different ideas and principles. Just =buying an IP is not the way to go at the moment, in my opinion. There =are other ways to make money in property. At the moment everyone has it =easy and you just have to buy something and it goes up 10 to 20%. So =people think this property game is easy. But it isn't. I think many =people are paying through the nose for properties and not doing any due =diligence. So I think that eventually the bubble will pop and property =may drop back a little. Many people will end up with negative equity, =increasing interest rates...12% is quite feasible and rents going =nowhere and then having to sell at a loss. If they have purchased into a =two tier market they may end up bankrupt. My tips are:

1. You must do the some formal study about real estate..... like the =short 5 day real estate sales courses advertised daily, any short =courses on valuation, development and building appreciation and =appraisal at TAFE. Do the HR Block tax course to really get a handle on =negative gearing and tax deductions. Learn about unit trusts, company =structures. If your 'investing' in real estate you have to know =something about the actual 'business' .
2. You must study finance. You must 'infiltrate' the organisations that =supply you with services or at the least learn their secrets. Go and get ='accredited' with some financial groups who are always looking for new =people. You don't have to stay and work for them if you don't want too =but you can get the benefit of learning how the home loans business =works and what people like mortgage insurers really look for.
3. You must understand the whole system and see where the value is =added. Go and work casually for one of the many property marketers out =there and find out how they really work, how investments are marketed. =You will find that most are just 'spruikers' with no real training or =understanding of property. Some seem to think that if you happen to own =an investment property or two, you know all about property, ha ha ha ! =What crap ! After 7 years of selling, investing and working in the =industry and meeting a few switched on property people I now realise how =little I knew. In the last 2 years I have remedied that situation. A =good comparison: how many own a car yet haven't a clue about mechanics, =or have done a safe drivers course....most car owners no little or =nothing about cars ! Likewise with property investors. Most really know =little about real estate, finance, building, law etc..
4. Much money is made every day by having a network of agents, buyers =agents, developers, valuers etc..giving you tips and referrals. .eg just =finding out about a site/block, setting some terms...put up your 1% with =5% exchange in 4 weeks and settlement in 90 days... then looking at the =feasibility of, but not actually doing, a DA can make you a hundred =thousand in just weeks...you need a feasibility program, a financier to =bounce it off re pre sales and figures, getting a concept from your =architect, consulting the local council DCP LEP...... then contacting =agents or just someone wealthly in your network and onsell it to them =prior to exchange. It can cost you as little as $5,000 to make $100,000. =As a DA can often increase a site value by 50% over night many =developers will pay huge sums to take it off your hands. If it has a DA =you can borrow up to 90% of sales value and you only need 2.5% =equity...and do it yourself.....a few financiers will do this though =they have hefty fees.

5. Put and call options. Put up $50,000 then use your network to sell =them paying agents say 2% with your premium on top. Call date say 4 to 6 =months. You outlay for the valuation though prior to doing this. I am =doing one at the moment, $50k outlayed, 16 sales with $30k on top for me =and business partner. Do the sums. Even after paying the agents and the =original developer.

Anyway just a few thoughts about property.

Regards

Brett




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I hope this post does not come out all 'funny'. =Being nearly
computer illiterate I have little understanding of what happens after I =press
the enter button !

In regards to learning about property and getting =the really
good deals, I think I have stumbled upon afew differentideas =and
principles. Just buying an IPis not the way to go at the moment, =in my
opinion. There are other ways to make money in property. At the =moment
everyone has it easy and you just have to buy something and it goes up =10 to
20%. So people think this property game is easy. But it isn't. I think =many
people are paying through the nose for properties and not doing any due
diligence. So I think that eventually the bubble will pop and property =may drop
back a little. Many people will end up with negative equity, increasing =interest
rates...12% is quite feasible and rents going nowhere and then having to =sell at
a loss. If they have purchased into a two tier market they may end up
bankrupt.My tips are:

1. You must do the some formal study about =real
estate.....like the short 5 day real estate sales courses =advertised
daily, any short courses on valuation, development and building =appreciation and
appraisal at TAFE. Do the HR Block tax course to really get a handle on =negative
gearing and tax deductions. Learn about unittrusts, company
structures.If your 'investing' in real estate you have to know =something
about the actual 'business' .
2. You muststudyfinance. You must
'infiltrate' the organisations that supply you with services or at the =least
learn their secrets.Go and get 'accredited' with some financial =groups who
are always looking for new people. You don't have to stay and work for =them if
you don't want too but you can get the benefit of learning how the home =loans
business works and what people like mortgage insurers really look
for.
3. You must understand the whole system and see =wherethe
value is added. Go andwork casuallyfor one of the many =property
marketers out there and find out how they really work, how investments =are
marketed. You will find that most are just 'spruikers'with no real =
training or understanding of property. Some seem to think that if you =happen to
own an investment property or two,you know all about property, ha =ha ha !
What crap ! After 7 years of selling, investing and working =in the
industryand meeting a few switched on property people I now =realise how
little I knew. In the last 2 years I have remedied that situation. =A good
comparison: how many own a car yet haven't a clue about mechanics, or =have done
a safe drivers course....most car owners no little or nothing about cars =!
Likewise with property investors. Most really know little about real =estate,
finance, building, law etc..
4. Muchmoney is made every dayby having =a network
of agents, buyers agents, developers, valuers etc..giving you tips and
referrals. .eg just finding out about a =site/block, setting
some terms...put up your 1% with 5% exchange in 4 weeks and settlement =in 90
days...then looking at the feasibility of, but not actually doing, =
aDA can make youa hundred thousand in justweeks...you
needa feasibility program,a financier to bounce it off re =pre sales
and figures, getting a concept from your architect,consulting the =local
council DCP LEP...... then contacting agents or just someone =wealthlyin
your network and onsell it to them prior to exchange.It can cost you as little as $5,000 to make $100,000. As a DA =can often
increase a site value by 50% over night many developers will pay huge =sums to
take it off your hands. If it has a DA you can borrow up to 90% of sales =value
and you only need 2.5% equity...and do it yourself.....a few financiers =will do
this though they have hefty fees.

5. Put and call options. Put up$50,000 then =use your
network to sell them paying agents say 2% with your premium on top. Call =date
say 4 to 6 months.You outlay for the valuation though prior to =doing this.
I am doing one at the moment, $50k outlayed, 16 sales with $30k on top =for me
and business partner. Do the sums. Even after paying the agents and the =original
developer.

Anyway just a few thoughts about =property.

Regards

Brett




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