Reflections of an investment newbie

How long did it take you to (a) find an area (b) the rest of research including shortlisting the properties?

It took me 2 viewings over 2 weeks, no idea prior to the area, never did any research on it either...did a lot of research only after buying it. No shortlist either. V little negotiations on price, went to absolute max the bank was willing and even then I had to twist their arm as they were hesitant...bought for less than what they were asking. But that's because there was no way the bank would lend me more.
This could have turned disastrous for me...very fortunately it all went fine...I like the property. The area, the neighbours, and the price I paid for it, and also the cg it has done to date. Most of all, I'm happy with its future prospects.

DO NOT do as I did. Case study in exactly what not to do.
 
It took me 2 viewings over 2 weeks, no idea prior to the area, never did any research on it either...did a lot of research only after buying it. No shortlist either. V little negotiations on price, went to absolute max the bank was willing and even then I had to twist their arm as they were hesitant...bought for less than what they were asking. But that's because there was no way the bank would lend me more.
This could have turned disastrous for me...very fortunately it all went fine...I like the property. The area, the neighbours, and the price I paid for it, and also the cg it has done to date. Most of all, I'm happy with its future prospects.

DO NOT do as I did. Case study in exactly what not to do.

And I forgot to add... The only gguidance / person I consulted prior to purchase was the real estate agent trying to make a sale...fortunately again, they were very good and quite honest ( rarity, I know).

Again, purpose of this to denote what not to do, especially for fhb's.
 
Thanks for sharing the experience with us, may I ask what you mainly take picture and notes of?

They seemed to be mainly of the extremely handsome guy that went with him on the first (and ultimately futile) set of inspections!

Congrats again mate.
 
Hi everyone, I've been reading this forum for quite some time now, but never have written a post (apart from PM's). Having just successfully bought and tenanted my first investment this week I think it's time I gave back to the forum and in particular to those who are starting out.

Recently, I decided to buy a true investment property (one in which I had no intention to ever live in). Doing the numbers (and ZERO emotion) I discovered that I had to look outside my local area if I wanted a cheap house that was neutral to positively geared (median <$300K and 6.5%+ gross yield). This was very confronting as I had to face the prospect of buying in an area of which I had NO IDEA about, and to abandon my long held view of purchasing negatively geared apartments (adopted from parents).

Having read widely (including Somersoft) I knew what price and yield I wanted, so the question was 'where?' To start off I used sites like realestate.com to identify areas that matched my price/yield target. After finding a few areas I then used a whole host of sources (sites, forums, tools) to look into: Distance from me (wanted something within easy reach of a capital city), increasing population (increased demand for housing), multiple sources of employment (I find a single source like mining too risky for my appetite) and upcoming infrastructure (speculation on growth).

Once I selected an area, I'd then look into the area's demographic (size, income, etc. to dictate what type of housing would be in demand), median type of property (something easy to buy and if necessary sell), and researching trouble spots to keep away from (eg. crime, flood hot spots). So in a nutshell I had cast a wide net from a state by state level and allowed my research to progress me down to the street/house level. I'm skipping a lot here in the interest of brevity, but each decision was made with my goal in mind, and with what I was comfortable with.

Having found my area and type of house to buy, I then bought flights interstate and hired a car for the day. I had also funded my friend (similar investment philosophy but more experienced) to accompany me to help teach me what to look for during inspections. I took HEAPS of photos and notes, and experienced the full gambit of real estate agents (from woeful to brilliant). Long story short, it took me 2 flights, 25 inspections, 5 offers, and 1 termination of contract (terrible building report) before I settled and successfully tenanted an investment property with 6.7% yield. Mission accomplished! It wasn't easy, but definitely rewarding. I'll be looking to buy again soon and starting to consider strategies to manufacture equity. Exciting times ahead!

Top tips I would recommend to anyone starting out: 1) Find someone experienced that you can trust to mentor you. 2) Determine and write down your goals. Keep yourself to them. 3) Research, research, research! The more you know the less likely you'll run afoul. 4) Action!! Knowledge alone is impotent! 5) Tenacity! Keep trying! Its not meant to be easy the first time around.

Although this seems like a long post, in fact, I've glossed over a lot. Feel free to reply and/or PM if you wish to know more.

Last but not least, I wish to thank Beanie_Girl and Michael_X for sharing their wisdom, experience, and insight in guiding the launch of my investment journey! I give a genuine heartfelt thanks :)

Mr_Jaq

Him Mr_jaq

Great post . Nice to see someone learn something from this forum and being prepared to spend the time to put something back . In reality that motivation is what drives most of the long term posters including myself . I arrived here over ten years ago knowing nothing . Our lives have changed and I'm happy to put some time back into this place .

I think we will be seeing a lot more of you over the next ten years .


Sounds like your seeking praise and reassurance yet giving advice and trying to mentor.. Which one is it?

For someone who tags them selves as a professional working within the area of property investing , I'm left to wonder about your motivation . Someone writes an informative post and you give them a brick bat .... Mmmm. Part of the process of learning involves seeking feedback on what you're doing .

Is this going to be the standard of feedback you're going to give other forum members seeking advice in your area of " expertise "

BTW , I think your tag " Whatever a man soweth, that shall he also reap"" is something you should say out loud every time , before you press return .....


precisely, :rolleyes:

Steady rich , what makes Mpire builders comment worse is that they say they work within the area . Yours just comes across as a me too smart **** comment . Steady ... Mm ... More like going no where ..

Kudos to mr jaq

Cliff
 
Browns Plain is great suburb to buy in.

In Logan council, lesser low social economical concerns than other Logan suburbs but benefit from the new planning ( build secondary dwelling and rent out separately)
In addition, it is close to Sunnybank Hills which is around $500k mark versus $300k for BB.

I picture the BB versus SunnyBank Hills situation similar to Dundas Valley versus Eastwood in Sydney
 
Awesome work Mr Jaq! I know many people in your shoes who are still afraid to take the plunge.

First step is always the hardest, well done!
 
Nicely done!

To the OP Mr_Jaq, not only does your process sound right on the money, now you have done it once the sky is the limit!

I think what you have said reinforces a critical point and that is "there are no shortcuts to building wealth through property (or any other asset for that matter)".

Keep up the contributions mate, I'm only on IP2 so am keen to hear more.

Trev
 
KT_Blues, I spent about 3 months researching, and then it was an iterative process of shortlisting for the next 6 weeks amongst the 2 trips up to Logan. I found there was already a lot of investor activity in the area, and interstate investors were buying site unseen! I had to update my shortlists at the last minute right before both trips as half my list had already gone under contract!
 
Thanks for sharing the experience with us, may I ask what you mainly take picture and notes of? I am going through the property purchase process myself and I am not sure when is a good time to take pictures and/or notes.


Hey glasszon, I guess it all depends on your experience. I was new to investing, and new to understanding building condition, so I took as many photos and notes as possible. The aim was to have an extensive record of each property for reflection at the end of the day. I found this crucial as after inspecting up to 16 properties in 1 day, they did all blend into 1.
I took photos of potential concerns (e.g. cracks, water damage, etc.) as well as general pics such as the kitchen and bedrooms to remember the property. re notes: I also made a template to record the real estate agent's responses to my q's, as well as general prompts that I had googled. This made sure I was consistent with my questioning and didn't forget anything.
Good luck with your purchase!
 
Congrats great post! Have you got to wait for equity to build now before purchasing again?

Yep, but I think my next purchase will be done with a saved deposit. That's the beauty of positively geared properties as it accelerates your saving for your next one.
 
Yep, but I think my next purchase will be done with a saved deposit. That's the beauty of positively geared properties as it accelerates your saving for your next one.

If you have non-deductable debt, you can paid it down first and then re-borrow for investment.
One of debt recycling strategy..
 
Sounds like your seeking praise and reassurance yet giving advice and trying to mentor.. Which one is it?

I can only imagine the reason for such a post. A newbie steps out of his comfort zone, educates himself, and purchases a property, and you want to put him down. Poor form!

Mr_Jaq, congratulations! The first is always the hardest. It's down right scary, when you take that first step. But the good news is that it gets easier & easier.

Well done!
 
Good work mate. I guessed it was Logan with your price,yeild and who you acknowledged at the end hahah. I've got a couple of IPs in Slacks Creek. Give that suburb a look for your next purchase as I reckon it fits your strategy.
 
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