rules of thumb when identifying deals?

[my03]

Hey guys, eveyone on here talks about a good deal. Just wondering what are the fundamental things to look for in a deal?

The only things I have been doing is looking at recent sales prices and comparing properties that are comparable. I also look at the yield and how much it's going to cost me. Of course I have my eye out for the potential to value add.

Do you guys usually shoot for a specific yield? Do you shoot for a specific % under market?

I know every market is different, but for example I've had my eye on the western sydney market. Just wanted to hear your thoughts or get some pointers.

Cheers

 

[spludgey]

There's only one rule that I have: If it's not paying for itself, I'm not buying it.
So according to my assessments, the yield needs to be north of 7% based on 105% LVR.

 

[Rixter]

Hey guys, eveyone on here talks about a good deal. Just wondering what are the fundamental things to look for in a deal?

I look at my selection criteria, Macro & Micro based around my investment strategy, and if it ticks those boxes I make an offer.

 

[Catalyst]

I look at my selection criteria, Macro & Micro based around my investment strategy, and if it ticks those boxes I make an offer.

Have you shared your selection criteria before? If not, please share your wisdom

 

[Ace in the Hole]

I look at my selection criteria, Macro & Micro based around my investment strategy, and if it ticks those boxes I make an offer.

I don't know exactly what this means but I think I agree.
The specific properties you buy must work in with your investment plans.
Sometimes buying below market or achieving a minimum yield is irrelevant to results which can be achieved in the medium to long term, depending on your goals and plans.

 

[travelbug]

A good deal means different things to different people. You need to decide wht your criteria is.
It can be confusing at first because different people are telling you you need certain things.
I got caught up with this and rejected a few great deals because I was trying to get all the things people were saying I needed (high yield etc). don't get me wrong I do buy for yield but there are other factors (like the opportunity to make a great capital gain) which need to be considered.

Listen to all then choose what suits your situation.

 

[Ace in the Hole]

Also, many of the good/great deals talked about are in hindsight, years and years after they were acquired. At the time, many of these deals would have been pretty ordinary deals and time has done its work.

 

[Rixter]

I don't know exactly what this means but I think I agree.
The specific properties you buy must work in with your investment plans.
Sometimes buying below market or achieving a minimum yield is irrelevant to results which can be achieved in the medium to long term, depending on your goals and plans.

Spot on Ace.

I say it all the time to newbies who post asking what & where they should purchase.

Property investing is NOT about property... its about what you are ultimately wanting to achieve and your time frame for achieving it.

The property itself is merely the vehicle being driven by your chosen investment strategy to that higher purpose.

Its ones investment strategy that dictates what & where to purchase.

The Investment strategy provides you your property selection criteria.

The problem is that most people are property focused instead of strategy focused which is like putting the cart before the horse.

I hope this helps.

 

[Rixter]

Have you shared your selection criteria before? If not, please share your wisdom

Many times Catalyst. Do a search for my CGA Property Investment Strategy. There is also a link to it in my public profile.

 

[Catalyst]

Many times Catalyst. Do a search for my CGA Property Investment Strategy. There is also a link to it in my public profile.

Cool. Will do that, Rick.

Btw that was the first time I've learnt of public profile on this forum

 

[Truly Exotic]

I don't know exactly what this means but I think I agree.
The specific properties you buy must work in with your investment plans.
Sometimes buying below market or achieving a minimum yield is irrelevant to results which can be achieved in the medium to long term, depending on your goals and plans.

Exactly, there is no perfect property for every person

Think an analogy being cars, some want a sporty two door, some a 4WD, some a cruiser, some a bomb to restore

but most people would prefer a european/japanese car over a chinese piece of junk