Sleep At Night Factor - and I haven't done anything yet!

I was up at 3:30am this morning filling out loan application forms - is this a bad sign? Usually I have no trouble sleeping (I practice regularly) but for some reason not last night!

I know from all that I have read that I am doing the right thing, but I guess I am overwhelmed by the choice of properties on the market (Cairns) and feeling pressured to make a good choice for IP#1. Aaaargh! Location Location Location - but where??? Why do I feel like I am picking Lotto numbers?

I think I have to make sure loans are available to me before getting too serious about looking at properties. Hence the 3:30am application that goes in today - Equity Manager loan against the equity in my PPOR. I am hoping to get access to $140K to use as deposit(s), and then finance the rest through a mortgage broker.

I initially thought I should look at low cost properties as I am still learning, but that might proove to be like learning to ride on a bike with a buckled wheel - more difficult in the long run! No depreciation, repairs, bad neighbourhood...

At the moment I am thinking northern beaches of Cairns... but that could all change by tomorrow! Aaaargh!

This is why most people don't buy investment properties - it takes a bit of stamina - for me anyway.

Yawn... I should get some sleep!
 
Maybe your not ready to buy IPs. The apprehension and indecision you are feeling should be reduced to almost negligible levels by research & self education in the field of property investing in general and your chosen market in particular. But its always a bit of a buzz to snag a sweet deal and make some serious coin so some feelings are natural but not to the extent of filling out your finance app. forms at 3.30am :) Was there a deadline for today?

If you are going to succeed in this field in the long term tho, you need to take the emotion out of it and look at it purely as a business. If the numbers stack up, it will work if they dont it wont regardless of your feelings.

Its that simple. With low yields and not real good prospect of cap. growth for the next couple years, getting the numbers to stack up is more difficult now than anytime in the previous 5 years. In my opinion its not a good time to be entering the market for your first IP, there is no rush at this stage of the cycle so take your time and enjoy the journey. And get some sleep :D
 
Sleep pill

Last time I had to do a loan app. I took a sleeping pill. Seriously! I have enough trouble sleeping when my brain is lightly loaded,
and it usually is FULLY LOADED and RARING TO GO for MORE numbers even after the broker is gone.

Sigh.

:D
 
Hi 4G

Don't over analyse it. ;)

This is not an exact science, you have to make certain assumptions, cover the risks and move on.

My brain tends to work really well after a few hours sleep and getting rid of all the clutter of the day.
Not unusual to wake up at 3.00 am at suddenly have the answer to a situation, or a reminder of something I forgot to do during the day. :)

If you wait for perfect timing/perfect situation - you might be still waiting in 5 years. Then you've suffered at the hands of another risk - the risk of lost opportunity.

GarryK
 
Hi 4GH1RH,

We are past the peak 4GH1RH it’s now time to change your thinking. Be careful to not get caught up in all the hype about buying an investment property at this time. Only a little while ago it was buy, buy, buy but now its time to hold off and watch what the market's doing. Take your time and do your DD properly.

You are in a very good position still 4GH1RH others who bought late last year might be holding their mistakes for quite a long time to show a reasonable gain. You, on the other hand, can now improve your deposit situation and casually browse the net searching for that perfect property (what ever that is for you and you circumstances).
 
Taking long term action to build up an IP portfolio is one of the hardest things to do. This is not because it is technically difficult but simply because for me anyway it is emontionally draining, particularly if you have to pull your partner along for the ride.

There is a very old saying in the computer world "nobody gets fired for buying IBM"; for the residential property investment maybe it should "its you wont lose money buying in the boring middle and keeping long term". I suggest you dont get distracted by looking at the extreme ends of the residential property market and focus on the most boring middle market property you can find.
 
Hi 4GH1RG, I reckon the 1st one is always going to be the hardest (it was for us) especially if you're trying to analyse all the strtegies IE CG vers CF+. wrapping, fix & flick, position position position throw in DGG's trust magic. Boy a lot of good info/choices in all these. I'm kinda glad we got into it all after only reading Jan's first book.

I wish I knew then what I know now though but don't let that stop you. You'll always learn more and gain experience and knowledge along the way.

We've missed a lot of good opportunities by waiting and guess what, we didn't realise overnight what we had missed out on, but I think everyone would have a similar story. From what I've read here and elsewhere Cairns seems a pretty stable place generally to invest.

Like Gary K says, it's not a science and don't get overloaded with the analysing but still do the due dilligence.

Wait until you get that approval, I'll bet you'll be proud and get a good boost from that alone. (maybe a little bit of invincibility may even creep in)

Good luck, it is exciting and can get you places.

Steve
 
Thinking about property, the future, your life, etc can be quite exciting. You get about a million thoughts running through your own head. I always get a lot of nervous energy when doing something like this. Don't worry if you can't sleep for a night or two and well done for putting your energy into something constructive.
 
I look at it from the opposite view point...

If I don't have the occasional sleepless night , it either means I havn't looked into what I'm doing enough ( so I don't know what the risks are .....) , I have no idea what I'm doing or I'm not pushing myself enough.

Life without stress is just as bad as no stress at all.

See Change
 
I agree with the "wait and see what the market is doing" advice.

There are currently 426 properties for sale in Cairns in realestate.com.au alone.

3 weeks ago there were 408, on 2 Aug, 392 and 5 May only 369. Same time last year there were less than 200.

If this trend continues (and I'm not saying it will) there is going to be an even number to choose from in a few months time. This suggests that there are currently more trying to sell than there are trying to buy. This will limit any capital growth in the short term and realistically could mean negative growth for a while.

I'm not trying to scare you but I think its important that you make sure the numbers add up.

I have these figures because I've been interested in Cairns for a while now but don't plan on buying until I see these figures come down because at current rental yields in Cairns I don't see too much capital growth.
 
Was thinking we hadn't heard anything from you recently LB.

How long have you been watching Cairns for?

For longer than you've been on the forum ?? I notice you joined the forum in July 03.

We bought in Rocky around that time and we're looking at 50 % capital gains since then. On 100% borrowed funds that makes for a nice return :)

What are you looking at LB ? More shares which you buy first and then check out the company ??!!

Maybe now is not the time to buy in Cairns . I don't know , I don't follow Carins , but I'd have a good bet you won't know it when it happens.

See Change
 
Nice to know, I'm in your thoughts See change.

Been studying Cairns since a visit there in March last year. Liked it.

Congratulations on your gains in Rockie - thats great news. 50% in a bit over a year, wow. You must know how to find bargains.

Maybe now is not the time to buy in Cairns . I don't know , I don't follow Carins , but I'd have a good bet you won't know it when it happens.

I dont think anyone will know with precision when will be a good time to buy in Cairns again.
A few things to look out for that may suggest time to buy again -
a) number of properties available for sale is decreasing rather than increasing.
b) interest rates look like falling rather than rising
c) net rental income receivable able to cover at least the cost of capital (interest on loan)

In the meantime, its a great time for fence sitters - I see there are a lot more of those at present.
Cheers
LB
 
Actually anyone who bought in rocky at that time has made similar gains , and people who were buying at the bottom of the market have made more.

Wouldn't say I think of you often LB . Just every so often I see some one make a silly post here or on Reefcap ( Time piece , the profit of doom over there ... yes one day Bluescope will go down and he will be correct ) which lacks something... that's when I think , " I wonder if LB is out there lurking"

I wonder if LB has actually learnt anything .... :eek: :eek: :eek:

See Change
 
L Bernham said:
This suggests that there are currently more trying to sell than there are trying to buy. This will limit any capital growth in the short term and realistically could mean negative growth for a while.I'm not trying to scare you but I think its important that you make sure the numbers add up.

Well, I have to agree - just driving around Cairns is pretty confusing at the moment. I don't know if I am more aware at the moment, but there seems to be For Sale signs on every second house. And on top of that there is more and more new development going on. There is at least 100 lots going in around the corner from where I live (Edmonton), excavations going up most of the hillslopes, they have just cleared a huge section of land at Forest Gardens which will probably double the size of that Estate. Palm Cove will also double in size with a huge tract of land being developed there.

I guess that is what is making me nervous, I dont see how sustainable this big building boom is. When the bulding stops will everyone leave town and there be a surplus of houses then? There just does not seem to be enough in Cairns to sustain this level of activity.

/me thinks I might just sit tight for a while and finish uni first - I er, have not been paying much attention to *those* books thats for sure.
 
4GH1RH said:
Well, I have to agree - just driving around Cairns is pretty confusing at the moment. I don't know if I am more aware at the moment, but there seems to be For Sale signs on every second house. And on top of that there is more and more new development going on. There is at least 100 lots going in around the corner from where I live (Edmonton), excavations going up most of the hillslopes, they have just cleared a huge section of land at Forest Gardens which will probably double the size of that Estate. Palm Cove will also double in size with a huge tract of land being developed there.

I guess that is what is making me nervous, I dont see how sustainable this big building boom is. When the bulding stops will everyone leave town and there be a surplus of houses then? There just does not seem to be enough in Cairns to sustain this level of activity.

/me thinks I might just sit tight for a while and finish uni first - I er, have not been paying much attention to *those* books thats for sure.

I looked at Cairns about 18 months ago , and the thing that strcuk me was how dependant it was on the tourism market . Townsville and Rockhampton are less dependant on one volotile industry. While the good times in Cairns maybe very good, Historically it's fairly volotile , and at times has high vacancy rates.

If I was looking for a lifestyle "investment " I'd be looking at Cairns Northern beachs as a possible area.

One problem that happens with areas that are having a building boom is that they can over shoot demand and then there is a problem with over supply. Areas around logan were badly affected by this in the last cycle, but the market there has matured since then.

I also avoided Gladstone for similar reasons, High demand for rental properties during the construction phase of all of the projects but ? what will the long term demand be ?

See change
 
I like your way of thinking LB. Supply is definitely more than demand.

How do you come up with those figures? Hard work, and counting all the properties for sale yourself, or is there somewhere that gives you that info?

Cheers
mono
 
4gh1rh

Hi 4GH1RH,

I think the sleepless night/s are the result of you stepping outside your comfort zone, and taking some positive action. Well done!

I disagree that the sleepless nights will go away the more research you do. With me it's the opposite, could just be our natures though. A case sometimes of not being able to see the forest for all the trees.

If you consume the media, visit forums, pound the pavements, talk to agents then I find all the conflicting views can cause you to lose sight of why you are seeking to invest in the first place. Everybody has an opinion, and it's easy to be swayed by others opinions.

Have your own long term financial goals, work out what you will need to do to get there, research the best you can and invest anyway! Regardless of what people will say.

I'm currently filling out bank forms myself :) Been sent the wrong forms twice in a row, sigh..

WaySolid
 
Yes, I think if you're suffering from "buyers remorse" before you've even bought its only going to get worse if you buy while youre not totally comfortable with you're decision.

monoply said:
I like your way of thinking LB. Supply is definitely more than demand.

How do you come up with those figures? Hard work, and counting all the properties for sale yourself, or is there somewhere that gives you that info?

Cheers
mono

Thanks mono. My figures don't take too much effort to obtain.
ie for cairns its just these three URLS -
http://www.realestate.com.au/cgi-bi...pr=0-200000&tb=padding&u=cairns&cat=&p=30&o=p

http://www.realestate.com.au/cgi-bi...0000-350000&tb=padding&u=cairns&cat=&p=30&o=p

http://www.realestate.com.au/cgi-bi...000-1000000&tb=padding&u=cairns&cat=&p=30&o=p

Incidentally, there used to be just one URL, but such is the number of people trying to offload their property in Cairns that there are now more than 200 and you need to break it down into price ranges to get the actual figure.

I keep track of quite a few areas that I'm interested in just to give a rough idea of demand in the area. By no means is it the be all and end all of deciding where and when to buy.
The general trend I'm finding is that the increasing number of properties is indicative of most areas anyway as it seems there are currently too many people that cant afford to buy at current prices to match the number of willing sellers at those prices.

Stepping outside of comfort zones is not a guaranteed indication that you're doing the right thing.
I'm probably not the right person to talk though as I've always stayed within my comfort zone (ie diversified risk, high liquidity, strong cash flow) and had to put up with average portfolio returns of only around 15% per annum for the past years.
I hear that investing in Rockhampton you can get around 50% gain if you buy smart.

good luck
LB
 
Damn LB - post No.10 was great!

Then I read the rest of the thread...it is a shame your posts return to rants shortly after that...
 
Again LB is on the ball. I enjoy your contrarian posts mate. (Contrarian to the forum )

Getting back to the original subject, the way i see it is the market doesnt care if you have a SANF or up at 3am doing forms or whatever your emotions are. Its all about the cold rationale of the numbers, if they dont stack up and you make a bad investment decision - you'll get burnt- its that simple.

Properties and shares dont care who own them, they dont know if youve been stressing over a purchase.

So research and education to reduce the feelings are the key to success.

As any day trader will tell you, the quickest way to lose your money is to let your emotions enter the buying/selling equation and this is where people find the most difficulty with day trading and lots have lost big time.

More in the head and less in the heart as my Italian cafe owner mate says :)
 
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