20 years ago....

Hey Geoffw..I just realised that saying "Property investments worked" was really weak, especially in a property forum. I should have offered more than that with 20years to reflect back on. My bad. I guess I struggle with saying that XYZ worked for me as a strategy, because I have found that I am a great hustler, and a very average investment guru. I feel the bile rise at the word guru. Guru I am not, hustler I am. It's not very quantifiable, I approach each opportunity as a hustler...what can I get for not much, how can we do this deal for max benefit. Then in my later years, I found that I could hustle my way into business shares by offering my know-how and working on the business with owners till it is self-sustaining, for getting into the trenches I want a piece of the business. That has been my mainstay in between hustling bargain deals on the occasional property. All of this combined has offered me a very privileged and wild lifestyle. I wouldn't recommend it. You have to have a bent towards intense pain coupled with intense joy. I like the ride.

 

You got me intrigued, so how does this work, has it been difficult to do this??

 

MTR, do you have any current deals or business happening? Need a hand? I can help, I know lots about lots. Let me review what you have on offer, if I like it and think I can do something with it that you can't, just give me a good cut and I'm in. taaDAAAA!

 

Hi Nivia

Welcome back . I think you were the first ( along with Rob F and Tracey ) member I met in real life when we met at Rob's for a night of Cash Flow . Do you still keep in touch with them ?

Sorry to hear about TH , nice guy .

Still remember The Wife's BBQ in Canberra , there must have been close to a 100 people gathered from around Australia including Michelle B from SA . Don't think she's been around for a long time . I got the award for analysis paralysis , but made up for that in the next year , I think we bought 20 IPs in the 18 months . Goanna still floats around occasionally and we're facebook friends . She ended up developing that Hobart Site and it's more like it's own suburb now . Very cool . Met Steve Navra that day going round doing his hard sell.....

Do you every hear from Asy ? You were almost a permanent fixture in the chat room which was almost the epicentre of the forum back then.

Vicki ( my Wife ,@MTR ) says hi .

As you would have seen , there's still a few of your original students floating around . Thanks for all your help back then , many lessons learned . Our lives have been totally different ( in a good way ) having met you . Thank you .

Cliff

 

How the hell do you buy 20 IPs in 18 months? How do you get the DD done, let alone everything else!!!??!?!?!!

Cheers,
Inertia.

 

It's easy if you've got your deposits & a high enough income. If I'm not mistaken @See Change bought many around where I usually buy, so not a high purchase price, with good rental yield.

 

Hello The Wife, I love this post & am intrigued. Would you share with us one of the business shares that you did in the past ? the nuts & bolts etc if you don't mind ?

 

Pretty much the exact opposite of inertia.

 

Lol.

Let me say something. A big wheel unicycle is hard to get moving. But once it's moving, it's harder to stop! Just like a big ship.

But yes, 20 IPs in 18 months? My gosh. Not easy like buying shares.

 

Cheap properties , finance to 105 % , good income ., high returns
Find one , then repeat .

checked up , it was actually only 19 ...

The Wife and a few others bought way more ..

Two members bought a street of houses of a developer ...

Cliff

 

If you don't mind me asking, are you able to share rough locations of the properties? Like regional or just in your backyard where you knew the area? Not wanting to be lazy and just take your ideas but I am curious where you managed to do this and make it work as I am fascinated by all the different methods people have used to be successful.

 

Here's some tips on how you can buy 20 houses within a few months:

1. Have a very high income.
2. Find properties that have a 10%+ rental yield on the purchase price but are not in high risk locations.
3. Have available either cash or equity available for 20% of each purchase price, plus purchase costs.
4. Go back in time at least 5 years to when lending policy would enable all this. Going back 13 years or more would be better.

Sorry, but the investment and finance environments of 20 years ago are completely different to that in which we currently live. Many strategies employed 20 years ago aren't going to get the same results today.

 

Yeah I am aware that unfortunately most strategies from 20 years ago won't work now however I still like to hear them as there can be certain aspects I can implement or at least look in to even if the whole strategy cannot be implemented.

 

Fundamentally the strategy from back then was to purchase properties that had massive cash flow. Enough to the point where 80% of the rental income covered the loan repayment for the full purchase price and costs of the loan. Many of the people doing this owned their home outright so they had loads of equity and there was quite a bit of cross collateralisation going on (which later was also a problem for many).

The type of properties with these types of returns have always tended to be right at the low end of the market. Some locations that come to mind where I saw a lot of this (and it still happens) was Frankston North, Wendouree West, Gipsland, Tasmania, some parts of Western Sydney & Western Melbourne, to name a few. The problem is most of these locations have enjoyed significant growth and the opportunity has long past.

Information wasn't as readily available back then so those who did figure it out didn't have a lot of competition. There weren't magazines with stories and forums such as this were in their infancy. Being in the right place at the right time made for huge success. Opportunities are still out there, it's just easy to see what those opportunities were in hindsight.

The strategies are really the same as what people do today. Use equity to fund a deposit, find a location with a decent rental return, repeat as often as you can. The problem is the prices have increased, margins shrunk and finance has tightened. There's still plenty of ways to get great results. It's gotten harder, but access to information has gotten easier.

 

Many on here would suggest that the locations WERE high risk.

 

You're forgetting Geraldton. I believe @Karina bought around 25 sight unseen.

We targeted Gippsland, Campbelltown, Western Sydney....but didn't have the high income back then to buy as much as we wanted. My rule of thumb was that it needed a 10% yield to be viable on a 100% lend. Western Sydney, from a cashflow perspective was a poor performer, but had stellar CG. Gippsland awesome cashflow, but poor CG.

 

From memory she said she bought ~25 of them for around $80k I each, then a few short years later they went to $300k each. Don't need much of a deposit when they are $80k.

 

During this time we had low doc and no doc, so all you needed was equity and a booming market, very easy to grow a portfolio

 

Exactly! But, $80k was not uncommon price in many areas too, and wages much less as well. We bought one in Gippsland for $67k and had difficulty in getting finance, despite having lots of equity because we had a low income. Would have liked to buy more, but had to wait.