Another day. Another young property investor

yeah i bought a place recently, and got revalued at nearly 30% more and that is only under a few weeks from the date i bought it. It may or may not sell for that price but only useful if i was drawing equity which i am not. I got a place overseas when it bought and it moved with forex and cg nearly 120% in 1.5-2 years - sometimes it is just luck and timing.

 

I challenged the 600k val (10 months ago), they wouldn't change their valuation but will increase the expected rent by 50 pw... Yup another 50pw and the valuation remains the same, good on ya...

The 600, 640 and 750k were all full bank vals with the 600 and 750 being from 2 of the 4 big banks.

I do understand they are on the conservative side as it is meant to be what would the bank be able to get if they needed to offload the property quickly.

The 750k full val was 670k desktop (which happened at the same time we had the 640 full val). I challenged the 670k desktop and they performed the full val providing 750k (hence weeks apart with the 640k).

I didn't challenge the 640k but would of if I couldn't get a 7 in it as it was holding up our plans.

 

This is what I am talking about.

You don't feel confident you will get that price but yet a valuer (who spent 3 years studying) puts 30% on top of the price you paid just weeks after it.

Could you provide which suburb/town the property is?
Was it some special type of transfer (e.g. inheritance and you bought out siblings)?
Has the suburb/town really grown 30% in weeks?

I would love if a vauler gave me 30% over market value on my valuation (might have to PM you for their details haha). As it would allow us to do a lot more sooner.

I can understand if it was a mining town where the valuations can grow like this but my property is located in Melbourne so it isn't going to boom 17% in 2-3 weeks (unless zoning rules change).

 

There's a big difference with market value and a valuation. Sounds like @melbournian bought smart! Nothing wrong with that. Good job

 

i would say in the lines of 20-25%. 30% was higher than expected.
It's in melbourne - can't say details till it settled. you're right, you do know your stuff it it rezoned. I did a bit of research ion the councils that it could/might be rezoned and gambled on it and couple weeks later it went GRZ (general res zone) to RGZ (resi growth zone). So more or less apartment ready to build. As for the overseas well AUD to USD was at one stage 1 to 1.1 and it is 0.73 to 1 coupled by CG growth.

 

Excellent work! No need for further details but would be interested to know further details once settled .

Also thanks for the compliment

 

What you pay, some one else would pay and what a valuer values it at, are all 3 very different things.

So melbournian's valuer came in 5-10% more than expected and probably a normal range with someone that's on the ball. Its also a big difference to 30%.

 

Zoning rules changed hence the 30% change, without this the valuation would likely come in at the same price.

 

The asset has appreciated at roughly 3.1%pa & its not like QLD has seen a sydney or melb type boom (which I'm happy about - I would rather make a decent return and not have prices hit insanity levels)

its also:

• Positive geared since day 1
• Has a decent yield that puts cash in my pocket every month (& could be bumped higher but I like the tenants)
• Represents a 10.4%pa return on my actual investment amount (not factoring in rental yield) if I sold it today at market val.

Would I have done better in Syd & Mel to date? Maybe. But I don't live in Syd or Mel so who knows if I would've got a comparable deal. Personally I wouldn't touch either for a number of reasons.

Maybe I'm boring but I'd rather slow and steady QLD with positive gearing & constantly lowering my lvr to repeatedly doubling down in boom markets with neg gear property. The latter might mean I could retire in 5 years instead of 15, but time is on my side..

As for your comment about me pushing my don't needs down anyone's throats, I'm not pushing my needs onto anyone else... You seem to be the one that takes offence to any differing opinion.

 

An issue I have always had with these sort of stories is the valuations like many others. I note the story says they are bank valuations... but are they full vals or just desktop vals which can be manipulated (and have been by some less scrupulous spruiking organisations) and non existant equity released via working on the edges of lender policy.

There have been a number of occurances of some well known investment mentors/spruikers who would use really questionable vals in presentations and videos, where they will say their $200k 2br unit they gave a $10k reno is now worth $350k based on local comparables... but fail to disclose their comparable 2br $350k places are bigger and newer (or new) as though an old 1950's block vs a new one doesnt affect end val only the atttributes.

Usually if someone is giving you figures that are too good to be, they are usually are.

 

Sounds like you might be referring to someone we know.
Maybe starts with N and ends with athan Birch?

 

Sounds like a scoundrel

 

Not sure about that

Fast forward to 4.30 and 6.30 of video...seems like the same guy.

 

Gotta tip your hat to Mr NB, get the clients in the door and then hire the ones that have a good crack at the property game! Why employ muppets when you can get the ones that have some skin in the game and you've already dealt with them numerous times before the job interview

 

I'm outside of Australia. Why can't I watch 9Now?

There he is, with guess who haha
Good luck to both of them

 

Who?

 

Either way, well done to this kid.

However if you use NB's benchmark on this portfolio:

1. BMV - his property seemed fair valued. Still good buys perhaps.
2. Upside growth - TH in place like logan will not outgrow houses in Logan. Historically hasnt moved much over the last 8-9 yrs
3. Cashflow - Ok, this box is ticked

 

Awesome to build that sort of portfolio by 24 ! Good to see other young investors like myself. Let's hope binvested brokers didn't get the bank vals, they always seem to off by a mile. In any case he has done very well as we all know the struggle is real to accumulate 6 properties at a young age

 

It depends.
Everyone's a genius who bought in Sydney before 2013, whether they knew what they were doing or not.

 

Agreed.
The ones who have only seen the one cycle (Sydney's meteoric rise) are 'property experts' now. Myself included.
Will need to weather a few more cycles before I feel like I know what's going on.