Finding it hard to get the ball rolling

@Jess Peletier

For a first property a lawyer and bank is fine - so maybe barber vs hairdresser.

No issue from me if you want to use other professionals - but they are not essential when starting out.

No need to make the first purchase more complicated then needed.

Who did you use for you first property purchase ?

 

I agree, you don't necessarily need the whole hog. My first property was a PPOR, I used a mortgage broker and a conveyancer.

If you're not an investor maybe going to the bank is fine, but when you're paying LMI and want to build a portfolio, it takes more planning ahead which you'll never get from a bank. If you use the wrong lender to start, it can be very expensive to move and/or fix any structuring errors.

 

i also find it true that you might have to go through a few professionals before you find the right one for you.

i am on to my 3rd solicitor
looking for new broker,

just found a new accountant here. he is my 4th

 

@Simon Hampel @Jess Peletier

I admit that when we got to 5 properties the bank said no and we got a mortgage broker (@Shahin_Afarin) . At that point we realised we had badly messed the finance side of things up and may have wished we had got advice earlier.

However, we also had already accumulated a lot of equity and Shahin was able to unravel and fix things up pretty quickly.

 

Imho One of the greatest benefits of a community such as this is to be able to leverage the skills, talents, knowledge and contacts of other experienced investors so that we can, 1. make more informed decisions, 2, reduce our overall risk and 3, get to our goals perhaps a little quicker than otherwise. This is precisely one of, if not THE best benefits of having such a forum. To marginalize such leverage is in my opinion a little short sighted. It's not a case of contracting out your intelligence and decision making to a third party but precisely the opposite - using your intelligence to leverage the best information and talents possible for you to then make the best informed decisions.

Just my opinion.

 

Wow that 2 years has gone quick. I remember having coffee with you to catch up and talk Perth stuff and surely it wasn't that long ago.

I think you can definitely renovate as a FIFO. You can do some stuff DIY on your home shift and have professionals booked in for when you're away. For example you could demolish a bathroom on your week and have it waterproofed and tiled when you're at work.

It's easy to get over whelmed by the many many options and I find it helps to at least reduce the geographic area. Yes it does mean that you might miss out on some bargains but it is quite impossible to review every suburb for new listings and understand their quirks.

Once you know your budget, your skills (those that you can DIY), those skills that you will need to pay for then it can be easier to narrow in on some postcodes that fit that AND your strategy desires/risk appetite/CG vs CF (or both!)

 

Be aware of your resources (your time, your financials, and your skills) and align a strategy accordingly. For instance, be aware of whether you are handy enough to tackle your own renovation, or have the funds to finance a renovation. If not, when would you have such funds? Go after a property that is in adequate condition to remain "as is" until you have your funds available to renovate. If you have insufficient time or skills to DIY your renovation, have a think about how you might manage this process remotely. It might turn out that the reason you are having trouble starting is that deep down you know that you can't manage a renovation without help. For you, this might mean either not targeting renovation properties, or going after those that have requirements that are easy to manage from afar (a lick of paint and some new carpet are easy enough to organise with 2 phonecalls), or aligning yourself with someone that can help with a tiny bit of overseeing of your renovation.

I receive a great number of calls from people that believe that they are supposed to do developments "because that's what people in the magazines are doing" but realistically the idea of a development frightens them due to large-scale costs that have a habit of changing a bit along the way, and the fact that they don't actually have access to such money anyhow. Once people sit down and identify what they have access to and what sort of strategies are in line with this, they are on their way because they are not confusing themselves over strategies that were never an option in the first place.

Identify your resources and work back from there. Add resources that are absent if you can and you'll be on your way

 

And for another perspective, I got the bank to uncross my loan myself. Plus, plenty of brokers cross.
Also, brokers are more likely to attract bees using IO loans - I bet there'll be some cranky customers in times to come.

 

Yep, I agree that there MUST be good professionals on board. Different people need different things, some may be comfortable with the finance, some may be comfortable with project managing, etc. We all use some sort of outside help along the journey.
The one thing that I would point out is that is unlikely that over a 30 or 40 year journey you will have the same professionals on board as the ones that you started out with......

 

I agree with that @Hosko. Some of the people we started with we outgrew or their service slipped and we just found new guns to replace them. The only people in this game which are the most difficult to get good professionals in, is property managers. Most are just glorified money collectors and distributors. I have come to accept a property manager who can at least communicate to me in a decent manner and timeframe is all I can hope for really.

But in the main, I don't know any really successful investors who have large asset bases and businesses and did it all on their own without engaging other savvy professionals along the way. I think its pretty much non existent and this viewpoint is consistent with the copious readings I've done of many successful business people all over the world. Leveraging other successful professionals experience and knowledge is crucial to help ourselves achieve the best results. I always advocate for educating yourself as much as possible but engaging very savvy individuals to work with you on certain tasks (generally to me these are legal, financial and other specific expertise areas) to help reduce your risk and aid you in achieving the best outcomes possible.

The other really useful thing to do is network with other successful, like-minded investors. I have certainly benefitted massively from peer networking.

 

Maybe - but the seeds had all be planted and much of the wealth made. The important thing early on is to buy well and largely these advisers don’t help that.

 

For my first purchase I approached a lender directly and did my own conveyancing. No issues.

For my second, I used the same lender and a property solicitor. It was a disaster using a solicitor.

By property 3 I was in a real mess with my loan structures and had to engage a good mortgage broker to unwind it all so I could settle property number 3. The mortgage broker got me out of the mess but it was costly and I would not have had those additional expenses if my loans had been structured properly in the first place.

My point is that you don't know what you don't know. I didn't know I was getting myself in a real mess until I was up to my kneck in it. A good mortgage broker from property number 1 could have saved me heaps.

 

Surely that was just one year ago? about this time last year? In fact, it was. I just checked ha I freaked for a minute like damnnnn I've messed around that long?!?!
I will be looking for cosmetic renos and yeh plan to do some work on my week off for sure, I like your thinking of planning it out like that though

I would like to do a reno property - firstly to increase the value of the property to be able to (if done correctly of course) quickly pull the equity to move onto the next. additionally increasing the yield would be nice too.
Will want to look for one that I can rent out as-is and plan the reno from there to minimise vacancy when I start it and have a well thought out and demographic - suburb - etc appropriate plan. Unless by the time I have bought one that I have the funds ready to go then why wait!
A lot of people on this forum have tackled their own renos and I will definitely be tapping into their wealth of knowledge when it is needed later on