Going to buy ip soon , should I buy bluechip for growth or netural cashflow

Well done on saving so much and the high savings rate. With $90k available, you have lots of options including 2 x cheapies (e.g. $300k).

Another option is buying closer to the city, doing a reno to neutralise cashflow (and add value, allowing you – pending serviceability – to draw equity for your next deposit).

 

.... and that is my point, target the markets that are actually rising/moving in QLD, then you are not guessing you are actually buying because the market has moved and the idea is to buy at the early stages or even in the middle because boom cycles do last around 3 years and close to the peak is where you make the most $.

 

Hm yeah true , what do properties go for around in the middle ring of Melbourne , Melbourne is still cheaper then sydney right ?
And yeah I am buying for long term

And yeah thats true with brisbine and atm I actually know nothing about areas whats rising whats not or anything like that , so I gotta do heaps more DD and research till I know what its like /unles I use a ba agent in brisbine

Im gonna check out melb on real easte and see what properties go for

 

Have you brought it brissy your self ?
Also would u share those suburbs ? So u can do my research about them
Thx

 

Much cheaper than Sydney.

Look at a map of Melb and drawn a radius around the middle ring and look at all areas, west may be cheaper, but I particularly like south east corridor already moved significantly.

there are a couple of threads on Melb market read these @melbournian knows this market and I would be looking at these threads

 

Yes mate I have bought in Brissy. All in middle ring and 1 in inner ring. Those suburbs have already moved so no use looking there. If your looking in Brissy then I would be looking at suburbs that neighbour middle ring and have scope to add value. But it has to suit your goals, skills and risk profile at this point in time.

To be honest I would be first working out what your goals are, then devise a plan and strategy, THEN start to execute it by researching, doing due diligence etc. It's really not much use looking at suburbs and prices if you don't know what your looking for, why your looking for it and how it will get you closer to your goals.

 

So when I look on real easte.com , look in south east melb ?

 

How long ago did u buy those properties ? Also wen u got em what were your DD checks ? Did u make sure they weren't in flood zones ?
Thx

 

Bought them all more than 2 years ago. With regards to DD, this is a post I made on 23.5.2016 cut and pasted below. This is just how I go about it and is not the only way.


Goal Due Diligence
1. Before each purchase determine where I am in my portfolio and what the goal is for the next purchase. Is it a CG buy, CF buy, Neutral buy.
2. What strategy do I intend to employ for the purchase. B&H, Reno, Develop or a mixture
3. Ensure I have all my finance ready, and I know exactly my budget and how far I can go. Get refinancing of equity consolidated, pre approvals done, give lawyer and anyone else on the team a heads up that we're about to go into battle. Then:

State Due Diligence
1.Which states do I think are at the optimal buying segment of the property clock, (7-9 o'clock mostly for me). I use HTW reports, Core Logic Capital Market Reports, Terry Ryder reports, any other on line reports, Property magazines and the media (to gauge sentiment mostly, and of course chatter on the forum as well as engaging with my peers for property market discussion. I try to make the best choice based on a mixture of all those factors. Choosing the state is a big decision for me. Once chosen, then:

Suburb Due Diligence
1. Determine how far I want to draw a radius around my map from the CBD. Is it 5,10,15, 20km etc. Usually what will determine how far I go from the CBD is the particular state i'm looking at, the strategy i'm employing and any specific opportunities in areas that may be worthwhile exploring.

2. Choose a few suburbs that meet my buying criteria. I look for value suburbs, eg suburbs that are cheaper than their neighbours but share most of the same fundamentals to make them grow which is only a matter of time, the 'ripple effect'. Use websites like REA, Domain and even property magazines might alert you to a suburb in your chosen rough area that you can look at and do further DD comparing prices of dwellings to try and find that 'value surbur' or two. Of course make sure the suburbs have the usual good growth drivers like transport, infrastructure, amenities, cafes, hospitals, trendy hubs etc. Once I've narrowed it down to say 2 suburbs I then look at historical CG, SOM, Discounting Rate, Vacancy Rates, Supply/Demand etc. Property magazines and on line sites have all this. I make sure I use at least 2-3 sources to corroborate the data for further reliability.

Demographic Due Diligence:

1.Research what the demographic is, and what they want, in your chosen area. Is it detached housing that is most prevalent? Villas? How many bedrooms is most common? Most wanted or common size of dwelling and land (so you don't buy a 400sqm home in an area that really values 500+sqm for example), How close to transport? Families or singles? Students? etc Any specific nationality in the area that may influence your purchase?

Dwelling Due Diligence
1. When I know exactly what I am looking for after I have my list, I troll all real estate websites and look for stock that fits my description. I also call probably 10 or more REAs in the area to tell them what i'm looking for, i'm preapproved and ready to buy right now and ask that they alert me to anything that they think i might be interested in. Having 15 ppl looking for me is better than just 1 person. I also first make sure any dwelling I look at is not next to any major power poles, cemeteries, very busy main streets, noisy kindergartens, not in flood areas, bush fire areas, high crime rate areas etc.

2. When I have 'acceptable stock' in my sight, I will then use RP Data to do what I call 'Vendor Due Diligence'. See when it was bought, who bought it, for how much, etc etc. I want to know as much of the story as i can to try and put a picture together very fast to basically try and determine just how motivated the vendor might be. Really this only should take 20 mins. I then call the agent and discuss with him the property I am interested in to try and learn from him as much as I can. (i'll leave it at that for the agent because this is getting too long already).

. Basically from there its a negotiation process. I try to find many properties that meet my criteria and put offers on all of them trying has hard as possible to buy BMV and create equity on the way in and also try to buy on favourable terms eg delayed settlement, building and pest clause (a negotiation tool in its self), Subject to finance, etc. Having said that it depends on the deal. If its in my interest to go 66w then I will.

 

look at all suburbs in middle ring, west probably represents best value at the moment?

 

Thanks ,
What do u reckon I should do ; 2 cheapies or one close to the city ?

 

Wow thanks thats great , how long have u been in this real easte Investing game for ?

 

No problem.

A couple of years give or take

The important thing imo is to take the time to actually learn. Spend 4 months learning and networking on the forum and it will boost you way ahead of most. Of course experience will teach you the rest over time, but take some time in the beginning to learn the basics. Most don't do it. Once you have the basics, you will know how to avoid so many easy mistakes, choose better deals and reduce your risk. Also you will have a better chance of actually achieving your goals. Your young, if you start right, take massive action and stay committed, your achievemnts will follow soon after and will amaze you.

But start by actually learning, methodically, your craft and not just relying on random comments here and there. Then bounce ideas off people once you have a plan, then take action.

Just my 2 cents.

 

Chat with a broker (lots of great ones on here) and look at your serviceability, see how each scenario would impact your ability to move forward and achieve your goals and follow whichever path will best move you toward your goal

 

Well...
Wouldn't you rather somewhere that increases in the short term so you can use the equity to get another one?

 

I think you should do a hell of a lot more reading before you start thinking about actually properties. Read half a dozen property books. Then somersoft - read through some of the interviews if nothing else. Then come back here. Then do your research/due diligence.

 

Is that what the guy in Atlanta, Osaka, Xian, Athens, Lake Como, Dublin told you?

 

Can you please elaborate

 

What did you eventually buy?
Cash flow positive or negative ?