I "R" much good property investor!

Hi everyone,

My name is Brendon, found this site while looking for information on property seminar scams and spruikers and decided this might be a better place to start than dropping $5000 on an "expert" course.

I am a home owner with my beautiful wife Donna and several furbabies, living in the far Northern suburbs of Perth. We are both in our early forties, and keen to make better a better life for ourselves and avoid working all the hours God sends just so we can retire in our 70's with just enough money to scrape by! There had to be a better way.

I have attended a couple of property seminars and I am sold on the idea that a well planned and executed property strategy (along with some alternate passive income) is the first foot in the right direction. However, I'm not sold on the "big sell" and "fear of missing out" marketing methods these "experts" employ to sell you their knowledge!

Anyway, long story short... I'm keen to connect with people, learn and share experience and develop a real wealth building strategy for the long term. I look forward to meeting you all on the forum.

Cheers,

Brendon.

 

Welcome Brendon.
PC (previously somersoft) was the best thing that happened to us when we started our property journey.
Read, read and read....research - but do take action

 

Hi Brendon
Do a search on threads about the Perth market, this may be helpful

MTR

 

You don't need to do any expensive courses, especially just starting out .

My recommendation is learn though books and other on line material plus hang around the forum. Books have massive value in that they are structured and allow you to learn the basics in a methodical manner. Then keep building on your knowledge and refining . When you have clear goals and a strategy in place take action.

 

Welcome!

It is better to make an educated decision than a FOMO rushed decision even if it means waiting enough time to get that education.

If you want to buy in Perth then there is probably no rush. The deal of a lifetime comes along once a month

Read up on the Perth threads. Learn about what makes a good investment property, think about what sort of risk appetite you have, have a chat with a broker about what you can afford to borrow then you can start looking at what sort of investment strategy or product you'd like to buy and where.

 

welcome to the forum Brendon.

great thing is you are not sold to the sales in the seminars,

spend some time reading on the forum, ask questions, reach out to ppl you can relate, gradually you will formulate your own strategy.

also read books, to get good understanding of what you want to do.

@Westminster is in Perth, she is great, maybe get in touch with her for a coffee

@Sackie can give lots of good advice on lots of topics as well.

 

Welcome Brendon! Good to hear you didn't get sucked into the spruikers, that's a wise move.

Have you spoken to a broker yet? That can be a good first step - the finance available to you is the life-blood of any strategy, and what you have access to finance-wise will determine to a large extent the strategies available to you.

 

Hey all,

Thanks for the welcome and your nuggets of advice so far.

So a basic outline of my strategy thus far as follows.

Short term, i'd like to do a basic property flip. A small project with a paint job and possibly some minor structural work if the work will Net a good ROI. Take the profit and post into my mortgage to increase my equity, and possibly do this again. Giving me a good foundation to rent out my current house for a positive cashflow investment.

Long term 5-10 years, 'd like to completely replace our combined income through positive cash flow investment properties. I'm not interested in negative gearing, but I am interested in minimising the amount of tax paid on said investments.

Need to learn about grid variance analysis so I I'm not stabbing in the dark with my purchase and maximising the possibility of a quick profit from the flip.

With this in mind, what are the books, threads, sites ( or software packages) I should be looking at first? Any recommendations for members that have done similar things I could talk to or have goals that align with my own that I could chew the fat with so to speak?

I have a great broker already and that will be next step to figure out what kind of finance I have available to me.

In the meantime, any knowledge, truth bombs, or advice you can share is welcome!

Cheers,

Brendon.

 

Property flips are HARD work simply because once you factor in transaction costs (stamp duty, selling fees, tax) plus the renovation costs then it's hard to make any money and you'd be better off selling lemonade at your front footpath.

However it can be done if you can find the right place and put in plenty of sweat equity and are very very sure about your numbers.

Replacing income with positive cash flow properties in 5-10 years will be a hard target but I like the fact that you are willing to aim high. Aim for the moon and touch the stars.

If you want to truly jump start it then you'll need to spend 6mths on self education and go for a retain + renovate + carve off a rear block. It would give significant more chance of profit, more bang for your buck BUT can be riskier.

When I have my development hat on I like to have 20% profit (inc all costs except GST and tax) in my spreadsheet but I know plenty of people that are willing to do things for less - even I can go for 15% if it's low risk. Just remember that contingency budget can easily be eaten into, the ATO loves being your joint venture partner and GST is appropriate on some sales.

 

So buy a property. Property cost, plus stamp duty, other buying costs, loan costs, renovation costs, holding costs (bank interest, 2 month reno, 3 month to sell 1 month settlement so 6 months interest) and selling cost. A big price increase over purchase price just to break even.

Then sell house in same street for a profit. Perth property in many areas is the same as it was in 2006.

 

Assuming you have no passive income yet, 5-10 years is not long term. Also I don't know what passive income amount you have in mind . 80K is very different to 250k.

Imho to achieve what you want to achieve ( in your short term timeframe) or anything close (which will be quite difficult) as I see it, you will need to do the following:

1. Commitment: Make achieving your goal an obsession and be willing to sacrifice some serious time and taking on a level of commitment that 99% of investors will never do.

2. Study: Spend some time ( prob at least 3-6 months to actually study (not merely flick through pages) RE investing via many books, on line resources etc. This is where the bulk of your hardcore study will come in. Investing basics, fundamentals of building a team , easy mistakes to avoid, cycles, due diligence analysis ( S/D analysis, SOM, Discount rate, vacancy rate, etc) of state, city, suburb, property, demographics, understsnd how to maximise leverage, CG Vs CF and what balance you'll need, negotiation strategies, networking tactics and outlets, how to assess and mitigate risk and more.

You'll need to learn your craft well. 99% of investors never do this and tbh they don't really need to as most have vastly more modest goals than what you want and a looong timeframe .

3. Add value strategy: Adopt an active approach ( specialise in an active strategy) to investing in order to give yourself the greatest chance for largest/quickest returns . Subdivisions, structural renos, small developments and possible JV partnering . Even more study here around risk/feasibility analysis , building a specialist team and further networking. However what comes with an active approach is greater risk . And alot of it depending what strategy you choose.

4. Mindset: Develop and maintain a superior psychological mindset than most others when it comes to investing. IMO without this, you have no chance. YouTube Jim rohn, Les Brown, Tony Robbins . YouTube "its not over until you win. Your dream is possible". 35 minute clip .

5. Financial capacity: Serviceability/income/current money on hand . If your currently earning 40k a year ( for example) and have no savings, large credit card debt and had spending habits, its pretty much game over. You need to have strong financial capacity to be able to allow you to adopt an active approach and achieve your goals in such a short period of time.

Alot of work ? Consider this . Who doesn't want to build a chunk of passive income in 5-10 years and be able to retire if they wish in such a quick timeframe ? Everyone does . If it were easy, everyone would be doing it.


You'll often hear "financial success is a journey". Imo that's BS. There are many ppl who journey their entire lives and never attain much financial independence.

Attaining financial success is a process not a journey, though it'll definetly take you on one hell of a rollercoaster ride.

Best of luck.