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Investment Advise Review

Discussion in 'General Property Chat' started by Alana Hopps, 10th Oct, 2015.

  1. Alana Hopps

    Alana Hopps New Member

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    Perth
    I recently went to see a property investor specialist to get some advise on what I should do to set myself up for the future. This is only my first IP so I thought I would get advise first before doing it on my own. What they recommended sound great and I wanted to proceed with it but once I crunched the final numbers i just found it a little too out of my price range. I wanted to be able to pay the deposit and mortgage whitest its being built out of the money I have saved now whilst leaving some for a holiday. However what they have recommended is a little too much over my current savings and would leave me with nothing spare and nothing for a rainy day. I want to go back to ask them to find something else which meets my requirements and I wondered if this happens regularly, do they get clients changing their minds or asked to find something else a lot? If I have found something else which meets my requirements and I would like them to review it, would they do that?

    Thanks.
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Sounds like they may be selling the property they recommend...conflict of interest perhaps?
     
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  3. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Are they specifically recommending the property, or are they talking strategy? How do they get paid?

    In many cases, people get paid a substantial commission by developers for recommending a specific (brand new) property. They're recommending based on how they get paid, not necessarily what will deliver the best outcome for you.

    If you're going to be taking advice or recommendations from a third party, understand how they're getting paid.
     
    S.T likes this.
  4. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    100%

    Some "investment property specialists" are merely real estate agents flogging overly expensive off the plan stock to rake in large commissions.

    If you've decided that property investing is the appropriate investing method for you - and you don't have time/expertise to source your own property, then consider using an independent buyers agent.

    Cheers

    Jamie
     
  5. Bran

    Bran Well-Known Member

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    Don't feel pressured.

    Do what is right for you. Even if that is walking away.
     
  6. larrylarry

    larrylarry Well-Known Member

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    Like what @Terry_w said strategies not products. Have you spoken to your broker at all? I've spoken with some specialists in the past and they often have properties ready to sell. Strategies determine type and price of properties you acquire. The properties you buy need to suit your strategies either short mid or long term. A lot of experienced investors can give you some tips here but at the end of the day it's your money and your call. Keep an open mind.
     
  7. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    The fact they are recommending something that takes every penny you have tells me they either aren't looking out for your best interest, or aren't listening to you - both are red flags.
     
  8. CosmicTrevor

    CosmicTrevor Well-Known Member

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    Alana, great that you are asking questions and reflecting on your goals and what you feel happy/comfortable with.

    I had my time with so called property investment specialists. The bottom line is that if you aren't paying them for the service then someone else is. Those other parties are making something from the transaction therefore the situation is likely to be conflicted.

    From the sounds of your post I think you will be more than capable of choosing your own property, but spend time doing your due diligence and grow your confidence. Use the people on this forum to bounce ideas off.

    Trev
     
  9. WattleIdo

    WattleIdo renovating Premium Member

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    Don't worry about their feelings or what they think of you. This is business and if they're professional, it shouldn't matter.
    Good on you for crunching the numbers yourself.
    To me it looks like they've pretended to be your friend/rescuer and are trying to sell you a property for which they will receive commission - whether it's good for you or not.The fact that you are worrying about what they think suggests that they play on your sense of decency to make a sale.
     
  10. BuyersAgent

    BuyersAgent Well-Known Member Business Member

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    As per the sensible comments above from the brokers and others, you need to know how the "advisor" gets paid, and if they suggest chewing up every dollar they haven't listened. A typical conversation I have with a new client goes something like this...
    1 What are your goals
    2 How long do you want to take to reach them
    3 How much do you have to start right now
    4 How are you going to do that safely.
    etc etc

    So for people with 100k saved, I would commonly see them arrive at a rough set of numbers after talking to their accountant, broker, me, etc:
    purchase price of 300k (with current 20% deposits being common)
    leaving 240k loan,
    commit say 60k deposit,
    15k costs,
    5-10k reno,
    15-20k buffer.

    Some more some less but this would be common. If you can still get a 90% lend you can stretch it out to more expensive property but I would want a little more left in buffer.

    You can decide how hard to leverage but my view is that a conservative approach is less likely to get you foreclosed if you get sick or are out of work for a few months. You have to sleep at night.