My Property Investment Journey - Week by Week

I would have to spend on stamp, legals, buyer's agent etc anyway, regardless of buying a shiny one-year old property or an old dump that needed renovation. This is irrelevant for the analysis of whether it was a good investment or not.

The comparison that matters is: was buying a dump for 270k and spending 15k in renos better than buying a property in a much better state for, let's say, 300k and not having to spend a dime on renos? That's the difference that matters from an investor point of view.

 

The sheer amount of comments from people saying they were learning a lot from this thread discredits this sentence, not to mention all the messages I've received throughout the months.

There's ways and ways of expressing an opinion. Maybe you should work on improving the way you deliver your criticism so that it becomes constructive (even if it's negative) rather than destructive.

 

I know agents who would look you up and down doing that,reluctantly give your offer to the vendor, and then never answer your call or email again.This method can work,as @Jose Eduardo Slompo has shown,but would not work in every purchase.

 

Love it. Onwards to the next one.

 

Well done @Jose Eduardo Slompo and Simon. Simon does find great deals, totally worth the BA fee.
If you don't mind me asking, did you need to get permission to convert the garage to a bedroom?
Also, how's the serviceability looking after this purchase. If you have any equity in this property, would you be able to actually extract it in this lending environment?

 

Still not bad to get an approx 20% return p.a. even if it wasn't your primary driver!

 

I don't feel I have to work on anything.
Sure you may have had 100 pats on the back along the way but this is a public forum and you don't have to share the same view as I do.

It is my opinion that based on that house, simple brick 90's build, listed $300k, signed $285k and then via b&p knocked off another $15k (or 5%),is strategic excessive discounting while you have the vendor in your hand.

It's not a nasty highest Queenslander hiding who knows what inside it. It's a bread and butter simple brick house.
I'm not saying BA encouraged this either.

I'm saying I am all for minor defect costs being addressed at b&p stage, I have obtained $2-5k before myself, however there are people out there who use the b&p clause as a strategic play to obtain further price reductions because they have the vendor signed up and eager to settle.
I think it is unethical and opportunistic and something that occurs too much in the marketplace.

So I stand by my view that $15k (5%) is very heavy handed after you/your BA had already negotiated $15k off listed price.

 

Your missing my point. I don't care what you are buying, I am talking about the underhanded b&p tactics here

 

Thanks for the write up and your kind words Jose! Your diligence in maintaining every detail in this thread has been truly awesome and will be invaluable for any investor particularly for those starting out

Its been a real pleasure working with you and being a part of your learning curve right from the beginning. Glad you are happy with the deal also and the process from start to finish.

Can't wait to see whats in store for you in the future as I'm sure you'll be itching for your next property very very soon

 

If you want to be ethical then I would suggest that an investor forum is the last place you would look, maybe try a church or an ethical super fund? Personally I wouldn't do anything illegal but that's as far I'll go - I'm sure people here would disagree and accept rental payment in cash to avoid the ATO Anything that makes a deal even sweeter is worth it. Distressed sellers are the best people to buy from - if only I found some like that in my journey, I would have been able to buy another property at this point. No one is forcing the vendors to sell - I couldn't even get the sellers to budge on the prices at the B&P stage or even fix anything. @Jose Eduardo Slompo I think you did a great job with the help of the legendary @Simon L I hope the next one goes just as smoothly, if not more so. Love hearing success stories like this!

 

So your saying investors are not ethical, speak for yourself buddy.

 

I'm all for a sweet deal, but I don't like the way you do business.
Also, how is this a success story?
Bloke paid a BA to find a property and swindled the vendor while property was already under contract to the tune of 5% of PP.
Sorry, that's not how I define success

 

Also, a persons character is judged on his actions not intentions and it stems to all parts of life: romance, finance, friends, work etc. so if you carry this sort of attitude across your investing,I'm not sure what else it says about you.

To clarify, I raise my glass to those who construct a great deal, bargain hard and fight for a favourable outcome, don't misconstrue my comments to think I lay down when it comes to my own investment negotiations. Think again.
I am saying if being deceptive or unethical in order to achieve an outcome in your favour is the only skill set you have you should find another game to play.

 

No one got swindled. Vendor could have rejected request or counter-offered. $15k reduction on a sub $300k property with minimal real problems is a great outcome. Need your business card @Simon L

 

If achieving a great result is measured by the discounting due to b&p then a BA isn't worth his salt.

 

What's next once the dust settles on this one?

 

I never said investors are not ethical, just that you won't be a great investor as you will always have a weakness. In a repeated game of property investing, ethical investing other than giving you a warm fuzzy feeling at night is not going to help you much and youre also not going to deal with the same seller. Every dollar counts, especially early on so you can quickly get your second property.

There are always asymmetrical information in property but I would say that the seller has the upper hand here, so any deception would on the seller or agent side. Anyway you may call it unethical, I call it superior negotiations which is the norm for anyone working a career in contracts between parties. Obviously you will always try to get the more favorable terms.

I would separate my personal life from my investing life. My investing life I think with my calculator, my personal life I think with my heart. You can't soft when you're an investor just you can't be soft when your an army at war.

 

Thanks Blueskies! Feel free to PM me or contact me with the details on my signature below

 

@Invest_noob: No permission needed, and I'm still not sure about how my serviceability is looking, but it's the next thing on my to do list (along with finishing sorting out the depreciation schedule and getting a tenant in, obviously). I'll start talking to a few brokers in order to try to understand how much I'll be able to borrow, how much equity I'll be able to extract etc.

@Toby: absolutely agree. Spent $6k, so if I manage to get an extra $1k in rent per annum (extra $20 per week) I'll be more than happy, especially because it wasn't the main purpose of the reno.

I'm the one who thanks you, @Simon L. It's been an absolute pleasure! And you're right, I'm already itching for the next one.

Thanks @Pentanol! Agree with almost every word you said - expect "if you want to be ethical then I would suggest that an investor forum is the last place you would look".

Couldn't agree more, @Blueskies!

@Darwin55: now I plan on buying what I originally wanted to, but couldn't afford: a blue chip, either in Brisbane or Melbourne. Based on how my monthly savings are going and depending on how much equity I'll be able to extract from this first one (and also on how the market behaves, obviously), I'm forecasting it will happen sometime between May and September next year.

 

My view is business is business. In an auction/sale campaign, the vendors/agents will try to do everything in their power to get the buyer to pay as much as possible, even tactics of making them bid against themselves etc etc. I think it makes good sense as a buyer (especially an investor) to try and pay as little as possible.

Just my opinion.