Recommendation for a good Buyers Agent

Yep .... number of people looking for a silver bullet....is astounding.

 

Thanks @BuyersAgent @Simon Hampel @sash .
Would you guys be pls able to help with how to structure my approach around whwre to buy. What things to look for and where to look for.

 

I think no one can advise you on where to buy and what things to look out for without knowing your personal situation. This is something I realise and am struggling to decide on:
Investing in Commercial properties are great if it suits where your personal financial situation is, Investing in cashflow regional could work too if it suits your goals ,
Investing in Perth could work too if you are looking for medium term- long term growth,

Will the acquisition hamstring your next property purchase if you want one? Or are you done? How is your cash flow? What income do you have? What expenses do you have? Are you stretching yourself for the purchase? How aggressive are you? Do you have an exit strategy?

Talk to your broker/accountant/lawyer, these 3 are the most important people IMO and no one will (and should)give you free specific advice, as it is not worth the time and liability.

12.30 am rant over XD

 

I posted this awhile ago. Maybe some of it might be of help.

Goal determination
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.

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 and the state of the market.

I approach (personal strategy) most purchases with trying to buy keeping 3 things in mind. 1. Buy value, preferably below market value, 2. Buy add value ability 3. Buy with decent chance for medium term CG.


Re buyer's agent, even if I engaged one (I have in the past), I would want to have a good idea on the answers to some of the key questions above. Be informed as much as possible so you don't blindly accept any property recommendation.

Good luck

 

One of the key reasons to use a buyer's agent in this market is that we are still seeing clients want to pay more for property than we are telling them they have to pay or should pay, which is strong evidence that most people are overpaying for property (relative to what they could pay) across the board. This occurs because good sales agent are adept at extracting more money from buyers, and "only another $10k" seems like not much on a $2m property, but every last dollar counts!

It's actually harder to purchase in a market that is a little turbulent/declining, as certain mistakes, such as paying "a little bit more", isn't as easily masked as the market rises month by month. We're finding it's taking longer to negotiate and having to be even tougher with our position with sales agents/vendors given there's not as much competition.

Just in the last week we've exchanged on two contracts where the client wanted (almost begging!) to pay $60k and $30k more (respectively) than we ended up getting it for! We're having to hold clients back in this market even more so than when it was booming. This is because the margin on the price we know we can get it for and the price the buyer is prepared to pay has actually widened in many cases.

Horses for courses of course, but the value proposition does change, not only from client to client, but market to market too.

- Andrew

 

Wow......... pure Gold....thanks for this @Sackie , really appreciate it.
Will start search myself again. Just that I dont have a great history with reports as I bought in SA, Vic and QLD everytime thinking that Sydney is on the overheated stage as suggested by reports and missed all the CG in Sydney. Not that above properties of mine havent grown but not to Sydney's capacity. Will try to restart the process checking the property cycle market reports again

 

Thanks @BuyersAgent , with Sydney market overheated and tipped to drop, are you still seeing opportunities for medium term CG in Regional NSW where you purchase. Do you think it is possible for you to work with something like max $600k. I am also looking for a rental yield around 4.8 to 5% from serviceability point of view. Not having any property in NSW, I am much inclined to buy one in NSW but not on the cost of CG. Moreover I think my budget is too less to buy something with land component in NSW CG oriented area. Thanks again!

 

Not impossible but tight in the good markets. If you had a budget of 700k or even 650k it would massively improve the choices. I did one for a client 612k last month that I would happily repeat (old house, corner block, development potential) but the good ones quickly evaporate below 600 nowadays. Yeilds average around 3.5-4% - with good buying, a coat of paint and a new tenant we might get 4.5%+ but anything over 5% is gonna be further out regionally at that price point. Happy to chat sometime if you want to throw ideas around.

 

Thanks mate!!