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Stratergy That has worked time and time again ???

Discussion in 'General Property Chat' started by the world is your oyster, 9th Feb, 2016.

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  1. the world is your oyster

    the world is your oyster Well-Known Member

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    Hi guys and girls ..

    iam wondering if we can start a thread of peoples choice of strategy they used or are using to work towards financial freedom ???

    there are many strategy's and ways to do it iam curious to see how many people are replicating success time and time again
     
  2. Greyghost

    Greyghost Well-Known Member

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    Everyone is different.
    Age, income, dependants, equity, savings, income growth potential, life issues, health, life vs investment choices made.

    But it is true most stumble their way through their investment journey, but that I mean a high % fail to establish a plan or end goal to begin with. They just buy what they an afford, where they know etc. So I think by having a solid plan you are ahead of many to begin with!
     
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  3. ellejay

    ellejay Well-Known Member

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    I guess the most successful investors change their strategy to suit the times. Some will say reno works for them, or developing works for them, or buy and hold works for them but it depends where you buy, what you buy and what's happening politically/economically at the time. Just sayin' you need to flexible with strategy and be prepared to change with the times.
     
  4. Ace in the Hole

    Ace in the Hole Well-Known Member Premium Member

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    Buy & Hold is hard to beat in the long run.
     
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  5. datto

    datto Well-Known Member

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    Hey Oyster, buy and hold strategy is a no brainer. Not recommended for those in their eighties though.....some may beg to differ.
     
  6. the world is your oyster

    the world is your oyster Well-Known Member

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    Yea that's very true
    I love the buy and hold stretergy but Iam working on chunk deals to get capital to afford buy and hold in growth areas not just cash flow areas :)
     
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  7. Foxdan

    Foxdan Well-Known Member

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    Pick a boring capital city suburban area that you think will go up in value. Go buy something that fits your budget that people want to live in. Wait a few years and you have your 100k capital that you lost in Gladstone. Reinvest and repeat.

    Patience Jedi. Young you are.
     
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  8. Biz

    Biz Well-Known Member

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    Earn more, pay down debt.
     
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  9. MTR

    MTR Well-Known Member Premium Member

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    Currently I buy development sites, build and sell all and reinvest funds back into developments.

    buying cash cows in USA for income

    Strategies I have used dependent on market

    buy houses in rising markets as many as you can afford, then sell down perhaps half to generate income and reduce debt

    buy dual income properties for cashflow

    buy development sites and either develop or put together DA and onsell or sell down for cashflow

    build land and house packages in rising markets

    buy corner lot which can be subdivided, keep front, build new at rear, sell 1 keep 1, cashflow play

    buy properties that are under market value, revalue and continue growing portfolio

    renovating and on selling, this is the hardest, don't do this unless you are addicted to hard work, I am not:)


    MTR:)
     
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  10. D.T.

    D.T. Adelaide Property Manager Business Member

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    If there was something that worked every time, we'd all just do that.

    Same as everything. There's not a diet that works every time, a gym routine that works for everyone - everyone just has to find what suits them and run with it based on their existing circumstances and goals.

    In general though (and same goes for everything in life), if you just keep doing it, you'll eventually get to where you're going.
     
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  11. Adele

    Adele Well-Known Member

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    Agree to this, strategies change with the times. I started out with buying undervalued properties at the start of the boom cycle. When this was no longer viable, I stuck to the buy and hold method. Who knows what is next. Possibly the save up and wait for bargains.
     
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  12. Leo2413

    Leo2413 Well-Known Member Premium Member

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    As others have said there is no '1 strategy fits all and is foolproof.',

    Though if I had to choose 1 particular barrage of steps for potentially great results, it would be.

    1. Make sure you buy BMV or at least pay a good price that is less than the actual overall value you can identify in the deal.
    2. Buy a deal that has room to manufacture growth by adding value.
    3. Buy at roughly the right part of a state's market cycle, eg 7-9 o'clock.

    By doing this you A), mitigate some risk buying on the way in, B), dont completely depend on organic growth and allows you to take some control over that and C), put your buying (guestimate wise) at a part of a state's cycle that is lower risk with more upside.

    That's what I do and it seems to work well. But its horses for courses. Everyone has to do what's right for their personality, skills and own situation of course.
     
    Last edited: 9th Feb, 2016
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  13. ellejay

    ellejay Well-Known Member

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    Yep, you need income/cash though to buy all of these and that's why I don't think starting by buying a small handful of negatively geared IO ips in areas where you expect "growth" is a great idea. Sure, it works for some some of the time, but it's not guaranteed. You may be left working indefinitely to pay for those and unable to move forward. I'm thinking of people I know who bought IO NG in WA/some areas of Q/land. Would probably be in negative equity now having held them for a few years on IO, so no principle paid off either and rents not flash. Many other examples.
     
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  14. the world is your oyster

    the world is your oyster Well-Known Member

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    That's awesome mate I love what your doing :) what state do you live ? Is that where you do most of your deals besides USA
     
  15. JessicaP

    JessicaP Well-Known Member

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    Sometimes you have to get creative. depending on your risk profile. Buying and hoping and waiting just aren't things I can do. So we made it up ourselves - buying in regional areas (first block was in orange for $45k) and we move houses which costs a lot less than a new build. That way we manufacture our own instant equity and positive cashflow and don't have to guess/wait on a rising market.

    Now in a position to diversify a bit - looking at either some quick Reno and flips or buying in capital cities for some CG plays.

    I like the idea of buying land and getting DA approval then onselling as well.

    There are people on here who would say never sell.

    The guy who is doing the NRAS stuff is fascinating as well, have a look at his posts in the "how far along are you thread". There are so many strategies and so much creativity to be had here.
     
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  16. Tim & Chrissy

    Tim & Chrissy Well-Known Member

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    Some common themes that I have picked up from a few sources now:

    * Build a strong foundation portfolio in captial cities before venturing into regional areas
    * Look for properties with a capital growth upside i.e. infrastructure projects, growing population, big business moving in
    * Look for deals that have the potential to be picked up under market value e.g. reno project with good upside, IP with underachieving rent
    * Work out your end goal and work backwards e.g. $50k passive income requires X properties, Y equity
    * When buying regionally (after foundation built) try to stick to 10,000+ population towns

    I also hear 7%+ yield thrown around a lot, every property we found with this sort of yield had illegal dual occupancies, a risk we weren't willing to take (we looked at what had to be done to get approval but the costs was too great an unknown). Also almost everytime we enquired about a property with 6%+ yield it had already been sold, even after just hitting the market. 7% is great if you can find it but we found it was really difficult to find in a rising market.
     
  17. Greyghost

    Greyghost Well-Known Member

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    To clarify your "illegal dual occ" comment..
    It is correct that the properties were most likely not legal height.
    This means you cannot have a separate lease for upstairs and downstairs.
    However, if the property is built in and is set up as a dual occ there is no issues with having say family a upstairs and extended family b (relatives) downstairs - all on the same lease, or just family a on the lease.

    @Michael_X and @Beanie Girl are the experts in this area.

    Also regarding 7% yield, I guess this is in reference to SE Bris? yes it is difficult to find now. 3 years ago it was easier.
    Now you will most likely have to do some work on a property to get that type of yield, fix downstairs, partition off downstairs to create new rooms etc.
    It can still be done.
     
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  18. Ace in the Hole

    Ace in the Hole Well-Known Member Premium Member

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    I reckon you don't need to over complicate things at the start.
    Leave the advanced strategies for when you have plenty of experience under your belt.
    Most of the old timers, many whom have built massive portfolios simply bought, held and paid down debt, often at high interest rates.
    It just takes time.
    Trying to speed up the process with complicated or risky strategies can put you at more risk of things going wrong and increase your operating expenses, which may result in a lower gain overall than if you were to simply hod what you had for the long run.
    Of course the more creative strategies can work better than buy and hold, but at certain times of the market cycle for people with certain skills and experience, under other certain conditions.
    With experience, you'll work it out yourself.
     
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  19. Dan Donoghue

    Dan Donoghue Well-Known Member

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    I'm 40, planning to retire the day before I turn 50.

    My journey is about to begin (within the next 3 months) and my strategy is buy, improve and hold. I plan to retire with as many IP's as possible paid out (Selling down some after the 10 years to pay out others), this will provide enough of a passive income to replace my current income and allow me to live at and walk on the beach with my wife every day for the rest of my life.

    I had a recent health scare (still going through Chemo treatment for it) and it has completely changed my outlook on life. Due to this, my favourite saying i came up with recently is: I don't need to die as a rich man, I need to live as a comfortable man.

    My focus on this saying is what is going to make me work my butt off to get to that stage of passive income asap.
     
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  20. Leo2413

    Leo2413 Well-Known Member Premium Member

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    @Dan Donoghue good post mate. Wish you a speedy and complete recovery.
     
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