The Holy Grail - Property Investing

Discussion in 'Investment Strategy' started by MTR, 15th Apr, 2018.

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  1. MTR

    MTR Well-Known Member

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    Been pondering on this for some time, thought I would share this for those interested, if not .....read no more:)

    I am talking Aussie property market

    For me the holy grail would be to consistently make money from property in any market - boom/bust cycles, not as easy as it sounds.

    I know an investor who has successfully been doing this for over 15 years and financially free a few years, now its play money, and the formula never changes, but works in all markets.

    Buy property under market value in any cycle - this requires close contacts/networks with re agents, investors etc and to be prepared to walk if it is not secured at the right price. In other words emotion has no place in this game.

    Develop/build lower end product within 15-18 km ring from the CBD, close/walking distance to infrastructure/transport in affordable suburbs, primarily FHB market.

    Maximise the potential of the land for upside and select smaller builders with competitive pricing. Formula never changes for the build in terms of specifications, everyone wants the bells and whistles, just make sure its at the right price.

    Sell down/not all.......to increase capital, and continually increase cash flow. If you can not sell hold for the next cycle, sell old stock in the next boom cycle.

    Rents must be able to cover the interest, do not hold negatively geared properties, unless it development stock.

    Consider JV arrangement if finance is an issue, which can provide opportunities to increase volume and profits. Only do this with investors who have the same mindset and end goals.

    I believe the reason this investor has been so successful is because they found a market that works where there is consistent demand, the rest comes down to lots of homework and networking.



    MTR:)
     
  2. Xenia

    Xenia Well-Known Member

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    I actually have been in trouble on this forum because I had no idea what the words “holy grail” mean. Literally I don’t.

    I tried to look it up and it came up with “a cup that Jesus drank from or a sacred feminine”

    Ok that confused me even more since the post was about real estate not Christianity or gnostic teachings.....

    I questioned the poster on what it means and she got aggressive lol then Simon canned the post.

    So I know “holy grail is used as an analogy in English laungage” wtf does it mean?????

    Is it a thing you aim for, a goal?
     
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  3. MTR

    MTR Well-Known Member

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    For me.......

    The big mother.....

    Making a home run

    Winning gold forget silver

    Finally learning how to ride a bike

    Etc etc etc
     
  4. Redwing

    Redwing Well-Known Member

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    an object or goal that is sought after for its great significance
     
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  5. Harry30

    Harry30 Well-Known Member

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    I think the people who do well in the property or the share market for that matter are the ones who stay in it for the long hall. Sitting on the sidelines is a losing strategy in my view. It is very hard to pick markets - is it going up? has it peaked? is this a good time to buy? Bubbles are only evident after the fact, as Alan Greenspan use to say (perhaps not a great source I admit). Property is cyclical so you need to be in the market in good times (thrive) and bad times (survive). I am a boring buy and hold investor, and I am thinking about adding a big IP in the Sydney market right now. It is difficult to get finance and everyone is saying that the market will fall, and advising me not to buy. But, I still feel for investors like myself, that if you can overcome the current tight finance market and make a decision to invest, will do very well in the long term. All the great property companies (think Grosvenor in London) are generally those that stay in the market over the long term and don’t try to pick cycles. Of course, their strategy and approach will vary depending on the market cycle, but pulling up stumps and just sitting on the sidelines ‘waiting for things to get better’ is a losing approach. I think the person you reference has indeed been successful largely because they have approached property in this way. I know others will see the world a bit differently to this, but this is how I approach it and what has worked for me.
     
  6. Lizzie

    Lizzie Well-Known Member

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    Our best set-and-forget performers are a couple 1970's red brick, can't kill with a sledgehammer, units within walking distance of the train station in one direction and the shops in the other. Outer edge of the inner ring.

    Wish I'd bought more - way more - a few years earlier
     
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  7. datto

    datto Well-Known Member

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    Sure , property yield is small in Sydney. But we have been through the mother
    (holy grail) of a boom. Give it 5 or 10 years and yield will be back IMO.

    All those holding multiple properties will be cleaning up. Patience is the key.

    Got itchy feet ? Then invest in other streams eg commercial, interstate, overseas, equities etc. Still got itchy feet? Then try some antifungal medication.
     
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