What mistakes did you make when you first started in IP's?

Discussion in 'Investment Strategy' started by Tim & Chrissy, 16th Dec, 2015.

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  1. S1mon

    S1mon Well-Known Member

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    • paid off a lot of debt off PPOR, should have invested earlier
    • bought OTP apartment. kept dragging out. in the end the developer went bankrupt. then a while later the builder. all before it started build. got out with only losing opportunity costs.
    • too conservative. was waiting years for the above OTP to go again..finally decided about 2 years later (before i knew what was happening with OTP) to buy again anyhow but would be in a better position had i not waited
    • lack of research on IP1..didnt know about zoning, costly land tax etc
    • too conservative again
     
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  2. Sonamic

    Sonamic Well-Known Member

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    I would've leant about Equity Releasing earlier. Would've saved me selling some good little renters for upgrades and missing out on expanding my CG base.
     
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  3. HUGH72

    HUGH72 Well-Known Member

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    Managed to cross 5 ips with Nab and left it for nearly 10 years before unraveling the mess.o_O
     
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  4. legallyblonde

    legallyblonde Well-Known Member

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    Not being more competitive with me offer ;)
     
  5. datto

    datto Well-Known Member

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    Not buying enough IPs esp when they were really cheap.
     
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  6. The Y-man

    The Y-man Moderator Staff Member

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    Bought OTP. Then bought Brand New. Both bad choices.

    The Y-man
     
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  7. Tim & Chrissy

    Tim & Chrissy Well-Known Member

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    I've thought about building in a new area but it seems a lot like buying a new car, if you sell a short time later (assuming the market hasn't moved) you won't recoup the building and land cost
     
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  8. Johnny Cashflow

    Johnny Cashflow Well-Known Member

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    That and wasting the money on stockys for Vn Calais lol
     
  9. dabbler

    dabbler Well-Known Member

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    Never sold.
     
  10. blackenator

    blackenator Well-Known Member

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    Not buying properties earlier :(
     
  11. MTR

    MTR Well-Known Member

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    Ignoring cash flow
     
  12. TMNT

    TMNT Well-Known Member

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    mistake: I didnt buy
     
  13. Sky Huo

    Sky Huo New Member

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    Pay the premium in the buyers market. Set up the P& I for the investment property.
     
  14. Tim & Chrissy

    Tim & Chrissy Well-Known Member

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    You just went for the standard $500k buy = $500 pw rent?
     
  15. sanj

    sanj Well-Known Member Premium Member

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    Made heaps.

    Thought i knew a lot more than i really did, its truly a case of "you dont know what you dont know". Needed the market and my mistakes to humble me.

    Bought buy and holds in the hope of gains before i realised how much i prefer value adds, no longer do that.

    Not having a thought out mid and long term goal and the short and mid term strategies needed to achieve that.

    Believing in the old "magic pill", im one of those who got convinced to set up a hybrid trust by chan and naylor back in around 2007 or so without fully grasping the downsides.

    Not having the right team or recognising the importance of having it and how long it takes to get an outstanding one.


    Nothing wrong with making mistakes, ideally of course youre learning from others mistakes as well and not youre own. Key is to always look at your own performance/decisions objectively, pick holes in things and see what could have been done better. Dont let your own ego get in the way of improving future outcomes of fixing past/current mistakes.

    I actually did well with OTP and bought again, was going well and had chance to crystallise a decent gain about 12 months prior to settlement but got greedy. Come settlement time prices had dropped and finance was hard for self employed. Had to pull some major strings to get out of that one without losing deposit but opportunity cost of capital and loss of potential profit were big lessons.

    I now treat capital going into a project with a lot more respect and also am not afraid to take a profit instead of always waiting for more. No one went broke making a profit.

    Unfortunately forgot that lesson with a no property investment, had a massivr profit on my hands that turned into a small one because i didnt take enough cash off the table. Lesson learnt again.
     
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  16. Tim & Chrissy

    Tim & Chrissy Well-Known Member

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    What is the hybrid trust? I was calling around yesterday to find a solicitor to set up a discretionary trust for the future purchases.

    I have a mortgage broker that, on the face of it, is doing a good job but it's still early days in the approval process. There was a string of bad ones prior to her.

    I have a cheap NSW solicitor/conveyancer but they don't exactly knock my socks off in terms of being on the ball and performance.
     
  17. sanj

    sanj Well-Known Member Premium Member

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    Important to remember though if youre playing to win you will sometimes lose along the way, theres no shame in that. Many people in this country are brought up fearing failure or the unknown, it's really not that big a deal.

    Some of my biggest wins have come as a result of lessons or contacts or whatever brought on from a prior small loss or mistake.

    Im hoping to make 15x my investment on something over 6/8 months, conservatively imo it is 8-10x and it wouldnt have happened if i hadnt opened the door to it through some prior work.
     
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  18. Sackie

    Sackie Well-Known Member

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    Hybrid trusts – Good option or overkill?
     
    Last edited by a moderator: 4th Nov, 2016
  19. sanj

    sanj Well-Known Member Premium Member

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    Someone can explain in more legal detail (maybe @Terry_w ) but essentially one of its main appeals is it tries to offer you the benefits of a discretionary trust with the ability to claim negative gearing against your personal income. Great in theory bad un practice as its very hard to get finance for
     
    Last edited by a moderator: 4th Nov, 2016
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  20. Phantom

    Phantom Well-Known Member

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    Elements of discretionary and unit trust.
     
    Last edited by a moderator: 4th Nov, 2016