Category Archive for Property Investment

The process of buying something then selling it at a higher price before you have to pay for it is nothing new in most business models, but what about with houses?

Getting control of a property that needs a renovation, a few repairs or a refurbish is usually very easy to do as most investors and new home owners are not too keen on the hard work side of buying houses.

Flipping is a great way to get your portfolio going very quickly. You can make serious cash if you get into the right opportunities and can move fast when they arise. There are some pitfalls that I know to watch out for and I am sure there are more that I have not thought of.

You need to get networking with agents who are prepared to bring you deals where you think you can get a deposit down fast to secure the deal. You then need to get a buyer to ‘flip‘ the property to.

Here is how a Flip works

1. You get a call from an agent or you find a suitable property below the market value of similar properties in the immediate area.
2. You get a contract to sign from the agent or owner. Do not go unconditional just yet!
3. You advertise for a buyer to buy the house from you just below market value.
4. Get commitment from them and a deposit.
5. Get your new buyer to sign an unconditional contract to complete the purchase.
6. You buy the house at your price.
7. The new buyer buys at the price you negotiated.
8. You make the difference minus the tax implications.

Essentially you will find that there are some risks involved and they need to be attended to before going out and offering or buying anything. Property investing comes with risk and mitigating or understanding these risks enables the investor to get closer to the rewards.

Flipping houses for profit in some states creates stamp duty implications as capital gains tax is payable at the applicable rate for the investor. In the event you cannot find another buyer straight away you are obligated to buy the houses as you signed a contract for sale.Your position then would be to withdraw from the contract and therefore lose your deposit.

I suppose in the event you have to settle on something you cannot move for one reason or another you might be able to do a small reno, value add or repaint and then list it for sale using either traditional methods, vendor finance or a 20% carry back.

I have been involved with a Flip in the southern suburbs of Brisbane and did not sleep for the days around the settlement. Investors need to have nerves of steel and plenty of guts to make this work for them.

As always your accountant and solicitors will have you better prepared for the implications in your area and will have to direct you in the correct way to do Flips - with Success!

My Good Friend and Buddy, Rick, has given me a great free audio file from one of his closed door sessions.
He has been kind enough for me to make it available to you guys in order for me to get my website up and running.
Its all about the standard and doing things differently!
Who said the Guru’s don’t help?!?!

http://www.propertyinvestoradvice.com.au/

Its on the right hand side together with a lease option report for all to enjoy.
Rick is sending me a few more in the coming weeks.
Also i will be doing a day by day of buying a house and sandwich lease optioning it. With pictures, emails and solicitor’s commentary too. Video of the house and the conversations with agents for those of you who are having trouble.
Don

Picture This

1. A friend of yours wants a loan from you.
2. You ask them to insure your money against the risk of you not being able to return it or pay it back.
3. They don’t repay the loan.
4. You claim your insurance on the funds you lent them and the insurance company pays you the cash.

That is what mortgage lenders do everyday to ensure their money is lent ‘Fully Insured’. They get to make money, fully insured, sounds like a great business! Read the Rest.

Just this morning, on my 8am walk, I noticed a house for sale. The sign had been there for some time so I decided to call the agent. When I got home I checked my diary where I noted that it was a good 3 months that it had been listed.

These ones do excite me, as vendors get desperate - as you can imagine - and they are sometimes a great boost to anyone’s equity! He has had tenants that caused or were involved with a fire inside the house. Insurance paid out to cover replacement / refurbishment cost of the fire. Total renovation and re-marketing to cover some outlay. Meanwhile the mortgage still has to be payed each and every month.

When I asked the agent some questions, she said to me that they are looking to re-rent the house out and will have the rental agreement by the end of today. I said why don’t I rent it and buy it at the end of the 12 month lease. Read the Rest.

You are able to act on your own behalf when purchasing a property, however, the documentation and settlement process can be quite complicated and includes many legal issues.

Buying a home is often the biggest purchase you will ever make and it is strongly recommended that you commission the services of a solicitor or conveyancer, who are experts in this area, to ensure that everything runs smoothly and is done correctly.

Solicitor or conveyancer’s charges vary from state to state and in accordance with the amount of time and work required. They usually cost between $750 -$2000 for their services. They arrange the title, council and any outstanding searches. They attend settlement and will interact with your bank to make sure things go smoothly when you are buying property. Read the Rest.

The idea of coming up for deposits every time you buy is a real worry for most investors, and it is in fact why most are not able to buy more than 2-3 properties over their investing career.

I have found an investor who is very willing to sell the house he has had as an investment for a number of years. He only needs 80% of the sale price, and wants to go into another deal of a commercial nature. He only listed the property at the higher price because he thought that he would get close to what the agent said he would sell it for. The property has performed well for him and has increased over 40% in the past few years.

He needs the cash to get into another transaction, I want the property so we are all getting what we want. Read the Rest.

If you’re like most people, you have a limited memory after a few repetitive ‘inspections’ of something fairly similar…like houses. Also, if you’re like me, you can mix up some of the easiest things to remember - for some reason I am not always the guy who can repeat your name after 3 minutes at a party. But I am the guy who can turn a property that others have walked away from into something that can send money to my bank account each week, with little or limited risk.

Inspecting property is one of the loneliest and boring tasks I have had to do. I like property for the benefits, not the fact it has red bricks or yellow daisies in the garden. I like the fact that sometimes you can turn the second living area into a 4th bedroom or you can enclose a balcony to make a perfect afternoon tea area for your tenants. I just think that there are better things to do with your time. Read the Rest.

Imagine for a minute you find a vendor or seller who desperately needs to sell their house today, for whatever price (yes whatever!, more later).

You know you are able to afford the repayments on the house, but might not get the approval fast enough to secure it, TODAY. What are you left to do? Well unfortunately, you will miss out on this property, just like everyone else the vendor has called or asked to buy it.

May I suggest a strategy I have used to get things done when the banks say NO? Read the Rest.

It seems there is evidence to dismiss the rubbish fed by newspapers and real estate agents that a hot market is forming.

I know for myself that here in South East Queensland, there is nothing but a struggle for the agents to get properties sold and to get new tenants in their management properties. I have never seen more signs in the front of houses up for rent, looking for tenants. I have never seen so many television ads for real estate agents and property websites. Read the Rest.

Choosing the right mortgage is not just important for your needs, but could make the difference of thousands of dollars in the long term. There are so many products from so many financial institutions, all with differing interest rates and a huge range of features and fees.

Below are things to consider-

The Purpose of the Loan
Most home owners who plan to buy one home only, but possibly may like to sell and go to another house, require just a basic no frills loan. Some people may like to go out and get a loan with features like Read the Rest.