EPI 094 | Where to start — with Nhan Nguyen

What’s news

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  • Mastermind Jo goes Masterminding!
  • Kaz on selecting an investment location—
    location reports and prediction reports

Feature – Nhan Nguyen, author and property and wealth creation expert

Nhan Nguyen
  • Having focus
  • Buying at $450k or less
  • Looking for massive discounts
  • Becoming an area expert
  • Thinking Big, Starting Small
  • Positive cashflow options
  • Looking at population trends
  • Making low written offers

Mindset

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Quick tip and action

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A Special Request!

I’m putting something special together for our 100th episode (which isn’t too far away) and I need your help! Send me an email or a message on Facebook and tell me two things:

  1. What is the best piece of advice you have ever received that relates to property or wealth creation?

  2. What is the thing that you most want to know about or learn more about related to property or wealth creation?

One lucky contributor gets a pack of 3 property investing books! Entries close 14th August 2014.

 

EPI 040 – Investing in US property with an expert – Interview with Trish Davies

In this weeks episode Kaz is very excited to speak to the wonderfully knowledgeable Trish Davies.  Trish is an expert in property investing in the US and was very kind to spend her time walking Kaz through the process of investing in the US –  and all this at a time when the media and property experts are either talking it up or talking it down!

Things we talk about:us-realestate-investing

Action:

  • Send us any questions you have about self managed super funds – we’ll be interviewing an expert in SMSFs very soon!

EPI 039 | Property Investment Finances Made Easy

In this weeks episode we tackle some topical banking related issues – including interest rate cuts and interest rate hikes, the reserve bank of Australia, fixing interest rates and investing in a difficult economic climate.

Things we talk about:

  • Property Investing
  • Investing in US property
  • Reserve Bank of Australia
  • Interest rate changes
  • Big banks and other lenders
  • Fixed versus variable interest rates
  • Exit clauses for property investment loans
  • Investing in a difficult economic climate
  • Positive cashflow property

Action:

  • Assess three different loans
  • Look at any existing loans that you have and understand your exit fees if there are any

Build a solid foundation with affordable property investing education

Learn how to invest in property to build your wealth with these affordable property investing education courses.

[Read more…]

EPI 038 | Property Investing Success – Interview with Jane Slack-Smith

What a wealth of property investing knowledge and experience is our fantastic guest for this episode, Jane Slack-Smith, from Your Property Success.

Jane has amazing knowledge and in this interview we get to find out how Jane became involved in property investing, the sorts of strategies she has implemented.

Jane has a fantastic property education product on the market which is a great, affordable option for people wanting to learn about property investing.

Things we talk about:

  • Property Investing
  • Evicting tenants
  • Getting your finances in order
  • Finding positive cashflow property
  • Mortgage interest rates
  • Successful property investing with the awesome Jane Slack-Smith!

Action:

  • Ask your bank for a better deal on interest rates – yes, again!!
  • Think of one action that you could implement that will improve your financial situation – be it cutting spending, increasing saving, improving your financial management…

The biggest mistakes investors make: Mistake number 6 – Failing to plan

Property Investing - common mistakes

Successful property investing is easier than most people think. The mistakes that prevent most would-be property millionaires from realising their potential are predictable and easy to avoid. In this series of blogs, Den details each of the most common mistakes and how to ensure you don’t make them.

Mistake number 6 – Failing to plan

I have a confession to make. I started investing in property ten years ago and I really had no plan for my investing other than “I have to invest in something”. I didn’t know enough about investing; I didn’t know what properties were going to serve me the best and I certainly didn’t know what my exit strategy was. I wasn’t even clear about precisely why I was investing. Frankly, it’s a miracle I’ve been as successful as I have!

I now realise that I’m not alone – many property investors don’t have clear plans around why they’re investing or what they really hope to achieve. Like me, they leave it in the hands of the gods. Fortunately the property gods are often kind.

But there are ways to increase your likelihood of success and wealth.

What can you do to make sure you’ve planned well?

Work out why you’re interested in investing in the first place. Is your reason about retiring early? Is it about increased wealth? Security? Future overseas travel? Once you know precisely why you’re investing, other decisions become easier; what kind of investments will be best, which properties are right for you, what your exit strategy is and so on. Making other decisions becomes easier when you have confidence in your goal and can ask yourself, “Is this in line with my overall goal?”

So what can we learn?

The lesson here is that too many people fail to plan. If you don’t plan then at best you’re hoping Lady Luck will be kind. At worst, you’re planning to fail.

Almost all successful people are great goal-setters and good planners. They know, and clearly define, what they want and how they’re going to get there. Take a leaf out of their book and give yourself a greater chance of success.

What can we do now?

Spend some time now working on your goal. Be totally honest (even selfish) about it – you don’t have to tell anyone! Make your goal clear; the clearer the better. Write it down, make it visible to you and track your progress. You’ll feel an instant sense of purpose and direction, and you’ll find a greater sense of motivation!

And you’ll be just that step closer to achieving your goal!

The biggest mistakes investors make: Mistake number 5 – Letting your emotions get in the way

Property Investing mistakes

Successful property investing is easier than most people think. The mistakes that prevent most would-be property millionaires from realising their potential are predictable and easy to avoid. In this series of blogs, Den details each of the most common mistakes and how to ensure you don’t make them.

Mistake number 5 – Letting your emotions get in the way

I know an intelligent, professional couple who recently bought a house to live in. As my friends tend to do, they called me to ask for advice. We chatted about their future purchase and agreed that it was a good buy for them. I was stunned to hear later that there was a pool in their back yard, but not quite as stunned as they were to find it after they had settled on the property! Fortunately it didn’t worry them too much but it does highlight the need to do your due diligence.

When you’re buying the house in which you are going to live, you look for a place that you fall in love with, as my friends did. The kitchen can be adorable; you can topple head over heels for the solid jarrah benchtops and the back-yard spa bath can be everything you’ve ever wanted. An investment property, however, is always better selected with a tempered heart and a logical mind. Too many wanna-be investors I know are too willing to buy a house because they like the look of it, they think the area is lovely, or they reckon it’s going to go through the roof with capital gains. Put simply, these emotional reactions won’t serve you well as an investor – you need to leave them at home!

How can you make sure you stay logical when it comes to making important financial decisions?

By far, your main concern when choosing your investment must be the bottom line. Ask yourself:

  • What are the numbers like?
  • Is this the property that’s going to progress me towards my financial goal?

Once you’re satisfied that the property is going to be a good investment now, look at the future trends and numbers. Ask questions like:

  • Is this property in an area that will see rental demand continuing into the future? What industries are here and are they growing? Are they diverse? How is the infrastructure allowing this area to remain desirable?
  • Is this property going to be reasonably cheap and easy to maintain?

By far the best tactic that I’ve ever employed is to create a “property checklist” and stick strictly to it. I score the properties out of 100 and I know a property must need a certain score for me to consider putting in an offer.

So what can we learn?

1. Stay calm and objective. A checklist is an ideal way to keep you on track.

2. A property that might be adorable for you to live in might be a nightmare to be a landlord for; consider the heartbreak when you find a million knife cuts in your solid jarrah benchtops and a pool of algae in your luxurious spa bath. Look for a place that’s tenant friendly, not one you fall in love with.

3. Have building and pest inspections completed by professionals, and ensure their satisfactory reports are conditions of your purchase.

4. Do your research. Know your area, your population drivers and the future prospects for the location.

What can we do now?

If you’re looking at properties to buy, or you’re educating yourself for the future, our investment property cashflow calculator is a great tool to use.

Make sure you create a list of what really matters for your investment property, and keep your list handy.

And finally, check the back yard to see if there’s a pool!

The biggest mistakes investors make: Mistake number 4 – Doing it all alone

Property Investing Mistakes 4

Successful property investing is easier than most people think. The mistakes that prevent most would-be property millionaires from realising their potential are predictable and easy to avoid. In this series of blogs, Den details each of the most common mistakes and how to ensure you don’t make them.

Mistake number 4 – Doing it all alone

Many people have some experience in the property market; either they have bought (and sold) or they have rented. Most of us gorged ourselves online, looking at lavish properties and dreaming of how we’d love to be there, but for just one lotto win. We often hold opinions of how to deal with real estate agents, how to get a great price at an auction and what a property is really worth. Some of us even read property books, watch property shows on TV or subscribe to property magazines (or websites).

All of this experience can lead us into a false sense of security when it comes to investing in property. We tend to know the tip of the iceberg but there is so much more to know, and so many ways to become better educated.

What structures exist that will help me?

There are many ways you can get more education and support for your property investing journey, from internet forums to structured discussion groups. Here are a few suggestions.

1. Read some books about real estate investing. Amongst the flood of property investing books on the market, we’d recommend a few on our Property Books page, for example, Margaret Lomas’ How to Create an Income for Life and Jan Somers’ More Wealth from Residential Property. These books are clear and easy to understand and cover both positive and negative cashflow properties. For the brave, Steve McKnight’s From 0 to 130 Properties in 7 Years covers all sorts of other ways to profit from real estate.

2. Sign up to an internet forum or even our facebook page where there are many different conversations going on at the same time, about many different topics. Remember that some forum-writers are experts, some are amateurs and others contribute in an effort to sell you some kind of product.

3. Join a property investing club or group which holds regular meetings.

4. Do a property investment course at your local TAFE or adult education centre.

5. Sign up for a property masterminding group where you get to meet a variety of different investors that you can learn from. Check out Everyday Property Mastermind for the latest groups that we’re holding.

6. Find yourself a mentor or a coach. While getting yourself your own coach can cost a little more than some of the other methods I’ve mentioned, a good coach will help you specifically clarify your goals and set you well on your way to reach them. Make sure your coach is qualified and has experience investing in property. Ask them for references too! It may be the best money you’ve ever spent. Check out our Everyday Property Coaching for information about one-on-one property coaching.

One warning I would give you is to ensure your education and support don’t come from someone who is actually trying to sell you property. Some companies offer free seminars and “courses” in which you learn about one type of property investing (yes, there are several different ways to invest in property!), concluding with a slick sales pitch of why you should buy property from them. Some free seminars and courses can be extremely beneficial for your property education, especially if you are a newbie, but be mindful that some courses are designed to promote a particular product to you rather than give you valuable knowledge. Keep your wits about you!

So what can we learn?

Almost every experienced property investor will tell you that they started investing in property without knowing all the “ins and outs” of property. They’ll also tell you that you can never get enough education or support. Make one of your property goals “to never stop learning about property investing”. The more you know, the better your decisions!

What can we do now?

Jump online and go to our facebook page and have a look at the conversations. Go and sign up to a property investing forum. Have a look around and see what you can find. Next time you’re at the supermarket or book-store, grab a property investment magazine – they’re always great for a big hit of inspiration! And sign up for our free fortnightly property investing podcasts.

The biggest mistakes property investors make: 3 – Listening to the wrong people

Property investing mistakes

Successful property investing is easier than most people think. The mistakes that prevent most would-be property millionaires from realising their potential are predictable and easy to avoid. In this series of blogs, Den details each of the most common mistakes and how to ensure you don’t make them.

Mistake number 3 – Listening to the wrong people

I can’t help but feel that it’s a little ironic that I’m writing this particular blog all about receiving property investing advice. There seem to be lots of experts out there and I don’t pretend to be the final authority on good investing but still I’m adding to the voices. That all being said, please hear me out.

I don’t know about you, but I’ve certainly received a lot of advice about property over the past few years. I have heard all about the taxes someone’s mother-in-law had to pay and how someone else’s 30 year old friend bought the right place and has now retired. The strange thing is that, even although my property portfolio has extended into double figures, most advice I receive is from people who have never bought an investment property.

How do you know who to listen to?

It’s critical that you find people who have similar goals to you. If, like Kaz, you’re looking to own 15 properties by the time you’re 50, try to find someone who has already achieved that! If not, find someone who’s on the way. If you’re looking to develop, find someone who’s into developing – not someone who “knows about developing” but someone who has actually done it.

The best way to find someone worth listening to is to ask a couple of polite questions. When someone offers advice, consider asking the following:

  • Have you ever purchased an investment property?
  • Do you still own it (and if not, why did you sell it)?
  • What are/were your property investment goals?

So what can we learn?

A lot of the advice I’ve received has been well-intentioned advice from well-meaning family and friends. It’s important to respect these people’s opinions without necessarily taking on their advice.  There are communities you can join and even more structured groups like our Everyday Property Mastermind groups. Reading the right books, getting the right education and joining a supportive community of experts is the best way to get the right advice.

What can we do now?

The most important thing you can do is ensure you are clear about what you want to achieve from your investing. Then, when you find someone else who is walking the same path (especially if they’re a few steps ahead), you’ll be able to find out the next actions you can take!

Renovation Update – #2 Pre-settlement access and tasks

Renovation update - planning our attack

I’ve got a couple of things that I wanted to cover in today’s renovation update:

  • Pre-settlement access
  • Tasks that you can do pre-settlement

1.  Pre-settlement access

Time is a really important factor is completing a profitable renovation, because as you know, properties have holding costs and the longer you take to complete your renovation, the more money you are shelling out on bank interest and utilities bills.  This is why arranging for access to a property before the property settles can be a huge factor in your renovation success.

If you want early access to a property then you need to ask for it!  And if that early access is important or even vital for your project then you not only need to ask for it but you need to make it a condition of your contract.  This is the only way that you can ensure you will be given access to the property.

Some people simply ask for ‘access to the property to obtain quotes’.  As with all things ‘contract’ I like to make sure that I’m quite specific and say something like:

“access to the property for the purpose of obtaining quotations and performing measurements on at least  three occassions prior to the settlement date’

There is a more formal arrangement called a ‘license to occupy’ which is something that a legal person can arrange for you.  Sometimes a vendor may require that you complete this document to formalise the arrangement.  I have yet to use this, so suggest that you obtain professional advice should you require this.

In this project that we are currently doing we have been very fortunate in that we pretty much have full access to the property whenever we wish.  The only condition is that we do not undertake any major, structural or demolition tasks on the property.

 

2.  Tasks you can do pre-settlement

Given that we can’t really undertake any work on the property until it settles you may wonder what we have been doing – and trust me, we’ve been doing heaps!

Here’s what we have been doing in our pre-settlement period

Costing spreadsheet

We have a very detailed costing spreadsheet that we are using to budget and to track our expenditure for the renovation.  This spreadsheet is the crux of the project.  Remember, renovation isn’t about tools and paint and tiles, it’s about money.

Our experience with renovating is minimal so our initial cost estimates really were just estimates and we have spent this time getting refining and validating our costings based on what we learn in sourcing materials and obtaining quotes.

Materials

How much are tiles?  Where should I get carpet from?  How much does it cost to plaster the walls?  What is a light fitting going to cost?  Where can I obtain the cheapest electrical supplies?

When it comes to sourcing materials and finding good suppliers you have to love the internet!  It’s a great place to find prices and suppliers.  In saying that, however, do keep in mind that in some parts of the world (including the regional town where our reno project house it) there are still a heap of companies who aren’t on the Internet.  Hard to believe, I know!!

Some tips for finding good materials and suppliers include:

  • Internet (just a general search)
  • Ebay
  • Local paper
  • Word of mouth – speak to the locals
  • Other tradespeople

Quotes

Getting trades people to come out, measure up and provide a quote can take a few weeks, so getting this underway as early as possible is a great idea!

In some cases you made need materials ordered or custom made or tradespeople can have a ‘lead time’ before they can fit your job in.  Planning ahead is definately a good plan.

Plan

Speaking of planning…do you know exactly what you are going to do, how long it will take and in what order things will need to occur.  This should all be a part of your documented plan.  Sure you can wing it, but we are trying to undertake a professional renovation in as short a period as possible, so we have a detailed project plan listing everything that needs to be done, in the order that it should be approached and which resources are required for the job.

I have a project management background so for me, using a project Gantt chart is my preferred method, however, a great tool that most people know how to use is a simple spreadsheet.

Garden

Technically we aren’t supposed to ‘start work’ on the house until we own it.  What we have commenced with, however, in this pre-settlement period is the garden.  Knowing that we had a lot of tree and bush clearing to do, we considered this a good thing to tackle.   We’ve spent a few days so far just clearing trees and bushes from the fence line as the fence will need to be replaced on two sides.  We’ve also mowed the lawns back and front and have found this a really good way to meet the neighbours!

Cleaning

This is another good pre-settlement activity for when you can’t really start but want to get stuck into something.  For the most part lots of things will be patched, replaced, re-tiled, re-floored (is that a word?) so we haven’t done much cleaning as it’ll all need to be redone.  There are some things, however, that we can start cleaning up, such as a good clean of the inside window frames.

Phew!  I’m tired just thinking about all that we’ve done and we don’t even own the house yet!  Spirits and motivation are still high here (well mine are…my partner I’m not so sure about), just three weeks now till settlement!