On the hunt again

I can’t believe it’s already been 16 days since the last post! Since then:
All paperwork has been finalized;
Pet inspection completed with a glowing report; the pest inspector actually called and congratulated me!
Building inspection happening today
Property Evaluated yesterday

In the meantime a few other things have happened.

Property Secrets
I purchased the recent addition of My Property Investment – which is a magazine I absolutely LOVE! I read an article about a guy named Paul from a company called Property Secrets. I had actually spoken to Paul in August regarding the system his company uses in regards to RE investing and was impressed with what I discovered and I decided there and then that I would be working witht hem at some stage. I was however still attracted to the Destiny financial system due to my lack of confidence with figures. I saw Destiny as an opportunity to learn whilst I invested; because I had come to realize that the best way of learning is infact by doing. I just didn’t want to rush in to the doing part and make very costly mistakes. So Daniel and I decided to join Destiny and have used them to purchase this 1st property. In the meantime I have decided that I want to be as aggressive as possible with our investing as I really do not want to have to sit back and wait 15 years to start enjoying the fruits of my labour.

I see Destiny as a steady and safe way to accumulate a property portfolio with a long term approach to your investments. They say you can’t have your cake and eat it too…. High capital growth plus a positive cash flow; generally speaking positive cash flow properties aren’t in high capital growth areas. Margaret Lomas (founder of Destiny) doesn’t advocate renovating either; which is not something I agree with. The important thing to remember is some systems work better for different people.

I tend to agree with Dolf DeRoos’s approach. Dolf DeRoos to date is my favourite Real Estate guru. I have found his products to be easy to understand and very realistic and they make sense! I definitely recommend his books and products!

So, back to Property Secrets. Basically once I decided I wanted to take a more aggressive approach to Real Estate investing there were a few things I knew I would have to do.
find a property significantly either undervalue or one I could negotiate to a purchase price significantly under value; looking for properties where I can see potential to increase the value
do some renovating to the property to increase it’s value and
also be able to rent this property for a neutral to positive cashflow.

Even when I re-read my criteria I ask myself “what are you thinking??” “How are you going to find those properties??”

My answer; a lot of time, phone calls, studying and waiting for the right deal to present itself! So in short; I discovered that property secrets do all of the above for you. Of course there are fees involved – who’s going to do something for nothing?
The fees are:
$5000 – when you buy a property off them
$5000 – to oversee renovations

Now you don’t have to be a rocket scientist to know that for a $10,000 investment (which is fully tax deductible) if they assist you in 1. getting a property significantly under value and 2. assisting you to significantly increase the value – you’re going to end up in a pretty good position.I have decided on this method due to one word LEVERAGE! Property Secrets have a large data base of clients; they already have the contacts with Real Estate agents and trades people; they have already used the tradespeople for other projects and they know thy will get a quality job done. Now for little old me sitting 1200km’s north of the closest major City with zilcho knowledge of renovating; this seems like a pretty darn good option! Plus; they use their own property managers which ensures you’re going to get pretty good tenants and they have negotiated management fees down to 5% due to volume.

Can you see how my work load is lessened? I still get to earn an income and focus on other projects whilst being assisted towards other goals.

Your own back yard

This takes me to the other thing that has happened. Over the passed few months I have been looking for properties which have the ability to be developed – subdivided etc. I looked all over the country and have found out that theblock we already own is SUB-DIVIDABLE! (yeah I know…. Should have gone there sooner; I just took the word of Daniel who told me it wasn’t!) After talking to the town planner who doesn’t see any dramas arising with sub-dividing; we stand to increase the properties vale from 1 block worth $160k to 2 blocks worth $130k each for a total maximum cost of $30k! If we then build 2 houses on these blocks the value is through the roof! It stuns me that I had this sitting under my nose the entire time; we could have already had this sub-division done using the equity in it to pay for the costs!

The day before I found out I read a story in One Minute Millionaire about a guy that goes searching for diamonds far and wide – he ends up old, lonely and dying far from home with no diamonds and yet there were a field of diamonds in his own farm. So I suppose the moral of the story is there is always a diamond close to home; sometimes it just takes a change in perception to see it!

What Now

So I guess I’ve had quite a few developments in 16 days! One thing I am more sure about than ever is that Daniel and I have to increase our cash flow to assist with our Real Estate ventures. This has lead me to look at franchises and also try and get my own act together learning about website design and e-commerce as I believe this is a great way to build a buisiness that requires limited outlay of capital. It will be time consuming getting these projects off the groun; but I believe once they’re up and running they will eventually provide a cashflow with minimal effort. Back to the diamond theory – Daniel has been offered the opportunity to purchase the business he is currently running. I am very keen for a break from the town which we’re currently living; but figure if we can double our current incomes by him doing that and myself possibly staying where I am – but negotiating some kind of a deal where I can go to ABN and subby to my boss or get a partnership in the business I run we can get ourselves in to a pretty darn nice position over the next 5 years.

I cant help but think maybe with this opportunity the diamonds are in fact in our own back yard – yet we’re contemplating running off and starting something new somewhere new. We’ll know what we’re doing in the bnext few weeks. When I get back from holidays im going to be working with Dan in his shop 2 Saturday mornings and for 2 hours in the afternoon on the counter to see how I feel about it. It was a chance to help him out as they’re so short staffed as well as an opportunity for us to work together!