Property investing is becoming addictive...#2

Good Job Nixba!! On to a winning formula! Curious to know how you managed to pick up the property before it "hit" the market?
Side note to Robbo.. I bought through as u say "Birchy".. paid mid 200k.. projected would be worth 300k.. currently worth 190-200k.. ouch!
 
Mushu Eddie said:
Good Job Nixba!! On to a winning formula! Curious to know how you managed to pick up the property before it "hit" the market?
Side note to Robbo.. I bought through as u say "Birchy".. paid mid 200k.. projected would be worth 300k.. currently worth 190-200k.. ouch!
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Hey Mushu,
Where and what did you buy? I'm thinking it can't be west Sydney, there's no way it would only be worth 190-200k after paying mid 200's.
I went through birchy for a 2 bed unit out west in 2012 when he hadn't long started up his buyers agent section, paid 167k, similar unit sold in my block a few weeks ago for 255k. Was pretty happy with that
 
Robbo2621 said:
Hey Mushu,
Where and what did you buy? I'm thinking it can't be west Sydney, there's no way it would only be worth 190-200k after paying mid 200's.
I went through birchy for a 2 bed unit out west in 2012 when he hadn't long started up his buyers agent section, paid 167k, similar unit sold in my block a few weeks ago for 255k. Was pretty happy with that
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Bought into Gladstone, I'll ride the storm & hope its a passing tsunami.. hardest part is securing a tenant longer than 3 months! Massive financial lesson learned to do more detailed due diligence! Now looking into a more stable & more promising rising market which provides CF+ such as Logan .. High 5 to Nixba!
 
Mushu Eddie said:
Bought into Gladstone, I'll ride the storm & hope its a passing tsunami.. hardest part is securing a tenant longer than 3 months! Massive financial lesson learned to do more detailed due diligence! Now looking into a more stable & more promising rising market which provides CF+ such as Logan .. High 5 to Nixba!
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Haha feeling your pain there mate, my other IP is in Gladstone, lost a cool 70-80k so far on that one I reckon, but yea hopefully sometime in future it will do ok again. I'm about to advertise for a new tennant, will be interesting to see how long it takes to land one.
 
Robbo2621 said:
Should mention the Gladstone IP wasn't through birchy. That one was my own stupid fault :eek:
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Funnily enough.. I bought into St Mary's back in 2012 also.. not through birchy .. threw a dart at the map & landed on a nice corner block.. super happy with that one! Timed the market perfectly! Hopefully Brisbane is next & looks like other somersofters are already getting 2 steps ahead & buying into Adelaide!
 
Robbo2621 said:
Hi Nixba,

You are doing a great job, well done :)
Are you using a buyers agent for these purchases? Not a bad thing at all if you are, just curious as it sounds up the alley of the birchy or RPG strategy.
Whatever it is it sounds like its paying off for ya mate good stuff
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Hi Robbo

I used RPG. I really like their strategy as it fits very much in line with my risk profile and long term aspirations. I'm still very hands on in terms of due diligence, but I didn't have the expertise in the QLD market and work made it very difficult for me to travel there etc. I'd rather focus my attention on maximising my income potential at work and let them look after the negotiation piece for this one. It worked well for my situation at the time.

Brady said:
What did the property in the same block end up selling for?

Fingers crossed good price, reval and searching for #3 :)
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Hi Brady

Thanks for the kind words.

1/8-12 Bourke Street, Waterford West (same complex) sold for $182,000 and settled on the 3rd of June 2014.

I've also just had a quick look this morning at some recent sales comparables for 2 bedroom townhouses in Waterford West. An interesting read and potential signs that the market is slowing creeping:

* ?/9 Allora Street Waterford West - SP: $185,000 - settled 9 May 2014
* 51/28 Chambers Flat Road Waterford West - SP: $192,500 - settled 2 May 2014
* 10/24 Chambers Flat Road Waterford West - SP: $183,500 - settled 23 April 2014
* ?/9 Allora Street Waterford West - SP: $195,000 - settled 11 Apr 2014
* 10/25 Bourke Street Waterford West - SP: $190,000 - settles 2 Apr 2014
* 12/24 Chambers Flat Road Waterford West - SP: $185,000 - settled 24 Mar 2014
* 9/24 Chambers Flat Road Waterford West - SP: $183,500 - settled 14 Mar 2014
* 44/28 Chambers Flat Road Waterford West - SP: $180,000 - settled 14 Mar 2014
* 39/9 Allora Street Waterford West - SP: $180,000 - settled 21 Feb 2014
* 19 Bourke Street Waterford West - SP: $187,000 - settled on 19 Feb 2014
* ?/707 Kingston Road Waterford West - SP: $185,000 - settled 8 Feb 2014

Kind regards,
Nixba.
 
Hi guys,

Just got back from QLD inspecting this property. Very bread and butter cash flow property in a tidy and quiet complex in an area for future capital growth upside. All is going well - tenants pay on time, have minimal maintenance requests, and look after the property. Current rent is $280pw, purchase price $165,000.

Images 1:





 
Hi Nixba,

Excellent buy !!

Can you explain what is RPG ? I am from Perth so do not have much idea of prominent buyers agents in east coast.I am looking to buy on brisbane somewhere and doing my initial analysis of buyers agents.

Rooky
 
rooky said:
Hi Nixba,

Excellent buy !!

Can you explain what is RPG ? I am from Perth so do not have much idea of prominent buyers agents in east coast.I am looking to buy on brisbane somewhere and doing my initial analysis of buyers agents.

Rooky
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Hi Rooky,

Thanks for the kind words.

RPG is Right Property Group.

There is plenty of threads on this forum about buyers agents - pros, cons, what to look for, what Q's to ask, whether they add value, who to use etc. It's very much an individual choice - I've had success with them as it has allowed me to focus on maximising my PAYG income, and also gain valuable personal insight into an interstate market that I had very minimal knowledge on. Additionally, I wouldn't be in the position I am today without their networks, ongoing education and accountability. Sure, I've paid a 'fee for service', but I don't regret it as the equity I've made in the past 12 months has far outweighed what I could have imagined or hoped to achieve without their assistance. To each, their own.

Hope this helps,

Nixba.
 
Nixba said:
Hi Rooky,

Thanks for the kind words.

RPG is Right Property Group.

There is plenty of threads on this forum about buyers agents - pros, cons, what to look for, what Q's to ask, whether they add value, who to use etc. It's very much an individual choice - I've had success with them as it has allowed me to focus on maximising my PAYG income, and also gain valuable personal insight into an interstate market that I had very minimal knowledge on. Additionally, I wouldn't be in the position I am today without their networks, ongoing education and accountability. Sure, I've paid a 'fee for service', but I don't regret it as the equity I've made in the past 12 months has far outweighed what I could have imagined or hoped to achieve without their assistance. To each, their own.

Hope this helps,

Nixba.
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I used them once when NB used to work with them. Do you think the $10k is worth the $165k purchase? Could you have negotiated this yourself?

They are based in Sydney - so how is the effectiveness of using someone based in Sydney?

Congrats :).

What sort of tenant demographics are you looking at?

Thanks,
MsAli
 
MsAli said:
I used them once when NB used to work with them. Do you think the $10k is worth the $165k purchase? Could you have negotiated this yourself?

They are based in Sydney - so how is the effectiveness of using someone based in Sydney?

Congrats :).

What sort of tenant demographics are you looking at?

Thanks,
MsAli
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Thanks for the kind words MsAli. Absolutely worth it, no questions asked. For the record, I didn't pay $10,000 for this property (not close). There's no way a beginner like me would have had access to a deal like this without their services, nor the time to negotiate/speak with agents/develop relationships etc. I've since used that time to focus on maximising my PAYG income. This property was already exchanged/nearly unconditional by the time it hit RE.com.au

I've found them very effective for what I need, despite them being based in Sydney. They know the Brisbane market well, and have a dedicated Buyers Agent up in Brisbane sourcing deals on a daily basis who has grown up in the area and has a sizeable portfolio himself. I admit though, BA's are not for everyone - people need to review their own individual circumstances to see whether there is value. For me, it just worked out that way. So long as there is value, I will continue utilising their services and expertise.

Tenants will typically be within lower SE areas/status, however I believe there are bad tenants in every area. I know it's only early days, but I've been very lucky with the quality of tenants I've got in my portfolio. All long term tenants, who pay on time, very rarely ask for maintenance work, and look after the properties well.

Hope this clarifies.

N
 
Well done Nixba,

I've enjoyed reading your journey and take inspiration from it!

When your crunching your numbers and the interest on your 97% loan, have you covered the remaining deposit/costs with cash or equity from your other properties?

Thanks and keep it up!
 
sandyfeet said:
Well done Nixba,

I've enjoyed reading your journey and take inspiration from it!

When your crunching your numbers and the interest on your 97% loan, have you covered the remaining deposit/costs with cash or equity from your other properties?

Thanks and keep it up!
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Hi sandyfeet,

Thanks for the kind words. I'm glad my journey has inspired you :)

I'll break your question down into two sections;
a) Deposits, and
b) Holding costs

In terms of deposits, naturally over time I have moved from pure post-tax savings to more equity focused. Unfortunately in the beginning I never had any hand-outs or lump sum equity in existing properties or a PPOR, so I've just had to work hard at my PAYG job to be able to turn deposits around as quickly as possible. For my first property in St Marys, I paid the deposit 100% from cash savings. For my second property (this threads property), I paid approx 75% from post-tax savings, and 25% from equity. And for my most recent purchase, this has shifted as it was approx 80% from equity, and about 20% from cash savings. That has naturally progressed over time as would be the case for most people I would imagine as their portfolio grows and they start extracting equity through topping up loans. On the contrast, if I look at my girlfriend's portfolio for example - her next 3-4 properties next year will all come from equity, with no savings input required.

In terms of holding costs, if I take this property for example, my total holding costs in FY2014/2015 thus far have been: $3321.65. The rental income that I have received within the same period has been: $3360.00 - so all my holding costs are currently being paid for by my tenant. This includes all strata, property management fees, loan repayments, council rates, repairs & maintenance etc. On my other two properties, St Marys post the top up is sitting a little bit negatively geared, and the Waterford West house is about neutral pre-tax. Any negative cash flow will just come out of my PAYG savings. As I mentioned earlier, I carry a $5,000 contingency buffer for each property, just to be kept aside for a rainy day.

I hope this helps.

Kind regards, N
 
Hi all,

I just thought I would share a quick update on how this property has performed over the past 10 months since it settled on the 19th March 2014.

The property was purchased at $165,000 with a day one rental income of $280pw (day one yield of 8.82%). I just received valuation results back from Bankwest (current bank) of $195,000. This equates to a 18.18% increase on purchase price in 10 months. A top up at 90% LVR will allow a release of approx $14,000 to use for subsequent purchases, and will leave a property still cash flow neutral at 7.46% yield.

I still feel that these type of townhouse purchases show a lot of value in the SE Qld market, especially for newer investors who want to dip their feet into the market. I also still think the best is yet to come in terms of growth prospects for the area.

Kind regards,
N.
 
Hi Nixba,

Thanks for providing a detailed story of this purchase.

Im looking into interstate purchase as well, my main concern is the reno and repairs that need to be done prior to the IP being rented.

I note that you used RPG to assist u in your purchase, did u also used ur Trust in them to organise for renovations/repairs prior to the IP being rented, whilst u are still based in NSW (stuck in ur day job)?

How many times did u go up to QLD to inspect the property?

Regards,
k
 
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