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  • PI - Where to Start

    Hi all

    Real beginners here trying to understand the order to get started.

    I have read books and magazines, have a meeting with an Accountant next week, think we know where we want to buy the 1st PI (Nthern Suburbs, Wgtn), but would like to know if anyone can provide a simple "check list" of things to do to get started (and in what order). Simple Q's like:-

    1) Should we join the local PIA - is it worth while for beginners, what benefits does it provide
    2) Who do we engage when and in what order (Agents, Banks, Accountant, Lawyers, Who Else ?)
    3) How do we get a timely view of properties available (apart from the web and weekly distributions)
    4) Anyone got recommendation on good PI Accountants / Lawyers in the Wgtn area
    5) How do we define which PI Strategy fits us best (and do we do this before the Accountant), and how do I go about building it.

    Apologies if these seem real simple Q's - we have only bought 2 houses in our lives, are essentially mortgage free (Equity >$200k) and wanting to invest for the future through Property.

    So many Q's, so much unknown
    Thanks in advance for your guidance - WINNIE
    To Know Does Not Necessarily Mean You Understand

  • #2
    For me, I would suggest contacting the bank or a broker to get an idea how much money you can get from the banks. With >$200 equity you have a good starting point.

    Then I would research different areas. I start with open homes in various areas to get a feel for what is out there before contacting agents in specific areas I am now interested in.

    Find out what the expected rents are in different areas. Talking to property managers can help here, or www.tenancy.govt.nz which has actual market rents listed.

    Accountants advice is needed before signing anything. You need to get the structures right. I only get lawyers involved right at the end when I am interested in a specific property. Their time can be expensive.

    There is a start. I am sure others will add to it.

    Comment


    • #3
      Re: PI - Where to Start

      Welcome to the forum, Winnie,
      Originally posted by Winnie
      1) Should we join the local PIA - is it worth while for beginners, what benefits does it provide
      Yes. I joined the local PIA several years ago and have benefited a lot, considering the free magazine, discount card, monthly meetings with speakers from different property professions, networking, etc.

      Comment


      • #4
        Hi Winnie,

        3) How do we get a timely view of properties available (apart from the web and weekly distributions)
        For me this is the hardest part so my piece of advice here is to talk to lots of real estate agents and give them your brief of specifically what you are looking for, and i mean very specific. This should match your investment rules.

        Once you have done this spend the time to look at what they come back with. You will find that some have no idea of what you are looking for, what is a suitable investment property, etc. Ditch these agents immediately!

        For those that do come up with appropriate opportunities, look at the properties carefully and tell them exactly what appeals and doesn't appeal about each.

        Once you have done this, make it clear to them that you are committed to purchase a property and ask them to call you as soon as any suitable opportunities come in. You must be prepared to meet them to look at places on short notice.

        Once you have done this you should only be receiving calls about deals which suit your rules and wishes.

        Finally, what we did was notify these agents when we were and were not in a position to buy. This prevents them from wasting their time, and when you are wanting to buy they know you mean business and will act.

        IMO this is the best way to efficiently get good deals. Keep us updated with your progress!!

        cheers

        kolzee

        Comment


        • #5
          Winnie,
          Knowing the market is crucial to your success.
          I strongly advise you to pick one or two areas and get to know it like the back of your hand.
          Starting out, the old adage look at 100 put an offer in on ten get three accepted buy one is important.
          Where you'll come unstuck is not knowing the market.
          Here's a list that you should view EVERY week.
          Property press
          Real estate mag
          Agents
          T&E
          Homesell
          Open homes
          Viewing properties
          Hutt News
          U/H Leader
          Remember above all else Believe it is possible and you will create the financial freedom you seek.
          Winners never quit, Quiters never win.
          P.S Get your entities sorted first.
          P.S.S Read Graeme Fowlers book

          Comment


          • #6
            All - thanks for your kind advice. I'm guessing the first thing we need to do is to set the strategy around yield, ROI, CF +ve vs CF -ve as these are critical to the areas to look for property in.

            In simple terms, can anyone suggest what the strategy should cover. Can Acct's give advice on the pros / cons of CF +ve vs CF-ve as there seems to be different views on what can work.

            Area we live in (Johnsonville) has 2 Bdrm's renting $200 - $250, with purhase $170 - $200k. Rates say $1000, Insurance (House and Contents) $600, so how would we then calc the "performance" of that against a particular startegy (yield, ROI, Cash Flows etc). We would be borrowing 100%

            Thanks again for your help
            Winnie
            To Know Does Not Necessarily Mean You Understand

            Comment


            • #7
              Hi Winnie,

              Please spend some time and study the past messages. There has been a number of discussions on how to calculate yield, cashflow, different strategies, etc. Good luck on your investment journey!

              Comment


              • #8
                Fudosan - many thanks for the response. You've just confirmed what I thought in that there are no easy answers (I was hoping there were), and to do this properly, we need to ensure we put the time in.

                I'm off a searching
                To Know Does Not Necessarily Mean You Understand

                Comment

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