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  • IP beginners!

    My partner and I have been to a couple of seminars, are reading books and have approval for $300k. We are wanting to buy cashflow positive do-ups as I am a builder. We were in Wanganui recently and saw we could get properties that were around $100k. We would like to buy three and smarten them up a bit. We are going to join the Wellington Property Investors Association. What do you think?

  • #2
    Welcome Geeza.

    Are you borrowing 100% if so at 100k the properties will not be CF+ve.
    How do you eat an Elephant?
    One Bite at a Time!! (Source: Spaceman)

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    • #3
      Re: IP beginners!

      Welcome to the forum, Geeza.

      We joined the Auckland Property Investors Association a number of years ago when we had near zero knowledge about properties. That turned out to be a very good investment on the membership fee we paid.

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      • #4
        don't be afraid of negative gearing if you can put it against other income..

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        • #5
          Hi Geeza

          Interesting post.... and Welcome aboard....

          Cash flow positive in Wanganui is getting very hard to get.... Believe me I should know... I live there. I stole most of the good properties about two years ago

          Most properties that are being sold as cash flow positive are in fact the bottom of the barrel. You can only rent rubbish to rubbish. They don't pay the rent so it is no longer cash flow positive. Also the gang problem and the white trash areas. But don't give up looking. I'll race you

          You haven't said where you live.

          Joining an association may not be quite so straight forward. There is a group that are currently in Wanganui that are in the throws of starting an association. Being a local group it may be the group to join. Obviously you should have purchased before you consider that avenue. If you purchase somewhere else there would be less of an advantage for you to join that group.

          Making a guess if you live in or near Wellington then it may be to your advantage to join that group. The closer you are to mentors the better. I strongly recommend joining a group even if you haven't purchased yet. The knowledge that other like minded people are prepared to pass on for "free" is "priceless"

          If you want any advice for the Wanganui market or Property Managers or tradesmen or .... or ..... send a PM I'll be glad to help if I can.
          Counter cyclic means always swimming against the tide

          Manawatu Property Investors' Association

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          • #6
            Hi Geeza
            To confuse matters for us newbies, there are TWO property investors associations in Wellington. The Wellington PIA and the Capital PIA. To make my decision about which one to join I called both and asked the same question, "what is the difference between the two associations". Fair question I thought. The WPIA couldn't really answer me straight and umm and ahhed for a while. The CPIA straight away gave me two valid answers, one of which is that they are part of the national NZPIA where as WPIA are not. Guess who I chose. I went to the CPIA meeting last week and found it very good. Lots of people from newbies to highly experienced and all in between. The WPIA has a meeting next month which I will proably attend, everyone deserves a second chance, and see how it goes. The meetings are free to attend but the perks for joining are well worth it. May see you there.

            Jarrod

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            • #7
              IP beginners

              Hi guys , thanks for your replies. Really appreciate it. Yes , we are going to borrow 100%. What does ve mean ? If you had approval for $300k what would you do. Any suggestions would be welcomed. We live in wellington. Should we keep looking closer to home? Total novices but keen to learn as much as poss.

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              • #8
                Hi Geeza

                CF+ve = Cash Flow positive.

                This means that you have more money coming weekly in rent than going out in bank payments, rates and insurance.
                Basically to be CF+ve the rent on a $100k house needs to be at the very least $200/wk. This will give you a 10.4% gross yield.

                Regards
                "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

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                • #9
                  Janesco wrote:

                  Most properties that are being sold as cash flow positive are in fact the bottom of the barrel. You can only rent rubbish to rubbish. They don't pay the rent so it is no longer cash flow positive. Also the gang problem and the white trash areas.
                  The above is so true, pity the truth isnt told at some of our favourite weekend seminars.

                  The buyers agents still allow for $600.00 pa maintenance and minimal vacancy/loss of rent in these one horse towns - the deal can then be sold as CF+ve??

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                  • #10
                    I always laugh when they quote those dogs as $600 per year maintenance

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                    • #11
                      Hi Guys

                      Whitt said:
                      "The measure of a mans success is not by the quantity in his portfolio but by its quality."
                      Too true!!!!

                      Regards
                      "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

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                      • #12
                        Janesco wrote:

                        Most properties that are being sold as cash flow positive are in fact the bottom of the barrel. You can only rent rubbish to rubbish. They don't pay the rent so it is no longer cash flow positive. Also the gang problem and the white trash areas.

                        Whitt said:
                        "The measure of a mans success is not by the quantity in his portfolio but by its quality."

                        I think the above two quotes are suitable to be teak framed and placed above the reception desk at PropertyTalk corporate headquarters.

                        'You may drive around town in retreads but do not undertake a long distance trip with retreads.'

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                        • #13
                          IP beginners

                          Hi guys , thanks for your input. We`re learning more everyday. Going by your comments , would we be better off looking at say 2 houses around the $150k mark ?

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