Fulltime Property Investing

[Tony1]

Is it feasible to become a fulltime property investor ie without a regular salaried income? Having recently been made redundant, I like the idea of using my time doing something interesting like buying, renting, renovating and selling houses , instead of working for someone else. I am in a good financial position with no morgage and enough funds to buy the first investment without borrowing, but I am a real novice and am not sure where to start. Any advice or suggestions where I can go to find advice would be appreciated.

[drelly]

Hi Tony,

Welcome to the forum.

When starting into something new like property investment, it's hard to know where to start and what to ask. The best advice I can give you right now is to read, read read and read some more.

There really is a great wealth of information on this web site that will be valuable to help answer specific questions but right now I think that you need to get an overview of what property investing is all about.

There are a number of good books that would serve as an excellent introduction. Graeme Fowler (Orion on here) has written a great book called NZ Real Estate Investors' Secrets which tells the stories of real life investors. Other authors of value are Dolf DeRoos and Steve McKnight among others. Check out the book store on here.

After you have a general understanding of PI, then you will have a much better idea of what questions you need answered. Almost anything you want to learn about is somewhere on these forums... try the search function.

[Kiwi_Investor]

Hi Tony and welcome.
I believe it is possible to make a living from Property Investing.
There are many ways to do this, I would suggest the below points.

1. Education - Get educated about property investing and the different ways to make money from property.
2. Form a good team around you - eg Bankers, RE Agents, Accountant, Tradesman and the like. These people can work with you and help with the process of making a living from Investing.
3. Decide what strategy or strategies suit your situation best and apply this. Also have a back plan and entry exit plans, treat your investing as a business.
4. Have FUN doing it !

My mothers partner has 60 rentals in the Invercargill area and he is a full time investor/rennovator. So it can be done !!

All the best and good luck.

[fudosan]

Hi Tony1, welcome to the forum.

Apart from "read, read, read" as suggested by drelly, I'll also suggest "look, look, look" to look at lots of properties in your selected areas. It's a very good way to know the market.

[drelly]

Open homes are a great way to learn more about property... and to understand how little clue most real estate agents have of what makes a good investment!

[Stevegoodey]

Hi Tony

Welcome to the forum, apart from reading, looking and have deposits to get you started I think that it is also important to look at what type of person you are.

What I mean by that is to not kid yourself about if you would be prepared to muck in and clear a section or if you are better to be left with clip board and cellphone.

Either way you can make good money but you need to be realistic and setup your systems early.

Also have a look at http://www.propertytalk.co.nz/postt2832.html

And read the G Fowler book as advised above, great info for someone looking for their niche.

All the best

Steve

[Tony1]

Wow, I'm impressed with this forum. I post a rather vague and non specific question, and within a few hours there are all these helpful and very specific answers posted. Thanks for all your responses. Steve, your story is fantastic to read and thanks for sharing it.

So, I suppose I better start reading...

Cheers
Tony

[SimpleSimon]

Hi Tony,

As someone who has only recently ventured into property investment I can tell you from personal experience that there are many pitfalls for the unwary. I have learnt a couple of those the hard and costly way.

I had read a couple of books before starting off but I really wish I had been aware of these forums and the wealth of information and support contained here before I set out. I'm sure I could have saved a lot of money and stress.

A thread that I have particularly learnt from is here, but there are many others as well.

I am on the verge of purchasing my third property, this time following the kinds of advice and suggestions I have found around here and from Ron's videos, and this one will be immediately profitable with great potential for adding value and capital gain.

So I'd just like my thanks to folks around here for sharing their knowledge and experience.

Cheers

Simon

[Glenn]

Having recently been made redundant, I like the idea of using my time doing something interesting like buying, renting, renovating and selling houses , instead of working for someone else.

I have come from exactly the same situation as you and yes it can be done. Perhaps I have been lots slower than others but then the kids needed to be fed and educated along the way as well.

Just my penny's worth though.

Having made some wise and some slightly less wise investments along the way I have come to the conclusion that one has to make a few small mistakes to make it all sink in.
I see lots of investors in my property management business. Some are my clients and some buy properties off my clients.
I really have not seen too many come from nothing and build a large portfolio by simply only investing.
I have come to the conclusion that the biggest risk and problem that investors suffer from is procrastination. Most are looking for a mythical wonderful investment.

Some experts suggest finding a niche and sticking with it. I believe this is the way to go despite not having done that myself in the types of investments I go for.

I have seen some fantastic make overs and great profit taken here and there and the best deals seem to be plain ordinary houses in serious need of new gardens, rip up the carpets, paint from top to tail.
So if this is your thing go for it.
Do not think about it for too long. There is never a perfect time.
Just take on what you can cope with.

[toby]

Hi Tony,
I think it poignant to point out that making a foray into real estate investment full time when you haven't done it part time would in my opinion be fool hardy.
I'm not saying not to do it, however if you haven't/can't do it part time is it wise to undertake doing it full time?

As in any business cashflow is king. I would suggest you create cashflow first, ie.Take care of todays cashflow needs first before you build wealth.
If you try and buy and hold without cashflow using only capital you have raised and hope to forge a living you will get a real life seminar.

Realistically you need to concentrate on trading houses before you build a portfolio and I would suggest you have a significant amount of money stashed away to see you through until you get off the ground proper.

You will need either good strong high cashflow OR someone who does to build up any sort of portfolio of properties.

Remember you will be effectively going into business dealing in houses and there are not to many outfits that like lending money to unemployable people.

My two cents worth.

p.s TAKE CARE OF TODAYS CASHFLOW NEEDS FIRST!!!

[Propoholic]

Hi Tony1

Previous replies pretty well cover everything!

By joining your local Property Investors Association and reading lots of books and posts on this forum/website you'll pretty much have all bases covered!!

Ensure supposed 'experts' that give you advice are experienced in property investment themselves. Some of the poorest property investment advice I have received has been from accountants & lawyers... they are no longer my accountant or lawyer!!

[RentMaster]

I agree with Toby.

Starting out with no clues and taking it all on as a full time occupation sounds rather dangerous to me. Property investing requires quite a bit of cash up front, and so there is potentially quite a bit of cash to loose.

We all learn from our mistakes. Mistakes are inevitable, and in the long term they are a good learning experience. But if you are starting out with nothing, mistakes can be a lot more devastating. You need to be able to afford a loss.

Having said all that, I still think you should read about property investing and learn as much as you can, and go to it. But I think you should have an escape road in case you need it.

[Julian]

And don't forget the banks - those lovely people in their pin striped suits. They will feel a lot more comfortable loaning you money if you have another source of income. Finance is the life blood of any investor.
Get yourself a job (horrible word, I know) that allows you enough physical and mental time to get started in your property investing career. In time you can wind down with the job if you like, or perhaps change it for something more aligned to your investing.
Good post. Best wishes.
Julian

[NZMtgBroker]

You need to consider your cashflow position if you have no other income. Most lenders will take into account 75% of the rental income and then make an allowance for living costs. You may find that the ability to borrow will answer this question for you. Sure you may be able to purchase a couple of properties but this may be your limit financially. This will then mean going to a low doc situation at a slightly higher interest rate. I would suggest you need a financial plan in place to understand your borrowing ability as you could do all the ground work and find your ability to borrow may be the restricting factor.
Regards

[rajohn1]

I'm a full time property investor. - it didn't take me long to get out of the rat race, and my partner joined me about a year ago.

We only started in 2000, and in the first year we only bought one.
(We now have 60 IP's and 13 waiting to settle. spread over Australia and NZ)

We mainly buy and hold residential, but we choose our properties very carefully, with cashflow being the main criteria.

Cashflow and finance are the biggest headaches for us, but luckily we focussed on cashflow from the start.

Note that we have several friends that are in a similar situation to us, but none have the same strategy as us. They renovate, trade lease option etc.

Once you quit work, you have much more time to look for better deals.

Whether you can do it will depends on your creativity and patience, your ability to know who to listen to (successful investors) and who to ignore (most "experts" with lots to say, but not much property and still tied to a job).

Also whether you are solution rather than problem focussed helps.

JF