Trading property flat market vs rising market

[Bluekiwi]

What is dishonest about a cold hard cash lowball unconditional offer to a vendor who has been burned by many conditional ones falling over.

Asking sincerely.

[Bob Kane]

What is dishonest about a cold hard cash lowball unconditional offer to a vendor who has been burned by many conditional ones falling over.

Asking sincerely.

Buyers are usually honest - you can't argue with cash.
Dishonest vendors are the problem:
- Buy a leaky home for a lowball amount.
- Splash some paint about, hide a few mouldy spots and present a glowing builders report.
- Sell for a high amount.
- These vendors are often RE agents.

[marklowes]

Buying well is key - Do this in a rising market and yes you can flip with just staging and no reno needed and make good money (that you will pay tax on).

Develop relationships with real estate agents and find motivated sellers, overseas sellers, let them know you are flipping and will use them again to sell in a few months time - be careful to play by the rules as agent acts for seller not you - Ron Fong (ronovations?) springs to mind as someone who often crossing the line into unethical behaviour and has been recently fined a few 100k for this -

Graeme Fowler (Orion on here) also flips occasionally and is a good role model to follow, can make money with minimum reno in rising HB market - I think he has he own facebook group worth a follow

[BlueSky]

He is buying commercial these days. Could he see the writing on the wall?

[Wayne]

He is buying commercial these days. Could he see the writing on the wall?

He's still trading residential.

[Nick G]

Margin what whatever I could sell it for minus what i paid for it :-) Made a couple of small losses, one large one, mostly profit. Usually 20-30K. Wish I'd kept them all :-)

I have his "Massive Action" DVD series kit right in front of me here on my desk.

Bob Kane, yep of course you can do in a rising market.
But I am talking an instant on-sell so no waiting for market to rise, and in particular looking at a flat market situation.

Nick G yep that was a flat time, what was the margin with no reno.

[MaddyBlu]

My wife and are looking at property trading as our next plan.

As we are beginners in the trading sense of property (own our own house and one buy+hold) we thought best to wait until a rise in the property markets as a rising tide can hide a multitude of sins. Buying in a flat market might catch us out.

For those that started trading, what kind of market did you begin in? Would you have done it differently if you had your time again.

Our plan is;

Beginning flat market (such as now) - focus on paying down debt and improving current property

End flat market- yields will be higher so look to purchase buy + holds

Beginning rising market- delayed settlements, new builds, begin property trading.

Middle/end rising market- sell off trades, quicker turn around trades.

Rinse and repeat.

Thoughts?

Not sure if you have a plan ahead now after 50+ comments but i thought i'd just give my 2 cents.
My partner and I have been trading over 4 years here and there; starting from when we were 26 but only doing it seriously for the past 2 and half years. We've seen a lot of traders (and agents) leave the market in the last two years. Everyone is a 'winner' during a rising market! We've found the key is always to sell in the same (or better) localised market you bought in and for that reason we try to sell within 3 month.
We've done a lot of properties in the last two years and i'd say 80% of them we added substantial non-structural cosmetic value; making the house more desirable in various ways. The one where we lost money we didn't follow our buying rules and we got our market and end-buyer target wrong.
We're kind of glad we only got serious during the 'down-turn' or the flat market because it got us to get strategic; spending time understanding why, how and where we made the right and wrong moves so that it is a repeatable process.
It helps to join support groups and surround yourself with those who want to or have done it before - that goes for anything you want to achieve really!

[Don't believe the Hype]

Margin what whatever I could sell it for minus what i paid for it :-) Made a couple of small losses, one large one, mostly profit. Usually 20-30K. Wish I'd kept them all :-)

This is something I hear a lot.

Using trading as a way to generate income to buy and hold is ok as long as you think about it as any other job but if you just want to trade houses you're just buying yourself a job.

Stop flipping, you stop earning.

Houses I renovated for rent a decade ago we spent less on that if we were renovating for sale (saving money), the rent has steadily climbed and the values are (on paper) far in excess of the profits I would have made by flipping them.

The concept of compounding which I learned to fund my first deposit ends up turbo charged a decade of more later and leverage added to compounding interest changes the game.

If you have the ability to earn big $$ at your day job either now or by focusing on your career - do that, utilise the pay check to leverage into cash flow assets - use the flipping skills to understand your rental target market, maximise rents by investing in smart upgrades and before too long you'll be making more $ each year from your portfolio than you did from your day job and then you've bought your time back to focus on whatever you want.

[Bluekiwi]

This is something I hear a lot.

Using trading as a way to generate income to buy and hold is ok as long as you think about it as any other job but if you just want to trade houses you're just buying yourself a job.

Stop flipping, you stop earning.

Houses I renovated for rent a decade ago we spent less on that if we were renovating for sale (saving money), the rent has steadily climbed and the values are (on paper) far in excess of the profits I would have made by flipping them.

The concept of compounding which I learned to fund my first deposit ends up turbo charged a decade of more later and leverage added to compounding interest changes the game.

If you have the ability to earn big $$ at your day job either now or by focusing on your career - do that, utilise the pay check to leverage into cash flow assets - use the flipping skills to understand your rental target market, maximise rents by investing in smart upgrades and before too long you'll be making more $ each year from your portfolio than you did from your day job and then you've bought your time back to focus on whatever you want.

Some good points there, you have to really knuckle down and get a plan before you do anything.
I would suggest getting as many cash flow neutral rental properties as the bank will allow you (its a lot less and a lot slower than it was back in 2008 when I did it).
Before you start trading.
I tried to do trading and holds at the same time, and it hurt when I made 30k on a trade, and 2 years latter the property was worth 250k more than I sold it.
But certainly when you are maxed out on rentals with the main trading banks, start trading then.

Cash flow neutral with rental properties is the way to go.
As then over time, maybe 10 years, they will start making you money, you just need to hold them, its a long game, long plan, not fast money, but big slow money.
Over that long term your mortgage is inflated down, your rents go up, and your asset value rises, and your yields on purchase price should get a lot better.