Where are the cash flow deals?

[Heg]

Hi everyone,
Still struggling to know which area to target to get our portfolio up and running. Would welcome advice as to which part of NZ is good for CF+ve deals. Can't target everywhere at once, so just need a helping hand to get us started.
Also - would welcome advice on which areas to avoid at all costs!!
Thanks guys
Heg

[Ted]

Hi Heg,

Welcome to PT, Check out a few threads that might be helpful first.

http://www.propertytalk.co.nz/postt3501.html

http://www.propertytalk.co.nz/postt3292.html

http://www.propertytalk.co.nz/postt2946.html

http://www.propertytalk.co.nz/postt2651.html


As Ron says "Be an expert in the area you choose" im pretty sure he said ltht LOL so what I think is check out your area where you live and go from there. IE Muppet and I were driving down a street in Tokoroa just the other day, we saw a house that had just come on the market, we looked at each other and said 170-180k, it appeared in the local rag yesterday I think and it had 185k. I dont know if that makes us experts but we sure know what we would like to think a property would sell/buy for in the area we were driving and what it wasnt.

Cheers

[Gerrard]

Hi Heg,

the question to ask is not "where can I find cashflow positive properties". The question is "how can I find cashflow positive properties".

It opens up a whole new world of possibilities.

Gerrard

[Dean@Massiveaction]

Absolutely right Gerard.
Heg there are deals everywhere. I have found 3 this week. One in Howick, one in Pakuranga and one in Papakura. Once you learn how to find them, they are there. The simplest way to start is to start making lots of offers on property to start unearthing motivated vendors.

[Heg]

Tell me Pooomaba,

Do you find them yourself or use birddogs? I seem to have spent every waking second on the internet browsing different areas. When i spot what looks like a good deal, I then have no idea what the rent return will be per week as I do not know the area. I guess its just something that takes a lot of research initially. This forum has been a fantastic help in that respect me already. I just feel like I am wading through treacle at the moment.
Heg

[fudosan]

Hi Heg,

For rent information, you can use the one available from Tenancy Services at http://www.dbh.govt.nz/housing/tenan...t%20region.asp

The back of NZ Property Magazine or KPI (I think) also have such info. You can also use NZ Herald's ads to see the latest rent.

[Dean@Massiveaction]

Rental info here

http://www.dbh.govt.nz/housing/tenancy/Market-Rent/market%20rent%20region.asp

However I would suggest you are going about it wrong. To educate yourself try this. Pick say 6 streets close to where you live. Do a bit of research on them regarding rents, school zones etc. Then visit every property for sale in those streets. Talk to every agent and take note of what they say about the property and the area. Put in very low offers on every property for sale that you would'nt mind owning. Rule of thumb for every $100 rent you want to pay $50,000. That is rent of $300 a week, offer $150,000.
You just might unearth a desperate vendor. If you don't you at least now know enough about your area to put an offer in on every property that comes up for sale in those streets. That's how you can become an expert. I did that in Papakura and it worked unbelievably well. I found 10% return properties at up to 20% below valuation just by knowing the area really well. Sometimes properties get listed at cheap prices. If you know the area well you can put an offer in before anyone else knows about it.
If you're serious about investing try this. Pick one area and learn it. It works

[BusyLizzy]

I found 10% return properties at up to 20% below valuation just by knowing the area really well.

Hi Pooomba (and anyone else, for that matter!),
As another newbie still in 'research mode', I would be interested in knowing what '% below valuation' you target as a minimum, and what minimum % return you would look for before purchasing an IP.

Also, I have approx 70% equity in my home, and ultimately would like to build a portfolio of 3-4 houses in the next year or so. For my first property, is it smarter to look for a high yield, high equity or high cap growth property?

[Heg]

Thank you for the advice. However I live on the North Shore in Auckland so would be AMAZED to find a +ve cash flow in this area. Still , you never know.
Will keep you all posted. Your comments and time are much appreciated.
Heg

[RentMaster]

Hi pooomba

How can you continue to put in really low offers all the time without pissing off the agents? I know I have had a go at putting is low-ish offers and the agents really dont want to know about it. They think you are wasting their time. Maybe you have gained a reputation with the agents to show you are a serious buyer. What would you recommend to someone without that track record?

[sinead]

Hi Heg,

Have you considered what you can do to improve the yield of a property to make it positive cash flow e.g. find a 2 b/r house with 2 living areas and turn one into another b/r by putting up a wall. For $2k investment you could increase the rent by $50/week.

You sound a little defeatist when you say it is not possible to find positive cash flow on the Shore. If this is what you believe then you will make it so. How about considering a change to your belief and telling yourself that they are out there and then setting about the business of finding them or making them.

I am new to this forum but I bet you will find success stories here from the North Shore if you search.

Good luck

[mariner31]

My experience:

1. Ill repeat it in different words: "Emerse yourself"

2. I looked at about 40 homes before I bought the first. Some are just drive by's. Remember 1pm, 2pm Saturday and Sunday is Open Home Heaven.

3. There are some really crap dives on the Nth Shore so why wouldnt you find Cash flow postive? I can think of a few places around Browns Bay.

4. Its always easier to talk when you have deposit money ready to go.

5. The worse the property looks, the less youll pay, street appeal ads dollars, so an untidy lawn can save you money. Thats the lesser example of what I mean.

6. Dont give up, I almost lost hope at one stage, persistance paid off and then a floodgate of property opened. Wish I had more $$$ and nerves of steel to make them all happen

7. Good luck, let us know how you progress.

[Dean@Massiveaction]

Thank you for the advice. However I live on the North Shore in Auckland so would be AMAZED to find a +ve cash flow in this area

I'm looking ata property at lunchtime today in Glenfield. Purchase price low 400's returning $850 a week

How can you continue to put in really low offers all the time without pissing off the agents?

I make it clear to the agents that I'm a cash buyer and not a time waster. And if the agents are a pain I go to other agents. On properties I am really keen on I deliver a copy of the S&P to the vendor directly. Agents are legally bound to present an offer. I try and find an agent in each company and direct offers through them, even if the listing is with another agent

[Heg]

ok ok - I'm going to put my 'positive thinking means positve cashflow' hat on and go looking!!
Thanks for the moral support. Watch this space.....

[Cliffy]

I have found 3 this week. One in Howick, one in Pakuranga

Hey Dean, I've been actively looking in these areas, not quite ready to purchase - waiting for re-financing of previous deal to come through.

Do you mind telling me more details about these?

How did you find them?

List price v purchase price?

Can I take you out for a coffee / lunch and discuss?

Cheers,

Cliffy