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**Julian** · 06-09-2005, 09:19 AM

You are just as likely to get a multitude of different answers on this site as anywhere else.

I suggest you start with your goals and work backwards. Only consider action that moves you towards your goals.

At times there will be a multitude of possibilities, and this is when you should listen to your gut feeling.

Finally, take action. All the analyses, pontification and theorising will take you nowhere unless at some point you take action.

Best wishes.

Julian

**BusyLizzy** · 06-09-2005, 09:55 AM

As a fellow newbie, I would personally suggest reading "Residential Property Investment in New Zealand" by Lisa Dudson and Andrew King.

http://www.propertytalk.com/componen...71/Itemid,116/

I read this when I first decided I was interested in Property Investments, and it definitely helped me to understand the basic issues, and to make me realise I needed to determine what MY buying strategies are (which can and will be be very different to my friends, and other people on this forum)

It's a relatively short book, and easy to read - but most importantly, it will explain how to crunch the numbers and to determine whether or not a particular property may be a good buy for you in terms of your PI strategy.

There are many other books around that are equally good - but I found this one good to start with for understanding the basics.

One more suggestion - do not necessarily listen to the advice of well-meaning friends unless they have a successful portfolio themselves! The one thing you will find on this forum is that people will generally not offer advice on whether or not a particular property is a 'good buy' without understanding YOUR particular buying strategy. What is a good buy for them is not necessarily a good buy for you (and vice versa).

And that means you need to understand your strategy yourself, first!

Hope this helps! Good luck!

**No Regrets** · 06-09-2005, 10:23 AM

Luke,

Along the same lines as Julian I would suggest that you come up with some goals, both short and long term. Once you have decided on your goals you can then look at what is needed to help you to reach them, and if you decide to use realestate what types of properties/strategies you will need to use.

The reason why you get different advice from everyone is because everyone is different, and most people have different goals, and there are also many ways to skin the cat.

You have a decent amount of money saved up so make sure you invest it wisely and with a set strategy in place, and also dont be afriad to take action, it is very easy to get cold feet when starting out.

Also, with regard to the cost of housing in Hamilton, why have you limited yourself to only buying in Hamilton? If a cheaper house fits your strategy better, then find a town in NZ with a cheaper house.

Hope that helps and good luck

Rob

**cube** · 06-09-2005, 11:08 AM

Luke,

Don't worry too much about what other people say - ask enough people, and someone will have an opinion that backs up your reasons to not take action!

Setting goals is good, and needn't be too scary. Your aim may be nebulous and difficult to measure - "Retire early with enough money and walk off into the sunset with the partner of my dreams" (pretty much everyone's aim), but your goals are things that are more concrete that will get you there.

You could start off with

1 Property by Christmas that meets my criteria
3 by the end of 2006
10 by the end of 2007
Retire early with enough money and walk off into the sunset with the partner of my dreams by the end of 2010

Even that first goal, which is perfectly acheivable, needs some work - what are you criteria, how do you find a property that meets them, how do you finance it? You could break that goal in to mini-goals - have your criteria written down by the end of September. Visit 10 Open homes by 13th October. Put in at least 3 offers by end of October.

See - isn't it easy!

So why am I sitting here writing about it, and not out there doing it........

Remember, once you have worked out where you want to be it is allowed (but don't tell anyone I told you) to decide that property isn't the way to get there

Good luck

cube

**JohnL** · 06-09-2005, 11:53 AM

I also suggest you meet with some other successful investors.

The local property investors association for a start.

You missed morning tea with Robyn and many colleagues last Friday in Hamilton (I know its more difficult when you work).

I happy to give you my thoughts, if you want, as I am only 50 minutes away from Hamilton.

If you are really serious about taking action, there are many who are happy to give advice. Most successful people are not so interested in wasting time with 'tyre kickers'.

John

**FreezingandHot** · 06-09-2005, 12:16 PM

Hi Luke

John has made a great comment about finding people to talk with. As a newbie(4 months ago brought my 1st IP) I too was confused by all the numbers, types of properties, and all things involved with buying IP,s.

I asked lots of questions and listened to the answers that best fit my criteria.(goals)

I now have a great mentor who advises me from time to time and I find that he is always willing to help. He is successfull aand wants other people to succeed as well.

As John said, find and talk to people who have had success through property investment, set your goals and stick with them, I am learning all the time about property and think that I learn a lot more when I ask questions directly relating to my situation and what I want from property.

Good luck.

FH.

**NZGEMS** · 06-09-2005, 12:32 PM

Hi Luke
good on you for deciding to take the leap into investment property, only you can decide how that looks for you unfortunately. I wouldnt live in most of my houses if that is any help but my tenants are happy there and paying my mortgage off for me. That is something I think you should really look at which probably rules Hamilton out unless you are willing to do some work to increase value, you are best to look for houses that pay their way and put a bit of money back in your pocket.

i am happy to meet with you one day for a chat you can shout me a coffee but not till i am back in NZ again, I head off to USA for a month next wednesday.

that is something you might want to consider doing a course or two on this type of thing the last thing i do in USA before I return is go to John Burleys realestate bootcamp that will really set you in the right direction are you ready to spend $10 or $12000 right now that is what it would probably cost $5 for bootcamp US which is 7 or 8 NZ another $2k for an airfare and accomodation there but it IS WELL WORTH IT. Might be too early I dont know the main thing you need to do is make a start perhaps keep an eye on this forum good on you for posting on it. or try Johnburleys forum too. www.johnburley.com let me know if you cant get on [email protected] as they had been having some trouble with the website.

You have had some good advise here set yourself some goals, you need to decide what you are comfortable with but i would advise against properties that take money out of your pocket to start with, they can come later if you want when you have several throwing off a good income already.

Best of luck

Robyn

**leapy** · 06-09-2005, 02:25 PM

Keep reading and don't be afraid to take your time. Set yourself a deadline for buying that you are comfortable with - it might be 6 weeks from now, it might be six months. Better to have well-considered strategy set in place for yourself and take six months longer to start buying, than to feel there is some race you are losing by not getting started right this week and to go off half-cocked.

There are some very smart people out there, and there are some very smart property strategies. But the buck very literally starts and stops with you. Don't give away your responsibility for making the best decisions for your own life to some guru. You know your own strengths and weaknesses, what will satisfy you and what will be intolerable.

Mentors are great - but the very best thing you can do is invest in your own sense of control and responsibility.

Trust in your own knowledge-gathering and sifting process - and keep at it. The huge volume of new information you are currently processing will soon settle into a set of principles that seem workable to you.

Try on different ideas for size and put them through the mental paces to work out if they will be an appropriate stepping stone to what you want to do next, and if they will enable you to sleep at night.

Seek feedback - but don't trust any one person's feedback 100%. The final buck does rest with you - and you need to embrace that.

I bought my first house at 21. Starting young gave me a confidence that has underpinned future decisions, and has given me financial and lifestyle opportunities that have brought me happiness.

And at the end of the day - ain't that what it's all about?

**Dorien** · 06-09-2005, 03:23 PM

Hi Luke

Well done that you have $20,000. Good for you!
I would suggest that you don't spend a cent of it until you are a little more sure of your direction. There are many property investors in Hamilton. I would suggest that you start by reading books and learning about the local market. When you are OK with the number crunching go out and find some good deals then offer them to the local Hamilton Investors for a finders fee. Even if you don't know them yet maybe you could explain the bones of the deal on this website and if others agree that it is a good deal they will gladly pay you and spend time with you to teach you what they are looking for. That way you can slowly get into the game and find out where you are most comfortable in the market, before you commit your precious $20,000.

To your success Dorien

**luke21** · 06-09-2005, 03:24 PM

Good Information

Thanks everyone for all the good information I will now try to reply to you all. This could take a while haha.

Julian

Thanks heaps for what you said, I understand I do need to make goals, but would like some advice on how other people have started, and what these goals should be. But as you say its just really about taking action
Cheers

Busy Lizzie

Thanks for the link to the book, I am definitely thinking of getting that. It would be good to get something that gives me some knowledge on the numbers and things. as at the moment I think I work on the numbers that just seem right in my head, would be nice to understand a bit more.
Thanks

Robsta.

I understand what you are saying but as I said to Julian, I would just like to know what goals I should be setting are the examples that Cube wrote what we are talking about?? If so then this is all great information. With regard to the house prices in hamilton, I have thought about this before I looked at buying some houses in Tokaroa. They were 70k and getting around $200/week. I was quite keen but then got told, that would I get year round tenants and what are they going to like from Tokakroa. This comment was made from someone with no investments but it sort of stuck in my head. I just dont know whether I should or should not, and would love someone with experience to tell me about buying in places where most people would think is risky. Or is it true it would be a bad place to buy??

Cube.

Thanks for the info on goals etc all good stuff. Is this what everyone thinks I should do. I am thinking it seems right. Also as you broke it into mini goals and there was the part about how will i finance it, should I have been to the bank by now and got pre approved for a set amount. Everyone tells me that this is what I should do. I have no idea. Also I get a bit scared putting in offers, I have done this once before, and got worried that I was tied in, of course I was not as I had done the right things, but I would also like some tips on the best ways to make offers and how to work out how much I think a house is really worth etcetc
Cheers

John

Yes I am truly interested and would love just to get a bit of advice from some people in the know. I understand it is solely up to me in the end, but it is quite dawnting at the moment the amount of differing opinions i get from people, because of the recent hike in prices etc, people say they will drop[ others say no.
Are there any more meetings coming up
Thanks

Freezing hot

I totally understand where you are coming from, and think that a mentor or someone to just bounce my thoughts off would be great. I mean I dont know if the reasons why I want to start in property are similiar to the reasons that you guys have started in the market.
How do people get in touch with a mentor??
Cheers

NZ Gems

Thanks for the advice, and I would definitly shout you a coffe for a bit of a chat and get some advice on goals, and how to do things etc. Thanks heaps.
I will get in touch sometime at the en of October???
Thanks

Leapy,

I understand where you are coming from. there are a few things, the part where you say set a time frome could be 6 weeks could be 6 months, this is fine but I have absolutely no idea what I should be doing in this time, should I be looking at every single house around and what happens if i get to the end of the time and have found nothing, I have no idea where to start really and not to sure how to work out the numbers so i can work out whether a house is a good buy or not. I will start to set goals but I think i just need to learn a bit more so i know what I should be looking for.
Thanks

Cheers everyone, please keep writing I am very interested in learnign more about all this and am very thanmkful you all took the time to reply.

Cheers

**No Regrets** · 06-09-2005, 04:07 PM

Hi Luke,

With regard to your goals they are basically what you want to achieve in your lifetime, and then broken down into milestones in order to reach those goals.

You will probably find that you already have a number of goals, but just dont realise that you have them. The way I went about it was to get a big blank piece of paper and write down my ideas of a perfect life, for example I dont want to have to work for someone else, I want to have the choice to do what ever I want with my time, I want to be around while my kids are growing up as well as the odd material goal like I want to own a 65 Mustang.

I then took a look at these goals and summarised what I need to have/do in order to accomplish them.

From here you can go about setting milestones which is basically what Cube was saying.

For example to achieve freedom from having to work I need passive income, to get passive income I need assets and I have chosen property as one of these assets. So I can then look at the type and amount of property needed to meet my goal by the deadline that I have set.

I also think that in order to have the motivation to achieve your goals you not only have to want them, but you have to REALLY want them

You talked about risk with reference to Tokoroa.
Risk is directly proportional to knowledge.

If you try to drive a car on the road without a license or any knowledge of the roadcode then this is risky and you are likely to run into difficulty. However the more you invest your time in reading the road code and talking to other wise drivers the less risky your driving will become.

Education is the most valuable resource, and as a number of people have already said talking to those that have been there and done that is priceless.

There is a new book out there that is very cheap called Wink and Grow Rich, that I think would be great reading for someone in your situation.

Just remember that you can read and talk until the cows come home, but you still need to DO to get somewhere. To quote from the book I suggested, "To know and not to do is not yet to know"

Hope that helps, and keep us posted with your progress!

Rob

**leapy** · 06-09-2005, 04:36 PM

Munching the Pachyderm

OK. Let me relate the process I went through last year when teaching myself the workings of a new property market I wanted to become involved with.

1. Took a deep breath and quit panicking.(You eat an elephant one bite at a time.)
2. Sought and actioned some book reading recommendations.
3. Joined the local Property Investors' Association.
4. Kept searching for and reading websites that contained pieces of the puzzle.
5. Kept having many conversations on the topic of property. (Don't try to judge whether people's opinions are right or wrong. Just listen and ask for clarification for now.)
6. Opened a word document. Titled it "My Principles Of Property Investing".
Every time I heard a piece of knowledge or advice that seemed to make sense to me, I copied it to this document. The document grew rapidly. I didn't fret over adding contradictory new pieces of info to it.
One month from the day I started the document, I read through what I had accummulated, and bolded any statement that I found myself in particular agreement with.
I kept stashing any piece of info that seemed like a piece of the puzzle. One day each month, I bolded the pieces that stood out as especially important or right when I reread it.
Continued this process month by month. After three months, I copied my bolded statements into a new document. I entitled it "My Property Investing Strategy". This formed the bones of isolating what strategy made the best sense for me.

Let me put the disclaimer up front that I am just Joe-elle Average Investor, with a day-job. This is not advice from a professional.

Quit believing you need spoon-feeding and start munching the pachyderm!

Good luck.

**muppet** · 06-09-2005, 08:14 PM

Hi Luke21

Welcome to the Propertytalk forum.

You certainly have caused a good discussion with your initial post.

Several people have suggested that you set some goals but nobody has really answered your question.

What they should be giving you is examples of some goals to give you an idea of what you should be buying.

O'kay, here then may be some ideas to which you could be modelling your goals on.

1. Do I want cashflow positive properties?
2. Do I want to be negatively geared?
3. In what way do I want to buy my properties in?
4. How big a deposit do you want to pay?
5. How much prior approval will the banks give me?
6. Do I want one property in Hamilton or several scattered about the country located in small towns?
7. Do I want to buy in the immediate area or buy far away?
8. Back to deposits - will I use my $20k for one deposit or 4 properties at $5k each?
9. Will I manage my property/s or get a PM?
10. Do I care in what location I buy in?
11. Go to as many open homes as you. This will give you some idea of what properties are available.
As Dolf de Roos rule says 100:10:3:1.
100 open homes
10 offerput in
3 arrange finance for
1 buying

If you can, read Dolf's book Real Estate Riches
Try the library or Trademe.

Sooooo, some questions to get clarification on.
These questions and many I can't think of at the moment will help you set your goals and set your direction in property investing.

You mentioned about buying in Tokoroa for $75k and having a tenant paying $200/wk. Would love to know where this property is. Please send me a private message with the details.

I have 3 properties in Tokoroa and they are rented for well under that.
To get $200/wk rent in Tokoroa you would be paying $140k+ and be buying location.
Most places rent from $120-$165/wk.
If you visit Tokoroa let me know and I will give you a conducted tour.

Good luck with your goal setting and direction.

Keep us informed on how you are doing.

Regards

**Glenn** · 06-09-2005, 10:17 PM

Well Luke I have read what you asked and seen what everyone else has answered. All good stuff but no one has actually mentioned the big question that you pose.

Should you buy a property that you would not want to live in yourself. I know of a number of really successful investors that take this moral high ground.

I personally think that is such a narrow view of life.
The world is full of very different people and many of them will make just fine tenants in quite different houses to the one you live in. It just needs to meet their needs. They might even come to love living there because it will become their home.
Most commentators have mentioned that we investors all have our own little area of investing.

I get the felling that it is best to start with something that you can identify with. There are so many variables out there if you start with a city or suburb that you are familar with this will reduce the risks. Risks in this game are not just about Ground Hog day. Like you wake up every morning and nothing that you do will change anything. Then suddenly one morning it has all changed and you do not know why.

The biggest issue that investors have to overcome is not getting into an emotional bind about your investment. You are providing a service not a religion and life style for your tenants. They do not have to be the same as you. They simply need to be able to pay the rent and put the rubbish out.

A big problem landlords have is that they are scared of dealing with a diverse range of people.
It is just like dealing with dogs.
If you are scared of them they will bite you.
If you abuse them they will bite you.
If you feed them they might work for you but more likely they will just keep eating.
If you take charge they will work for you. They might not love your but who cares.

The other issue many first timers all want to avoid is mistakes. The best lessons I have had is mistakes. You can not avoid a few hard times and lots of boring times waiting for things to improve.

So thats my 2 cents worth.
Property investing is like sex.
No point in looking at the pictures all the time is it.

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