Beware of inflated valuations
Before we can cover true discounts it is vitally important that you understand one simple fact the sales price or price you would have paid normally is not normally the actual market valuation.
It is normally higher, in some cases up to 10-15% higher.
Unfortunately, in this industry it is endemic that developers, builders and property clubs will inflate the actual true valuation of the property in order to pass on or advertise discounts off this valuation. Be warned, our industry is rife with this practice.
You should be skeptical any time that you are told the valuation price of a property you are about to invest in without it being back up by a written valuation. This written valuation must be from a surveyor registered with the Royal Institute of Chartered Surveyors (RICS) and the valuer must be on the panel of lenders that you wish to choose for a mortgage.
Some property clubs will try and tell you that it is not a problem that you will be using their solicitors and their mortgage brokers, this is a tell tale sign of price inflation. Be wary. You may not discover this inflated value until you attempt to re-mortgage after completion.
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New build and property investment strategies - which is best?
I told a story about one of my property mentors in Australia the other day. The short story is this…
Alec has been in property for ages. He specialises in industrial property and owns millions of it. He’s the type of guy who can tell you what an individual plot cost 20 years ago. Alec researches specific areas and in particular will look at unused or vacant plots that he may be able to offer the owner well below value and ’steal’ it. He will then get planning to put a large shed that will hold a number of smaller sheds. The great thing about this is that he pre-lets them before start the build program. He builds it simple - a tin shed with nothing inside and the people that lease the property will do what ever they need to. He taught me a great deal about making money from industrial property.
Funnily enough I was speaking with the same investor the following week and telling him another story - one about Peter and Jodie, a couple of my other mentors. There story goes like this…
Peter and Jodie make money from residential property. They buy low and sell high, and Jodie is a trained architect who loves adding value through renovating. Between the two of them they make a lot of money through renovating property. They are very good at researching areas and finding bargains. Again they always buy below value. They taught me a great deal about making money from residential renovation.
Anyway the investor asked me “Which strategy was best, Alec’s or Peter’s?”
Click over to my blog to read the rest of the article: New build and property investment strategies - which is best?
Who’s responsible? Who’s to blame?
It’s surprising the number of people who call my team feeling like they have been screwed over, mis-sold, mis-lead, lied too or just plain ripped off when they bought through other property companies and agents.
I’m in two minds about these people.
Firstly I get frustrated at the amount of “salesmanship” in the industry and secondly l get frustrated about the lack of responsibility displayed by many people today.
We are all salespeople. You are. I am. Your best friend and your best friend’s dog. The world is full of people trying to sell a product, a concept, a point of view, a solution to a problem or a belief.
So let’s dispel the myth right now that selling is bad. Selling in itself is neither good or bad — it’s the application of the sales techniques that can be unethical and more importantly the mis-selling or lack of information that is the problem.
Is it the company that’s responsible?
Click to read the entire article on my site: Who’s responsible, who’s to blame?…
The ’set and forget’ strategy for managing your new build property
It has taken a while but I finally have clearly identified my overriding philosophy for building a new build property portfolio. For me the reasons why I do property are clear; it gives me lifestyle options and let’s me help others to achieve the same.
Pinning down the overriding philosophy that I build my portfolio too, a philosophy that pervades everything I do, has been a 10 year quest but I recently realized that the answer has been right in front of me for so long. It can be summed up in 3 words
Set and forget.
Set & forget is more than just a strategy for your new build portfolio, or a way you set up each of your properties. It is far more than a term I came up with because my marketing hat says you need to capture a buzz word.
Set & Forget is the philosophy, it is present in every transaction, in every strategy, in fact it is perhaps the most important thing I do. Without Set & Forget I would be simply working an extra well paid job.
Set & Forget as a philosophy is quite simply everything - every little thing I do that has anything to do with property is set it up in such a way that I can forget it for a full 2 years, then l simply set it up again so l can forget it for another 2 years.
The reasons for this are simple: firstly, the biggest assumption we make in property is that it will double every 7-10 years. So if we Set and Forget 4 or 5 times our property will have doubled in value. Secondly, the other and more important reason is that I have better things to do with my time than spend it on my portfolio. I often laugh at how simple my portfolio is to manage with Set & Forget.
Here are some practical examples of what I mean when I say “Set & Forget”…
