This Is How I purchased My Interstate Investment Properties.

As there are a lot of new investors (and not so new) here looking to purchase interstate at the moment, I thought I would post the logistics how I executed it to help investors gain a better understanding behind it.

The following process I have applied over the past 15 years has allowed us to build the Multi-Million Dollar Residential Property portfolio we hold today spread all over Australia.

Approximately 4-6 weeks prior to traveling I make all my online bookings for air fares, motel accommodation and car hire.

A mobile phone, digital camera & a notebook/laptop with internet access are mandatory tools to take with you.

In between purchases, prior to me flying I do all my MACRO level due diligence via the internet. This provides me a couple of areas to do my MICRO due diligence once I hit the ground interstate.

I fly over usually for a period of 7 to 10 days. Upon arrival I usually spend the first 2-3 days driving around getting to know the areas I picked out from my MACRO due diligence prior to arrival.

From there, I decide the area that I prefer and then hit the internet, phone, email and agents inspecting all the properties I can over the following week that meet my purchasing criteria at the Micro DD level.

I do not make any property inspection appointments prior to departure.

If I see a property that exceptional I will put in an offer there and then, otherwise I will bring all my micro level inspection notes back home, then over the following weeks pick the best of the crop and make an offer remotely from home.

The offer/contract process I conduct by phone, fax, email & registered express post. Once an offer is accepted a signed contract copy is forwarded to my mortgage broker to get the finance process under way.

I also immediately forward a copy of the signed contract to our Solicitor to start their side of the conveyancing process. I always use a Solicitor / Conveyancer that is located locally to the state the property purchase is in because they are familiar with the settlement process system for that locality.

I then organise the relevant contractors / agencies required in relation to fulfilling our contract conditions / requirements , such as, ie. independent valuers, building inspections, pest inspections etc etc. Once these requirements have been met satisfactory to myself I then notify my solicitor of such and the solicitor liaises with my mortgage broker to take the contract through to settlement.

Once settlement is complete I set up systems to have our portfolio pretty much operate on auto-pilot. All IP outgoings such as insurances, council & water rates notices, repairs & maintenance bills etc get posted from our creditors directly to our property managers who then pay all of them from rental income collected each month.

At the end of the month my property managers deposit all rental incomes direct into our bank account and forward a management statement to us listing all incomings & outgoings.

Over the years we have found the whole process to run fairly smoothly. With each subsequent purchase you learn from the previous ones so you can fine tune the way you do things along the way. This kind of stuff you don't learn form text books. Its hands on practical experience where the nuts & bolts learning is really acquired.

The biggest obstacle that needs to be conquered is your own thinking or mindset. Basically it's the having the courage to over come the fear of stepping out of your comfort zone to things that are all new and foreign to you. Are you doing things right, what do you need to do next and the fear of losing are all thoughts you will have to move through to succeed.

At the end of the day once you have moved through these barriers that stop the majority of people you will think to yourself that it wasn't as bad as you thought it was going to be. Chances are you will be revved up wanting to do it all again - I know I was.

You dont have to get it right you just have to get it going!

Hope this helps & demystify things for you.

 

Nah...too organised....my recent trip to Melbourne shopping for H&L looked like this...did not plan anything...:

1. Book flights and accommodation for 2 nights (2 days)..land in Melbourne at 8:30am

2. Visit 8 new estates and 3 builders over the day...we went till about 6pm.

3. Over night assess the opportunity and look at 2 estates to negotiate.

4. I put in offers on 2 blocks of land one for my mate and one for me. One was a corner...and despite being told no more price reductions...we were able to walk away with 5k rebate on one and 6k on the corner. The blocks were bought for princely sum of 124.5k and 134.5. We plan to put a 17sq single on 1 and a 21 sq double on the other. Total turnkey build cost is 180k on single and 235k on double. The rental on the single will be 370-380pw and double 390-420pw. The end value we expect is 390-410k single and 430-460k double...in about 1 year. Based on our research the land value will form 35-50k of this. The land we bought on the new release is between 148k and 165k. We are confident with the builders being so busy the build costs will rise about 5-6% over the next year. So alot of potential growth is already locked in.

 

Where is it sash if youvdo not mind to share?

 

Thanks Rixter, good post and good approach

 

great info! i was going to ask you some q's but you have answered them! (i'll have more q's soon enough!)

 

Steadyrich,

With that land price I would suggest in outer western suburbs!!!

 

I'm with Sash on this one, just do it....
Damn, that's quite a complicated analytical and careful approach to buying interstate.
I suppose personal risk profile plays a part.

For my first interstate buys, (2nd IP but not new to investing), a few years ago in Brisbane, contacted a guy from this forum, a few phone calls and emails later purchased a couple of properties. He also helped me develop these properties and now they are worth about 7 mil.
Simple as, I only went up there on a few day trips for inspections and hand over.

Different methods for different people.

 

I agree - overkill.
There's a much simpler 3 step methodology...

Read property forums for 10 yrs
Work out who the smart guys are.
Do what they do.

 

Yea agree. It's much simpler than most people think. Some people just try to over complicate it in order to sell their services.

 

just want to say thank you for taking the time to share this with us Rixter!

 

Sounds good. What timeframes do you usually achieve for getting a builder under contract, getting the council approval and then getting the build complete?

 

That's it, just do it...its a simple process..its the starting that stops most people.

 

All I can say is Melb outer suburbs...I am still buying so can't go into details..sorry.

 

And different circumstances.

I think current cashflow/capital can play a big part in how much due diligence some folks will undertake.

 

Most definitely.
If funds are tight, you're no doubt going to be more careful.
More information is usually better than less, but you still need to have some intuition and be ready to pull the trigger when an opportunity arises.

 

Thanks Rixter. Awesome advice/info.

 

Alternate lazy method...
1. Gain trustworthy & decent investor friends.
2. Get their advice on the areas.
3. Pay someone to do the inspection
4. Make a fair offer

 

That's how to do it, leverage.

 

Thanks Rixter!

 

It's not what you know, it's who you know ;P