How To Buy An Investment Apartment With Just $16,500.00
Buy An Investment Apartment With Just $16,500.00
I wanted to take the next 10 minutes just to share some very powerful lessons learned about property investment that has worked so well for me, that’s helped me generate a multi million dollar portfolio of my own, but it’s also helped many of our clients achieve some great results as well.
I want to share with you some very powerful strategies that will allow you to, for example, buy an apartment with just $16,500.00.
Make you aware that you can achieve returns of up to 20% on your property investments, when you know what you’re doing.
So watch very carefully and I’ll be as concise as I can and share this knowledge with you.
The first thing I want to speak to is how you can purchase an apartment with just $16,500, say a million dollar apartment, for example. I also am going to cover just a little bit of the selection process that all of you should use when you consider investing in a property.
And also I want to put to you why I believe the Gold Coast and Brisbane are amazing places to invest.
Before I hook into that, just a little bit about me and why perhaps you may want to listen to me. So I’ve personally bought and developed over 11 properties and worth over 13 and a half million dollars.
We believe that property is one of the best ways to generate wealth without stuffing it up.
I’m a best selling author and I live a life of really my dreams these days. I very rarely leave my horse property located in the hinterland of the Gold Coast and just at the base of Tambourine Mountain.
So that’s enough about me. What I do is specialize in sourcing high quality investment apartments mainly on the Gold Coast and Brisbane and certain international properties that I. believe meet my criteria. We focus on only properties that have great potential for capital gain and at least a cashflow neutral to cashflow positive.
Cause let’s be frank, you prefer money going into your bank account rather than money coming out. So how about we speak to the first topic, which is how to buy your investment property for just $16,500. Okay, now when you go to buy an apartment that’s under development, a lot of people put down a 10% deposit.
They make you say a million dollar apartment, for example. So when they put the deposit down, that’s tying up their capital and that capital could be earning eight to 10% per annum for them or over two years, maybe $20,000.00 It could have been generating for them, but it’s been placed into this development.
So you’re not making that extra money. Now, if you use a deposit as a bond. It’s just a different way of investing in that same apartment. Okay. So as we said, most people put a 10% deposit onto an apartment under development. That million dollar apartment we’ll use as an example of a hundred thousand dollars.
You’re losing that gain. If you use a deposit bond, the first thing that you do need to have is property with some equity in it, okay? But if you have a property with equity in it, the way a deposit bond works is it actually guarantees that the developer, that they’re going to actually get their money when the development’s complete.
So just about all the developers, they don’t get their hands on your money. That money is held in trust and the only way they get access to it is when they finish the development. Whenever they sell an apartment, their financier releases more funds to them. With a deposit bond, you’re paying a small fee so that it’s like an insurance policy that the developer knows you will actually pay up.
When the project is complete. Now, how much does it cost bond? Or how much does a bond cost? Let’s again, say the 10% deposit rule of $100,000. Number one, the bond company wants to know that you have at least three times that equity in your properties. So say $300,000 in this case. Now they’ll then charge you around two and a half to 3% of that deposit for the bond and they’ll charge that per annum. So in this case, that’d be $3,000 per annum, 3% of a $100,000.00. When there’s a developer in the contract, you will see a sunset clause in the contract. Generally they make them around about five and a half years. What does that mean? It means that the builder promises to get your project done, even if there’s all dramas like COVID and this and that, within five and a half years.
So that’s what the sunset clause is. But what the developer needs from you, is the deposit bond times the sunset clause. So in other words, $3,000 times five and a half years, which in this case would be $16,500. Is this sounding good to you, ladies and gentlemen? I’m just curious. I’m hoping it’s making sense, but we’re basically saying you can either put $100,000 down to secure an apartment.
Or, you can put $16,500 down to secure an apartment. What one makes more sense to you? Back to it. Let me show you some numbers. If we went with the putting the 10% deposit down, okay, potential gain, assume it was 10% for the sake of this exercise, that’d be $200,000. You’re making 100% profit.
If you use a deposit bond, you’re only putting down $16,500 in this example, you’re still making a $200,000 capital gain. That’s a 1,200% profit. Now again, I must stress, I am not a financial planner. I am not a, someone with letters after my name. Although I do have an MBA, which is a massive bank account.
That’s pretty good. But, I do not have letters after my name to say, You should do this or do that. This is just for educational purposes. And I hope you’re learning something here. I am a real estate agent and I’m also a business consultant. Spent the last 17 years helping businesses succeed. So what I want you to take away from this is that there are different ways to get ahead and you can start to understand why some people become very wealthy and yet other people seem to keep struggling. It’s not because anyone’s smarter, it’s simply because they know something you may not. And now you do know something others don’t know because maybe 5% of people understand this strategy of a deposit bond.
What do you think is better? A 1,200% improvement or a 100% improvement? Both are great, it’s whatever, you know, you feel works for you. Benefits, you could potentially buy a number of properties instead of just one, because you don’t require a large amount of capital to put down as a deposit each time, okay?
Now before you race out and you go, Oh my god, this is fantastic, I want to get as many as I can. Please do not over leverage yourself, okay? Always get good advice. And always make sure that it’s a very good development. I am very selective with the properties I recommend to my clients because I simply want you to make a lot of money or really love where you live.
So that’s all I have to say about deposit bonds, but why is it that I am now so passionate about The Gold Coast and the Brisbane area. I’ve lived just about everywhere you can imagine. And yes, I’m slightly biased. I’ve lived on the Gold Coast now for the last nine years. And you’ll be dragging me out of here in a box.
I promise you that. However, people are starting to discover what an amazing lifestyle Queensland has. And let me just show you a few stats here, ladies and gentlemen, of what’s happening up north. Number one, we’ve got incredible employment up here. Okay, it’s very strong. The lowest rental vacancies that are around. So, that means there’s strong demand and strong rental growth. When you’ve got strong population growth and you’ve got less supply, Guess what? That means that there’s an increase in price, hence capital gain. They’re building a $5 billion health and knowledge precinct here, just up the road from Southport.
People from all around the world, the top medical minds, are going to be working in the Southport area. They’re spending $5 billion on rejuvenating Southport. Now, that’s the northern end of Surfers Paradise, for those of you that don’t know. And it’s going to be extraordinary. How do you spend five billion dollars?
It’s going to be a great outcome when it’s done. They’re upgrading the highway between here and Brisbane. Now, they’re also doing a huge refurbishment and upgrade at the Star Casino. You’ve got the light rail that’s going to be finishing down at the airport by the time the Olympics are on. You’ve got the airport in the Gold Coast being constantly upgraded to handle the increased supply of people coming here from immigration.
You’ve got the SPIT, the huge upgrade happening around the Broad Beach area. The ocean terminal that’s being built so international tourists can start to come to Queensland to the Gold Coast. You getting excited yet? What about the Home of the Arts, the upgrades that are happening there? And then just a little bit about Brisbane.
Did you know that on average Sydney apartments are 58% more expensive than Brisbane? So there’s still huge upside here. Huge bang for your buck, okay, when you invest here compared to Sydney or Melbourne. There’s been a 25% increase in immigration over the last three years. In addition, remember the Olympics are coming to town!
Didn’t the Matildas do so good? They did us proud. Okay, so again, you’re getting an idea of just the potential that’s happening here, but don’t just believe me. This is Chiefs of Research in Domain is one of the major property sites in Australia. They’re saying that the strong population growth just means that the Gold Coast is going to keep growing very strongly, and Brisbane, and the Sunshine Coast.
And Tim Lawless, the head of CoreLogic, pretty well says the same thing, that overall demand is going to remain strong because of the lifestyle that we have up here in Queensland. A little bit of a quick recap, ladies and gentlemen, what I’ve just covered off on. First, consider how you’re going to purchase your investment property, or one that you want to live in. Both will work. Then consider, is it better going into an area after all of these improvements are happening? Or is it better investing in an area before all these improvements are happening so that you benefit in the increased value of the properties once these improvements have occurred?
Obviously you want to do it prior so that you then get the benefit of all of these improvements. Now, when I’m selecting a property for myself or for my clients, I’ve got about 40 different things that I check. But I want to just give you six of the main ones to help you when you’re looking for a property to invest or to live in.
The first is, make sure you look for the long term capital gain in an area. Make sure that, hopefully it’s around about six, seven percent or better, okay? But look for the long term capital gain, not just over the last one or two years, you want to look over the last 10 years. Have a look at the average household income.
You want to have that higher net income because that lifts the actual suburb when you’ve got high net worth people and professionals in an area. Have a look at the demand supply ratio. You want to make sure that there’s more demand than supply because when there’s more demand, again, that keeps the lift for the value of your property. And also, rather than live near a great big Westfields or something like that, you want to be next to the nice sort of cafe latte strip. You know, that lifestyle. Much like what you can do in surfers where you go and there’s fantastic little cafe strips and shops etc. Or in Milton is another great suburb that I love where you’ve got exactly that same sort of cafe latte.
You don’t want to be right next to major Westfields or a big complex like that. Now another thing to be aware of The blacklisted suburbs that banks have. Okay, so you may not be aware, but Brisbane City is actually currently on the blacklist simply because of maybe their exposure to the amount of apartments that are in there and also make sure when you’re looking at a property. that you know what future development’s going on. In fact, I had a friend recently that bought a property that they wanted to flip. I did advise them against it. They didn’t listen. And, uh, so they bought this property. And unfortunately, after they finished their renovations, they got notified about the freeway and the off ramp that’s right next to their property.
Obviously, it’s going to dampen the things and sadly they they did do a smart thing they cut their losses and they probably did about $200,000 on that experiment but at least they didn’t hold and pray which is what a lot of people do when you’re wrong you learn from it you do the next one but be mindful what future town planning is there go have a look what developments are coming up are they going to block out your view those types of things.
So again, I hope you found those criteria a little bit helpful. Whenever you’re looking at area, yes, there’s a lot of emotion when you’re considering buying a property, but you want to follow a system before making a decision. And again, that’s what I do for my clients. Now, I just want to just share with you.
Investment wealth formula and It’s very simple. The first one and arguably the most important is the mindset You got to have that clarity on what you’re wanting to achieve then create the right plan and system to make it happen Have the right team of experts around you. Understand the property selection method so that you put the odds in your favor when you’re selecting a property.
Cultivate a great relationship with the right real estate agent. Hopefully that’s me. Get into the market and buy early where you can. When you see a great development starting, don’t be one of the last to get into that development. You want to be early because you get the best pricing. Know your numbers. Here’s an example. So this is actually a friend of mine lived in this apartment and the owners bought it off the plan for $1,280,000. They got rent of $52,800 and they sold it for $1,530,000 a few months ago. They made a $302,800 profit in just 10 months, ladies and gentlemen. How good is that? In fact, I’ve got another client that I just, uh, A couple of clients that I sold into a development in Surfers a few months ago, now they’ve gone up 15% in value just over the last couple of months.
So it’s incredible. Some of them have made a couple of $100,000 in a couple of months. So when you select the right property and you use the right strategy, the returns can be extraordinary for you and really speed up your wealth creation process.
Why are we unique? Alright, we only source the very best properties in the best areas, and we follow a 46 point due diligence criteria. We target the suburbs that we believe are going to be best, for best potential growth. We have access to over a thousand properties at any one time. We have access to off market developments.
We negotiate very special deals for our clients in certain developments. We reject over 95% of the properties that we have available to us. We’re actually business advisors and property investors first. And we happen to have a real estate license. Okay. So that’s our background. So again, just so you’re aware, my past life for 17 years, I’ve helped thousands of business owners improve the results in their companies and had quite a successful business school for many years and I’ve been a property investor since I was 19 years old. So I know a little bit about this stuff and I’m very passionate about seeing my clients succeed.
Now we also are unbiased. We don’t have any attachment or get any kickbacks. We find the best properties and then share our thoughts with our clients from there. Here’s something I’ve learned over many years of expensive experience and that is the enemy of wealth is delay. Your ability to make a decision, it doesn’t matter if it’s a yes or a no, but making a decision is one of the real secrets to wealth.
You don’t want to be in the situation where you go, oh son. If only I bought property 10 years ago. How many people are saying that about the Gold Coast right now? How many people were saying that over COVID? I was buying property left and center when all of the media was saying, “Oh, don’t buy property is going to crash 50%”. No. Okay. Just make sure you have good property in the right areas and you’re going to be okay over the long term. Properties. Very forgiving. Okay. Now remember successful people make decisions quickly and change them very slowly. Unsuccessful people make decisions very slowly and change them very quickly.
That’s one of my favorite phrases and quotes. This is your invitation. If you think perhaps that I may have some benefit for you and be able to assist you in finding what you’re looking for as a great investment cashflow, neutral cashflow, positive. A great luxury place for you to live. I’d love to help.
There’s a link down below. Give me a buzz. I’ve got some great opportunities on the Gold Coast and up in Brisbane right now and also internationally. In fact, some of these properties are returning yields up to 20%, believe it or not. So I’d love to talk to you. I’d love to be able to help you. I found this interesting.
Don’t hesitate to reach out. I hope to talk to you soon.