What’s It Like Buying Your First Property?

Buying your first property can feel very overwhelming. In this episode we talk about the process of buying your first property and which parts are easy and which are hard.
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0:00 – Introduction
1:08 – Finding the perfect property and removing emotions was the hardest part
3:35 – Limited serviceability made finding a property difficult
4:11 – Tips on making an offer on the property and negotiating for a win-win
8:41 – The terms of an offer
9:46 – Working with your mortgage broker
12:10 – Working with a solicitor
13:15 – The value of having a good team
15:04 – An important contact point: A property manager
16:42 – Was there any hiccups along the way?
17:42 – The value of working with people with experience

Recommended Videos:
Success Story: Simon Buys His First Property – https://www.youtube.com/watch?v=HP376QV3qi4

Transcription:

When it comes time to buy your first property, often it can feel extremely overwhelming. You don’t know what steps you need to take. You don’t know what hurdles there are contracts you have to sign, all of these sorts of things. There’s a lot of little moving parts that can be quite daunting if you haven’t done it before. So today I am here with Simon Everingham from pumped on property who has just purchased his first property that’s well done. And he was saying to me that it was actually so much easier than he thought it was going to be. So in today’s episode, we’re going to talk about that process of buying your first property and what Simon went through and what was easy, what was hard, et cetera. So conduction line, the first property she’s feeling good, feeling stoked, actually feeling stacked. Yeah. So the property has been renovated, fully rented now. Yep. Right? Yep. So you got a tenant in there paying rent. Have you seen any of that rent coming in yet? Yeah, yeah, yeah.

Came in yesterday. Yeah. That was the first first week’s pay. So artist goes into anything.

Yeah. Yeah, that’s all part of the process. So you were saying off camera that the process was actually easier than you thought. I know we talked in the last video, which I’ll link up talking about Simon Success Story and buying his first property took about 18 months to say that deposit and then there’s actually a period of about six months where you’re actively looking in the market but couldn’t really find anything. Yeah. So that obviously would have been quite difficult. Yeah. Yeah. Well

it’s your emotions just take control and some different periods over that journey. Like you spend all this time and efforts saving up your deposit and researching the market and developing your strategy and figuring out exactly what you want. And then you think the perfect property comes up and then you miss out and then you think you find another perfect property. But it doesn’t really, you just emotionally attached to it. So that was the most difficult part, like removing my emotions from this decision. Um, but luckily I had a good team of people around me that were keeping me on check throughout that entire process.

So how, how were they keeping you on checks? Obviously you’ve got your brother Ben, which people will likely know if they’ve watched the channel as well as crystal, um, who are very experienced buyer’s agents and own property in themselves. How are they keeping you in check?

So that’s pretty much what had a really strict set of key performance indicators and property investment goals. So it was important to me and my portfolio. So whenever I would identify right property, it’s okay, let’s go check it out. And it might seem as though at the surface level that this is a good opportunity. But once you scratch beneath the surface and you start to look at different sorts of things, you start getting like maybe zoning, um, updates on that particular area. You look at, um, maybe flooding, you look at easements, you look at housing commission surrounding it, and some of those things might not be like, I didn’t want to be purchasing in a street where there was lots of housing commission. Uh, definitely didn’t want to be purchasing a property that had any flooding issues whatsoever. And I didn’t really want to be in an area that was going to have new zoning where there’s going to be massive, um, highrises unit blocks and stuff going out.

Like I wanted to be in at a really nice owner occupied part of the suburb that’s fully developed and got no plan to change. So one of the hardest parts was obviously then identifying a property that feed all of that criteria. Yeah. And waiting, yeah. To be able to find that right at the right price as well. Because obviously I had limited serviceability, I couldn’t, I wasn’t able to target a lot of the market. Like my borrowing capacity was capped at $400,000 and that’s not much money to purchase a home. So if something was more expensive than that, I wouldn’t even consider it. Yeah. I’ve been in consider. And if something was less than the likelihood of there being some issues is, is increased because it’s cheap. Yeah. So yeah, that was the hardest part. Um, but then it’s patience and perseverance is what paid off in the end.

So when you found the property that you ultimately purchased, I think I remember I was there the day that you had made an offer on it, kind of sitting there twiddling your thumbs, waiting to hear back. I think you made a look by quite a low ball offer or something in the beginning. Yeah, yeah, yeah. We threw in Ed, we throw in a throw away out. Yeah. So like it was so low, but it was because of the property had been sitting on the market for such a long period of time. Um, and they hadn’t had any really stick ball. They hadn’t had any written offers. Um, I just wanted to throw a curve ball at him and just be like, what you guys are asking for is completely unrealistic even though it was realistic. Um, just to get them a little bit scared because that was the first offer.

So you know, that’s a negotiation tactic that some people use. Um, and obviously some, obviously you can’t use that on every property. Every property is in extremely high demand and you do that, then they’re likely going to reject your off. I won’t even contact you. Yeah. They might get back to you. There’s no renegotiation. Yeah. Because this property had been sitting on the market for a period of time was in quite a derelict. Yeah. Yeah. That was it. It was a terrible, terrible looking property. Yeah. Um, that had had no offers on it. So, you know, they didn’t even know where market value was essentially because they hadn’t had an offer. So negotiation is something that a lot of people get really fearful of. Did you find it a scary process to negotiate? Not at all. Like I enjoy confrontation and I enjoy having difficult conversations. Like I find joy in that. Like I don’t see it as, as a confrontation. I didn’t see it as negotiation. It’s just a conversation.

So what mindset do you have going into negotiation that allowed you to enjoy the

process? Like I’m going to get this property at a great price. Yeah. But for me, luckily I had a really great real estate agent that I was working with. Like this guy had been around the block. He was one of the highest performing real estate agents in the area. Uh, we put purchase properties off him in the past, so we knew how he liked to negotiate and we knew what his expectations were and that made it a lot easier. So it’s like, I know that I can do this with this agent, but there’s some agents where I wouldn’t have even considered throwing in a low ball like that because they would have just been

so, because they would have taken offense to it personally. So because you had rapport with the agent, you were able to negotiate more easily. Whereas if you didn’t have rapport with an agent, then they may have been offended by it.

Yeah. Which is, that’s a bad agent. If someone’s getting offended by your office, that’s a bad agent. You know, like that’s their job isn’t to get emotional about that. So that was positive, a positive thing. And that was an easy process. Like there was never any arguments or anything. It was just like, this is where I’m at. And he’s like, okay, this is where we’re at. And then it’s like, well let’s find a win win for the both of us. And um, essentially that’s what we came to.

And I think that’s something, a couple of things for people to realize when negotiating is I been detached from the outcome. So obviously you get a bit emotional and you would be quite attached to the outcome, but understand that you were happy to let this property go if you weren’t able to get up for the right price. Exactly, yeah, because you knew there’d be another one around the corner, even though it had been six months waiting while I lost

the add on two properties before that. So I knew that like there was going to be another great property. So I put two offers in the, on two different properties that didn’t get accepted that someone else ended up purchasing those properties at a high price. And I wasn’t willing to pay over where I saw market value. So I just walked away. And then when you okay to do that, of course is you cry yourself to write those nice little losing out. I definitely did not because in hindsight I ended up with a better, a better opportunity anyway.

Yeah. So I think being detached from the outcome, obviously you want to create a deal, but being detached from it, knowing there’s something around the corner and you don’t get it is important. And then also understanding that real estate agents on evil people or anything like that, they want to get a deal done just as much as you do. And it’s about having, as you said, that conversation about how can we make this a win win for everyone rather than seeing it as like a budding heads competition. Exactly. Actually working together to make a deal get done rather than fighting against the agent I think is really helpful. So talk us through the rest of the process. So once your offer was accepted, so you made a written offer, I’m guessing where the contractor, I’m in Queensland, you presented with a contract returns attached to it as well. Did you work with a solicitor to create that

contrast in terms? So you’ve got your set Queensland government contract that you can’t amend essentially. Um, it’s got all the information that you need there and you just need to fill in the bright parts. Um, but we have what we call an annex vow, which is an addition onto summit onto that contract with some specific terms that we had previously written up for other clients. So these are things that aren’t actually included in the contract. So in the annex shy, there’s a couple of little due diligence clauses and additions that we thought were important to add into the contract and the sellers have to sign off on those essentially. So that was my, my first point of contact, I guess that it was, here we go, we’re, we’re in the ball game. And then immediately after that, um, well I got in contact with my mortgage broker and I think that’s a really important thing to do, like my mortgage broker and made the whole process so simple.

I literally sent him an email saying, this is the property that I want to buy. This is how much I’m likely to buy it for. Um, here’s my situation. He sent me through a document that I needed to fill out and put all of my information on, which took me about 10 minutes to fill out. He did everything else. So you heard already had preapproval? No stage, you didn’t have, I didn’t even have preapproval. Why is that? I knew what I could borrow your, so I need already spoken to the mortgage broker but you hadn’t been through the process of approval because I’d already put offers on other properties. I knew exactly where I was at, but until I had a contract accepted, I wasn’t going to put a preapproval in place. So I told him, I’m like, this is the one we’re going to get this one, put it out there to the world.

You’ve got those positive energies flowing. And um, ended up going through that negotiations, sending off my mortgage broker, the finalized contract and he got the finance organize over that period of time. Now I sent in my, I had the final offer accepted on the 22nd of December. So like it’s a really bad time to be getting that without a preapproval organize because the bank was closed for a certain amount of days and I only had a certain amount of days to get finance approved. But luckily the Chrysalis brain, yeah. Luckily I probably have to worry about any of that. The mortgage broker game. Yeah. So like that’s their job. It’s their job to get that organized. If you need to ask for a finance extension, you can, uh, but the sellers can reject it. So again, I guess that’s an element of being detached from the outcome because if you don’t have a good mortgage broker and they don’t pull through from you, you could lose the deal over that. You could, yeah, you could. So it’s really important to have a great mortgage broker that’s just, you has done this sort of stuff before. Like the mortgage broker that I use, his bought and sold over 40 investment properties. So He’s been around the block, he knows what he’s doing. And I knew that he had the capabilities to get that one over the line in the timeframe that I needed it done.

Yeah. And did you need to work with your solicitor a lot?

Yeah. So after I engage them mortgage broker, I got in contact with a solicitor as well and um, essentially sent them the finalized contract and said this is everything that needs to be done. They sent me back some information, I had to fill out some documents, sent it back and they took care of everything as well. So with my mortgage broker and my solicitor can buy everything between putting the offer down and settling on the property was completely taken care of. I didn’t have to worry about anything. I constantly had my solicitor’s sending me reminders, making sure that everything was organized. And essentially throughout that period of time I probably spent maximum three hours on over a like a 35, 40 day period, like three hours signing documents, reading over different forms. And that was it. Like everything else was just taking care of by professionals. And I think that’s super important.

Well that’s the value of having a good team. Right? Yeah. Talk about the value of having a good team and people struggle sometimes to understand what is the value of having a, and that’s it when it comes to crunch time. Yeah. When things are happening, the fact that you trust in your Salissa and your trust and your mortgage broker to get what needs to get done done rather than stressing having to follow up with your mortgage broker because they’re not doing their job, not knowing where things are at and not having good communication that can turn what seemed like a very easy period for you, especially over Christmas into yeah. What sounded like a very easy process. It was such a

simple process and um, I think you’ve just now did on the head, like if you’ve got the right support network around you, there shouldn’t be any issues. Like if you are in a position to buy a property and you know that from your mortgage broker, then there shouldn’t be any issues whatsoever. But, um, I had trusting those advisers, my mortgage broker and muscle, they sit up because we’ve worked with them in the past for my sister’s properties, for my brothers properties, um, for client’s properties. So we knew that they were, they were more than capable for getting all of this stuff finalized

and around support network as well. Obviously having your brother and your sister, would they a great help as well? Did they help calm your emotions during that time? Did you have any questions that you

no necessarily like they were away like that they were away. We finished work on the 21st of December and they weren’t even back until the 14th and we kind of just like, I was away over that period of time. So they, so it didn’t even really chat to him over that period. So they weren’t there to keep anything on lock. But I had, I knew that everything was going to be okay. I knew that I had put in place everything that needed to be organized, so there was no issues. I think somebody that did have a major impact on that as well. That was was my mom. Now she’s a property manager, so I think that’s a really important contact point as well. Like might not be a mom, but I’m sure it’s pretty easy to go to like a property manager in that area and just go, Hey, I’ve just purchased a property here.

Um, can you give me a little bit more information about the rental market? Because my property was really run down and I needed to do certain renovations. I went around there with a property manager and walk through and she’s like, okay, well this is what needs to be done to get this price and then if you want to get a little bit more, this is what you should do. And I was like, okay, cool. Well now I know exactly what I need to do to get the best of both the most amount of rent. So

that was got someone in the market who knows the market, who rents to people.

Yes, this is what people are looking for, this is what people are willing to pay for and this is what I can rent it for. Yeah. That’s so good. That was really comforting to know that like I had this property in and she had pretty good understanding of how much those things we’re going to cost, like pain, like replacing the curtains, like doing some landscaping, like getting the electricals VX, getting some new vanity, things like that. And um, yeah, it gave me a lot of peace of mind knowing, okay, well alls I need to spend is five to $10,000. Excuse me. And um, we’ll be ready to rock and roll and you’ll be getting market value. Yeah. And did you have any hiccups along the way? Were there any issues or was this on just, it was smooth sailing. It was crazy. It was, it was not like the ocean right now. Um, it’s bumpy out there. Um, but yeah, it was really casual. Like I have the right people around me. I had great advice from experienced people and that’s all that you really need. And you had waited for the right property as well. Yeah. Overextending yourself on you with the right strategy was I knew what my borrowing capacity was and I knew exactly what needed to be done to get that over the line and get it rented out at market value. Yeah,

so we hope this kind of gives you an insight into what it’s like to buy your first property. Obviously everyone’s experience isn’t always as smooth as what Simon has, but Simon being a part of pumped on property, the buyer’s agency does have a lot of experience around him to help him. He’s got experienced investors around him, experienced buyer’s agents, mortgage brokers, solicitors, Cetera, and that can be one of the value of working with a buyer’s agent is that you do get all of that expertise and like you said, you knew that the mortgage broker would get things across the line because you worked with them in the past and we’ve seen it been done before. Whereas if you’re out there on your own, then you’ve got to choose a mortgage broker. You don’t know if they’re good or not. So it can be valuable to work with a buyer’s agent.

It’s not. Definitely not for everyone because obviously it does cost money in order to do it, but it’s definitely something to consider. If you guys are out there, you saw how smoothly it went for Simon and that could be smoothly for you. So as you can see it went quite smoothly for Simon. He’s now got that experience under his belt along with the rest of the team over at pumped on property. If you are interested in learning more about investing in property, if you want some personalized help on getting clear on your strategy and what your next steps need to be to get where you want to be in purchasing your next property, achieving financial freedom. And then Simon and the team over at pumped on property are offering free strategy sessions. So if you go to on-property Dotcom Day you, you can read more about that over there and you can book a time that suits you, jump on the phone, get clear on where you’re at, get clear on what you want to go and get clear on the next steps.

And then obviously if you want to hire pumped on property as a buyers agency, you can go ahead and do that if it’s a good fit or you can just take that advice, which is absolutely free and you can go and implement it, implement it yourself as well. So check out on property.com.eu for more details on that. Thanks so much for sharing your journey again, Simon. No worries. I hope I get to talk to some more people about it. Yeah, it’s pretty exciting stuff and it’s great to see Simon doing it. Hopefully I won’t be too far. You Ain’t behind him there. And why are you here? Go ahead and check out the last video that we did talking about Simon buying his first property and more details around that. I will link that up in the description down below and until next time, stay positive.

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