My first property began with this ugly ducking
Maybe it will not too many times for us to buy properties in our life time. Especially the properties are so expensive in Melbourne and Sydney. However, it was quite valuable experience for me to share about my first home purchase experience.
I was so young that time and just read so many property investing books. Actually, I didn’t have much experience and waited so long. I had loan approved one year ago, I didn’t pay any properties instead of searching around because of hesitation. To be honestly, I felt scared and uncertain to take so much loan at early age. After one year, the property price soared 40% and then I began to search and gave offer seriously.
My experience about purchase my first property
In my memories, I gave three offers, they were all refused or missed it due to different reasons.
1, It was in inner north suburb in Melbourne. It was the full block with three bedrooms house. But the tenants lived in there. They were a lot of mess inside when I inspected it. The owner did a quick renovation and I can see that they had some cracks in the wall. I gave $2000 less than what they asked for. But I forgot that it was hot market and so many buyers came around. The agent got my deposit and he didn’t look impressed. He told me that you need give more due he has another offer from another buyer. I was not sure whether he tell me truth. I didn’t. At last, I miss it.
2, It was another house in north suburb in Melbourne. I went to the auction and it was near the tram line. Actually, it was quite ugly brick house and un renovation inside. But it was full block with 650 seq land and had three bedrooms. The location can’t compare the first one. The house was old inside than the first one. I stood to begin bid with another middle age man. I didn’t like auction at all in hot market. It gave you so much pressure and the agent kept going to push you. I always thought that how silly of me. My relative helped me and he kept going to add the price. It looked that we nearly got it. However, the middle age man finally kept another $500 at top. There were so many children stood around him. I felt quite sorry and thought that he must be family man who need house for his children. Then we gave up at the end for $500.
3, Then we kept going to search around and finally found the worse subdivision house in inferior location. It was auction again. My relative accompanied me to go auction. There had investor to compete with us. The price was over my budget. But I had already lost my patience to search so many unit and house and felt frustration and failed. At the end, we put $5000 up to win the auction. It became the house which in all my list.
What is main features about my first property
It was un-renovation and old. It was not full block such as 650 sea land. It was subdivision land with 420 seq land. The location was worse compared with previous two.
I ran out of budget and I could not go to renovation the unit. The renter continued to live in the house for three years. The renters used to low rent which the previous owner gave her. After I took over, the family decided to ask me to do a lot of repairs due to the house was old. It was not good experience and I sold the house at 2018. I walked with not bad profit due to hold quite long time.
There had some lessons for me to learn from my first-time purchase experience:
1, Right mind set
It is most hard for me. It is not simple as the book tell you. Right mind set need begin with vision. Your wealth success mindset consists of your beliefs, your habitual thoughts and your action. During the journey, I feel confused and distraction, self-double, fear and frustration.
2, Herd mentality
It took courage to do opposite with most of people. It needs critical thinking and against herd. You need have rich and wealthy knowledge about market and economics. It also needs you block all market noise and stick your plan. For example, how many investors will have courage to put all wealthy to invest during most gloomy time in share market and property market.
When the market was quiet and no people shop, I also hesitated to do it. It called Herd mentality. From Wikipedia, it explains mob mentality and pack mentality, also lesser known as gang mentality, describes how people can be influenced by their peers to adopt certain behaviors on a largely emotional, rather than rational, basis. When individuals are affected by mob mentality, they may make different decisions than they would have individually. Social psychologists study the related topics of group intelligence, crowd wisdom, groupthink, deindividuation, and decentralized decision making.
More lessons to learn
3, Not overcome my fear and add more money to secure house in rising market
In rising market, I should use max money which I can afford to find the best in the list. When I went back to my experience, I should add $2000 to buy the first one instead of add $5000 to buy the worse one. But if you were not going through it, you will never learn it.
4 Educate in myself
Lucy plays no role in wealth creation and I may have some good or bad luck from time to time. But we accumulated exactly what we deserve based on our mindset and application of knowledge.
5, Who should you listen during your journey?
Real estate and financial planners sometimes mean nothing more than they have managed to pass more test than you. Parents can be another person who hold you back due to risk.
I sold this property three years ago with some profit and put into my another project. It had some good gain. I were so happy for new home owner to improve their value with new wooden fence and vegetable garden.
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