A simple little deal, just gone unconditional.

Discussion in 'Investor Stories & Showcase' started by Sackie, 3rd Mar, 2016.

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  1. larrylarry

    larrylarry Well-Known Member

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    simple is good.
     
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  2. MTR

    MTR Well-Known Member

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    From my research the properties in this area that have sold in the $1.1M+ bracket are all double storey homes, which would require minimum of $1800 sqm to build. The single storey homes are selling for much less. Perhaps I have it wrong, this is just from my basic research.

    Here is a link, for this you have all the fruit and double storey, larger block
    Rochedale, QLD 4123 Auction Results & Sold Property Prices in Rochedale, QLD 4123 (pg 1)

    As I said I don't know the area, also if its a rising market your end values may be higher on completion? but I would not be working my numbers on this. All the best:)

    MTR:)
     
  3. Sackie

    Sackie Well-Known Member

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    @MTR its not in Rochedale, its roughly 9km closer to the CBD than Rochedale. Thats why i'm amazed Rochedale is selling for that price. Must have amazing restaurants. :D

    I currently have a steep block, two homes each triple level, high end, being built for less than 1mil . Of course no bricks at all. Thank god Brissy aint like Perth :p
     
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  4. MTR

    MTR Well-Known Member

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    got it, great work, that's a relief, keep us posted:)
     
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  5. Sackie

    Sackie Well-Known Member

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    Thanks @MTR . I would like the market to move a little to make me feel even better about it but I know we should never buy a deal and base figures on speculative future possibilities...but its kinda hard not too when Brissy seems to be doing well and picking up with momentum. :)
     
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  6. albanga

    albanga Well-Known Member

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    Great Job!
    My advice, don't worry about the Reno. Attract a lower class tenant and hopefully they trash the joint. Claim it on insurance, pocket the cash and offset the holding costs. If your lucky they might be so bad they do the demo work for you :)
     
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  7. Cactus

    Cactus Well-Known Member

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    Sounds like a good deal to me. You have reserved this potential 20+% gain for small money and next to no holding costs. You can sit back and watch the core values in the area increase whilst you focus on your other projects. When you free up debt facility and finishe more pressing projects with higher holding costs then bang you've got 6 months till payday with a 50%cgt discount. If Brisbane appreciates to where you think it will time is your friend. Good luck is made by the way. Well done.
     
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  8. MTR

    MTR Well-Known Member

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    Its your insurance policy if the land prices rise. Sometimes you can even offload it without building dependent on how strong the market is.

    I personally like smaller deals as well, easy to secure loans, less stress and if you have a good builder, sit back and get some updates, or employ a building inspector at each critical stage to report on this, that is what I did, well worth spending $200 each inspection, and also fly over to view/holiday, nice tax deduction.

    MTR:)
     
    Last edited: 3rd Mar, 2016
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  9. bob shovel

    bob shovel Well-Known Member

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    Wow! Awesome!
    I'll be following to annoy you and your drafty! ;)

    Great stuff I need to meet up with you one day and pick your brains!
     
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  10. Bran

    Bran Well-Known Member

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    Not too dissimilar to mine @Leo2413 , so maybe I will tack on this thread.

    I went unconditional on Monday as well, with one month til settlement and unrestricted access for renovations.
    405m2, about 9km to CBD in a good street, 3/1/1
    It was renting for about 6 years at 380 week in its current state, so I hope with the cost of a painter, I can get 400 a week, maybe a smidge higher.
    Purchase price was mid 4s.
    The landscaping is now 90% done thanks to two days of my (hard) labour and a skip. (And a little help from a PC friend at the end ;) ) I've done quite a few odd jobs in this time to including repairing fences, and old timber screens etc. There isn't much to go. A spot polish of a kitchen floor and some silicon in the bathroom and I'm done.

    Same story - neighbouring houses look a bit like these ones, and are selling for 950-1.2, up until now. Median house price is about 590 last I checked. Screen Shot 2016-03-03 at 7.46.14 pm.png


    Here are some examples to show what I've got to work with. One of the bedrooms, and then the view from the roof, the level of which is below the new floor level for the master suite.

    Rental yield and market movements will somewhat dictate how quickly I demolish and build, if things are ticking along then Ill just ride the wave for now with the view to preparing and timing it with my best guess at a peak, although I may hang on to the finished product anyway.

    The bank val put the land at 420k, which is a tad lower than fair retail value IMO of 440-470k. This equates to the purchase price. I believe there will be 80k instant equity by settlement with only the most basic of cosmetic improvements. We are doing this with a somewhat temporary lender, so hopefully when my position changes, I can reval, refinance, and get some money back out.

    After this time, Ill crunch the numbers and make sure a demo/build is worthwhile, but with a say, total 480ish acquisition + 400k build, I'm at the lower end of the expected selling prices without much of a margin. But I'm in no rush - and a moving market and/or a cheaper build and/or a good end product will bolster this. Time will make it worthwhile. I have a good feel for this pocket having held here for the last 5 years, it is on an inexorable course upward in terms of desirability. If the numbers don't stack up, I can always on sell it, and should cover my buy + selling costs.


    Screen Shot 2016-03-03 at 7.48.51 pm.png Screen Shot 2016-03-03 at 7.49.03 pm.png


    Now, if you just let me mirror your process and steal your team, that'd be great :)


    PS. I think its very hard to go wrong in the 4s as close as you have to the CBD. That's why I jumped too.
     
    Last edited: 3rd Mar, 2016
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  11. Sackie

    Sackie Well-Known Member

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    Mate it's like you stole my Property Plans Book from my desk and typed a paragraph of it. :D Exactly my thoughts.
     
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  12. Sackie

    Sackie Well-Known Member

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    Agree, money well spent with the inspections imo.
     
  13. Sackie

    Sackie Well-Known Member

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    @Bran quite a similar deal I think mate. Worst case if the numbers don't stack up perfectly just yet, if momentum keeps moving then in 12 -18 months should stack up well.

    I got reliable REAs already telling me that people looking in camp hill for similar stock 1.3m plus, want to buy into 'our' areas with similar stock at the 1.1-1.2m range.

    By the way you have a great view too to capitalise on. haha.. its funny I'm saying that...1 year ago I thought the view is crap/nothing special... but apparently they love that sorta thing there... so now I'm starting to say how good the view is unwittingly...crazy stuff..
     
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  14. Bran

    Bran Well-Known Member

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    I like this a lot.

    I'm not yet in the same stage as you, but am accumulating for now whilst my income steadies. Everything I'm holding now can have something done to it.
     
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  15. Sackie

    Sackie Well-Known Member

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    Oh I hear you buddy., :D
     
  16. Sackie

    Sackie Well-Known Member

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    @bob shovel If you keep picking it too much... I might end up buying into the whole 'all Australia is in a bubble, prepare for the end of the world' type scenario :D
     
    Last edited: 3rd Mar, 2016
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  17. MTR

    MTR Well-Known Member

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    great work:)
     
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  18. MTR

    MTR Well-Known Member

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    won't take long just keep working it, half the battle is sourcing finance
     
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  19. MTR

    MTR Well-Known Member

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    Perth is definately a NO GO at the moment
     
  20. Sackie

    Sackie Well-Known Member

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    Yeah seems to be the message at the moment... I know pretty much nothing about Perth, just waiting for prices to stabilise, then see whats happening on the ground. Can't wait to pick all the Perth people's brains here... but I'm sure they will be too busy buying their own deals...