Anyone Turned a Lemon into Lemonade

Look forward to hearing from those who pulled themselves out of the sh$t to turn the lemon they purchased into lemonade.

I purchased 1 lemon, sight unseen, once I realised it was a lemon I basically cleaned it up, a quick make over and back on the market within 6 month, offloaded and made $12,000 profit, peanuts but if I did not sell it I knew I would be in for much more pain... lesson learnt.

I also have a great story, a developer I know who purchased a property with the idea of subdividing into 2 lots and building. Unfortunately this person did not realise there had been many prior objections that council rejected due to a technicality with the block. This person purchased a lemon so they thought... More research, more phone calls etc etc. solution found and thanks to a booming market and a solution to the problem this person made a massive profit over $350K

MTR

 

I bought a 2br villa in St Marys (syd) in 2012, was a dump and dirt cheap and in a pretty ordinary complex but returned me 8.5%+ yield. However it became apparent that the sort of tenants the complex attracted was pretty D grade and this had a knock on effect to the type of tenants I could attract despite renovating it. Had cops turn up during an open to the villa next door for a domestic etc.

When I had tenants they were troublesome and it was by far the most time draining property in the portfolio, so I cut it loose in early 2015 when the boom was in full swing and sold it for a lot more than what it cost me.

I took the cash and put it into some more Adelaide properties, and renovated my ppor which was then refinanced and post reno value gave me another 250k equity to play with for less troublesome investments.

I am all for cutting dogs loose and using the cash for better purposes/investments.. you dont just hold blindly regardless.

 

Problem with turning lemons into lemonade is you need a hell of a lot of sugar.

Best not to buy lemons in the first place.

 

Yes i have had to do the same ...poured a lot of sugar (cash) in
But time seems to be the healer!

 

I am with you on this one, if you have a lemon get rid of it if you can

Unfortunately those who purchased in Mining towns are screwed, for example Port Hedland has dropped 40%, this who purchased at peak around $1m are going to potentially lose $600k+.

 

Time will help, but if it's highly negative geared then it's going to hurt

 

All part of the process...just learn from it I guess

 

Yes that's why I don't buy negative geared properties!
Vacancies are my no1 killer!

 

me too, another lesson

 

With earlier purchases that were based on 10+ % net yields with today's cost of 4.2% it's quite easy to just hold a lemon even with vacancies it breaks even
Plus with a wide spread of income the good look after the bad investments
With time lemons have made some profits on sale ....only sold one at a loss. ..due to the company rules saying you can't rent the unit out and as i had a partner my "bachelor's pad" had to go ...at a loss

 

We bought a single bed unit for $160K, it was beyond revolting, in its original state, and had a major cockroach infestation. We redid the whole thing, furnished it, rented it for 6 months, then sold it at the peak of the market for $230K.

The unit itself was fine after we'd finished doing it up, but it was in a dodgy older complex with heaps of units (like I think around 100?) and the strata company were beyond incompetent.

We got an incredible price for it - we sold seven years ago, and reno'd single bed properties from the same complex are currently on the market for $205K.

 

Doesn't sound like a lemon to me.

 

At the time we were in a tight spot financially - we had a friend help us with the renovations, he did a lot for us - all the cabinetry in the kitchen (which looked amazing), all the tiling in the kitchen and bathroom etc. Which sounds great - except he took an awfully long time about it (5 months) and we weren't getting any income from it. I had to borrow some money from my parents, which I swore I would never do again (and I haven't) just to keep paying mortgages etc.

That, combined with the dodgy-ness of the complex itself (think drug dealers, users, ladies of the night who worked from home etc) basically meant we bought it, then looked around and kind of said, 'Oh ****!'. It was just lucky we offloaded it when we did.

 

Dealers and ladies of the night, no wonder someone gave you such a high price for it with all that convenience and amenity.

 

lol, don't ever under estimate location