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Anyone Turned a Lemon into Lemonade

Discussion in 'General Property Chat' started by MTR, 15th Jul, 2016.

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  1. MTR

    MTR Well-Known Member Premium Member

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    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:)
     
    Last edited: 15th Jul, 2016
  2. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    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.
     
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  3. Cactus

    Cactus Well-Known Member

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    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.
     
  4. Beano

    Beano Well-Known Member

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

    MTR Well-Known Member Premium Member

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    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+.
     
  6. MTR

    MTR Well-Known Member Premium Member

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

    MTR Well-Known Member Premium Member

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    All part of the process...just learn from it I guess:)
     
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  8. Beano

    Beano Well-Known Member

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

    MTR Well-Known Member Premium Member

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    me too, another lesson:)
     
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  10. Beano

    Beano Well-Known Member

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    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
     
  11. JenW

    JenW Well-Known Member

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    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.
     
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  12. Cactus

    Cactus Well-Known Member

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    Doesn't sound like a lemon to me.
     
  13. JenW

    JenW Well-Known Member

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    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.
     
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  14. Cactus

    Cactus Well-Known Member

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

    MTR Well-Known Member Premium Member

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    lol, don't ever under estimate location
     
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