Hello from Albury, NSW

G'day guys, have been reading & following for some time now a lot of the the posts here on pc and must thank you guys for all the useful information I have absorbed in the short period of finding this useful Forum. My wife and I are keen to start our property portfolio but with very little savings and no Equity its a bit of a hard one for us right now as we recently lost all of our lifelong, hard earned retirement investments in a Franchise (Int Pizza Franchise) we owned for a number of years which had turned sour on us. We are both in our fifties but will not give up on our dreams of being financially free. We have both lifted ourselves off the rug, dusted ourselves and currently managing a local Motel which offers us free lodging and I started my own little handyman business contracting to a local RA which is owned by my sister-in law. They manage over 300 rental properties in Albury/Wodonga btw.

My question to you guys is this - As we are both over the 50 mark and time not really on our side for long term investments right now, is buying property for a quick reno and sale viable in Australia, (especially Albury). I am seriously thinking of doing this as I have the skill set to complete any reno myself and finding properties while having a great contact within a RA is handy but am nervous to take the plunge in buying a property and then sit with another head ache if we are not able to sell quickly.
My thoughts are to do this with a few properties to build cash flow and then ip's after that?
What are your thoughts on this, please be gentle
ps. I am learning as much possible as I can about PI's and reading books etc but thought this site the best tool to use as "my personal mentor" many thanks.

MUNBUD

 

Hi & welcome. Sorry to say that flipping houses in Australia does not generate the same profits as you see in the USA market. Here the transaction costs incoming, of stamp duty and loan fees (and holding costs) as well as exit fees like REA commissions and tax on profits, eats up so much of your manufactured equity it is all you can do sometimes just to break even or slightly better.

 

Thanks for the feedback @Propertunity, would this be the case even if you bought well under the market value?

 

You need to do your numbers but I read an article the other day where a few prolific flippers (including C Barber) were saying there's more money in buy-reno-hold and refinance than selling.

 

Most people "successful" at flipping owe a large part of their profits to natural growth in the market while they were renovating. So the strategy works best in a rising market.

 

Agree with Alan. Might be easier to do in the short term in Wodonga with the Vic fhb stamp changes coming in. New builds seem so cheap in Alb-Wodonga though. Seems like it would be hard to get a return on a flip/trade.

 

If you were to buy, make it your PPOR, reno over a few months, end up leasing it out, then down the track you may be able to claim the 6 year ppor tax ruling (whilst residing back at the motel)...
@Terry_w

 

Was exactly my thoughts if not able to sell immediately for a profit. Thanks Stoffo, read somewhere here on pc today that most of the time the answers stare you in the face, you know them but just cant seem to make sense of it until someone else mentions the same. So my thoughts are to buy hopefully at a great price, reno and maybe rent out while looking for a change in the market or the right buyer comes along and live free at the Motel while doing so.

 

Thanks, your feedback is much appreciated

 

I was down in your part of the world on the weekend. A lot of new estates around the airport.

Chatting with a subbie he mentioned that residential was very active but commercial was flat.

 

Change of address, voting registration and all services connected in your name should be enough to prove it was at some point, your PPOR.
There may be a min mandatory period of residence also ???
That period is what i am unsure of (sorry)

 

As per @Scott No Mates post
Maybe you could find a commercial investment bargain ?
I got my retail/office because all the residential apartments were all anyone was interested in, no interest and the price just keep coming down to my offer

 

There is no mandatory minimum period.

 

Yeah lots of happenings around airport and especially Thurgoona way but not much percentage growth potential on investment, maybe over long term?

 

Thanks again Al, btw, I'm a Alan too

 

Pizza, property and Albury. This is my sort of thread . As others have said tread carefully with flips. Make sure the market is heading up, don't overcapilatise and know the buyer demographic like the back of your hand.

I have a few down that way so if I need any work I will PM you

 

At least you spell it the correct way.

 

hi munbud,

a fellow local investor doing similar to myself, getting out of the realestate maintenance game now though. ive just bought a cheap block of land in tallangatta(where i live) for 70k subdived into 3 and re-located some old weatherboard houses (free) for approx 40k ansd reno'd and now val about $300k + each and rent out for $300+ per week.
nice equity gain off about $500k for about 1&1/2 yrs work. been looking at north albury for dual occ blocks and would be looking at there if i was u.. pm me if you wann catch up for a coffee.
good luck.
yorkie

 

Ay Yorkie, thanks for the info, sounds like you got a good thing going there. Wife and I stopped on Talangatta just the other week for a coffee, very nice rustic old place would love to catch up for a coffee, let me know when u next in Albury mate

 

Welcome!

If you got skills and experience you can make plenty of money. Maybe start off slow and build from there. I've seen it happen. Not to me though.

They still got that Clyde Cameron college down there? Of course it's still there lol.

What an amazing building. Tunnels everywhere. I felt like I was in a submarine.