Mayfield (Newcastle) NSW flipper 2020

I Thought I would share our recent renovation, this is number 7 for my wife and I.

I just wanted to put it out there, I would never buy from direct from a client or off market being an agent myself. I will always buy through another agent to keep it arms length. I get told all the time that I must get great deals, I must be doing something wrong because every time I’ve purchased a house I’ve paid over the asking price.

This is the first time that the intention from the start was to turn it over straight away.
The other renovations have been a mix of investment properties turned major renovation once the tenants have vacated, or purchased as a PPOR, renovated over a couple of years than got itchy feet once it was completely finished.

After our first child was born in 2018 my wife said no more living through renovations, so It has been really enjoyable not having to live through it. We purchased early June, the world still wasn’t in a great place, this popped up online listed with a price of $450,000. Nothing in Mayfield has sold for under $500,000 that was in a decent spot for a number of years, the first open had 30 groups through the first open, three other buyers all offered similar money to me but all wanted pest and building reports. I’ve used the same builder for the last 6 projects so when he gave me the all clear, I put my unconditional offer in and was lucky enough to secure it.

It’s funny though at this point in time, I thought the market was going to be in for a turbulent time, I thought I would take on this project as my wife was due in November with baby #2 and this would help supplement the potential downturn I thought my industry was heading into. I did have comfort buying at this time because of the government grant allowing FHB to use a 5% deposit up to $700,000. This figure formed my worst case scenario number. I have a good idea what these buyers are looking for and this was the main demographic I target with our renovation design and styling.

https://www.realestate.com.au/property/webview/77-fawcett-st-mayfield-nsw-2304

You will notice no internal photos, the house was so full of stuff that I had to wait until August before they could settle.

The numbers below;
Purchase price $480,000
Stamp duty $18,000
Legals $1500
=$499,500
Estimated renovation, selling / holding costs $120,000
Total spend $619,500

 

I should of put in my first post that the time frame for this project is 3 months. The plan was to have it on market the week before my son is due in November

Week 1-3, the demo seemed to last forever, renovating old homes before I’ve learnt the hard way with trying to “patch” horsehair so made the decision to completely gut the home. It was a shame ripping out the old ornate ceilings but It wouldn’t of been a cost efficient renovation if I tried saving them.

We did manage to keep the timber fret archway and all the three panel doors. After ripping up three layers of carpet we had a win finding Baltic pine floorboards that were 150mm wide.

20 skip bins later, the demo was done

 

Week 3-5

The fun part, putting it all back together finally! Inside we had to remove two internal walls, add an en-suite to the front bedroom, rebuild the bathroom/ laundry and kitchen. The double sided fireplace was removed, we managed to save the floorboards from the en-suite to patch where the old fireplace was. The floor layer did an Unbelievable job, you can hardly tell.

As with any renovation it is hard to estimate everything, the first oversight was that I needed 5 new windows, I missed this with my planning as I couldn’t physically check if they worked when I first inspected the home as it was so full of stuff. I found a window supplier that on sells windows that have been returned because they were order in the wrong size. I got all 5 windows for $1500 which was a good save.

 

Week 5-6

Complete rewire by the electricians, all new plumbing, Gyprock, insulation and the black japan sander off the floorboards.

 

Loving this project @tomlemke Been following the insta stories. Will have to come down for a catch up and you can give me the full story and a tour.

 

Hey Dan,

I would love to give you the tour, give me a bell next time your in town.

 

Awesome stuff! I may have to steal you approach for my Mayfield places

Cheers,
Inertia.

 

Thanks for sharing @tomlemke
Can I ask, what kind of profit margin are you expecting once it's all said and done?

 

Definitely the way to go, it's not worth leaving any money on the table.

95 Ingall Street Mayfield purchased July 2020 for $502,000.
https://www.realestate.com.au/sold/property-house-nsw-mayfield-133950670

Now on the market for $650,000 - $690,000.
https://www.realestate.com.au/property-house-nsw-mayfield-134879270

 

Hi Lindsay,

Aiming for $80,000 after all costs - the CGT

 

Great work Tom. You find yourself a development site for the next project, corner block in Mayfield. Build 3/4 units.... sell 1 and keep 2 for casflow at $550pw

 

Week 7-8

Waterproofing, Tiling, painting and floor sanding and a complete re pier (39 piers in total)
House was surprising Dead level, all the old concrete piers had just split down the middle.

 

More pier pictures, 39 individual piers along with the front wall of the house. This ended being a massive job lucky there was plenty of room under the house.

 

Looking good! really interested to see the end result.
Any tips for people looking to get into this kind of reno flip?
Choosing the right builder seems like an important part, keeping costs down and on budget.
Do you get in an help with any of it, such as the demo, or no?

 

Just take your time, the old saying that you make you money when you buy couldn’t be more true. I could of paid $550,000 for exactly the same house 2 months later.

Yes finding the right tradies is crucial, I pay the majority of my tradies an hourly these days. They prefer it as takes the risk off them trying to quote unforeseen issues.

I used to pretty much live at the house when I first started renovating homes, I’m still hands on but not nearly as much as I used to be. I was a plumber for 8 years before I got into Real estate so I’m fairly handy.

 

Once all the piers got finished the kitchen went in, I went something a bit different with the kitchen. I would usually go with a fairly conservative finish, the whole house was going to be white so decided to do something bold to break it up. I’m really happy with how it turned out.

 

Love those floorboards and tiles!

 

Insides all finally complete.

 

Looks great!

 

So a great thing happened, I had a family friend who kept missing out on homes in the area. He reached out and said he would buy mine as is.

Inside was completely finished, painting, driveway, carport, fence and landscaping all had to be completed so we put those items in as a condition for settlement in the contract and the sale went through!

Settlement is due for the 14th December, I love a deadline!

The numbers for anyone interested;

Purchased 1st August - 14th December Settlement, just over 4 months for turnaround.
Purchase price $480,000
Stamp duty + Legals = $498,000
Total Renovation/ holding costs = $120,000
Total cost = $618,000
Sale price = $740,000
Gross profit = $122,000