My Property Investment Journey - Week by Week

I am guessing SimonL is the BA?

Great buy.

There is a approx 200m2 backyard land and 4m side clearance. You'll have no problem building a 70m2 granny flat... maybe 3-5 years down the track...

 

Tks, man, hopefully you're right!

 

Yep, a granny flat is definitely on my future plans, when I need some extra cash flow!

I'll disclose the name of the BA once everything is finished.

 

Taking a stab.
BA simonl
Broker michael x

 

Maybe? I'll post all the details once everything is finalised.

 

I'll take a stab too.
BA Jose
PM Jose
Broker Jose

(DIY approach followed in the end =P )

 

hahaha love it!!!

I truly wish I had the knowledge to do all that!

 

What's the update mate?

 

Weeks 22, 23 and 24: 20/8/17 to 11/9/17

It's settled! I officially have my first investment property!

As I said in my previous post, the original date for settlement was the 21st of August, but the seller asked for an extension of one week so they could get a certificate of death needed for settlement. We agreed, but asked for early access to the property, which we got, and started the renos later that week.

The seller then asked for another 2 weeks of extension, given the certificate was taking longer than expected. Massive call out to my BA here: I was seeing this new extension as something negative, but my BA made me see the whole picture and showed me how good this actually was, given I was doing all my renos without any holding costs - it was the perfect scenario. During those 2 weeks the seller sorted out the certificate issue, which allowed settlement to take place last Monday (11/9). In terms of renos:

- The first reno was the big one: converting garage to new bedroom, adding a carport, redoing bathroom/shower, fixing the termite damages. Was completed on 2/9. Cost: $10913
- The new carpets were done on 6/9. Cost: $1590
- The final reno is for the small stuff: touch-ups on the painting, new oven, new blinds, flyscreen, clothesline, door handles. It's in progress and should be finished before the end of the week. Cost: $1949.20

I'm just waiting for the final reno to be completed and I'll ask the PM to take some pics and I can post a before/after here.

As promised in my last post, here are some more details of the professionals I've used:

- B&P --> 360 Building And Pest Inspections. Great people, easy to deal with, always available on the phone, extremely detailed report. Cost: $460.

- Invasive Termite Inspection --> Knockout Pest Solutions. Great guy, easy to deal with, very good report, was very helpful when I gave him a call after reading the report in order to clarify a few things. Definitely gave me the piece of mind I was after. Cost: $250

- Insurance --> EBM, already disclosed all details in my last post

- BA --> As I said numerous times, my BA is doing an outstanding job, also managing the renos for me. Once it's all done and dusted, I'll disclose the details. All I can say for now is that it's not always you bump into a professional like this. Impressive work so far

- Solicitor --> Loved the work all the way, I'm just waiting for some final details to be closed out and then I'll disclose the details

- Tradies (big reno, carpets and small reno) --> I'm quite happy so far, but want to wait till it's all finished and then I'll disclose the details

- PM --> Happy so far, but definitely too early to disclose any details

- Surveyor --> Only had an initial phone call so far, once the renos are all finished I'll have the depreciation schedule done and then will share my experience here

- Mortgage Broker --> I left this one to the end because it's the only professional so far that let me down. I won't disclose any names, but they definitely need to improve their customer service. I know I'm not the easiest customer to deal with: I'm extremely detail-oriented, ask lots of questions and always expect answers - or at least an honest "sorry but I don't know" or "sorry but I don't have time for all these questions, find someone new", which is perfectly fine. Regardless, I didn't have any issues with any of the other professionals - and trust me, I've asked a lot questions to all of them!

In the first phone call, which lasted for about an hour, all the answers were there, awesome customer service... but unfortunately this quality decayed during the process. Sometimes I was getting answers like "why are you asking this? Why do you want to know all of this?" etc. Something shocking happened at one particular point: the broker sent an email to the assistant saying something along the lines of "Watch out, he's an engineer, pedantic af", but accidentally sent it to me rather than to the assistant. I didn't make a big deal out of it, given we were at the final steps of getting the loan and I wouldn't let this delay the whole thing, but it obviously didn't make me happy. Trust me, at that point I had already decided I wouldn't use their services again and this particular email was not the reason for that, but it was the icing in the cake.

I understand brokers don't get paid until late in the process, but I don't think it's a fair excuse. What do you guys think? Is this scenario common amongst brokers? Are they all like this? Did anyone have different experiences?

Well, that's all for now. Thanks everyone who's been following, what an awesome journey it has been!

 

Hey Jose, out of curiosity did you need council approval for the garage to bedroom conversion?

 

Next time try @York , If he lets you down I'll give you a free IP!

 

Hey @BeefEater, my BA didn't mention anything about it and I honestly didn't ask. I'll check, tks!

 

Big statement! haha... Tks for the recommendation, @Leo2413

 

a garage is class10a
a dwelling with habitable rooms is class1a
a conversion generally requires approval
approval needs to ensure there are insulation, adequate height (esp for bedroom), holes if brick work, windows for sunlight

 

First thing I thought when I read it.. Did the BA check with council re permit.
I'd assume even the carport would need a permit.
Best to give councils a quick call but not disclose the property location.

 

Tks a lot, @RetireRich101 and @BeefEater, I'll definitely check it out.

 

Weeks 25, 26 and 27: 10/9/17 to 30/9/17

Alright, so the minor reno, which was the only outstanding piece of work, was finished on 19/9 and the we put the ad up (www.realestate.com.au/property-house-qld-crestmead-421876798). Now it's just a matter of getting a good tenant in to get some cash flow rolling.

So here comes an update on the list of professionals I've used, which a lot of people have been messaging me about:

- B&P, Invasive Termite Inspection, Insurance and Mortgage Broker --> all details in my previous posts

- Solicitor --> Certus Legal Group, more specifically a solicitor called Robert Haseldine. Loved his work all the way and there's not one single bad thing to say about him. He's responsive, knowledgeable and efficient. I went for the Basic package (list of packages here), which cost me $1395.

- Builders/Tradies --> These ones are a bit hard to judge in terms of quality of work, given I haven't seen the property physically yet, but based on the photos it seems like all of them did a good job. Here are their details:

- Carpets --> They did lounge and 4 bedrooms for $1590, but I didn't deal with them directly (my BA managed the whole thing), so there's really not much to say apart from the fact that it all looks great on the photos. Will be able to share more once I physically see the house.

- Minor reno --> Same thing: I didn't deal with them at all (my BA managed it too), but it all looks good in the pics. Let's wait till I visit it. Full cost was $2015.20, and this is what has been done:

- Flyscreen on back sliding door
- Daytek 48m Hawthorn Green Rotary Clothesline (cloths line, cement, labour and waste removed)
- 6 Door handles
- Paint walls in garage
- Reseal bathroom vanity kitchen and laundry
- New oven plus labour
- 2 Zone Interiors 150 x 150cm 63mm Vivid White (Basswood Shutterview Venetian Blind) plus labour to install
- 5 Zone Interiors 60 x 150cm 63mm Vivid White (Basswood Shutterview Venetian Blind) plus labour to install​

- Major reno --> Full cost was $10913, and this is the list of what has been done:

- Supply and install single zinc carport
- Remove damaged trimming and skirting through out the property and then prep and repaint damaged areas only
- Back fill left side footing
- Shower revamp (remove wall tiles, re sheet, full water proof hub and wall, retile, regrout, reseal, supply and install new screen)
- Garage conversion to bedroom (remove roller door, build in wall, supply and insert window including flashing, water seal and resheet, trim skirting inside, where needed prep ceiling and repaint wall)
- Lift up exhaust fan to normal height in the kitchen​

- PM --> {deleted - no longer operating}. They've been extremely helpful from the very beginning (even during the B&P period they were there, taking pictures and looking for things that would need to be done, knowing that there was a possibility that the sale wouldn't go ahead and their work would be wasted), and continue to be so now that the ad is up and the inspections are happening. I know PM is a long-term thing and the proper way to assess a PM is on how they perform over a period of a few years, but all I can say for now is that they've been amazing and, from what I've seen, I'm confident it won't change. Let's see.

- Quantity Surveyor --> Have been exchanging emails to clarify a few details, the plan is to have the depreciation schedule done this week. One of the interesting things they offer is a Deferred Schedule, which is a service on top of the normal depreciation schedule. The idea is that I can use this schedule in order to reduce CGT when (if) I sell the property. Even though I don't intend to ever sell it, the extra I'll have to pay for this Deferred Schedule is just $275 (and the returns can be quite good, based on some research I've done), so I've decided I'll do it just in case things change in the future and I end up having to sell the house for whatever reason (never say never!). Something else they offer that I found quite good was the fact that they amend the schedule free of charge whenever I upgrade/replace any item in the property, so overall I think it's a pretty good deal. Let's see how the conversations play out this week, but so far it seems like they'll be the ones I'll hire.

- BA --> I left this item for last because it was the most important during the whole process: Simon Loo, from House Finder (@Simon L). As you guys have seen in my posts, I've been praising his work for quite a while, and now that everything is finished I'm more than happy to finally disclose his name and say that the quality of his service didn't decline at all throughout the whole process - if anything, it got better as things moved along, as can be easily noted by reading my posts from the previous 3 months.

Not only did he find a property that ticked all the boxes for me (good location, in serious need of renovation that could quickly add value, below market value, seller desperate to sell), but he was impressive at negotiating the price, managed the whole renovation process and referred me all professionals, all the while giving me awesome advices and, to an certain extent, some mentorship.

In the beginning I was doing my due diligence for every professional he was referring me, but as time went by I just stopped doing it and started to trust him 100% with every referral. In the end, the only professional I used that wasn't referred by him was my broker, and you guys have seen in my last post how that turned out. Should have asked him for a broker referral as well!

Well, I guess I'll wrap it up here for now. Looking forward to getting a tenant in and getting the Depreciation Schedule done, as well as physically visiting the property (planning on doing it in November). Also want to get a valuation to see how much value I managed to get through the renos, so that I can assess whether they were a good idea or not.

 

Great stuff @Jose Eduardo Slompo !

How much do you think the 4th bedroom increased the rent? And how much do you think the conversion part of the project costed?

 

Hi @Toby,

The conversion itself cost exactly $2820 (that's the value in the invoice from Connell's). Important to notice, though, that I had to add a carport because of the conversion ($3150, according to Connell's invoice).

I'm hoping the extra bedroom will add about $20 a week in rent, but I'm mostly interested in the value it added to the property, so that I can use that equity towards my next purchase.

 

Knocking 15k off at b&p stage is unethical if you ask me. Sure you find 2-5k of stuff. But looking at the place, it's age, to me there is no way you wouldn't have found $15k of issues up front,to me just seems like you were leveraging the owner.
Not cricket in my opinion..

So the equity you are generating (285k plus stamps, legals and Reno) is basically the amount you bent the owner for while the property is under contract.

Pages and pages of a thread to amount to a lesson such as this.