Need to start trading assets.. What was your last trade?

Hi guys,

25yo with 10 IPs. I've finally hit my lending limits, so it's time to sell down a couple properties to improve gearing/serviceability and reduce debt. I'll be keeping my core properties that have potential to add value down the track (adding granny flat, subdividing, building units on etc).

My next step is to start trading assets for a quick profit, and using the profits to add more 'value-add' properties to my core portfolio, and to reduce debt in that core portfolio.

Has anyone been using the 'trading' strategy recently? Can you share some recent projects that worked well?

I'm thinking my targets should be:
- unit blocks that can be strata titled and sold down
- fire damaged houses
- termite damaged houses
- deceased estates
- badly neglected properties

I'd like to avoid subdividing and/or building, as I believe these will trigger GST payable as well (need to get further tax advice) but if the numbers stack up, then obviously I would look here as well.

Price point - flexible, as I have cash investors who would partner up with me if it was something too large for me to do myself. So let's say up to $3m. But would prefer to start with smaller projects.

Cheers

 

Bump. Anyone flipping properties at the moment, or is everyone just cashing out and waiting on the sidelines for now?

 

Trading works better in a rising market, but with Sydney at the peak you might find the transaction costs make it not worthwhile.

 

I agree Jess, I certainly wouldn't be doing it in Sydney unless the margin had some extra fat in it! I know the Logan and Ipswich areas well (I have 8 IPs there), so these would be my preferences however I'm not seeing any opportunities with enough margin to enable a flip.

I might have to start learning some new areas...

 

Where are your 10 IPs? That's massive!

 

Thanks. 8 in Ipswich/Logan and 2 in Sydney. But I'm probably going to sell my 2 in Sydney to improve gearing/serviceability. I think Sydney is at/near the top and may not see much more growth until the next cycle.

 

I'm looking at Ipswich. Wonder if I have let it too late.

 

I think Ipswich will continue to grow slowly. What are you looking for?

I bought one in Booval which doesn't cost much to hold (paid about $230k and rents for $275) and it is zoned medium density so I can put 3 townhouses on it. Not worth doing right now, but in the next property cycle it will make a lot of sense, and doesn't cost much/anything to hold. Perhaps something like this suits your portfolio if you're looking for a buy and hold, with future potential to add value?

Cheers

 

Yes something like that which allows flexibility to add value. Long term hold.

 

BUMP - has anyone traded recently? I can't see many opportunities in Logan, Ipswich or Sydney. Should I look to Perth/Adelaide/Melbourne?

 

There are guys flipping land in Melbourne's west in tarneit and the like. 10% deposits and then selling them off prior to settlement. No loans required.

 

Why are they able to flip so quickly?

 

We are selling one at phillip island at the moment
List price is 415k
We bought for 380k in may last year and subdivided and rennovated
All in costs including interest and rates were 460k
We will retain the block of land which we received an offer of 190k for yesterday
So if we get 410 and the block is worth 190 then less selling commission our profit is about 125

Plan is to relocate an old home onto the block - completion costs should be under 100k
Value would be 420 - 450 on completion

So total deal should bring us at least 270k