Officer South House and Land Deal - using very little deposit

Long story...one day at work...I got tired of someone else determing my future at that point I had 5 properties...that was 2005..........12 years later am at 30.

Started with buying el cheapos in outer suburbs...now doing mostly smaller house and land packages. Mostly on Melbourne....I am getting 25-35% in equity on the end value - usually takes 12-15 months...end to end. Longer if you have to wait for land to title.

 

Thank you for sharing your story @sash. I have seen not a lot of people share their success and want to keep it to themselves. The community here for example like @MTR , @Connor and others are awesome! So thank you guys.

For a guy like me who is only starting, do you have any tips/suggestions/advice?

 

Nice. I have just transacted (conditional) on a H&L package. I am building so one-part contact.

Numbers
$133 Land
$178 Home
$10 stamps and finance (should have been less but commercial app fees on this one)
$321 total
$409 sale (net of com)
$88 profit
$8 gst
$24 company tax
$56 dividend fully franked, will stay in company to be recycled into next gig.

 

thanks for the breakdown! What size house are you building when its only 178k? Also the quality?
Very nice numbers
Where are you building?

 

Yep...awesome......something I plan to do when I retire to stay out of trouble.

At the moment...all mine are being held.

I reckon if I do 1-2 developments...I can easily earn about 100k gross per annum on top of any rental income I get.

 

Some tips:

1. Don't listen to the naysayers.
2. Get educated on how things work with property...learn from people who have built wealth consistently
3. When working with people who have made it...don't waster their time or tell them it can't be done....
4. Take it one step at a time....Rome was not built in a day
5. Quote for wealth : "People overestimate what can be achieved in 2 years and underestimate what can be done in 10 years"

 

Thank you @sash. I have written these down to ensure i follow religiously.

Your quotes are fabulous and meaningful!

Few things i experienced:
- Have come across lots of naysayers advising 'this suburb is crap', 'dont invest in properties', 'get shares/managed funds' etc.
- Real estate agents, almost all of the ones i have met have advised to invest to make quick capital gains in suburbs that are 'hot'. For some reason, for a moment, I did started bidding on those properties but realized that buyers are crazy when bidding, lifting the prices up. Moreover quick capital gains sounded risky after i started reading this forum.

 

4/2/2 roughly 19sq I think from memory
Quality not bad stone kitchen 900mm oven LEDs etc
Outer SE Melb

 

That is really cheap build. I can't seem to find anything around that price point. Will you be willing to share who your builder is? Unless you are building this yourself?

 

Not this one... they don't build retail clients. They mainly build for themselves.

But I have built Simonds before they build pretty cheap

 

Agree with Cactus we were in the market for a cheap 4bedroom house for SE melbourne mid last year. The cheapest we could find was with Simonds out of builder who had ok reviews and best build timeframe

we paid 195k for 4/2/2 24sq house in Aug 2016

 

Which suburbs of Melbourne are you mostly looking in Sash? I did do a quick search of your posts, but interested in current. I remember how excited we all were for you when Sydney took off, as I remember you took some stick for your strategy from some less informed people.

 

Still some value in Werribie suburbs....parts of Melton are also worth a look.

Geelong..is also a great spot...taking off now..

 

Interested to see where everyone is looking now

 

Sash are you actively looking in these areas? Do you think there's still enough time left in this growth wave in Melb for H&L strategy or do you think that this strategy will work regardless of the overall market movement?

 

There is still time left to ride the growth wave in Melb H&L if you know where to look and what product your building.
Eg. Last week I missed out on a deal which would of had 60-70k equity on completion at current market values....not factoring in any market growth while building. Would of yielded around 5% too.

 

Yes there is but price point and suburb selection is paramount...

 

Cool, thanks for the confirmation. I'll add this to my potential deals for this year then. Cheers!

 

Agree @sash and @Connor and would add that price point is almost more important than suburb selection imo. I think it's easier to make a 30% uplift on a package end Val from a starting $160k land price than from a $300k land price.

This is prob why you looking at Werribee and Melton @sash and why I have moved my attention from pakenham Beaconsfield Cranbourne to Rockbank Werribee Wyndham Vale...

 

Fast forward 1 year, just wondering Sash and Cactus (and anyone else) are still building house and land packages. Or has the market drop meant that its no longer profitable