Post your worst price dropped ip

Sydney's southern suburbs, both dramas were around the 04 05 period.

This is what happens, it happens everywhere, we have looked at many places in QLD, specifically Bris and surrounds where they only now are back to or close to 07ish pricing.

The key is if you need to sell, or can hold and choose when to sell.

 

Sorry to hear your loss mate keep positive

 

Hi guys here's my worst price drop

In 2012 I was sitting good I just finished my first Reno deal and had 120k in equity I was 25 years old and in a good position to set my life up I was keen to buy a home to live in and was doing research on how to use equity to buy your own home I should have went to see a broker atrophy away ..

Any way I got caught up with a buyers agent and he advised me about Positive cashflow properties and in high growth I though ok I can delay some time in order to get a bigger deposit for my home as the place I wanted to buy was only 250k median I thought if I wait 2-3 years I will nearly own a house .. Well not the way it went down ....

I bought in Gladstone August 2012
Purchase price $414,000
Value today $320,000
Loss of $94,000

Well that's before the house took so long to build the banks ordered another valuation half way through where the value was $380,000 and I had to get a extra loan of $40,000 to bring my LVR to a % where they felt more confterble

So it looks like this
Purchase price $414,000
Value today $320,000
- main loan -$360,000
- line of credit -$55,000
- equity loss. -40,000

Total equity loss of $135,000 in four years
And to rub the salt in I was told the rent would be $500-$550

It was rented for $330 pw for a year
Now it rents for $250 pw atm

It is negative cashflow of around $18,000 per year

It has totally stuffed me up finiancialy and abit mentally it has tore me away from friends and family due to finiancial comitments Iam having

Iam currently looking at selling the house at a loss , then go a head and sell my other house then I will walk away nearly neatual or a slight loss still but in doing that I will lose the $18,000 negative cashflow and I don't see Gladstone going to go up in the short term that much both value and rents

So that's my loss guys

I can't shout how important education is and doing your own due diligence is on suburbs ,towns , rents , values etc
I have since done a property course and learnt a lot and have decided if it takes longer to get to my goals so be it but got to build a solid foundation first and being around positive like minded people is very helpful

I hav been feeing better by getting this out lately and actually accepting the loss

Cheers daniel

 

What's a dud? I bought a 50% share of a development site in Melbourne in 2007 which we never got around to developing. Sold in 2015 for $300k more than purchase price. I haven't run the total numbers but with losses of up to $30k per year, we potentiall spent $240k to just hold the thing. After stamp duty, commission and tax, I reckon we will be lucky just to break even. It will be interesing to see if my guess is right when the final numbers come in.

Cloverdale for sure. Bought $465,000 in 2011. Based on a per square metre rate of sales in the locality, the priced peaked at over $730k in May 2015. Based on the most recent sale in the locality, the value has dropped back to less than $498k. Who said property isn't volatile?

 

Nah, no need to be sorry, it happens, that is why I posted and why I sometimes play devils advocate, to demonstrate that property does indeed go down at times, not just up, even in the best places.

I will clarify though, the place was not a dud, far from it, nor was the suburb in Sydney, it was due to market sentiment and instability of a dying NSW government & the need to sell due to other circumstances at the time.

You can't always win

 

Hey @the world is your oyster That is bad.

I can't say what to do, as I do not know the area at all.

Anyway all these problems really just = time, if you are young/ish, you have plenty of time to clean the slate or dead weight and start again, just keep your credit file intact, always pay for things, never try to avoid or pass off/ignore debts, this I believe will cause long term problems.

During the recession we had to have, I knew/met many people who prior were well off, that were back to nothing and working in a ground level job again, you just pick up and get going again.

Your no doubt not alone, all the best.....

 

GFC hit some people hard too. I know some who were to retire but lost so much value in super they had to keep working.

 

but good work in accepting the loss and moving on.... your next deals will be that much better for you having already gone through this experience as you learn from your mistakes.

Btw. I think this would be a very good story that should be shared in the risks of property investment for newbies thread...

 

Thanks for being honest Daniel. Seems you've had a pretty good education: be careful who you trust when it comes to your money. A lot of these so-called experts don't know much and they're looking out for no. 1, not you.
Now you're more than ready to listen and learn. That's the main thing. Some people experience great losses and are still not open to common sense. You've still got plenty of time and I'm sure you'll do well now. Take it easy.

 

Well done on that mate. Take your time, like others have said you'll recover and your young so time is on your side. If you can have faith and hope, you will come out ok and then it will make you even stronger than before. Don't let this experience define you. It's only a small moment in time. Move forward from here, better, stronger and ready for success with your new skills/knowledge.

All the best mate.

 

Thanks for your encouragement
I was in the API mag January edition for my fork in the road to get the story out that it's not all glamorous and Fat profits there are risks involved in property investing it's up to us to mitigate them
Thanks for your comet

 

hi there , iam nearly 29 so time is on my side thankfully ,
I have not let sight of building a property portfolio this is just a minor hiccup along the way I am going to build a legacy to pass on to my future children and end up living life on my terms

thanks for your commit

 

Hi there
this has giving me time to re asses what I actually want in life and out of property

I now know going in with no plan can be very dangerous iam not saying it cant be done but its more chance and luck ....

say you are in Melbourne and want to drive to Darwin and there are no signs nor a gps or map to direct you there, do you think it might be hard to get there with no direction of where you want to go? property is very much like that with no goal or vision you will end up in no mans land
thanks for your reply it means a lot

 

thanks a lot for the encouragement leo

 

@the world is your oyster... think of the upside! When you do have an investment that has heaps of capital gain, you'll be able to offset the gain on the sale against this loss.
#GlassHalfFull?

 

yes that's very true ..

iam planning on selling Gladstone first

then sell my Melbourne house

the loss will off set my capital gain hopefully leave me with some more for my next deal....

and I have already been looking into positives rather then focusing on the negatives they leave a sour taste in your mouth

 

thats not such a bad deal, I feel sorry for the world is your oyster

2 ips, and a few years later, his net position is negative, especialyl at a young age

as for courses, I doubt any course will teach you how to avoid mining towns, its just a bit of common sense as well as research into other forums etc. (im not impicating that you have no common sense for buying into mining towns)

I have one too, .

for those that are saying "you could see it a mile off as a disaster" its easy to say in hindsight,

there is a chance that the property is in a bubble and will collapse, and for those that avoided mining towns but heavily leveraged in normal properties, in hindsight, people could say oh property was too risky, anyone could have seen that,

the only reason I didnt buy multiple mining towns was because I was unsure, and it was all too new for me, and I was jealous of those people in those magazines with 10 properties in gladstone returning $900 pw in rent

 

good for you for coming out, I too am a bit worried about my portfolio,

its leveraged at 72%, cash flow positive if fully occupied, but its not, at the moment, its breaking even, a lot of regionals, which didnt get the boom of sydney or melbourne

I sleep at night not a problem, but stories like yours do keep me grounded


NOTE: for those more expeirenced folk, during doom and gloom times,do the magazines change their tone?????

Ive only subscrbied for about 3 years so havent seen them

 

@TMNT is there any particular reason why you went with many regionals mate?

 

I did aspire to nathan in certain ways,

and when you only work part time in an industry that doesnt pay well, 1 blue chips negative gearing almost wipes your entire salary out,

by buying cheap ones, yeah a few were in the dumps, think ashmont, on paper its great, and I did fall/believe/entrust/want to believe that with a good PM, ghetto or blue chip, doesnt matter, but maybe I got unlucky, or maybe the reality is different, I can only go by my own experiences.

my current strategy now is to offload a few problem ones, and eliminate the vacancies, so im cashflow positive or netural,