Three Sisters/

Good strategy they have in today's climate ? Quick reno and flip ???

HOME

 

I would love to quit my day job and do this full time.

 

These renovations are very nice.

One thing I did notice though that these were all purchases during the Sydney boom from 2014, 2015 and one for sale/auction now.

It will be a totally different beast now that the market has changed, as they captured growth. Now it will be very interesting and higher risk because they need to ensure that the area they play in will hold out.

Also had a very quick run of the numbers they grossed around anywhere from 10-18% gross which is not huge, however what they turned over stock in a short time frame. We need to take out all buying and selling costs and also tax. I would assume they pay no more than 30% tax as its run as a business. Still lots of work for smallish profit?

I expect they will make much more money by selling their renovation secrets, this is where they will generate their money, there is certainly not enough in renos just my opinion from what I can see here.

For me, reno ...yeah...no.... too much work for little gain, but then again I am lazy.

MTR

 

Agree- a lot of work/risk for little reward. I will try and attend upcoming auction to see where they land.

Can you imagine renting out such a place should it not sell for maybe less than 3% return ???

 

that will be great, interesting to see what it sells for.
I am not in Syd do you know this area, last property on the list?? is it still strong or falling??

Another problem or perhaps not a problem for everyone, imagine giving up your day job to do this?? how do you finance the deals, no income?? Also the profits would be your income, that's a turn off because you are not creating income streams but eating profits not ploughing back into the deals and you have 3 mouths to feed.
That is why they require a business.

The higher end values also make it higher risk unless its a rising market because you have higher holding costs and if you can not sell at the right price you will be holding a negatively geared property.

This sort of strategy requires not only buying at the right price in the right market but a little luck or a lot of luck

MTR

 

and this is why Cheree Barber has gone to the US to film shows ... the boom is over for this kind of strategy in my view.

 

All these reno and flips are always grey and white trim

 

Each of their partners are ex-NRL players and now a current NRL coach or media personality.

Don't know the structure but I suspect that helps with some aspects of the business - certainly allows for some longer term objectives.

 

Agree - I think there is more than just the reno here ...

 

the spends seem a little under quoted maybe? Seem to get a lot of value compared to renos I have done and I only use tradies for stuff I have to

 

No doubt.
I guess it's a bit more hands on than enabling them to be "decorators".

 

A lot of work and risk for (after entry and exit costs) marginal returns but I like their decorating style. I wonder whether this enterprise would trigger a GST liability?

 

Someone above mentioned it's being run as a business, what would be the deal with that?

 

Second hand residential property is usually input taxed and not subject to GST but pretty sure GST would apply in this case as it's trading stock. GST will also apply if the renovations amount to 'substantial renovations'. The company is registered for GST so I suspect they are paying it. If it's trading stock the profits may then be taxable as ordinary income rather than a capital gain but not 100% sure on this. I'm a property lawyer not a tax lawyer so I could be off base here.

 

Well sounds legit to me
I have no idea about that sort of thing.

 

Thanks.
With GST - Would margin scheme apply??

 

Yep - likely to be able to apply the margin scheme as it was acquired as second hand residential property.

 

Thanks
Seems net returns are not that attractive for all the work and risk involved, especially now that market in Sydney is starting to turn.

 

Yep not worth it at all to sell because of the exit and re-entry costs, reno and keep can definitely work though.

 

I doubt these girls are doing it for the money, they were probably set up by their footballer husbands to keep them entertained.