Join Australia's most dynamic and respected property investment community

Three Sisters/

Discussion in 'General Property Chat' started by hillsguy, 16th Mar, 2016.

  1. hillsguy

    hillsguy Well-Known Member

    Joined:
    25th Aug, 2015
    Posts:
    45
    Location:
    Sydney
    Good strategy they have in today's climate ? Quick reno and flip ???

    HOME
     
    WattleIdo likes this.
  2. dianab

    dianab Member

    Joined:
    16th Feb, 2016
    Posts:
    8
    Location:
    Sydney
    I would love to quit my day job and do this full time.
     
    tgan and samiam like this.
  3. MTR

    MTR Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    7,362
    Location:
    Perth, Melbourne, USA
    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:)
     
    Hanison, Cactus and legallyblonde like this.
  4. hillsguy

    hillsguy Well-Known Member

    Joined:
    25th Aug, 2015
    Posts:
    45
    Location:
    Sydney
    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 ???
     
    MTR likes this.
  5. MTR

    MTR Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    7,362
    Location:
    Perth, Melbourne, USA
    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:)
     
  6. hillsguy

    hillsguy Well-Known Member

    Joined:
    25th Aug, 2015
    Posts:
    45
    Location:
    Sydney
    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.
     
    tgan, Player, Northy85 and 1 other person like this.
  7. Joshwaaaa

    Joshwaaaa Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    376
    Location:
    Adelaide
    All these reno and flips are always grey and white trim
     
    Heinz57 likes this.
  8. Tonibell

    Tonibell Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    392
    Location:
    Sydney
    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.
     
  9. hillsguy

    hillsguy Well-Known Member

    Joined:
    25th Aug, 2015
    Posts:
    45
    Location:
    Sydney
    Agree - I think there is more than just the reno here ...
     
  10. Joshwaaaa

    Joshwaaaa Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    376
    Location:
    Adelaide
    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
     
  11. Azazel

    Azazel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,113
    Location:
    Brisbane
    No doubt.
    I guess it's a bit more hands on than enabling them to be "decorators".
     
  12. JDM

    JDM Well-Known Member

    Joined:
    19th Jan, 2016
    Posts:
    145
    Location:
    London (ex Brisbane)
    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?
     
  13. Azazel

    Azazel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,113
    Location:
    Brisbane
    Someone above mentioned it's being run as a business, what would be the deal with that?
     
  14. JDM

    JDM Well-Known Member

    Joined:
    19th Jan, 2016
    Posts:
    145
    Location:
    London (ex Brisbane)
    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.
     
  15. Azazel

    Azazel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,113
    Location:
    Brisbane
    Well sounds legit to me ;)
    I have no idea about that sort of thing.
     
  16. MTR

    MTR Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    7,362
    Location:
    Perth, Melbourne, USA
    Thanks.
    With GST - Would margin scheme apply??
     
  17. JDM

    JDM Well-Known Member

    Joined:
    19th Jan, 2016
    Posts:
    145
    Location:
    London (ex Brisbane)
    Yep - likely to be able to apply the margin scheme as it was acquired as second hand residential property.
     
  18. MTR

    MTR Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    7,362
    Location:
    Perth, Melbourne, USA
    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.
     
  19. D.T.

    D.T. Adelaide Property Manager Business Member

    Joined:
    13th Jun, 2015
    Posts:
    5,578
    Location:
    Adelaide, SA
    Yep not worth it at all to sell because of the exit and re-entry costs, reno and keep can definitely work though.
     
    SirDingo and MTR like this.
  20. Special order

    Special order Well-Known Member

    Joined:
    7th Jul, 2015
    Posts:
    211
    Location:
    Nsw
    I doubt these girls are doing it for the money, they were probably set up by their footballer husbands to keep them entertained.