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Thanks for the info.
Hi Greg would you be able to comment on my last post please…..
So in summary if I have it correct – if I take out a CALL Option on a Qld domestic dwelling for say 12 months with 2 x 6 month extensions written into option – and on sell CALL option to an ultimate buyer or nominee – I only pay the CALL option fee (negotiable with seller) let's say non-refundable for the moment. The ultimate buyer pays stamp duty on property once he/she gives a notice to purchase to seller accompanied with a sales contract to seller thought Real Estate agent nominated by seller. I also place a CAVEAT on property when taking out the CALL Option to protect my interest in property. So what are the out of pocket expenses with this deal for me. Call Option fee let's say $1000, Caveat registration with Titles office – I think less than $200 in Qld, Do you have to notify local Council let's say Brisbane City Council that you have taken a Call option and Caveat on property? When exchanging Copies of CALL Option do you need a solicitor and if so what are the fees for administrating CALL option contract? I have a CALL options contract and is ready for use. Therefore no expense for Call Options preparation. Have a copy from a bootcamp I did recently. Although we didn't go into it in great detail for out of pocket expenses. What are the calculations for determining a CALL Option value? Is it a % of realised profit in deal that is: demo existing house and build 3 units with a realised profit of say $340K. Is 10% of that gross profit a starting point? Any help anyone can advise me on this subject would be appreciated. Thanks Bruce
nice deal – well done. Keep it up.
HI Jason – please accept any typos as I quickly bashed this out for you.
You can start when your 18 years old. You just need knowledge and drive. A little money say $1000 even $1 yes $1 deposit if you know what you are doing. I am not a professional – just an investor. So take everything with a pinch of salt. I have done Steve McNights MEGA conference and packages, Dean Parker's package, Carly Crutchfield's CCorp Bootcamp and a few others like one day workshops with Mark Rolton . A few of these my son went to when he was 16 and got the bug. He is now 18 enrolled in Uni of Central Qld distance education program for Bach of Property. The quickest way to make money in my option is – when you're strapped for cash, is to do property options like what most property guru's inform us about. The big stuff comes later – developments etc. I encourage you to get along to a Mark Rolton's one day workshop for Property Options and he shall explain it clearly. In short, you have 3 people: Seller, option holder (that's you) and the buyer. Let's do an example – You find a great property that has its owner residing on 1000 sq metres. House on front with enough room to build say 4 townhouses on back. You have to do a lot of research first and take the guess work out. Go on RPData or INVESTAR – I personally like the latter because the former has about 6 search variables – whereas the latter has 33. Go to Council ask them that you are looking in a particular suburb/s and what is the Council wanting in that area – they may say high density housing – like say 2bed townhouses. Check the zoning via the coloured maps available online at council for free. Tis should narrow down your area. You hand write neat clear and concise personal letters to a bunch of owners from your chosen area. Don't go mad and write 100 letters because if half reply to you then you are in trouble. Write 20 or say a short street. That should get the neighbours talking – never under estimate the power of a chat at the fence or front garden while watering their vegie patch. You are looking for an expression of interest to sell their property. Once you have got some or a reply. Arrange a meeting. Dress neat and casual – take dad since he sounds like he knows what he is doing. Don't come across like some power hungry developer – be truthful, sincere, honest, polite and dress neat in good casual clothes. Ensure you are groomed – hair cut and don't forget to shave. More than likely your target audience shall be the top end of the baby boomers. That's born 1946-64. So demographically older single persons or couples – who may be thinking of moving into a retirement home etc. Arrive out from 10 minutes early than meeting. now to the guts of the deal. There is a lot more that Mark Rolton can fill in – but here goes: You need to find out what the owner would like for the property – now let's be clear here, you would already know these details from your research and downloaded of one of those website the complete history of this house and all houses in street and similar in suburb. So you should know how much the house is worth within a $5000. So you will know more than most real Estate agents in their own work area. That is very important. Your seller may say I would like $290k to get a good retirement villa. You know the property is worth about same or maybe a little less. But you have done all your homework already. You say I would like to take an option on your property for $350k. I bet this get's their attention. He isn't sure what that means. You have to have on hand all the documentation regarding an option. You explain in simple terms and allow them, if fact go along with them to their lawyer, to explain to the lawyer what you are proposing. You want to take an option on the property for $1000 refundable deposit. Basic the seller owns the property, but upon option taking, you control it. You then take the option for 24months say. Find a builder or developer who is looking for land to build townhouses. You know the developer (buyer) can build these for 150k each x 4 = 600k. You want to sell the option for the property to the buyer for 100k. The buyer knows he is still going to make money….let's see. 350k for house (happy seller), say 100k for DA and improvements on existing dwelling, 600k for build of 4 townhouses, that's 1,050k costs to buyer + 100k for you the option holder selling the option to buyer. That totals 1,150k. He sells dwelling for – let's say break even 350k, and townhouses for 300k each that's 1,200k. Take debits away from credits and buyer makes 400k profit. More importantly you walk away with 100k less your $1000 dep the seller keeps. Not bad for a simple deal. There is a fair bit of work to do before this occurs but I hope this gives you an idea. Go for it. The IP or intellectual property on the option documents is passed onto you when you do the courses like Mark Rolton Bootcamp – check out his website and call them ask them when his next courses are on – Syd, Melb and Hold Coast this year. Mark doesn't know me really and I get nothing from mentioning this to you so he seems okay with his imparted knowledge on Options. The bootcamps are about 7k each. A lot of money not really when you consider what you are getting and where you can go from there. Educate yourself and go for it. My son is. All the best…Regards Bruce ps. I hope this gives you some insight. Age has no boundaries as long as you can legally sign a contract.
Hi there …I see “The Freckle” mentioned what I just observed on Foxtel regarding the Australian mining boom decreasing within 2 years. Also to consider the relevance of other info like the global demand for iron ore to produce steel – there is plenty of research available online for this subject which may be seen as good Due Diligence on an investors part. See http://www.miningweekly.com/article/global-production-of-iron-ore-decreases-2010-07-23
Also check out http://www.tandlnews.com.au/2012/06/12/article/australian-employment-market-continues-downward-trend/
Enjoy
CheersHi Auskiwi…small point for a larger answer really – concerning the subject to finance – ensure you make it subject to “your” finance not theirs as if held to the contract and you couldn’t get it through your financier – they could supply finance and authorise the purchase – it is a little more difficult than this, but if you have a good solicitor not just a conveyancer, they should point this out to you in any case and YES to most occurrences were your contract falls through due to finance, pest, building inspections then you would get your money back. Also think about one of your clauses being due diligence (DD) say for 14 days longer (i.e. 21) if you can get it. That is where you have all your tradies come in and gives you exact quotes on what needs to be done….if the work is outside your budget then the DD fails and you end the contract. Some will not like giving you 14 or 21 days DD but if they will not come to the party walk away there are plenty of properties out there. A lot of rental property contracts for purchase with occupants the agent will give you a 37 day contract i.e. 7 days to go unconditional + 30 days notice to tenant. Ensure the DD is completed and specified in contract as part of the unconditional agreement not just the banks rubber stamp. Hope this helps and there are a lot of member on here who can give you plenty of good opinions – my advice listen to them all and take out what you need. Cheers.
Hi Amanda
https://www.propertyinvesting.com/strategies/renovations
This link above is great info from Steve McKnight regarding what (I believe) one should really stay away from if you do not have the reno knowledge or think you can sort out those problem areas during the reno – and believe me he's correct as I know this from personal experience. Generally speaking as Steve says, the more costly areas to fix are:Roof (leaks, rotting areas)
Stumps (sloping floors and walls)
Rewiring and replumbing (old circuitry and copper pipes)
Shower recesses
Pest (particularly white ant) damageAlso not every paid house inspection picks up the hidden items that would cost you and I profit to repair. The expectation of a buyer is that there is a roof with 4 walls etc etc not what we do behind the scene. They don’t care how much effort and expense we have gone into to product this wonderful asset. The profit is in the buy not the sell as the market determines what the buyer shall purchase it for.
Do not stray from the plan – Dean and Elise Parker from:
(http://www.propertysystems.com.au/reno-expert-dean-and-elise.html) have a great package concerning the renovation system and it works – provided you stick to it. It’s business – don’t get emotional with the property – If you are buying it to reside in it for 5 years or so then you shall treat it as your principle place of residence. If you are buying it to sell in 5 years – you are still living there, though you have another agenda. Recognise that and stick to a plan. Through Steve’s, Dean’s and Elise’s knowledge and direction you can make it work. Learn from those who have done it and are doing it – it’s cheaper to spend some money on some Conferences, courses and books than fork out $50K and realise that you made a mistake.
Don’t forget to have fun – Regards Bruce
Hi Amanda…this is quite long so grab a coffee….first off these are just my opinions so feel free to get a second opinion…the look alike weatherboard stuff is probably cladding with a foam backing, generally not asbestos. It usual does not need painting as it is an aluminium product. However, it may have been placed over fibro sheeting (asbestos) to dress up the look of house. Generally houses built in 1990 or before will carry asbestos. To test a piece (about the size of a 50 cent piece – triple bagged and sent to a authorised testing facility (look up asbestos testing on web) I use – http://www.queenslandlab.com 22 Ereton Drive, Arundel Qld contact 1300 138 366. Call them and they shall info you procedure it cost $55 incl gst per test. They test piece immediately provided you have a credit card and then they info you over telephone and send a report through via email or mail. If not in Qld I am sure you can find an alternative. I have purchased properties with asbestos and if minimal doesn’t pose a problem – if your just washing it and painting all is good (the key is not to disturb it). Plenty of people buy houses for investment to reside in or rent out which contains asbestos. So I wouldn’t get too hung up on that issue.
The general rule with asbestos is depending on which council area you are in they tend to have slightly different mechanisms for dealing with and disposing of this product. You are correct if not damaged and undisturbed it doesn’t pose a problem. Even drilling, sanding, cutting, breaking or damaging it in any way permits the particulars to disburse into the air – this is a big no no. I have dropped some info from a guide as per below for you. Also here is a website regarding same and licences etc:
http://www.deir.qld.gov.au/workplace/training/training/activities/asbestosremoval/bclass/index.htm
There would be similar in what ever council you are in – go to your council website and search for asbestos.
However, the general rule (please check with your council) if following your particular council is that provided you are not removing more than 10m2 (equivalent to one bathroom wall) at a time, and you are adhering to the removal and safety precautions – you can do it yourself. Also there are specific guidelines concerning taking it to council smart dumps for disposal. In Logan (Qld) Council smart tips it cost around $14 per 100 kgs. Of course it has to be bagged and tagged prior to delivery and at this specific council you must ring tip 1 hour before arrival. It cost me in disposable coveralls (3pr, goggles, P1 or P2 asbestos masks (YOU CANNOT USE A NORMAL DUST MASK), duck tape, black plastic as per below, gloves and bags to cover boots, water spray bottle – about $200 neat. You make bags doubled wrapped so 2 x men can lift easily into a trailer. Quotes were about $1500-$3000 for someone to do it. To do a 3 bed small cottage inside and outside is about $13K. To be honest after observing some of these guys do their asbestos removal I wouldn’t want to go near the house afterwards. There are obviously licensed asbestos removalists who are very competent.
This fact sheet has been adapted from the Public Health Regulation 2005 and the 2005 NOHSC Code of Practice for the Management and Control of Asbestos.
REMOVING CERAMIC TILES FROM ASBESTOS SHEETING
IMPORTANT INFORMATION:
Asbestos is a hazardous substance.
It is a risk to your health and the health of those around you if asbestos fibres become
airborne.
Plan ahead to avoid disturbing materials containing asbestos.
Always prevent creating any dust.
Follow the correct safety procedures.
STEP 1. Get your equipment together
• 0.2mm thick plastic bags no more than 1200mm long and 900mm wide for collection of
asbestos waste
• 0.2mm thick plastic sheeting as a drop sheet
• Duct tape
• Bucket of water and spray bottle filled with detergent and water
• Wide scraper, hammer and chisel
• Disposable cleaning rags (eg. paper, cloth)
• Personal protective equipment – P1 or P2 respirator, disposable coveralls, safety
goggles and disposal gloves
STEP 2. Prepare the work area
• Remove all loose and unnecessary items from the work area
• Close doors and restrict entry
• Cover the floor with plastic sheeting and secure with duct tape
• Keep asbestos waste separate to all other waste
• Put on your personal protective equipment
• Check the fit of your respirator as per manufacturer’s instructions
Warning!
Check for electrical hazards. As you will be using water in this task, it is safest to turn off all
electricity where you are working to prevent electrocution.
STEP 3. Remove wall tiles
• Use the chisel to gently tap between the top of the tile and the backing sheet to release
the tile (do not dig the chisel into the backing sheet)
• As the tile is released, spray detergent water lightly behind the tile to prevent release of
fibres
• Try to prevent the tile from falling onto the plastic
• Place tiles in disposal bags (only fill the bag half full)
• Remove tile adhesive and grout residue from backing sheet to achieve a relatively flat
and clean surface before laying new tiles. Treat all waste as asbestos waste.
If the backing sheet is damaged or broken before or during the removal of the tiles, you’ll need
to remove the entire sheet. You’ll also need to remove the entire sheet if you can’t remove the
tiles without damaging the backing sheet. Arrange for the sheet to be removed by a
professional or remove it yourself using the “Removing Bonded Materials Containing Asbestos”
This fact sheet has been adapted from the Public Health Regulation 2005 and the 2005 NOHSC Code of
Practice for the Management and Control of Asbestos.
procedure. Replace the asbestos sheeting with an alternative wall lining (eg. plywood,
plasterboard, fibre cement sheeting).
STEP 4. Clean up
• Use a cloth and detergent water to gently wipe down the wall. Keep the surface damp
with the detergent spray. Use a scraper to gently remove all residues and do not dig
into the surface of the sheet
• With the wall sheeting now clean and level, wipe down again with a damp detergentwater
cloth
• Remove larger scraps from ground plastic sheet and place in a disposal bag
• Carefully roll or fold plastic sheeting from the floor, so any collected dust or debris does
not spill
Warning!
Domestic vacuum cleaners are unsuitable and should never be used, even if they have a HEPA
filter.
• If necessary, use damp rags and/or an approved asbestos vacuum cleaner to clean any
remaining visibly contaminated sections of the work area
• Do not resoak used rags in the bucket, as this will contaminate the water. Either fold
the rag and use the clean surface or use a new rag.
• Place asbestos debris, used rags, plastic sheeting and other asbestos waste in disposal
bags (only half fill the bag – this is to reduce the chance of the bag splitting)
• After the work area is clean, wet down your personal protective equipment and clothing
with a light spray of water and place them and all used damp cloths into a disposable
bag
• Before removing the bags from the work area, wipe external surfaces with damp rags
to remove any dust and put the used rags in one of the bags
• Seal all disposal bags with duct tape, place into a second disposal bag and seal again
• Label all bags with an appropriate warning such as:
CAUTION – ASBESTOS
DO NOT DAMAGE OR OPEN BAG
DO NOT INHALE DUST
CANCER AND LUNG DISEASE HAZARD
• Dispose of asbestos waste at the appropriate waste facility (contact your local Council
for more information).
Hey Kerrie…the likelihood of another flood like the devstating one which just occurred is possible… yes but if it takes another 37 years to surface then just get on with business. The only thing I would ensure is that your Insurance coverage has that detail of "any flooding" in policy. There could be an earthquake as well…sometimes we just have to move on and get on with life. We can takes logical steps to ensure the basic due diligence is completed – but hey people don't forget but people still need to rent and buy houses as well. Mortgages may possibly be more difficult to place on flood affected areas as well, depending on bank etc. The fact that you have 16 houses under your belt shows your not new to the subject and very lucky that none were in any flood zones. Keep doing what your doing – yes the ideas of raising houses in some fashion is an idea – but people always shall find a way to squeeze a little more out of something. If you raise the house – someone will buy it and build in underneath after settlement to make more room regardless of the flood plain lapping the gutters on previous occassions. Enjoy! Onward and upward.
If in QLD yes you require it same time as signing contract (you can get a cover note until sorted) best price I was quoted is by YOUI insurance – can't comment on rest of Oz.
“Depending on where you are based I could recommend a few good solicitors in this area.”
Thanks that would be great Robert I reside in the Logan Central area just South of Brisbane. A heads up on some reliable well informed solicitors would be apprecaited.
