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We do most of the work ourselves accept for the laying of the carpet. Get yourself 3-4 quotes and play companies against each other. I find the prices almost always have margin for a considerable decrease based on the first quote. Another handy hint is to re-use the underlay if it’s in ok condition, which I find has been the case 90% of the time. It’s amazing how much they’ll try sting you for the stuff. We also buy the rock bottom cheap carpet. This suits our target market nicely but obviously alter the standard depending on the quality of home and area.
We tend to go with vertical blinds. Functional and clean. You can get them made up cheap or purchase from a place like spotlight. They’re fairly easy to install.
Getting to know what your renovation needs tends to come from experience and a little vision. I’ll get quotes from builders for stuff like roofing or carpentry that don’t have time to, or can’t do, myself. Mostly these quotes can be used as a bargaining tool during the BPI clause. For one purchase we got $3000 of the purchase price for a leaky roof, that ended costing us $300 to fix!
Do up a budget plan and include a time frame for delivery. Some people use a Gant chart but I find a spreadsheet table works fine. Most of all read up on what has worked for others in the past. Look at you-tube clips, google images, read forums and create a board with all your ideas. Get stuck in and give it a go. If your adaptable and willing to change plans at a moments notice it’s amazing what you can pull off. Good luck.
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This reply was modified 9 years, 6 months ago by
sciencesurf.
sciencesurf
http://sciencesurf.wordpress.com/
Email Me | Phone MeClick my website for the Sunshine Coast Property Blog
Hi Engelo,
Thanks for your reply. Cash flow is king – catchy phrases and royalist words..
Toledo and the US market should only be considered as a cashflow play. I would never recommend to anyone investing in US real estate with the hopes that they will see the market appreciating in the near future.
That’s really interesting to read. I don’t think I have once read that ‘in print’ from a US based investor. I guess that negates some of the risk of investing in property. All you need is for the US economy to ‘hold in there’ :)
The cashflow on this particular deal and many others is stupidly big when compared with the Australian market.
Percentages are only relevant to the capital they are based off. 30% net yield in the US could be equivalent to a much smaller yield in Australia. For example, after expenses/depreciation we are pulling close to $3k cash-flow per year for one of our Sunshine Coast investments. It sits at a ‘measly’ 7%.
Are you worried you might be missing the leverage you can gain in Australia? Some Buyers Agents promote positive cash flow as a sweetener to the deal – not a reason to buy – The old to make money in real-estate you need to buy into capital growth. Minimise your holding costs, choose the right location and time to invest’. etc.
Rent – $750pm x 12 = $9,000
Expenses:
Management = $1,000pa
Taxes: $1,000pa
Insurance: $500pa
Other: $1,000paNET= $6,500 / $22,000 = 30% yield
Closer to $5500 but whose counting ;)
The income can be re-invested into more properties and they can all compound together.
I like this notion. Re-investing with cash made from positive properties is difficult in Australia. Most investors choose to access equity from other properties for future purchases – on the pretext of tax deduct-ability. Your method seems a lot ‘cleaner’. Slowly building an empire. Reinvesting with cash only is the smartest strategy I’ve come across so far. I can understand why you thought twice about buying the Go Pro :)
Imagine owning 20-30 of these with all cash. That’s my goal that I am working towards.
Theoretically awesome, in practice, possibly not that easy. As the Cat mentions, don’t US tenants scare you!?
Good luck to you mate!We bought our first two houses with cash deposits (40k each). At the going Toledo rate I might have had 5-6 properties by now!
I will definitely check out your blog. If the ‘Cat’ holds you in high esteem you must be doing things right.
Cheers
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This reply was modified 9 years, 10 months ago by sciencesurf.
sciencesurf
http://sciencesurf.wordpress.com/
Email Me | Phone MeClick my website for the Sunshine Coast Property Blog
Awesome cash flow Engelo!
It got me thinking though.
Assuming initial purchase cost $12000 + $10000 Reno = $22000
Revalue $40000 upon completion.
Lets say the Toledo property goes up 10% per year for the next 3 years, compounded. You make around $15k in unrealised capital gain on top of the $18k after the reno.
Is this worth all the time and risk? Be interesting to know the gross yield on this one to see if you’re making up for it in positive cash flow.
Would you say compounding is more effective on Australian properties selling for much larger figures? I know if i made $15 grand for three years in the market I would be less than impressed.
Next week I begin my next reno project on the Sunshine Coast. 1 week – in and out. Total spend $5000 with projections of capital increase of 4 to the dollar. Your’s is barely gonna hit 1:2.
I havn’t got my head around US realestate yet. Please let me know if i’m completely off the mark and missing something.
Cheers
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This reply was modified 9 years, 10 months ago by sciencesurf.
sciencesurf
http://sciencesurf.wordpress.com/
Email Me | Phone MeClick my website for the Sunshine Coast Property Blog
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This reply was modified 9 years, 6 months ago by
