FLIPPING PROCEDURE

Shelly.
firstly you should be asleep now, as making millions in realestate is exhausting work.But you are probably to exited to sleep??
But as youve asked and I have no life, hears my two cents worth.
The big thing and I hope the more experienced out there agree, is you have to plan for what goes wrong… and it will eventually.
By that I mean you need to have the funds and the time to hang on this property if it does not go to plan. Your bank manager and solicitor are the people you need to make your best friends, as with out them we are all in trouble.
There are also tax and stamp duty issues that can take the shine of a good deal,but again your friend the solisitor can help.
Your solisitor will also help with the wording of the contract, which is very important and will vary depending on what state your in, I gather your south due to time difference, in Qld most contracts are done with out solisitors until the contracts are signed and all negotiating is by real estate agents, thats fine till you have a deal like yours.Were I’m going is. if the owner thinks they are underselling because you have a contract that states you wish to sell it while not owning it yet… they may not sign or even may put the price up.. (I’ve seen it).Some times you have to be subtle…

Just some thoughts untill the more experienced get up from there beauty sleep.

Good Luck

Coast

Forget to add, other than that, what you have written sounds correct.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
Click below to email me

Sorry, I’m new to this but could you buy “xxx or nominee” and then have the sale contract in the other person name? I don’t know how this would work but I was told to always insert the “or nominee clause into the sales contract. One thing to be wary of is that there is no extra charge for nomimating someone else. I got stung $300.00 this way.
Cheers

Hi Shelley,

Coast’s advice is good, and as Terry said, don’t forget to factor in the stamp duty on your loan contract.

Another minor charge could be the lender’s loan application fees which are usually non-refundable even if you don’t (need to) proceed with the loan ‘cos the simultaneous settlement you plan on did in fact happen.

And what about your Pest & Building Reports. You may not plan to do them but you’d have to assume that any buyer would. You don’t want them to discover termite damage or structural imperfections that you too should have been aware of before the end of the ‘cooling off’ period of your contract lapses.

If a NSW property have you counted on the new vendor’s tax? (introduced July 2004 from memory).

What about Land Tax? Does it apply in your situation?

Just a question – what makes this property so cheap that you’re considering flipping it? And have you read the current market correctly?

All part of the learning experience I ‘spose.

Hi,
I know this may sound silly, but what protection do you get when you insert ‘or nominee’ as a clause?
Landt.