Yes PLC my hubby thinks the same way as you. He thinks that the "other buyer" will fall through due to financing. I see now that I should have had Jac do all my negotiations, lol.
Thanks for the advice Catalyst. I was terrified about the reno but a bit excited to see how could improve the place. This has been a big learning curve. We evolved in our thinking to looking at the remo and only doing things that would increase the rent or equity the most. I looked at some things and knew it could be done better but asked myself would the tenant even appreciate it. But it is all moot now! At least it gives me time to study some books on renovating in the meantime.christianbParticipant@christianbJoin Date: 2009Post Count: 386
You're welcome Jewel47.
Well thank you very much for your positive reply, I was working in the real estate industry at the time and I spent almost 8 month’s finding the deal.
To get a “bargain” is becoming more difficult day by the day because there are allot of people who are looking for these deals as well.
I think you need to find a motive for why the person is selling their home, In this case it was a divorce. I try and talk to the vendor while I inspect the home with the agent.
I used to sell allot of homes “that where controlled by the bank” and I usually sold these properties above the asking price, When people found out these was a mortgagee they would think that the bank would sell the home for nothing, Which is not always true.
The market is very messy at the moment and even though some people may be desperate to sell they will not sell for free.
Another thing to think about is this: If the property you looking for suits all your boxes and you think you can make some good capital growth out of it “etc” it is sometimes worth to pay a bit more to get the property (in my opinion) the current market conditions don’t justify this action!!!
There is a saying that my grandpa told me THERE is money to be made out of SHI%.
Thanks JP and if this was going to be my fifth or sixth reno I would feel more comfortable and would know if the property warranted a bit extra in order to make a nice gain at the end. But as this was too be my first Reno I wanted to be very conservative. I don't have a firm handle on costs and I didn't want to risk underestimating what the Reno would cost and have that problem compounded by the fact I overpaid on the property. Once I get more experienced I probably would be able to size up deals and more accurately determine value and costs. But for now, I am playing it safe.
I have only done three RENO deals and let me tell you I still get uncomfortable at times, To me this is very important, I usually perform better when I am nervous or uncomfortable.
With costing the best way to learn is to do it on paper, Look at a few houses on the market and take some photos of your own.
Once you print your photos, try to vision what you think you would improve if you bought the house, Then do your research,
I think being conservative is great, With budgeting you can never be 100% right or accurate,
I am not a trades person so I also found it very difficult to estimate at the start but one thing I would like to share is this….
Before you buy anything, try and make some connections just in case you need help….
What part of Melbourne you are looking in???SundanceParticipant@sundanceJoin Date: 2012Post Count: 57Jewel47 wrote:Hello All!
I am a first time poster but a long time lurker. I feel like I already know everyone on the site! I often speak to my hubby and say, well "TerryW said", "Jamie stated", "Jac made a good point about", "Richard suggested". He thinks I am talking about people I know, lol.
I have just read your post out loud to my husband so he realises that I'm not the only crazy wife out there who does this! I could have written that myself!
"The brave man is not he who does not feel afraid, but he who conquers that fear."
My knees were knocking together so loudly when we submitted our offer that I was sure the neighbours heard them! I hope it gets easier. Funnily I had never considered Reno as apart of my investment strategy. But I am learning a lot as I go through this process.
You are three renos ahead of me. We are looking in the northern suburbs. Looking is the right word as we haven't bought anything. One day we buy! I just hope our first buy isn't our retirement home!
Sundance we will start the crazy wives club together, lol!AilimeParticipant@ailimeJoin Date: 2008Post Count: 28
Count me in, please
I did the same to my husband, too.jleongParticipant@jleongJoin Date: 2010Post Count: 8
I'm still in very early stages of my investing career, but your post has definitely gotten me keen to try all this out!
You've inspired me to the point of offering tradie mates to help them out on their next residential job !
I'm still keen to know more about the sale processand how it ties into 'putting together the numbers' on a reno plan, though….
After you had chosen state/city/suburb etc…did you put together a basic reno plan so you had specific criteria that the property needed to meet before you would consider it?
Or was it the other way around (see properties, quickly put the numbers together, put in an offer?) ?
Chicken or the egg!?
Welcome and good luck in your investment journey! I am at barely on the investment road, but I will get there one day! When it comes to renovation there are others on this board that are far far far more knowledgeable than me. Just reading through this thread you will see that Catalyst, JP Morgan and Christianb have all renovated before. They have been so kind and gracious in sharing their knowledge. I am sure if you ask nicely they can help you as well.
As for me, I had never thought about renovating. It was never part of my investment strategy. What happened was that I looking for a property and found one in our price range but it was a bit of a dump. Hate saying dump, but in all honestly, it is a dump, lol. But nothing structural because I wouldn't even know where to begin if it required structural changes. And besides, structural changes are more costly and time consuming. But I could see the potential in the property. I reviewed what needed to be done and did a basic cost analysis. I reviewed the cost of the reno, how much the renovated property would be worth and the initial cost of the property. I also looked at comparable renovated properties in the area. I wanted to ensure that I was not renovating out of the market, meaning once renovated that the property would not cost much more than houses in the area. Because we would be holding the unit , I looked at potential rent gains once the property was renovated.
So after looking at what the unrenovated property was worth and cost of renovation, I put in a offer. Unfortunately the owner thinks his property is worth more than I do and more than what anyone else does, considering we are the only ones to have put in any offer on it! It went to auction and had been on the market for 2 months before we put in an offer.
I am sure that people who renovate as a strategy can give you heaps of information on how to access properties and what to look for. This board is a wealth of knowledge and it has the most friendly people who are wiling to share advice.
Jewelray buttersMember@ray-buttersJoin Date: 2009Post Count: 13
Hello all. I'm after some advice. I'm looking to invest in a duplex development and would stand to make $200k profit. My question is how much CGT am I looking at paying. Thank you in advanceJacqui MiddletonParticipant@jacmJoin Date: 2009Post Count: 2,539
Ray – depends on your tax bracket. You work out your profit, you add that to your taxable income that year and you are taxed accordingly. So if you are in the 37% tax bracket before you add your profit (ie based on the salary of your day job) and you are still in the 37% tax bracket after adding your profit, you pay 37% CGT. Note if you hold the property for more than 12mths you get a 50% discount on your CGT.
All that said if you are doing a development, you are creating new dwellings and as such GST will apply as well. You need to talk to a good property accountant to understand what you are up against, and to be sure GST is accounted for correctly in the contract of sale when you initially buy the place, and again when you offload it.
Well Well Well!
A few weeks ago we, hubby and I, had a second viewing on a property. And surprise, surprise, surprise no less than a few hours after we viewed the property I was told another party was interested in it as well. Then the very next day I was told the other party put in a bid at asking price and did I want to counter. I said no thank you. Hubby said, "There is no other party." Amazing how this other party appeared hours after we looked that the property for the second time. I kept an eye on the property waiting for it to go under contract and then sold. Umm nothing happened. Well today I get a call from the agent asking me if I was still interested in the property!! Hubby was saying, "Tell them we have other properties that we are interested in." I asked what happened and the agent said that the other party hadn't signed the contract so they were putting the property back on the market. Funny thing is, the property never left the market! It was always listed as for sale and never listed as under contract or sold. Why do agents play these games??!!!DerekMember@derekJoin Date: 2004Post Count: 3,544
Methinks time to reduce your offer if you still want the property.
Christmas, vendor has waited a few weeks, agent looking for a sale just before quiet time at Christmas. Could be an opportunity for you.PLCParticipant@plcJoin Date: 2012Post Count: 400PrimePropertyInvestorMember@primepropertyinvestorJoin Date: 2012Post Count: 48
I recently read an article on RLA how heart les some landlords has become with all of no kids, no cats, no couples, no cocking, no games in garden, no, no, no….
As a landlords from experience I can say that most problems are made by landlords them selves dishonoring tenants and treating them worse than animals. As better you treat your tenant – better they will treat your property, if you help them feel as at home and welcomed and do your best for them, they will treat your house as good as possible.CatalystParticipant@catalystJoin Date: 2008Post Count: 1,404PrimePropertyInvestor wrote:I recently read an article on RLA how heart les some landlords has become with all of no kids, no cats, no couples, no cocking, no games in garden, no, no, no….
As a landlords from experience I can say that most problems are made by landlords them selves dishonoring tenants and treating them worse than animals. As better you treat your tenant – better they will treat your property, if you help them feel as at home and welcomed and do your best for them, they will treat your house as good as possible.
This might be interesting but NOTHING to do with the topic.
Well I never put in offer originally. Once she said there was an offer at asking, I said goodbye. If agents tell me there is on offer on a house, I say I am not getting into a bidding war. I immediately walk away. First of all I don't trust agents so I assume the other bidder could be fake and I am not about to start bidding against myself. Secondly, as an investor I am not emotional about the property, so I don't have a need to get the property at any cost. There will be other properties.
My max budget for the property is 5% below asking price. Any advice on what my first offer should be? I was thinking of starting at 10% below asking.