Forums / Property Investing / Creative Investing / Investing In A Declining Market

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  • Profile photo of Brett MBrett M
    Participant
    @brettmesser1
    Join Date: 2016
    Post Count: 14

    I would suggest it depends on your time horizon and the quality of the property/location over the long run. Warren Buffett is fond of saying he looks for a great company at a fair price rather than a fair company at a great price. Then hang on forever. If that’s a good enough strategy to make $80 billion, then there’s probably some truth in it for us regular investors as well.

    Another favourite is from Jodie Foster in the movie Inside Man – “When there’s blood on the streets, buy property.” Not sure how true that is, but a catchy quote all the same.

    David Thiu
    Participant
    @david-thiu
    Join Date: 2017
    Post Count: 75

    One strategy Mark Rolton mentions in his video is ‘Strata Titling’ and ‘Renovating’.

    The reason this works really well in a ‘Down Market’ is because you can bring a product to the market that is 30-40% cheaper than everything else.

      Example Block of 5 Units:

    Purchase Price $470,000
    Stamp Duty $15,980 (3.4%)
    Strata Titling $11,270 (2.4%)
    Basic Renovation $46,700 (9.9%)

    Total: $543,950

    Gross Realisation
    5 x $155,000 = $775,000
    Less Commission = $23,875 (3.1%)
    Less Total Costs = $543,950

    Total Profit: $207,715

    David Thiu
    Participant
    @david-thiu
    Join Date: 2017
    Post Count: 75

    P.S. The above is obtaining control of the property via an ‘Option’, then ‘subdividing’ and ‘renovating’ the blocks of units before the expiry

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