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How are they making money on this?
Topic Started: 5 May 2012, 07:26 PM (771 Views)
Trojan
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http://smh.domain.com.au/real-estate-news/pros-and-conversions-20120504-1y2f8.html

Bought for $550k
Renovation costs of $105.5k
Add on stamp duty, holding interest and selling costs, I would expect they need over $700k to break even.
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
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stinkbug
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Trojan
5 May 2012, 07:26 PM
http://smh.domain.com.au/real-estate-news/pros-and-conversions-20120504-1y2f8.html

Bought for $550k
Renovation costs of $105.5k
Add on stamp duty, holding interest and selling costs, I would expect they need over $700k to break even.
On that kind of reno, they aren't.

Reno for profit is possible, but not without some serious planning and take care not to overcapitalise.
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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genX
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Trojan
5 May 2012, 07:26 PM
http://smh.domain.com.au/real-estate-news/pros-and-conversions-20120504-1y2f8.html

Bought for $550k
Renovation costs of $105.5k
Add on stamp duty, holding interest and selling costs, I would expect they need over $700k to break even.
Just the tail end of the boom. Colleague of mine saw a 2 bedroom house in Newtown a few weeks ago. Sold at auction for 771K. It's not really a mystery why. At the end of a bull run, prices spike while volume collapses. That last spike shakes out the last and most irrationally exuberant of longs, and then the market goes bidless.

I'm sure the bulls will disagree. Ride on.
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themoops
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If they get $680k minus 20k for stamp duty and 105k for the tradies they'll make $5k. :bl:

As far as I know Marrickville still has planes flying really low over it and most of the properties look pretty skanky. Can't see it ever being the new Newtown.
stinkbug omosessuale


Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments.
Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck!
See here
Property will be 50-70% off by 2016.
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Mike
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Trojan
5 May 2012, 07:26 PM
http://smh.domain.com.au/real-estate-news/pros-and-conversions-20120504-1y2f8.html

Bought for $550k
Renovation costs of $105.5k
Add on stamp duty, holding interest and selling costs, I would expect they need over $700k to break even.
Renos if you do them should mostly be done by yourself, do the labour and hard work and it pays of big time. Spend $100k+ on a reno is just crazy, they did not do their homework or paid far to much for tradies. You only need electrician, plumber really, most of the rest you can do yourself and its not that hard to learn new skills. Plus very rewarding, I did a few of those years ago to get started, well worth it.

Now to make quick money I just buy land and build homes, dont over capitalise and build what the market wants not what you want. I just sold a house 2 weeks ago for $565k, total building and holding costs were $505k, $60k in the pocket once it settles. Ofcourse you need to pay capital gains, unless you have other means of reducing your taxable income. :D


If you keep your costs down, on average to can aim to make about 10% on a build an sell of the total price. This one I did alittle better. I had 3 competing offers, so I said to the real estate agent. I wont be negioating back and forth tell the bidders to offer their best price, highest price and best settlement peroid wins. Luckily for me the highest bidder already had their house under conctract to a cash sale with finance already pre-approved, I went with them. I love buyers like that, well prepared. I took the best offer straight, no back and forth. Easy sales but it was also a very nice home, and the new owners will do well their. I was half tempted to keep it, rent it for 12 months due to perths rental crisis at present and sell in 12 months when its value would go up alot more. I decided to stick with my plan, I already have another home under construction with a 3rd block of land just bought, plan to build on that one later in the year.
Edited by Mike, 6 May 2012, 12:41 PM.
http://mike-globaleconomy.blogspot.com.au/
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newjez
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They probably improved the value of the neighbours property as well :>
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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