All Topics / The Treasure Chest / Stay in or get out…that is the question

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  • Profile photo of Gus_2Gus_2
    Member
    @gus_2
    Join Date: 2002
    Post Count: 39

    Well guys it’s time for me to seek some friendly advice. I’ve got an investment property (eastern suburbs of Melbourne)in partnership with family members that we have been renovating with a view to selling on completion. We needed to acheive a certain price to breakeven and at this stage (3 months on the market)we have got close, but no cigar as they say in the classics. I guess the decision before us is – sell and make a loss now, but get back into the market and make some money somewhere else OR hold the property, find a tenant and get the rent and depreciation benefits to help meet our repayment obligations, and sell when the market picks up. It is a good 3brm house in a good area. Has anyone out there been in a similar situation and have some relevant advise for a couple of first timers? [:I]

    I’m sure people will have an opinion re renovations and costs etc, but what I would like to hear is comments about the sell or hold options before us? Alternatively, is there any other options?

    Thanks in anticipation [;)]

    Profile photo of ADAD
    Participant
    @ad
    Join Date: 2002
    Post Count: 636

    Hey Gus,
    Tough one to call. Do you walk and call it a learning experience that you are much wiser from or is it the kind of property you want to hold. How does this fit with your investment goals ? Do whatever brings you closer to your desired goal. Remember that if you are looking at break even you could wrap the property and sell at a small premium to market enabling you tomake a profit out of the deal.
    Hope this helps.

    Enjoy
    AD [:0)]
    (Andrew)

    “”Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world.”
    Albert Einstein

    Profile photo of Paul DobsonPaul Dobson
    Participant
    @pauldobson
    Join Date: 2003
    Post Count: 1,196

    Hi Gus

    I’d recommend, if you haven’t already, doing some research on selling the property via a “wrap” or a “lease/option”. Using either of these two options should get you into a positive cashflow situation now.

    All the best, Paul

    Paul Dobson | Vendor Finance Institute
    http://www.vendorfinanceinstitute.com.au
    Email Me | Phone Me

    An alternative way to finance your home.

    Profile photo of Gus_2Gus_2
    Member
    @gus_2
    Join Date: 2002
    Post Count: 39

    Thanks for the feedback. With regard to wrapping (which I have never before attempted, but want to learn how), is this ideally suited to homes at the lower end of the capital value continuum – say under $200K? The property in question is priced to sell around the mid $300K mark? Does the price tag make it prohibative to do a wrap deal?

    Gus[?]

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