Good call KellyP.  Very true. I hope you figure things out without too much emotional or financial pain.  Merry Christmas

I am no expert but I think your $12k is capital expenditure so it raises your capital base (relevant for CGT if you sell).

Then when you rent it out you can depreciate the $12k you spent.  (as opposed to claiming anything now. )

Going back to the original post, are these good numbers, anyone?  Correct my numbers, but there does not seem to be much profit margin:
purchase $210k
puchase costs (approx 5%)= $10.5k
renovations $25k
estimated sale price=$270k
sale costs (approx 5%)=$13.5k

net profit=$11k.
you then get slugged for CGT on $270-($210+$25)= $35k capital gains, so whatever CGT applies to that.

To me there is almost no margin, so why do it? 

(PS This is not a comment on what Jacqui is doing, more a question on how people calculate the numbers, as I have very similar numbers on a place I want to get and renovate and the above calculations stump me because there seems to be almost no fruit for your labour, as it were, unless you renovate and hold, which would mean no sale costs and no CGT.)

can you just cross out the "TBA" and insert the correct address on the lease, initial the change and then sign it without actually pointing out the change to your friend?
BTW I agree with everybody else-deals with friends get extra messy if they are not at arms length and completely above board.  Just the fact you asked the question on this post in the first place means you are not 100% comfortable with the TBA bit.

Looks fantastic Brian.  Inspirational!

Your costs don't include paint.  Also what did you do your floors with?

We had a room the dimensions of a perfect cube-12'x12'x12' with very ugly bricks floor to ceiling, including an area where an old internal brick chimney had been removed leaving uneven broken brick in one section and soot stained/heat damaged bricks in another.  We Gyprocked the lot.  basically the method was get a hammer and bash the walls to scuff the brickwork every 1-2 feet apart.  The gyprockers whacked plaster in these scuffs and then just glued the sheeting to the walls.  Once dried, the filled the cracks between sheets as per normal and put up fancy cornice, then I painted it all as per normal (plus added a frieze etc etc, boring decoration details).

But it was no more expensive than sheeting a bare room with stud walls except for the 12' ceilings.

Thoroughly recommend it.  Great "normal" finish

Great thread Scotty. 

getting back to the original post. This is our story…

We did what you should do-ie buy a house and pay it off as quick as you can.  We aimed low so that it would never be a stress, which it wasn't.  Now fully own PPOR.  Meanwhile bought local business premises against our will, (because we could,) mainly to prevent erratic business partner from having too much control over things (great person, very entrepreneurial, good friend, this helped it stay that way). This was never planned to be an investment.  Gave property no thought other than that it served a function and owning it meant not being kicked out unexpectedly when whoever owned it wanted it back. However this premises is insanely positively geared. (which I did not realise till later-read on)

Then in January this year while pulling out the BBQ on the concrete verandah, the gas bottle fell off and pulverised my big toe.  Suddenly all the watersports and biking/hiking/motorbiking etc we had planned for a family holiday was out for me for a month.  Couldn't even swim or walk properly. Our family holiday was at some friends' house who happened to have some investment magazines lying around (they were getting into shares), including Your Investment Property magazine and money magazine.  So while all the kids/other adults did active things, I bummed around with coffees, timtams and investment magazines and in the process suddenly understood what "equity" meant .

Then how we could go and buy more property without actually intentionally saving any deposit money at all. 

I have since devoured every book I can get my hands on, subscribed to YIP and API and Money magazines and the steep learning curve has resulted in us using some of said equity as deposits for IPs in different states this year.  Now we want to get another IP in a capital city-just not sure which city as we want something for capital growth.

Books that have been excellent:
"Rich Dad Poor Dad" by Robert Kiyosaki- very inspirational and motivational. (and quoted by many other authors in their books, I might add!)
"From 0 to 130 properties in 3.5 years" Steve McKnight (essentially about positive gearing and going ahead by volume)
"20 must ask questions for property investors"-Margaret Lomas
"How to grow a multi-million property portfolio"-Michael Yardney.  (He makes a lot of sense about how capital gain is so powerful)

In summary we are still learning and our goal is not really properly formulated, except for the common thread in all these books , which is "get started", which we did quite quickly.

Other common thread is "Time".  so we are learning patience and waiting to see what Time does to what we have bought.

A bit nervous about having over $1M in loans all of a sudden, esp with interest rates on the rise, too, but the numbers are all ok so have to trust my maths a bit.

Anyway, that's our story.