Forum Replies Created
Dunner Runner……
Not quite Terry,
Companies are not eligible to any CGT concessions ( ie…50% CGT discount after 12 months)therefore any profit from the sale of an asset is fully taxed, but at the company rate.A trust or individual may be elibible for a CGT discount of 50% depending on certain conditions ( its a tax law…so it gets very grey)
So in fact you may still be better off paying tax on profit with a 50% CGT discount at the top marginal tax rate compared to paying tax at the company rate.
kp
Yuo have the same problem I do PK
Every time I type ‘the’ it comes out ‘teh’Anyway, thats a rough rule of thumb stating that your profit may be $60k.
Your costs and timeframe can blow out very easily and eat away at your profit margin.There are lots of costs that have not been included, in your example.
Have you worked out how the three blocks will have access to the street ?
Are you talking about a green title subdivision or a strata title, or a survey strata ?It will be difficult for the purchasers to buy the blocks if you do not complete the subdivision process, as they have no acces to a title.
So they will have take considerable risk and have to make their offers….subject to…etc.
Not a very attractive proposition for a purchaser.Buying in a company only has the advantage of maintaining the tax rate at 30% for any profits due.
All profit whether in a company or in another entity, is tax due at the end of the financial year (??)
The tips I would give you would be to follow up with the council to confirm that the property is suitable for subdivision, and then consult a good surveyor to get a run down on the costs and timeframe required to complete the subdivision..
kp
This thread is going on forever and ever……one of the most popular.
must reflect Perth’s status atm.Anyone feel like a bubble is forming ??
kp
Sounds like you are offshore currently, and got the blues…
Seems like the portfolio is dependent on your job income to maintain it..
Have you considered sourcing other streams of income that are more inline with your property investing experience?eg…you can organise syndicates for other investors and take a success/management fee.
you could do some developing and sell the finished product to take the profit as income ( to replace your current oilfield income)I think its just a matter of going outside your comfort zone ( like you did all those yrs ago), and that the current generous income is just too easily had. Its a trap in itself..
kp
The best ppl to know should be the developer….
But they will not be able to give you and exact date.The best you can hope for is to contact their settlement agent closer to when they expect the titles to be released.
kp
*** Nice view ***
Marisa, is that who you bought the block through ?
And how much was the required deposit ??kp
Surely you need a licence before you can operate a betting establishment??
And you will have mucho problems getting a licence…so it would be an illegal activity without the licence….thus leading to criminal charges.No licence no bets imo..
kp
Depending on who is responsible for listing all the conditions that need to be met (eg…for strata subdivision it should be the local council and for green title subdivision it should be the relevant govt. department)…once all these conditions are met, then the title is usually created and made available for dealing…
Some of the conditions imposed may include the requirement to have services such as water, sewer, and electricity available and/or connected, etc.
It can vary from 3 months to longer ( if you are building as well), depending on what type of subdivision you are doing.
If you get in touch with a local surveyor experienced in doing subdivisions, they will probably be in a better position to give you a more accurate estimate on the time required, given their knowledge of your local area ( ie…Tassie)
kp
Originally posted by DannyBoi:Originally posted by Dazzling:
“You can’t teach new dogs old tricks”.
Are you aware that the more well known saying is “You can’t teach old dogs new tricks”. This really seems to be true in your case. You are way too opinionated for your own good.
I could argue with you all day but there is no point. After all you are an old dog!
Bye!
Danny boi oh danny boi….I think you’ve missed the point.
Everyone knows what the ‘more common’ saying is…including Warren Buffet.His cryptic saying was in context of all the new dogs who have forgotton the fundamentals of investing that are timeless and still hold true today. Of course he is speaking more specifically about the stock market, but the analogy also applies to property investing.
Buffet is currently sitting on billions in cash as he can’t find anything worthwhile that meets his criteria, to invest in.
Now that says something…….
kp
Originally posted by Don and Liz:Nice post KP. Heaps of detail in there already but could you share what sort of house and land you rolled the profits back into. Are they single homes on blocks of seperate title or have you split another block/s and built dwelling on each.
Oops!! Sorry Don n’ Liz…haven’t logged in for awhile and missed your query..
The proceeds were reinvested into 3x single blocks of land with a building contract to add to the equation.
This was done because the spread between the cost of the house and land vs the current market price for a similar property was approx. $100k each.If I had found another old property that was zoned for subdivision, I would have bought that, but atm the asking prices have moved too far ahead to make this viable from what I can see.
It seems that agents are pricing properties like they are already subdivided ( expecting you to pay for the potential gain by building it into the asking price ) and as we all know, vendors once a price is stuck in their heads, are reluctant to budge.
So basically, opportunity dictates that while the margin between cost and market value is attractive, its onto single titled blocks with the addition of a home.
I also bought into some raw land, suitable for subdivision, but this is more longer term stuff ( not quite landbanking ) as it takes longer to bring to fruition.
A lot more interesting with potential for big gains, but obviously also higher risk.kp
Promise I will contribute a story soon!!!
Cheers
What the ?????
CGT is a federal tax administered by the ATO.
It applies equally across all states.Who told you such misleading info vernon, and on what basis was it referred to?
There is a 5 year rule but it applies to GST payable on the sale of a NEW property or house.
GST is due upon the first sale ( ie, not due on subsequent resale of the same property ), but if you keep the property for five years then GST is exempt.
kp
Thats the point Kerwyn,
There are always opportunities out there.
Does everything come to a grinding halt coz the RE market is not performing??
More a matter of ones mindset, and whether one wants to bother looking for those opportunities.
Misnomer as far as I am concerned, as it still is performing as far as I can tell.
Anyway, the more ppl sitting on the sidelines waiting, the less competition, so its all good !!Don’t shoot yrself….just get out there and do it !!
Imagine how much you can achieve in three years……
kp
Ahhhh…that would explain it
Thanks Steve.
But…posing the same question again…can you originate a loan for a customer (me) who is in WA for a WA property ??A broker in Melb has advise me that they can do it.( for a WA property)but I am not sure how ??
I have used the same broker to organise a loan but it was for a Qld property.kp
Wheres part II Redwing ?
OK…here is one completed in March this year.
Duplex subdivision ( green title) in PerthPurchase property $305,000
Closing costs $ 12,000
Subdivision costs $ 23,000 (incl demolition)
Loan to purchase $244,000 (80% lvr)Construction cost $260,000
Construction loan $260,000 (100% of cost)Cost of each home $300,000
Market value $410,000Sold one May 05 $405,000
Interesting thing I have found is that the lender is happy to lend ALL your construction cost and then some, as long as the overall lvr does not go over 80% based on MARKET (or completion) value.
Shortfall between original loan to purchase, and total purchase cost can be sourced from LOC or cash.
Proceed from the sale have been reinvested into three other house+land packages, all showing exc. returns.( 1 presold before titles created )
Finance on the additional land purchases was achieved at 90% lvr with the construction cost, once again approved to 100% based on final market value of the properties.
I think someone ( or someones) has coined the phrase to describe this process ( duplication, or multiplication, or divide and conquer, or leapfrogging ???) but all I know is that in a market that is supposed to be flat, this sure speeds the process up in building wealth, equity, profit, or whatever you want to call it..
Sure beats waiting for the market to recover ( waiting…..waiting….) or the next ‘boom’ to occur !!Dazzling, you have a PM
Cheers
kpOriginally posted by yack:Time to Consolidate?
Forget about buying any property now.
If you got properties just do what you can to consolidate.
Pay a little more off or maybe do a little renovation.
Wait for it to come back. Save a deposit in the knowledge that prices will possibly fall a little or remain constant.
Don’t buy now just to find that in a few years you cannot afford this investment, its costing you money to hold an asset that is not appreciating and you got repairs and hassles with tenants. I can tell you it aint no fun paying interest, paying for repairs and addressing tenant issues when prices are not rising.If you do buy now and you do experience problems in the future or loose patience with the market and then decide to sell – dont worry – I will be there to snap it up. I am consolidating and aint buying anything for the next 3-5 yrs.
What do ya all reckon?
Scary stuff Yack,
Sit on the sidelines for 3 to 5 yrs !!!???
What if the market doesn’t come back by then…what next??? wait a few more yrs??Personally its full steam ahead…..and 100% property. There are so many opportunities out there to make instant returns. Profits from day 1.
In 3 yrs I should expect to be fully consolidated…and you’re suggesting it will be time to wake up and start investing again ?
Scary stuff…….
kp
Awesome result Terry…
Can you clear this one up pls?
I have spoken to a broker in the eastern states who has advised me that they cannot organise finance for me in WA unless they have a CPL as issued in WA ?
Is this correct, and if so, how did you manage to organise finance for Dev on their WA purchase ( apart from the obvious, that maybe you have a CPL?)Thanks
kpPS….. out of curiousity, where is this ‘hot’ market you are operating in, such that you have to offer ‘cash’ as an inducement / incentive to convince sellers to sell ?
I was of the understanding that most markets for property are steady to luke warm at the mo’
kp
OK I understand.
I thought by the banner under your sig that you were maybe offering a service….Myself ????? mainly buy, subdivide, build, and sell.
Similar to you in that we turnover property and take a profit on a regular basis.Its a bit of a bad habit that I am trying to get away from…( ie…diversify and look at other areas of property investment such as commercial…)
But the current strategy seems to keep the lenders happy in that we are always reducing debt ( before going back and asking for more funds!)
kp
Thats great JD53
Can you get them to open a branch in Australia, and I will be their first customer !!kp
