Just thought it would be good for people oout there now doing deals to put down some of their latest successes so as to encourage others to keep powering on. Here is my 2c worth….
Deal 1. One side of a duplex. $85000 renting currently for $130/week should be $150-160/week). The other side of the duplex sodl in July 2002 for $95000 and the original purchase price of this unit was $112000 back in 1992. I will buy htis deal for cash then get a valuation on it then refinance the house according to the valuation. All things being equal I should achieve above $100K which means that I can have this property for a very small amount of my own money in the dal ($8000) on a 80% lend. The other good thing is that it is 3 month settlement. Will let you know how it goes.
Deal 2. Bought a house from Public Trustee that listed at 10 am two weeks ago (Friday) and I got a call shot out there and offered $95000 (asking $100000) and got a contract agreed that afternoon at my first offer. Now I know some of you may think that I paid too much but here is what happened. After that weekend the PTrustee had a few other contracts come in all at asking prce and apparaently some who would pay more.I then had a building inspection done and found that the reno I was contemplating would blow out by around $15000 due to having to restump the whole place and then do some structural stuff in the roof. (stuff is a technical term). This made my first guestimate on margin of profit drop a fair way down to around $10-15K. Not so sweet. There was still the option of subdividing the block to allow a removal house to be dropped and dressed to realise another $30-40K but that was not guaranteed as we all know how councils work (1000m2 block two street access).
Well last week I was pondering the deal and whether to go ahead or walk (there are always other deals !) when I got a call from the agent. She said the next door owner (mens guest house) was very upset they had missed out and wanted to buy the property. Initial offer $110K. Now I was unsure about progressing for a few reasons and then this came. Naturally I tried to play it cool and said not enough. 30 mins later $120K. I did my sums and realised that it would cost me around $103K to buy and sell this deal so I wanted a neat $20K to walk so I said $125K and it’s done. They came back with the fair middle ground ($122500) which I expected them too and I agreed. So I will officially own this property for 14 days and it will gross me $20000. Now I am in a partnership with this deal so I will get $14000 for 44 days with me only having $8000(approx – deposit and legals) out of my pocket. ( My business partner will front the $90000 for $6000 return – 14 days).
So I will get a return of 175% for 44 days and an annualised return of 1450%. Not bad for a deal I was thinking about tossing. God is good and he looks after me.A few points that were brough home to me.
1. If it is a good deal at full or near full price then it is still a good deal. You don’t always have to haggle every cent. Remember Win-Win.
2.Things have a way for panning put for those who are seeking to do only what is good for everyone and not just yourself.
3. You never know which way the next deal will twist. Go with it and see what fruit it may bear. If this deal falls over I know that this property I bought can still make me money and it has also shown me that I could possibly put a set of flats on the site.
4. You often have to act quickly to get the best deals. If the numbers work then buy the property. I looked at one recently where it was a duplex(both) for $80K returning combined $170/week. I dawdled and then the day I decided to do the deal it had sold that afternoon. Strike when the opportunity presents itself.
Hope this was encouraging.
Enjoy
AD [:0)]
(Andrew)“”Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world.”
Albert EinsteinC,mon Guys and gals someone must have some good news tales to tell about recent deals……
Share and encourage !!!!!!!Enjoy
AD [:0)]
(Andrew)“”Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world.”
Albert EinsteinHi AD
Thanks for sharing, it’s fascinating to see the inside working of a creative deal.
Right now I’m stuck in the quagmire of needing some private funds to keep buying properties, and I’ve yet to source anything much. [
] So not a lot of deals happening right now!Keep smiling
FelicityHi AD
Well done. Iam somewhat curiuos as the partnership seems somewhat lop sided. How come the profits were not based 50/50?
Cheers
Very good deal,sometimes you just got to open up to the universe and let it happen.Remember the deals are out there we just have to negociate them and they do not have to be for sale,for a deal to happen.If the numbers add up(positive)just make the offer.I make offers that are regected firstly but if you can get the owner involved either externally or internally it is amazing what can be acheived,create the win win situation and the possibilities are endless.My mentor is doing very well in NSW and is home for dinner each night in sydney metro.he buys or makes the deal cash positive.
Well done Andrew, but please explain why it was not a 50/50 split?
It sounds like you’re ripping your partner off especially if he is putting up most of the money and receiving a much smaller return.
Perhaps you haven’t posted the full story and details?
You shouldn’t be so greedy – you know it’s one of the deadly sins? []AD and all, now for our latest. Hope it encourages. Purchased a few properties end of last year, all positive cash flow. I kept in touch with one of the agents, who rang us about 6 weeks ago to say that there was a unit we may be interested in. Price was $60,000 and I thought this was right so agreed. The good part is that it is furnished, quality furniture, and was rented for $135 pw 3 weeks prior to settlement last Monday.
Looked at a couple of houses weeks ago, side by side listed at $120,000 each. Bought the above unit and another as well so didn’t do any more about the houses. I rang the same agent last week about something else and he asked what I would have offered on the other two houses. I said not more than 90,000 each, which was accepted, rental $160pw. There’s nothing in the area under about $140,000 for a 3BR house.
It’s worth always checking the net, papers, checking in with agents, for sale magazines, driving around, etc. Good luck everyone. Anna
Well Done Anna,
Sound slike you got some good deals there .
As to the question of greed a few people raised. This was a deal that the other party was more than happy with. The other person has the choice to either earn -ve returns in the share market or 4-6% in the bank or for a very short term loan (with me) earn 6.7% or an anuallised return of around 173%. The reason they do it is because they can see their money go up for a change (umlike the managed funds).
The other side of the deal is that I could have funded the deal myself and taken the whole pot but I have a strong belief in sharing wealth and also in the abundance of wealth. The upside of this deal for me is that the other party is happy to keep doing deals so I know can run my reno properties without too much cash from me. the agreement for the next one is that he fronts the purchase and I pay all reno costs and manage the deal with the same split. A business relationship now existswhere the other person feels comfortable with letting me use their funds creatively.We will continue to do JV’s over the rest of the year with any reno’s and hopefully we can use that $100K again and again and make by partner a lot more money.
As to there being more to it, we have done one deal before this one which is up for sale now where he fronted $50,000 and I put up $50,000 and also managed the reno. For this deal he will get $10000 on his money which has been out for 3 months. Again he is happy because he has returned 20% annual return on his funds if he does nothing more with his money. We will do more so that will grow.I am a strong believer that there are lots of people out there who would be happy earning 20% plus on their money and they couldn’t care less how much extra you or I made.
There are two option I can offer my partner.
1. A straight 10-15% return on funds used eg. I borrow $100000 and do what I will with it. (Mosts people would be happy with this and to be honest many retirees would be happy with 10% at present.)
or
2. Offer him a chance to eat some of the pie (1/3)and ern more. On an annual basis with the $150K he has already earnt $16K or around 10.7% pa. (Pretty hard to find that in a super fund at present.)
If we continue doing deals and say we do another reno then he will earn around $10K again and that sends his return to 17.3%pa. He has chosen the path of some risk to greatly increase his potential returns.
My partner is as happy as a pig in mud. All he has to do is write a cheque and then get one back a few months later with interest.
I find all the deals I manage the reno and do some work myself (limited) to minimise cost and maximise profit so his income is truly passive and returns good.
I also believe that my knowledge, contacts, and creativity are being rewarded well.
We both win so it is a good equation for us.
Win-Win is the name of the game and that is where I am. This arrangement may not suit you and that is good because you are a step closer to finding an arrangement that will suit you.
Enjoy
AD [:0)]
(Andrew)“”Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world.”
Albert Einstein
] So not a lot of deals happening right now!
]
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