Greetings people,
I have a thought about PREDICTABILITY.
Lets say there is a popular area ie. new land subdivisions, and these blocks are 4-6 months from being registered. Previous stages obviously had sold for less, but a few are on the market as they had been registered with a comparible price to the unregistered and they sell. There is also a couple that are being offered as house and land packages with full turnkey.My question to all you readers is how many of you would go for a deal that will ultimatly take up to 12 months to complete but will give instant equity of around 60k per property in todays market, and potentially more if growth is to continue in 12 months time.
And no this deal is not a cf+ as could cost upto 300k and rents for 260-280pw. But the profit is equivalent to upto 50 small cf+ deals without the tenants p.a and is in a high growth area.
Are there any fans for PREDICTABILY out there.
Has anyone experienced the PREDICTABILITY FACTOR.
Could there possibly be a down side.Looking forward to replys
regards the freedomfinder.
Once again I’ll play devils advocate, and point out a possible downside,
> ‘deal that will ultimatly take up to 12 months to complete but will give instant equity of around 60k per property in todays market,’
How confident are you of where the market will be in 1 month let alone 12 months ? is the the return gareenteed ?
On the up side 12 months gives you more time to add to the equity via extra savings.
BC
bc,
if a building block is available today but wont be registered till 4-6 months and price = 165k which is paid after registration, and the cost to build something comparible to sales evidence = 125k then you have built your own package costing 290k + some interest payments, stamp duty(on land only) and legals,
this package will still cost under 300k today hypathetically but recent sales data shows sales of around say 350k+, then in my opinion you have created a wholesale product that the norm pay retail for, Hence you make your money before you begin. Where’s the market going to be in 1 month let alone 12 months who knows but by beating the market before you begin ensures a profitable start. If the market grows you can add to your instant equity, if it falls it MAY affect the retail purchaser who bought as a PPOR which in my opinion they will continue to live and enjoy their home. If the market did fall it would have to fall by more than 15% to break even, but really if the majority of homes are owner occupiers then prices would tend to stabilize as apposed to fall.
In my opinion if there where to be a fall it would hit (and already has) the unit investment market, that is that these are predominantly targeted to novice investors and most will sell their investment unit at a loss before they sell the family home.This is my opinion I welcome yours
Regards the freedomfinder
isnt it economics watson dear?
Supply and demand
if there is no demand, the supply is worthless in my books.you can promise the cure alls…but will it fix the ailment? Supplying the land or development doesnt necessarily guarantee the project or profts.
many have been burnt like this…
cheers
Elves
Freedomfinder,
Lots of people make money like this. I have many clients who do so over and over again!
I also believe that in the event of a slump middle class 3-4 bedroom homes hold their value best.
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
you know what I have found
most people dont talk about their losses
like gamblers, they say, oh I just won $100! but they dont tell you what they lost before it.and as Simon says: he may well know lots who have made money, I also know lots who have lost, but as I say they dont brag about that aspect..
cheersElves
cheersand it is those fears that stop everyone from doing it.
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
I lost $175K in some deals buying off the plan – not because the price didn’t go up, but because our finance fell through at the last minute.
However, that just made me more determined to ‘get it right’ the next time, so that I could recoup that money (we did, and some – thankfully[
]). My partner wouldn’t have done it again, but I think it’s like falling off a horse, if you get back on quick you’ll be right, but if you don’t, then you’ll forever lose.Even now, I have four units under contract which at this stage won’t be completed until 2006. In the last 6 months, they have all increased by $50K, or about 12%. No guarantees what the market will be when it’s time to settle, but on the current valuation we can afford the market to have dropped by about 10% and we’ll still be in front.
Freedomfinder, I would certainly look at that deal.
Cheers
MelMel said :”Freedomfinder, I would certainly look at that deal.”
Apart from the fact that the arithmetic is off.
Pisces
What part of the arithmetic is ‘off’?
Cheers
Mel
]). My partner wouldn’t have done it again, but I think it’s like falling off a horse, if you get back on quick you’ll be right, but if you don’t, then you’ll forever lose.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
