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great posts guys…but what is “buku depreciation”?

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Hi Dazzling,

I’ve tried to think of something entertaining and possibly interesting for you and those on the forum and will brush up on my typing as i’ve promised myself to do recently…we’ve recently turned a PPoR into an IP.

We purchased our Principle Place of Residence after deciding to move out of a 2 bedroom unit in a great little complex.(bought for $85k now worth $150k+.. a 3 bedroom in the complex is “currently” on the market for $225k)
This small complex consisted of 12 units in total and was nice and close to all facilities as well as having a great group of owners/tenants (no arguing neighbours, cats using your windscreen for a toilet, unruly kids or first time tenants with * doof-doof * music- in other words, nothing like “Neighbours” and Ramsey St) however we were cramped so decided to move..

We spent some months searching for properties in our target area, as I’m a big believer in looking at lots of properties to get a feel for the price range in the area and getting to know the neighbourhood and the agents.

We also spent a lot of time walking the area in the early evenings and found a lot of residents doing the same thing (Tip people- close your curtains; it’s funny the things you see as you stroll a neighbourhood in the evenings), these residents were friendly also; lots of hello’s etc as we walked about (always a good sign as in some bad areas it seems you have to walk around with a menacing look and not talk to anyone, lest you be taken as a target) my wife is also great at starting a conversation with anyone (seriously)as well, so we talked to lots of people in the area and they told us of properties to look at.

One day we watched an agent put up a sign on a nice looking house that possibly needed the gardens redone; we’d walked past this house many times before, so approached the agent and had a quick chat (I always recommend talking to agents telling them what your looking for as even if the property you view is not the “one” they may know of others in the area; I’ve been told of ones not listed yet, or a property where the owner doesn’t want the tenant to know he is selling yet etc and firmly believe that agents will contact sure fire buyers and investors rather than tyre kickers if they obtain a good property-it saves everyone time and money).

Anyway the house was open on the weekend so we dropped in for a look..it was shocking!! The husband was a landscaper (yeh right, if you know what they say about mechanics and their cars then this was true about the landscaper and his gardens- the last thing he must want to do at home is play gardens on his time off).

The family had just had a recent addition and they were leaving Oz to go back to NZ, he was selling his business as well and they’d started to do the property up to add value but had given up (see what I mean about talking to the agent).

The walls inside the house struck you straight away (like a sledgehammer) they were painted numerous colours including terracotta and what I loosely term baby s**t yellow, the painting was very modern and extended to the cornices, the Alarm P.I.R detectors (passive infra red if anyone is wondering), lighting and all other switches the vertical blinds and their mounts and they were even “blending” the paint colour scheme into the carpet- wonderful, they were either blind, drunk, blind-drunk or in a hurry when they painted.
Handles were off the taps in the bathroom the toilet cistern was loose, there were slate tiles that needed sealing, oil on the kitchen verticals and so far back in the cupboards I have “no idea” how it got there and numerous other interesting things (that’s before I saw the back yard which resembled a salvage yard or swap meet)

Suffice to say we saw opportunities and put an offer in and began the negotiation process.

***Let me know if this is interesting or not so I know whether to continue..i’m brushing up on my typing skills to extend beyond two fingers and am using this as an exercise***

REDWING

“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow Calculator

PART 2

Of My Typing exercise, i’ve done quiet a bit and have suprised myslvf wft moy accurcay [biggrin]

Eventually we arrived at a figure of $158,000.00, more than we as the vendor wanted to pay, less than they as the owners wanted to pay; but nonetheless a good price. We stipulated a white ant inspection as well as a building inspection as part of the process; both reports well worth the money as there were white ants in an umbrella tree out the back and the building inspection became our “to do” list as well as helping with negotiations.

Initially when we inspected the property the shed out the back was full of equipment and had a dividing wall with fertiliser and poisons etc on one side and tools and equipment on the other meaning we couldn’t see inside it to well.

When we took possession of the property we realised we were in for a battle and I remember well working nightshifts, finishing at 8 am and going home for 3 hours sleep (I know because i set the alarm for 3 hours) then getting up staggering to the showing having a caffeine *boost* and going to the new property. I was lucky to have my wife helping me after she finished work, as well as her parents assisting and her brother dropped in and helped many times as well.

Many times I would rush home have a shower and then go to work again; sometimes I’d go home sleep for an hour and then go to work. It may be just me, but when I’m tired, really tired, I know, because I hit my second wind and go into overdrive; my body overheats, especially around the back of my neck and I loose any hunger I may have had and rely on coffee to get me through.

Anyway,We stripped the house, threw out all the carpet, pulled off all the fixtures and fittings, cleaned them with thinners to get the original owners paint smears off, cleaned out all the cupboards and we eventually repainted the whole house; with a nice feature wall as well in the middle of the house.

One evening my father-in-law painted all of the ceilings and to our horror when we arrived the next day we found that ‘all’ of the ceiling paint had peeled, taking off the original coat as well and exposing the raw grey material of the gyprock, we stood around for half an hour scratching our heads and checking the tins of paint (yep; he definitely used the new stuff used not some of the old paint I’ve carried with me for about 3 or 4 houses now hoping to use one day). So off I trundled with my apparently ‘dodgy paint’ back to the supplier, wherein he told me that the original paint from years ago mustn’t have had sealer applied and as our paint has adhered to the original coat and dried(shrinking) it has lifted the first coat.

I double checked this and it appeared he was correct.

Our only remedy was to take off all the ceiling paint by wetting it with hot water and detergent and scraping off the paint (which we did with hand scrapers, then sanded it ) then applying an oil base sealer and repainting the whole lot.

We then installed new carpets through the bedrooms and living area from a wholesale rug/carpet importer, he gets the reams of carpet and makes some great rugs, luckily, we had my wife’s grandfather who knew him from when he was in the carpet game (a story in itself) and we got some quiet expensive looking carpet at a great price.

Getting it installed was no problem either with my wife’s grandfather helping out and he’s such a stickler for doing it once – doing it right, that the tradesmen wouldn’t have dared do a half baked job. After that we had many people comment on our * expensive * carpet when they dropped over (which made us feel good).

We fixed and re-seated all the taps and did a lot of other small repairs inside the property including installing brass looking towel, toilet and hand towel rails as well as bathrobe hooks behind the bathroom doors.

REDWING
The speed typer

“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow Calculator

Small things can make a BIG difference.

My first property took a really long time to buy. Just could never quite get over that first hurdle.

I was renting a great fully renovated place
at the time. I had been in it only 3 weeks when I discovered the carpets (only 12 months old) infested with fleas.

When I rang the agent to request the place be treated for the problem she promptly told me that I walked them in! I was that furious with her that the next morning (Saturday) I bought the newpaper, scoured the Auction section, saw a place that was suitable, knew the market since I had been looking for a while, attended the Auction at 11.00 that morning and bought the place. (it was a good price $90K at the time but worth 250K now)

We joke today that it took something the size of a flea to get me over the line – but I guess everyone gets a push from someone or something![biggrin]

Hi Dazzling..

we bought a duplex block off DOLA and sold to Homeswest 3 months later making $15k after costs..we were happy as i’d used my money from my shares to purchase the block; i’d made $3k Profit on the shares as well..

REDWING

“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow Calculator

Thanks everyone for sharing their stories.
Here is my contribution, sorry the figures are very out of date as this happend in 1984, but hopefully the process could entertain you for a few secs….

Our first PPOR purchase (in SA).

Our situation:
Both were 2nd year fulltime uni students with a 2yrs old child, living on student allowance (was called TEAS, Tertiary Assistance Scheeme then) and partime work at restaurant.

Total purchase inc. expenses= 54K
Bank would only lend 30K (after rims of proof of income and character reference provided)

—> we needed to find 24K deposit (HUGE amt for us !!!).

We had 10K savings (how we managed to achieve this, was another story), plus 4K of First Home Owner Scheeme . I.E. we were still 10K short.

What we did was:
1./ AS we both worked 2 nights per week at a restaurant earning $140 p/week, which was $7200 per year. We approached the owner proposing them to pay us our one-year earning of $6000 upfront, instead of $7200. This would be similar to them lending us $6000 and we pay them back $7200 within a year. Took them by surprise but they eventually agreed as we had been dedicated trustworthy waiters and they did want to keep us…

2./ Ok, now we still had to find another $4000. We called onto friends and the people we knew, proposing the following:
20 of them, each put in $200 to lend to us , this meant $4,000 for us.
What they would have in return: every month for 20 months, each kept putting in $200 and a name was drawn from the hat. This person would get the next $4000. If this person did not need the money right at that time then he/she could pass the turn to someone else who did.

Our risk: we had to act as guarrantor. This meant if any member had had their turn, took the $4000 and then ran, we would have to cover for them. It was a big risk but mittigated by us carefully chosing the members. A lot of mutual trust involed here and the system would only work with the people you know well. You have to have proven credibility otherwise no one would want to join.

We moved into our first 3bed house, shared one room with a student going to the uni nearby. The extra income helped paying our mortgage.

If I could turn the clock back I would do a few things differently. But no regrets, as all we can do is making the best decision we know how at the time…..

Cheers,