Hi All,
How do you guys like a return of 1100%?
Well, I achieved that and hardly belive it myself. Back in Janaury 2004 me and an investment partner pick up two properties in Charter Tower, QLD for $55,000 each. Rental return is about 14% per annual. Rental incomes paid for all interest and expense and still put $30 in our pocket every weeks.We sold the two properties after 13 months for for $128,000.
This is how we structure the deal:
$1000 deposite ($500 for each property)
100% financial including costs (Using the equity in our home).We make a gross profit of $18,000 and after all costs were taken out we net $11,000. So our cash return over 13 months is 1100%. We use the surplus to support other properties in our portfolio. It was nice and trying to find that of deal now is getting harder, but it is still out there….Good Luck everyone…
Dreamer
Nice one dreamer thanks for taking the time to share. Always good to know the deals ARE! out there…
Thomas
Hiya Dreamer,
I am very impressed with the 1100% gain.
I am not impressed at all with the $11K gross profit.
Re-affirms my long held belief that this real estate game is simply a game where big gross $ numbers and the scale of your operation over rides everything else.
Noel Whittaker once said in his books “If you can consistently perform at that good level it is skill….if you can’t it was luck.”
Good luck with your future real estate endeavours. Onwards and upwards.
If your gross return on the investment was 1100% then the figures would look something like this:
$55,000 X 2 = $110,000 times 1100% = $1,210,000
but based on your figures of $18k gross profit the figures are $18,000/$110,000 *100 = 16.36% gross profit. Net profit is $11k/$110k = 10%.
Well done anyway!
I work it your way dreamer
I bought a property in Geraldton 2 years ago After years of research I figured the place was way under valued and prices could not stay as low as they were.
I am a divorced man with kids so saving for a deposit was imposible.
I found a place that was returning 8% and bought it for 120,000.
It was almost cashflow neutral.
The trick is that I borrowed absolutly everything.
Deposit and leagals on a credit card at 11% the other 95% on an investment loan. even all outgoings have been borrowed.
If I sold now it would go for around 220,000
but the consequences of unloading now would be a rather large bonus for the ex.
It’s now totally self supporting.
The numbers look like this
Purchase Price 120,000
Legals and borrowing costs 4,100
Rent – outgoings 5,000
Total Borrowings 129,100
Current value – selling costs 212,000
Capital gain 82,900The way I look at it any return on no money down is an infinite return on your investment.
But I must admit it’s not all skill.
I expected the price to go up but I had no idea it would go up so fast.asabove
Dreamer1,
If the Investment was putting $$$’s in your pocket every week why did you sell ?.
Cheers
MIKALA
Asabove,
hopefully you are not in this situation, but from what I have been told the child support agency will look at an investment property a dad has and takes the view that the rent received is your income, without taking into account the loan you have on the property.I’m not sure if the proposed changes to the legislation will fix this problem, but if correct is totally unjust.
Dreamer a question to you. Can you still get a 14% odd percent return on your rent up there, or was your IP pretty much a one off?
KStone
Hi Dreamer
Well done on finding and making the move on this deal back in Jan 04. They are good figures whichever way you look at them…but I’m with Mikala…Please explain why you would sell an asset putting money in your back pocket… every week…potentially for the rest of your life?
Ben
Hi Guys,
Sorry I being busy with uni and all that don’t have time to repiy. Now I got bit of time on my side I reply to your question.
The reason to sell the two properties were…that both properties is about 70 odd years and everything start to fall apart so the maintenance is starting to eat into the profit. So the best thing to do is to sell it and use the profit to buy other property. Otherwise the repair cost will eventually be eating all profit in the deal.
One comment on the return is that as an investion never look in the return on total value. Always look for the cash return. As that is the money you use out of your pocket. So I always look for the cash return since that is what we are trying ot do…add more cash to our pocket.
And the comment on the little return, if I come into the deal with little of my own money I be happy with a 100% return. Don’t be greedy leave some profit for the next investor that come alone. If you squeeze to much eventually it will dry up and you end up losing. So therefore, I rather take a $10,000 dollar profit and use that $10,000 to make another $10,000 rather than wait for a bigger profit. To be wealthy is not how much you can make from the deal by how fast you able to create a profitable deal…!!!
Good Luck Everyone,
Dreamer[biggrin]Hi all,
Not really a seller of properties but how about this one.
Purchase Jan 2002 79,475
Sale Dec 2003 281,000
This was in OZ.
Financed on a 95% lend. I kept the rest but this one was a thorm in my side re vacancy
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