Hi All,
Thought I would start a topic dedicated for South Australian investors. I would love to hear what my fellow South Aussie's are doing in the current market, where you are looking etc etc.
It would be a great place for us locals to share ideas about investing close to home.
Look forward to hearing from you all soon!
Cheers,
Matt.
Hi Matt,
We are currently working on our 3rd deal so fairly new to it all.
We do small residential developments ie subdivs and cosmetic renos down south. We have found it to work well as we know the area and find it convenient to do deals close to home with our family commitments.
The greatest challenge in this current climate is financing projects so we have had to change the game plan a bit. We had a site we were going to develop next year but we are now selling it to reduce the borrowing costs on this current project. We are happy to do it in order to move forward and improve the "sleep at night factor" as I call it.
Our goal is to quit our day jobs and do this full time within the next 5 years.
Kind regards,Mary
Hi Mary,
Thanks for the comment. My partner and I live in the North Eastern suburbs in a property we bought late last year. It has been my dream for quite some time to renovate / develop properties – so will be looking to go down the same path as you by the sound of it.
We are currently renovating our PPOR to unlock some equity that we will use as a deposit and to renovate another property. Are you able to tell me a bit more about your first few deals and how you got started? Are you still making resonable profits (bar the one you just sold to reduce debt)?
Are you selling your properties once the renovation / development is complete or keeping to rent out? I am thinking that we will renovate and sell for a profit on the first few deals to build up some capital before we keep some of the completed projects. This way you can keep moving instead of waiting for more cash / equity to invest in the next project.
Thanks again – I look forward to hearing more from you!
Cheers,
Matt.
Our first deal was with another couple in a partnership. We purchased a house on a corner block, spruced up the house on front, subdivided and built on back. The project took about 14months and we made a before tax profit of 110k. We then bought a house on a large block, knocked it down, subdivided and sold the blocks, making a before tax profit of 87k. We then renovated a house spending 12k that was revalued at 70k more than we paid for it which we have kept and tennanted. It will be a great development site down the track. The house we are selling we were going to knock down and build 2 courtyard homes but by selling now we will still make a capital gain of 60k which even after tax will pay for our current project. Our current house is on a corner block. We have done a basic cosmetic reno and plan to subdivide and sell block.
Whilst we have acheived good results so far it must be said that we purchased all these deals in 2006 and 2007 and there was a bit of a boom after that. I think it would have been near impossible not to make a decent profit in that period. Now is a lot tougher. I think you need to do lots of research, have finances in good order and be realistic about end prices.
Still if it was easy I would be bored of it by now. I'm really enjoying the ride.
Good luck with your project!
Kind regards,Mary
Sounds like you have been busy Mary! Good work though – looks like you have been making a real go of it and doing some great work! I do agree there is lots of research that needs to be done in the current market. I would love to start off by buying a large block, renovating the house and sub-dividing the and selling the vacant block of land. Hopefully we can end up with a free house (so to speak). Anyway I need to do lots more research, as I am not all that familar with the process and rules as far as sub-division goes.
Does a pretty straight forward sub-division take long to get council approval and get ultimately sub-divided? Have you looked into (or done) a sub-division on a property that is not on a vacant block. Where you keep the dwelling at the front and sub-divide the land behind?
Sorry about bombarding you with questions – I am just really interested in the topic and excited about getting started!
Thanks again.
Matt.
We have subdivided with a house on. The process down here takes about 7 months from go to wo but I have had council approval within a few months. The councils vary greatly so you need to check the rules of the council in your area. It costs about 20-25k depending on sewer ect down here. Its not been a difficult process at all from our experience.
Thanks again Mary – I will do some more investigation with the council! Sounds great though I cannot wait to get started!!!!!
Good luck!! Try and soak up as much info as you can from many sources. I studied for a couple of years gathering as much info as I could before I did my first deal. It has really helped.
Thanks Mary. I have and still are reading many property books, have done extensive research on-line and listened in to many teleconferences. As well as this I have spent a lot of time researching Real Estate and their values in my area. The one area I really want to spend time researching is with the sub-division process. I really have little idea where to start with the whole process so this is what I will be focussing on now!
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