I quit my hated office job 4 years ago with the goal of making a fortune in property.
I have a small home business on the internet which barley covers my living costs.
Ive done quite a few successful small deals over the last few years but now ive hit a dead end.I purchased a run down house on a big double block with the goal of renovating the house and
subdividing.Unfortunately the renovation cost were higher than I thought and I ended up using up all the money I had in the bank.
I managed to finish it and get the house tenanted.To proceed with the subdivision I need about $30k.
Unfortunately for me I dont have any access to funds my friends and family are not risk takers and will not lend me
any money despite me explaining just how little risk is involved.
If I was a good salesman I could join the local golf club and talk somebody into being my business partner.
Unfortunately im not.I keep getting told oh well you’ll have to go back to work now and be realistic . This makes me mad with rage. It was this kind
of talk that made me leave my hated office cubical job in the first place.
In any case I used to work in IT and my skills have dated over the last four years. A lot of retrained and major bluffing would be need.I have one other property. A unit in Brisbane. Selling it would free up about $50k. Ive had it on the market for a few months and theres no interest. The Brisbane unit market is dead as disco. I could try dropping the price but its hardly worth it as i put a lot of work into renovating the unit myself last year and its already cheaper than it should be. Plus it gets a much higher rent than average.
At the current rate nothing might happen for a year or two.
I had the old house revalued after I renovated it and the bank increased the value by $25k. If I could borrow that i might almost get there but because my business doesn’t earn much money I would have to lie to bank to access the extra funds. I already tried once with the truth and they rejected my application.
I could just sell the house as is for somebody else to subdivide but i would be leaving $130k on the table as this would seem self defeating after all ive been through.
If I could subdivide and sell the front and back of the old house I should net about $200k which will cash me up for my next deal and i’ll be back on the road to success again.
Unfortunately im broke and very frustrated. I need some inspiration.
Anybody ???
Seriously – would it kill you to get a job that pays an income for a few months, if only for the purpose of securing a loan? The bank is of course not going to loan you money if you can't demonstrate that you can make the loan repayments…
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Where to start? Somewhere in all that mess .. is an entrepreneur just waiting to get out.
First, you are treading water at the moment with your income situation. This is hardly the correct approach to starting an investment scenario. Second .. to sell into the plunging Brisbane market is the WORST possible scenario.
I had hard times two years ago and was thinking selling a couple of my units. I sat down and went thru what i could do. I decided that selling wouldnt really do anything for my REAL financial picture. The units have gone up by another 200k in the meantime. Which means my LVR on the whole deal is looking kinda pitiful now. And the income is up 9k so my financial probs that i had just dont exist.
Grab a Kiyosaki volume. RICH DAD POOR DAD is the obvious choice but they are all inspirational.
And lastly .. do simple accounting. If you got a MONEY DUNK property it remains a liability until you can convert it into a working asset. Dont have the finance to make it work? THEN DONT DO IT.
Finally .. whatever you do .. dont listen to the WORK HARD, BE REALISTIC, SAVE MONEY crowd. They just drag you down. You've made the big decision. Now the next step is to innovate to create workable solutions to make money.
Remember the longest journey starts with the first step.
I've done similar scenarios before. My gut feeling with your deal is .. if you cant do it directly .. and you own the asset, approach a young cashed up builder and work out a profit sharing arrangement on this deal. It will mean you lose a little profit but you will be able to get subdivision and building through. Like every good real estate agreement GET IT ALL IN WRITING. Walk around nearby building sites .. take notes of who is building. Ring them up. There are ways and means to get things done.
Oh ya .. if you cant trust the builder face to face .. dont employ him for anything. Cant trust is usually a good instinct.
Finally .. until you have a situation where your properties are returning AN INCOME you can live off .. you'll still need a job. Mow lawns .. deliver pizzas … tap dance in a mall for pennies. Do something u like to get the income u want .. to service your dream. Money is options, and without the money .. you have lost out on your options to carry the property deal through yourself.
Lastly, its ok to get a couple of credit cards to use just for building expenses. You use them to complete the deal, and refinance them from the proceeds of sale. Calculate the interest costs involved with maintaining them. This is a step for when you are working though .. its a way of having extra finance you dont need to ask the banks for. Treat them as available credit and not a free lunch and .. credit cards can be your best friend.
Finally .. real estate is all about thinking outside the box. And having some idea of how to market a property too. Grab some sales and marketing books. You need to learn how not just to buy and sell .. which any clown can do .. but .. who to sell to .. and how to make it all work. Some of my best purchasers were also my tenants, think about that.
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