Selling Properties

Hi Scruffy,

I would like to share my story to encourage you. I know it is hard to stay positive when the market is down. My situation is such that I’m selling a property in Cammeray now where properties sell within weeks of listing and my “sale” keeps falling over. Now, that’s really sad. I, too, is struggling to keep my spirit up but I know from experience that a solution is always available. There is always a way out of any tight spot.

This story goes back 12 years ago.

Newly divorced, four children under 7 (6, 4, 3, 1), working as a mortgage broker. My ex and I accumulated 4 properties by the time of our divorce. We split the assets; we’ve sold two and kept one each.

I got the house in Richmond, Sydney NSW. When I did my budget (we live frugally), I found that I’m $100 short of being able to keep the investment property. This is when I developed the philosophy that if all you needed was $100 and you can’t find it, it might as well be a million. The alternative was to sell it. I had no bargaining chip.

Then I thought, what if I ask the tenant to be an “equity contributor?.” I approached them. Told them if they were willing to pay the rent and add $100 as “equity contribution” into the property, I will give 20% of the capital growth when we sell. And, if I decided not to sell, we will get an independent valuer to assess the value, and I will give them the equivalent of 20% of the capital growth . When we drafted the contract at the start, we decided on the value of the property.

Three years later, they decided to move to Gympie. As I didn’t want to sell, I gave them the equivalent of 20% capital growth, which amounted to $15,000. Enough to start a new in Gympie! For them, it was such a joy to go with cash to start that new life with their children.

When people hear this story, they often say but 20% is such a lot of money. That’s not how I view it. The alternative was to lose the property. In this way, I got to keep it, and not have to worry about it. Did you know what they did as soon as we signed the co-equity contributor deal? They repainted the whole house at their costs. Over the 3 years they lived there, I didn’t have to spend a cent on repairs and maintenance.

Secondly, it gave me time to recover. I was able to re-start my career and within a year of the deal, was able to increase the value on Richmond to buy a second investment property – a little beauty — a two-bedroom unit in Hunters Hill. The millionaire’s row! Can you imagine that? I have since sold this and it’s another long story.

I learned that we have to give some, to gain some. My tenants have become like family to me. I adore them, continues to speak to them and I “bought” a house for them in Gympie. They are paying me for it. They are lovely people.

I am not saying this is what you should do. All I’m saying is that the solution is not necessarily to bail out at any costs. Sometimes you only need a shoulder to help you.

Don’t despair. If your heart is in the right place, a solution will come to you. If it’s a win-win situation, everyone will benefit.

Take care and if you need someone to help you keep your spirit up you can send me an email to [email protected].

Fellow struggler,

Angel

Twelve ago was when properties skyrocketted. It didn’t matter when you bought, you made money.

Hi NSW 2011,

Thank you. I’m equally inspired by many people here.

Take care.

Angel