Reno addict 2

I have had a couple of Private messages asking about some help with Strata Title of an existing building.
I purchased a block of 10 un-strata units and settled the sale Jan 2005 for 820k gross.
After completing a building inspection and employing a Consulting engineer to undertake a Fire Service inspection required by Clause C3.2 of the BCA with the recommendation by this Consultant we were able to supply to Council a Certificate of compliance.
With the Fire service conditions, we only had to provide smoke detectors and illuminated lighting in the stairwells. At the time of lodging the D/A I also lodged the Strata Linen Plan,
I decided to undertake a quick low cost renovation, I striped out all of the kitchens, shower screens, carpet, light fittings and power points, we then rendered the front elevation and the side elevation next to the driveway, sand blasted all balcony rails and repainted all.
The total cost of the renovation worked out to be only 12.5k per unit, the time taken was 3 months.
I sold 6 x 2 bedroom units with a contract price of 179k each, I allowed for a remote control for the garage doors and a clothes dryer in each unit for a quick exchange of contract, on 3 of these units I also gave a 1 years rental guarantee of 170K per week this is now about to cancel and it has only cost me $500 over this period.
I also sold 1 x 3 bedroom unit for 195k with same inclusions but no rental guarantee.
I kept 1 x 3 bed and 2 x 2 bed with valuations of 553K borrowing of 210k interest cost 15k per year and a rental return of 27k per year.
Cost of project
Purchase 820k
Renovation 125k
Interest 22k .
Sales costs 36k
Total 1,003k
Total sales plus value kept. 1,812k

Great foresight Presto........I'm impressed.

Cheers

Jared

Beautiful, Presto, I wish I could afford something that big. I guess it's only time.

Nice Presto,

Its amazing how a render can turn old cr@ppy looking units into nice relatively classy ones.

Nice Job

presto said:

I decided to undertake a quick low cost renovation, I striped out all of the kitchens, shower screens, carpet, light fittings and power points, we then rendered the front elevation and the side elevation next to the driveway, sand blasted all balcony rails and repainted all.

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Just comparing before and after pics, the biggest improvement apart from the painting/rendering would have to be concealing those bins.

Did you add about 50cm to the height of the bin wall, or (cheaper/greener) get the council to give you smaller bins in exchange for the large ones?

Either way, it made a huge difference.

BTW, there's a rejuvenated block very similar to yours in my street. But they would have spent several times what you did, putting in fancy dark tiling for the driveway, new letter boxes, security gates, intercoms, landscaping, new balcony rails, etc. Whether the results/effort ratio would bave been better than what you achieved is doubtful, though it sure looks good.

Peter

Yes the first thing I did was hide the bins, the guttering and handrails came up well to make the look a lot more attractive.

Where did you purchase the units? NSW?

Was there any reason why you didnt render the whole building instead of only the front and side? I know it would cost less but would'nt it look a little odd?

ok180 said:

Where did you purchase the units? NSW?

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City of Bathurst NSW not far from the Uni.

Hi Presto

Did you go looking for a block in Bathurst, a block anywhere or just a good deal somewhere that stacked up?

I like your integrated approach which allows the keeping of the 3 units.


Bear

bear said:

Hi Presto

Did you go looking for a block in Bathurst, a block anywhere or just a good deal somewhere that stacked up?

I like your integrated approach which allows the keeping of the 3 units.


Bear

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I am always looking for a project I like to have a number going at different stages, say, one in construction, with one in the design stage whilst looking for the next, I enjoy the challenge.
Regards Chris

presto said:

Cost of project
Purchase 820k
Renovation 125k
Interest 22k .
Sales costs 36k
Total 1,003k
Total sales plus value kept. 1,812k

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Hi Chris,
Were there any other costs you had to meet ( eg....gst on the sales and tax on the profit ) ?
Was wondering if you do your feasibility to show minimum percentage return, and in this case, what was the return (%) on this one ?

kp

kph said:

Hi Chris,
Were there any other costs you had to meet ( eg....gst on the sales and tax on the profit ) ?
Was wondering if you do your feasibility to show minimum percentage return, and in this case, what was the return (%) on this one ?

kp

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To answer your question yes you pay GST on the sales (debit /credit) what profit?
This is how I earn my income, so tax is paid on my total profits from year to year, not on individual developments.
I do the basic numbers, enough to give me confidence in the project.
I do not get bogged down, do not have a special amount % return to chase, you miss to many deals, doing to much research.
If it stacks up go for it, dont try to go to the max, leave a bit in for someone else, it will not be the last one you do!!!!

Hi Presto

You don't have to answer this if you don't want to... What type of finance did you use on this type of project? I guess it doesn't qualify for a construction type loan, but I have no idea really

Also what are the costs of stratering a block of flats? I guess it is different for everyone but is there a ball park range?

Thanks
Greg

Grego said:

Hi Presto

You don't have to answer this if you don't want to... What type of finance did you use on this type of project? I guess it doesn't qualify for a construction type loan, but I have no idea really

Also what are the costs of stratering a block of flats? I guess it is different for everyone but is there a ball park range?

Thanks
Greg

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The purchase was undertaken using the any existing income (rentals+) and my own equity base to achieve 100% loan.
The renovation was funded from Line Of Credit.
I just checked my Council approval, there was no fees to be paid for subdivision only the survey cost, linen application fee and lodgement with Land Titles Office plus setting up of Body Corp cost $1,400.

Greetings All,
There seems to be a great lot of interest in the renovations undertaken by presto and his team and from the questions on this and other subjects to which Chris has contributed . I have organised , and asked him to attend, a meeting at Petersham RSL on 26th February at 4 pm up the stairs and the desk will know where.
This will be a general discussion open to all questions about these and any other subjects and of course is open to all.
Those in Sydney who have inquired of Chris on the forum and would like to ask questions and quiz him face to face ----now is your chance.
For those having trouble financing deals , I believe there may be info on that subject also.
Just come along and watch it snowball.
Contact me direct if u wish to at [email protected]
Cheers for now and look forward to seeing you there. Len

gidday camder

Want to tell us what you are selling 1st?

I might be interested in coming along but only if you can assure me you will

answer all the hard questions.....

... from someone who has been doing strata conversions longer than he

cares to remember....


rossv

Geez rossv,
I guess you have caught me out ----alas----I am selling , good ideas friendship and morale support----but of course we are giving it away, (as the actress said to the bishop) . To those who have been to our gatherings and gone away after picking up maybe only one good idea and still had an enjoyable time is all the selling we do.
Beside it is not we really , I am just the instigator, the attendees provide the feed back on items they would like discussed.
So if you have done more strata conversions than you care to remember, you may not have time for our little nondescipt group and I wish you well if you do or do not attend. Cheers for now Len