Hi all,
I would like input from anyone that has done similar or just thoughts regarding risk etc.
I have been looking at a property that has some problems. Fundamentally the property is good in all aspects except appearance and it needs could do with a few minor adjustments to the floor plan.
The problem with the property is that it has been on the market for some time now with very little interest, mainly due to presentation I believe, and the owner is getting desperate.
Its a 5 bedroom house with pool/spa 1 garage and large entertaining areas in a good area. If I could afford to buy and hold I would. At present the internals are painted blue and yellow and the internals in general are pretty tired, hideous really.
Scope of works would include. Internal paint. Clean up grounds and some minor landscaping, render and paint the front (only) of house. New timber boundary fence approx 30m. Roof resprayed. Reconfigure existing kitchen + new post formed bench top. Reconfigure bathrooms x 2, not extensive. Block up a couple of doorways, new floor coverings, remove cubby house and crap from yards and a good gurney all over.
I believe the owner would settle for approx 420k but my analysis suggests the property to be in the 455-470k region.
Now what I am proposing is this. The property is stale, take it off the market for 4 weeks. I’ll project manage and bankroll the cosmetic reno’s in exchange for the difference is in vendors agreed price (say 420k) remarket the property post reno and I pocket the difference.
Reno time 3 weeks, Figures would look like this:
Reno: 15k
Expected sale: 460K
Agents comm.: 10K
Settlement to vendor: 420k
Profit 100% CoCR: 15k (3weeks)
My main concern is that CMA’s indicate that there is not a lot selling in the area but all comparable sales are in the 460-470 region.
Welcome your thoughts and if you think its a hair-brain scheme, be gentle, I’m just testing the water.
Thanks
Slingshot
I would like input from anyone that has done similar or just thoughts regarding risk etc.
I have been looking at a property that has some problems. Fundamentally the property is good in all aspects except appearance and it needs could do with a few minor adjustments to the floor plan.
The problem with the property is that it has been on the market for some time now with very little interest, mainly due to presentation I believe, and the owner is getting desperate.
Its a 5 bedroom house with pool/spa 1 garage and large entertaining areas in a good area. If I could afford to buy and hold I would. At present the internals are painted blue and yellow and the internals in general are pretty tired, hideous really.
Scope of works would include. Internal paint. Clean up grounds and some minor landscaping, render and paint the front (only) of house. New timber boundary fence approx 30m. Roof resprayed. Reconfigure existing kitchen + new post formed bench top. Reconfigure bathrooms x 2, not extensive. Block up a couple of doorways, new floor coverings, remove cubby house and crap from yards and a good gurney all over.
I believe the owner would settle for approx 420k but my analysis suggests the property to be in the 455-470k region.
Now what I am proposing is this. The property is stale, take it off the market for 4 weeks. I’ll project manage and bankroll the cosmetic reno’s in exchange for the difference is in vendors agreed price (say 420k) remarket the property post reno and I pocket the difference.
Reno time 3 weeks, Figures would look like this:
Reno: 15k
Expected sale: 460K
Agents comm.: 10K
Settlement to vendor: 420k
Profit 100% CoCR: 15k (3weeks)
My main concern is that CMA’s indicate that there is not a lot selling in the area but all comparable sales are in the 460-470 region.
Welcome your thoughts and if you think its a hair-brain scheme, be gentle, I’m just testing the water.
Thanks
Slingshot