Attention Investors: I'm looking to flip...

Hi Matt / Les

Just noticed this . How are things going at the moment ?

With regards to the expected rental return , is that with it renting as three seperate units or on a room by room basis to students etc.

As you know we're based in Sydney so wouldn't be interested in anything that needed hands on management with the property management.

Cliff
 
G'day Matt here - son of Les (one of the Mods). It's certainly been a while since I've posted, or even visited, here - just busy with current things, I guess - so my apologies, if I've posted in the wrong location, and I thank in advance the moderator who moves it to where it needs to be. :)

Anyway, the reason for the post... I'm currently under contract with this little gem and I'm considering the possibility of flipping it (first-time flipper BTW). Given that even the most basic (though well presented) 3bdrm workers cottage on 400m2 in East Brisbane is selling today in the mid-high $500Ks, this one is a winner, and it's available today for ~$565K but, yes, it does need work!!

I would not be offering this, except for being pretty much "jointly and severally stuffed" by the Banks. The potential income is huge (depending on your purpose for it). I have plans to provide a >15% return from it (eminently achievable based on my experience when renting to students). After fighting for several weeks now on this, it seems likely that I'm not going to win - but YOU can...

Circa pre-1900 Queenslander former Mansion with Maids' Cottage (underneath), converted into three registered flats in 1952. Lot: 3; Plan: RP91176; Parish: South Brisbane.

  • With 7+ bedrooms, 3 bathrooms, 3 kitchens and over 290m2 of current internal living space this property also boasts;
Just wondering is this property still on the market,is this property vacant,or has it tenants,and is this in the demo control area,it's a pity you have to sell something like this on the land value alone,there is a lot of this type of property starting to come on the market in the inner southside..
willair.

 
sounds like the house is borderline demo anyway - yes it it sound but the renovation costs could make it prohibitive to most.

by the sounds of it, a potential purchaser is staring down the barrell of about $150k to get it to a decent, rentable specification - including new kitchens, bathrooms, handrails, possible stair repairs when floor is levelled, new weatherboarding, ceiling repair etc.

however, this would all bump the rent up significantly.

god i wish i had more time - would be fun to renovate this. stick the famly in one flat when it's done and continue on the other 2 for a "renovation holiday"...
 
G'day all,

Well, it's all over for Matt - so they'll be wanting new buyers.... :(

Shame, as he worked his bum off trying to make this work (had a "fallback position" at 12.5% Interest if it all went South - unfortunately, the "fallback" became "fallout" when they refused to accept the property as collateral for the loan). Left him with nowhere to move !! (Surprised me somewhat when this happened - I mean, aren't they taking Higher Interest to cover a Higher Risk - yet, they didn't want to take the risk that our main lender was happy with at ~9% - go figure) !!

Main Bank had said "Yes" to val, but got him with that damn "joint/sev" rule.

Meanwhile, for the last week of "trying to make it happen" and all this week, he has been crook with some kind of flu - so, apologies for him "not keeping in touch".

Specific answers:-

Hobo-jo Matt was looking for "any interest" - with the potential this place offers, he was hoping to snag Auction price, plus any SD he might need to pay, plus various inspections, etc. - and maybe a few grand to make up for his time. The ~$565k mentioned was always up for negotiation (the ~ would have told you that, I hope). He had the option of a further week's extension (at a cost), but with no solid interest, he had to let it go.

See-Change Matt's niche is in Student rental - he had figured > 15% on that basis. Later figures, when fighting with lenders, saw >10% gross (based only on Purchase Price?) if rented as 3 flats (many lenders don't wanna know about "students"). I don't think this allowed for any renovation costs (not sure)..... his spreadsheet had included $50k for that (cosmetic) - but I don't know if the spreadsheet took that figure in or not in the Yield figure.... If I remember correctly, some lenders won't look at "more than 2 flats" as a residential purchase, so wanted him to stump up 30% on a Commercial Loan - that was never gunna work for us.... Watch out for that one (I have NO knowledge, as I only buy houses, not flats....)

Willair
Just wondering is this property still on the market,is this property vacant,or has it tenants,and is this in the demo control area,it's a pity you have to sell something like this on the land value alone
I believe it is now back on the Market, still vacant AFAIK, and it "could be" in a DCA (our other house - just around the corner IS in the DCA, but is not subject to it - it's rated as LMR)

Re the "land value", it is the condition and position that lets it down - thus the lower price. Ideal for students, not so ideal for 3 families.....

Blue Card
by the sounds of it, a potential purchaser is staring down the barrell of about $150k to get it to a decent, rentable specification - including new kitchens, bathrooms, handrails, possible stair repairs when floor is levelled, new weatherboarding, ceiling repair etc.
If one wanted to fit new bathrooms, kitchens, etc, then, your $150k would be on the money. For a cosmetic reno, though, Matt had allowed $50k. And, yeah, it might stretch a bit past that..... as one discovers the other "odds and ends" along the way. Levelling is quite cheap - we levelled a similar property for <$2k - not quite the same floor area, but a big 4bdr Classic Qldr.

The probs with weatherboard, etc. are minimal - the odd hole here and there. Same with ceilings.... Matt might have over-stated the case in trying to present a fair picture to all here (so that there were no surprises).

I can easily see a >$200k profit (Equity bounce) on completion - that is why I was so keen for him to "have a go" (thinking he had this "fallback" money option in place)..... Alas, 'twas not to be....

Cashflowplus Yep - that's it !!!

Sorry for the delay in getting back (too busy licking wounds :eek: )

Regards,
 
Les thanks i went and had a look last week,talked too the R-E and he told me that it was already sold for 510k ,not sure how accurate that is but he told me he had 3 backup contracts in place if that one fell over,but like you said it did need a lot of work,but there was moneyin that place.
I hope it works out for your son..
good luck..willair..
 
Les thanks i went and had a look last week,talked too the R-E and he told me that it was already sold for 510k ,not sure how accurate that is but he told me he had 3 backup contracts in place if that one fell over,but like you said it did need a lot of work,but there was moneyin that place.
I hope it works out for your son..
good luck..willair..
The property for sold for 495K according to past sales.

Just wondering Les if your son lost his 10% deposit on it? :eek:
 
Sale date of 8/10/08 for 495k

A value add special for those with the skills, would be interesting to follow the progress of this property.
 
For those interested in following the progress, the inside has been completely renovated and a new deck has just been approved by Council at the rear of the property. Unfortunately, I don't have any pics.
 
For those interested in following the progress, the inside has been completely renovated and a new deck has just been approved by Council at the rear of the property. Unfortunately, I don't have any pics.
Sorry LJW. You're new to the forum but your post suggests that you have previously posted. Are you an old member under a new name?
 
For those interested in following the progress, the inside has been completely renovated and a new deck has just been approved by Council at the rear of the property. Unfortunately, I don't have any pics.
I have been watching that property as i drive past,it looks good now,, just car flow per hour flow rate is huge,the value was in the land because parts of that river section are still trending up wards,a large sign in the front section would make good money....
 
Sorry LJW. You're new to the forum but your post suggests that you have previously posted. Are you an old member under a new name?
Hey Geoff, I am a new member to the forum, although I have been lurking around for 6 months or so. I randomly stumbled upon this old post and recognised the building. Coincidentally, I have just obtained development approval (i'm a town planner) for the recent extension at the rear.
 
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