Bought a house for $22,000

engelo10

engelo10

Hi guys,

Just thought I would write a post on a interesting purchase I have recently made. Its a 3 bed house in Coonamble. I submitted an offer of $20,000 for the property, I was more mucking around than thinking I could actually buy it at that price. After a bit of negotiating I managed to seal the deal for $22,000. I checked some comparables currently on the market for sale and there are a few properties under contract around the $80,000 range. Most of them are in average condition. I also did an RP Data CMA on the property and it came up between $90,000 - $110,000. I wanted to see in what condition the property was so I set out on a 8 hour drive to have a look and found out that it is actually a 4 bedder. Buy 3 get 1 free hahaha. Its a Nathan Birch special as its in pretty bad condition and needs renovating but offers great equity and yield. Reno will take 2 weeks to complete and cost no more than $15,000. Not much availabe for rent in the area and few local agents indicated that should get between $160 - $200 per week rent. After all expenses the net yield is around 16%.

Regards,
Engelo
 
engelo10 said:
Hi guys,

Just thought I would write a post on a interesting purchase I have recently made. Its a 3 bed house in Coonamble. I submitted an offer of $20,000 for the property, I was more mucking around than thinking I could actually buy it at that price. After a bit of negotiating I managed to seal the deal for $22,000. I checked some comparables currently on the market for sale and there are a few properties under contract around the $80,000 range. Most of them are in average condition. I also did an RP Data CMA on the property and it came up between $90,000 - $110,000. I wanted to see in what condition the property was so I set out on a 8 hour drive to have a look and found out that it is actually a 4 bedder. Buy 3 get 1 free hahaha. Its a Nathan Birch special as its in pretty bad condition and needs renovating but offers great equity and yield. Reno will take 2 weeks to complete and cost no more than $15,000. Not much availabe for rent in the area and few local agents indicated that should get between $160 - $200 per week rent. After all expenses the net yield is around 16%.

Regards,
Engelo
Click to expand...

Of the few people that i know in the rental game,all started in small country towns like myself,then moved into inner city cbd,as long as the reno costs are low then the numbers on something like this are very solid,good luck..
 
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Well done Engelo - sounds like a great deal, and hopefully someone will discover mineral resources (coal, iron ore, etc) in the area then things will really take off.

Thanks for sharing with us, and best wishes in the reno.

Tony
 
tonyc00 said:
Well done Engelo - sounds like a great deal, and hopefully someone will discover mineral resources (coal, iron ore, etc) in the area then things will really take off.

Thanks for sharing with us, and best wishes in the reno.

Tony
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That would be pretty dam good haha
 
WOW

Spent say $50k and getting minimum $150 a week.

Awesome.

At this rate even a major issue like new HWS is only $1k.

FYI make sure you have flood insurance. I use to live outback and this town is a regular flood risk. Flooded bad in Christmas 2009.

Other than that it is a nice town and does not have the social and drinking issues like some Outback towns such as Bourke.

Peter 14.7
 
Congrats and thanks for sharing!
I would love to see before/after pics! Good luck with the reno. Are you able to spend any time on the ground doing it yourself or picking your tradies? Or will you be doing it mostly remotely?
 
@ peter, No bank insures for floods except Suncorp I think. I spoke with council today on the phone and the media made it much more than it was I was told. Only a few streets were flooded most people were evacuated just for safety. My purchase is on higher ground. It is a risk tho you never know when it will happen. Look at Wagga.

@fokas, I will take a few of my tradies from here and spend 2 weeks there just project managing and doing a bit of the work myself.
 
Property Meister said:
dont mean to put a dampener but with a population of 4000 odd, are you worried about finding a tenant? or even being able to sell the property for say $50k
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SQM has coonamble's vacancy rate at 0.2% at the mo.
I Think it will rent just fine.
Well done - it might not be everyone's cuppa but who cares at that price?
 
knightm said:
SQM has coonamble's vacancy rate at 0.2% at the mo.
I Think it will rent just fine.
Well done - it might not be everyone's cuppa but who cares at that price?
Click to expand...

It was too cheap not to buy, you dont come across many properties at that price that arent fire damaged or completely dead.
 
Great job engalo there's a few round 50k in outback vic but I consider it too high risk. 22k let's say 40 after costs and reno is good buying imo just don't buy all of your houses like this due to illiquidity
 
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