Hello all. LONG time reader, first time thread starter!
So, here?s my situation. I?m a 26 year old from Melbourne who currently lives at home (in Plenty) with my dad, younger brother and younger sister. I have worked full-time for 5 years and have a very stable job in advertising and in-between a few European vacations, I?ve relatively easily managed to save up $60,000 and get a loan approval for $400,000 to buy my first home!
I would like to stay relatively close to home simply because I like the area, I want to stay close to my family, friends, social activities, work (good train line). I?ve been looking for a small house or even a unit in the Greensborough / Watsonia / Macleod area over the last few months and have come close once or twice. I may need to save up a few extra $ but that can be sorted out given a few months! I?ve had help looking around from my dad but the purchase itself will be mine which is something that is really important to me (having MY own place that I own alone).
But here?s my situation (albeit, a very good one to have). I have an very wealthy uncle (I mention this because he doesn?t have ulterior motives) who I?m very close with who has offered to go 50% with me if I was keen on buying a place (in say Macleod), subdivide it and build out the back (to then sell and split the profit). So, we would go $400,000 in each to buy a place (say for $750,000 + stamp duty, etc), I?d live in it for a year and then we?d go about getting it split up and build something on the back lot. My uncle is very wealthy due to business ventures and so on but he is not in the property game AT ALL (ie. thought I wouldn?t have to pay any stamp duty on the aforementioned purchase as I?m a first home buyer, etc). He is using this as an opportunity to help me out which I'm very appreciative of, learn himself as well as getting his foot in the door (I guess) without having to do any of the leg work (as my old man and I would be doing that).
After reading this forum and doing a lot of research (I?ve had to present a $ case to him), I?ve come to learn that it?s not as easy as it seems. Saying you want to subdivide and then going through with it with no experience are two very different things. Finding the right place which could take time (especially considering I?ve just gotten myself into gear and incredibly excitedly have almost purchased a place myself), getting permits, getting other people involved etc. And that the financial gain from doing this doesn?t seem to be as good as it?s made out to be?
I spoke to a family friend who is a financial advisor early doors when I was getting my deposit sorted and he advised me to stay away from this type of situation as he doesn?t think it?s worth it at the moment. I?ve been told this by a couple of other people too but family, friends etc all say it?s an unbelievable opportunity. Everyone seems to be an ?expert' on property though...
What do you think about the latter option? Is it something I should be taking up without even thinking and am I stupid for being so cautious and even contemplating not doing it or would it be better to go it alone, have my own place and proceed from there?
I've been reluctant to post, but I will kick myself if I go with the second option and it blows up in my face (or the first for that matter) and I didn't consult with everyone here, especially considering I've been using it daily as invaluable resource up until now.
Any help would be very much appreciated!
Thanks.
tl:dr – should I purchase a property myself or go halves with an uncle in buying a property and then subdividing it.
So, here?s my situation. I?m a 26 year old from Melbourne who currently lives at home (in Plenty) with my dad, younger brother and younger sister. I have worked full-time for 5 years and have a very stable job in advertising and in-between a few European vacations, I?ve relatively easily managed to save up $60,000 and get a loan approval for $400,000 to buy my first home!
I would like to stay relatively close to home simply because I like the area, I want to stay close to my family, friends, social activities, work (good train line). I?ve been looking for a small house or even a unit in the Greensborough / Watsonia / Macleod area over the last few months and have come close once or twice. I may need to save up a few extra $ but that can be sorted out given a few months! I?ve had help looking around from my dad but the purchase itself will be mine which is something that is really important to me (having MY own place that I own alone).
But here?s my situation (albeit, a very good one to have). I have an very wealthy uncle (I mention this because he doesn?t have ulterior motives) who I?m very close with who has offered to go 50% with me if I was keen on buying a place (in say Macleod), subdivide it and build out the back (to then sell and split the profit). So, we would go $400,000 in each to buy a place (say for $750,000 + stamp duty, etc), I?d live in it for a year and then we?d go about getting it split up and build something on the back lot. My uncle is very wealthy due to business ventures and so on but he is not in the property game AT ALL (ie. thought I wouldn?t have to pay any stamp duty on the aforementioned purchase as I?m a first home buyer, etc). He is using this as an opportunity to help me out which I'm very appreciative of, learn himself as well as getting his foot in the door (I guess) without having to do any of the leg work (as my old man and I would be doing that).
After reading this forum and doing a lot of research (I?ve had to present a $ case to him), I?ve come to learn that it?s not as easy as it seems. Saying you want to subdivide and then going through with it with no experience are two very different things. Finding the right place which could take time (especially considering I?ve just gotten myself into gear and incredibly excitedly have almost purchased a place myself), getting permits, getting other people involved etc. And that the financial gain from doing this doesn?t seem to be as good as it?s made out to be?
I spoke to a family friend who is a financial advisor early doors when I was getting my deposit sorted and he advised me to stay away from this type of situation as he doesn?t think it?s worth it at the moment. I?ve been told this by a couple of other people too but family, friends etc all say it?s an unbelievable opportunity. Everyone seems to be an ?expert' on property though...
What do you think about the latter option? Is it something I should be taking up without even thinking and am I stupid for being so cautious and even contemplating not doing it or would it be better to go it alone, have my own place and proceed from there?
I've been reluctant to post, but I will kick myself if I go with the second option and it blows up in my face (or the first for that matter) and I didn't consult with everyone here, especially considering I've been using it daily as invaluable resource up until now.
Any help would be very much appreciated!
Thanks.
tl:dr – should I purchase a property myself or go halves with an uncle in buying a property and then subdividing it.
