You'd need a good volume of deals to make this worthwhile. Can you imagine how many people you would have to approach before one deal comes off.
Fliping grouped properties to developers
- Thread starter jezza888
- Start date
Depends on the scale. If you helped, say, 4 people collectively make an extra $300k, it probably won't be enough.
This is like people opening up advisory investment banking firms. If you pull off one deal and make a million bucks, that's great. But most of these boutiques do no deals each year, or do one really small deal that pays nothing.
This is like people opening up advisory investment banking firms. If you pull off one deal and make a million bucks, that's great. But most of these boutiques do no deals each year, or do one really small deal that pays nothing.
I had 3 Brisbane clients sign assignments of their options today.
1. $330k assignment fee 3 months under option, lots of design and townplanning work that led to a positive pre-lodgement meeting in regards to an extra number of units. Cost <$20k
2. $400k assignment fee 6 months under option, DA for 6 stories Cost ~$80k
3. $35k assignment fee, 3 weeks under option. Low ball offer accepted on door knock and then resold at market rate.
Number 3 is not going to leave a great deal but $15-$20k for such a quick turnaround and on a $1,000 deposit is nothing to sneeze at.
Reasons
1. Right place at right time, fell in their lap.
2. Does it all the time, full time.
3. Having a try at options, went for something safe with no spend.
It works now, it worked pre 2008. Not going to work in a year or 2 in Brisbane, or at least be much harder. We have a new city plan and a warming market.
1. $330k assignment fee 3 months under option, lots of design and townplanning work that led to a positive pre-lodgement meeting in regards to an extra number of units. Cost <$20k
2. $400k assignment fee 6 months under option, DA for 6 stories Cost ~$80k
3. $35k assignment fee, 3 weeks under option. Low ball offer accepted on door knock and then resold at market rate.
Number 3 is not going to leave a great deal but $15-$20k for such a quick turnaround and on a $1,000 deposit is nothing to sneeze at.
Reasons
1. Right place at right time, fell in their lap.
2. Does it all the time, full time.
3. Having a try at options, went for something safe with no spend.
It works now, it worked pre 2008. Not going to work in a year or 2 in Brisbane, or at least be much harder. We have a new city plan and a warming market.
I'm trying my darndest to package up a site right now...it's not easy. Everyone thinks their property is worth more than next door (or behind) or you find Beryl's nephew who used to be an agent 10 years ago in another state told her, her property is worth $6mil.
Currently I've 7 lots, individualy worth between $900k -$1.1mil each. I've got a developer happy to purchase a 12month option for 1.5% at $1.8mil each and I still have one person being greedy and wants more, they just happen to own the middle block so if they're not on board, the deals off.
I've been involved in a few multi property purchases (mostly strata buildings) and as soon as people hear the word Developer....their price triples. If it were me, I'd do exactly the same, but jeez it makes my job hard sometimes.
Currently I've 7 lots, individualy worth between $900k -$1.1mil each. I've got a developer happy to purchase a 12month option for 1.5% at $1.8mil each and I still have one person being greedy and wants more, they just happen to own the middle block so if they're not on board, the deals off.
I've been involved in a few multi property purchases (mostly strata buildings) and as soon as people hear the word Developer....their price triples. If it were me, I'd do exactly the same, but jeez it makes my job hard sometimes.
I'm trying my darndest to package up a site right now...it's not easy. Everyone thinks their property is worth more than next door (or behind) or you find Beryl's nephew who used to be an agent 10 years ago in another state told her, her property is worth $6mil.
Currently I've 7 lots, individualy worth between $900k -$1.1mil each. I've got a developer happy to purchase a 12month option for 1.5% at $1.8mil each and I still have one person being greedy and wants more, they just happen to own the middle block so if they're not on board, the deals off.
I've been involved in a few multi property purchases (mostly strata buildings) and as soon as people hear the word Developer....their price triples. If it were me, I'd do exactly the same, but jeez it makes my job hard sometimes.
What you need to do is this:
You need to get your developer to sign the contract with all the other interested parties with the option to come into effect once all properties have signed on. Make your developer place the 1.5% fee in the owners solicitors trust account which can be accessed once all the properties have come on board.
Put a 2 month expiry date for the developer to execute the option if they are able to only acquire all the relevant lots.
This firstly reduces the risk of other parties backing out once you secure the last one as well as puts pressure from all the owners to bug the last one holding out.
If you can't secure the last property in that 2 month window it will never happen and you know to walk away. Your developer friend walks away as well with only legals to pay.
The good thing with this is that your developer friend can negotiate with the last one and pay a little more to secure the property in full knowledge all the other properties are secured and that re-negotiations won't have to restart.
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