flipping mentor?

ok so i have 1 ip villa in mount druitt which is doing very well.
my equi is great, my tenant is great and looks after the place, i also look after him while covering my costs :)

now im looking to get into flipping but have no idea on how to cost up whats a good buy to flip, my neg. skills need work to.

if there any one willing to help out or share some information?
im still young (26) and am keen to learn all i can about property.
i currently study building studies and work in commercial development and wish to one day develop my own projects.

cheers
 
In some states it is not legal to flip properties.

The laws are very heavy in SA and have just been tightened. Even buying option contracts and selling them without a license is deemed illegal and breaches the licensing act. Fines used to be $20,000 per transaction but have gone up.... dont know to what, but OCBA will crack down on anyone recieving any type of kickback or payment for a property transaction, sales, flips, property management etc who does not have a license.

I don't know about other states but the risks are huge in SA and I would not recommend having anything to do with it.
 
or do you mean flipping as in ... buying legally, quick reno, selling for profit?

hard in the current market. you need a market that is rapidly rising to make it worth your while in regards to stamp duty, agents fees, borrowing costs etc.

we did this during the last upturn - and then got caught when the guts fell out of the market. but in the interim we made good play money and paid off a lot of our ppor debt.

however, i wouldn't do it again - now i would buy, reno and hold. or preferably buy, develop and hold.
 
Cartoon, you say equity...

CBA have been harsh on my val, which lender are you with? And what have they Val'd the place at?? If you can PM me, I may be able to assist with your Q above :)
 
Flipping, as in buying, doing a reno and then selling (and making a worthwhile profit) is very difficult to do in Australia - mainly because of fees, holding costs, stamp duty, legal costs and CGT.

You are better off, as many of us do, buy a place for a low amount, do a smart reno on it so that you increase the value (and your equity in the place), and then rent that place out with the rent based on the new value. It is very important that you get a new valuation after you have done the reno.

But you have to be smart in doing your reno. Some of the more common jobs are: a new coat of paint, curtains, some landscaping, an outdoor entertainment area, a garage/shed, new heating, updated kitchen/bathroom, maybe even a new bedoom etc. Don't be too excessive though.


Thanks


g
 
Flipping, as in buying, doing a reno and then selling (and making a worthwhile profit) is very difficult to do in Australia - mainly because of fees, holding costs, stamp duty, legal costs and CGT.

You are better off, as many of us do, buy a place for a low amount, do a smart reno on it so that you increase the value (and your equity in the place), and then rent that place out with the rent based on the new value. It is very important that you get a new valuation after you have done the reno.

But you have to be smart in doing your reno. Some of the more common jobs are: a new coat of paint, curtains, some landscaping, an outdoor entertainment area, a garage/shed, new heating, updated kitchen/bathroom, maybe even a new bedoom etc. Don't be too excessive though.


Thanks


g

lol no it aint it's easy if you talk to the right people :p
 
flipping - i did it and made short term gains.

At your age, I've flipped several times and made money. In the 90s I bought a house for $80k and flipped it for a 20% gain after costs in 3 months. I did a few similar deals. I thought I was pretty smart at the time and reinvested the profits in snappy suits, an upgrade on my car, an overseas holiday. But the suits and car are worthless today. The house, however, is worth close to $500k today. The saddest thing is that the house rent could have covered all my mortgage costs. I was stupid to sell it for a short term gain.

Whatever I flipped years ago - and all of them were in major cities - I now regret. Get in for the long haul mate. Its only the smart ones who learn from the mistakes of fools like me.

Be smart. Buy cheaply and find good tenants (I know its a hassle) who will cover the bulk of your outgoings. In a decades time you won't regret it. Repeat: BUY CHEAPLY, the money is made in the buying. Do your homework and never pay too much for anything.

I am a migrant and property changed my life and has given me freedom. But if I could go back, I would never have sold the gems I once owned. I hope property gives you similar opportunities.

Goodluck in chasing the great Aussie dream of home ownership.
 
There comes a time where you can have enough of fixing fences and pulling toys out of toilets...

For anyone starting i would suggest to build a strong base of buy and holds first as then you have a foundation portfolio, along with knowing the ins/outs of the whole process. Say 10-20 properties.

Then look at buy/resell once you have a sizable amount of properties, it is possible in any market. You need to find the right properties to onsell.

Finance is probably the big key especially if you go to buy/sell fulltime, one needs to think how will they fund the next purchase and be able to fund the remainder of their portfolio.

It is being done by many in current market and in previous markets.

Settled on one last monday @ $155k, and I have offers already @ $200k, but want my $210k, minimum which will net $40k for a few phone calls.

I have another that is going 66w exchange tomorrow which I already have a realestate agent with buyer @ $50k more wanting this property (this is strictly a b/h though so not going to take a short gain).

Need to ensure whatever property it is thats purchased is bought well.
 
Cgt

Hi there i have a question regarding CGT.....


I am a 1st time investor / buyer. Signed a house and land package deal in a new and upcoming area 5 months ago. About to settle on the land in 2 weeks time (way overdue). My agent assures me that if i want to sell right now he can sell for 40 k profit tomorrow (my contract was 190k land + 130k house).

My question is:

Say i end up with 30k in profit after agent fees / bank fees etc what is the CGT on this? Is it the full 100%?

What if i sell after settlement?

I am looking to repeat this process again and keep the money liquid.

Any thoughts???


Cheers

Adam
 
I'm a bit confused

What seems to be described here is "buy a house, reno it quickly and then sell it on".
My understanding of flipping is that you buy a house from a vendor by using somethng like an option and then sell it again almost straight away. This is done by offering the vendor an option, signing any contract between you and the vendor as 'your name' or nominees and then simply stepping out of the way when it sells to a third party. this way you avoid all the usual fees. Rick Otton teaches a form of this ( I did his course a couple of years ago). I think he called this method 'back to back lease options' but someone else here might be able to clarify this.

If this sort of thing can work in the right market (and it obviously does for the people skilled at doing it) this would be worth trying.
I do also agree with bobbiemenzies, buying and holding will make you wonderful money in the long run. All my houses are now worth at least double what I paid for them and the longest held one only dates back to 2003.

Good luck
 
It is being done by many in current market and in previous markets.

Settled on one last monday @ $155k, and I have offers already @ $200k, but want my $210k, minimum which will net $40k for a few phone calls.

I have another that is going 66w exchange tomorrow which I already have a realestate agent with buyer @ $50k more wanting this property (this is strictly a b/h though so not going to take a short gain).

Pardon my ignorance, but how exactly does this work?
I dont understand how you can buy a property @ 155k and as it settles have other people offer 200k on it? How can a property be undervalued by that much initially? Also wouldnt the potential buyer have an issue with the valuation given the bank knows it last traded @ 155k?
 
ok so i have 1 ip villa in mount druitt which is doing very well.
my equi is great, my tenant is great and looks after the place, i also look after him while covering my costs :)

now im looking to get into flipping but have no idea on how to cost up whats a good buy to flip, my neg. skills need work to.

if there any one willing to help out or share some information?
im still young (26) and am keen to learn all i can about property.
i currently study building studies and work in commercial development and wish to one day develop my own projects.

cheers

I would start with downloading episodes of the tv series "flipping Out"

http://www.bravotv.com/flipping-out

it's about an american guy who's flipped 50+ properties in Los Angeles selling them and making close to a million each.

It shows how he juggles renovations, time mgmt.. interesting series!!
 
or do you mean flipping as in ... buying legally, quick reno, selling for profit?

hard in the current market. you need a market that is rapidly rising to make it worth your while in regards to stamp duty, agents fees, borrowing costs etc.

we did this during the last upturn - and then got caught when the guts fell out of the market. but in the interim we made good play money and paid off a lot of our ppor debt.

however, i wouldn't do it again - now i would buy, reno and hold. or preferably buy, develop and hold.

it is indeed very hard. i now prefer to hold and depreciate with higher rents coming in.

i wouldn't say flips but i buy and and hold for a year to minimize tax. Unless there are good offers i would not sell as stamp duty kills.

I recently bought a inner city unit for 430K and sold it for 590K in 2 months.
stamp duty was ard 22K, renovation ard 12K, holding costs till settlement was around 6-8K but still up more than 100+K in couple of months.

Super rare and would unlikely to happen again.
 
Say i end up with 30k in profit after agent fees / bank fees etc what is the CGT on this? Is it the full 100%?

What if i sell after settlement?

If you sell after settlement, and make $30,000 after all costs, then you have to pay CGT on the $30,000 at your marginal rate (unless you have other deductions to off-set it)
 
I do also agree with bobbiemenzies, buying and holding will make you wonderful money in the long run. All my houses are now worth at least double what I paid for them and the longest held one only dates back to 2003.

Good luck

I have found it is about the mix. Sure when you sell you lose future capital gains, but it does provide nice cash flow to support holding costs of other property (and a small amount of cream for lifestyle :D).

I look back on some that I have sold say 5 years ago that have more than doubled since, but I made the profit at the time and have since turned that capital over several time since and has enabled me to keep buying other property to keep for the longer term.

So if you do even 1 or 2 buy,reno,sell a year in addition to holding other IP's, and make even just $15-20k after costs on each, it is a nice bonus. How many hours do you have to work in your JOB for that?
 
If you sell after settlement, and make $30,000 after all costs, then you have to pay CGT on the $30,000 at your marginal rate (unless you have other deductions to off-set it)

Better to move into it. declare it PPOR and then and sell it otherwise wait for 1 year for 50% on CG.
 
What seems to be described here is "buy a house, reno it quickly and then sell it on".
My understanding of flipping is that you buy a house from a vendor by using somethng like an option and then sell it again almost straight away. This is done by offering the vendor an option, signing any contract between you and the vendor as 'your name' or nominees and then simply stepping out of the way when it sells to a third party. this way you avoid all the usual fees. Rick Otton teaches a form of this ( I did his course a couple of years ago). I think he called this method 'back to back lease options' but someone else here might be able to clarify this.

If this sort of thing can work in the right market (and it obviously does for the people skilled at doing it) this would be worth trying.
I do also agree with bobbiemenzies, buying and holding will make you wonderful money in the long run. All my houses are now worth at least double what I paid for them and the longest held one only dates back to 2003.

Good luck

Is it legal to do that? never heard of that method. Would the vendor allow it?
 
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