Renovating for deposits (buy, reno, hold, repeat).

Discussion in 'Adding Value' started by Richard Feynman, 30th Apr, 2015.

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  1. Richard Feynman

    Richard Feynman Mortgage Broker

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    Who of you has had success in renovating properties to produce deposits to do more?

    Ideally:

    • Buy at 80% LVR
    • Renovate
    • Val shop
    • Refinance with new lender at 88% (taking out more than your deposit/purchase and reno costs combined)
    • Renovated property = cashflow neutral or positive
    • Repeat

    If so, I?d love to know about the projects (numbers, timing etc).
     
  2. TMNT

    TMNT Member

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    yes many times, but with increased number of properteis and leverage comes increased risk

    if the property market flattened or even dropped 5%, combined with a few vacancies, major renovations, youre going to go bankrupt very quickly,

    leverage is a double edged sword, I have been considering this in the last couple of years once my IPs hit double figures
     
  3. ANDREW H

    ANDREW H Member

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    Cairns, QLD
    You should also know the areas your buying in well so you have possibility for capital growth as well to limit risk. Nathan Birch and Michael Xia have done this u should read up on them as they use the same strategy, but there is more to it. Can make you highly successful, all risk is manageable to a point.