Renovating - Profits

Lizzie did a reno and made $95k in 18months tax free! Yield was probably just over 10%. If she had annalysed that too much, she could well have missed out on a $95k profit!

Good luck to you!

the yield was only 15% at $105k profit - but considering it was only part time and i could still be involved in the school, long lunch with friends, get another business started, pick up and drop off my daughter, be home for the school hols, do some south coast travelling, spend days taking stepkids for driving lessons, do all the house stuff (cleaning, baking, shopping) or just chilling out etc etc ... it was very part time :rolleyes:.

there is no way on god's earth i could've made that sort of money in a "job". and there is no way i could've had the freedom to do all of the above and more.

but then - if i had to split the profit with equity partners, then the figures look a lot sadder at perhaps only $35k each if 3 ways. i prefer to go it alone and reap the entire reward for myself.
 
how are you reno'ers going getting funding? churning and burning these properties can't be easy from a finance pov these days? a couple of years back there use to be some good funders for short term deals.
 
It is essential that you use a redraw facility. Banks will get suspicious at the amount of credit inquires that you are undertaking. However, this should be better now due to positive reporting.
 
whereabouts is this if i may ask? i'm a renovator too but only in selected areas in melbourne.


Hi Melbournian
took a while to get back to you, the area is Mt Lawley in Perth, which is blue chip. She lives and knows the area well, she targets period homes in the better pockets.

Cheers, MTR
 
I tend to prefer to think of it in dollar figures - how much actual return rather than % because 20% of $300,000 is very different to 20% of $800,000 for example.

Have a think about how much in $ you would like to make from you your reno, over what time frame and with what budget. I always break down our profit figure by the time it will take too so that I can see a per month profit figure to help me compare deals..

Wishing you every success, Ana

Ana
my g/friend also works this way, work out what you want to make in the first instance.

Cheers, MTR
 
Thats great MTR, I tend to prefer that focus because it helps you compare deals but also it helps you compare different variations (and startegies) you can do with the same deal which is why I like using PAT for profitability analysis.

You might be able to get $70k in real profit for a 6 month turn around or $90k in real profit for 12 month turn around with the same deal, so then you decide if you would rather do two 6 month projects (quick reno, back on market, settlement for new buyer) or do one longer one.. etc

Wishing you every success, Ana
 
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