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  • KyronGosse
    replied
    Hi Sarah
    There is a silver lining in that your father has a large network of investors willing to invest in you. This is something all investors (myself included) dream of. As for the reno you need to gain an understanding of the Hamilton market. Look at the median house prices of certain areas and decide where you want to invest. From what I can tell by your post you wont actually be contributing any money so you just have to find the property and do the reno. Look for an area that has a large range in prices and find a house well below the median house price -I.e. if the median house price is $400k look around the $330k mark, it may sound hard but they will be out there. You need to be able to renovate the house with no more than 10% of the purchase price - $40k and then sell for 140% off the purchase price = $462 000. This allows for 2% buying costs, 4% holding costs, 4% selling costs, 10% reno costs and 20% profit. (I normally aim for a 10% profit in which case you would sell at 130% of purchase price) Remember to renovate for your target market.

    As for your house there are other more creative ways of selling it such as lease options, which could bring you an income as well as get rid of a problem.

    Hope this helps

    Leave a comment:


  • SuperDad
    replied
    I don't blame you for not wanting to live there Sarah - N. St is one of the very worst streets in Hamilton. Getting out of there and starting afresh would definitely be a priority. It is a real shame that you will have to quit it without a profit - the house itself looks nice.

    In terms of the Hamilton market, are you confident enough about the better and worse areas not to buy a lemon this time around? If not, I would sort this out first. I don't know much about the market for quick renos in Hamilton at the moment, but I don't expect you would bank a profit of $100K again (for an average house in the $300-$400K range).

    Really hope that you can find your way through your difficult circumstances.

    Leave a comment:


  • Wayne
    replied
    I gather this 'investor' will want to make money - who wears the risk? I have my doubts that the Hamilton market is the place for this at the moment.

    Leave a comment:


  • TheLiberalLeft
    replied
    I'm going to print and frame your post for my daughters. Proof that splurging money on weddings is foolish, in your own words.

    And for crying out loud, OE's are there to allow you to make money, not waste it all as a tourist.

    Concentrate on the business. Making that sort of money in property now, in the short term, isn't easy.

    Leave a comment:


  • lawt
    replied
    I will be interested to see the replies here.
    You are seeking advice on an investment forum but what you are wanting to do is development and speculation - not investment.
    It also appears to me from casual observation over the years that the very issues you face now are typical of developers and speculators at all levels really - when things are going great there seems to be good money to be made, when they're not well it just seems I hear of more than a few going broke.

    Perhaps applying a similar formula to the purchase of an investment property (there's some good posts on that in here) would be a start - then work back from that. At least in a worst case scenario you should then be able to break even.

    Leave a comment:


  • AllowayS
    replied
    Originally posted by flyernzl View Post
    What worked well for the market and for you eight years ago may not work now.

    Perhaps you need to consider a less risky and challenging option for a few years until your child is older and you two are more financially stable.

    Keep the house and concentrate all efforts on the business?
    Thanks flyernzl, we werent planning on using the exact same strategy as last time, we were planning on making fact/based decisions. Re. the business, we have been concentrating all efforts on it for the past 2 yrs, and its killing us. Hubby works 70 hrs a week and the nature of the business means as soon as we sell our house we are selling the business as we need an alternative life. We also hate our neighbourhood so much that keeping the house is not an option. Our next door neighbours got burgled on Sunday, on the otherside the neighbours came and warned us that a crazy, armed, gang member may come shooting next door, and we call noise control several times a month. Not good with a young baby.

    Leave a comment:


  • flyernzl
    replied
    What worked well for the market and for you eight years ago may not work now.

    Perhaps you need to consider a less risky and challenging option for a few years until your child is older and you two are more financially stable.

    Keep the house and concentrate all efforts on the business?

    Leave a comment:


  • AllowayS
    started a topic I dont know jack!

    I dont know jack!

    Hi all,
    a quick run down on my background so you have some context: when I was 22 (8 yrs ago) my partner and I bought a house in Hamilton, spent 18 months doing it up with $30k and sold it on to make $100k pure profit. We got cocky, bought another do up, this time in a crappy area, AND quit our jobs and started a couple of ok businesses. Planned to do up and sell in quick time. Took ages to do it up (18 months), and then rented it out while we went on our OE for a year. Came back, kept it rented out (cash flow positive) and rented in a nicer neighborhood Started a business, got married, got pregnant, moved back into crappy neighbourhood house to redo and sell. A year on, we are still in the house, my son is 7 months old, we are struggling financially (family is supported by business, which is not quite making enough), we spent all our equity on OE+wedding+business+baby and we now also have credit card debt. Yep, feeling pretty foolish. Altho blissfully married and totally in love with my baby, this is not the life I envisioned for us.

    So what now? We are still stuck in crappy neighbourhood and house wont sell at the price we could afford to sell it for. We are dropping the price to what we bought it for this weekend, desperately trying to sell. In the meantime, my Dad is a mortgage broker and has offered to come up with the funds for a do up via the investors he has on his books. So basically, I've been told "go and find a property, cost it out and come back to me with something that will return at least 20% more than what it costs". What an opportunity!!! The problem is, I've been out of the property game for so long that I dont even know how to spot a bargain. How to know what something will sell for??? We own a handyman business so my hubby can price up some of the rennovations although we will have to get quotes from other builders as well cos hubby wont be doing all of it. We are damn good at rennovating and adding value, but considering our situation I'm not about to do anything stupid (I know, you are thinking too late for that!). Part of me is terrified of doing something like this as over the past 8 yrs we have gotten more and more strapped for cash and have gotten lost in the rat race, so my mentality is not where it needs to be. Deep down inside me I'm thinking "feel the fear and do it anyway".

    So can anyone offer me advice? We are still living in Hamilton, and we really need to take an opportunity like this, but every property I look at I'm thinking "how the heck do I know if I can make a profit on this??".

    Thanks so much in advance,
    Sarah.
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