cracker “crack den” deal. deal specifics: splitter block (2 lots: 1 title) house straddling both...
TRANSCRIPT
CRACKER “Crack Den” DEAL
Deal Specifics:
• Splitter Block (2 Lots: 1 Title)• House straddling both lots• House: 2 bed, 1 bath, 1 car• House: run-down with squatters• Found through agent – I was looking at a splitter
around the corner• Property repossessed on unpaid rates and taken to
auction by the council
CAR JACK
PLAN OF ATTACK
• No money down deal!• Evict Squatters!!!• Shift and raise the existing house so its sits on its own lot• Renovate the existing house into a 4,2,2• Sell land & rent positively-geared house• Make lots of money• Celebrate!!!
Reality
• Evict Squatters twice & have them steal most of the fittings & fixtures
• Development over-time & massively over budget
• Multiple Tradie Drama• Investor Drama• Difficulty in off-loading stock – led to tactic
change: sell house, develop land and sell.
NUMBERS
Purchase Price: $120,000Legals: $1,700
Stamp Duty: $2,625House Slide & Utility connections (water & sewer): $44,000
House Renovation: $80,000Holding Costs & Utilities: $3,250
GST on the LAND: $13,000Valuation House: $275,000
Valuation Land: $135,000= $140,000 Equity
Before…
After…
Before…
After…
Lessons Learnt
• Have a separate bank account where the investor can put all their money – no PAYG scheme!
• Keep a supportive expert team around you to keep you on your path!
• All the hidden expenses when moving a house!• All the timelines that Utility companies work on!• Start looking at exit strategies right at the beginning!• If you go on holidays – leave someone else in charge of
project management!• Don’t forget to have fun, and keep going back to the reason
WHY you are doing it in the first place!
$140,000 Profit!!!!!
Rental Appraisal on House = $330-340 per week…