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How to make $1 million ‘flipping’ houses

How to make $1 million ‘flipping’ houses

HIS last property sale earned him a tidy million-dollar profit, so it’s safe to say when it comes to “flipping”, Tom Hall knows his stuff.

The Melbourne man has been flipping property for 16 years, and has 10 successful “flips” under his toolbelt.

The Brighton property before flipping. Picture: Supplied

The Brighton property before flipping. Picture: Supplied

For the uninitiated, flipping refers to profiting from real estate, either by “buying low and selling high” or buying a run-down home and renovating it for profit.

Mr Hall, a former electrician and real estate agent, ventured into the world of flipping when he bought his first property at 24 for $124,000, renovating it before and after work and on weekends.

He more than doubled that investment when he sold it a couple of years later for $265,000 after shelling out just $14,000 in renovations – and his love affair with flipping began.

Knowing he was onto a winning formula, Mr Hall went on to purchase bigger, more expensive properties each time, culminating in the most recent sale of a Brighton property which he bought for $1.35 million, and sold for $2.35 million 18 months later.

Mr Hall transformed the four-bedroom home. Picture: Supplied

Mr Hall transformed the four-bedroom home. Picture: Supplied

In the early days, Mr Hall and his wife Alicia used to brave the “dust and dirt” and live in each property during the renovations.

With two young boys, that’s no longer possible, but today Mr Hall runs his own renovation business, Overhall Your Property, alongside his flipping passion.

“I’m a visual person and to see the property go from nothing to something amazing gives me a thrill,” he said.

“It can be a bit stressful – it never stops and it’s very consuming.

“But I wouldn’t have it any other way. I wouldn’t want to do anything else.”

Mr Hall said a successful flip came down to meticulous market research and the ability to do most projects yourself.

When he bought it, the bungalow was looking a little run-down. Picture: Supplied

When he bought it, the bungalow was looking a little run-down. Picture: Supplied

But is flipping always a sure-fire cash-cow?

New analysis from CoreLogic revealed 90 per cent of flipped properties sold last year made a profit – but as house prices ease in Melbourne and Sydney this year, a rise in loss-making flipped properties is expected.

“Although the proportion of flips at a loss has declined from recent highs in 2009 and again in 2012, there has been a clear increase in loss-making flips recently,” CoreLogic’s Property Flipping Report stated.

After flipping, it was transformed. Picture: Supplied

After flipping, it was transformed. Picture: Supplied

Nevertheless, while Mr Hall agreed property prices had already cooled slightly, he said there were still plenty of opportunities to make decent money flipping.

He said lower house prices could even help flippers enter the competitive housing market.

“If you put the right product to the market and keep the purchaser in mind you’ll have no problems selling property,” he said.

“The whole idea of owning your own home and renovating it is a big Australian dream – everyone wants to own property.

“There’s definitely still a future in it.”

The house was in need of a makeover. Picture: Supplied

The house was in need of a makeover. Picture: Supplied

So how do you make it in the flipping business? Mr Hall shared his top tips for flipping success.

DO YOUR RESEARCH

“If you’re looking to buy, educate yourself on the market – entry price is the most important thing. If you pay too much getting in, you won’t make dollars and cents at the end. I read heaps of books, and really annoy real estate agents on trends and what’s going on in the market. I always hassle them because they’re pretty much three months ahead of the market – they see what’s going on in the market before it hits the papers,” Mr Hall said.

“The main thing for me is getting in at the right price. Keep an ear to the ground in your market and don’t look at 10 different suburbs, look at two, otherwise you’ll just confuse yourself.

It’s now a stylish residence. Picture: Supplied

It’s now a stylish residence. Picture: Supplied

“On my way home I always drive a different way so I can see what boards are up and what’s going on. I’m a bit nosy, but you have to be if you want to do this seriously.”

START SMALL

“I have flipped 10 different projects varying from smaller properties and apartments to bigger houses. I really built my way up from something small into property worth millions now, and the way to get into it is to start small and learn from there – I’m self-taught.”

DO IT YOURSELF

“Hiring tradies can really chop into your budget. If you can always build on your skills and learn you will save yourself a hell of a lot of money, so the more you can do yourself the better off you’ll be at the end. Always use a licensed plumber and electrician, but for example if you have someone doing rendering, hang around and learn about a trade if you’re not experienced in it, so next time you can give it a go yourself and save big money.”

Nearly nine out of 10 ‘flipped’ properties sold last year made a profit. Picture: Supplied

Nearly nine out of 10 ‘flipped’ properties sold last year made a profit. Picture: Supplied

INVEST IN A GOOD FOOTPRINT

“My strategy is always renovating what is there – I’m not a new-build man, I’m an add-value man. I try to utilise the home’s footprint to add value. You’ve got to have a bit of forward thinking in terms of what you can do with spaces.”

KNOW YOUR BUYER

“Have a target market in mind. Whether it’s a family with children or a young couple, you need to do your research and tailor your design towards the purchaser. That’s the end game – it’s not necessarily for you, it’s about getting a sale from the right purchaser who will pay the highest price.”

CoreLogic predicts a rise in loss-making flipped property this year. Picture: Supplied

CoreLogic predicts a rise in loss-making flipped property this year. Picture: Supplied

Originally Published: sunshinecoastdaily.com.au

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Brisbane

Where can first-home buyers find a home under the First Home Loan Deposit scheme cut-off?

Where can first-home buyers find a home under the First Home Loan Deposit scheme cut-off

First-home buyers hoping to take advantage of a new government scheme will have to look to the outer city fringes to find a free-standing house, new analysis shows.

But, they will be able to choose from up to 40 per cent of all properties, including units in each capital city.

The federal government’s First Home Loan Deposit scheme, introduced at the start of this year, helps first home buyers to purchase a property under various price caps.

Designed to enable the purchase of a modest residence, homes worth up to just $700,000 are eligible for Sydney, while the cut-off is $600,000 in Melbourne, $475,000 for Brisbane, $500,000 in Canberra and $400,000 in Perth.

It lets buyers avoid paying lenders mortgage insurance even with a deposit as low as 5 per cent, for singles on an income of $125,000 or less, or couples with a combined income of $200,000.

The government then goes guarantor for the rest of the deposit, in effect allowing people to take out low-deposit loans without paying lenders mortgage insurance or going to the “Bank of Mum and Dad” to top up their deposit.

Only 10,000 loans are available nationwide per financial year, and since the scheme was introduced at the start of this year, 6500 of those spots have already been snapped up.

So, where can these buyers find a home under the price caps for each capital city?

An analysis by Domain of reported property sales in each capital city from July to December last year showed just where first-home buyers had the best chance of jumping onto the property ladder.

Brisbane had the highest percentage of any capital city of property sales under its threshold of $475,000 – with more than 13,500 of its 33,315 sales meeting the price cut off.

The lowest percentage of sales under the threshold was in Canberra, which saw 34 per cent of total properties sold under its cap of $500,000 – and only 13 per cent of properties were houses.

What is available for first-home buyers?

  Percentage of property type sold below the price caps
Capital cityFHLDS price capHousesUnits/apartmentsAll dwellings
Brisbane$475,00034%65%41%
Perth$400,00033%62%35%
Adelaide$400,00032%69%38%
Hobart$400,00035%51%38%
Canberra$500,00013%62%34%
Darwin$375,00024%70%39%

 

Domain economist Trent Wiltshire said the scheme was designed to target a “modest home”.

“I think the price caps seem pretty reasonable, when you look at all the capitals you can buy around 30 to 40 per cent of all properties put up for sale in the second half of last year,” Mr Wiltshire said.

He said houses in the inner and middle suburbs that met the price caps were hard to come by, but that in the outer suburbs there were more options.

“It’s pretty obvious that it’s going to be hard to buy a house in the inner city,” he said. “Also, in all the capitals, quite a high proportion of units are available.”

Melbourne and Darwin also saw a low number of house sales that met their price caps of $600,000 and $375,000 respectively.

Areas with the most house sales in Melbourne included the statistical areas of Wyndham – which included suburbs Werribee, Hoppers Crossing and Point Cook – Casey South (Cranbourne, Hampton Park, Narre Warren South) and Whittlesea-Wallan (Bundoora, Mill Park, Mernda). More than half of all house sales in these areas were for less than $600,000.

First National Westwood agent Rob Westwood said his agency, based in Werribee, purposefully put properties on the market on Christmas Eve last year in the hopes of catching the eye of First Home Loan Deposit scheme punters.

“We definitely noticed the difference straight away,” Mr Westwood said. “That first Saturday back after New Year’s, there was a big influx of first-home buyers.”

The most house sales in Brisbane were in the Brown Plains statistical area, which included suburbs Chambers Flat, Boronia Heights and Marsden. The most units were sold were in the Brisbane inner area, which included Brisbane City, Fortitude Valley and New Farm.

LJ Hooker Browns Plains agent Scott Brannigan said he had seen more first home buyers interested in taking advantage of the home loan scheme.

“It’s a good time to get in, especially if you’re a first-home buyer, with all the incentives available.”

Brisbane: first-home buyers using the FHLDS have plenty of choice in Brisbane’s outer suburbs and also units in the inner-city

Proportion of sold properties under Brisbane’s $475,000 price cap, by SA3 region

Where can first-home buyers find a home under the First Home Loan Deposit scheme cut-off

Canberra’s price cap has been set at $500,000, and in nearly all districts except Weston Creek, 30 to 40 per cent of properties sold were under the threshold, the analysis found.

But first-home buyers may need to look for an apartment, with very few houses sold below the price point in most regions.

Canberra: there are few options for first-home buyers using the FHLDS to purchase a house

Proportion of sold properties under Canberra’s $500,000 price cap, by SA3 region

Where can first-home buyers find a home under the First Home Loan Deposit scheme cut-off 1

Perth, Adelaide and Hobart all had cut-offs of $400,000.

In Perth, the areas south of the city were most accessible, with 82 per cent of homes sold in Kwinana below the price cap. Rockingham offered 66 per cent of homes under the cut-off, with 61 per cent in Mandurah.

Perth: most opportunities for first-home buyers using the FHLDS are in Perth’s southern suburbs and in Mandurah

Proportion of sold properties under Perth’s $400,000 price cap, by SA3 region

Where can first-home buyers find a home under the First Home Loan Deposit scheme cut-off 2

For Adelaide, Onkaparinga near the Mclaren Vale wine region had the most house sales that would suit first-home hopefuls.

In the northern suburbs, 87 per cent of homes in Playford were below $400,000, and 76 per cent in Salisbury.

Adelaide: most opportunities for first-home buyers using the FHLDS are in the north

Proportion of sold properties under Adelaide’s $400,000 price cap, by SA3 region

Where can first-home buyers find a home under the First Home Loan Deposit scheme cut-off 3

In Hobart, the North West area was the most popular for houses under $400,000.

Some 72 per cent of sales in the Brighton region were accessible, while the inner suburbs proved a challenge with only 12 per cent of homes below the threshold.

Hobart: for first-home buyers using the FHLDS there are few options under the price cap in the inner suburbs

Proportion of sold properties under Hobart’s $400,000 price cap, by SA3 region

Where can first-home buyers find a home under the First Home Loan Deposit scheme cut-off 4

 

 

 

 

This article is republished from www.domain.com.au under a Creative Commons license. Read the original article.

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Brisbane

Six houses sell for more than $1 million in bumper Brisbane auction weekend

Six houses sell for more than $1 million in bumper Brisbane auction weekend (3)

Brisbane’s auction market posted another bumper weekend, with six properties selling for more than $1 million. A total of 81 properties went to auction at the weekend, with a healthy clearance rate of 64 per cent.

The five-bedroom, three-bathroom house at 12 Cavell Terrace, Ashgrove, sold under the hammer in a busy auction. About 60 people gathered at the house to watch for just 15 minutes as a massive 11 registered bidders battled for the gorgeous home.

Bidding opened at $1.2 million and the competition quickly came down to three bidders. The house was called on the market at $1.44 million, narrowing the field down to two bidders who bumped up the price in increments of $1000 to $5000.

After several minutes of fierce competition, the hammer was dropped and the house was sold for $1,542,000.

Six houses sell for more than $1 million in bumper Brisbane auction weekend (4)

The property was marketed by selling agents Christine McKay & Toni Malaquin of Harcourts Solutions. Mrs McKay said there was immense interest in the property, with 98 people inspecting over the three-week campaign. Some visited the house five times.

She said the majority of this interest came, unsurprisingly, from professionals and families with younger children.

“We ran a very tight campaign over three weeks,” she said. “Very good advertising, beautiful photography. It’s a typical Ashgrovian, and they are a very popular home.”

The vendors had lived in the house for several years. Their children have recently moved out, so they’re now downsizing to the country. Meanwhile, the buyers were a young family with children.

Six houses sell for more than $1 million in bumper Brisbane auction weekend (1)

Mrs McKay said the result demonstrated the importance of running a good campaign that ticked all the boxes. It also spoke to a Brisbane auction market that was brimming with buyers keen to walk away with a shiny new set of keys.

“There’s huge numbers of buyers out right now, and very little stock,” she said.

Elsewhere, the five-bedroom, two-bathroom house on 607 square metres at 32 Dennis Street, Grange, sold for $1.32 million. While on the other side of the city, the five-bedroom, three-bathroom house set on a spacious 767-square-metre block at 28 Coneyhurst Street, Carindale, sold under the hammer for $1,215,000.

Nearby, the classic Queenslander at 95 Belgrave Street, Morningside, was sold in a hotly contested auction for $1.03 million, marking the first time the property had been put to market in 42 years.

Six houses sell for more than $1 million in bumper Brisbane auction weekend (4)

About 40 people packed into the home to watch for 15 minutes as five registered bidders attempted to stake their claim on the two-bedroom, one-bathroom house set on a substantial 809-square-metre block.

Bidding opened at $850,000, with two bidders very quickly moving to the front of the pack. As the price continued to rise, a third bidder got involved before the auction was paused briefly at $960,000.

A few bids later, the house was called on the market at $995,000, and then quickly snatched up by the highest bidder for $1.03 million.

Selling agent Samuel Battel, of Harcourts Property Centre, said the size of the block combined with its low to medium-density zoning meant the property appealed to a wide variety of buyers.

“We had an investor there,” he said. “We had two renovator owner-occupiers who were going to do a bit of work straight away, probably live in it for 12 months then maybe think of selling it. We had a developer who ended up buying the property, and we had another owner occupier there that was very much looking for their long-term family home.”

Mr Battel said properties of this block size were increasingly hard to find, so buyers saw it as a very rare opportunity. This was amplified by the property’s history, and that it hadn’t been to market in such a long time.

“It’s a more and more scarce product,” he said. “Particularly that close to the CBD; the majority of them are being chopped up. Either in half, if possible, or having townhouses put around them.”

The vendors had moved out of the house several years ago, but saying goodbye was still an emotional experience because the house had acted as a family home for many years.

 

 

 

This article is republished from www.domain.com.au under a Creative Commons license. Read the original article.

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Market Place

Brisbane real estate: ‘Rightsizers’ want apartments as big as houses

Brisbane real estate ‘Rightsizers’ want apartments as big as houses (1)

Forget upsizing and downsizing. ‘Rightsizing’ is the new lifestyle trend set to dominate Brisbane’s property market in 2020.

APARTMENTS the size of an average house have replaced the white picket fence as the new Great Australian Dream thanks to a new breed of home buyers known as ‘rightsizers’.

By 2022, Brisbane is forecast to have more three-bedroom apartments than any other city in the country, according to new research by Knight Frank.

Entrepreneurs and young families are joining “active retirees” who want low-maintenance properties, with house-like proportions and top-shelf amenities.

“Perhaps surprisingly, ‘right sizing’ also appeals to the younger generations, and we are seeing this at a much earlier stage than in previous years given the agile, transient and global nature of their work and play,” Knight Frank Australia’s head of residential research Michelle Ciesielski said.

Brisbane real estate ‘Rightsizers’ want apartments as big as houses (2)

“Downsizing the living areas is not part of this movement; the yard most certainly, but the new luxury apartment must be the right size, with amenities to match.

“Rightsizers want to be in a walkable location with proximity to activity hubs and amenities.”

When it comes to the apartment itself, ‘rightsizers’ want high security and a concierge for lock-up-and-leave convenience, a reputable developer and builder with certainty of delivery, single-level, in-house amenities, a good view and access to transport links.

Knight Frank Queensland prestige residential sales director Jason March said the ‘rightsizing’ trend was growing in Brisbane, with an increase in demand from buyers looking to transition to well-appointed, luxury apartments.

Brisbane real estate ‘Rightsizers’ want apartments as big as houses (3)

“This demand is coming from not only retirees, who are more active than ever, but increasingly from families and entrepreneurs,” Mr March said.

“In Brisbane we see many retirees looking to relocate from sizeable homes in the northern suburbs such as Ascot, Clayfield and Bridgeman Downs to luxury apartments in well-located suburbs closer to the CBD including Newstead, Teneriffe and the CBD.”

Mr March said that eastern suburbs’ retirees often migrated from Chandler and Balmoral to Bulimba, Kangaroo Point and Southbank, while western suburbs’ rightsizers from Chelmer, Pullenvale and Brookfield were more likely to be drawn to Toowong, West End and St Lucia.

Brisbane real estate ‘Rightsizers’ want apartments as big as houses (7)

“Only recently has luxury apartment product been built in Brisbane to cater for this rightsizer population,” he said.

“Brisbane developers are one of the first across the major Australian cities to respond to the increase in demand for three-bedroom apartments from rightsizers, being one of the only cities in Australia analysed in the research to have a strong supply.

“Brisbane’s luxury apartment market provides great value, with southern buyers able to sell up in Melbourne or Sydney and buy something really special that suits all their requirements for right sizing at a much more affordable price.

“That value proposition will likely change over time, so buying in the near term is key for rightsizers in Brisbane.”

Brisbane real estate ‘Rightsizers’ want apartments as big as houses (4)

New research by the Australian Housing and Urban Research Institute (AHURI) has also found space remains important to Aussie buyers, with more than half moving to a home with three or more bedrooms and a third moving to an apartment.

“Australian governments typically see downsizing, or rightsizing, as a way to use housing stock more efficiently, with downsizers reducing the number of bedrooms in their dwelling freeing up larger dwellings,” lead report author Dr Amity James from Curtin’s School of Economics, Finance and Property said.

“However, most downsizers still want space and regard spare bedrooms as necessary in a dwelling.”

A number of new developments are now catering for ‘rightsizers’ in Brisbane, including Prominence Residences in Kangaroo Point.

Brisbane real estate ‘Rightsizers’ want apartments as big as houses (5)

Simon Caulfield of Place Kangaroo Point is marketing the full-floor apartments, which are priced from $3.4 million.

“Our buyers are hyper local within the blue-chip, inner-city suburbs of Brisbane,” Mr Caulfield said.

“Most are in larger homes, but their children are staying longer in their 20s and the benefit of the location is attractive without the maintenance of a large home.”

And Mr Caulfield’s clients aren’t the only ones looking for luxury apartments with at least three bedrooms in prime suburbs.

He and his wife, fellow real estate agent Courtney Maguire, have just bought a house-sized apartment in Banc in Toowong after selling their luxury, four-bedroom unit in Walan at 2 Scott St, Kangaroo Point, for $4.45 million.

Over in New Farm, ‘rightsizers’ Miles and Juanita Browning are looking for a one-floor apartment after raising their two children, Zac, 3, and Millie, 7.in a house-sized apartment at Cutters Landing for the past six years.

“We don’t have the time to do the garden and look after all the aspects you would with a normal sized house and land,” Mr Browning said.

“We also don’t want to compromise on space and we want security, so the idea of one apartment on one level gives us both of those things.”

Brisbane real estate ‘Rightsizers’ want apartments as big as houses (6)

Mr Browning, a physiotherapist, said they wanted to stay in New Farm because the suburb had enough outdoor facilities for children to need a backyard.

“When we first moved in (to the building), we were the only ones with children,” he said.

“All the apartments from our entry point now have kids on every level, ranging from a one-year-old, all the way through to young teenagers.

“I think people are realising that they have busy jobs, they want their weekends for their kids and their family and not spent doing all the tasks you have to do to maintain a house.”

BRISBANE’S MOST SOUGHT-AFTER ‘RIGHTSIZER’ SUBURBS

1. Bulimba

2. St Lucia

3. Brisbane CBD

4. Teneriffe

5. Hamilton

6. West End

7. South Brisbane

8. Kangaroo Point

9. Toowong

10. Newstead

(Source: Knight Frank Research)

NEW DEVELOPMENTS CATERING FOR ‘RIGHTSIZERS’ IN BRISBANE

Banc

160 Oxlade

Le Bain

Lume

Prominence Residences

Skytower

 

 

 

This article is republished from www.news.com.au under a Creative Commons license. Read the original article.

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