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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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Market Place

Property Listing Shortfall Squeezes Prices

Property Listing

Residential stock is being cleared out nationwide as the number of buyers outstrips sellers and listings continue to fall.

Property listings fell 6.3 per cent in May and are down 19.2 per cent on last year, according to data from SQM Research.

The low level of stock is continuing to squeeze the market with house prices rising in all capital cities and regional areas.

Old stock on the market is also getting moved—the number of properties on the market for more than 180 days was down 44 per cent on the year and by 9.2 per cent in May.

Total property listings

City May 2021 Monthly Change Yearly Change
Sydney 27,440 -3.5% -8.7%
Melbourne 40,958 -7.4% -1.4%
Brisbane 23,519 -7.1% -18.4%
Perth 22,075 -1.7% 1.5%
Adelaide 12,033 -7.1% -21.4%
Canberra 3250 -9.7% -21.7%
Darwin 1430 2.9% -13.5%
Hobart 1346 -11.2% -36.1%
National 245,953 -6.3% -19.2%

^Source: SQM Research May 2021

SQM Research managing director Louis Christopher said property listings fell in May due to strong market conditions.

“The downward trend in old listings suggests strong absorption rates, so new property listings are not completely offsetting the falls in old listings,” Christopher said.

“This is indicating there are more buyers than sellers in the market, which is fuelling the property boom.

“This is contributing to strong growth in asking prices, particularly in regional and coastal locations, such as the NSW Mid North Coast and on the Gold Coast.

“The trend is also pronounced in the inland regions, such as the Murray Region.”

Christopher said with interest rates looking set to remain low for 2021, and many households awash with cash as the jobless rate continues to fall, SQM expected to see sustained gains in house prices for the rest of the year.

This week, the Reserve Bank of Australia decided to keep the cash rate at 0.10 per cent for the seventh month in a row.

“Housing markets have strengthened further, with prices rising in all major markets,” the bank said.

“Housing credit growth has picked up, with strong demand from owner-occupiers, especially first-home buyers. There has also been increased borrowing by investors.

“Given the environment of rising housing prices and low interest rates, the bank will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.”

 

Article Source: www.theurbandeveloper.com

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Brisbane

Locals snap up Gardner Vaughan Group’s Monterey apartments in Kangaroo Point

A Locals buyer who purchased the four-bedroom, three-bathroom penthouse at Monterey said the home ticks all the boxes

Locals are snapping up apartments in Gardner Vaughan Group’s latest Brisbane apartments, Monterey at Kangaroo Point.

The development, which looks out to Brisbane CBD’s skyline and beyond to the mountains, has seen increased interest from locals searching for properties in a premium location.

Monterey

Monterey Kangaroo Point 9 Lambert Street, Kangaroo Point QLD 4169

With its beautiful tree-lined streets, Mowbray Park, Raymond Park and the Kangaroo Point Cliffs all on your doorstep, the home is set amongst an ideal backdrop.

A local buyer who purchased the four-bedroom, three-bathroom penthouse at Monterey said the home ticks all the boxes.

“Our family has resided in Kangaroo Point for the past few years, and we love the location!”

“Monterey offers amazing amenities with the rooftop and pool and gym on level one. The Northern aspect, boutique building and high-quality construction with Cross Laminated Timber [CLT] made it an easy decision to purchase the penthouse”, they said.

The use of radiata pine in the CLT method is an innovative wood product developed in Europe over 30 years ago, according to the developers.

The choice of CLT for Monterey was a carefully considered decision, providing benefits to the construction process and its residents, including high strength-to-weight ratio, low embodied energy and reduced stress impacts.

The renewable resource also sequesters carbon and enhances thermal properties.

“As long-term residents in Kangaroo Point, there is a real shortage of modern, luxury boutique buildings available”, said another local buyer, who purchased a four-bedroom, three-bathroom residence on the sixth floor.

“The developer has a great track record and we have confidence in them pioneering this new CLT design,” they added.

Designed by architects Hayes Anderson Lynch, the riverside development features full-height glass, sustainable principles and is the first timber multi-story construction in Kangaroo Point.

Derived from a response to the subtropical climate, the form of the building considers the orientation of the sun, prevailing summer breezes and winter winds.

Monterey

Monterey Kangaroo Point 9 Lambert Street, Kangaroo Point QLD 4169

“Recessed, shaded balconies are skirted by brass perimeter screens that provide both sun shading and added privacy. At the ground floor, the driveway and services are tucked to one side, giving way to the light filled, glazed lobby”, said Hayes Anderson Lynch’s Elizabeth Anderson.

The angles and ribboning of the balustrade design maximises views and delivers a residence that embodies the synergy between design, sustainability and natural beauty.

“Monterey not only offers the North-East aspect and river views, but it affords the privacy and security with fewer neighbours in the building”, a third local buyer said, who is downsizing from their sub-penthouse in Macleay Towers.

Monterey truly encompasses Brisbane’s vision for “buildings that breathe.”

 

Article Source: www.urban.com.au

 

 

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Market Place

Housing investors to pick up slack as first home buyers retreat: AFG

Housing investors

One of the country’s biggest mortgage brokers, AFG, expects Housing investors will continue returning to the market, helping to fill the gap left by retreating first home buyers.

After figures this week showed house prices surged again last month, the chief executive of wholesale broker AFG, David Bailey, said investors were making up a bigger share of its new lending and he expected the trend had further to run.

While banks have predicted the rapid growth in house prices will slow this year, Mr Bailey said he had not seen a softening in lending activity, which was being mainly driven by people upgrading to a new home.

“Coming through the other side of the pandemic … my view is that as first home buyers — particularly who look at apartments and smaller places and so forth — come out of the market, that volume will probably be replaced by investors,” he said.

The chairman of the Australian Prudential Regulation Authority (APRA), Wayne Byres, also said on Wednesday he expected investors would continue returning to the housing market.

Appearing before Senate estimates, Mr Byres said the fact owner-occupiers and first home buyers had driven the market until recently was a positive trend, but investor lending was now on the rise.

“Certainly the commitments to investors had been very low through 2020, but they’ve started to pick up again in recent months, so I think we’ll see them start to come back to the market,” Mr Byres said.

Lending to housing investors is being closely watched by regulators, who have warned banks not to cut their loan standards as low interest rates cause prices to surge. When APRA has put the brakes on previous housing booms by introducing credit restrictions, the measures were targeted at investors.

Mr Bailey said the share of AFG’s new lending going to property investors had risen from 21.3 per cent in the first quarter to 24.9 in the current quarter so far, but this was still well below its historical average of about 35 per cent.

Mr Bailey made the comment as AFG on Wednesday said it would take a 7 per cent stake in the neobank Volt for $15 million, and it announced Volt would supply some of AFG’s white-label loans. Volt also said its next chairman would be Graham Bradley, former chair of HSBC Australia and listed companies including Stockland and Graincorp.

In a further sign of investor activity lifting, the chief executive of mortgage broker Homeloanexperts.com.au Alan Hemmings said inquiries from investors were up by about 50 per cent compared with last year. He said this could be a response to some lenders cutting interest rates on investment loans.

“It may also be due to investors seeing opportunity in the market with the RBA continuing to state it will keep interest rates low for the foreseeable future and continued speculation of property price increases,” Mr Hemmings said.

The strengthening conditions in the housing market were also underlined by credit rating agency Standard & Poor’s, which said arrears rates for lower-risk borrowers had fallen to 0.94 per cent in March, down from 1.03 per cent a year earlier.

Director at S&P Global Ratings Erin Kitson said ultra-low interest rates, government stimulus, and a refinancing boom had allowed customers to build up financial buffers, and helped some struggling borrowers to move out of arrears.

“Given the low level overall, we are not expecting a big uptick in arrears as borrowers come off their mortgage deferral arrangements,” Ms Kitson said.

Ms Kitson said that in previous housing booms, the retreat of first home buyers had been followed by stronger lending to investors. She said investors were typically more able to access credit because they were likely to already own property, and had higher incomes.

 

Article Source: www.brisbanetimes.com.au

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