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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

Real estate industry in testing social distancing shutdown amid coronavirus fears

Real estate industry in testing social distancing shutdown amid coronavirus fears

Australian estate agents will set out this week to ascertain if they can continue to transact their property sale listings and leasing managements given the social distancing shutdown regulations.

In the absence of any official industry edict as at Monday morning, some estate agents will seek to adapt how they can continue to transact their property listings and managements.

Many agents are hoping it is business as usual.

On Sunday both the NSW Premier Gladys Berejiklian and Victorian Premier Daniel Andrew announced they will enforce a comprehensive shutdown of “non-essential services.”

But neither Premier indicated that the real estate industry was restricted from trading.

The later official advisory on stage one of the measures from the Federal Government advised the following facilities will be restricted from opening from midday 23 March 2020:

  • Pubs, registered and licenced clubs (excluding bottle shops attached to these venues), hotels (excluding accommodation)
  • Gyms and indoor sporting venues
  • Cinemas, entertainment venues, casinos, and night clubs
  • Restaurants and cafes will be restricted to takeaway and/or home delivery
  • Religious gatherings, places of worship or funerals.

The Urban Taskforce CEO, Tom Forrest, has called on State and Commonwealth Governments to be clear with their messages.

“The announcement must be clear and targeted”, Mr Forrest said.

Mr Forrest said that the messaging to date has too often been clumsy and ambiguous.

“If there is to be a close-down of business in NSW, what does this mean for construction workers? What does it mean for those working out-doors or indoors? What does it mean for delivery drivers or manufacturers?

Mr Forrest called on the NSW Government to be clear about if businesses should continue to operate remotely or shut down altogether.

“Urban Taskforce members support measures to prevent the spread of COVID 19. But support for the property, construction and development industry is critical to the economy and the hundreds of thousands of jobs involved,” Mr Forrest said.

The real estate industry appears spared from the extreme of the first stage of the shutdown if it enforces social distancing that doesn’t put the participants at risk.

One of the ways agents can adapt to these measures is using available technology.

Whether open for inspections for multiple unknown parties can continue is highly questionable.

Limiting auctions to registered bidders practising social distancing appears wise.

Requesting that visitors to open inspections come in small private groups and keep hands in their pockets while doing so are among measures being taken by some agents.

Last week some auction slated for inroom or indoor were moved outdoors to stay within the government’s 100 person limit on indoor non-essential social gatherings

All non-essential indoor gatherings of less than 100 people must have no more than one person per 4sqm.

“All Australians should expect their local businesses to be following this rule,” the latest official update advises.

There are around 115,000 sale listings on the market, according to CoreLogic. SQM calculate 68,079 vacant residential properties.

 

 

 

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

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Brisbane

Brisbane auction buyers still keen amid COVID-19 fears

Brisbane auction buyers still keen amid COVID-19 fears (1)

As social-distancing measures ramp up in response to COVID-19, public auctions present an interesting challenge for real estate agents. Despite this, a bumper 94 auctions went ahead across Brisbane at the weekend, with a clearance rate of 39 per cent.

“Buyers were cautious walking in,” said Nick Penklis, director of Space Property Paddington, of his auction of the two-bedroom, one-bathroom house at 20 Atthow Avenue, Ashgrove.

“[People] kept their distance. But, having it in the backyard certainly helped a lot, because it can provide private space.”

Brisbane auction buyers still keen amid COVID-19 fears (5)

About 30 people gathered for 15 minutes to watch the auction, with five registered bidders attempting to walk away with the keys. Bidding opened at $700,000, and quickly jumped to $750,000.

Things slowed somewhat after this as bids of $5000 and $10,000 edged the price higher. Eventually, the hammer was dropped, and the house was sold for $885,000.

Despite the need for social distancing and hand sanitiser, buyers were still keen, Mr Penklis said.

“The buyers were there to buy, not to view,” he said. “It wasn’t like ‘Oh, we’ll just see what happens’. That was a strong sign for our market. The only thing we can’t do is shake hands. But, there were smiles all around, within distance.”

Brisbane auction buyers still keen amid COVID-19 fears (4)

The vendors have owned the house since 1997, and have used it as a family home and an investment property. Meanwhile, the buyers are looking to get a foothold in the area.

Auctions in Sydney and Melbourne are under a cloud from next weekend with premiers in those states flagging shutdowns of non-essential activities. No such plans for Queensland have yet been flagged, though it remains to be seen whether coronavirus may bite into Brisbane’s much smaller auction scene.

“We’re not expecting to see an impact on the values of homes but we will see the number of sales fall as people wait and see what is going to happen,” said Real Estate Institute of Australia president Adrian Kelly.  “Estate agents are pretty good at adapting in these circumstances.”

Elsewhere, Kosma Comino, of LJ Hooker Sunnybank Hills, sold the five-bedroom, two-bathroom house at 10 Mansfield Place, Mansfield, in Brisbane’s south-east before auction. He said COVID-19 was having an impact on people’s willingness to sell in the short term, but several sellers were still keen to get things moving in the coming months.

“I’ve got a lot [of auction campaigns] launching after Easter, but I think a lot of the sellers are up in the air with what’s going on with the coronavirus,” he said. “At the moment, what we’re seeing is a lot of increase in buyer inquiry, I think there’s a lot of panic buying at the moment.”

Brisbane auction buyers still keen amid COVID-19 fears (3)

On the other side of the city in Brisbane’s inner north, the four-bedroom, one-bathroom house on a spacious 810-square-metre block at 295 Days Road, Grange, sold under the hammer.

Just one party attended the auction, making one registered bidder and an audience of two people. Despite this, the house sold over reserve.

The single registered bidder was a developer, who opened with a strong offer and, after about 20 minutes of private negotiation, the hammer was dropped and the house was sold.

The vendors were two sisters who inherited the house after a death in the family. It was particularly process for them because the house had been in the family since the 1980s.

Brisbane auction buyers still keen amid COVID-19 fears (2)

Selling agent Georgie Haug, of Belle Property Samford, said the successful result was thanks to an incredibly smooth process, as well as the vendor’s willingness to trust her advice.

“I sold the seller’s property in Ferny Grove a couple of years ago for a record,” she said. “So, just the trust and the communication. I took [this] job in a heartbeat because they had so much trust in me to do the right job and get the result. It was just a really beautiful process.”

Closer to the city, the two-bedroom, one-bathroom house at 16 Skinner Street, West End, sold in an incredibly fast auction. About 20 people gathered to watch as two registered bidders battled it out for under five minutes.

Bidding opened at $700,000 and moved quickly to $800,000. Bids continued in increments of $20,000 then $10,000 until the house was sold for $970,000.

Selling agent Keryn Osgerby, of Sold Property Group, said 33 groups inspected the property over the five-week campaign, with the vast majority of interest coming from families.

“It was overwhelmingly young families who wanted to be in the area of lifestyle reasons,” she said. “Second to that would be the schooling benefit, but most of it was all about the West End vibes and lifestyle.”

The buyers fit this bill exactly and will be moving in with their young family very soon. Meanwhile, the vendors live overseas and were using the property as an investment. They sold because of a change in circumstances.

 

 

 

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

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Cairn

Cairns real estate: Buy and sell remains strong in a pandemic

Cairns real estate Buy and sell remains strong in a pandemic (1)

A global pandemic has not dampened demand for property in the Far North with many agents posting record sales.

A GLOBAL pandemic has not dampened demand for property in the Far North, with many agents posting record sales.

Elite Real Estate Services sales director Karl Latham said this week had been the firm’s busiest in months.

“Obviously there has been a big impact in a negative way on the share market and bricks and mortar is relatively safe,” he said.

“We’ve got high vacancy rates, the mortgage rate has dropped to about 2 per cent. In any previous economic shift, usually the property market is affected in a negative way, but not now.

“We have just got to adapt, really – there is still an intention out there to buy and sell.

“There are still rental properties on the market, there will still be people taking job transfers and needing homes, people moving away and selling.

“I think the market will go on – the conditions will make it more difficult for inspections, but we will all come out the other side, whether it’s (in) a few weeks or a few months.”

Cairns real estate Buy and sell remains strong in a pandemic (3)

RE/MAX Cairns principal Ray Murphy said that in the past 10 days his office had completed seven cash contracts.

“And they were not small either – they were for properties worth $400,000 to $800,000,” he said.

“We’re finding because the stock market is so vulnerable and unpredictable, people are pulling their money out and putting it in bricks and mortar, and we are seeing a positive flow-on from that.

“I’ve talked to first home buyers who have said ‘if I lose my job, I’ll have to pay rent, so I may as well buy the house because the house is cheaper’.”

An auction held on Tuesday at the Whitfield chapel recorded a 50 per cent clearance rate.

Cairns real estate Buy and sell remains strong in a pandemic (2)

For those who already own property, Mortgage Choice Cairns’s Lindon Reed said there were two ways to take advantage of a highly unusual economy.

“Look at your own individual circumstances. If you are in a casual job and the future is a bit uncertain, talk to the banks,” he said.

“If you’re in a safe job or you’re self-employed but stable and you’re expecting your income might drop a bit, considering refinancing, even if it is a 50/50 combination, so you’re getting that benefit of the reduction in interest rates.

“We are preparing for people to hunker down and take advantage of these low rates.

“People are starting to say the RBA doesn’t have too much room to move, we’re expecting things to flatten out a bit. The banks have already proven they are passing the cuts on. Earlier this month, all they did was drop the variable rate, never touched the fixed. This time (on Thursday), the variable stayed the same and they dropped the fixed. They are hedging their bets.”

With first homebuyer’s grants and the mortgage insurance guarantee certain to continue, according to Mr Reed, the property market should continue to get an injection from the younger demographic.

“The First Home Loan Deposit Scheme is going gangbusters, especially for smaller homes and units,” he said.

 

 

 

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

 

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