Personal case study: How did I buy 2 properties this month, which will make my family and I $80,000 in equity?

Personal case study: How did I buy 2 properties this month, which will make my family and I $80,000 in equity?

This is a brief overview of how I bought two properties in December of 2013, which will make my family and I, $80,000 to $120,000 in equity on the day we walk through the front door, and provide us with $10,000 in passive income per year.

The great thing about property investing is how quickly you can make things happen. There is no way I would have predicted that we would be doing deals like these when I started out a few years ago, in fact a few years ago I didn’t know deals like these existed.

Looking to buy an investment property in the next 12 months? Learn more about how we can help you here…

Property 1: Sunshine Coast, QLD, Principle place of residence

  • 4 bedrooms, 2 bathrooms, single story house

Closing costs: $434,000

  • Land price – $253,000
  • House price – $170,000
  • Other – $11,000

Re-sale value as of December 2013:

  • $500,000 – $525,000

Estimated equity the day we finish building:

  • $66,000 – $91,000

Property 2: Brisbane QLD, Dual occupancy investment

  • 5 bedrooms, 2 bathrooms, 2 kitchens, double story house

Closing costs: $406,000

  • Land price – $155,000
  • House price – $240,000
  • Other – $11,000

Re-sale value as of December 2013:

  • $420,000 – $440,000

Estimated equity the day we finish building:

  • $14,000 – $36,000

Estimated annual rent:

  • $30,000

Why do the deals work?

Property 1: Sunshine Coast, QLD, Principle place of residence

  • I found a builder who will build this property for $25,000 under market value
  • I’m making equity on this property at the beginning of the deal
  • Its within 800 meters of the Southern Hemispheres largest teaching hospital
  • Over 5.3 billion dollars is being invested into the suburb over the next 5 years
  • Over 12,000 new jobs will be created in this suburb over the next 5 years

Property 2: Brisbane QLD, Dual occupancy investment

  • I found a builder who will build this property for $25,000 under market value
  • I found a developer who had a distressed block of land that he was willing to off load
  • I’m building a dual occupancy dwelling that will dramatically increase the rental yield of the property and therefore its value
  • I can claim a number of extra tax deductions on the property as its brand new

What did I learn from these two deals?

  1. It’s all about who you know. Take the time to build the relationships with the people who can help you achieve your goal.
  2. Always attempt to make your money on the way into a deal. It’s the only time that you can guarantee a gain in today’s market and the easiest way to move forward into another property.
  3. Take your time to find the right deal. It’s taken me 6 months to get these properties over the line.
  4. Don’t take no for an answer. My current bank manager told me I could only build one of these properties in 2014, so I found a mortgage broker who will help me do 3 – 4.
  5. There are a number of highly distressed block of land still for sale. These are the blocks of land that developers are willing to offload at a discount and can be found by talking to local builders, real-estate agents and developers.
  6. Never take the initial price a developer or builder gives you at face value. There is always room for negotiation.

The information provided in this article is of a general nature only and in no way constitutes legal or professional advice, or specific advice in relation to any finance. In all cases we recommend you receive professional financial advice for your own personal circumstances.

If you have a questions, or would like me to write on a specific topic let me know in the comments below…

Ben

Ben Everingham

About

Ben founded Pumped On Property after building a multi-million dollar property portfolio over a 5 year period. His mission is to show you how to replace your income through property investing so you can do what you love…full time.