CRACKER “Crack Den” DEAL. Deal Specifics: Splitter Block (2 Lots: 1 Title) House straddling both...

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…