[THE VAULT] PROPERTY FLIPPED FOR $280K PROFIT IN LATE 2016
For first home buyers, cracking the Sydney market can be difficult, yet not impossible. Buying land and building on it at a wholesale price is one way that first home buyers can buy a dream house for a pre-boom rate.
WORKING WITH THE MARKET
Nathan says, “In a changing market we need to change strategy.” This means working with the deals that are available. Although a project build is not a foundation property, it can still offer a way to get the investor further in their goals as long as the numbers stack up to a good deal.
PROJECT BUILDS ARE NOT FOR EVERYONE
Although a very lucrative project, this sort of development is not for everyone. Buying land and building on it can take some time – during which you will need to cover holding costs. You also need to be in a position to borrow the sum required to buy and build.
WHO CAN BENEFIT FROM A PROJECT BUILD?
Those who have already build their foundation property and are looking to pay down debt can benefit from these sorts of deals. It is important to have an asset base behind you to land on if things don’t go according to plan.
It may be possible to use the equity from a well-established portfolio to fund the deposits for the land purchase and construction loan. Without this option, you would need to be in a position to borrow a large amount of money and cover the repayments without the passive income an established investor may have at their disposal.
FIRST HOME BUYERS MAY ALSO BENEFIT
Say you weren’t looking to buy an investment, but you wanted to buy a four-bedroom, lifestyle home in Sydney for less than $1.5 million. A wholesale land and build project such as this one could be the answer.
LET’S LOOK AT THE NUMBERS
The land was purchased $560,000, which was $100,000 below open market price. The house cost less than $400,000 to build. This home came at a total cost of just $950,000.
Comparable sales on a property of this caliber in this area (in North Western Sydney) are as high as the $1.3 – 1.5 million mark.
The Binvested client who developed this property sold it for $1.18 million in 2016, meaning that they made $230,000 in just 19 months on this deal.
Any home buyer who takes on a deal like this, could potentially save themselves a truck load by being savvy!
That translated to years shaved off a mortgage repayment period. It also possibly provide access to hundreds or thousands in equity, which could be used to buy investment property.
IT’S NOT A ‘BUDGET’ HOUSE
The house is a nice one. It has four bedrooms, two living spaces and a two car garage. It also has nice finishings – it is not a poorly constructed budget home. It is more like a dream home, built for $100,000’s less than what it would have cost to buy outright.
In fact, it is so under market value, it is at a pre-boom rate.
Deals such as this are available through Binvested because of its group buying power. You won’t find any house and land packages for this price in Sydney. So, throw out those glossy brochures and give us a call to find out how you can join our community of buyers and keep the profits for yourself.
Have you completed a wholesale project build? Please share your experiences in the comments section below.
WANT TO GET YOUR HANDS ON ONE OF THESE DEALS?
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