My personal motto is simple. A property deal must create a win/win for all involved. Vendors, buyers, real estate agents.
We’ve heard stories about investors making big money from buying discounted properties from distressed property owners in the United States but can it be done in Australia? And how can a win/win result be achieved?
Continue reading to discover how I made a tidy profit from a cosmetic renovation, without purchasing the house, and how you can do it too.
This story has three characters – The Owner, The Rescuer and The Renovator (me).
Life doesn’t always go according to plan. Couples buy or build their first home with great aspirations for their future… and then life happens. Job losses, unforeseen expenses, bad luck, poor choices, relationship breakdowns; the list is endless. I certainly have first hand experience in all of the above in my own life!
I know that when The Bank (and others) start breathing down your neck for overdue payments, stress levels increase and the ability to focus on solutions flies out the window.
The Owner found himself in a no-win situation. The reality he faced was losing his house, being declared bankrupt and being left with debts to pay. The date had been set and there was no way out.
Until The Rescuer appeared.
The Rescuer had negotiation skills and access to a legal team that specialises in rescuing home owners from seemingly impossible situations. This allowed him to stave off the most pressing creditors and buy time to negotiate a solution.
The Solution. Renovate the house and sell it for more than was owed.
The Problem. No money and no renovation skills.
Enter… The Renovator.
When you’re feeling overwhelmed by life’s problems, finding the energy to clean and maintain a house is almost impossible.
Typically, properties that are being repossessed from distressed property owners are in desperate need of a renovation and this particular house was no exception.
After inspecting the property and planning the scope of works, an agreement was reached between The Owner, The Rescuer and me regarding the distribution of funds. With the legalities complete and the finance organised, the renovation train was ready to travel full steam ahead.
Fifteen years of built-up grime were whisked away when the floor coverings were removed, internal doors replaced and walls and ceilings painted. A high pressure cleaner – a karcher on steroids – took care of the outside brickwork, roof and driveway and very soon the home was unrecognisable.
Here are a couple of photos to give you an idea of the transformation.
We repainted throughout and installed new flooring, window dressings, light shades and air conditioning grilles.
In the kitchen we cleaned the face brick walls, painted the cupboards and bench tops and installed a new gas cooker.
The bedrooms came up a treat with new carpet, doors, blinds and modern furniture.
- A $30,000 renovation was carried out. This took four weeks to complete.
- The home sold during its first week on the market.
- The sale price was $80,000 higher than the initial valuation.
- The Owner, The Rescuer and The Renovator shared the proceeds. Win/Win/Win.
- The Real Estate Agent was happy too! A bonus win.
This can be a simple strategy if you know what you’re doing but please seek specialised legal advice if considering this avenue. Australia’s expert in this field is Dominique Grubisa. You can learn more about what she teaches here.