You are right luke, long-term hold is the best strategy. This property today paper value is $980k,which is 15% increase .You really should hold and rent out. But anyway thanks for sharing, letting us take serious to flipping.
Well done guys, thank you for sharing this experience. I am in Sydney and bought a house in Marsden with the intention to renovate and build a granny flat. But unfortunately do not have time for that. I would be happy to pay someone like you who has this proven experience to manage such a project from design to the final result.
As my favourite property guy and as a family moving to Brisbane soon, I'd love you to do a video on a house to live in! Not investment, not to flick, but for you - or rather a typical couple or family. We're not wealthy - maybe $700k to spend after the NZD-AUD conversion. Or maybe a mill if the son chips in lol. We like being comfortable, bit of a yard but not too labour intensive, we like walking along a river, park, forest or beach every day and don't want to drive to get to it. We like Sunday drives. Just to round out the breadth of your channel :) Pete - your cuz across the ditch.
Liked and commented for the honesty. Good to see, surprised you didn't get more, I was buying an investment around then and good stock was really hard to find.
My wife and I will post our renovation project on here shortly, we purchased and settled 3 days before Christmas 2022 and finished in June, we are on the Sunshine Coast and it was such a blessing as we found out after securing the property the building at the back which at the time didn’t resemble a granny flat was in fact an approved one.
Good series, Some comments I have, I think you were harsh in your assessment of 1.83%, I would argue that your margin should be calculated off your money invested so including the missed interest you would be into it at $147,101, that would mean you actually got a return margin of 10.35% which I think is pretty handy over the span of 5 months. another thing to note is that you bought at a peak in the market and sold after a few interest rate hikes when everyone was gun shy to buy, I would be interested to know what would happen if you were to hang on to it for another couple of months and sold when stocks were low and demand was picking up again. Another thing I noticed was that you seem a competent handy man and this is evident when you are game to tile yourself, were you not game to at least hang your own plaster and only pay to set and sand? just a few thoughts, I thoroughly enjoyed the watch and are in the middle of doing something similar myself just around the corner in Kedron
When you look at it that way the cash on cash return is pretty good. Especially for a few months and a couple of days a weeks work. Your comment has given me a new perspective! Thanks
I was going to make the same comment. It’s roughly a 10% return in 5 months. I’d also add that I’m not sure where you get roughly $13.6k in interest earned on funds invested. $147k at 4.5% savings account is $2750 over 5 months. If a 6.5% home loan offset it’s only about $4500. Are you comparing opportunity cost to index funds over that period? If your opportunity cost was $4500, then your return was $25k. Which is 17% in 5 months. Risk: Why the type of loan you took? Macquarie not keen on a flipping loan? What’s the risk of not paying it back in time?
Very cool little series, great insight into all the costs & what’s involved. My wife & I are looking for a property to do a small reno/flip on too, for similar reasons. I’m a plumber by trade so have a good grasp on what’s involved but I can see that there are so many hidden costs & tax’s… & there’s always things that can be missed & not accounted for in costs, drainage not being in good condition or house wiring etc. Anyway thanks for the videos good job all involved, will have to watch the others, cheers 👍
Loved your series and honesty. I really was concerned at your house choice from the start. Too many unknowns. I’d like to see you do a cookie cutter or apartment flip. The numbers and unknowns would be so different.
Really loved this series and real numbers! We’ve done 4 flip houses in Victoria. Paying that second mortgage ontop of your own mortgage payment, whilst all the reno expenditure is flying out of the bank account. It’s not for the faint hearted lol it can get very stressful ontop of really exhausting. I wish you would’ve made more money for all your hard work you put in! Could you not have gone through a mainstream lender to cut down on all those hefty fees? That’s interesting about charging interest on the money you put down. We always put 20 percent deposit in but haven’t known you could charge interest like that in the calculation. Great stuff, job well done 👍
Was difficult to go through a mainstream lender for us at the time and because the house needed so much work. Congrats on your projects! And appreciate your feedback
Really enjoyed this video and series Luke - I might have missed it, but did you count your own labour as a “cost”? I mention it because there is probably an argument that the opportunity cost should be valued. Then again I guess it was an educational experience so perhaps that’s why you’d through in your time as a freebie. The joint venture idea also seems like a genius idea! Probably a market for that
Thanks for the vid! Great detail. It's an interesting result actually. Even with a rising market, profit was hard to make! I think you must have good buying skills however. 687K is a good price I reckon.
Thanks for sharing the experience Luke. Congrats on the family growing. You mentioned the cost of funds but what about your returns against the cash you used. Also i wouldnt do a joint venture with a seller that retains the legal title unless you can get security over them be a pain to recoup proceeds later.
Thanks for the candour and insights Luke. We have watched the series and have thoroughly enjoyed it. We are empathetic to the effort and sweat equity that goes into something like this having done two small projects to improve 2 of our IPs in the last 12mths. So well done for having a crack and I’m sure you’ll learn a lot from this. Well done to Emily who I am sure did all the work behind the scenes to look after your son while you were at the house working. Can you share anything on CGT payable on the project as well?
Thank you for sharing Luke. I really enjoy this flip project❤. Can anyone sell their own house or a R/E license is required? Do you mind sharing any good tradie who can install door and door frame on an older home( thus not standard size)? Thank you!
Hi mate Hi thanks for your videos, very helpful for new business owners like me. I have once questions, what video camera or tool you Yousef while filming this project renovation, I like it very much.
Great video! I enjoyed watching them and learned a lot! Was this a full time job for those four months? Keen to see how much time you put in in terms of actual work days cheers
@@lukewiles1so really you made 15k on a 2.25 month full-time equivalent (FTE), that's not too bad. Probably not feasible for you to work full-time on it, but seems like the holding costs at 8% loan plus fee caused some margin erosion. Loved the series !!
I often wonder how many flippers make losses... While $15 isn't a loss, it is by time invested, it means you paid yourselves about 50cents an hour for all that stress.
Great series mate! Congrats on the sale even if you didn’t achieve your goal, you learnt a lot and gained some valuable experience for the next one. How does CGT play into the final profit?
Thank you! Not the result we would have liked but still happy with the small profit. No CGT because we were able to use carried forward tax losses from a while back👍
Apologies if I missed it, but what about capital gains tax? Selling within 12 months of purchase attracts full marginal tax rate. Should this be deducted off the total profit as well? Appreciate if you can clarify. Thanks and well done on such a comprehensive analysis 👍
For our situation we wanted the capital for our own home, so still would have sold. Generally would have been better to keep as a rental. Would have been able to amortise the stamp duty over a longer period of time. Seen market growth, finance at a lower interest rate (rather than a short term project) and be less fussy about the renos
Has anyone been able to find a seller in Australia willing to joint venture to skip the stamp duty cost? Has anyone tried buying in a new company and then selling the company instead of the property?
The real question is how can you rely on the joint venture if the person you are doing this with fks you over, i,e after fixing up the house he says i dont know you?
In Australia there's no way you can make money flipping, renovating etc. Here's why in your calculations where's all the running around, stuck in traffic, juggling family life, cost of tools, maintenance of the same tools and the list goes on, everyone has their finger in the pie etc.
Have to agree... This was so much more taxing than I had expected. We've made a lot more money holding onto our reno projects rather than flipping in a short period of time
Cute you call stamp duty a State Government 'Fee' > It's a Tax. Always with Government with their hands out expecting something for nothing. You get nothing for it & the Government will do a terrible job wasting it on some crap no one cares about. Anyway, The switchboard should have been up to current electrical standard before sale or could have shaved down a few bucks, Surprised this wasn't pingged during the building & pest. They would have also told you if the cable in the walls was the old vulcanised rubber that gets brittle after 40 years. Same as interconnected smokes alarms are required for sale, If you found out after the fact the whole property had to be stripped and re-wired this project would be in the negative. :(
Every time I think about my journey to profitable Investments and how I was able to grow my finances to six figures, I feel very satisfied and very grateful to the ALMIGHTY.
The joy you feel knowing that you will never be broke again should be incredible. I hope to experience it one day. Would you mind sharing how you achieved this?
Having someone who can provide you with proper guidance and insights into the market can make a big difference. I wasted valuable time and money to learn this lesson and that is why I work with the best I can find ~ Lynn Erica Barnes. ~~
I completely agree, emotions like fear and greed are problems for most people who try to invest on their own and end up losing their capital. I know many people who have made a fortune with cryptocurrencies, FX and Real Estate and this was possible thanks to the guidance they received from professional Mentors. Can this professional help?
Not all heroes wear capes. I will always be grateful to ERICA LYNN BARNES for being so professional and knowledgeable, helping me escape the hustle and bustle of the 9 to 5
Watch the full How to Flip a House series from the Start! th-cam.com/play/PLLnaoECB3seTic2RAQiT7lU2eMIAxcxs4.html&si=1MLxOdS8L2cAFA5O
Thanks Luke for taking us through this journey. Glad you are not in red. Great insights.
Thanks for sharing. At least you got the experience and learning yet didn't make a loss. Most people wouldn't even do that.
Great series, thank you for sharing. It is a shame about the result, but some great lessons learned no doubt
Great effort on the house 😎
I'm glad for you that your finances didn't finish in the red.
Thanks Luke for your honesty mate!
I believe the learning curve is your actual win in this case.
Nice one Luke, Thank you for sharing. All the best with the new kiddie.
You are right luke, long-term hold is the best strategy. This property today paper value is $980k,which is 15% increase .You really should hold and rent out. But anyway thanks for sharing, letting us take serious to flipping.
I have been following a lot of your channel as I am buying a house. Nice work mate and love your bold honesty.
Loved the series!! Well done Luke and Emily, now I have to watch the Qlder reno!!!🙂
Well done guys, thank you for sharing this experience.
I am in Sydney and bought a house in Marsden with the intention to renovate and build a granny flat.
But unfortunately do not have time for that.
I would be happy to pay someone like you who has this proven experience to manage such a project from design to the final result.
As my favourite property guy and as a family moving to Brisbane soon, I'd love you to do a video on a house to live in! Not investment, not to flick, but for you - or rather a typical couple or family. We're not wealthy - maybe $700k to spend after the NZD-AUD conversion. Or maybe a mill if the son chips in lol. We like being comfortable, bit of a yard but not too labour intensive, we like walking along a river, park, forest or beach every day and don't want to drive to get to it. We like Sunday drives. Just to round out the breadth of your channel :)
Pete - your cuz across the ditch.
Liked and commented for the honesty. Good to see, surprised you didn't get more, I was buying an investment around then and good stock was really hard to find.
My wife and I will post our renovation project on here shortly, we purchased and settled 3 days before Christmas 2022 and finished in June, we are on the Sunshine Coast and it was such a blessing as we found out after securing the property the building at the back which at the time didn’t resemble a granny flat was in fact an approved one.
Keen to check it out when posted
very insightful video, glad I came across your channel!
Very nice and informative video. Wish you more success for your next project
Good series, Some comments I have, I think you were harsh in your assessment of 1.83%, I would argue that your margin should be calculated off your money invested so including the missed interest you would be into it at $147,101, that would mean you actually got a return margin of 10.35% which I think is pretty handy over the span of 5 months. another thing to note is that you bought at a peak in the market and sold after a few interest rate hikes when everyone was gun shy to buy, I would be interested to know what would happen if you were to hang on to it for another couple of months and sold when stocks were low and demand was picking up again. Another thing I noticed was that you seem a competent handy man and this is evident when you are game to tile yourself, were you not game to at least hang your own plaster and only pay to set and sand? just a few thoughts, I thoroughly enjoyed the watch and are in the middle of doing something similar myself just around the corner in Kedron
When you look at it that way the cash on cash return is pretty good. Especially for a few months and a couple of days a weeks work.
Your comment has given me a new perspective! Thanks
I was going to make the same comment. It’s roughly a 10% return in 5 months.
I’d also add that I’m not sure where you get roughly $13.6k in interest earned on funds invested. $147k at 4.5% savings account is $2750 over 5 months. If a 6.5% home loan offset it’s only about $4500. Are you comparing opportunity cost to index funds over that period?
If your opportunity cost was $4500, then your return was $25k. Which is 17% in 5 months.
Risk:
Why the type of loan you took? Macquarie not keen on a flipping loan?
What’s the risk of not paying it back in time?
Very cool little series, great insight into all the costs & what’s involved. My wife & I are looking for a property to do a small reno/flip on too, for similar reasons. I’m a plumber by trade so have a good grasp on what’s involved but I can see that there are so many hidden costs & tax’s… & there’s always things that can be missed & not accounted for in costs, drainage not being in good condition or house wiring etc.
Anyway thanks for the videos good job all involved, will have to watch the others, cheers 👍
Hey Luke, thanks for sharing mate, great video.
Loved your series and honesty. I really was concerned at your house choice from the start. Too many unknowns. I’d like to see you do a cookie cutter or apartment flip. The numbers and unknowns would be so different.
Great breakdown of costs, thank you.
Really loved this series and real numbers! We’ve done 4 flip houses in Victoria. Paying that second mortgage ontop of your own mortgage payment, whilst all the reno expenditure is flying out of the bank account. It’s not for the faint hearted lol it can get very stressful ontop of really exhausting. I wish you would’ve made more money for all your hard work you put in!
Could you not have gone through a mainstream lender to cut down on all those hefty fees?
That’s interesting about charging interest on the money you put down. We always put 20 percent deposit in but haven’t known you could charge interest like that in the calculation.
Great stuff, job well done 👍
Was difficult to go through a mainstream lender for us at the time and because the house needed so much work.
Congrats on your projects! And appreciate your feedback
Really enjoyed this video and series Luke - I might have missed it, but did you count your own labour as a “cost”? I mention it because there is probably an argument that the opportunity cost should be valued. Then again I guess it was an educational experience so perhaps that’s why you’d through in your time as a freebie.
The joint venture idea also seems like a genius idea! Probably a market for that
The risk is huge if the person does you wrong. Because its their house and how can one establish terms?
Just came across this channel. Awesome vid, thanks!
Thanks for the vid!
Great detail.
It's an interesting result actually. Even with a rising market, profit was hard to make!
I think you must have good buying skills however. 687K is a good price I reckon.
Thanks for sharing the experience Luke. Congrats on the family growing. You mentioned the cost of funds but what about your returns against the cash you used. Also i wouldnt do a joint venture with a seller that retains the legal title unless you can get security over them be a pain to recoup proceeds later.
Thanks for the candour and insights Luke. We have watched the series and have thoroughly enjoyed it. We are empathetic to the effort and sweat equity that goes into something like this having done two small projects to improve 2 of our IPs in the last 12mths. So well done for having a crack and I’m sure you’ll learn a lot from this. Well done to Emily who I am sure did all the work behind the scenes to look after your son while you were at the house working.
Can you share anything on CGT payable on the project as well?
Thank you! Trying to create a better life for our family. No CGT because we were able to use carried forward tax losses from a while back
Interesting. I did wonder, in a situation like this, can share market loses be used for this?@@lukewiles1
Just wondering did you buy the property off market?
Nope it was purchased on market and was an ageing listing
If you figure capitol gains tax on the profit…Ends up about $4 per hour for quite a bit of risk.
Thank you for sharing Luke. I really enjoy this flip project❤. Can anyone sell their own house or a R/E license is required? Do you mind sharing any good tradie who can install door and door frame on an older home( thus not standard size)? Thank you!
could done better on the suburb selection, I guess you chose a suburb good for long term growth
Wonderful series! What was the capital gains tax like?
Thanks Luke for your video. Have you consider your net profit of sale is taxable in your annual revenue?
Was the labour part of the expense allowing for your own time??
Or have you not allowed any costing towards this??
Keep up the vids
Labour was free on my part
Hi mate
Hi thanks for your videos, very helpful for new business owners like me.
I have once questions, what video camera or tool you Yousef while filming this project renovation, I like it very much.
Insta360 x3
Did you plaster over the old panels?
Great video! I enjoyed watching them and learned a lot! Was this a full time job for those four months? Keen to see how much time you put in in terms of actual work days cheers
Nope, this was just a side project. I'd say 2.5 days a week would have been the average
@@lukewiles1so really you made 15k on a 2.25 month full-time equivalent (FTE), that's not too bad. Probably not feasible for you to work full-time on it, but seems like the holding costs at 8% loan plus fee caused some margin erosion. Loved the series !!
I often wonder how many flippers make losses... While $15 isn't a loss, it is by time invested, it means you paid yourselves about 50cents an hour for all that stress.
Great series mate! Congrats on the sale even if you didn’t achieve your goal, you learnt a lot and gained some valuable experience for the next one. How does CGT play into the final profit?
Thank you! Not the result we would have liked but still happy with the small profit. No CGT because we were able to use carried forward tax losses from a while back👍
Quite good buying at 687K.
Apologies if I missed it, but what about capital gains tax? Selling within 12 months of purchase attracts full marginal tax rate. Should this be deducted off the total profit as well? Appreciate if you can clarify. Thanks and well done on such a comprehensive analysis 👍
We bought the property in a family members name who had carried forward tax lossess to offset the gain 100% :)
Thanks Luke, appreciate the clarification.
So would you have sold it again or rented it if you knew the outcome? Does renting it out make better financials?
For our situation we wanted the capital for our own home, so still would have sold.
Generally would have been better to keep as a rental. Would have been able to amortise the stamp duty over a longer period of time. Seen market growth, finance at a lower interest rate (rather than a short term project) and be less fussy about the renos
What about capital gains tax?
Has anyone been able to find a seller in Australia willing to joint venture to skip the stamp duty cost? Has anyone tried buying in a new company and then selling the company instead of the property?
Transfer duty has that one covered.
The real question is how can you rely on the joint venture if the person you are doing this with fks you over, i,e after fixing up the house he says i dont know you?
Contract reviewed by solicitors known as a Joint Venture Agreement 🤝
In Australia there's no way you can make money flipping, renovating etc. Here's why in your calculations where's all the running around, stuck in traffic, juggling family life, cost of tools, maintenance of the same tools and the list goes on, everyone has their finger in the pie etc.
Have to agree... This was so much more taxing than I had expected. We've made a lot more money holding onto our reno projects rather than flipping in a short period of time
I understand that the "fees" are part of doing business, but they really dont miss, do they? SMFH
Cute you call stamp duty a State Government 'Fee' > It's a Tax. Always with Government with their hands out expecting something for nothing.
You get nothing for it & the Government will do a terrible job wasting it on some crap no one cares about.
Anyway, The switchboard should have been up to current electrical standard before sale or could have shaved down a few bucks,
Surprised this wasn't pingged during the building & pest. They would have also told you if the cable in the walls was the old vulcanised rubber that gets brittle after 40 years.
Same as interconnected smokes alarms are required for sale,
If you found out after the fact the whole property had to be stripped and re-wired this project would be in the negative. :(
5 months work for 2 people? 500 hours at $30 =$15000.
probably did about 2.5days per week. Still not the best hourly rate however you look at it
Every time I think about my journey to profitable Investments and how I was able to grow my finances to six figures, I feel very satisfied and very grateful to the ALMIGHTY.
The joy you feel knowing that you will never be broke again should be incredible. I hope to experience it one day. Would you mind sharing how you achieved this?
Having someone who can provide you with proper guidance and insights into the market can make a big difference. I wasted valuable time and money to learn this lesson and that is why I work with the best I can find ~ Lynn Erica Barnes. ~~
I completely agree, emotions like fear and greed are problems for most people who try to invest on their own and end up losing their capital. I know many people who have made a fortune with cryptocurrencies, FX and Real Estate and this was possible thanks to the guidance they received from professional Mentors. Can this professional help?
Yes, I firmly assure you she can, look for her name online.
Not all heroes wear capes. I will always be grateful to ERICA LYNN BARNES for being so professional and knowledgeable, helping me escape the hustle and bustle of the 9 to 5
You still havent factored in the cost of your labour. For the 3 or 4 people who were involved.
You woulda made a lot more working for someone else..
You left out apital gains 15k for 4 months work 😂😂😂😢😢😢😢