How Lisa and Steve divided on old house in two blocks to make $70,000 profit.
Our names are Steven and Lisa. We are in our late 20’s and a year ago we attended Property Options with Mark Rolton. From the knowledge we gained that weekend we have been able to work together on a plan for our financial freedom.
Within 6 months we had a property under Option, which means we control the property but are not the owners. We learnt on our Property Options weekend the power of controlling or optioning property without the headaches of debt, repayments or risk. We are in the process at the moment of submitting the Development Approval to council to divide the property into two.
Within 18 months we will subdivide the property into two parcels of land. We will keep the existing house at the front and sell it as well as selling off the back block as land only. By doing a ‘Splitter’ as Mark calls it, we are using the land for a higher and better use. This large block is in a rapid growth area and the council wants the see the density for the area increased. So the splitter works well and also doubles our profit. By the time we take out our costs to council for realigning the land we still end up with a tidy profit – at least a year’s wage. We plan on doing a couple of Splitters per year to increase our cash flow and make our lives much more comfortable and allow us to travel.
Step 1: Learning to Create Wealth
We attended Property Options with Mark Rolton and learnt that controlling and profiting from property was much smarter than being in debt. When we Option a property we can always offer the owner more than the market value and we like the philosophy that they get a good deal too.
Step 2: Find the Deal
Looking for great deals in real estate agent windows just doesn’t work. We learnt from Mark how to use RPData to target exactly what we were looking for – a large block of land with an old house on it. We also learnt to look in high growth areas and talk to the council and find out where they would like to see more density. We used RP Data to specifically search for large blocks that we could divide into two. We found a 946m2 block with 2 street access – perfect for a Splitter!
Step 3: Applying the Strategy – Splitters
Using our knowledge from my Property Options course, we optioned the property. This gave us plenty of time to go to council and realign the lots and sell them individually. We divided the yard equally into two parts as the two street access gave us flexibility. The back block faces a street which is perfect for a builder to construct a low set brick home onto. A vacant block of land this close to the city centre is rare and in high demand from builders.
Step 4: Know the Numbers
Being sure of our numbers is important as it lets us know when a deal is profitable and how much we can afford to Option a property for. Below is a quick breakdown of how much we Optioned the property for and how much profit we will make.
We are thrilled with our profit of $70,000 in 18 months, as we know it would have taken us years to earn and save that amount of money. The best part is we can do Splitters every year for the rest of our lives and generate great income for ourselves.
- Option Price: $280,000
- Project costs: $30,000
- Sale Price: Parcel A with house $250,000
- Parcel B Land only $130,000
- Profit: $70,000