Step 1: Getting Started
Step 2: Find the Deal
Step 3: Choosing the Right Strategy
Deal 3: Renovating a Property Under Option!
Our latest project is a Mark Rolton special! Without Marks knowledge we would not even thought of this.
We noticed a house in our area that was very badly marketed. If you’ve not worked it out yet we are big on renovations. The house in question needed work done to it and was badly marketed and had sat unsold for a long period of time. We approached the agent to see if the owner was open to being a little creative, as she had no serious offers.
We thought, why don’t we put one of Marks theories to the test! We decided to use an Option to control a property and then renovate it during the Option time. The asking price was $980,000, so we put forward an offer $60,000 over the asking price with a 10% deposit and permission to get access to the house to renovate.
Now don’t get me wrong this took a little bit of time, but getting to understand the owner’s needs and making sure that they felt comfortable in what we were doing as well as assuring her she was welcome to view at any time. To date she has only ever been around once, as she feels more than comfortable in what she has seen us do to the property.
We settled our 10% deposit in mid February of $ 104,000 this gave us access to a property worth a million dollars, since then we have fully gutted the entire house and are close to completing the renovations.
Purchase price $ 1,040,000 and remember that we also live 12 months rent free. The rent would have costs us $ 40,000 for the year – so really we paid $20,000 over the asking price.
- Deposit of $104,000
- Renovation costs: $220,000
- Valuation: $1,550,000
- Profit: $176,000
Now if we want to sell straight away there is a profit of $ 176,000 but we intend on staying in this house and using this as our Principal Place of Residence. It’s our dream home and we’ve renovated for ourselves and couldn’t be happier!
Effectively we used an Option to secure a million dollar house and renovated it and are living in it rent free. After our renovations we have increased the value of the property by $500,000. When the Option expires and we settle on the property we will be asking for a loan of $1,0404,000 even though the property is worth $1,550,000 – the bank will think it’s a stonker of a deal. We have used the power of Optioning to now live in a million dollar plus home that is fully renovated
– so we are thrilled!
Deal 4: Another Renovation
This is not our only deal we also love to renovate homes and know that this also forces massive value onto property.
We found a great unit in our area and renovated and held it for 12 months to reduce our capital gains. We didn’t do a huge renovation – as Mark says nothing structural, all cosmetic improvements.
- Purchase price: $450,000
Renovation costs $30,000
(works done within 4 weeks, and then rented out for $ 600.00 per week)
- Sell Price: $755,000.00
- Profit: $225,000
Step 4: Know the Numbers
By combining our knowledge with Mark’s experience we have really made the most money possible on our properties – just by thinking outside the square a little.
The two deals above have made us $401,000. If we combine that with our other deals, we have conservatively made just over a million dollars in cash and equity. It has taken a lot of hard work but more importantly the know how to do it right.
I hope that the above gives all you guys out there inspiration to go out and start your journey in the real estate game. We know if you follow Mark Rolton’s strategies, regardless if you have very little money you will finish well in front. I cannot speak highly enough of Mark and the Massland team.