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How do I know what price to pay?

How do I know what price to pay?. www.renos.com.au | info@renos.com.au | 1300 550 656. How do I know what price to pay?. CMA’s Become a Valuer. CMA’s. When it comes to Buying, there are two things you must determine: You are paying the right price Your strategy will make money

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How do I know what price to pay?

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  1. How do I know what price to pay? www.renos.com.au | info@renos.com.au | 1300 550 656
  2. How do I know what price to pay? CMA’s Become a Valuer
  3. CMA’s When it comes to Buying, there are two thingsyou must determine: You are paying the right price Your strategy will make money It is odd, but sometimes a bargain buy still doesn't make you money
  4. CMA = Comparative Market Analysis It is hard evidence of a property’s value If adding value, complete a CMA for the finished product CMA’s
  5. CMA’s Ask real estate agents for comparable sold properties as well as those for sale Include time on the market Also use RPData Compare like with like: Number of bedrooms Land size Position Condition Remember, for sale is not a sale!
  6. CMA’s CASE STUDY Asking price $450,000 Say you could buy it for $420,000 You carry out CMA for the finished product (post reno) The question is...
  7. CMA’s Will you make money?
  8. CMA’s EXAMPLE 1 You find from the CMA that similar renovated properties have sold for $575,000 Hands up if you would buy A: the $420,000 reno property and reno it. Hands down if you would buy B: the $575,000 finished property The $420,000 buyers… keep your hands up …. Property A: Renovator Property B: Renovated Purchase: $420,000 CMA: $575,000
  9. CMA’s EXAMPLE 2 CMA shows similar renovatedproperty is selling for….$525,000 Keep your hands up you would still buy A: the $420,000 property and reno it Hands down if you would buy B:the $525,000 finished property The $420,000 buyers… keep your hands up Property A: Renovator Property B: Renovated Purchase: $420,000 CMA: $525,000
  10. CMA’s EXAMPLE 3 If CMA shows similar renovatedproperty is selling for….$490,000 Keep your hands up you would still buythe $420,000 property Hands down if you would rather buy thefinished property i.e. pay $490,000 The $420,000 buyers… keep your hands up Property A: Renovator Property B: Renovated Purchase: $420,000 CMA: $490,000 Who has no idea?! Let’s find out…
  11. CMA’s Reno and Rent – Qld Investor Asking Price $450,000 You buy it for $420,000 Conveyancing/buy costs $16,000 (3.5-4% of Purchase Price) 4 week reno $42,000(10% of PurchasePrice) Holding costs during $2,400(6% @ $478,000) Total (if you reno & rent) $480,400 Rent $550pw (5.95% gross)
  12. CMA’s Reno and Sell – Qld Investor Total (if you reno & rent) $480,400 If you sell add 8 weeks holding $ 4,800 Total $485,200 Plus sell fee/advert/clean etc(3% of sale price) @$575,000 = $17,250 @$525,000 = $15,750 @$490,000 = $14,700
  13. CMA’s Remember – we are using Stamp Duty as a Qld Investor
  14. CMA’s Qld Stamp Duty
  15. CMA’s And if you bought an interstate investment
  16. Become a Valuer Valuation Reports Use this when buying, when valuing or when refinancing
  17. Become a Valuer
  18. Become a Valuer
  19. Become a Valuer
  20. Become a Valuer
  21. Become a Valuer
  22. Become a Valuer
  23. Become a Valuer
  24. Become a Valuer
  25. Become a Valuer Methods of determining value: Comparable sales - can be broken down Rental Yield Development Feasibility Land value
  26. Become a Valuer Comparable sales Land size and value Location Property type Property condition Sale date
  27. Become a Valuer
  28. Become a Valuer Low sales: Related parties No advertising Structural/cosmetic issues Flooding Pipes Good buy Other
  29. Become a Valuer High Sales: Related parties Something special Idiots
  30. Summary Be realistic and use realistic sales Determine the best valuation method for your product Know why certain sales were low or high When refinancing/revaluing, go for 3-5% above
  31. What did you learn today? Buying Well Justin Eslick Granny Flats Judith Taylor Research Justin Eslick Clauses for Buying Well & Negotiating Rob Balanda Joint Ventures Rob Balanda Investor Profile Jon Johnson Where to Buy and Why The Reno Kings How do I Know What Price To Pay Justin Eslick
  32. TOMORROW: DAY 2 FOUNDATIONS FOR SUCCESS Warren Black Matt Cosgrove Colleen Sutherland Kerri Burness Accountant/Lawyer Investor Profile Principal - Sutherlands Managing Director/Licensee Wealthsafe Property Management Equity Access Australia Group
  33. Write down your questions
  34. Tonight... We want you to think about just 3 things! RCR Model Roadblocks – Facing and overcoming roadblocks. Change – What are you doing to get the change that you want and deserve. Role models – Using role models to achieve that change.
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