how to make $110k 12mths without quitting my day job
- Thread starter Erica
- Start date
GST issues aside, I'd argue that if you repeat this venture it would no longer fall under capital account (thus CGT concessions), but under income account under ordinary concepts of S.6-5, due to a number of factors such as regularity of activity and seeking to generate profits rather than improve or realise a capital asset, therefore land would be trading stock under S70-10.
I'm not going into specifics of thus but id like to wave the warning flag on this one.....
It may work the second time, but the 3rd time I'm pretty sure you would be in income territory rather than capital..
Best of luck,
Dave
I'm not going into specifics of thus but id like to wave the warning flag on this one.....
It may work the second time, but the 3rd time I'm pretty sure you would be in income territory rather than capital..
Best of luck,
Dave
Wrong, in isolation they are exempt from CGT etc but if they are a regular activity of the taxpayer then the taxpayer will be in the business of developing and subject to ordinary concepts 6-5 for taxation purposes, GST registration etc...
yeah thats what i was alluding to, ie that income tax would be payable not CGT
Income tax payable on CGT profits (if on capital acct) or Income tax would be payable on profits (if on income acct).
But I understood what you meant!
What's the cost ....
Thanks Erica,
I am impressed with your numbers .... I used to admire people who ran these projects and thought someday I would want to do this.
It helped me kick my full time job with Westpac, but certainly found there was more to life than stressing myself out.
If this works for you great, but I hope it does not eat into your time with your family, especially your son. You can never get that back ...
So work out what's the true cost of the project...
Thanks Erica,
I am impressed with your numbers .... I used to admire people who ran these projects and thought someday I would want to do this.
It helped me kick my full time job with Westpac, but certainly found there was more to life than stressing myself out.
If this works for you great, but I hope it does not eat into your time with your family, especially your son. You can never get that back ...
So work out what's the true cost of the project...
Ifbf
What's your story. I am interested.
What's your story. I am interested.
Hi IFBF
The type of investment strategy I have chosen for myself certainly wouldn't suit many- each person needs to decide on a strategy that suits their own financial goals but also importantly a strategy that suits their own personality type and level of involvement they wish to commit.
Luckily there are so many different options for those people that are passionate about property as their chosen investment vehicle. Buy-hold, reno-flip, subdivide-develop just to name a few. I am in no way suggesting that what I am doing is the best option.
I think this reno/subdivide/sell strategy would obviously be best suited to people that enjoy getting involved in a hands on project, and wouldn't suit people that can't handle unexpected challenges or are prone to get stressed about things. Each investor needs to decide where their own (and their partners if involved) limits lie in regards to their 'sleep at night factor' (an individuals level of comfort with the investment they have chosen).
The type of investment strategy I have chosen for myself certainly wouldn't suit many- each person needs to decide on a strategy that suits their own financial goals but also importantly a strategy that suits their own personality type and level of involvement they wish to commit.
Luckily there are so many different options for those people that are passionate about property as their chosen investment vehicle. Buy-hold, reno-flip, subdivide-develop just to name a few. I am in no way suggesting that what I am doing is the best option.
I think this reno/subdivide/sell strategy would obviously be best suited to people that enjoy getting involved in a hands on project, and wouldn't suit people that can't handle unexpected challenges or are prone to get stressed about things. Each investor needs to decide where their own (and their partners if involved) limits lie in regards to their 'sleep at night factor' (an individuals level of comfort with the investment they have chosen).
Well done Erica!!!
just joined this forum and already seeing real action and motivation from yourself and the community here.
May i ask how you manage to find the right sites for sub-dividing? do you find the right location first then wait for the property to come online or do you go and do letter box drops or speak to the realestate agent?
just joined this forum and already seeing real action and motivation from yourself and the community here.
May i ask how you manage to find the right sites for sub-dividing? do you find the right location first then wait for the property to come online or do you go and do letter box drops or speak to the realestate agent?
I just monitor www.realestate.com.au daily for any listed sales that match my criteria.
I did consider letterbox dropping but never got around to it.
I found calling realestate agents got me no-where. Perhaps once I have built up a good relationship with one agent after listing a sale through him or her- then good delas might come my way before the general public- I can understand that agents would rather deal with customers that have proven themselves to be genuine buyer\seller than someone cold calling them.
I'm doing a little happy dance right now
Got quote back from SA water for the sewer main extension only $8170 (I budgeted for $10k so came in less than expected, woohoo)
Settles today, picking up keys this arvo, last day at my desk for a month, off with the family camping for this long weekend then strait to getting into the reno, can't wait! (you know you are a Block-Head when you are more excited about renovating than going away on a holiday....
Got quote back from SA water for the sewer main extension only $8170 (I budgeted for $10k so came in less than expected, woohoo)
Settles today, picking up keys this arvo, last day at my desk for a month, off with the family camping for this long weekend then strait to getting into the reno, can't wait! (you know you are a Block-Head when you are more excited about renovating than going away on a holiday....
hooo rrrray....
good to take a break before the challenge starts!!!!
Happy for you and hope all goes well......
May i ask one more question before you go on holiday?
I have difficulty understanding the finanicals aspect.
For this project do you normally lend at 95% and use your own funds for surveyor, titles, lawyer fee, etc sub-division? or do you borrow as well for the sub-division?
if it is coming out of your own procket, how much does one needs to get started?
good to take a break before the challenge starts!!!!
Happy for you and hope all goes well......
May i ask one more question before you go on holiday?
I have difficulty understanding the finanicals aspect.
For this project do you normally lend at 95% and use your own funds for surveyor, titles, lawyer fee, etc sub-division? or do you borrow as well for the sub-division?
if it is coming out of your own procket, how much does one needs to get started?
G'day bumblegoodie
This project is being financed 100%
The deposit /stamp duty/ holding costs/ reno costs/ subdivision costs are being funded through a Line of Credit we have secured against our family home, the equity we will use up for these costs is a total of $150,000
The rest is 90% of the purchace price borrowed from a seperate lender with an interest only residential loan + mortage lenders insurance.
This project is being financed 100%
The deposit /stamp duty/ holding costs/ reno costs/ subdivision costs are being funded through a Line of Credit we have secured against our family home, the equity we will use up for these costs is a total of $150,000
The rest is 90% of the purchace price borrowed from a seperate lender with an interest only residential loan + mortage lenders insurance.
good start to the reno
All before lunch on the first day - truck that was delivering my 10 cubic meter bin got bogged in the back yard and stuck there for 3 hrs then the bloke driving the mini excavator removing old concrete fencing accidentally dug up the water meter so we had to get SA water out to fix the geyser of water poring into the front yard
Gotta laugh, hopefully it's not an indication of things to come
All before lunch on the first day - truck that was delivering my 10 cubic meter bin got bogged in the back yard and stuck there for 3 hrs then the bloke driving the mini excavator removing old concrete fencing accidentally dug up the water meter so we had to get SA water out to fix the geyser of water poring into the front yard
Gotta laugh, hopefully it's not an indication of things to come
Haha and so the fun begins! Good luck
and so the challenge begins
Well, so much for hoping for a quick approval, it looks like I am in for delays while I resubmit my application with council- good news is they only took 4 weeks to notify me, bad news is the development is "not supported" for about a half dozen reasons. Way to complicated to explain every detail here, I'd have to write a 2 page essay, so I'll just say I'm now back to the builder's designer to completely change the proposed new dwelling (have to make it much smaller, increase the front and rear setbacks), plus off to the surveyor to change the overall allotment sizes (bigger for the existing house, smaller for the new block), and hopefully appease the council on various things they didn't like- like the positioning of the private open spaces.
I'm confident it can still be done, and in the end I don't think it will effect the profit margin, just wasting time.
Well, so much for hoping for a quick approval, it looks like I am in for delays while I resubmit my application with council- good news is they only took 4 weeks to notify me, bad news is the development is "not supported" for about a half dozen reasons. Way to complicated to explain every detail here, I'd have to write a 2 page essay, so I'll just say I'm now back to the builder's designer to completely change the proposed new dwelling (have to make it much smaller, increase the front and rear setbacks), plus off to the surveyor to change the overall allotment sizes (bigger for the existing house, smaller for the new block), and hopefully appease the council on various things they didn't like- like the positioning of the private open spaces.
I'm confident it can still be done, and in the end I don't think it will effect the profit margin, just wasting time.
Personally, I'd say to quit your job and do this, you'd want a bit of cashflow from elsewhere. Developments can and sometimes go wrong.
