Sucess story: Wealth acceleration through property renovations

Ray Chua, is one of our Acquisitions Specialists. Qualified with an honours degree in Engineering, Ray is an active investor with an analytical and systematic approach in finding high performing properties. Ray’s experiences in business and as a real estate agent have given him the edge in negotiating great deals.

Last year in August, Ray acquired a property for a client in a sough-after location within close proximity to the coast, schools and transport links. The property was the ideal renovation candidate and was purchased for $350,000. At the time of purchase it had a market value of $410,000.

Ray had thorough knowledge of the market in the area and understood the demand this particular area attracted by buyers and tenants alike. When he found this property he recognised a great deal immediately. He assessed the property’s suitability for renovation and knew what finishes were required to successfully carry out a renovation project.

After completing the building inspection, a few items for repair were discovered. Given this information and the additional clauses Ray included in the contract, he was able to negotiate for the seller to replace all cracked windows, fix the manual roller shutters, water-proof all skylights, complete all roof repairs and take care of the rubbish removal.

If the client had not employed a buyers’ agent the above repairs would have not been completed by the seller. The reason being is that the client would have used a normal real estate contract, which is intended to protect the seller, not the buyer. Under this particular contract, the seller is only obliged to cover repairs relating to electricity, gas or plumbing. Our buyers’ agents work solely on the buyer’s behalf and have the client’s best interest at heart. One of many ways we protect the client is by including special clauses into the contract, which the seller is legally obligated to carry out, such as above.

Another important negotiation Ray successfully accomplished was for the seller to allow the client to commence work on the property before settlement. In fact, the client was able to commence renovation works straight after finance approval which gave him an additional 30 days.

Over all, the client was extremely satisfied with his property and was able to get started with his project immediately. He sold the property 6 months later for $457,000.

Here is his testimonial:

“I have just sold the renovation Ray helped me to secure; I would like to thank Ray for all his help. Having never done this before Ray’s help was invaluable and hope we will be able to work together again soon. Ray’s ongoing help and information throughout the project was fantastic and gave me great encouragement and confidence” B. Scott, Southern River WA

Successful property investors use property renovations as a way to fast-track the wealth creation process. This particular client used one of the property renovation wealth creation strategies, the Buy, Fix and Flip strategy. His property didn’t meet the long-term investment criteria but had the potential to generate a profit from renovation and re-sale, when all costs were taken into account.