Current renovation is coming to an end with the expectations that all structural developments will be completed by the end of this month. Meeting with a reputable agency that deals with foreign school I have connections with on Tuesday. Students from rich arab families mainly. They want to visit the accommodation and see if it is adequate to house their students. Likely to see c. $900 per student but costs would be higher than if I housed other tenants - e.g. expectations include one cooked meal a day, regular cleaning, bills inclusive, etc. Still a fantastic yield.
In summary: Purchased a foreclosed residential from a government housing association for $150,000 (£1=$1.25). Derelict and required significant work. Total cost will be c. $20,000.
Some of the changes made include:
- full roof repaired,
- wet rot removed,
- chimney stacks and breasts taken down,
- wall and ceiling replastered,
- lounge knocked through and closed up
- dining room converted to bedroom (total 4 bedrooms) and an ensuite built in
- total rewiring,
- radiators (most) removed and flushed,
- leaks in the heating system repaired,
- eight double sockets put in,
- light pendants changed
- fresh piping run through the entire house
Manager has also arranged a meeting with an estate agent to get an idea of valuation and has advised landscaping on the garden and other cosmetic changes to maximise the selling price. Manager expects a selling price as high as $225,000, which would represent profit of $55,000 on a $30,000 investment (5% deposit and refurb costs). i.e a return of over 100%.
Unlikely to sell if I can keep the tenants in, as yield is fantastic and I don't need the capital.
Still issues with
the units being developed, which I've paid the reservation fee for. Sent a formal request for the return of my fee. Will keep fighting and try and be as much of a nuisance as possible but accepted that it may have to be a write off as I don't intend to spend any additional funds on lawyers to pursue it.
I have eyes and ears in regional cities seeking the
next deal to replicate the above process. Funds ready to go.
Have kept up with reading the Greatest Salesman in the World. Missed maybe two or three readings, but going forward I'll endeavour to ensure I don't miss anymore.
Haven't found much time for the guitar or Spanish at all. Also haven't read any of HTMFIP. That needs to change. Intending to wake up earlier so I can fit in my morning read of TGSITW and then read HTMFIP after.
Try and get as much out the way before work.
Have been reading the Intelligent Investor. Haven't really considered equities or bonds but after I've gotten one more real estate deal under my belt I need to really think about
portfolio allocation. Ideally looking at:
- Real estate - 60%
- Equities - 20%
- Bonds - 10%
- Cash - 5%
- Speculative investments - 3%
- Gold - 2%
IF this deal does end up providing the value that is projected then it will see me hitting a
six figure net worth...crazy when you think that in January 2015 I was living in my overdraft and had about $20,000 worth of debt. It's so easy to forget how far one has come.
Hard work and self belief are the cornerstone.
