In a Real Estate Selling Partnership!!!
Joint Ventures, Partners in a Trust, Property Options, Builders conditions, Delayed settlement, Profit sharing agreements, etc, etc…
A lot of regulations and terminology.
Here at Plummer Persson Properties we make an agreement, find out what we want to achieve. agree what needs to be done – and how we can do it. In addition we might sketch up a time plan and a financial plan.
Once the agreements are in place, we can always find a contract that suits – and sort out the legal terminology as we go.
Straight out purchase;
The new stamp duty of 4% applies.
Doubling up as it applies when we buy the property, and when we sell after a quick renovation, subdivision or development.
Holding costs for the property, including new short term loans. (normally higher setup costs and interest rates.)
EXPLAINING THE FEASIBILITY AND THE “NAME OF THE GAME”;
Note 01;
The market determents the final value of your property, regardless if it is immaculate or in desperate need of repair.
The market and prices fluctuates a bit, but at the end of the day…. The value of your property is what you can make a willing buyer to pay!
Note 02;
Real estate agents promise high prices, quick sales and the “pie in the sky” if needed, just to get your property listed exclusively with his office. From thereon it’s downhill, or “vendor conditioning” as the term goes. And if you don’t agree to the price drops, “to meet the market” then your property will sit there – for months – and maybe for years.
The Feasibility;
(Simple example only, the possible sales price is always a variable.)
Let’s say we can Renovate / Rebuild or develop your property up to the value of;
$1,000,000.00
We believe we can find a buyer willing to pay this amount for a well renovated immaculate property at the location.
Then we have to deduct “acquiring costs”.
Stamp Duty on Purchase; $ 24,000.00
Finance and holding costs; $ 60,000.00
Legal’s, Consulting Engineers
Development Approvals $ 22,000.00
Renovation Cost; $150,000.00
Sales Costs; $ 25,000.00
Stamp Duty on exit; $ 40,000.00
Investor profits; $ 64,000.00
Possible purchase price for the property; $614,000.00
The “OPTION” or the “JV” or the “PARTNERSHIP” deal;
Basic concept;
Having the vendor remaining as the property owner throughout the project.
Savings;
Stamp Duty on Purchase; $ 24,000.00
Finance and holding costs; $ 60,000.00
(In addition possibly savings on vendors sales costs.)
Increase in the possible purchase price; $ 84,000.00