"I have finally finished my Noosa project", shares Dean Zarif.
This is what every passionate renovator expects to say when he deeply transforms a property so that even its former owners cannot recognize it.
But Dean's nuance of having finally reached the finish line, which at times seemed to be moving away from him, is all the sweeter as he turns out to be. attacked every owner's worst nightmare.
And that was before COVID-19 had an impact on the market.
"I was told that termites had been severely damaged and" on the verge of falling, "" Dean said of the state of Queensland property when he learned of it. of his visit to Sydney.
Nevertheless, with a series of successful renovations to his portfolio, Dean decided to buy the invisible property and undertook to relaunch it for his next revelation on the sales market.
Discover the unexpected
The first time Dean entered the creeping nightmare was six months later in December 2019.
He came inside with his carpenter and two workers – all ready for a six-week pickling and cropping of the whole house. At first, it looks like it could be a repeat of that movie, The Money Pit, where the stairs collapse and the bath falls across the second floor.
But once the work started, the property turned out to be a gem in its rough state.
"To our surprise, the house was only damaged in a few areas rather than the whole. We only replaced 30% of the framing, so we were well below the budget, ”shares Dean.
The navigation went smoothly until Christmas and New Years – a period during which Dean continued to work on the large-scale renovation, propelling it to completion in early February. The project was sealed in less than three months.
Dean says, "It was too good to be true how it all went on budget and ahead of schedule."
Navigate on a retarder
However, when he decided that a luxurious feature would be installed in the backyard, the project was faced with its first major challenge. This delayed the start of the property on the market by eight weeks, and reduced work that needed to be redone by an additional $ 5,000.
"While the backyard feature debacle was unfolding, I built a huge merbau deck with my chippy – he looks amazing. When the new concrete slab fell around the element, I had it covered with white travertine, "shares Dean of his choice in an elegant and modern design.
"I had the house assessed between $ 700,000 and less before decorating the backyard and the terrace. I was told it would cost $ 800,000 afterwards. The backyard is L-shaped, so I thought the [feature] on one side and the bridge on the other would make the best use of the space and make it bigger. »
Dean says, in hindsight, this approach made him back off. Not because he overcapitalized, he explains, but because the consecutive delay in the project meant he was part of the uncertain climate of COVID-19 – which put many buyers and investors under financial pressure as they navigate their existing finances and loans.
A brilliant valuation
By examining the statistics, it is clear that even with the integrated pandemic, it is a very profitable business.
The fixer-upper in Noosa, Queensland, was purchased by Dean for $ 355,000 in 2019.
The purchase, conservation and renovation costs amounted to $ 160,000 and, in total, the project cost Dean $ 515,000.
Under current market conditions, Dean says, "I have been told that I can expect around $ 750,000 now, which still represents a profit of $ 235,000."
"I love the finished product and my team has done an incredible job. The stagers also exceeded my expectations, ”he says.
When it comes to finding good builders and traders, Dean recommends word of mouth and checks reviews online.
"I was lucky to find a lot of guys and I use the same trades in each project. Sometimes one of my trades is busy or has left the industry, so I will ask my other trades for recommendations, "he shares.
In the event that this approach does not work, Dean uses the Facebook community pages and is often able to find a replacement for urgent work in just a few hours after the publication of the opening. He also achieved effective results on hipages.
Dean's house is on the market at the time of writing the offers over $ 749,000.
How to Find the Right Upper Fixer Property
For a property to have promising market potential after the renovation, Dean says it must measure appropriately up to 5 criteria.
The property must be purchased well below its market value. "Generally, I aim to buy a property where I can make a profit of 10% without touching it", shares Dean.
The property must be in poor condition – "The worse, the better."
The property must be surrounded by good quality houses. Dean says, "The worst house on the best street is ideal, but the worst house on a beautiful street in a decent neighborhood is also fine."
The current layout of the property must be malleable. "Since the house will be completely stripped, I am looking for a property that can be reconfigured to add an additional bedroom and / or bathroom," explains Dean.
"I have already converted a huge house that has been converted into 3 bedrooms with 1 bathroom into a house of 5 bedrooms and 3 bathrooms with an intelligent redesign of the floor plan."
Adherence to a cash return formula. Dean says his project must achieve minimum profit when he sees the property advertised online for the first time or when he hears about it from a real estate agent – and he takes that "profit" into account final minimum 'in its offer on a property and when negotiating a price.
"I always keep in mind that this is a business and that the numbers have to add up before I can make a deal," says Dean. . "I'm not afraid to walk away if my offer is at the top end of where it needs to be for the deal to stack up."
The average profit on one of Dean's recent projects was $ 160,000, and his current project is expected to generate profit of more than $ 200,000.
