Over the next few weeks we will follow the journey of successful property investor Nhan Nguyen as he attempts to buy and sell a property in only 30 days for a gross profit of $50,000.
We start the story today with week 1 – finding and securing the property.
Kevin: House flipping is one of those subjects that fascinates me, and I’ve always thought that you have to get the right time of the market to do it. I wonder if that’s actually the case. Nhan Nguyen from Advanced Property Strategies is undergoing a really interesting exercise that we’re going to follow over the next few weeks. We’ll call it house flipping.
Is that what you call, it, Nhan?
Nhan: I’m not sure what you want to call it. Buy and sell, flipping, whatever you want to call it. Making money, that’s what I’m into.
Kevin: Pretty much, it’s securing a property with the intent to sell it and make a profit out of it. Call it flipping, call it turning over property, whatever you want to do. In this exercise, you’re going to do this in a 30-day period. Is that right?
Nhan: Well, that’s the aim. My aim is to make over $50,000, yes.
Kevin: How far are you into the process now? You’ve just started this?
Nhan: Yes, I’ve just started it. I came back from holiday recently. I was overseas. When I came back, there was this property in my inbox. Basically, I have a guy who’s out there looking for property for me. He said, “Nhan, there’s a seller, and he’s keen to sell the property for $320,000. I think you should buy it. He’s giving you 24 hours to do that.”
That’s what happened. I came back. The e-mail was in my inbox. I did have a look at that property before I went overseas on holidays, but it hadn’t been on the market. While I was overseas, I did receive an e-mail saying the property was on, but I thought that the property had actually been listed with an agent, so I didn’t even bother to look at it. When I got back, I met with the owner’s family, and yes, we signed off on a contract within one or two days.
Yes, we’re having fun. My plan is to basically buy it for $320,000. The median price in the area is $384,000. The most comparable property that I’ve seen is going to be somewhere in the $400,000s. A really rundown property sold recently in that area, on the south side, for $388,000. This is zoned low-to-medium residential, which means that you can put townhouses on it. So it’s going to be somewhere between $390,000 and $410,000 is my projection to sell the property.
Kevin: Let me ask you, then, in terms of transparency, the owners of the property are aware of the fact that you’re going to turn this over and make a profit?
Nhan: No, not necessarily. On the contract, we did put a clause on the contract that basically gave us the right to renovate the property after it went unconditional, and at the same time, they’ve given us the right to show valuers, surveyors, engineers, town planners, or prospective occupants through.
I wasn’t really sure that I was going to sell it, but basically, once I’d signed the contract, after I’d looked at a few options – should we develop it, should we renovate it? – I thought, “Okay, here’s an opportunity for some quick cash. Let’s play and let’s put it on the market and see what happens.”
Kevin: Are you planning to do any renovation to it?
Nhan: As little as possible. In fact, my backup plan is if we can’t sell it, yes, we’ll renovate it and probably rent it out and land bank it or develop it, depending on what the town planners say.
Kevin: How did you find the property?
Nhan: I have what we call a property researcher who works with me, under my training and my systems. He’s out there 5 or 10 hours a week, sending out letters, flyers, business cards in mailboxes. We have a certain area on the south side, about 15 K’s out, housing commission. We’re out there marketing. He got a phone call a few weeks ago, and it’s been bubbling away for a few weeks now.
Kevin: I have to be a bit careful about how I ask this question. The people you’re purchasing it from, is it just that they’re not aware of the values in the area?
Nhan: Let’s just say they live out of town – about two hours out of town. They bought it for $310,000 in 2007, and they’re just wanting to get out of the property. They’re really, really motivated to sell. I think they have some other court issues that are pending that I found on Google.
They’re just motivated sellers, and they want to get out. I think a few days after we signed the contract, they did get an appraisal. I found out through another agent that, yes, they are aware of the value of the property currently.
Kevin: Excellent. We’re going to follow this journey with you. This is week one. You’ve actually secured the property. It’s now under contract?
Kevin: All right. I’d love to come back next week and talk to you about what’s happened between now and then, just to see how it’s progressing, because 30 days to actually find, secure, turn over a property, and do that in 30 days is very, very quick. So, I’ll be keen to follow this journey with you, Nhan.
Nhan: Yes. Me, too.
Kevin: Yes, I’m sure you will be.
Nhan: Thanks, Kevin.
Kevin: We’ll catch you again next week. Thanks, mate.
Nhan: Cheers, mate.