***PDATE***This was a simple flip deal with an estimated turn around of 4-5 months. In a sought after suburb, in a great location. We were able to secure this deal well below the valuation outcome (in its original state), meaning we could have on-sold this in its original state. However, we were looking to add good value on this with a simple renovation.

In the market conditions at the time, with a looming slow down in property sales, due to predicted interest rate rises, we deemed it more important to get in and out as quick as possible with the most value.

We limited the renovation, and only touched up some areas where we originally wanted to do full replacements, like the kitchen and bathroom. This reduced the cost for the overall project, meaning with a potential reduced sales price, we still had some margin to play with.

The outcome was not ideal, due to the interest rate rises and inflation changes, the market turned more than we anticipated.

However there are many positives out of this deal:

• We were still able to keep out partners engaged with another deal. These include our selling agents, solicitors, our builders and our investors.
  Having multiple deals with different strategies at the same time, the risk is shifted across all the deals – one deal might not be as good as the next, but these seems to even out across your portfolio.
• Experience – as this was in unprecedented times (Off Covid lockdowns in a hot market, to a low in the property market with economies struggling) this gives us more experience and insights to ensure we limit the risks for future deals.
• Paying back Investors – we we able to pay back all our investors that has partnered in this deal with us, even though the deal did not produced the returns as expected. We always ensure we have backups (funds / replacement investors) in place to be able to do this, and always pay our investors first.
• We could have held out with this deal for better market conditions, or to change strategy on this (Rent for a while then sell / Subdivide and develop) however that would have locked in our investors for longer, and we decided to rather prioritise the investors to get their money back, so we accepted the reduced offer.