We often promote, but rarely showcase, the success of joint venture projects and the opportunities they offer those willing to think outside the square.
These two enterprising Cosmetic Renovations for Profit graduates, Marjorie and Mark, teamed up together to pull off a $100,000 profit, which is pretty amazing when you consider they paid no deposit or stamp duty, required no bank loan – and a contract of sale was signed on the house two weeks before the renovation was even completed. Here’s how they did it.
“The property was in very poor condition,” says Marjorie, (one half of the joint venture). “The agent contacted us and said the vendor was highly flexible on terms and prices, so we managed to secure it under an option to purchase for $185,000.” The price for the 4-bedroom, 2-bathroom brick home was a steal, even for the modest north Adelaide suburb it is located in.
A call option is a legally binding agreement between parties that gives the purchaser the right to take up the option to purchase property or land from the vendor at any time within a fixed period.
The dilapidated state of this property provided plenty of opportunity to add value, without the need for any structural changes. It was purely a cosmetic makeover, pulled off for just over $50,000. A major clean-up was the first big job before any actual renovating could begin. There was rubbish left everywhere by the previous occupant and all the plaster walls had been damaged.
The main work required was a brand new kitchen, tiled floors, carpet for the bedrooms, update of both bathrooms, and fixing up the scruffy exterior. Apart from design & project management of tradies, the hands-on pair took on the extensive plaster patchwork required, as well as painting inside and out, tiling, and some of the more straightforward kitchen and bathroom updates.
The dilapidated state of the property provided plenty of opportunity to add value, without the need for any structural changes.
Outside, they really had their work cut out with:
- Clearing rubbish
- High-pressure cleaning the driveway and roof
- Laying down fresh turf
- Painting roof, gutters, eaves, window frames, front door and fences
- Building new retaining walls along fence with plants.
The existing pool threw up a major challenge: whether to fill it in and put in a garage on top, or repair the pool. They opted for the latter, but underestimated the work and cost required, which amounted to $6000. “Unfortunately, we weren’t aware of the extent of the damage and of meeting pool compliances,” says Marjorie.
When it came time to sell, the pair had a very lucky break . “We sold the property to the children of the next door’s neighbours, who wanted to move closer,” says Marjorie. “We were very lucky, as we gave them the first opportunity and therefore didn’t market the property.”
Even though the pair had completed many renovations between them, they realised after completing CRFP they still had a lot to learn.
“The most valuable things we learned from Cherie’s course was the system to follow through in a renovation, her detailed scope of work from start and finish, and definitely her colour scheme, so you have a nice, modern finish.”
And their top tip?
“If doing a project with a JV partner, be sure everyone agrees with the end result, including scope of work, timeline and roles during the project, to avoid any confusion. High and effective communication is an absolute must to ensure a smooth process during the renovation.”
- Purchased: December 2017
- Purchase price: $185,000
- Renovation cost: $52,000
- Sold by private treaty: April 2018
- Sold price: $340,000
- Profit: $103,000