flipping out

Property investing and flipping to smash a mortgage, How She Did It

How one woman bought distressed property and flipped it to remove the stress of mortgage debt before nearing retirement.

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Property investing! It’s one way to reduce mortgage debt if you get it right.

In this How She Did It, we look at how one woman flipped away mortgage debt before hitting retirement age and here’s how.

When Mia was 53 years of age, she was divorced and happy… well kinda sort of except for the money part. She didn’t own a property or have any other assets.

So, her strategy: Buy cheaper-than-market properties, and flip them until there was little to no mortgage as she approached retirement age.

Here’s how she did it.

Property 1: Bondi – 2008 GFC hits, a two bedroom unit with no parking comes on the market. The asking price: $450,000

It presents as a mess, smells of pets and backpacker-smoke, half the kitchen has been ripped out, walls are stained yellow, flooring is damaged and carpet is threaded. Mould is a big problem in the bathroom and there is no parking – this is Bondi remember and that’s kinda important!

What she offered was: $381,000 including a $20,000 cash deposit – and that was her maximum affordable bid, but one that she felt she had a chance on given that the contract stated the property was mortgagee in possession. A horrible position for a vendor to be in, but one that can present an opportunity to a potential buyer.

Sold. And a $50,000 renovation undertaken by a line of credit from the bank (bad move because of the difficulty in paying it down) allowed her to then flip it five years later for:

$620,000, therefore a profit of $239,000 but less the unpaid portion of the loan for the reno costs and agent fees meant the total profit was $180,000.

“Property investing flip profit $180k”

Property 2: NSW mid north coast – 2014 the property market has stalled and a three bedroom pool house with river views comes onto the market.

Mia has only her $180,000 cash deposit to buy this property. The asking price: $410,000 but the agent has indicated the property is also mortgagee in possession with Perpetual the trustee, and it must be sold.

It’s run down and needs about $20,000 spent on it to repair wood rot and other problems.

What she offered was: $360,000.

What it’s now valued at: $550,000. This is based on the median house price in the local area.

Her current mortgage is $200,000 after two flips in eight years.

“Property investing flip mortgage $200k, all from $20k and repayments”

If Mia is able to use her strategy again, she stands to own the next property outright or have a very small mortgage… that’s if she ever wants to leave that view.

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