Wednesday, April 20, 2011

Sunk In Sorrento

37 Seaward Loop
Bought 11-09-2007 for $2,175,000 

*** Update November 2011 This property is now listed as "Offers from $1.990 million" WOW!! Down from $3.5 million & still no takers ***

Advertised as "Desperate Sale all offers by May 13th 2011 Considered"
(Still Wants over $2.68 Mil?)
This property was bought by professional home renovator & property Flipper Sasha de Bretton to live in for 12 months & then sell & make a $1 million dollar profit.{TAX FREE} Or that was the plan on paper.
{See her web page:}

However 4 years later she is stuck with a property she cannot shift (Has been for sale for 3 years)
No doubt Sasha has been successful with this strategy in the past but even this
"Professional Renovator / Flipper" is going to get smoked in this market!
Bought for $2.175m &spent $200K renovations plus other costs = $2.5 mil 
She brags on her website that it is valued at $3.5mil to $3.7mil but in the end is only able to advertise it for $3.0 mil when she lists it for sale 12 months after renovating it. 

Still not a bad profit however between buying it & listing it for sale the housing market changed. No longer could speculators flip property for massive profits.

Sasha has been holding $2.5 mil debt on this property for close to 4 years. However if her strategy  worked all she intended to do was flip it in under 12 months!! 

So now  the interest on this has cost her $700K Plus!! 
Yes she has had a house to live in but she could have rented a house just like this in Sorrento for under $150K for the same period.
So her actual holding / speculation cost has been over $500,000 This is why she needs $2.68mil to try and break even. 

On top of the interest bill she has had to fork out for advertising etc for 3 years of marketing the property.

Original owner First Advertised this house for sale 23-05-2007 for $2,500,000.

Property then Bought by Sasha (Current owner) 
11th September 11-09-2007 for $2,175,000
(Sasha has then spent Approx $200K Spent on renovations)

Sasha First lists this house for sale 20-07-2008  as "EOI"
{Listed 3 months trying to get $3.5mil price. Clearly nobody willing to pay target price of $3.5 mil Plus?}
Price wanted advertised 18-10-2008 $3,000,000 
{Interest rates in 2008 were 9.5% & the GFC has just hit so price reduced}

Price reduced to attract buyers 10-01-2009 $2,990,000  

(Another 3 months pass lets reduce it $10K that will pull in the buyers?)
Further Price reduction 28-03-2009 $2.59 mil to $2.89 mil (Still No Takers)
20-02-2010 Advertised as "EOI"
(No takers so property rested for a few months.)

Back on the market 6-03-2011 $2,680,000 

Now November the price has been reduces to $1.990 million

So what do I think this property is worth in this market?
Sorry but I would not pay more than $1,500,000 not in today's market

So why do I think this property will only sell for $1.50 mil. ? 

Follow this Link & watch 2nd last video story on Sashas web page, look at the "Cost Saving" techniques like a "GRANITE TRANSFORMATION" in the kitchens & Bathrooms instead of doing it properly & replacing the tops completely. Remember she only intended to "FLIP" the house in 12 months all it had to do was look like a Million Dollars. Makes you wonder what other shortcuts have been taken to achieve a  maximum return?


37 Seaward Loop, Sorrento, WA 6020 
 37 Seaward Loop, Sorrento, WA 6020


  1. Who's a greedy girl then!
    Got to love all those smilling faces, they all have diplomas and stuff. Making money was never easier.

  2. There are so many people that are going to be smoked by this...not only housing but also exposure to shares as many have borrowed to buy shares.

    Making money by not doing a lot...well not actually creating anything of meaning.

  3. It's a beautiful house before.It becomes perfectly beautiful after.Love looking at it.

    Real Estate Seminar

  4. Nice looking place, Brandon. Why don't you take it off her hands! I'ts now 6 months down the track and she's been forced to slash the asking price by 25% and apparently has no takers!

  5. As I've said in a more recent thread, the place is now on offer (26th November 2011) for "Offers from $1,990,000" Since Sasha paid $2,175,000 for it in the first place (no doubt thinking she had a bargin beating the seller down from $2.5 million) she is now making a loss of $185,000 on the purchase price alone. If, as our host says, she really put $200,000 into the renovation work, she has now LOST $385,000 - assuming someone buys it now at the asking price! And she's a "professional", not some "mum and dad investor type" or some OS investor who knows little about Perth. I notice that she displays this house on her website claiming that the renovation work has INCREASED the value by $500,000!!! If that's really the case, does this mean if left in original condition (with just regular maintenance) it would not be worth just $1,450,000? I guess that explains why it's rented out at about $1500 per week. Weekly rent was always reckoned to be about 1/1000th of the property value before the hubris of "the boom".