Million Dollar Makeover or Million Dollar Mistake

Beware of False Prophets

Remember when reading the following to keep in the back of your mind the fact that Sasha had complete control of the project. It was not a property she had to work with. But it was a property that she went out & bought specifically to do up for a profit. It was her own money & choices. All her skills & judgement were at work here selecting the right property & paying the right price knowing the cost of renovations etc so we can now judge just how good Sasha's talent to turn a buck really are. Now remember if she can get it so so wrong with her own money & she had complete control, what faith can you have that you wont suffer the same outcome as Sasha in this market?

 

Back in April 2011 I put up a article about failing Professional Property Flipper Sasha DeBretton 

CEO of home renovating company 

"Million Dollar Makeovers"

Sasha DeBretton - Sunk In Sorrento 

(Below is a update that's rather interesting)

Sasha is a great proponent of "Self Promotion" & makes some outlandish claims about her ability to renovate your property in a couple of weeks & add hundreds of thousands of dollars to it's value (If not millions?) But lets just look & see if the claims she makes are all they are cracked up to be. 

Sasha appeared in the following article in this weeks Sunday Times "Home" liftout (27th Nov 2011) 

On her Website Sasha has a link to "Case Studies" of projects she has renovated in the past & she shows how much was spent on renovations & then how much profit was made in the end. Most of her claims of extraordinary profits are difficult to substantiate because there are no names or exact addresses that can be checked & verified. Those that can have not come onto the property market "For Sale" to have their price verified by the buying public. It is very simple to get a Real Estate agent to give a arbitrary price or opinion of what a house might sell for or how much value a makeover may or may not have added, it is a completely different matter actually getting that price in this market.

 

Fortunately one of Sasha's "Million Dollar Makeovers" has come on the market 

#37 Seaward Loop Sorrento

Link to For Sale Listing for : #37 Seaward Loop Sorrento

And as luck would have it it is Sasha's very own house. So we couldn't hope for a better example to test Sasha's claims of being able to add Millions of Dollars value to a property even in these "Difficult Economic Times" in fact Sasha goes so far as to claim it is a "Sure Fire" thing.

So lets see how the CEO of "Million Dollar Makovers" went renovating her own home for a "PROFIT"?

# 37 Seaward Loop

Sorrento 

This house was bought by Sasha on the 11th September 2007 

for $2,175,000 now with Stamp Duty of $105,000, $250,000 Renovation Costs & $75,000 selling costs Sasha needs to sell this house for at least $2,600,000 just to break even. So let's see how she went in the real world shall we?

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

Property is then Bought by Sasha (Current owner) 
11th September 2007 for $2,175,000

(Talk about timing right at the peak of the Perth property cycle but that's OK because prices only ever go up don't they?)

Sasha First lists this house for sale 20-07-2008  as "EOI"
{ Very Smart Girl waiting 1 year to avoid capital gains taxes but by doing so missed timed the market. House is listed 3 months trying to get $3.5mil price. Clearly nobody willing to pay her target price of $3.5 mil Plus?} 

 

Actual Price wanted finally advertised 18-10-2008 $3,000,000

{Interest rates in 2008 were 9.5% & the GFC has just hit so price reduced to shift the house fast }

Price further 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"

(Fishing for buyers but No takers so property rested for a few months.)

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

(Still no takers after 3 months property taken off the market & rested)

Now November 2011 Sasha is coming to her senses & has reduced the price to $1,990,000

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.

So what do I think Sasha's property is worth in this market?

Sorry but I would not pay more than $1,500,000 not in today's market!!

Why? 

Well look at this substantially better house listed in Sorrento for 

$1.53 Million: 

http://reiwa.com.au/Buy/Pages/More-info.aspx?SearchType=RESSALE&prop_no=1&listingid=10116000&listingno=3116665&puid=0 

A far Far better home that needs no more than 21 days & $1,000 worth of paint from Bunning's.

I like to call this a $1,000 Makover.

Below are Images of Saha's Million Dollar Mistake

Before

 

AFTER