Fire Sale Valuation - Property
 

A question.

No, not up the creek without a paddle. :)

Am considering a period of 18-24 months where investments would be more heavily geared than normal, and curious to know what rules of thumb (if any) can be applied to valuing fire saled residential property. In other words, to fully explore my worst-case scenario to see if I can actually accept the risk and still sleep at night.

I realise the advisors (more than one) whose counsel I will be receiving, will probably offer some indication but I think it’s also diligent to do my own homework.

Re: Fire Sale Valuation - Property
 

Well, are you holding for a return or fixing and flipping?

If I'm understanding your question correctly essentially I would want to be in a position where I could have enough savings to cover my outgoings for at least 3 months should I find myself out of work.

Why 3 months? That's enough time to sell off some assets or find another job.

I'm in a similar boat actually, I'm in the process of selling up and downsizing and will want to get back into the property investing game as it's something I did very well in and enjoyed doing before I got married... and then divorced.

Re: Fire Sale Valuation - Property
 

I’m looking at a period under 24 months of heavy debt, as a calculated risk before scaling back to less debt.

So, yes, in popular parlance that probably means a flipper but preferably one with negligible downtime. I don’t have the time to renovate or the interest in funding it to a suitable standard or the patience/vanity/delusion to leave a place empty.

I see those signs on power poles, either in English or Chinese “we buy houses” and have wondered what sort of money the chancers actually offer as a percentage of a formal, accredited valuation.

Re: Fire Sale Valuation - Property
 

In the current market its a tough call. I'm bucking the trend and going from a house to a unit. Houses are going gangbusters but units seem to be stagnant which suits me just fine.

I'm planning to sit tight and put my money to work elsewhere then when I come across the right house or block I'll be ready. I'm very fussy about my house or land but for the moment any old 3 bedroom unit will do as it's only a short term thing.

Also, with all these record high sales and low interest rates I think come 3-4 years when rates start to creep up and fixed terms end there may be some distressed sales. Pure speculation on my part of course.