Focusing on small amounts for a moment, a real estate agent friend was telling me about a place that she’s selling at the same price that it was purchased for off-the-plan two years ago in Brisbane. For those unfamiliar with the Brisbane market, prices have boomed by about 10-20% in that time (and this is for a very nice little unit)… so why was this person selling?
Simple: They couldn’t pay the settlement costs!
So here they are, offloading a place for $375,000 that’s worth about $425,000 or more because they can’t handle the holding costs for a month or two while it sells.
Such great deals show up from time to time, and this one could yield whoever lands it (I’ve been in touch with a good friend…) about $50,000 for a month of holding something that doesn’t even use any of his own money (it’s fully secured against the value of the property!).
Is it ethical to make money like that?