Had a very interesting and informative experience recently with a Blacktown/Marayong Property. Should be an interesting read for anyone planning on buying in Blacktown or nearby.
The Deal
I'm on the market for a cashflow nuetral/positive house in the Blacktown area and recently came across a place at 4 Attard Place Marayong that you can see here
http://www.realestate.com.au/property-house-nsw-marayong-107619667
563sqm brick two floor property with a total rent of of $1070 from three leases. Lease one is second floor, three bedrooms 1 bathroom - $385 Lease two is first floor three bedrooms 1 bathroom - $400. Lease three is a granny flat with 2 bedrooms (not confirmed), 1 bathroom - $285.
Location is in a relatively low crime street for that area and walking distance of shops and the train station.
It was up for auction 8 days from when I discovered it.
Sounded great so with sweaty palms and a racing heart, I started to do some number crunching and checking before making an offer.
The offer
Checked sale and rent figures for that area, went over a residex report on that property, called the agent (LJ Hooker) who was handling the auction, called another agent (Astro Real Estate) who had the listing on RE.com, called council and went in search of some expert opinions.
Made a conservative written offer Sunday night of 520k that I did not expect to be accepted half way through all this due diligence. Received an email back Monday to say the offer had been passed onto the vendor. Received another email Tuesday to say the offer had been declined and the property was going to auction. Told the REA that my offer would still be open if the auction did not reach reserve.
Two agents and a vendor, A RE triangle
While making an offer to LJ Hooker and exchanging emails, the REA from Astro is also emailing me saying that they can make the sale for me and that they are in contact with the vendor. Checked with LJ Hooker who said they had exclusive rights to the sale. Strange. Astro kept sending emails from a gmail account that were written unprofessionally and with poor commucation skills saying that they had the right to sell. Stranger.
I'm not into games so I suggest Astro and LJ Hooker talk to each othe and the vendor.
A couple of days before the auction, Astro are getting more excited with emails and saying the vendor would not go to auction. LJ Hooker email me on the day of the auction to say the vendor pulled out and the property did not go to auction.
After the Auction
Astro sent an email saying the vendor has accepted my offer on the condition of a 25% deposit. Red warning lights flash here. Too strange.
A call to Blacktown councli who are great reveals that since digital records were kept in 1989 there have been no approvals for that property. That means that the granny flat is not approved (not surprised) and that the house itself is most likely not cleared for dual occupancy.
Outcome
The vendor is making an under the table deal iwth the cheapest agent, the agent is extremely unprofessional, the property is not legally tenanted for 2 out of 3 leases, even at 520k the property is over priced for its size and location.
So with some regret (awesome cashflow
) I'm walking away from this deal. This has been an interesting and learning experience.
What would you do?
I'm fairly inexperienced and still learning so my reasoning/approach/dd/conclusion etc etc may not be the best. I'm curious to know what the more experienced and successful investors here would have done???
The Deal
I'm on the market for a cashflow nuetral/positive house in the Blacktown area and recently came across a place at 4 Attard Place Marayong that you can see here
http://www.realestate.com.au/property-house-nsw-marayong-107619667
563sqm brick two floor property with a total rent of of $1070 from three leases. Lease one is second floor, three bedrooms 1 bathroom - $385 Lease two is first floor three bedrooms 1 bathroom - $400. Lease three is a granny flat with 2 bedrooms (not confirmed), 1 bathroom - $285.
Location is in a relatively low crime street for that area and walking distance of shops and the train station.
It was up for auction 8 days from when I discovered it.
Sounded great so with sweaty palms and a racing heart, I started to do some number crunching and checking before making an offer.
The offer
Checked sale and rent figures for that area, went over a residex report on that property, called the agent (LJ Hooker) who was handling the auction, called another agent (Astro Real Estate) who had the listing on RE.com, called council and went in search of some expert opinions.
Made a conservative written offer Sunday night of 520k that I did not expect to be accepted half way through all this due diligence. Received an email back Monday to say the offer had been passed onto the vendor. Received another email Tuesday to say the offer had been declined and the property was going to auction. Told the REA that my offer would still be open if the auction did not reach reserve.
Two agents and a vendor, A RE triangle
While making an offer to LJ Hooker and exchanging emails, the REA from Astro is also emailing me saying that they can make the sale for me and that they are in contact with the vendor. Checked with LJ Hooker who said they had exclusive rights to the sale. Strange. Astro kept sending emails from a gmail account that were written unprofessionally and with poor commucation skills saying that they had the right to sell. Stranger.
I'm not into games so I suggest Astro and LJ Hooker talk to each othe and the vendor.
A couple of days before the auction, Astro are getting more excited with emails and saying the vendor would not go to auction. LJ Hooker email me on the day of the auction to say the vendor pulled out and the property did not go to auction.
After the Auction
Astro sent an email saying the vendor has accepted my offer on the condition of a 25% deposit. Red warning lights flash here. Too strange.
A call to Blacktown councli who are great reveals that since digital records were kept in 1989 there have been no approvals for that property. That means that the granny flat is not approved (not surprised) and that the house itself is most likely not cleared for dual occupancy.
Outcome
The vendor is making an under the table deal iwth the cheapest agent, the agent is extremely unprofessional, the property is not legally tenanted for 2 out of 3 leases, even at 520k the property is over priced for its size and location.
So with some regret (awesome cashflow
) I'm walking away from this deal. This has been an interesting and learning experience.What would you do?
I'm fairly inexperienced and still learning so my reasoning/approach/dd/conclusion etc etc may not be the best. I'm curious to know what the more experienced and successful investors here would have done???
