Asking for some help with this deal

From: Simon .

I made some enquiries via the internet on commercial property in Brisbane. I have built up a rapport with one agent in particular who has found me an office suite in a good suburb in Brisbane not too far from the CBD.

The vendor was motivated to sell prior to 30 Jun - I am unsure of the reason. Anyway the agent was putting pressure on me to make an offer before this date but I was fudging for time as I didn't plan to be back in Australia before 29 Jun.

To cut the story short I put in a low ball offer that I fully expected to be knocked back. I wouldn't even have been surprised had the agent refused to present it.

Anyway blow me down the vendor is seriously considering it and will let me know in 48 hours.

At this price the return will be a fraction under 17%pa which should see me comfortably managing it.

Earlier in negotiations the vendor said he could put a tenant in on a 3+3 lease at a price satisfactory to me. Now that we are negotiating for 30 Jun settlement he is asking that

"Before he responds officially he
would like to know if you will accept a lease guarantee from him directly.
The reason he suggests this is that it would provide him with the
opportunity to put a tenant in place for you while avoiding the
paperwork/GST headaches of subleasing"

My questions are:

1. Can someone recommend a good valuer that is accepted by the major banks in the Toowoong area.

2. Can anyone comment on the Toowong commercial area. I hear vacancy rates are 5%?

3. Can anyone comment upon the lease guarantee vs the tenancy that the vendor is offering and the GST implications.

4. Where can I get figures for past sales of suites in this building?

5. Is it possible to settle in two weeks?

I really appreciate any assistance that anyone can offer me...time is short and it makes things so much harder when I live overseas.

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Reply: 1
From: Simon .

The latest.

Vendor still hasn't accepted the offer although I believe he will from some of the queries coming back from him. He is moaning that it is below his bottom line.

One thing puzzles me...The agent told me that the vendor is very motivated to sell prior to 30 Jun and I was guessing this was for tax reasons. However the vendor has just asked for a long contract to October to ensure he has a tenant in place. This is fair enough as he is providing a 3 year rental guarantee at 17%. And a longer settlement is fine by me. But this is a backflip and I am wondering if the story about being motivated to sell by the 30 Jun was concocted by the agent to put me under some pressure to make an offer.

What do you guys think?

I am still looking for a valuer...I have emailed a few and they don't seem any better at returning emails than real estate agents!

I would welcome any contacts.

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Reply: 1.1
From: Paul Zagoridis

Hi Simon

Valuers live and die by the phone. Call them.

The June 30 deadline was definitely designed to motivate you.

However it can also be a motivation to the Vendor as the date of exchange may be a CGT event but settlement can take a longer.


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