G'day all,
Well, it's all over for Matt - so they'll be wanting new buyers....
Shame, as he worked his bum off trying to make this work (had a "fallback position" at 12.5% Interest if it all went South - unfortunately, the "fallback" became "fallout" when they refused to accept the property as collateral for the loan). Left him with nowhere to move !! (Surprised me somewhat when this happened - I mean, aren't they taking Higher Interest to cover a Higher Risk - yet, they didn't want to take the risk that our main lender was happy with at ~9% - go figure) !!
Main Bank had said "Yes" to val, but got him with that damn "joint/sev" rule.
Meanwhile, for the last week of "trying to make it happen" and all this week, he has been crook with some kind of flu - so, apologies for him "not keeping in touch".
Specific answers:-
Hobo-jo Matt was looking for "any interest" - with the potential this place offers, he was hoping to snag Auction price, plus any SD he might need to pay, plus various inspections, etc. - and maybe a few grand to make up for his time. The ~$565k mentioned was always up for negotiation (the ~ would have told you that, I hope). He had the option of a further week's extension (at a cost), but with no solid interest, he had to let it go.
See-Change Matt's niche is in Student rental - he had figured > 15% on that basis. Later figures, when fighting with lenders, saw >10% gross (based only on Purchase Price?) if rented as 3 flats (many lenders don't wanna know about "students"). I don't think this allowed for any renovation costs (not sure)..... his spreadsheet had included $50k for that (cosmetic) - but I don't know if the spreadsheet took that figure in or not in the Yield figure.... If I remember correctly, some lenders won't look at "more than 2 flats" as a residential purchase, so wanted him to stump up 30% on a Commercial Loan - that was never gunna work for us.... Watch out for that one (I have NO knowledge, as I only buy houses, not flats....)
Willair
Just wondering is this property still on the market,is this property vacant,or has it tenants,and is this in the demo control area,it's a pity you have to sell something like this on the land value alone
I believe it is now back on the Market, still vacant AFAIK, and it "could be" in a DCA (our other house - just around the corner IS in the DCA, but is not subject to it - it's rated as LMR)
Re the "land value", it is the condition and position that lets it down - thus the lower price. Ideal for students, not so ideal for 3 families.....
Blue Card
by the sounds of it, a potential purchaser is staring down the barrell of about $150k to get it to a decent, rentable specification - including new kitchens, bathrooms, handrails, possible stair repairs when floor is levelled, new weatherboarding, ceiling repair etc.
If one wanted to fit new bathrooms, kitchens, etc, then, your $150k would be on the money. For a cosmetic reno, though, Matt had allowed $50k. And, yeah, it might stretch a bit past that..... as one discovers the other "odds and ends" along the way. Levelling is quite cheap - we levelled a similar property for <$2k - not quite the same floor area, but a big 4bdr Classic Qldr.
The probs with weatherboard, etc. are minimal - the odd hole here and there. Same with ceilings.... Matt might have over-stated the case in trying to present a fair picture to all here (so that there were no surprises).
I can easily see a >$200k profit (Equity bounce) on completion - that is why I was so keen for him to "have a go" (thinking he had this "fallback" money option in place)..... Alas, 'twas not to be....
Cashflowplus Yep - that's it !!!
Sorry for the delay in getting back (too busy licking wounds
)
Regards,