Buying Wholesale

[WebBoard]

From: Mike .


Buying Wholesale???
From: Darren
Date: 30 Oct 2000
Time: 11:48:34

Hi all,

There is always a lot of talk on this site about buying wholesale or below FMV. But how??? Unless your looking in the less desireable areas competition is fierce and bargains hard to find. At least that's what I've found here in Melbourne. Most properties within the desirable 7km's of the city go to auction and either the price skyrockets or the property is passed in. I think that most vendors here in Melbourne only want to sell if they think that they can get a fortune for it and will quite happily let it pass in if they don't.

Anyway, I suppose the idea is not to whinge about what you can't change and think of alternatives. Hence my next question. Has anyone on the forum had experience with buying land with the intention of building units on it? It seems to me that this would be one way of getting property at wholesale and hence be positively geared from day 1. Only one problem, where to start? Does anyone know where I can get some information on these types of projects? Are there Australian books or web sites that deal with the topic of multi unit developments? Any advice or experiences with this sort of project is greatly appreciated.

Thanks, Darren

 

[WebBoard]

Michael Yardney

Reply: 1
From: Mike .


Re: Buying Wholesale???
From: Michael Y
Date: 31 Oct 2000
Time: 21:07:52

Hi darren

I'm doing just what you are asking about. Buying sites, developing / building units selling some, keeping some. In the current market it's not easy to find sites that meet my buying criteria which include good area (we all know about that) the type of units the market wants and most importantly projects that have a 20% development margin in them. That means the expected profit is about 20% of the total project cost. You need these sorts of margins as a safety net as there are so many contingencies.

Being a developer may sound glamorous, but there are lots of people who have gone broke trying to do it. What it does mean is that you get to buy your property wholesale and at the end of the project you can get close to 100% finance as the bank lends you on the final retail value not your wholesale cost.

Currently I am putting together a few syndicates of interested parties to develop properties and allow them to become "armchair developers". If you would like me to post more info on property developing, or you or anyone would like to considerabout forming a syndicate and buying / developing property wholesale please email me at [email protected]