Can I buy it with land instead of cash?

[kyebosh]

Howdy folks, hope you've all had a nice break! HNY & all that

So my master plan for this year was:

• Sell some of my land (8 x ~500sqm lots worth, yet to be sub-divided)
• Use money from above to buy (& modify for wheelchair access) an apartment as my PPOR
• Think up something fun to do with the remaining land

Naturally, an apartment which seems ideal has come up exactly where I'd like to live. My dilemma, then, is that by the time I get a DA & cut up (or even just sell outright) my land, the apartment may be gone - by the time I have the cash it may be too late.

Now of course, I'd be doing all my Due Diligence (strata etc) before I made any decisions, but in the case that everything checks out, is there any way I could make some kind of deal with the selling agent? I was thinking something along the lines of:

1. We negotiate a settlement
2. Agent then takes on selling my land
3. Revenue from sale of my land pays off purchase of apartment

The benefit for me is essentially a property lay-by.
The benefit for the agent is 2 commissions instead of 1.

Is this something which is ever done? Is it a really bad idea?
I'd love to hear your thoughts, or any other strategies which might be useful.

Cheers!
Kye

 

[DaveM]

Hows your ability to pay a mortgage?

Simplest thing might just be a LOC on the land, use it to partially or fully fund the apartment + development costs?

Maybe chat with some of the finance brokers here eg Marty, Rolf, Aaron etc to get ideas

 

[kyebosh]

Thanks Dave! That is another option...
I'd tended away from borrowing for a PPOR for tax reasons (not to mention interest), but maybe I need to run the numbers & see where it would place me (compared to, say, paying more for a long settlement).

 

[Aaron_C]

I'm guessing there's a particular apartment available right now that you have in mind? There's literally 1,000s of apartments for sale every year what's the rush?

However, what you have said is certainly feasible and it's do-able. For the finance side of things, you may be able to get a 'bridging loan' to purchase the apartment, while giving you time to sell your land as well. All lenders offer a similar product.

 

[Terryw]

What if your land doesn't sell, or takes years to sell?

Easiest way would be to borrow against the land and buy. tax issues will be minimal as you can pay out the loan once you sell the land.

 

[kyebosh]

Aaron: I guess the rush is that while 1,000's of apartments go up for sale, exactly 0% of them are required by legislation to be wheelchair accessible - Finding an apartment which doesn't require too much modification in a good, flat location very much narrows down the selection*, thus I'd hate to see a great opportunity go by.

Borrowing against the land would work... I'm a bit cautious about losing all my profit servicing an interest only loan though. I'll keep pondering. Thanks!

*Note to developers: There is a huge unserviced niche in properly accessible housing - get on it!

 

[Aaron_C]

Aaron: I guess the rush is that while 1,000's of apartments go up for sale, exactly 0% of them are required by legislation to be wheelchair accessible - Finding an apartment which doesn't require too much modification in a good, flat location very much narrows down the selection*, thus I'd hate to see a great opportunity go by.

Buying a high-rise apartment would solve this problem as they have lifts for wheelchairs.

 

[kyebosh]

Buying a high-rise apartment would solve this problem as they have lifts for wheelchairs.

I'm not sure if this was sarcasm?
There's something seriously amiss if this is the perspective of those within the property industry. Please tell me you were just having a laugh...

 

[Aaron_C]

I'm not sure if this was sarcasm?
There's something seriously amiss if this is the perspective of those within the property industry. Please tell me you were just having a laugh...

??? I live in a high-rise apartment and people in wheelchairs live here without a problem...

 

[kyebosh]

??? I live in a high-rise apartment and people in wheelchairs live here without a problem...

The diversity of abilities, strength & motor function between different wheelchair users is enormous. Just because an Incomplete L2 Para manages doesn't mean a C4 Quad could.

Elevator does not equal accessible. Not by a country mile. I don't mean to be argumentative, but you're going to have to trust me on this one