First offer in 18 months

[Dazz]

We decided to bite the bullet, and today put an offer in on a run down dusty old place in Perth. It's been our first serious offer for over 18 months now and it feels good to be back into the hunting mode.

It's the first time we have written an 8 figure offer. It's a lovely 13 acre block of dirt, 11 kms from the CBD.

If the offer is accepted, that should keep us busy for the next year trying to financially digest the place. We'll need our usual friends of trucks / cranes / bobcat's to clear up all of the garbage strewn about the place. Some of the stuff is too big and too heavy for my usual friends like the rake / broom and wheelie bins.

We have extreme confidence in the current Perth market that it has at least a good 3 or 4 years left in it. As one of my tenants recently commented "This is a once in a lifetime scenario - if you can't make money now, you never will".


Fingers crossed.....should know in the next few days if we were successful.

 

[lizzie]

very exciting - waiting with baited breath

 

[redwing]

Good Luck Dazzling

 

[Hados]

WOW! 8 figures. I'm stuck on (very) low 5 figures at the moment.

Good luck Dazzling.

 

[sailor]

Sounds like you need to invite the junk yard people in to take their pick, and make you an offer for the stuff. That way, they pay you to take it away.

 

[TheAnalyst]

Dood on you Dazzling. Love to read your posts and story.

I do remember you did a post saying you were thinking of doing the investment only or working for the oil company overseas. If you still work in oil company overseas, how can you get time to do these?

What is your intention on the blocks? developing (residential)?

Pls....

 

[Dazz]

Thanks for your good wishes. I'm a bit nervous to tell you the truth, given the size of the operation, and what it will take to turn it around. Should hear back today sometime, given the Vendors have been waiting to open the offers for the past 2 or 3 months. The wife on the other hand, is playing golf all of today, so I guess she is calmer about the whole affair.

Sailor, in terms of getting the junkyard people in, yep that would be an option....if I actually owned the "stuff" that I was trying to move.

Unfortunately I've had experience with shifting other people's garbage before, and it's unlawful to just pick stuff up that doesn't belong to you and get rid of it. Abandoned Goods Act.....a royal pain in the bum to tell you the truth, must have been drafted by the same clowns (read pontificating lawyers) who wrote the Residential Tenancies Act.

Some of the wonderful 'collection' includes ;

2 concrete bridge pieces (20m x 6m x 1m)...must weigh 300 tonnes each
A dilapilated old boat that wouldn't fit on a semi-trailer
20 or 30 rusty ol' 40' containers
Similar amount of 40' dongas
Train carriage from the 20's....must weigh 60 or 70 tonne
Enough pallets with drums / bricks / tiles to cover a football field
Enough truck tyres / oil / batteries to kick start your own trucking company


None of it you own when you buy the place...but you need to deal with. It's disappointing when the people who own these things are told to move them after you purchase the place and they shrug their shoulders and say "Whaddaya gonna do about it ??" Vacant possession you say on the offer....tried that....it's not that easy.

Went for a stroll down to the back of the property, which is apparently underwater and real swampy during winter. I was surprised to find only 2 or 3 semi trailer loads of industrial garbage strewn about the place in 9 foot piles.....should be a snip to pick up and remove.

One of my tenants is looking for a place to dump clean fill. I've calculated that he could dump 3,000 truckloads of dirt onto the property and it'll raise the level of the block by 40cm, which should get the property above the swampy line. Keeps me and him happy for the next 3 or 4 years I suppose.

It's amazing how much co-operation there is out there, especially when you have a match like that, someone is desperate to get rid of something for free and you have a good use for it.

TA, actually now that I am here full time in Perth, it’s harder getting out and managing the operation, rather than rotating overseas. When I was in Perth rotating, your time is your own…..so I know what’s like being a full time investor and it feels great….and you had time to organise everything.

The intention with the block is to get a tenant in their quick smart and pick up all of the outgoings for us (SR / WR / LT / Ins etc) and pay us a nett rent that covers the mortgage for a couple of years.

That’ll give us time to get our act together, put plans into council and start doing what all of the big boys are doing out there…slapping up enormous great monoliths of warehouses and big flash modern offices – just in time to snare a big corporate as a tenant for the next 20 years.


Either that or we’ll get crushed by the weight of the debt….


Anyway....it's all in front of us yet.....still haven't had the nod.

 

[Pete]

Best wishes with the offer, Dazzling.

 

[TheAnalyst]

Hi, Dazzling,

Thank you for your advice. It is a good feeling when I read your post. So enthuziasm (sorry forgot how to spell it), energitic...

Keep on with your story and it encourages me too.

Best wishes on the deal

 

[Celeste]

Hi Dazzling

8 figures scary, I am still on 6 but the mix of this 6 is creeping up, any way good luck.

Just wondering about the rubbish on the site, is covered by the normal run of the mill abandon goods act or the property rental one (can not remember the name of it) ?

Here is one for the legal eagles for future reference. Could you put a clause in the offer/acceptance to the effect:" That the purchaser/s has the sellers approval to dispose of any items left on site at time of settlement, for which no prior arrangement has been made in respect of its storage and or removal "
something like that anyway. Just a thought, just wondering. If this would make it easier?

I do a lot of that at the moment, just wondering. could be my catch cry!

Any way Dazzling I guess I know why you didn't get back to me re if I am doing well or not. I am way down the rung, I plan to see you up there soon!

Celeste

 

[Jaffasoft]

How do you do feasibility on that?

The landfill is the best idea and chipping away at that will improve the lands prospects and particularly since you say it's swampy!

I seen a 800 house development sub-division block get built up a couple of feet and it took truck loads after truck loads and lot's of water and lot's of escalation, but bought it up over flood zone material and they be building on that now. To get a lot of soil dumped for free will save on a bit.

40-foot containers can they be lined up and rented for storage? Or is there no control over them at all.

Hope you get the offer across the line and can move ahead with it and give a running commentary as it progresses! It would be interesting to get some insight into something we don't hear much about.

Sounds like the bigger version of the miniature version I grew up with which was my fathers back yard and the places he went and the things he done.

 

[redwing]

Start charging them for storage Dazzling
....what, you dont like my invoice .."well shift your crap"!!

Not sure if you can do it, but it sounds good.

 

[Dazz]

Well, the phone call came through from the selling agent, desparately hanging on with baited breathe....pant pant pant.....and his first word was "unfortunately".....spewing..., all of that time and effort, and detailed planning crushed in one word. Once again trumped by a large listed company.

With no internet advertising I thought it was good to keep to the local folk (only a big sign and newspaper advertising).

The agent was very forthcoming. Apparently 8 bidders. We ranked equal 2nd with our bid, but too bad, not enough to cut the mustard.

The successful bidder was a very large corporation who had their base next door and wanted to expand their mining support services. (They were my # 1 tenant option).

They came over the top of everyone else and plonked a 11M cash unconditional bid on the table with a 30 day settlement period, trumping our bid by a tad. I simply can't compete with that fin. muscle.

It was the first time it was available for about 30 years, and I don't reckon it'll come up for sale any time soon.

In 4 or 5 years it'll definitely be worth about 20M, so they'll look back and laugh at how cheap they picked it up for.

I always wonder if they call the agent and say - "Look, we need this place, whatever the top bid is, we'll beat it, here's 100K, just make sure we get it..." Just the suspicious character coming out in me....that's probably what I would do if I was Chairman of the big company and I really needed the site to grow the company.


Anyway, currently licking our wounds and retreating back to the drawing board. Playing hardball with these companies can get a bit fierce, and grinding through the rough and tumble takes it's toll when you get spat out the back.

Righto, better get the "for sale" listing out again. Here we go again.

 

[Pete]

Close but no cigar

Best wishes for the next one.

 

[lizzie]

obviously there is something better suited around the corner for you ... keep going daz. and we love to hear the news.

 

[sailor]

"No point having a cake if you can't eat it."

Guess tis back to the bakery for you then!

 

[sparky23]

Bad luck! I love following your fortunes really sorry you missed out but theres always another bus just around the corner. Actually thats crap they don't bother turning up half the time - sure there will be another deal for you soon though!

Sparky

 

[Pete]

And is there a lesson in this one?

Sounds, Dazzling, that if you had a second chance at it you might do something differently? Get closer to the selling agent or offer a higher price or ????

 

[lizzie]

but if he was competing against the cashup neighbour (who had a much higher vested interest in the property) daz's chances were probably pretty slim unless he submitted a ridculiously high offer.

kinda like us investors/developers competing against cashed up emotional ppor buyers.

 

[Pete]

Hi Lizzie,

So, in that situation, are there some tactics that might be helpful for next time?

Maybe a ridiculously high price with some conditions???