On the hunt again
- Thread starter Dazz
- Start date
Dazz - well done. With a yield like
that it makes its own CG. Is there anything that might come of out the detailed DD that may make you not sign on the dotted line?
Presumably you found a friendly bank? (Now if only you could make the lawyers behave!)
How did you beat the competing purchasers and secure exclusivity?
Hats off to you and thanks for sharing your successes. We can all learn a great deal from them.
Cheers
N
PS. You really must write that book!
Dazz - well done. With a yield like
It ain't bad; on (gross) yield that's a P/E of 6.1
Who's a lucky mortgage broker then???
Well done!
Just wondering... can you put in a higher price on the initial offer than you may likely be ultimately be willing to pay, just to get ''control'' of the property/deal, subject to your DD... which may include furthe comparable sales research, other price sensitive points/findings etc... and subsequently offer a lower price if you decided to sign the formal contract... (at the risk of losing the deal).
Or do you just put your best foot forward based on prior DD and knowledge of the property's expected valuation/worth...
....nahh, nothing that technical.
I asked him what they wanted.
He replied X.
I said it was a piece of **** and not worth X.
Meanwhile, picked myself off floor.
Yippee - X is cheap.
Then I tried to get it for X - big Y. No go.
Got told to "Go **** myself".
Screwed head back on straight and offered X.
X got accepted.
Don't have X.
Only have Z.
Need to find X-Z.
I'm broke. Need broker.
End of.
Nah, not really Rob. These guys are all 3 piece suits in the rarified CBD towers. They wouldn't know that language, and if they tried to use it on the phone, would be sacked for breaking the company policy I'd reckon.
I think people get the wrong impression sometimes. I'm ever such a polite chap really. It was all jam and scones.
Now me truck driver buddies out in whoop whoop.....well now, they can turn it up with the best of 'em.
No need for vulgarities with these MBA types. They're all little messenger boys anyway. Scurrying off to do their Vendor's bidding, relaying messages and being oh so formal about it all.
"We thank you for your revised offer and shall convey it to our Vendor. We shall advise once we have sought advice from our Vendor." Righto knob-end, off ya trot.
I always ask to speak to the head duck, to by-pass all of the REA's, all of the brokers, all of the lawyers, all of the ******$ who just get in the way of the principals trying to do a deal.
It never works though, they are all so enshrined and surrounded by advisers, they can't actually make a decision without at least 5 people nodding in unison in front of them. I'm yet to come up against a wealthy Vendor who actually had a pair. It'll happen one day, but certainly not in this deal. Wet fish the lot of 'em.
I think people get the wrong impression sometimes. I'm ever such a polite chap really. It was all jam and scones.
Now me truck driver buddies out in whoop whoop.....well now, they can turn it up with the best of 'em.
No need for vulgarities with these MBA types. They're all little messenger boys anyway. Scurrying off to do their Vendor's bidding, relaying messages and being oh so formal about it all.
"We thank you for your revised offer and shall convey it to our Vendor. We shall advise once we have sought advice from our Vendor." Righto knob-end, off ya trot.
I always ask to speak to the head duck, to by-pass all of the REA's, all of the brokers, all of the lawyers, all of the ******$ who just get in the way of the principals trying to do a deal.
It never works though, they are all so enshrined and surrounded by advisers, they can't actually make a decision without at least 5 people nodding in unison in front of them. I'm yet to come up against a wealthy Vendor who actually had a pair. It'll happen one day, but certainly not in this deal. Wet fish the lot of 'em.
"acres of land" "acres of buildings" "16.5%"
Does'nt sound like Syd or Melb, though it still rings nicely in any major city.
Does'nt sound like Syd or Melb, though it still rings nicely in any major city.
You've obviously been sleeping at the wheel while it happened.
Out of genuine interest (not trying to incite doom and gloom) what happens in a situation like this if your tenant goes bust? It sounds like a particularly niche piece of property, e.g. is not like a retail shop where a tenant can refit out the property to suit, it sounds quite specific. If the land is only worth half what you're paying, if the tenant goes bust and you struggle to find a replacement this seems like the size of deal that could send the owner to the wall...can you insure against such a scenario (e.g. like landlords insurance if contract is broken due to company bankruptcy)? Do you personally check out the companies and their financials when you take on a deal of this size?
By the way congrats on the deal, sounds like it will nicely fill your pockets!
By the way congrats on the deal, sounds like it will nicely fill your pockets!
This is a very interesting comment by Dazz,
Notice the emphasis on cash flow with capital growth being the 'icing on the cake'.
Whats that old saying, 'if you look after the pence the pounds will look after themselves'.
This is not to say that cash flow is the bee all just for the sake of cashflow, but cashflow allows one to be reimbursed for patience. A much more relaxing situation than to base ones investment premise (hope?) on the music chairs theory.
Notice also the comment re GFC, (whilst i take more concern of macro factors than maybe dazz does, that it because i DONT HAVE CONTROL OVER MANY OF THE INVESTMENTS I BUY).
By all means look at the macro factors, but if the numbers in your own micro world stack up, and you can create insurance for your position then go for it.
maybe thats why you looked at the deal in the first place.
The day it happens is the day it WONT pass your initial 'screening' test.
You cant have both, and why would you want to, you are on the receiving end.
Good question - dunno....I think that's where we hit the panic button and it all goes down the toilet.
Nah, in all honestly, it wouldn't be that bad. We've got a fat 6 month buffer of their cash in our bank account ready to go. We don't need to ask some Govt authority if we can have their bond. We don't need their signature. It's just sitting there ready to go....so it buys a little time. We then madly try and lease it out again.
That's just the main Tenant. There are over 15 tenants in the building, so we have plenty of diversification.
No, it's as bog standard as you can get, and looks particularly horrible, just like I like 'em. None of this fancy pretty stuff for me. Anything above my standard rusty 1960's iron shed is a step up for me.
Yep the Land is worth X/2. The empty infrastructure on it to replace would be worth about 0.8X.....so we are paying X and getting 1.3X in land and infrastructure. All of the established Leases are thrown in for free, or more correctly -0.3X.
To bring it back to a normal house scenario for clarity....
House for sale for $ 400K
Bare block is worth 200K.
House to build is worth 320K.
House currently rents for $ 1,230 pw
Probably can I suppose....although I am extremely wary of insurance solicitors refusing claims based on some minutae of the insurance contract they wrote up to avoid any and all claims. We've had two big Tenants go bust, and both times very quickly replaced them with better Tenants paying double what the others did.....so we aren't scared of that occurrence.
Our preferred strategy is to do no checking and do nothing.
No, too much effort. I just read the Lease.
Indeed, if the owners weren't clowns then this wouldn't be up for sale I suppose. The asset is solid and strong.
We feel like a vulture picking over the bones of their once proud empire. It has been sitting their unloved and forlorn on the internet for over 6 months....been through the whole 3 month national EOI campaign. Everyone else thought it was dross. It most likely is. That's why we went for it.
Are you still planning on heading over here on your Harley this year? If I hear that you get here and don't call, I won't be a happy Perp.
That's still the plan ozperp. Unfortunately am needed here to wrap up the paperwork. Deal is scheduled to settle in October. That sounds like a good month to go, not too wet and not too hot.
Of course, being married and with a bunch of kids who like hanging around their old man, they don't want me to go for such a long time.
I'd love to do a trip around the capital cities and perhaps give a brief chat to the SS crew in each state of how we do what we do. Only trouble is I wouldn't be there in a suit and tie.....people would have to get used to a big fat, hairy, smelly bloke who doesn't use polite English. Certainly not your usual polished slick presenter type.
Because you asked so nicely, if I do make it all the way to Brissy, I promise to make sure to come and have a chinwag. Cheers mate.
Oh, please do kind sir. Come to Melbourne now; sweating ain't a problem here for the next five months so you'll smell nice.
We're laid back enough to excuse the absence of suit and tie and we want the content of the steak/sausage, not the sizzle of slick presenters.
You are most welcome here
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Oh, please do kind sir. Come to Melbourne now; sweating ain't a problem here for the next five months so you'll smell nice.
We're laid back enough to excuse the absence of suit and tie and we want the content of the sausage, not the sizzle of slick presenters.
You are most welcome here
Ditto for Sydney - we would just need to find a place to meet.
Cheers
I reckon you'd be the only one if you did!