He was doing it in Western Sydney in 2008-2009.
Post up your amazing result (or stupid price) of the week
- Thread starter rprodrive
- Start date
He was doing it in Western Sydney in 2008-2009.
Oakleigh 2.4 % gross yield....retail
I read today in the paper that the under-bidder (losing bidder) then proceeded to the next (ex) Origin Energy shop auction in Oakleigh and though......"hmmmm, I lost that one, I think I'll pay too much here........." He bought in Portman Street for 2.67 M on a 65,00 gross return pa. So around 2.4 %..he only paid around 1.1 M above the reserve for that one.
Unbe(friggin)lievable.....the bind moggles
I read today in the paper that the under-bidder (losing bidder) then proceeded to the next (ex) Origin Energy shop auction in Oakleigh and though......"hmmmm, I lost that one, I think I'll pay too much here........." He bought in Portman Street for 2.67 M on a 65,00 gross return pa. So around 2.4 %..he only paid around 1.1 M above the reserve for that one.
Unbe(friggin)lievable.....the bind moggles I read today in the paper that the under-bidder (losing bidder) then proceeded to the next (ex) Origin Energy shop auction in Oakleigh and though......"hmmmm, I lost that one, I think I'll pay too much here........." He bought in Portman Street for 2.67 M on a 65,00 gross return pa. So around 2.4 %..he only paid around 1.1 M above the reserve for that one.
Have to hide the drug money somewhere
LOL
He'd still have to repatriate it through the banking system to cover such a NEGATIVELY geared purchase.
Maybe he'll add value to the premises (with such cash) by installing fancy chandeliers and a roof-top pool or cigar lounge
Agree......to my mind it isn't terribly prudent.
Despite both being strong retail precincts and the Centre Rd Bentleigh one being more prime..........I fail to understand where (and when
) the upside is or will be.Entertaining for us nonetheless.
If only it were that simple..........
That's the problem with retail leases. Market rentals and reviews with no ratchett clauses. Rents can actually fall if the market conditions dictate.
The strategy you allude to Rocketman would (IMO) work best with underlet office or industrial premises where the leases are more commercial and not quasi-residential such as with retail. Increase to market and then apply the cap rate/yield to improve the value of the asset.....also then helps rebalance the LVR.
Problem with these two Origin Shop examples (and I'm sure it's occurring elsewhere with retail comm) is that assuming the purchasers are seeking finance for these, I don't reckon any lender will lend on contract price.
If they have paid cash..............there are plenty of other places to make your money work.
Agreed Player - the thing I would be concerned about is the valuation. If the market rent implies a cap rate of 2% then this guy is absolutely f#$%ed at the bank - no valuer would go past a cap rate of 6% for a retail shop in Oakleigh. But like someone already said, if he's trying to clean his drug cash then it doesn't really matter
Ok, here's another, its a 2 br flat in North Balwyn. Sold for $489k.
18 months ago (September & November 08) there were 2 sales in the same block (size of 2 bedders are all identical) both for $340,000 each. Not totally unrenovated, although only with some very minor updates.
Admittedly, this recent property is fully renovated, but you could update to this, IMO, for $25k from an unrenovated one.
18 months ago (September & November 08) there were 2 sales in the same block (size of 2 bedders are all identical) both for $340,000 each. Not totally unrenovated, although only with some very minor updates.
Admittedly, this recent property is fully renovated, but you could update to this, IMO, for $25k from an unrenovated one.
Yes, that's true but that was the case 18 month ago. An ~35% increase (even assuming $489k minus $29k for renovation = $460k, from $340k) is still substantial.
Rents for unrenovated ones are ~$340pw. Not sure what this one would rent for - high 3's, maybe at a real push above $400pw?
The $489k price however IMO is for an OO'er.
Edit: Have confirmed buyers were Asian
Last edited:
Yeah, I was there. It was quite small. Still probably 30-40% passive CG in a bit over 12 months time from what it would have likely sold for at the height of D&G and the GFC late '08 or so.
Begs the question... if you time your purchases well, why bother renovating/developing?
red money knows no logic, other than you buy and it goes up in value
I think this is an interesting and true statement. Remember, that the concept of property ownership is extremely new in China. The property market in China has only been up and running for around 10 years, and is yet to suffer a serious correction. No one in the Chinese mainland has experienced negative equity and falling prices. Investment options are pretty limited in China, you can only invest in property or stocks, people have been burnt by stocks, so they are seen as unsafe, therefore most put their money into property.
The Chinese also like Australia, because it has a small population, most of my Chinese friends are always complaining that China has too many people and is too crowded. Australia, is nothing like this, so the Chinese like the idea of potentially living somewhere that doesn't suffer from the overcrowding and intense competition that occurs in Mainland China.
So the changes in the FIRB rules, have tapped into a ready source of demand because the Chinese have the cash, the perception that property never loses and a desire to own a piece of somewhere that does not have loads of people living in it.
Most wealthy Chinese in mainland China are not new to the concept of propety. They have been investing in HK for quite a while and have been through lots of ups and downs (dot.com, SARs, GFC). And big city property prices are extremely volatile in China. They know that and realise it's not a 'safe haven', just another investment class.
What attracts them here is because they see it as cheap. In semi-developed cities - not even talking about the likes of Shanghai, Beijing, Guangzhou, Hong Kong - but just talking the likes of Harbin, Qingdao, Wuhan etc - upper end houses are far more expensive than Toorak / Double Bay.
In fact one extremely wealthy person just commented to me on the weekend that the old Victorian houses in Qingdao (a former German colony) can't even be purchased. It's not a matter of how much money you have (and this is someone with lots of money ... recently bought a ~$10m AUD penthouse so when her friends visit, they have a place to stay whcih I look forward to when I visit). These antique buildings in Qingdao are reserved for politicians when they visit for the summer breeze. So when she comes here and she sees a massive Victorian house in Toorak on a 1,600sqm piece of land for $15m, she thinks it's great value, especially considering it's the best part of the developed city - parts that only seriously powerful people (and money certainly does not equate to much power there) can even enter in her hometown.
What attracts them here is because they see it as cheap. In semi-developed cities - not even talking about the likes of Shanghai, Beijing, Guangzhou, Hong Kong - but just talking the likes of Harbin, Qingdao, Wuhan etc - upper end houses are far more expensive than Toorak / Double Bay.
In fact one extremely wealthy person just commented to me on the weekend that the old Victorian houses in Qingdao (a former German colony) can't even be purchased. It's not a matter of how much money you have (and this is someone with lots of money ... recently bought a ~$10m AUD penthouse so when her friends visit, they have a place to stay whcih I look forward to when I visit). These antique buildings in Qingdao are reserved for politicians when they visit for the summer breeze. So when she comes here and she sees a massive Victorian house in Toorak on a 1,600sqm piece of land for $15m, she thinks it's great value, especially considering it's the best part of the developed city - parts that only seriously powerful people (and money certainly does not equate to much power there) can even enter in her hometown.
Yeah fair play Deltaberry,
I am referring to middle income / middle class Chinese, not the super rich elite.
Unfortunately I don't get to associate with them
I have a number of friends buying places in Tianjin.......why.......because property never goes down.....according to them.
I am referring to middle income / middle class Chinese, not the super rich elite.
Unfortunately I don't get to associate with them
I have a number of friends buying places in Tianjin.......why.......because property never goes down.....according to them.
2br unit in Frankston South (Williams Rd) sold for $317k on Sat at auction.
Renovated inside, unrenovated outside.
In average-looking group of 14(?) in great location.
(I actually caught the auctioneer practicing that auction in the nearby park 45 min prior. Accepted my $150k initial bid but would then only take a $100k rise!)
Renovated inside, unrenovated outside.
In average-looking group of 14(?) in great location.
(I actually caught the auctioneer practicing that auction in the nearby park 45 min prior. Accepted my $150k initial bid but would then only take a $100k rise!)
