Should I buy my next door neighbour out?

Hi,

There seems to be an opportunity for myself to buy out my next door neighbour.

I am currently doing plans now for my property but I'm thinking of halting these to buy my next door neighbours as I think that would be a better idea.

Both properties are 15m x 45m for a total of 700sqm or 1400sqm for both.

I was planning on doing a 3 unit development on my site but my builder mate told me to definately buy next door because if you do, at the very worst you can do the driveway in the middle and the units become bigger or at the best, you could possibly even squeeze 1 more 2bedder on the it as well as you're saving heaps of space from the 1 driveway.......is this true? Do you think it would be possible to fit 7 x 3bedders on a 1400sqm block (30m x 45x)?

Any tips would be very much appreciated.
 
Thanks guys, I'm pretty certain the numbes stack up nicely, my broker and financial advisor seems to think so!!!

Yeah well they want a quick sale because unfortunately the father has only 5-6 months to live and he wants to set-up his family in cheaper Melton asap as they found a nice newer and bigger house for $250k.

I'm trying all I can to make sure we get it, we told them again today that we'd buy it off them without Agents so they could save themselves $8-$9k but they're still kinda hesitating as I dont think the mother knows what the process is involved to sell it with the help of a Conveyancer etc. They said they'd have a chat about price and get back to us, fingers crossed they do give us the chance to get it without an Agent.

I want it BADLY!!! :)
 
I did similar with a neighbouring block couple years back - go for it. Even without a 7th unit on the block you still get extra area for each of the 6 units which will add value to them (ie. bigger courtyards, more building area etc).

Remember when dealing with the seller - you want to get it as cheap as possible obviously, but work out in the back of your mind what the property is worth to you. Chances are it's worth more to you than the next buyer, so if you negotiate to get it for $350k compared to other sales in the area, then he comes along and says he's got someone willing to pay $355k for it - don't let it go for the sake of $5k on the principle of it. For example chances are (though you don't want to if you have the chance), it may be worth as much as $370k to you.
 
Good post as it gives me a chance to ask a question about Victorian Planning.
Aren't you limited to maybe 4 or maybe 5 units on 1400 sqm as you need 300 sqm of site are for each unit or this is this only for Torrens Title and its a completely different ball game if you plan to strata title (as it is in NSW)?

If it is different, how does it work?

I'd really love to know the answer to this one
 
You can definitely do a better development on the double block and if someone buys the block next door and does one it will detract from yours.

If a DEVELOPER buys it, they will neglect it for years. They are shocking neighbours. The block beside me is a swampy jungle. :mad:
 
Remember when dealing with the seller - you want to get it as cheap as possible obviously, but work out in the back of your mind what the property is worth to you. Chances are it's worth more to you than the next buyer, so if you negotiate to get it for $350k compared to other sales in the area, then he comes along and says he's got someone willing to pay $355k for it - don't let it go for the sake of $5k on the principle of it. For example chances are (though you don't want to if you have the chance), it may be worth as much as $370k to you.

Ditto.

This is called Win-Win negotiation, since you are a Motivated buyer, whereas the seller may not be as motivated.

Keep in mind of the big picture you want, and don't let the 1k, 5k haggling bits get into the way of your picture.

Remember negotiating is not just about price. It can be Emotional value or Service.

You can beat off a passer by buyers by proving to the seller you can bring more value to their life by scouting out for their new properties, helping with relocation, organising tradies, removalists etc.

:)
 
Hey guys,

Great discussion, thanks very much for your input, much appreciated :)

I'm at the point whereby I'm waiting for them to come back to me, they have found a cheaper place to move into for $250k in Melton they said yesterday and the initial estimates they were stating was around the $340-$350k mark for their place which is more than fine with me. I was hoping to spend $350k all up which includes Stamp Duty of about $15k so in effect a sale price of $335k but after reading the below discussions, I agree that it would definately be worth paying that extra $5-$10k for the long run.

Yesterday my father-inlaw went over twice to discuss with them and the way we left it was for them to contact me back for further discussion on price etc.....I want it really BAD but at the same time I don't want to intrude on them too much as the poor bloke is on an Oxygen mask in a poor state and the wife is devastated so I feel really sorry for them......But at the same time they do want to sell and quickly so I kinda need to guide them through it I think but not sure how! We spoke to them on Friday Night about it and again yesterday, so I don't want to seem to overly keen or insensitive at the same time. It would be a disaster for both parties if they call an Agent I reckon cause it'll probably end up costing us both more when if do this directly it'll be a WIN/WIN I reckon.

Ahhh the waiting game now, fingers crossed they come back to us.....
 
.....I want it really BAD but at the same time I don't want to intrude on them too much as the poor bloke is on an Oxygen mask in a poor state and the wife is devastated so I feel really sorry for them......But at the same time they do want to sell and quickly so I kinda need to guide them through it I think but not sure how! We spoke to them on Friday Night about it and again yesterday, so I don't want to seem to overly keen or insensitive at the same time. It would be a disaster for both parties if they call an Agent I reckon cause it'll probably end up costing us both more when if do this directly it'll be a WIN/WIN I reckon.

This shows you are agitated and impatient. The focus is on the I, Me and Myself: "I want it and I want it Now".

Where is the Seller? What do they want? What is most Important to them?

The Seller can read all your signals. The more you push, maybe, the more they will step back. If they really want to sell, an option is to get an agent in to buffer you out :eek:

Is this what you want? :cool:
 
The potential is obvious it seems. The aggregation of the property will put it into a different town planning "category", that is to say, a higher density is more likely on a larger allotment. This is so for a variety of reasons, but mainly because the set-backs are reduced because there is less peripheral land after you essentially "absorb" the property boundary between the allotments. Why not use the time to do some more research on the town planning possibilities? Perhaps there is an opportunity to enter into terms that will benefit all parties. The vendor might need a quick outcome but still want some time before settling and moving out? This would give you the opportunity to come to an agreement, enter into a contract and make a start on the town planning before you settle on the property.
 
I agree with not worrying about the extra few $ks, but make sure you take into building expenses for all these units too.

You don't want to spend more than you'll get back from it.

Then again it depends on the area, if it's anything like near me and you plan on building and selling straigh away you'd get an easy $300k each. Renting however, depends if you can afford to neg gear, but from the sounds of it it shouldn't be.

Goodluck, does sound like a good deal!
 
My advice:

ACT QUICKLY!

In my experience as soon as others family gets involved, sons daughter, grandsons, etc it gets complicated and falls over. Family are greedy!

I know he is sick but if you want to the deal make it more than fair and act now.

Having 2 blocks in savings of 20% at least overall so worth some upside to them.

Do the deal, Peter 14.7
 
Thanks heaps guys, appreciate it :)

The update is that our neighbours actually called us over tonight for a chat which was a great sign, they contacted us which what we wanted. It also gave me the Op to see their house from the inside for the first time.

I must admit the house was a bit shocking, in terms of it needs a fair bit if cosmetic work. The main work it needs is the kitchen, it's in a mess. Basically there's a whole in the wall which needs to be bricked up plastered where a heater was, there's some plumbing to do in the kitchen, the kitchen itself needs to be redone etc. The other things that need to be done is paint the house which we can do, rip the lino off and polish the floorboards and prob some retiling in the bathroom which I think we can do too. I'm putting a price on these Reno's of about $20k'ish, realistic you think? Remembering that family and mates will be able to doody things so will be cheaper for me etc.


Price was discussed and they mentioned $350k but without going into too much detail I basically stated that my budget was sitting more around the $340k mark. Therefore I'm assuming a total cost of $375k including purchase price, stamp duty & Reno costs of $20k. Once completed I think I will have a fairly decent 3bed rental property on 700sqm in Ardeer which price rise is about right I would of thought in the current Market or even a tad better.

I plan to downpay 20% cash for the deposit so my remaining mortgage will be around $305k for this property and $55k fir my current property, so total Mortgage of $360k'ish againt Assets of roughly $750k but more importantly 1 rental property bringing I reckon say $1100 per month and 1400sqm of prime land in Ardeer which the plan will be to develop in the years to come.

Based on the above, what do you guys reckon, definately go for the neighbours property even though it needs a fair bit if work etc???

Any thoughts would be appreciated. Thanks

They mentioned a price of
 
Keep the big picture in mind. You are not doing it for the house, you're doing it for the land.................and don't stuff around and possibly lose it by quibbling about $10K:rolleyes:
$10K in $350K is what, 2.85%? Gee you have to be good to value a property 5% either way.

I'm not saying 'Don't negotiate', just put things into perspective.
 
Yep got that one, but fact is it's probably not in any state to rent esp with the kitchen so any money we can save will need to go on the Reno!

Fingers crossed, let's see how it goes I guess. They still haven't even found another house in Melton yet so still a while to go but it's looking positive no doubt
 
Yep got that one, but fact is it's probably not in any state to rent esp with the kitchen so any money we can save will need to go on the Reno!

Fingers crossed, let's see how it goes I guess. They still haven't even found another house in Melton yet so still a while to go but it's looking positive no doubt

Could you offer them the "rent back" option with the sale. They sell to you, but rent back at at a fair market rent, ... they can then take their time finding a place in Melton and you won't have to fix up the kitchen.

Who knows by the time they finally get to move you might be ready to develop the site and you won't need to spend anything on the reno.

This option could ease their fears and not put any further stress on the family at this time. It would remove the urgency.

Martin
 
Martin makes a good point. (can't believe I said that! :p)

Offering them rent back should give them more piece of mind. That's what I did with the neighbouring property, as long as I had the sale finalised and the title deed in my banks hands :)rolleyes:) - I didn't care how long they wanted to rent back for. He said probably just 4 months or so. Ended up being about 8 months. Once they got out, I had the painting and floorboards done and had a tenant in within the month.

As Prop said - remember it's the dirt you want, the house on top is incidental, so spend as little on reno as possible.
 
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