Sydney City Fringe

[antloom]

Hope this appropriate to the forum

Hi folks,

I am currently working with a real estate in the city fringe. All the properties have returns above 5%.

I bought a 1 bd unit for $257k back in may and am currently getting $380 per week rent furnished.

There are a number of properties available from studios, 1 bd and 2bd. From 170K to 400K

Depreciation is post 7 years so only 2.5%.

Most of the properties have views into cockle bay.

Properties can either be permanent lease, furnished lease or serviced apartment.

All properties other than the studios are compliant with all lender policies.

Recent valuations and comparable sales support current prices.

These are good deals that I wish I could acquire for myself but you cant buy everything ;-)

If you want to have a look. I do the open houses for the building on saturdays between 1200 and 1445(no better way to keep an eye out for bargains).

Let me know if you are interested by emailing [email protected].

 

[XBenX]

are these in the goldsbrough? building in pyrmont ?

 

[antloom]

Yes its the goldsbrough

That is right it is the goldsbrough.

I know that the vacancy rates are very low.

and after all it is heritage.

What is your experience?

 

[XBenX]

none - pyrmont is just on one of my watch lists so I know a bit about the area.

its only the facade that is heritage listed right ?


plus I thought there was one company that had the mgmt rights for the building ?

 

[bbruham]

G'day all,

Beware of the Goldsbrough Building!
There was a hell of a investor blow up over management sucking up all the rents and using them to cover costs and their fees.
The investors went to court to evict management and replace
them. Don't know the out come of the court proceedings
That's the last I've heard of the building
One side of the building faces a high rise car park. There for hard to rent.

Bruce G.

Winners make it happen.
Losers let it happen.

 

[XBenX]

thats what I was leading to ... (about the mgmt rights company)

its nice to see if agents mention these things for themselves...

its a good test of an honest agent... shame every time they've failed

funny that

 

[antloom]

Misinformation spreads faster than truth

Hmmm where to start


First

>There was a hell of a investor blow up over management >sucking up all the rents and using them to cover costs and their >fees.

Yes when I bought in the building my solicitor told me that both the strata manager and the building manager had been removed as a result of legal action.

My research suggests that the owners of properties in the serviced apartments in the building where actually only receiving just over 4% NET.

Both very true and very sad for investors. But hardly the crime against humanity that bbruham seems to suggest.

>The investors went to court to evict management and replace
>them. Don't know the out come of the court proceedings
>That's the last I've heard of the building

They won their case and both the strata manager (alleged to have committed fraud) and the building manager have changed a long time ago.
The owners appointed the oaks property management group to manage the serviced apartments aspect and they also do short term and long term rentals.

I was actually referred to the building and the management group by another city fringe agent.

Currently most of the people buying in the building are existing investors in the building. Who have observed the lowering of costs and see it as an opportunity.

>One side of the building faces a high rise car park. There for >hard to rent.

Also true, the west facing units look-out over a carpark and the units above level 9 only have standard height ceilings and no wooden floors.

The real test is to try getting a vacancy in the building

My unit which faces this terrible carpark is nicely occupied with very happy tennants.

Anyway I was talking about the units facing east.

As an investor, I would never recommend that anyone buy anything without a) having a look, b) talking to another owner and/or tennant c) doing a strata search.

Ben sorry if I mis-understood your question. I am getting into the real estate game because I value and believe other investors value full-disclosure.

You just have to ask the question(s).

Ant

Winners do their homework.

 

[XBenX]

true ant - maybe I wasnt too fair

it was kind of an open ended question that wasnt really direct - I already knew the answer, I just wanted to see what answers would be given.

 

[antloom]

Why did I mention it

On the note of full disclosure...

I am trying to create employment for myself with the Oaks.
At the moment I work as an open house host.
So my interest outside of that time is my own.

I wanted to assess the level of interest on the forum for information on properties that are neutral or as as close to neutral as possible.

I come across them quite frequently.

I was also trying to assess the level of interest in investment wraps. ie a program to help people getting started, get started with a good property with a high probability of capital gains.

Has no one heard of enlightened self interest?

Has no one considered the implications of the changes to the scope of the FIRB slated at the the WTO meeting on property prices particulary in Sydney.

Anyway I will go back to my syndicate and get back to work.

The syndicate I work with is based on the following initial goals

- Assist all members to achieve a passive income of AUD$200 per day (approx AUD50,000 p.a. post tax).
- Assist all members realise a net worth necessary to support their desired standard of living.
- Assist all members to be able to be non-reliant on PAYG income within 18 months

Good fortune to you all

 

[Les]

G'day Antloom,

Your statement piqued my interest:-

Has no one considered the implications of the changes to the scope of the FIRB slated at the the WTO meeting on property prices particulary in Sydney.

I've not caught up with what happened re FIRB - can you please enlighten me somewhat?

The FIRB was one of the major reasons I have never considered CBD apartments - i.e. that near 50% are sold to overseas investors, and, if they wanted to sell, could NEVER sell to another o'seas investor. In other words, once an apartment became "second-hand", 50% of would-be buyers were immediately disqualified. Has that changed at all with this WTO thing?

Regards,

Les - Caveat Emptor Moderator

 

[antloom]

Change

My understanding is that the FIRB will undgergo a "scope change"
Removing restrictions on foreign entities and individuals whom are eligible to be approved...
The current rules are seen as a restriction on market access.

If this is correct my belief is that we will see an influx of USD investors from both Asia and the US.

As international cities Sydney and Melbourne and "lifestyle locations" such as the gold coast, Byron bay and Cairns to name a few prices in USD have not grown nearly so much as in AUD.

I think (and hope) it is unlikely that rates will drop any further and those investors who had to get out by and large would have had to sell when the currency first dropped.

The capital gains AUD while a moderate 8% or so have offset some of this capital loss USD. Although as I said those dependant on the income are long gone.

Current Politics aside: Australia is an extremely stable and resiliant state, a safe economy to invest in. An excellent loaction to be based from.

I have heard it remarked by some singaporean investors for example "...how unfortunate the current framework...creates limited opportunity" in relation to FIRB.

If I am correct sufficiently large investment will occur to absorb current stock and maintain upwards presure on city fringe property.

Offshore and International institutional investment in residential property has been extremely limited to this point.

Direct investment will also be increasingly popular with any number of local agents with the appropriate connections to do this.

My hypothisis is this:
FIRB scope change
FIRB opens access to the market
6-12 months later existing supply consumed
12-48 months demand exceeds new supply in limited markets.

All this will lead to a general increase in the USD price for high demand property.

It would probably be the biggest boom in property the east coast has ever seen.

Place your bets, winner take all.

 

[Jamie]

Hi Ant,

Am very interested in your post. But can you help us out with a few things...

Part of your enticement to prospective purchasers is that FIRB restrictions will be relaxed. I understand this, BUT...

Do you have any evidence other than:

"MY understanding", "My belief", "I think", I have heard", "If I am correct", "Its my hypothesis", and "It would probably"?.

Do you have any links we can go to, to help substantiate your beliefs? Are there any articles we can read/expert opinions?

Would appreciate this information as I am very interested in the implications of a change to FIRB.

Thanx in advance,

Jamie.

 

[antloom]

Calculated risk

First let me say that the properties I mentioned stand on their own merits.
Run the numbers for yourselves. If you need specific data.
I am happy to provide it free of expectation or obligation.

Re: Firb
Basically I am presenting my reasoning for getting into real estate as an occupation.

I studied political science at uni, mainly politics of development.
So I understand the basics of international treaties.

I have worked for multinationals in asia, europe and the US. Dealt with venture capitalists and investment banker types.
They love AUS and would love to direct invest.

For the share traders out there what I am really offering is an entry signal to look for.

A change in Firb as is occuring with FCIS


will create the pattern outlined in my previous post.

As for specifics the wto meet was about market access in member nations.

There will be no change to legislation as such but to policy.

What I am observing is a trend in regulatory change. eg

[URL=http://www.real-estate-au.com/foreign/foreign_investors_00.htm]http://www.real-estate-au.com/foreign/foreign_investors_00.htm

The trend is a dramatic increase in investment.

I have not really looked at what the "experts" are saying.

In fact it does not mater. The trend is there. Foreign investment in business is growing.

That investment creates a large number of exemptions under existing FIRB rules anyway.
This marks the begining of the trend.

It is a mater of observing approvals to see wether I am correct or not and the market keeps moving in that direction.

Market access is an agreed initiative.

Winners do there homework