Update on OTP first IP purchase

[Jodie701]

Our apartment we bought OTP last year is due to settle in about 5 weeks. We are paying $417,500 for it and it just received a bank evaluation of $375,000.

I know that bank evaluations are always conservative though.

 

[Propertunity]

Our apartment we bought OTP last year is due to settle in about 5 weeks. We are paying $417,500 for it and it just received a bank evaluation of $375,000.

Bummer, but this is what can happen with OTP purchases. The market can move against you during the build phase.

So you have to tip in more of your own cash I suppose?

 

[Jodie701]

Yeah a bit of a bummer but I'm also glad that it's not $300k or something like that

Hopefully it doesn't cost us anything out of pocket because we should have enough equity in our home. We just have to use more of our home equity then expected. We're still waiting for our PPOR evaluation. As long as that doesn't come back at less then $700k then we'd be fine. It's just a hard market atm. We could have easily gotten $745k for our place a couple of years ago.

 

[Propertunity]

We could have easily gotten $745k for our place a couple of years ago.

Quit living in the past

Yeah the PER market has a way to fall yet - just did SYD the same way.

Long term it will be OK

 

[Jamie_D]

Is it an inner city development in Perth?

Prices have definitely fallen 10% there

I helped a client in Melb recently where he purchased OTP (nov 07) at 1.24mill and came back at 1.08mill - Feb 08

MI costs where $40k - ouch!

Do you need to X-collaterize?

 

[Jodie701]

It's in Parramatta NSW actually.

I don't think we need to X-collaterize. It was suggested to us but I think it complicates things in the future, so I'd rather not do it.

Your client must be disappointed with that, to say the least.

 

[Jamie_D]

Yep
Very dissapointed however they love the place
Overlooking Albert Park / Bay
Their first F1 in a couple of weeks so very happy ATM

It was tough work to get finance over the line also