Updated Bank Valuations

[chilliaa]

Its been a hard year this year with business and the stock market. But some good news at last.
Just had CBA do bank valuations on my 5 high rise apartments in Melbourne's CBD.
Results as follows:
1Bedroom with car park purchased Feb2007 for $270k, my valuation $320K bank valuation $340k
2 bedroom with car park purchased May 2007 for $320, my valuation $390K, bank valuation $450k
2 bedroom with carpark purchased June 2007 for $327k, my valuation $390k, bank valuation $450k
2 bedroom with carpark purchased Mar 2007 for $370k, my valuation $450k, bank valuation $470k
one bedroom with carpark purchased May 2007 for $290k, my valuation $330k, bank valuation $350k.

These valuations where all done this week, so it looks like at least from the property valuers perspective, values are still holding.

 

[Zhouse01]

grats mate

 

[boomtown]

youve done well mate well done.

 

[Aaron Sice]

yay! some good news! nice work

 

[twobobsworth]

half a million in 18 months.

 

[sue78]

you should try BOQ

 

[craigb]

A champion you are , be proud, you deserve it!

 

[Strannik]

that's a good sign
i got valuers coming on monday, gonna take them through the property

bought it for 282k in nov 2006, 780sqm block in wakerley
recent RE appraisal was 380-440, hopefully the bank comes within that range

 

[Bandita]

Hi Chilliaa,

Who's your bank?!? We ALWAYS get bank valuations at our "guess valuation" - I've certainly found that frustrating for many years - would certainly love a bank that did INDEPENDENT valuations!!

Cheers,
Jen

 

[BV]

Hi Chilliaa,

Who's your bank?!?
Cheers,
Jen

CBA= Commonwealth bank

 

[chilliaa]

thanks for the encouraging comments.
It just felt like the right time last year for investing in high rise apartments. CBD high rise apartments had deservidly got very negative press commentary due to their over supply in 2003. But in late 2006 going into 2007 the supply of new apartments had dried up, and rental vacancies had droped below 1%, rents were appreciating rapidly. However because owners who had purchased in the glut of 2003 had experienced great difficulty in selling their apartmetns for their off the plan purchase price, by 2007 it was possible to give low ball offers and yet be accepted by some owners.
There was also a MASSIVE discrepency between the price of 'second hand apartments' and new developments trying to offer off the plan sales (something like a 40% mark up on off the plan sales against the secondary market).

 

[jingo]

thanks for the encouraging comments.
It just felt like the right time last year for investing in high rise apartments. CBD high rise apartments had deservidly got very negative press commentary due to their over supply in 2003. But in late 2006 going into 2007 the supply of new apartments had dried up, and rental vacancies had droped below 1%, rents were appreciating rapidly. However because owners who had purchased in the glut of 2003 had experienced great difficulty in selling their apartmetns for their off the plan purchase price, by 2007 it was possible to give low ball offers and yet be accepted by some owners.
There was also a MASSIVE discrepency between the price of 'second hand apartments' and new developments trying to offer off the plan sales (something like a 40% mark up on off the plan sales against the secondary market).

Smart moves chilliaa. Congratulations.

Does the rent cover your holding costs or did you put some cash into the deals as well?

Regards Jason.

 

[BayView]

thanks for the encouraging comments.
It just felt like the right time last year for investing in high rise apartments. CBD high rise apartments had deservidly got very negative press commentary due to their over supply in 2003. But in late 2006 going into 2007 the supply of new apartments had dried up, and rental vacancies had droped below 1%, rents were appreciating rapidly. However because owners who had purchased in the glut of 2003 had experienced great difficulty in selling their apartmetns for their off the plan purchase price, by 2007 it was possible to give low ball offers and yet be accepted by some owners.
There was also a MASSIVE discrepency between the price of 'second hand apartments' and new developments trying to offer off the plan sales (something like a 40% mark up on off the plan sales against the secondary market).

Well done C!

It goes to show that there is money to be made out of CBD apartments - as long as you are not the first buyer.

How's the cashflow on them now? What's the rental return average?

 

[thya2008]

The Melbourne CBD apartments seems has some good itme ahead. But still IP portfolios do not need to be in one basket. I personally have one off the plan purchased back to 2002. 2003 to 2006 is really the hard time and finally I have gone through it. Now start to increase both in rent and capital.

 

[chilliaa]

Smart moves chilliaa. Congratulations.

Does the rent cover your holding costs or did you put some cash into the deals as well?

Regards Jason.

The total annual short fall on principal & interest payment basis is $20k a year. If i chose to take out interest only loans it would have been cash flow positive, but i like the 'comfort' of principal & interest repayments. Also i managed to fix 70% of the portfolio's loans on a fixed rate average basis of 7.2% for between 10-20yrs. This would not have been possible if i chose an interest only option which i think has a maximum coverage of 5yrs.

 

[chilliaa]

Well done C!

It goes to show that there is money to be made out of CBD apartments - as long as you are not the first buyer.

How's the cashflow on them now? What's the rental return average?

The average gross rental return at the time of purchase was around 8%.

 

[xQuIz8]

Hi ! It is absolutely incredibly good news !

Well Done. Its always happy to hear fellow investors doing so well..

Mind sharing with us where the apartments that you mentioned are situated ?

or even better..the building ?

Personally, I have 2 inner city apartments too located in Melb CBD.

 

[ILoveProperty]

Mind sharing with us where the apartments that you mentioned are situated ?

or even better..the building ?

Bugger that - too late.
chilliaa - Next time you get a hunch or it feels like the right time, please share

Well done!

 

[Strannik]

well, bank came back to me with 350 today
that's up from 280 less than 2 years ago although a bit less than what i was hoping for (380)

 

[BayView]

The average gross rental return at the time of purchase was around 8%.

8% in Melb in 2007?