澳洲Australia property Option to buy out all remaining units in


在澳大利亚 The pool at of an IP needs to be resurfaced (or so the pool doctor says), the cost was estimated to be $10K ($10,000), after recoverying from my impresssion of a cat coughing up a fur ball, it just seems far too much. Its just a standard poo I need some advice regarding a property purchase. Property - semi-detached house Bedrooms - 2 Condition - average needs internal reno to modernise Street - one of the best in suburb Location - excellent Close to schools - yes Transport - 50m


Hi Everyone,

Just wondering if I could get some thoughts/feedback on an option that has come up for my partner and myself. My wife owns a single unit in an old 2 storey unit block (4 units total) in Southport just near the Gold Coast Hospital. There has been issues for over 12 months now with the lady who owns the other 3 units not having paid her Bodycorp/Levies in over 3 years and currently owing around $25,000 in levies. The units are all 2 bedroom / 1 bathroom with a balcony and off street parking space. Standard 1970s southport walkup unit block.

After increasing legal pressure to pay up these levies she has now decided to auction off the 3 units and subsequently pay off all overdue levies/fees/rates. Given the future Broadwater and light rail developments approved in Southport, I was thinking this could be a golden opportunity to buy up this whole complex and control the bodycorp and potential resale of the block to a developer down the track.

Any thoughts / experiences in this type of scenario would be greatly appreciated!  

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Sounds like it could be a good deal. Just make sure you have your finance ready - most lenders will not take security on more than 50% of the units in a block. Also make sure that in the contract, it says that you deduct the outstanding strata fees/levies so you don't pay for it twice.  

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sounds like a great opportunity, if you can pull it off.

Aaron, if fenrir's wife bought an additional unit, and he bought the remaining 2, would it get around the 50% ownership?  

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pennyk said: ↑
Aaron, if fenrir's wife bought an additional unit, and he bought the remaining 2, would it get around the 50% ownership?Click to expand...
No that won't work because on the bank's system they still have security over the entire block of units - it doesn't matter who the borrower is. It would be best to go to a different lender for the remaining ones.  

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What's the land content of the block? If you could get DA for an 8 unit or more development I suspect you could have an instant gain there.  

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fenrir said: ↑
Hi Everyone,

Just wondering if I could get some thoughts/feedback on an option that has come up for my partner and myself. My wife owns a single unit in an old 2 storey unit block (4 units total) in Southport just near the Gold Coast Hospital. There has been issues for over 12 months now with the lady who owns the other 3 units not having paid her Bodycorp/Levies in over 3 years and currently owing around $25,000 in levies. The units are all 2 bedroom / 1 bathroom with a balcony and off street parking space. Standard 1970s southport walkup unit block.

After increasing legal pressure to pay up these levies she has now decided to auction off the 3 units and subsequently pay off all overdue levies/fees/rates. Given the future Broadwater and light rail developments approved in Southport, I was thinking this could be a golden opportunity to buy up this whole complex and control the bodycorp and potential resale of the block to a developer down the track.


What size block is it and what's the zoning? If you are wanting to realise this upside be sure they are zoned appropriately from the start and there is enough land for the future developer to be able to optimise what they can put on there by way of building footprint and density of allowable bedrooms. Ring council and speak to a town planner and/or look up the address on pdonline for the Gold Coast to get zoning details and overlays.

Any thoughts / experiences in this type of scenario would be greatly appreciated!Click to expand...
Having full control of such an asset (assuming the yield stacks up) isn't a bad thing at all. Diversifying the lenders is a good idea as Aaron mentions.

As they are strata, if you own the lot you pretty much run the show. Ensure you are happy with the outgoings and the net yield remaining. Do not overpay (if you have to bid at auction) and keep emotions in check. Ideally it sounds as though you want all of them or none. Might be better to put in an offer prior to ensure you secure (all) the remaing three.

As for the area, I think Southport and parts of Labrador will do well in the next few years. They've been sleeping and with continuing gentrification and the light rail, the hub of Southport should start to improve.

Good luck with it. :)  

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Player said: ↑
Ideally it sounds as though you want all of them or none. Might be better to put in an offer prior to ensure you secure (all) the remaing three.Click to expand...
I was going to suggest this too ... come to a fair price and make an offer on terms that suit you both - she may want early/late settlement etc. Don't try and go super lowball as that will only peeve her off.

However - only buy if they stack up as a good investment, not "just because".  

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finance for these things is challenging, but in no way impossible.

Dont try a 95 % lend in a HDT with one years self employed financials though :)

t
arolf  

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Thanks for the responses everyone that is a big help! Ok i did some more checking into the actual zoning / size of the complex and future redevelopment restrictions thanks to the suggestions above and found out the following:

Division: DIVISION 6
Parish: NERANG
Area: 506 m2

Precinct: Residential
Local Area Plan: Southport
LAP Max Res Density: Rd6
LAP Character Area: Rc(b) Queen Street Residenital Consolidation
LAP Max Blg Hght: 7 Storeys

Each of the existing 4 units is approximately 70m2 in size excluding the balcony and the complex takes up currently 50% of the total land space based on google maps aerial shots. The 506m2 isn't huge but if it is zoned to allow up to 7 storey's and Rd6 Density which translates to around 15 units maximum on the property then there is potential down the track for a developer to purchase this lot and build a bigger complex.

I think the main attraction is that if purchased for around $180,000 each that has a rental yield of 7.7% and we are then in the position of owning the entire complex and having full control of the bodycorporate and our own destiny.

With regards to finance i was hoping that if my wife has 2 with her bank, and I buy the other 2 with a different lender then this would satisfy the condition of banks not wanting more than 50% security in a complex.

Thanks again everyone.
Phil  

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At 7.7 current yield looks like a nice little land bank that will look after itself almost

The strata plan report may reveal some yucky costs though.........

Many of the places in this area have had poor maintenace, have concrete spalling and empty sinking funds.

Still, the precint has good future potential


ta
rolf  

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fenrir said: ↑
Division: DIVISION 6
Parish: NERANG
Area: 506 m2

Precinct: Residential
Local Area Plan: Southport
LAP Max Res Density: Rd6
LAP Character Area: Rc(b) Queen Street Residenital Consolidation
LAP Max Blg Hght: 7 Storeys

Each of the existing 4 units is approximately 70m2 in size excluding the balcony and the complex takes up currently 50% of the total land space based on google maps aerial shots. The 506m2 isn't huge but if it is zoned to allow up to 7 storey's and Rd6 Density which translates to around 15 units maximum on the property then there is potential down the track for a developer to purchase this lot and build a bigger complex.

I think the main attraction is that if purchased for around $180,000 each that has a rental yield of 7.7% and we are then in the position of owning the entire complex and having full control of the bodycorporate and our own destiny.Click to expand...
That may also be the problem with something like this,at 180k that would be rock bottom,what if they sell for above 220k,or above you would want to factor all that in because just checking quickly in that small area,there does not seem to be many in that price sold over the past 6 months,but good luck with it,..  

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Rolf Latham said: ↑
At 7.7 current yield looks like a nice little land bank that will look after itself almost

The strata plan report may reveal some yucky costs though.........

Many of the places in this area have had poor maintenace, have concrete spalling and empty sinking funds.

Still, the precint has good future potential


ta
rolfClick to expand...
Good point Rolf and luckily my wife has already purchased in this building 18 months ago so had gone through her due diligence at the time and while the sinking fund is ok the admin fund is well behind. The owner of the other 3 units is 3 years in arrears in bodycorp/levies so arrears of $25,000 exist on the other units and as condition of this sale they would all need to be paid in full which gives a nice little boost to the admin and sinking fund and basically a fresh start. Though i would want a detailed strata report done this time around to catch anything that fell through the cracks last purchase.

Willair the issue you mentioned with the price being around 220k is a good point as by purchasing all remaining 3 for 180k we are devaluing my wife's unit in the process and i'm not sure what impact this will have as i would hope this is only a short term effect as surrounding prices are over the 220k mark for similar units.  

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