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Catching the deal with a catch

Discussion in 'General Property Chat' started by teetotal, 15th Aug, 2016.

  1. teetotal

    teetotal Well-Known Member

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    Location:
    Sydney
    The question that i want to ask is - does it make sense ??

    - Apartment Property in sydney area.
    - listed for about $80K less than market value.
    - catch is that you pay high strata of more than $200 per week for an unknown period of time, because management is collecting funds to repair something on the roof.

    What i am thinking is the instant equity gain that can be recieved. It can bring in deposits for my next couple of purchases.

    Even though you pay, lets say $130 extra per week, to an avg. Sydney area strata fee, it would easily take more than 10years to cover that gap of $80K.

    What are your thoughts?
     
  2. hammer

    hammer Well-Known Member

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    Location:
    Darwin
    It still might be ok...but I'd be going over the strata minutes and budget with a fine tooth comb.

    The fact that they are raising funds instead of using a sinking fund to do the repairs is cause for careful investigation.
     
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  3. dabbler

    dabbler Well-Known Member

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    Is it one of the new ones that a now famous council passed ?

    I suppose it would depend on if the valuer/lender knew or finds the issue, because they will treat it as a risk and lower value too, or may not want to go in on it at all, then you probably will need to wait to draw money out.

    Ask your broker.
     
  4. teetotal

    teetotal Well-Known Member

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    No, its an old one probably about 10years old.
    I'll look into the valuation, if i can get pre valuation somehow.
     
  5. Scott No Mates

    Scott No Mates Well-Known Member

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    • Quick sale at a reduced price for less scrutiny?
    • The owners may have other reasons
    • Special levies go back into the property so investigate the cause
     
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  6. teetotal

    teetotal Well-Known Member

    Joined:
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    Location:
    Sydney
    Received the strata minutes.
    There has been an issue with waterproofing in the building.
    Estimate for repair is more than $3mil.
    Builder has gone into liquidation.

    I think I'll stay away:D
     
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  7. Scott No Mates

    Scott No Mates Well-Known Member

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    Good decision, who knows what else will show up