Deal too Good to be True

Thought I would share my recent experience - the deal I could give away

Interesting when buying out of State certainly more risk, its not like you can drive and view the property and even if you have another set of eyes on the ground does not mean they will know what to look for.

This was the deal
Development site Melbourne (3 townhouses) plans and permits approved/in place, ready to build.
At this stage of the cycle it is sometimes best to go this way because there are not too many development sites around and there is too much competition. Its also the timeframe, get in get out as quickly as possible.

As part of the DD looked at what ticked the boxes
Proximity to transport/location - tick

Comparable sales for this product (3x2 townhouses) - tick

Floorplan/design which was very good, and met the criteria for the area, in terms of size and configuration - tick

Worked out estimated build costs, holding costs. House has already been demolished so actually save some money here. - tick

Profit - 25% - tick

Scratching my head why is this development site at least $100K cheaper than similar size, location and its a very strong/competitive market, sellers market

Finally after a little more research found out the site backs onto high voltage power lines, I could not see this on google maps and I am in Perth and certainly the re agent is not going to tell me this.

No point buying this at $100K cheaper because it would seriously impact end values and would also limit my market when selling.

Unfortunately no deal here, move along


MTR

 

Did you get someone to do a drive by?

 

Google Earth picked it up @ellejay

 

have you used nearmap before? worth looking at.

I think for a devvy site where ultimately a fair bit is potentially at stake it would almost always be worth flying over to have a look but with a combo of nearmap and street view you can get a decent idea of surrounding area I guess.

 

No, I just did some more snooping and research and contacted various agents in the area and basically got to the bottom of it.

If I placed an offer on it I would have had the DD clause in place and I think its 3 days cooling off and would have flown over.

My last 2 properties in Melb (deve sites) were also sight unseen but I had an architect check it out for me, makes me wonder whether he would have disregarded the high voltage power lines? I will never know.

Some people don't worry about this stuff, and focus on the price of the land??

 

I agree, with any new purchases I will most certainly be flying over.
As I mentioned in previous posts I don't necessary think everyone would think high voltage power lines are an issue and as it is a deve site may only look at the numbers??
My eyes on the ground may totally ignore this one?

 

This aint detroit lol

 

LOL..... thankfully, I am not a gun owner.

That reminds did anyone hear about the lady in US who shot herself accidently, she had a gun holster fitted to her bra.
Woman accidentally kills self adjusting bra holster

 

u must be talking about reservoir or thomastown ?

 

Thomastown is too expensive now for developing, the ship has sailed... there will be no money in the deal.

I wont mention the area for obvious reasons, if I secure something I will post area

 

Who knows what MTR's capable of to get a deal?

 

LOL..Reminds me of..

 

Groovy Baby

 

I'd be interested to hear how you actually manage to do a development from interstate. You must have some trusted people in the local area and lots of fly in/fly out?

 

Most important people/professionals you need, and they did not magically appear, its taken time to source some very good people who are on the ball and I can trust.

Architect
Town planner
Builders

I also employ a registered builder/inspector who is semi retired, pay him around $200 per inspection at each critical stage (4) of the development, the report is comprehensive, including photos and worth its weight in gold. I only pay on progress claims once I view the report and all is good.
Most will charge around $6000 for this service, I got lucky.

We also fly to Melb frequently these days

MTR

 

I am guessing @melbournian and I can have a rather good guess where if you are still looking along the North side.

Good luck

 

that's fair call. i wouldn't reveal it too i know the another place nearby too with power lines . wouldn't live anywhere close to it. Remembered a place in maidstone had permits etc sold 100K cheaper due to no buyers. Very diff to places which are sold next to a park or open parklands.

 

not in the north.

 

Can I guess this?

 

of course..lol