SA First time into the Adelaide market - My recent purchase

Hi all!

For those interested have a read below of my recent purchase.

It was my first time into the Adelaide market and also my first time in which I decided to use a BA. After a few calls with him I decided to use @DaveM from this forum.

The search took around 5-6 weeks from when the search began to going unconditional. I can’t fault my experience with Dave, as he pretty much hit every nail on the head from the brief I had given him and found a deal I am very happy with.

I used CBA for this purchase and I had a $220K limit. Hence, that forced us to a limited range of suburbs. We started to look up north.

After a month into the search a ripper deal in Salisbury North came up – a freestanding brick home on 640m2. It was a 4,1,2. Looking at comparable properties, a purchase price of $220K presented a very strong deal. Dave negotiated on my behalf and we got it.

The property requires a cosmetic reno which I have budgeted for $12K and with the final touches almost complete, it looks like they'll be little pocket change upon completion. This includes sand/polish floors, full internal paint, install new kitchen (second-hand from gumtree) and splashbacks, minor plumbing, new vanity, general yard clean.

The property has potential for future sub-division with 21.3m frontage. The adjacent property and the property at the rear have both been sub-divided, but I’ll wait for a few years until it becomes more profitable and because the existing property is still rock solid.

The numbers:

• Purchase price: $220K
• Renos: $12K
• Expected rental: $330/week
• Yield: 7.4%

Why I like this deal – it’s below market value, it cashflows, it has immediate value-add potential (cosmetic reno), it has future value-add potential (sub-division). In the current market, a newly renovated property like this will sell for $270K any day of the week.

If you have any questions – fire away!


Cheers,

Taku

 

Sounds like great setup - have also even considering SA for sub divide potential as I can get in at the right price point ~$400k

Curious how did you manage logistics around the cosmetic reno and kitchen re fit?? I am looking at going into a similar setup but not sure how I'll manage to add value at exchange.. Might have to take a few weeks off work

 

It was project managed by the buyers agent!

 

cheers @BCR. when it comes to reno aspect I am using @DaveM's network of trades. If you have a good team of trades it can be managed remotely which I do for my brisbane renos.Property managers can help take some of the burden off also.

 

Great work! The Reno should help you to have a wider choice of tenants. Fantastic yield too!

 

Well done mate, any idea how long the reno's will take till it's ready for rent? Post pics when done.

 

Great stuff Taku! Looks like a solid deal and great experience with Dave.

Are you going to have the property revalued and pull out equity for another purchase? Any more in Adelaide?

 

Even better! I don't have any network of trades outside of Sydney however I am sure I could get info from the PC group. Would imagine you would have to be on the ground a bit while it's getting done?

Want to knock a few walls out, refloor and redo kitchen but just seems tough managing remotely.

Congrats though - hope it comes along well

 

Get it project managed?

 

Congrats on your purchase - sounds great.

 

Great work @Taku Ekanayake and @DaveM !

So when's the next buy? Did you fly down for a look at all or just let the master work in peace?

 

Cheers @wombat777 !

Cheers @Barny! Renos got delayed due to the SA power outage that happened a few days back. Because of that, work got halted for a few days and the trades had to attend to emergency work.

Hoping it should it finished this week. Will post photos for sure

 

Yes, worth considering. Pretty sure the control freak in me would drive the PM nuts..

Probably end up taking 2-3 weeks off work and line it all up - convince my dad whose handy with tools to come along and have a go.

 

Thanks @Vk8975. Yep, thats the plan. Still undecided where I'll be looking to next

Thanks @sharon !

Cheers @bob shovel ! Next one can't come soon enough! Definitely before the year's out
I went to go check check it out to see the renos that was required to be done and just to see Salisbury in general

 

One more and you can be a broker
Awesome stuff you're going gang busters!

What's the plan for next chapter of investing and the property game? Have you got that worked out yet?

 

You're a busy man @Taku Ekanayake congratulations!

 

Haven't got that worked out yet @bob shovel but I am becoming more and more consumed by this game

You and me both @larrylarry! Thanks mate

 

Great @Taku Ekanayake . I am going to engage one of the adelaide BAs soon to enter the SA market

 

I note there was no backup generator

Well done, onward and upward.

Why that suburb, because it has been flat for a while, or mainly price ?

 

You forgot the all important costs to buy