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SA First time into the Adelaide market - My recent purchase

Discussion in 'Where to Buy' started by Taku Ekanayake, 16th Oct, 2016.

  1. Taku Ekanayake

    Taku Ekanayake Well-Known Member

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    Sydney, Australia
    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
     
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  2. BCR

    BCR Well-Known Member

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    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
     
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  3. D.T.

    D.T. Adelaide Property Manager Business Member

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    It was project managed by the buyers agent!
     
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  4. Taku Ekanayake

    Taku Ekanayake Well-Known Member

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    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.
     
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  5. wombat777

    wombat777 Well-Known Member Premium Member

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

    Barny Well-Known Member

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    Well done mate, any idea how long the reno's will take till it's ready for rent? Post pics when done.
     
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  7. Vk8975

    Vk8975 Well-Known Member

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    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?
     
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  8. BCR

    BCR Well-Known Member

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    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
     
  9. D.T.

    D.T. Adelaide Property Manager Business Member

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    Get it project managed?
     
  10. sharon

    sharon Well-Known Member

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    Congrats on your purchase - sounds great.
     
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  11. bob shovel

    bob shovel Well-Known Member

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    Great work @Taku Ekanayake and @DaveM !

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

    Taku Ekanayake Well-Known Member

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    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
     
  13. BCR

    BCR Well-Known Member

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    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.
     
  14. Taku Ekanayake

    Taku Ekanayake Well-Known Member

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    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
     
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  15. bob shovel

    bob shovel Well-Known Member

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    One more and you can be a broker :p
    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?
     
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  16. larrylarry

    larrylarry Well-Known Member

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  17. Taku Ekanayake

    Taku Ekanayake Well-Known Member

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

    You and me both @larrylarry! Thanks mate
     
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  18. hash_investor

    hash_investor Well-Known Member

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

    dabbler Well-Known Member

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    I note there was no backup generator :p

    Well done, onward and upward.

    Why that suburb, because it has been flat for a while, or mainly price ?
     
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  20. jim1964

    jim1964 Well-Known Member Premium Member

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    You forgot the all important costs to buy :)
     
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