I Wasn't Going to Buy in Western Sydney During a Boom.

As many of you know, I really don't like the yields currently available in Western Sydney at the moment, and don't believe there's real value, especially for someone like myself, relying on rents for my income.

BUT......

I was told of a townhouse that was for sale in a complex in which I know someone currently lives. They told me that it was too cheap, and 'they all sell them too cheap in this complex. Prices just don't rise'. They also told me that they tried to call the Agent and he never returned calls. There was a signboard on the side street, where the only cars that turn into it, go there for parking, not on the more main street at the front of the complex, and that they couldn't find it on RE.COM.

So, that was enough for me to do some searching.

Sign board on side street...Tick
Not on RE.COM.....Tick
Not on Domain.....Tick
Not on Agent's own website....Tick
Lazy Agent who doesn't return calls......Tick

Now, there hasn't been a lot of sales in that complex. Only one since 2019, and while yes, the prices were cheap, there is a reason for this. Prices were getting progressively higher on each sale until the sale in 2019, which was much lower than the rest. It was early 2019, when prices had pulled back everywhere, before the election. The one since that date was a similar price to sales in 2017, about $70k up from the 2019 price.

Eventually got hold of the Agent, and went through the property. Turns out it's an overseas vendor (so they don't know there's a boom happening) and we were the first to view it. It had been on the market for 6 WEEKS!!!!

So, what do you do in a situation like this? Low ball, of course! Except damn Hubby wouldn't let me go as low as I wanted (he didn't want to buy it). So, I went with Hubby's suggestion on price, which I estimated was around $100k less than it's real value, and less than that 2019 sale. This was Friday afternoon. No negotiation, no we couldn't sign the contract on Saturday, because the Agent doesn't work on Saturday (yep, in a boom, and the sales agent doesn't work on Saturday). In fact, he refused to allow us to sign the contract at all, we had to book with our Lawyer to sign the contract, so we just had to play his waiting game. GRRRR.

We spent a total of around $9k on it, getting a painter in, laying some floor, kitchen benchtop and blinds. Tenant went straight in @5% yield.

It only settled a couple of months ago, and last week we found out another unit was listed for sale in the complex. I phoned them on Monday, after contracts had been signed (yep, this one sold on the first open), and the Agent let me know that it went for $100k more than what we paid for ours. He also said it would have gone for more, but it needed work. I mentioned that the photos didn't look too bad, but he said that the tenant wouldn't allow photos, so they used old ones.

Not too bad. Only a cheapie, but that's all we can buy currently. Will probably sell in 12 months time to get the CGT discount, as I'm not a fan of units or townhouses as a rule.

 

Great deal @skater
Proves that there are bargains to be had in Western Sydney and that you just have to be prepared to look harder than everyone else out there !

 

Agent should be reprimanded for ripping off their client - sure the vendor may have suggested low key sale or "I'm too tight to pay for any marketing so advertising is coming out of your commission" but any agent worth their salt should have been marketing it appropriately even on one ofvthe portals at the very least - a $2000 advert would have yielded 20 times that in the sale.

Persistence pays off.

 

Haha, I wasn't looking. It found me and I couldn't help myself.

 

Persistence? What is this mythical thing you speak. This just fell into my lap.

I've been told by a reputable source, that this Agent is trying to get out of the Business. Desperately trying to sell off their rent roll, so he can retire, but as soon as people do their due dilligence, they back out. Lots of issues, like no bonds etc. Super lazy. The vendors bought if from him, so just gave it back to him to sell, since he's the nearest agent to the property.

 

Congrats @skater Never listen to your partner in critical decisions like this. Just like my wife never listened to me and often ended up being better decisions. Well done anyway! Good catch. Instant 100k gain!
Don’t you like overseas owners!? Maybe he needed cash for his Evergrande losses?

 

Well done. Sounds like the townhouse from this thread?

They Don't Listen......or Leaving it too Late

A townhouse came up for sale in the block they live in, and had no online presence, not even the Agent's own website. The only sign it was for sale, was a signboard out the front of the complex. Person A told me about this, after the sign had been sitting there for maybe 6-8 weeks. They had called the agent & he didn't return calls. I get onto the agent and eventually book an inspection. It's the only inspection this place had. Person A was upset because the price was so low, saying that 'they always sell for low prices' in that particular complex, proving that their own place had been a poor investment, so I do some digging.

Over the last few years, prior to 2019, prices had been moving up nicely, then they dropped back. Although this person knows about property cycles, they obviously hadn't really taken much of it in. By my estimate, it was worth reasonably more than the asking price, but as there had been 'no interest' in the property we decided to low ball & if they came to the party, we'd purchase it. We did!

So, just yesterday, Person A calls to say that another townhouse in the complex is for sale, and asking price is around $100k more than we paid only a few months ago. Well, that was no surprise, and it's not as nice as ours after a cheap reno, but this has now spurred Person A to once again look for property, possibly thinking that if they sell their place they'd have a good deposit. After scrolling through RE.Com, they've now come to the conclusion that they are now priced out of ever buying a house. I shake my head. They KNOW how this works. They know several people that invest. They've been offered help more than once......And they do nothing.

On the plus side for us, we've got a townhouse for over $100k less than the true valuation, renting for over 5% of purchase price in the outskirts of Sydney during a boom. We may sell next year, but will keep an eye on the market, as it's so close to the station, in an area that is having a lot of interest, and once the uni students come back may improve even more. If values don't go up more, we'll sell, which only really cost us around $9k to spruce up, and a couple of weeks work. After 12 months it will be $50k CG split between us, so only $25k each added to our income to pay CGT on.

 

I knew I shouldn't have listened to him, but he was adamant that we couldn't go any lower. I said that although I'd be happy to pay his suggested price if they countered I would put in the lower price. He said give one price & if they don't take it, we walk. He was cranky & hoped that they wouldn't take it, because he didn't want to do the reno. It just wasn't worth the argument.

I only got it across the line because I told him I'd get a painter in, so that he didn't have to do it all.

 

Yes, same one, although the other post wasn't really about the purchase.

 

Great work @skater. Nicely done!

Just goes to show if you know the areas you're looking in very well and act fast, some great deals can be nabbed! Although the 'just luck' folks wouldn't agree.

 

Thankyou @Sackie.

Everyone is doing all these big deals at the moment & this is really pocket change compared to some of them, but so many people spend 5 days a week, full time, to make a similar amount as this.

This post is to highlight that you don't need a huge income to make money out of Real Estate. Anyone could have bought this place and maybe piggy backed off of it onto bigger & better things, you just need to be willing to pull the trigger when you find something, and you need to pick up on the subtle hints you get when others speak, to hear what is being said.

What I heard was lazy agent, nobody's buying.....so I checked it out.

 

Something I'd like to highlight for any newbies that may read this thread.

If you find a deal like this, be confident and buy it, if you are interested. Don't come to the forum and say "I've just seen this property at XYZ address, and it seems really cheap. Should I buy it?"

As soon as you do that, if it IS a good deal, someone else will be on the phone to the agent and it will be under contract before you can blink. Of course, that only applies if it actually IS a good deal.

Many experienced investors will share certain things about their investments, but you will never find an experienced investor sharing the address before it's unconditional. Some won't even share any details about it even after they've bought it.

 

Yeah right...

I've used this line and thinking for almost 30 years.
Sometimes the percentage seems small and yet it would take a month working 40hrs a week to make that amount.
Other times people can be dismissive "All that work and hassle for a few bux rent", and yet in the scheme of things it was easy money.