Hi all, I'd be interested to learn what others more experienced would do if they were me right now.. My PPOR is on the 2nd floor of a 2-story apartment block in inner-Western Sydney, and as I came home from work this evening, I overheard a real estate agent talking to the owner of the ground floor apartment. They'd left the door open, so I heard everything (as I walked very slowly up the stairs..). The owner has had it for about 5 years, and it was tenanted until a few weeks ago, when he had to kick them out. He's now trying to give the apartment a quick face lift and sell it, so that he and his partner can afford a bigger house to raise a family. I heard the agent give him a reasonable-yet-probably conservative indication of what he could expect (in my opinion), and urged him to put it out there asap, as there "aren't any other properties like this in the area at the moment, but come Easter, there'll be a lot more." The downstairs apartment is a 2 bed, 2 bath with a sizeable courtyard and within 5 minute's walk to the train station. CG in the area, as you'd expect, has been great over the past 10 years. Assuming I was positioned financially to make an offer and I was certain this property would be right for my investment strategy (things I need to carefully consider obviously), would experienced investors recommend I approach the vendor privately? Is there anything really to gain from such "insider information"? And perhaps most importantly, are there ethical considerations given this was probably a strictly confidential conversation I overheard? Welcome your thoughts..
Assuming you decided it was inline with your goals/investment strategy ect ect then Yes, I would definitely approach the vendor with 'a plan' to try to nab it before it hit the market at the best price possible for myself. Anything to gain from insider info? ah well you have possible insight into the mindset of the vendor. Always great. Ethical consideration? Depends who you ask. If I'm being honest, it wouldn't bother me. Business is business. Its no different to anyone doing DD on buying a place, trying to uncover info about the property/vendor motivations/motivated sellers/low balling etc etc Its business. Most likely you wont be able to get a price massively below the market... but even 20k below is 20k saved. The vendor is not being forced to accept anything. Just my opinion.
Yes go for it. I would just say that I couldn't help over-hearing the conversation and would like to give an expression of interest. I'm sure your neighbour would at least feel good about this. I've had other unit owners ask me if I'd like to buy their unit and let them stay there. I've seen other units in my smallish block go cheap and should've bought them but didn't realise that I could.
"Welcome your thoughts.." @Glip Are you kidding me? I'd go down there right now and knock on the door. Second thoughts he might be on the job so probably better to leave it till later in the morning. He hasn't signed any sales agreement so it's open slather. Opportunities arise at any time.
Thanks for the comments . I can't help but wish I was a more financially agile and experienced investor, instead of a newbie! But I guess you never know when an opportunity will (literally) land on your doorstep.. I had a casual chat to him last night after posting the above, and I know he'll be toiling away by himself down there for a couple of weeks (never renovated before. Doesn't have a clue what he's doing. Poor chap). Gives me a bit of time to do more DD..
I also would be seeing him today before he starts the reno. He might be very happy to take an offer that lets him off the renovating hook.
Agree with @jrc and @wylie, if you think it fits your criteria, nab this place asap. Each day prolonged is another day agents, family, friends and everyone else can get in his head and change his attitude,approach etc. Put a proposal forward asap. Don't seem too eager but show enough interest that your very serious. Your possibly 1 foot in the door already.
If he sells to you he can save on REA fees with a private sale (so deduct some of that off price) and renovation costs if you take it as is. If you are TOTALLY sure about the value take it. Ring a broker from here today to check your finances. Good luck!!!
No harm in talking to him. As Leo said, even if it's only $20k, it's worthwhile asking. Are you directly above this apartment? Time for some internal stairs.
Get in quickly. So long as he has not signed up with a RE agent then commission will be saved which can be reflected in your offer. Marg
I would be concerned of concentration risk ie having all your eggs in one basket. Particularly in a unit building too - what if there was a special levy raised for necessary works? You'd be up for twice the hit. Also, my concern too would be that the ship may have sailed on Sydney.
Go and do it, but be sure of the price you are willing to pay. A good agent will inform the owner, if he tells the agent that you have approached him, that it is best to put it to market and create competition amongst other buyers...driving the price higher. He may be happy for a quick sale, pre-reno. I probably would be if I were him.
