Papermite offer

Discussion in 'The Buying & Selling Process' started by Burramys, 15th Apr, 2017.

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  1. Burramys

    Burramys Well-Known Member

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    The IP is a block of about 700 square metres, an old house, in need of maybe $30,000 to make it rentable. The IP wouild sell for about $500,000. An offer has been received from Papermite Pty Ltd for this property. Papermate say they are developers. This is a very strange offer:
    * handwritten;
    * no address; and
    * vague.

    Papermite propose to put five town houses on the block, and give me two of them. Papermite say that the townhouses will be worth $800-850,000 each, which I think is a stretch. This is described as a great offer. The letter does not mention any payment apart from this. I'd quite happily sell for $1.6 million, up front, but I doubt that Papermate has the funds. If they cannot afford a printer then $1.6 big is unlikely.

    As far as I can tell Papermate has no website. The principle seems to be Evangelos Nousis.

    I'm not interested in selling unless the price is a lot better than $500,000. Has anyone had any dealings with Papermate, or know anything about them? TIA.
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

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    Neither Papermate nor Papermate have an ABN. Evangelos Nousis has an ABN but isn't registered for gst. Does he hold a builder's licence? (unlikely if he isn't registered for gst).

    Search | ABN Lookup

    • Can you get 5 t/h on the site?
    • What is the zoning?
    • What are t/h selling for in the area?
    • How realistic are their numbers?
    • If the gross realisation is $4m+, then the site is worth at least $1.33m (so $1.6 isn't too bad but what is the likelihood of the development being built?)
    • What risk do you bear?
     
  3. wylie

    wylie Moderator Staff Member

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    Is the block worth $500k or $1.6m?

    I'm a bit confused, but sounds fishy to me.
     
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  4. Scott No Mates

    Scott No Mates Well-Known Member

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    If each t/h is with $800k, then it's possible but there are plenty of buts...
     
  5. hammer

    hammer Well-Known Member

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    If it quacks like a duck....
     
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  6. Burramys

    Burramys Well-Known Member

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    The block is about 15 X 50 metres. I'm not versed in townhouse matters but suspect that five of them would be small and cramped. The zoning is residential. I've not priced townhouses in the vicinity. However, if three bedroom houses like the current IP sell for about $500,000, I can't see a townhouse selling for more than this. Maybe $300,000. The numbers seem to be rubbish, and as advised above, if it quacks like a duck ...

    There are similar developments in the street, cited in the letter as being built by Papermate. Of course this may be BS, listing developments and claiming that the developer was the letter writer. I will look at these and see if I can find out who built them. The risk is that the townhouses papermate wants to build will not be worth anything like $1.6 million or even built, or built years into the future.

    Yes, there are too many uncertainties, staring with the legal status of the developer, and his experience. It's quite fishy. If he wants to buy for $1.6 million and keep the two townhouses offered as payment then fine. Old family saying - show me the money. But I think it's a scam. I like simple deals. Buy renovate, rent, sell later, 50% CGT. If the mysterious Papermate likes simple deals for $1.6 million then a sale is possible.
     
  7. Joynz

    Joynz Well-Known Member

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    What area is the block in - and is it a corner block?
     
  8. Burramys

    Burramys Well-Known Member

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    The property is in Clayton, not on a corner, a few minutes from shops and the railway station, quiet street.
     
  9. Joynz

    Joynz Well-Known Member

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    Assuming it is in a general residential zone, it would be interesting to see how they will get 5 town houses as well as the required garden space and parking on the block (following the recent Plan Melbourne changes where approx. 35% of the block has to be garden - if over 600 square metres).
     
  10. wylie

    wylie Moderator Staff Member

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    I'd be inclined to sell for a fixed price and move on. I'd not tie myself to such a dodgy sounding deal and hope to come out with more than I handed them to work with.
     
  11. Burramys

    Burramys Well-Known Member

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    The "offer" was badly expressed. It mentioned a development nearby with five townhouses, and then said that I could have "two of the five townhouses for (my address)". I took this to mean that they proposed five townhouses for the property and I could have two. No. They propose to swap two townhouses out of five being built nearby for the property. So maybe they will have two townhouses on the 700-odd square metres. This is much more viable.

    Agree, dodgy deal, just show me the money and move on.

    They must be keen. It looks like they have been to the Titles Office, found the name on the title, matched this with other online information, and made a phone call to an entity I was associated with ages ago.
     
  12. Big Will

    Big Will Well-Known Member

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    The following developers have built or planning on building 5 townhouses in Clayton in just over the last 12 months.

    Adiland Pty Ltd
    Fortua Constructions Pty Ltd
    Mercator Developments Pty Ltd
    Owner builder: Rebony Pty Ltd
    GNL Development Pty Ltd
    Rose Pty Ltd

    I couldn't find them in the system as a company name or project that had Papermite. The closest I could get to 'paper m' in Victoira was www.alphingtonpapermill.com.au.

    Best of luck
     
  13. Burramys

    Burramys Well-Known Member

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    Big Will, thanks for the list. I'm not surprised that papermate is not on the list. Is this list a public record, and if so, can you please advise where it lives?
     
  14. The Y-man

    The Y-man Moderator Staff Member

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    Ignore - we have received these at our church property in Clayton.

    Are you sure about $500k? If so I think I know quite a few people that would be interested.....

    95 Carinish sold for 1.12m on smaller land than yours (697sqm vs 750sqm)
    95 Carinish Road, Clayton, Vic 3168 - Property Details

    42 Koonawarra was probably such a dump they didn't show any photos of inside and it's miles from the stn (albeit closer to uni)
    42 Koonawarra Street, Clayton, Vic 3168 - Property Details

    If you only need 30k to make it rentable, and you are near Cly central, I reckon minimum $1.3

    The Y-man
     
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  15. Burramys

    Burramys Well-Known Member

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    Series of rude words. I will check recent like sales, and maybe have the place valued ASAP. Domain says the range is $1.08-1.43 million. How did that happen? Fortunately, most of that price is the land; the buildings are three bedroom house maybe 100 square metres, garage and shed. The bedrooms are quite small, and the floor plan is not good.

    The land size I cited is approximate, and I cannot recall the title details. There may be a scan somewhere. The place has been in the family for eons. The property is is in the rail-Centre Road-Clayton Road triangle, much nicer than 95 Carinish Road, which is on the rail and will soon be overshadowed by the elevated rail. However, there wil be extra parks and infrastructure under the rail, so it's hard to say how prices will move.
     
  16. sanj

    sanj Well-Known Member Premium Member

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    I can see almost no instance where a regular development site can be worth it 500k but still yield enough to make the developer so much money that they can afford to give you 40% of the finished units, apparently worth 1.7m and still make their cut too.thay site would be worth a lot more or yield a lot less
     
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  17. sanj

    sanj Well-Known Member Premium Member

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    Didn't see this, think you might need to do some research...
     
  18. wylie

    wylie Moderator Staff Member

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    If you approach an agent who deals with developers, you will likely get a quick offer, which will be low (from my experience). A few days after you say "no thank you" you will get increasingly higher offers (also from my experience).

    It will give you an idea of what your block is worth to a "real" developer.

    (And don't stop at just one agent, just in case he might have some tie up with a developer and might benefit in having you accept a low offer.)
     
  19. The Y-man

    The Y-man Moderator Staff Member

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    Interactive Map - Land Channel

    Search the property and you can run the area tool. If unsure, just pm the address to me and I'll run it. Can also do a free planning zone report with the site.

    The Y-man
     
  20. The Y-man

    The Y-man Moderator Staff Member

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    Beauty of investing is it not? You just suddenly find you are rich one day. :)

    The Y-man
     

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