Some disappointed OTP people in this story

Discussion in 'Investment Strategy' started by Depreciator, 19th Aug, 2015.

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  1. LibGS

    LibGS Well-Known Member

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    Lost nothing. Full refunds. The other thing is up front valuations. If the valuation is way off, walk away.

    Never smile at a crocodile.
     
    LibGS, 19th Aug, 2015
    #21
  2. Depreciator

    Depreciator Well-Known Member

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    As others above have said, the best thing with OTP would be to make sure somebody who really knows their stuff reads the contract before you sign it.
     
    Depreciator, 19th Aug, 2015
    #22
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  3. Azazel

    Azazel Well-Known Member

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    And the one in [edit: Wolli Creek in link below] not long ago, developer decided they could make more profit in current market, dragged their feet then triggered their option (2 year?) to cancel the contracts. Not good.
     
    Azazel, 19th Aug, 2015
    #23
  4. Azazel

    Azazel Well-Known Member

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    Azazel, 19th Aug, 2015
    #24
  5. Steven Ryan

    Steven Ryan Well-Known Member

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    That happens quite often.

    Sunset clauses.
     
    Steven Ryan, 19th Aug, 2015
    #25
  6. Chilliblue

    Chilliblue Well-Known Member

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    But you might be out a fantastic property that you did not acquire whilst waiting for your OTP which never eventuated.
     
    Chilliblue, 19th Aug, 2015
    #26
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  7. Big Will

    Big Will Well-Known Member

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    This is my thought to, what happened if you bought in Sydney 2 years ago and they just refunded you your money? You haven't technically lost any money however you have lost extra capital gains you could of had which could of been 100,000s.

    In my eyes it is a loss.
     
    Big Will, 19th Aug, 2015
    #27
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  8. LibGS

    LibGS Well-Known Member

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    That is definitely a concern. Fortunately I've got a lot in reserve. But eventually I will get to the end of that cash and maybe the last one trips me up and ties up a deposit needlessly.

    With the APRA changes and maybe an easing market, who knows what my capacity and prices will be like. So to minimise surprises, my next 2 (and last for a little while) purchases, which I want to complete by June next year, will be much closer to the finished product.
     
    LibGS, 19th Aug, 2015
    #28
  9. Gibson

    Gibson Well-Known Member

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    How prevalent is this practice? Is it confined to a small number of developers and geographic location. Would like to hear from others who may have been burned
     
    Gibson, 19th Aug, 2015
    #29
  10. nswvic

    nswvic Member

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    And yet the Government is encouraging buying from OTP with the FHOG requirements.

    :(
     
    nswvic, 19th Aug, 2015
    #30
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  11. Azazel

    Azazel Well-Known Member

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    I suppose buying OTP could be cheaper than buying a house in Sydney (and maybe Melbourne).
    Still not a good financial decision in general.
     
    Azazel, 19th Aug, 2015
    #31
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  12. Sackie

    Sackie Well-Known Member

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    Great you got your money back but what about the opportunity cost?
     
    Sackie, 20th Aug, 2015
    #32
  13. LibGS

    LibGS Well-Known Member

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    See my previous post. Absolutely none.
     
    LibGS, 20th Aug, 2015
    #33
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  14. Azazel

    Azazel Well-Known Member

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    If you're honest with yourself (and us), you would have to agree that having a substantial amount of money tied up for 2 years with nothing to show for it is lost opportunity, no matter how much money you have in reserve (or how much it hurts to think about).
    It's a good lesson to learn from, not only for you, but others here.
     
    Azazel, 20th Aug, 2015
    #34
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  15. Sackie

    Sackie Well-Known Member

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    That's great then. I know for me if it didn't have a monetary opportunity cost it would of had an emotional/mental cost which can sometimes have follow on effects.
     
    Sackie, 20th Aug, 2015
    #35
  16. LibGS

    LibGS Well-Known Member

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    You are absolutely right. But your statement is loaded with 2 massive incorrect assumptions. I would never do 2 years. That is huge. But you are also assuming a big deposit. I'm talking about 30k.

    Your condescending statement about being "honest with yourself" is just that, condescending.
     
    LibGS, 20th Aug, 2015
    #36
  17. Steven Ryan

    Steven Ryan Well-Known Member

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    It doesn't happen all the time, but it happens more often than it should.

    The real issue though is that with SO many different elements of risk associated with OTP, the odds of one of them playing out on any given project are higher than you would want.

    "Minor" stuff can happen like the estimated strata fees being higher upon settlement, the fixtures or finishes changing, facilities being removed like communal areas, and probably the biggest pain in the butt, the project taking too long to finish.
     
    Steven Ryan, 20th Aug, 2015
    #37
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  18. Sackie

    Sackie Well-Known Member

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    Exactly. For that kind of risk I want to know i'm getting equal or higher reward and for me, I don't see it happening with OTP generally.
     
    Sackie, 20th Aug, 2015
    #38
  19. Azazel

    Azazel Well-Known Member

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    Unless you write up all of the fine details of your circumstances, we won't be able to guesstimate it all ourselves.
    One of the above examples was 2-3 years. You said that this has happened to you - twice. Doesn't sound like you found the example unusual.
    $30k can leverage quite a good portion of an investment.

    You can read it how you like, just trying to help.
     
    Azazel, 20th Aug, 2015
    #39
  20. TMNT

    TMNT Well-Known Member

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    Legal or not i think its conplete bull

    Fancy signing a contract for a certain size and then because the developer can make more money by squeezing more in

    If the values fell and the buyer can have a apartment double the size . Then thats fair
    But it aint gonna happen


    Complete double standards
     
    TMNT, 20th Aug, 2015
    #40
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