Some disappointed OTP people in this story

I know and its good that you try to help. My investments are doing OK, I'll get about 10-15% annual after tax ROI. Maybe more depending on CG. That's the really cool thing about property, there are so many ways to do it successfully. I'll definitely change my approach overtime, but it's working for now.

I said I walked away from 2 deals and explained why. I didn't say anything about dollar amounts or time frames.

 

Yep aint that the truth @LibGS !. It allows massive leverage, ability to buy below real value, ability to add value, provides income, tax benefits as some side help and all the while holding assets that most people want!! A home!!

I just love it when the property haters in society say its gonna crash.. lol. They have no clue.

 

It's even more dodgy that he's on a council and able to vote on planning decisions that affect his interests.

 

The contract is written by them, what would you expect?

If they made an adjustment that the floor size might change but no more than 5% then they would of been in a better position.

Then again the developer could just breach contract and move on.

Guess what with an existing property you know exactly what you are buying, hence why I prefer them.

 

If I was doing an OTP 50 units and I was told 12 months on that by doing a few small changes completely within my legal rights and it would increase my bottom line by 5 million, I cant see how I would say 'Oh no its ok we'll stick to the old plans and never mind the 5mil I'm losing'. Doesn't make sense to me from a business standpoint. Business is business. There is massive risk for developers when taking on large projects and many going bankrupt, just as there are risks when buyers choose to go OTP. Just my honest opinion.

 

Won't crash. The government will support it. In the short to mid term we won't see massive growth like in the past. I can't see another doubleing of prices in the next 10 years. It will take off again, but when?

 

I don't think its likely either to see a doubling in prices for many areas in the next 10 years, that's why I feel its so important to #1 buy well and #2 buy with potential to add value and manufacture your own growth.

 

It strikes me that buyers are taking both the upside and downside risk of buying off the plan. Had prices in Sydney tanked instead of boomed then I'm pretty sure that the developer would be setting the lawyers on the punters to insist they complete.

However, it also comes across as being very dumb. Sure, the company might make another $45 million, but they're also getting a massive amount of negative publicity. I wouldn't touch a development by the Sydney Property Group now. I'm probably not the only one.

Then again, the Mehajer family seem to be somewhat dodgy if you look at the press cuttings. So the latest isn't going to phase them.

 

I think there is a place for OTP but only worth investing if it is developed by really big companies which could lose a lot of good will value in their shareprice if they do something dodgy:

- Mirvac
- Stockland
- Australand

Next in line would be:
- Meriton
- Crown

Not sure about others.

Too many small developers can just go "bankrupt" and then reborn again and sell the same property for much more inflated price.

I bought OTP house from Mirvac early last year and I am very happy with it. They delivered it in time and within specifications, even in significantly rising market.

 

I understand business is business and the contract was done so he could legally do it, however morally I wouldn't be able to do it.

I also wouldn't be able to look at myself in the mirror if I had done something like this as I intentionally screwed over people.

If it was 5-10% change in size due to things that came up in construction then sure but 30-40% difference to squeeze in more units is not something that I could do. Remember the business deal was good at the original spec and the buyers helped him in funding the project so he could start building...

 

HI @Big Will . I understand and respect your position on it mate.

 

Same as I can understand his reason but I do not respect it.

 

same here, I have morals,

I wouldnt rip any one off unless they ripped me off first, then Id be going all out

maybe thats why they are rich and im not!

I do see that a lot of successful people are quite ruthless in business

 

IMHO, the reason is just pure greed and selfishness. What goes around comes around.
The way to do business should always be win-win. But alas, that is not always the case. I think by having his "big" wedding he had called attention to himself.
I personally did not know this character until the silly wedding gimmick and, by this forum, by word of mouth, we know not to deal with such characters.

 

The OTP in this case was really only possible because of the timing between the older legislation and the new one that NSW Government made law 2 weeks ago.

 

it was done at the local council who approved the new height restrictions, which he was able to vote as it was a change across the zoning and not on his personal development. However it still impacted his development as the new rules allowed him to do it.

It is a grey area he has exploited for his personal gain as he benefited from the decision along with another developer on the council panel (2 out of 10).

 

So dodgy.

 

I think this is the key point. I'm guessing there are a heap with variances of around 5-10%, which I would think pretty normal, but to downsize 30-40% in size smacks of premeditated deceit and massive greed.

You don't start building something without plans to follow so how is it that there are magically another eight units per floor? Don't you have to put in all the services pretty early in a build? I mean, it's not like you are squeezing in another bedroom. You have to have bathrooms and kitchens in the 'new' units.

I just don't understand how he can get away with this. There should be some kind of legislation in place to stop this sort of thing from happening.

 

I heard from my friend that the original plan has two separate buildings and they are now merging into one big building. This can happen if Council has changed the height limit, FSR, building envelop, setbacks etc.

 

One important issue is that if they change the size, it could lead to bad consequences on a loan.

I'm my circumstance, it was never mentioned and only after I examined the contact and then the blurry plans did I notice a size discrepancy. The vendor wasn't willing to make a appropriate price drop. My broker said this would affect the loan and he advised me to bail.

This is another issue I have with OTP, sometimes the plans are blurry, basically copies of copies. Make sure that everything is clear and legible.