Case Study: Purchase of Wallace Street Crestmead

Below is a case study on a property I purchased in the past, I want to use the example to demonstrate the process of securing an investment property from beginning to the end.

Back to the old hunting ground of Logan. Found this 4/1/2 on realestate.com.au that was brick veneer with some nice interior touches, built in 1995. Advertised for $329,000.

This sort of setup is usually too low of a yield to fit in with my strategy, but given it is a 4 bedder sitting on a generous 618m2 block, and with my recent older highset starting to have a few teething problems, I decided something a little better renovated (new kitchen) and brick will help offset the overall portfolio.
The agent informed me it has been on the market for a month (unusual in the current climate and the setup) and upon further discussion it appears the owners had set their expectation too high, having had quite a few low ball offers turned down.When the agent mentioned the vendor are now quite motivated sellers my ears perked up. After doing my usual spill about how serious of a buyer I am, I managed to get the agent to give me a figure of what the buyer had in mind: 320k.

Spot on to the price I was thinking of offering!

Here I would normally offer a little lower and try to give myself room to move up – but since the agent basically told me the bottom line I thought let’s not waste any time and just try to strike a deal.

I told her I will get back to her, and within 2 hours I put in the offer, and it was accepted that night. Bingo! Just like that.

Building and Pest as one would expect with a 20 year old brick veneer came out spotless… well as spotless as a 20 year old house can be). There were minor gutter issues and terminates found on the fence from 16 years ago but everything else was fine. That did not stop me from trying to haggle post B&P however, I asked for a $5500 discount and was happy if I got half, and was fully willing to accept the deal as-is if the vendor stood his ground.

After a fishing call from the agent trying to sus out whether I was open to lowering the price (I declined to give anything away, plus it is silly for her to expect I would bargain with myself), the agent cited "We'll let the lawyers sort it out" and left it at that.

The very next day my solicitor called me and to my surprise informed me that the vendor accepted the discount in full! Happy days!

Stats:

4/1/2

Advertised Price: $329,000

Purchase Price: $320,000

Final Price: $314,500

Size: 618m2

Rental Appraisal: 355 pw

Yield: 5.87%

Finance:

Price: $314,500

LVR (Loan to value ratio): 88%

Base loan amount: $276,760

LMI ( loan mortgage insurance) added to loan: $3,167

Total loan: $279,927

Stamp Duty: $9,432

Other cost: $2,000

Deposit needed: $49,172