Hi All
This is an email looking for some encouraging words of wisdom.
I have been on the hunt for investment properties for 5 months now. During this time I have had a lot of discouraging, to say the least, events. Don't get me wrong there has been lots of fantastic people which I have met and also AMAZING lessons learned but i would love to know if I am one of few or one of many who start this 'adventure' as I have.
My motto in life is that if you can't take something good out of every situation you aren't looking hard enough, even if it is a lesson learned. Well, bad lessons have been remembered but the good is taking time to achieve. To give you a quick run down to date:-
1. (House) – Purchased property – will get to horror story at end
2. (2 Residence on 1 Title )- Building Inspector found property did not have Council Approval for dual occupancy despite R/E assuring me otherwise. Council confirmed would never be permitted – did not proceed with purchase
3. (House) – Building Inspector confirmed would be even the best renovators nightmare – did not proceed with purchase
4. (3 Units) – Building Inspector found major drainage problems – sinking foundations etc – did not proceed with purchase
5. (Torren Title Villa – 4 years old) – Building inspector found construction faults and poor workmanship (owner built) – did not proceed with purchase
6. (House) – When had independent rental appraisal conduct found that listing agents rental appraisals was significantly over estimated. (Actual return approx 3.5% return) – Did not proceed with purchaseDoesn't seem so bad you say……..I agree, I can live with a couple of thousand dollars for building inspection and conveyancer fees, keeping in mind that it has saved me hundreds of thousands should i have purchased these properties.
Well, the biggest problem i have had is the first property. It has taken 4 attempts (5 weeks) to settle the property as the Vendor did not complete works as agreed within the contract (complete external painting, repair several holes internally) and left rubbish all through the yard and house.
On the 3rd attempt things got nasty as I advised i would get quotes and deduct this cost for the repairs from the purchase price. Within 1/2 an hour of this advice being given to the Vendor i had my solicitor calling to advise the Vendor had commenced legal action against me for 'Illegal Advertising' and 'Breach of Privacy'. The reason being was that i had an engaged an agent to advertise the property for rent prior to me owning it and photographs had been published on the internet. This advertising had commenced a week previous on our 2nd attempt to settle. The Vendor's ultimatum to me was that I settle the property in its current condition, work uncompleted and without 'Vacant' possession – given the rubbish, otherwise they would proceed with Legal Action.
'Being the bigger person' realising this would be a costly and lengthy fight i reluctantly settled the property last Thursday.
So that is my tale…………..
Can't wait for your responses and thanks for reading my venting!!!
Hope to chat with some inspiring like minded people soon.
Kate
Hallo Kate,
It does sound like you have had a spot of hard luck or have you?
I wonder in which area you are looking for these properties? They sound very run down to me? Maybe you need to change your perspective on where you are looking/ price range?
As far as it goes with the house you purchased – you are giving contractual obligations to a vendor who couldnt care less about the state the house has been left in, not to mention the paint job they will be doing! I would have reduced the offer and organised the paint job myself, at least you know it will be done properly!
I hope you have better luck soon and dont give up!
TracyWhat a shame you have had some bad experience, that can be quite stressfull especially when you should be happy and excited about buying an investment. All you can do is think, it all happens for a reason and the right property is out there somewhere for you.
An example i have of my own is where we previously had a 30 day settlement on a property which secured us a better price to purchase but the vendor stretched out settlement for 4mths!! (great for us) the reason was they had so much junk and furniture and more junk to move out. I was concerned as to what state the property would be left in so we had our conveyancer send a letter 2wks before the final settlement telling them we expect the property to be free of junk and left in a clean order. This worked for us as the house and land could not of been cleaner if i did it myself. I made sure i inspected the property 1wk before hand also (driving 2hrs to do so) just so they new i was serious about it being clean.
Another example is where we offered a 30 day settlement (with a council) and our lower offer was accepted, we made sure we had a clause in the contract that stated we are able to show potential tenants through prior to settlement (as the place was vacant anyway) and that if after 30 days they could not settle we were entitled to rent out the property and we would pay all rates, bills from that date on. It has been almost 7mths and we still haven't settled (that's coucils for you) and we have a great tenant which we have been collecting rent from since xmas.
Let me just say that we have only had a win on both these properties after learning the hard way before.
Good luck with your ventures,
Hi
We are currently looking in the Newcastle / Lake Macquarie areas at all types of properties. Believe it or not 3 of the properties (including the 3 units) were less then 10 years old (4, 6, 9 years). We have always kept a broad range for both price range and types or properties (units, houses, dual occ's, new, old, renovated). As you can imagine this has made hunting very difficult as we are comparing and looking at so many different types of properties.
There is a silver lining with the house which we have purchased as it was a bargain buy of the century – text book buy ($337K – as the mortgagee was about to take possession) .The works were agreed to after the price had been negotiated as we thought we would try it on for size (and it worked). We saw this as icing on the cake, which saved us a time and money – even only for a few years until it need to be done properly. The real bug bare was that the Vendor should not have agreed to undertake these works if they had no intention to carry them out – we still would have purchased the property even if they hadn't agreed to them.
We are now undertaking a reno on the property ($5K, all labour free – 2 week turn around – ah ha yeh right) . We had the house revalued the day I got the keys at a conservative $360K and best case $375K and when the reno is complete an approx price of $425K. Got to be happy with that!!
I guess it's all the other crap that has gone along with it………… finding your feet and a criteria that is the hardest part. I am really keen to chat with people like yourself to seek advice, encouragement and learn some of your mistakes in the attempt to avoid them myself.
I really appreciate you comments
Thanks Kate
Great work kate !
you found an under valued property with problems that were solved with a little effort and for thought
is'nt it a good feeling to actualy see the results of your long efforts and labor finaly pay off.. in $$$ value added to your i.p and valuble experience gained
Glad you found the silver lining to the dark cloud you were under..
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