Purple Titled aparment (cash only) – to buy or not to buy?

Hey everyone,

I have come across an interesting apartment I believe to be under valued given that is under a "Purple Title". I understand a Purple Title is a title that is given to the whole apartment complex. You're not actually purchasing a title as such, just a share in the title, in this case being a 1/8th share.

As you’re not purchasing a title it is close to impossible to get any finance from a bank. In this case I have the right amount of cash to make an offer. An apartment with similar floor space, same amount of bedrooms but on the closest road to the freeway (more noise) under a normal strata title is asking about 35% more then the purple strata is. I guess because being a "cash only" purchase reduces the competition by quite a fair bit.

As it will be cash only and I will be turning this into a rental in the not to near future, can I still claim expenses? I just cant claim on any payments because there wont be any?

To transfer the purple title to a normal title requires $40,000 or $5,000 from each apartment. Apparently 5 of the 8 have agreed with the remaining 3 not agreeing (all aged 75+). 4 of the 5 agreed to tip an extra $2,000 in so its hit a hurdle and the vendor needs to sell. I am confident the price of the apartment will jump about 20 – 25% if it is on a normal strata title and therefore easy to convince the other 7 owners that it is a good idea to do so.

I know REA aren’t the most trustworthy sort of people, can I believe that 5 of the 8 are in fact keen on going Strata Title? I myself think the pro’s far out way the con’s

What does everyone think?

Good/Bad idea? How so?

Thanks for your input!