I’ve come across a property which could have great short term potential. The house is only 2-3 weeks from completion (at most), but it hasn’t been touched for at least 2 1/2 years!
The property is approx 6-7km from Melb CBD in the Essendon area. You would almost consider this place a mansion, 3 stories, balconies all round and generally designed to catch the eye. I’d just dismissed the property in the past but it seems it’s been forgotten about and just sitting there for some creative property investor to make a deal out of [
]I took a look around the side yesterday, it has a huge backyard, and the place just gets more interesting. Looking in the rear windows you can see half the kitchen doors have been fixed (the other half are still on the bench!) and there’s builders tools and ladders lying on the floor in the living area (covered in a cm of dust!).
The back yard is big enough you could put another house on it (accessed by a convenient side road) and still have enough room for a good sized garden. Although the house is almost finished, the rear is yet to be cleared with a couple of sheds and a load of land fill and old construction materials rotting away.
The property will have increased in value considerably over the last 2 years so maybe the owner might be willing to get out of it for what its cost them. I have a feeling whoever does own it is either dead or in jail though! In which case it may be in control of a benificiary.
I have personal barriers in being new to investing and having no experience in this sort of deal. It would be a big $$ investment early on but I can see there could be considerable returns. I would approach this with an equity partner who also has experience in development.
Another couple of points of note are that although the property is yet to be completed the interior is 2-3 years old in design and the whole building is also yet to be rendered (It’s 2 1/2 stories, the bottom storey is half below ground).
My thoughts are:
Do a search to find out who owns the property
Contact them, find out the reason construction stopped, offer them a price to take it off their hands as is
If they accept aim for a long settlement with a low deposit
Finish the property (including landscaping)
Clear the back and sell both the house and the subdivided block by the settlement date
Thanks in advance for your thoughts [
]Leigh
Leigh
This is a sketchy responce because the events happened about 4 years ago, but we looked at a place in the Bulleen area of Melb, for our PPOR it was incomplete and really only needed finishing internally (kitchen, bathrooms etc) and we thought it would instantly earn us 200k upon completion.
After contacting the council we found out the mortar mix was wrong and the entire house needed to have the brick work replaced [xx(]
So we said no thanks.We still went to the auction and the owner was there and was mad as hell because they had no say in the outcome, as the builder decided to go belly up and left the owner unable to finish it. So they were not very motivated to help anyone.
Hope this gives you somthing to think about.
Leigh K
“If you will take on your self-doubt and laziness, you will find the door to your freedom.”
-Robert KiyosakiHi Leigh,
I actually have a soft spot for old mansions, however I’d still do due dillegence by getting a building inspector out to look at the property.
Is it national trust or heritage listed? I ask this, because although it’s had work done on it, not always is it done by the book for eg. A structure built over the driveway to protect the owner’s care in one of the properties I looked at, did not conform to council regulations. I walked. The less hassles the better, but you could always inquire as to why the house has not been completed or touched in 2.5 years. I’d like to know the answer to that one.
I was brought up in an old Edwardian, double red clinker brick, with a central domed ceiling indoors including chandelier, more than 12 foot ceilings in the hallways and bedrooms, 5 bedrooms, 2 Kitchens, 2 bathrooms, 1 living room, 1 dining room, front manicured garden and backyard with garage from a long driveway, Gazebo and side garden. The house was enchanting and I loved growing up in it. However, the floorboards creaked, some were missing under the pure woollen carpet (the old good quality stuff), the wiring was better used for tying up a christmas turkey, the wallpaper covered a multitude of sins, the windows were wood and painted with enamel paint, to help keep it from splintering, and mould had began to rise up the walls (damp rot), causing Asthma and respitory illnesses not listed in any medical text books I know of.
Don’t get me wrong, everyone who came into the house fell in love with it and the warmth of my parents hospitality, however it was a lot of effort to keep it maintained. My parents poured a lot of money into the house ( I thought it was worth it, and taking wedding photos in the front garden and in the house was and is a priceless memory) but for investing purposes, dreams aside, it may be a black hole. In the 25 years my parents owned the house they made a 1000% profit on the initial purchase price, but in the meantime I am sure they spent that money and some in its upkeep. All they had from the sale was enough to buy another smaller house and pay some bills. Take care you may be landed with a black pit.
Cheers
Sooshie []There are no problems, only solutions
The Mystery Deepens
As a part of my ‘creative’ due diligence process i jumped the side fence and had a closer look!
The entire contents of someone’s house, including the kids toys, are sitting in boxes (untouched for a long time by the look of the dust) in the bottom level/garage.
Also, the electricity is still on!!!! What is with that? I know no-one has been there for years, but the utilities are still connected. (I found this one out by flicking on an side light, which the switch was also outside for… hmmm it just gets stranger!)
P.S – The property is newly constructed… Sorry Sooshie, takes away the ‘old mansion soft spot’ [
]It sounds like a typical case of the house being half built by a family before someone went psycho and killed everyone, burying their bodies in the backyard.
Happens all the time.
Have you checked the kids room for the moving rocking horse and jewellery box that plays music?
Sounds like a great investment to me!
I see the figures being something like this:
every $1 on painting = $4 back at sale
every $1 on cleaning = $6.50 back at sale
every $1 on lawn-mowing = $9 back at sale
every $1 on exorcism = $25,000 back at sale (priests don’t tend to charge much )[]Quasimodo
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It seems to me that action has a most magic way of answering all the questions our fearful mind tries to throw before us…
__________________________________________________Had a chat with the neighbour yesterday. Not a very friendly bloke, but he did fill in some gaps. The guy who owns the place is an owner/builder who’s ‘extremely sick’ and construction of the property actually started in 1994, so it’s 9 years old! They (I’m assuming family because he mentioned the daughter) still come to the property regularly, yet it appears they don’t do any work on it.
The neighbour questioned my interest so I told him that I was a real estate investor and was looking for an unwanted project such as this one to be finished off. He said that he would most likely see the owner or family this week and offered to give him my name and phone number if I’d like. I’m not sure how well he knows the owner/family, but that might show some possible interest, either way if I don’t hear from them within the fortnight I’ll make contact myself.
Keep investigating, you never know, please keep us informed it sounds quite fascinating.
It sometimes makes you wonder how people can just leave such an assett standing vacant/unfinished for so long.
Money out the window.
Regina
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