What’s the next deal you’re working on ??

Hiya everyone

Be interested to know what the next deal all the folks on the forum are looking at that are still in the pipeline ?? Is this your buying season ??

Here’s our group’s next one…lucky # 12.

First off it’s not for sale right now, which lessens the competition right there, but I reckon I can convince the Owner to sell to me if the price is right. I’m not too concerned about the price, as I’ll tie the rent to the price via a nett yield.

The Owner runs his construction business from it. He’s owned it since ’64, so there is a bit of attachment. We’ve chatted before about it and as long as I give him a long lease he seems OK with it.

The most important thing for me is the location and size of the dirt, and in this regard the block is better than anything else I can buy. Being next door to our previous purchases, it would beef up our land holding on this corner to over 11,000 sqm…4km from the Perth CBD. The Govt has been sniffing around and I am keen to package it up nicely for them to come in later and be my tenant. I like the thought of lots of those taxpayers dollars pouring into our coffers, it’d make a nice change.

The numbers would look something like this ;

Capital
Purchase Price…………..$1.3 to 1.4
Stamps and other gumpf…$0.1
Loan………………………$1.4 to 1.5
Interest…………………..$102 to 109 p.a. (fixed for 5 yrs)
Land value……………….$0.95 (~70%)

Income
Nett rent (8.4 – 8.6%)…..$109 to $120 p.a. (first year)
O/G’s…………………….Tenant happily chips in for the lot
Lease Term………………He wants a 5 x 2, which suits me perfectly
Escalation clause………..4% or better.

It’s a Landbanking opportunity for us, that’s also CF+ve, so it’s right up our alley.

If it doesn’t come off, we’ll be heading into town to have a sniff around the Terrace, although the dirt is a tad expensive down that street.

What is everybody else working on ??