Was wondering if anyone has heard about purchasing land wholesale that is being released by developers to selected investors prior to going to retail. Has anyone purchased wholesale land before and what was your experience?
I have been offered, as well as the property group im involved in, to purchase blocks around $150k 30 minuets south of Perth. Block size range from 280-350sqm. Land titles wont be ready for another 2 years at which point the developers estimate you would have made a profit of approximately $60-80k
Is 2 years a reasonable time to wait for your block (currently farmland) to be developed and to a point where it is ready to be build on?
A deposit of $50k is required to secure your block and 3 month prior to completion is when you come up with the rest of the money for the land
There is no such thing as wholesale really. They are just selling blocks at market price with a marketing spin. But you may do well buying land 'off the plan' as the prices can rapidly increase (sometimes). One of my clients purchased approx 20 blocks off the plan for about $40,000. He then on sold them at various prices before they were complete making a very nice profit. At the end they were selling for $160,000 each! But not everything goes well, so plan carefully and work out what will happen if the values don't go up, or even drop a bit – can you settle?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi
Can you tell me the name of the land subdivision for me to look at.
Regards
Bruce
G'day,
New land releases often have a long settlement. Two years is not really too long but 50K deposit is a lot to ask!!!! 1/3rd deposit??
If you are going to borrow to buy this land and have the land as the collateral, I doubt if the bank will lend the money without the titles which will come 3 months prior to completion.In this type of development how do they know when three months prior to completion is? I recently bought a pre release block and if I was subject to these terms I would have had to come up with the money 12 months prior to the actual completion date.
I think the developer is looking for partners but does not want to be bound by the legalities of a partnership.
Be very cautious and see if you can change the conditions to be a bit more in your favour.
This deal seems very fishy to me.
All the best,
MarkIt certainly is a great way for the developer to fund his land. Buyer beware
I would have thought that in the current cycle there are better places to invest than Perth. Concider Melbourne where you will recieve much better capital growth.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
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