Are firesale cashback deals on new and off the plan property safe to invest in? This is an example being considered at the moment:
Average price of suburb $350 K. Transport, shops, schools, medical all located within 1 km.
Purchase price $310 [brand new unit of 3]
Offer in at valuation which is $360k (Nett actual paid price is $310, $50K cashback)Loan of $360k at 80% is $288. The difference to Nett buy is $22k($310k -$288k = $22k)In costs are $22k difference plus stamp and settlement which is approximately $12k leading to total in cost of $34k
The idea is that the cashback can be used to pay the deposit and closing costs, without using up the equity in a line of credit.
First time investor, wondering if it is better to buy the cheap and nasty property down the road for the same price which has the option of being subdivided up later.
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