Hi All,
I went to a property seminar in Sydney last weekend and one of the strategies a speaker used was to buy properties (3 to 4 bedroom houses in regional NSW) dealing directly with property developers, i.e no real estate agents involved.
He would get a bank valuation done first as these are usually conservative and pay under this value (about $30k under), and then delay settlement. Once settlement has finished you could get another valuation done other than a bank valuation to realise the equity available. This would work better in a rising market. Of course there is more to the strategy but these are the essential points and to find out more would require me handing over a few thousand $$ as with all of these speakers.
The main benefits of this method is to purchase the property under the current market value, and the absence of any sales agents fees. Downside being the purchaser does not see the finished product before purchase (hence the lower purchase price), and the risk of the developer going bankrupt before its finish.
These downsides can be negated by looking at previous properties the developer has done and by checking on the financial soundness of the developer.
Has anyone had any experience in purchasing directly off a property developer? Do you have any contacts in this method of purchasing?
Thoughts or experiences would be appreciated.
Thanks
Fergus
Fergus
Good to ask the questions. A lot of people hear these speakers and think wow they have secrets and deals and contacts that I could never have, however they all started in the same place as us all. Some people need this kind of service to help them get going and good luck to them.
Your question seems to be do I need to spend all that money to find these deals or can I find them myself.
My opinion is if you have the time to put in and the belief in your knowledge, go for it.
I live in Adelaide and purchased around Sydney last year because of my beliefs in what that market would do in the next few years, I brought of builders and developers who needed to of load property to finish a development, move to the next, or the bank had pressure on them. Its all a matter of time and talking to a lot of agents etc to start finding the dealsAll the best
Barry
Such deals are available, but you would need some local knowledge of what is being developed. But I agree with Barry the Sydney area is a good place to look at, at the moment . If the pundits are right we should see substantial rises in the market in NSW in the short term say 2-4 years.
We lag behind most of the rest of the country with housing recovery and in no small way this has been hampered by state and local governments with restrictive fees structures for developers plus lack of land release etc.
Sydney has about 36% of the immigration numbers coming into this country and needs about about 50,000 new homes to meet the demand. I gather we have only been building some like 35-40,000 per annum. These figures in no way take into account the rise in migration under the Rudd Government.
So work it out ,if we build less than whats required for a number of years. Then we have a potential of the market shortfall times the number of years its been going on for.The longer it goes on, the greater the demand when the market moves.
heres talk of Sydney being like other world cities, million dollar homes and a generation of permanent renters. Even if it does not get that far, its obvious we are heading quietly, but definitely into another market rise of very decent proportions if not large.
I have lived through several Sydney housing booms and know only too well how fast things move once it begins.
We see auction rates are up and the median price is now $569k
rental rates a not helping although some believe its eased.But in my area rates are around 8-9% which ain't too bad
http://www.reinsw.com.au/2010-brings-higher-rental-vacancies-for-Sydney/default.aspx
BIS Sharpnel reports in the positive
cheers
neilNeil, sorry to disagree with you.
The statistics regarding the median price in Sydney is Outdated (30/11/2010). Have you check the API data recently!!!
It is above 600k with clearance 70+%You can compare Singapore vs. Sydney and I believe that house's price in Singapore is Untouchable cf. with their earning income (i.e. 15-20x of average income) excluding the government housing.
Fergus, I don't believe that you can get the bank valuation prior to completion. It is totally BS.
I would stay away buying off-plan especially in the rural/regional NSW.What else do you expect to hear on this seminar?
They will not tell you the exact town or developer to talk to.
They can not tell you what the market will do in a future – no one knows this.It sounds like you understand the principle.
Go take some actions!
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