Hi all,
I am new to property investing and have been browsing the topic and market for the last 6 or so months. I am possibly going into a partnership deal with a good friend of mine. We are both 27 and his parents own a few properties one of which is on the sunshine coast in Queensland. It is a 2 story, 6 bedroom house which could easily converted into duel living. The block is around 1 1/4 acres. They would sell us the house for $750k which is way out of our budget but they seem to be happy with letting us subdivide, and build our own. I was thinking a duplex which we could sell and hopefully create a cash flow to buy the initial house. Sought of a vendor finance deal, buy now pay later. Can anyone give me some feedback or even a better idea? I don’t really wanna miss out on a chance to get some land with the option to pay later.
Thanks
KDCHi KDC,
The sort of deal you are proposing will, in my opinion, become more common as wealth "shifts" between generations. The difficulty seems to be around securing each party adequately and ensuring it all stays friendly. I am coming across these scenarios more commonly in my work.
The first thing you need is some confidence that what you are proposing is legal, sensible and practical. You may need to get some advice from a planner or designer who has done similar in the area. If it can be done, then you need to look at how it can be done.
1 1/4 acres is a large allotment by most standards, and some sort of subdivision may be possible. When you say they will "sell….the house for $750,000" I will assume you are referring to the house and the land.
A proposal may work like this:
You agree to purchase the property for $750,000
Settlement is to occur in say 12 months (or otherwise by agreement)
You – at your own cost – seek and are granted a DA to subdivide into three parts:
a) Unit 1 (part existing dwelling)
b) Unit 2 (part existing dwelling)
c) Lot 3 land excised
The land approved for subdivision could then be excised and sold, with the proceeds to the vendor
You would then have a dwelling, approved for subdivision into two dwellings, and will have paid the vendor a significant part of the contract amount, thus allowing for a loan at an acceptable LVR.There are of course many variables in this sort of arrangement that others on the forum will be able to cover better than I can.
Good luck with your plan
You must be logged in to reply to this topic. If you don't have an account, you can register here.
