Hi folks,
Looking at a property in the next coming days for a potential BUY – RENO – SELL deal. I have been told by the REA agent this morning that the property actually had a fire, and as the owner was uninsured and his business has been slow lately, he has to sell and return to renting. He’s eager for a quick sale and all offers presented.
Advertised at $370k
I know from RPData he bought it for $302k in 2006.
RE Agent has advised they have priced it at land only price. it was built in 1969, brick construction. I have asked for what comparable sales in the area he has based it on to reach that price, as I found a 3 x 1 house 3 streets away with same sqm sold for $320k in December 2010.
Apparently the owner is still living in the rear of the house, but the front has sustained fire and according to RE Agent will need new gyprock etc. The floorboards are seemingly ok and could come up fine with sand and polish. No structural engineer’s report has been done post-fire.
I am early on in my due diligence, and just wanted to throw it out there – does anyone have any tips, warnings, suggestions on things to ask/inspect when I view the property in the next coming days? What shoudl I be looking for in terms of wiring/plumbing? How could I tell if floorboards should be fine with a sand and polish?
This certainly wont be a deal I’m going to rush into, but would just appreciate any words of wisdom people might be able to share.
Thanks,
Emma
Hi Emma,
A couple of helpful tips from someone who actually does the BUY – RENO – SELL strategy:
1. I found structural REPAIR renovations do not add value to the property, as buyers expect that to be done already. Therefore, realise that all the structural repairs that you will do to the property will only bring the property in line with other houses in the area. If you are adding on an extra bedroom then that’s a different story.
2. What the property was bought for and what the owner actually owes on the loan are totally two different numbers. When you are working out what your offer will be on property, keep in mind that sellers with damage homes might go way below their purchase price to clear the house.
3. In relation to the real estate agent, he’s trying to sell you the property therefore I would go and talk to 4 other agents in the area to get a better idea of what houses go for an area.
4. Depending on where you are at the moment, if you are in Queensland there is a large number of houses on the market at the moment where you can do cosmetic repairs on that a greater perceived value (I am talking more than the paint job) compared to investing in an awesome time in doing structural repair renovations.
Hope this helps.
Regards,
Jason MooreProperty Trader | Boston West Pty Ltd
http://bostonwest.com.au
Email Me | Phone MePrivate money lending opportunities available paying upto 12%, secured by bricks and mortar!
Hi Jason,
Thanks for the tips, appreciate it. Don’t worry I know to do plenty research to find out the correct price for the property and certainly will take the listing agent’s comments with a grain of salt, was just putting it in for perspective.
Also aware that structural repairs and things like rewiring all add up and don’t add value, which is why I’m keen to purchase well below market value and at the right price. Will see what I can discover about the vendor’s situation and how much $$ they are needing to recoup.
For now I’m really looking at any tips from the structural side of things, to look out for during inspection. Should be going to view tomorrow. I’m in WA.
Cheers,
Emma
You must be logged in to reply to this topic. If you don't have an account, you can register here.
