Hey guys,
You may hear the term group buy before. However, you may not aware that this term is being applied in the real estate industry as well. This idea was first generated by GrOffr.com and soon after that, its model is widespread throughout the world. The Aussie version of this is vagroupdeals.com.au.
The idea of group buying in real estate is pretty much the same as in other products: You buy in a group of many people and get a great discount from the developers. So, basically, you can buy any properties cheaper than your neighbors have to pay if you do it in a group. Personally, I think this is a very smart concept of doing business and it would change the whole industry in the future.
Indeed, this is totally opposite to the way people usually do in the real estate industry at the moment: Come to an agent to buy any specific properties. But guess what? The buyers' interest and agents' interest are in conflict. In fact, this is a win-lose game, where the agents try to sell the properties as high as they can and the buyers try to negotiate for a lower price as they can. Now, if a buyers come to an agency to buy one or two properties, do you think he has any negotiable power? Obviously, not much. What if a group of buyers come to the developer to buy multiple properties? The scenario change totally.
The property industry for a long time has witnessed the win-lose game between the buyers and sellers (represent by the agents). Now, a new role has just emerged, I don't know what to call them but basically, they work on behalf of buyers: grouping them together and then negotiating with the developers on behalf of this group to get the discount for the whole group.
Savvy, aye? So, in my opinion, it would be a great idea to go through this platform to get your desired property.
Luu09
I'm curious as to how this can work for real estate. With consumer goods people can make a payment straight away, hence groups of buyers can be attained quickly. Now with real estate, most people need to sort out financing, does that mean you will wait until everyone has financing before the group buy goes ahead? Otherwise wont you just be buying one by one, which kind of defeats the ability to gain bargaining power in a group?
Hi PropertyGenius,
Usually, if there are any buyers want to buy any particular projects, they just go online and suggest it for FREE. Then, what happen is that, whenever there are enough buyers (usually 5), the negotiator will ask you for a security deposit to ensure you are serious about the deal. Fair enough, yeah? After that, the negotiator will go to the developer to negotiate on behalf of you guys. Btw, the amount you deposit will be added to your initial deposit 5 days after you sign the contract to buy the property.
I hope this helps.
The website is advertising 5% or 10% discounts on apartments in Melbourne. That's pretty lame. Nothing that a buyer couldn't negotiate for themselves for an apartment in Melbourne at the moment…. A guy named Nathan Birch already does this, but with distressed developers – his discounts are much larger than 10%, and he and his buyers buy up the whole building. That website just seems like another marketing avenue for developers looking to offload in a glut.
Luu09 and property genius are the same people. Another day , another spruiker.
jmsrachel wrote:Luu09 and property genius are the same people. Another day , another spruiker.hahahaha! that's definitely "creative investing".
Must think we’re idiots
Yeah, distressed developers with high discount, anyone can do this mate. Be aware that not all properties are the same, if the project that the guy named Nathan Birch bought is really a good investment then he is bloody lucky. You don't get that good luck so often, mate. What I am talking about is an every day business, when normal guys like you and I can seek for discount deals. Think about it, if you, on your own, go to any particular developers to buy, say 2 properties (high growth potential ones), do you think they will give you some discount?
This idea is new, yes, but does not mean it will not work. Look at GrOffr.com, do some research about them and you will know what I mean.
Innovative ideas are usually not appreciated until they become something big and the smart people are those who recognise these opportunities and act timely.
property genius, you and I are the same? Why don't I know that? lol.
Luu09, you sound very familiar, where do i know you from?
what do u mean Joe? I just signed up yesterday!
luu09 wrote:Yeah, distressed developers with high discount, anyone can do this mate. Be aware that not all properties are the same, if the project that the guy named Nathan Birch bought is really a good investment then he is bloody lucky. You don't get that good luck so often, mate. What I am talking about is an every day business, when normal guys like you and I can seek for discount deals. Think about it, if you, on your own, go to any particular developers to buy, say 2 properties (high growth potential ones), do you think they will give you some discount?This idea is new, yes, but does not mean it will not work. Look at GrOffr.com, do some research about them and you will know what I mean.
If i was you, i would Google a person's name before judging. If you knew anything about him, you would know that his current position isn't due to "luck".
alfrescodining wrote:The website is advertising 5% or 10% discounts on apartments in Melbourne. That's pretty lame. Nothing that a buyer couldn't negotiate for themselves for an apartment in Melbourne at the moment…. A guy named Nathan Birch already does this, but with distressed developers – his discounts are much larger than 10%, and he and his buyers buy up the whole building. That website just seems like another marketing avenue for developers looking to offload in a glut.luu09 wrote:Yeah, distressed developers with high discount, anyone can do this mate. Be aware that not all properties are the same, if the project that the guy named Nathan Birch bought is really a good investment then he is bloody lucky. You don't get that good luck so often, mate. What I am talking about is an every day business, when normal guys like you and I can seek for discount deals. Think about it, if you, on your own, go to any particular developers to buy, say 2 properties (high growth potential ones), do you think they will give you some discount?This idea is new, yes, but does not mean it will not work. Look at GrOffr.com, do some research about them and you will know what I mean.
If I was you, would understand the whole story before making a judgment. I am talking about the negotiating power of a group. Nathan Birch alone cannot gain that much. whist, even someone can do it alone, are you sure you can too? If anyone have that talent then 10%, 20% discount is just formality, which means the market price = listed price – 10% (20%). Unfortunately, this is not practice.
Individuals actually can earn abnormal return if they have outstanding skills to find undervalued investment. However, there are not so many of them. So yes, if you are confident enough to do it on your own, please do it. I'm talking about a business model, which I can leverage on to build up my investment. Then, may be in the future, when I have enough resources and knowledge to be a superstar investor, I would go for it on my own -> isn't it less risky for the same return?
Also, If I did not know GrOffr.com, I would google it as well. Nathan Birch is very skillful, yes, I also admire him, but the big boy GrOffr have lots of things for us to learn as well. If I could chose between a person with some millions in his NAV and another one who generate a billion in 1 year operation, then I would prefer to learn the second guy first
I do much the same thing with Property Development.
It because apparent to me that trying to build a couple of units does not really work, because generally the land value is low. What this means is that other small investors and builders will push up the prices on smaller developments. However when you buy land where the value is say 1-3 million it creates better value. We do this by creating a group who buy the land and we can then borrow against it to create a much larger and more profitable project.
It is about thinking outside the square
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luu09 wrote:alfrescodining wrote:The website is advertising 5% or 10% discounts on apartments in Melbourne. That's pretty lame. Nothing that a buyer couldn't negotiate for themselves for an apartment in Melbourne at the moment…. A guy named Nathan Birch already does this, but with distressed developers – his discounts are much larger than 10%, and he and his buyers buy up the whole building. That website just seems like another marketing avenue for developers looking to offload in a glut.luu09 wrote:Yeah, distressed developers with high discount, anyone can do this mate. Be aware that not all properties are the same, if the project that the guy named Nathan Birch bought is really a good investment then he is bloody lucky. You don't get that good luck so often, mate. What I am talking about is an every day business, when normal guys like you and I can seek for discount deals. Think about it, if you, on your own, go to any particular developers to buy, say 2 properties (high growth potential ones), do you think they will give you some discount?This idea is new, yes, but does not mean it will not work. Look at GrOffr.com, do some research about them and you will know what I mean.
If I was you, would understand the whole story before making a judgment. I am talking about the negotiating power of a group. Nathan Birch alone cannot gain that much. whist, even someone can do it alone, are you sure you can too? If anyone have that talent then 10%, 20% discount is just formality, which means the market price = listed price – 10% (20%). Unfortunately, this is not practice.
Individuals actually can earn abnormal return if they have outstanding skills to find undervalued investment. However, there are not so many of them. So yes, if you are confident enough to do it on your own, please do it. I'm talking about a business model, which I can leverage on to build up my investment. Then, may be in the future, when I have enough resources and knowledge to be a superstar investor, I would go for it on my own -> isn't it less risky for the same return?
Also, If I did not know GrOffr.com, I would google it as well. Nathan Birch is very skillful, yes, I also admire him, but the big boy GrOffr have lots of things for us to learn as well. If I could chose between a person with some millions in his NAV and another one who generate a billion in 1 year operation, then I would prefer to learn the second guy first
So what exactly is the point of this whole thread?
What are you trying to achieve by posting it?
Isnt this the place where we share investment ideas? I sincerely believe in the group buy concept. The crowd has so much power and you can leverage on that to get benefit for yourseft.
I just want to share this idea to you guys and I dont want you to think this is a scam or something. Think outside the box and you will see there are lots of opportunities out there. (dot point)As alfrescodining mentioned above, I'm doubtful a 5-10% discount would get anyone to sign up to a 'group buying' scheme. Not to mention, by the time you get 5 buyers together, you will likely have drop outs which makes this very difficult to work. What stops me from registering interest and never following through? Wouldn't that just create a headache for everyone (unlikely anyone will put down a deposit that early in the process).
FYI I have no idea who Luu09 is.
This keeps getting better and better.
I think you miss my point. It is NOT NECESSARY for you to get 5 people in your group for any particularly deals to be ON for 5-10% discount, the more people you get in your group, the more possible discount you can get. Some people, who get a great network of buyers can even purchase the whole project with great discount for their group. The reason I mentioned 5 people is just for an EXAMPLE. Now imagine you come to the developer to negotiate for buying 2 units, how confident you are to get, say, 5-10% discount? For the good projects, the developers dont even want to listen to you, mate.
Why do you think the agents are out there, representing developers? For individual investors like us, it is not easy to get 5% discount unless you have enough capital to buy a large number of units.
Of course, sometimes, you can find great discount when you buy more than 1 units, but I dont think there are so many out there. And if you belong to a group, isn't is much easier to find these opportunities? if you have 2 people in your group, you have double chance to find those and so on. I've just taken a look on the site, the Lacrosse project in Dockland, Melbourne only need 2 people for 8% discount. you wouldn't know this great deal unless you joined this network, did you?
Now, about the deposit stuff, as I understand, you won't have any initial security deposit at the beginning as long as there are enough buyers in the group for the deal to be ON. Anyways, you can think of the site as a platform for people who share the same interest in any particular projects to form a group and get benefit from buying as a group.
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