Case Study - October 2005

We love those win-win solutions!

People usually ask us how does Investment House find deals for clients. As well as using the normal means as any investor would, we have several extra ways that a regular investor doesn’t have access to. Today’s case study illustrates one of our “other” ways and at the same time illustrates the win-win situations that we try to achieve everyday. Because we are so involved in the market, we sometimes get deals coming to us.

We had looked at a site and thought it was fantastic splitter site however the Real Estate Agent had the site for sale with a price that was just too high (they were asking $560,000). The reason for this was that the agent needed to increase the price to get their commission so that the vendor received the bottom dollar they need to move on. In addition, the agent had sold the vendor the idea of a higher price when all they need (or wanted) was $520,000.

The property stayed on the market for a few months until the vendor approached us directly. He saw one of our development sites in the area and thought he would call us as his agency agreement had finished. We were able to discuss the price and found out that what we were prepared to pay was the same amount he wanted to sell at. We were able to negotiate a win-win situation for both our clients and the vendor – the vendor sold at the price he wanted while the client bought it at great price with the conditions we wanted.

The client purchased the site for $520,000 and is looking to make a profit of $120,000. Moreover, the property is currently tenanted and this will assist our client with the holding cost while we get the DA.