The one about the abandoned mine shaft…

Hi,

Well – I’ve just finished off another chapter of the book and I thought I’d share with you a true story that I’ve just written:

quote:

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Insight #2 – If you’re investing in an area that you don’t know well then ask a local for help. Don’t be afraid – be humble, respectful and appreciative of the need for information that can only be gleaned by asking someone who grew up, or has lived in the area for a long time.

For example, Dave and I once bought an investment property that we spent every weekend renovating over a six or so month period. Anyway, there was an intriguing block of vacant land a few doors up the road; it was the only site on the street that hadn’t been developed.

One afternoon shortly after settlement I went to introduce myself to the neighbour. His name was Alfie and he’d lived in the Ballarat region all of his life – about sixty years.

I pointed to the vacant block up the road and asked him if he knew anything about it. It turned out that he knew quite a lot.

Alfie said that there was an abandoned mine in the middle of the property that had been ‘capped’, a process of pouring in concrete to prevent cave-ins. Over the years there’d been a few owners who would buy the property without doing the proper research, seek to build on it and submit plans to the local council, only to have them knocked back because the land around the abandoned mine was still unsafe.

A few months later I was walking up the street to the Milk Bar and noticed that the vacant block was up for sale as a ‘Rate Recovery Auction’. Apparently what had happened was the owner had deserted the block and now the local water board was seeking to recoup a substantial debt, comprising past water rates and interest penalties, by selling the property.

Unfortunately I wasn’t in town when the auction was held, but soon after I was tidying up the front yard of our property when a car pulled up in front of the vacant land. The driver and passengers got out and started walking around the block. Sensing that these guys might be in some danger, I went to warn them only to find out that they were the new owners.

When I asked them whether or not they knew the property was an abandoned mine site, their faces went a horrible shade of white as they realised that they had just bought a lemon.

A few months later the property was back up for sale. If only they’d asked the neighbours before buying…

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Have a great weekend.

Steve McKnight

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Remember that success comes from doing things differently.
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