Forums / Property Investing / Creative Investing / Buy properties in group, get instant discount!

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  • Profile photo of luu09luu09
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    @luu09
    Join Date: 2013
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    Absolutely! Actually, this is how we do business so far, don't we? Traditionally, if we dont have enough resources or capabilities, we usually come into a group and use the others' resources and capabilities to create something that bring the benefit to the whole parties. This is pretty much about the relationships in business and I think the group buying platform that these guys created will make this process much more easier.

     I'd like to think this platform as a social network for property investor, just like a version of Facebook in real estate.

    Profile photo of PropertyGeniusPropertyGenius
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    Oops posted twice

    Profile photo of PropertyGeniusPropertyGenius
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    Ok, well I guess we'll agree to disagree. Good luck with your site Luu.

    Profile photo of luu09luu09
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    @luu09
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    It's not my site by the way. I am just a fan of this concept, I have a friend working with this concept and he helped me a lot to build up my portfolio. I just think it is great and you guys may want to try some time

    Profile photo of alfrescodiningalfrescodining
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    @alfrescodining
    Join Date: 2012
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    luu09 wrote:
    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.

    Dude.

    Docklands sux. 

    Anyone who can't get a discount there on their own without a group must have an IQ of about 7. 

    Profile photo of luu09luu09
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    @luu09
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    Well, As I've seen on smh.domain.com.au, the median price increase in Docklands is 105% over the past 12 months. Plus, the Docklands development is just finished around 50% and when it's finished, it's gonna be twice size of Darling Habour. Given that fact, I don't see why it's suck, genius. lol

    Profile photo of alfrescodiningalfrescodining
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    @alfrescodining
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    luu09 wrote:
    Well, As I've seen on smh.domain.com.au, the median price increase in Docklands is 105% over the past 12 months. Plus, the Docklands development is just finished around 50% and when it's finished, it's gonna be twice size of Darling Habour. Given that fact, I don't see why it's suck, genius. lol

        So let me get this straight, you're expecting apartments in Docklands to go up 105% per year….   Look at these articles:    http://www.news.com.au/realestate/news/developers-face-apartment-supply-glut/story-fndba8uq-1226400771669    http://www.macrobusiness.com.au/2012/01/melbourne-apartment-glut-builds/      http://www.theaustralian.com.au/business/property/melbourne-apartment-glut-spells-empty-feeling/story-fn9656lz-1226367310732     http://www.smh.com.au/business/apartment-rents-tipped-to-fall-after-glut-dilutes-market-20120603-1zq1l.html      Developers are desperate to flog their stock.

    Profile photo of ten_burnerten_burner
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    Ill pass, you will end up dealing with too many competing ideas, probably end in court. business and investing is easy, people are difficult

    Profile photo of jmsracheljmsrachel
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    luu09 wrote:
    Well, As I've seen on smh.domain.com.au, the median price increase in Docklands is 105% over the past 12 months. Plus, the Docklands development is just finished around 50% and when it's finished, it's gonna be twice size of Darling Habour. Given that fact, I don't see why it's suck, genius. lol

    Just fell my chair!

    Profile photo of luu09luu09
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    @luu09
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    alfrescodining wrote:
    luu09 wrote:
    Well, As I've seen on smh.domain.com.au, the median price increase in Docklands is 105% over the past 12 months. Plus, the Docklands development is just finished around 50% and when it's finished, it's gonna be twice size of Darling Habour. Given that fact, I don't see why it's suck, genius. lol

        So let me get this straight, you're expecting apartments in Docklands to go up 105% per year….   Look at these articles:    http://www.news.com.au/realestate/news/developers-face-apartment-supply-glut/story-fndba8uq-1226400771669    http://www.macrobusiness.com.au/2012/01/melbourne-apartment-glut-builds/      http://www.theaustralian.com.au/business/property/melbourne-apartment-glut-spells-empty-feeling/story-fn9656lz-1226367310732     http://www.smh.com.au/business/apartment-rents-tipped-to-fall-after-glut-dilutes-market-20120603-1zq1l.html      Developers are desperate to flog their stock.

    Mate, the successful investors I know so far do not make their decisions based on the evaluations you see on the news, they just see the facts and decide on those. The reason for this is the biases, no matter what models you use to value an investment, the inputs you use are subjective. That is, the forecast people make online is not necessary true. Just see your articles, what date were they written? early or mid 2012 isn't it. What the statistic says? Docklands get 105% increase in price on average over the past 12 months.

    Now you know what the news say? Here you go http://www.smh.com.au/business/property/docklands-threat-to-cbd-20130328-2gxba.html

    Profile photo of Jacqui MiddletonJacqui Middleton
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    @jacm
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    There's a few things to say about The Docklands other than that it is a giant wind tunnel.  Nothing quite like stepping outside on what was supposed to be a nice day only to find yourself cowering against the cold of the wind.

    The first is that there are a loooooot of apartments there.  What this means is that at any given time, if you want to either sell or rent your apartment, you are not the only person trying to do so.  This creates a nasty situation called competition.  So your potential buyers/tenants have a lot of product to choose from – and most of it all looks the same anyhow.  So in order to get someone to pay more attention to  your property, you have to do something.  Such as discount your product.  Not ideal since you are in this business to try and make money, not lose money.

    Next thing is, there is no shortage of folks that have found themselves crying over spilt milk having invested in the Docklands, and found their property to have lost value, and not by a small amount.  Taking one example of a property whose sales history I just looked at: in the space of less than 18 months it plummetted in value by almost $100k in less than 18 months.  Perhaps it is more appropriate to say it was overpriced in the first place rather than that it dropped in value.  Overpriced and failed to rise in value to to the many many more of the same sorts of apartments flooding onto the market that it had to compete with.

    Take care if you are intending to invest in such a thing.  You are not immune from losing money just because you are in a group of some kind.  If you've all joined a group to jointly acquire one particular property, it gets even better – each and every one of you will be jointly and entirely responsible for the whole mortgage – not just your portion.  When you try and buy your second investment property, that is going to sting because as far as the bank is concerned, you have the responsibility of a whopping great mortgage and not just a portion of it.

    Also take care about attempting to refinance (ie in an attempt to pull out equity for use on a deposit with your next acquisition) within the same bank that currently holds the mortgage over your property.  It wouldn't be very nice if the bank said oh, we've sent the valuer to your property, and we deem it to have dropped in value.  Wouldn't be very nice to hear this at all.  Wouldn't be very nice if they said they needed you to "top up" your deposit to get it to the agreed LVR on the loan.  Imagine a drop in value of $100k that resulted in the bank requesting you somehow find $20k to top up your deposit.

    Coming back to discounting – 5-10% off in exchange for you bringing a bunch of other buyers to the table is not a particularly generous discount.

    In closing I will say there is a very big difference between the listed price and the sale price.  The listed price is just someone’s hope of what their property will sell for.  It is not the reality of what it will actually sell for.  Be sure to look at actual sales price history.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
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    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of Richard TaylorRichard Taylor
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    JacM makes a valid point but it actually gets worse than that.

    Imagine you borrow 100% of the purchase price and cross collateralise your new Docklands inv with your PPOR or other IP
    You decide to sell the PPOR and the Bank downvalue the Ip. They say to you either could you put some cash into the deal now as the value has dropped and of course we all have cash lying around we want to use as security or they suggest you refinance as the lvr has dropped.

    You find it impossible to get more than 80% as the mortgage insurer has gone off the post code or has to many insured properties in the area and the are looking to lighten their exposure.

    The best case is you put in cash and lose some deductible interest. Worst case is you have no pile of cash and the Bank wont release the Mortgage to allow the sale to go through. You end up defaulting and the purchaser sues you for being in default.

    Personally i would never put myself in that position when with the right carefully chosen property you could sleep at night and had good cash flow.

    Look everyone to their own but not for me. I also dont like base jumping either and the risks are much the same.

    We work with investors all day long helping them Turbo charge their portfolios and that wouldnt come into our statement of Property Advice.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of alfrescodiningalfrescodining
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    luu09 wrote:
    alfrescodining wrote:
    luu09 wrote:
    Well, As I've seen on smh.domain.com.au, the median price increase in Docklands is 105% over the past 12 months. Plus, the Docklands development is just finished around 50% and when it's finished, it's gonna be twice size of Darling Habour. Given that fact, I don't see why it's suck, genius. lol

        So let me get this straight, you're expecting apartments in Docklands to go up 105% per year….   Look at these articles:    http://www.news.com.au/realestate/news/developers-face-apartment-supply-glut/story-fndba8uq-1226400771669    http://www.macrobusiness.com.au/2012/01/melbourne-apartment-glut-builds/      http://www.theaustralian.com.au/business/property/melbourne-apartment-glut-spells-empty-feeling/story-fn9656lz-1226367310732     http://www.smh.com.au/business/apartment-rents-tipped-to-fall-after-glut-dilutes-market-20120603-1zq1l.html      Developers are desperate to flog their stock.

    Mate, the successful investors I know so far do not make their decisions based on the evaluations you see on the news, they just see the facts and decide on those. The reason for this is the biases, no matter what models you use to value an investment, the inputs you use are subjective. That is, the forecast people make online is not necessary true. Just see your articles, what date were they written? early or mid 2012 isn't it. What the statistic says? Docklands get 105% increase in price on average over the past 12 months.

    Now you know what the news say? Here you go http://www.smh.com.au/business/property/docklands-threat-to-cbd-20130328-2gxba.html

    riiiiiiiiiiiiiiiight… well mate it's pretty clear you're associated in some way with either the website or the developers trying to flog their stock. It's also pretty clear the concept hasn't had much positive feedback here, given that it already happens without a service like yours.  Have a nice life!

    Profile photo of fragarcolinfragarcolin
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    It sounds good but I am also curious to know that how it is possible with the real estate marketing.

    Profile photo of Jacqui MiddletonJacqui Middleton
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    @jacm
    Join Date: 2009
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    What do you mean, Colin?

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of hemi3000hemi3000
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    I love this strategy, it's like buying oranges at the supermarket but if you buy in bulk as a group it's plain to see how much savings you can get from volume.

    Hemi

    Profile photo of luu09luu09
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    @luu09
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    Don't be silly. I will. Thanks

    Profile photo of luu09luu09
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    @luu09
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    Yep, you get the idea. I like your comparison, btw. ha ha ha

    Profile photo of luu09luu09
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    @luu09
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    Hi, fragarcolin.

    As I mentioned earlier, this is totally possible as long as you buy in a group, represented by a consultant. The role of these consultants is to find buyers, who are interested in a particular project, put them into a group and then come directly to the developer to negotiate on behalf of them for a discount. This also means, for any projects you like you can suggest a deal and get a consultant to help you build a group.

    Profile photo of Nigel KibelNigel Kibel
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    There is nothing wrong with the strategy at all and I am involved in development products that do a similar thing however there is EVERY THING WRONG WITH DOCKLANDS

    This is an area that will be dramatically involved in massive oversupply of property. Also do not touch the CBD of Melbourne. 

    I generally look inner suburbs such as Essendon  however I currently link the inner suburbs of Brisbane.

    Again stray away from the cbd of Melbourne and Docklands you will lose money here over the next few years

    Nigel Kibel | Property Know How
    http://propertyknowhow.com.au
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