Forums / Property Investing / Help Needed! / selling a property that has fallen in value in gladstone

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Viewing 18 posts - 1 through 18 (of 18 total)
  • Profile photo of daniel vicdaniel vic
    Participant
    @daniel-vic
    Join Date: 2013
    Post Count: 120

    hi all I have a property in Gladstone qld I bought in 2012 it has fall in val by 70k I was wondering has anyone been or are in a similar boat and considered selling at a loss ? has anyone got or know anyone that are doing creative ideas in the area so I wouldn’t loose as much cash if I was to sell and move on …. I have been advised to hold on to for the long term but what shits you is the negative cash flow side of it and the loss of equity I no other investors that have bought similar houses before and after ten years the value has only just got back to where they bought it to me 10 years is a long time to carry a negative cash flow before I see any CG the -cash flow would eat the CG

    looking forward to hearing other stories or ideas

    daniel

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,366

    Hi Daniel,
    Click on the “Forum” Tab at top right of most pages. Once in the Forum listings, you will see a Search box – type in “Gladstone”, click the “Magnifying Glass” button, and you will find several threads discussing Gladstone.

    The first in the group (apart from your own reference in this thread) was this link :-
    https://www.propertyinvesting.com/topic/5010080-selling-a-property-that-has-fallen-in-value-in-gladstone/

    Maybe you and them can discuss strategies, ideas, etc and uplift each other. Hope that is a help,
    Regards,
    Benny

    Profile photo of BuyersAgentBuyersAgent
    Participant
    @knightm
    Join Date: 2005
    Post Count: 317

    Its painful to have negative equity but the real issue is what does the future hold for Gladstone. How much research have you done with regard to industry, jobs, vacancy rate, stock on market and other housing market trends etc. These things will help paint a picture of the likely future of Gladstone. Then you need to decide whether your strategy and timeframes fit better with holding or selling. Opportunity cost is sometimes a bigger issue than being vindicated, on other occasions there is a case for waiting it out. Post what you find and we can all learn.

    BuyersAgent | Precium
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    South Coast NSW Independent Buyers Agent - Wollongong to Batemans Bay and Regional NSW. DOWNLOAD OUR FREE 14 POINT PROPERTY BUYER'S CHEATSHEET to avoid painful mistakes at precium.com.au

    Profile photo of TaylorChangTaylorChang
    Participant
    @scha9799
    Join Date: 2009
    Post Count: 234

    Hi Daniel,

    It’s painful to watch the negative cash flow draining your hard earning money….

    I sold a negative cash flow property before. But it was in Sydney suburb area. I sold it at low price and now look back I should have keep it for a few more years then I will be laughing now.

    However, having said that, Gladstone is totally different demographics and economic from Sydney.

    Alternatively, maybe you can try to sell it at vendor finance term to minimize some loss.

    I hope this help

    TaylorChang | Finance Broker
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    Profile photo of CorieCorie
    Participant
    @corie
    Join Date: 2009
    Post Count: 113

    Hi Daniel,

    One way to get a higher sale price is to sell it through a vendor finance deal. The other benefit of doing this is if the deal is structured right it shouldnt cost you any more money from your own pocket until the buyers refinance. No paying rates or maintenance or property managements fee’s and your interest repaymentIts a great way to get rid of any duds in your portfolio.

    If you like I can give you the number of a guy I have been working with who will do all the hard yards for you?

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,010

    Hate to say selling a property on Vendor Finance terms these days is not as easy as it used to be.

    If you have a mortgage on the property i very much doubt the Terms of Mortgage allow you to sell the property with the lenders consent.

    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 CorieCorie
    Participant
    @corie
    Join Date: 2009
    Post Count: 113

    Your Probably right Richard, Im sure the banks dont want you paying off the loan early.

    At the end of the day its really only a rent to buy scheme and the title remains with the original owner until the buyers refinance and purchase the property which is normally after 4-5 years.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,010

    Sorry Corie massive difference between an installment contract and a rent to buy scheme.

    Normally under the Property Act the buyer is entitled to register a caveat against the property to secure their interest however this wouldn’t stop a lender selling the property under its powers of possession.

    There are also a number of variances in respect of max loan terms and amounts before the buyer can make you transfer the title into their name and convert it to a mortgage.

    Number of other issues but we can save those for another day.

    Either way the Standard Terms of Mortgage do not provide for such a contract. Trust me have done 1,2 or circa 220.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    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 CorieCorie
    Participant
    @corie
    Join Date: 2009
    Post Count: 113

    I knew you were going to shoot me down in flames Richard….but thats ok. I should learn to pick my fights with less qualified people.

    Sent you PM

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,010

    Yes all received.

    I am not sure why we needed to take it offline.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    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 CorieCorie
    Participant
    @corie
    Join Date: 2009
    Post Count: 113

    Just a respect thing. I just dont like turning somebody elses post into my own personal Q&A session.

    Profile photo of daniel vicdaniel vic
    Participant
    @daniel-vic
    Join Date: 2013
    Post Count: 120

    hi corie can I have the guys number to have a chat with please?

    Profile photo of daniel vicdaniel vic
    Participant
    @daniel-vic
    Join Date: 2013
    Post Count: 120

    just read Richards posts. that’s annoying as this property is a massive dudd

    Profile photo of ScottScott
    Participant
    @hey-bucks
    Join Date: 2015
    Post Count: 1

    There will always be value in gladstone i feel, as there is a lot of heavy industry and good employment options, however with the boom around Curtis Island once it is finished (shortly) the prices will drop further then steady.

    Profile photo of leewizzaleewizza
    Participant
    @leewizza
    Join Date: 2005
    Post Count: 26

    Yeah same boat. As my first foray into property investment I naively followed a property “mentor(very loose term)/mortgage broker” into a 10 unit development who bought one themselves.
    Down about $150k now but who knows?
    Worst part is that this mortgage broker bought one themselves AND convinced all of his retiring clients to do the same, just after being hit from the GFC too :(
    Even ran sessions on it multiple times in his ‘investment club’, which people pay for.
    Anyway, lessons learnt all round I guess.
    Oh and for the record I took up mortgage broking after that to ensure that people get good unbiased and not opinionated advice…

    If you do hear of any other ways around it Daniel please let me know.
    Going to Gladstone in March to see the outlook with my own eyes then will keep you posted!

    Profile photo of RedwoodRedwood
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    @redwood
    Join Date: 2013
    Post Count: 340

    Yeah same boat. As my first foray into property investment I naively followed a property “mentor(very loose term)/mortgage broker” into a 10 unit development who bought one themselves.Down about $150k now but who knows?Worst part is that this mortgage broker bought one themselves AND convinced all of his retiring clients to do the same, just after being hit from the GFC too :(Even ran sessions on it multiple times in his ‘investment club’, which people pay for.Anyway, lessons learnt all round I guess.Oh and for the record I took up mortgage broking after that to ensure that people get good unbiased and not opinionated advice…
    If you do hear of any other ways around it Daniel please let me know.Going to Gladstone in March to see the outlook with my own eyes then will keep you posted!

    Hi Lee,

    Firstly so sorry to hear about your experience. As you know, the mortgage broker should not be recommending property. Yes, property is such a unregulated minefield, however, there are so many brokers/ solicitors out there getting people into a off the plan property and taking a cut on the side. They should only be structuring your loan and telling you how much you can borrow.

    Are you looking at keeping the property?

    Cheers Ivan

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    Profile photo of leewizzaleewizza
    Participant
    @leewizza
    Join Date: 2005
    Post Count: 26

    Hi Ivan. Yeah I know this re: broker giving advice…
    :(

    Anyway, yeah at this stage we are keeping it. It’s truly bounced and found the bottom (we believe). Our March trip will tell us for sure.
    I think we could create more equity with the capital we actually do have so it seems crazy to use all of that to pay out a shortfall and start from ground zero again.
    I truly believe that with the stuff we will be doing this year and beyond that the loss of $ will be a small number in comparison but wouldn’t get the chance if I used up that capital in paying off the loss.
    Will keep you updated.

    Cheers

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,366

    Hi Leewizza,

    That is a huge point right there !!

    I truly believe that with the stuff we will be doing this year and beyond that the loss of $ will be a small number in comparison but wouldn’t get the chance if I used up that capital in paying off the loss.

    It is easy to get caught up in the drama of a poor decision, and we might take the path of “amputate the offending item to ease the pain”.

    But, I believe it is a perfectly valid (and sensible) path to continue to make payments on a “dog” to prevent a calling in of the loan if your situation can cover the negative payments, rather than stifling your progress by paying down the loss and starting again. e.g. A negative $100 a week (even if no Tax deductions) only costs $5000 a year. How does THAT compare with monetising a loss of $150k?

    As always though – the detail is in the numbers. The numbers work, or they don’t. If, in your case they do, then I’m with you,

    Benny

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