Purchase Property Below Market Value
I was able to purchase a property below market value by exploiting the information passed on to me by the real estate agent. I was given all the information in regards to the reason for the property sale and the issues faced by the owner. Using this information I was able to prepare a purchase strategy and price we wanted to pay for the home.
This property is less than 10 years old and was last purchased just over 3 years ago for over $500,000. Every valuation I conducted on the property through a number of different systems valued the property at over $500,000.
Our offer for the property was $485,000 which was accepted. There were no counter offers, our first offer and terms were accepted and the deal was done.
How Did I Do It
By Identifying the current owner’s issues and preparing an offer that was focused on solving their problems rather than submitting an offer based on price. In this case, the asking price was for offers over $500K and yet we have secured the property at $485,000.
The cost of financing this property at 100% with an interest rate of 3.5% interest-only equals $326 per week
The actual achieved rent for this property is $460 per week
Cash flow is $134 cash flow positive per week.
Rate of return is 4.9%