A great deal hidden in plain sight

by Chris McKernan on Jun 08, 2021
Article appears under: About Property Investment, Case Studies, Due Diligence, Legal

The brief

My client was based in Melbourne and was looking for something with a good cashflow to give her passive income. Her budget was $530k including renovations. She had very few restrictions on the types of properties and areas that she would consider - as long as the yield was good! 

The details

• 3 bedroom home with 1 bedroom flat at rear
• Purchase Price = $492,000 (not including our fee)
• Renovation spend = $16,004
• $13,000 PA Positive Cashflow
• Rent = $750 per week

The deal

The first property I presented to the client was a 3 bedroom home with a 1 bedroom family flat at the rear. The agent was (quite rightly) disclosing that the family flat could only be rented to family members of the primary dwelling and expected total rent was around $500pw. This seemed to put investors off and it was not your typical first home buyers property either. 

I established that we met the requirements to have the family flat encumbrance removed and completed other due diligence. It turned out we were the only party to place an offer for the deadline sale, so we managed to negotiate a final price of $492,000. 

Once the property settled, I had the encumbrance removed - it was simply a paperwork exercise. We added some new fences and changed the double garage into two single garages. The main house is now rented at $470pw and the minor dwelling $280pw. As a multi-income property returning $750pw rent, I would estimate the property to now be worth at least $650,000.

The iFindProperty Difference

The client was unfamiliar with Christchurch, lives overseas, and was very busy with her employment. She relied heavily on my local knowledge and contacts. I did the extra digging to confirm that the property could be a legal home and income and I organised the changes to the fence and garage through my local contacts. I've also introduced her to a property manager to manage the property while she remains in Melbourne. 

I had a great first experience with Chris and the iFindProperty team – purchasing from overseas, in an area I was unfamiliar with was quite nerve-racking. However Chris’s excellent communication skills and clear experience with his market put me at ease. Chris went above and beyond during the entire process to deliver an excellent result far exceeding my expectations. I would not hesitate to recommend Chris to anyone looking to purchase an IP in Christchurch.