Purchase a development project off-market

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If you’re looking for a specific type of development property, then yes it is important to establish relationships with local agents.

Searching for a townhouse development project a few years back, I introduced myself to agents at opens, and explained my specific requirements (under $500k budget, corner block, dual occupancy, etc).

Original WeatherboardAn agent contacted me regarding a deceased estate that wanted to sell quietly. Immediately following my inspection of 31 Adeline Street, Greensborough, I worked through my feasibility and visited the site quietly with my draftsman.

The next day, I wrote an offer for $410,000 that would expire within 24 hours (vendors aren’t the only one that can create urgency!).

The agent called me (on speakerphone) at the 23rd hour and explained that another offer had been made. I stayed firm on $ price, but knowing the family was likely listening, offered complete flexibility with other terms. The deceased’s son wanted to rent for 6 months after the sale, and another sibling wanted to transplant some much-loved rose bushes – my genuine openness sealed the deal.

Townhouses Sold Off-the-PlanI got the place on a 90 day settlement and, in a nutshell:

  • worked with an experienced draftsman to attain Council permissions for two 2-bed, double story townhouses
  • managed a cosmetic renovation and entered a fixed price building contract for the townhouses
  • sold the renovated weatherboard immediately after conditional planning approval for $378,000 at auction
  • sold both new townhouses off-the-plan the next financial year for $390,000 and $426,500
  • achieved over $220,000 in gross profits (a 150%+ return on equity)

Many learnings came from the project, but the most important was to repeatedly engage with local agents at opens, and be absolutely clear about the desired property characteristics.

You don’t just want to go on an automated database mailing list. When an agent is interviewing for a vendor’s listing, you want them to speak about you – a serious buyer who they can call immediately to explore an off-market sale (no advertising, opens, etc). This is a win-win-win for the seller, agent, and buyer.

Some of the best development properties never hit the market.

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