Binvested Video 16 Oct- Tim – 10 unit block
When you hear the term ‘The Block’, it might conjure up images of Scotty Cam and his dog, plus a bunch of annoying couples bickering over renovations and hamming it up for the camera. But like most reality TV, it’s about as far from reality as you could imagine.
What isn’t so unrealistic however, is that you can sometimes get a good value deal by buying a whole block of units. Sure, it’s usually going to mean a large initial outlay, but you can benefit from a lack of competition in the market.
This is because most buyers are in the market for a family home or a single apartment, while only a select few are looking to buy whole blocks.
Binvested’s version of The Block
Recently we purchased a block of 10 two-bedroom units in Sydney’s inner west. We snapped this up for $5.6 million; it’s on redevelopment land, but on a lovely, leafy street in a good neighbourhood.
When we purchased this property it took about 18 months in order to secure it and we closed on it at the end of 2019.
So, paying the $5.6 million works out of course to be $560,000 per unit, which you’d have next to no chance of getting when buying a single two-bedroom apartment individually in the inner west.
In fact, the valuations came back from the bank upon purchase at $662,000 per unit. That’s more than $100,000 in value created immediately for each owner.
On the grow
Since the purchase, some of our owners already pulled out equity and revalued at $670,000 with major big four banks.
If you were to take a look around the neighbourhood now, you would see some very nice other properties in the area, plus trees lining the street. Across the road from this property there are brand new blocks of units being built and it’s safe to say the neighbourhood is being redeveloped.
There are shops close by and it all makes for a nice area that people want to live and invest in. So while we created significant equity for our clients in less than a year, there is still plenty of upside in the future.
Investing is a numbers game
When you break it down, this deal is very simple. Two bedroom units for $560,000 each in the inner west of Sydney, with garages, redevelopment potential and valuations that came in on purchase at $662,000.
Basically, when purchasing, it was a pretty easy question for the potential owners to ask themselves: “Do I want to make $100,000 from saying yes to buying these properties?”
If you’d like to make money from investing, or get started on investment or home ownership journey, book in for a free Discovery Session with our team today!