Reading Time: 4 Minutes
“Argh!” Yells the frustrated young man in front of his laptop screen, a painful wince crosses his facial features.
“What’s wrong?” His wise yet still sexually attractive wife calls out, hurrying over.
“It’s SOLD already #*@(%&#”, he shouts – slamming his fist down.
“Oh… don’t worry, there’s always another one”, she responds… glad her husband is just over-reacting again. He’s just a boy at heart, still throwing those kiddie tantrums – she tells herself, before resuming the latest Korean drama series on Netflix.
Her husband continues to yell and curse in the background.
~~~
Sigh.
Hi guys – that was the little conversation MrsFrugalSamurai and I had earlier.
You see, I’ve been moping around for a day or so now.
How come?
Because when you see the “deal of the century” come and go – well, it ain’t easy to recover from!
What deal?
Let’s rewind eh.
Earlier this week – on Tuesday night, I was perusing the inter-webs as you do, having a quick scan of the real estate listing portals when I came by an ad for a 3 unit block inter-state.
At first, I thought I was seeing things.
It was listed for $300,000.
But that wasn’t what caught my attention – what caught my attention was the yield it was advertised for.
Unit 1 (a 2bdr) was rented for $265/wk, Unit 2 (a 3bdr) was vacant, Unit 3 (a 2bdr) for $255/wk.
If you work that out, that would average to be around $770-790/wk (assuming unit 2 is rented – and being 3bdr SURELY it would rent for something at least similar to the other two).
$770 a week annualised is around $40k per year.
That means the gross yield equated to a WHOOPING 13.3% – that is phenomenal.
Usually you only find those types of figures in regional or mining towns – where yield compensates for a higher risk in tenant quality and vacancy times.
But this was in a capital city, in a fairly diverse (albeit lower-socio economic) area and one I was somewhat familiar with.
To say my heart was POUNDING is an understatement – all sorts of thoughts and visions flashed by my eyes:
- $40k per annum, we can pay this sucker off in 8 years by itself and live off the rent!
- Wow this would fast-track our FIRE dream by a GOOD decade or thereabouts.
- Imagine what would happen if we had a couple, or three of these bad boys in our portfolio.
- $$$$ symbols flashing before my eyes.
It was too much, I had to sit down and grab a cool refreshing drink to calm my beating heart.
Yes, I’m ashamed to admit this but I got emotional, maybe a bit too emotional.
But to be fair, I think it’s the best real estate deal I’ve come across for a long, long, LONG time, probably the best deal to date.
EVER.
Why was it so good?
Wasn’t just the fact that it was ridiculously positive geared at an incredible yield.
It was the fact that the price was a good $60 or $70 THOUSAND below where it should be – based off my calculations and comparable sales in the area.
It was the fact that you could strata title these units, and artificially increase another $50K or so of value.
It was the fact that you could just renovate the properties (judging from the listing pictures) “as is” to further improve value or increase the rental yield.
It was the fact that being in a capital city location, vacancy times are reduced, the growth and infrastructure drivers will remain and tenant demand should always be there.
And finally, it was the fact that the block of land these units were sitting on, was significantly large enough to further develop and build more if you so chose.
What are you waiting for? Just BUY ALREADY!
I reckon aye! Shoulda just pulled the trigger.
Naturally I had to call the real estate agent. But being late night when I saw this, I decided to wait for first thing Wednesday morning (next day) to call.
Sigh, it’s painful to even think about how the conversation went:
Ring, ring
“Hello?”
“Hi, this is TheFrugalSamurai how are you, I’m just wondering if you have a few minutes to discuss this property I saw advertised online…”
“Sniff” (pulls out handkerchief and blows nose with a whimper).
S…sorry, but can’t talk about it at the moment – it’s still too darn RAW.
Get misty eye’d just thinking about it.
How about this, give me a couple of days more to recover… I’ll make sure to spill the beans and all on what happened next OK?
Ok, done deal – come back for the big reveal!
“Sigh”
The young man quietly shuts off his laptop… and stares at the pristine Eggshell White wall in front of him… a distant and forlorn look forms on his face… he reaches for the handkerchief again…
~~~
What do you think? Did you enjoy this post? Please help me out if you enjoyed this and put your email in and click on the little “subscribe” button on the right hand side. This way, you’ll never miss my words of awesomeness! So do the right thing, be a subscriber and get it straight to your inbox fresh out of the oven!
P.s. Will be continuing on with the “Bear Market Series” (read here for the latest) but this story was too GOOD not to share.
18 Comments
Hugzy
W…wow i had the EXACT same convo with mrs hugzy a few days ago… except it was a 1998 fiorentina jersey (gabbi the cabbie) that was sold
Hard to find a purple jersey
The Frugal Samurai
Yeah, but I prefer wearing Yellow – it’s a good colour and stands out. Any idea where to get a yellow jersey?
K'Mich E
Good real estate information.
The Frugal Samurai
Thank you for reading! Hope you enjoyed it.
Michelle M
But we already know that you didn’t get the house you wanted! It’ll be interesting to see what happens next!
The Frugal Samurai
I reckon! But the story’s a goodie – hope you enjoyed part 1!
Kristen Rumley
I really appreciate how you broke down all those numbers. Understanding the benefit of buying and how it is an investment is so important! -Kristen (http://kristenrumleylovesyou.com)
The Frugal Samurai
Thanks for reading and the free plug haha.
Michelle Goth
I thought I was the only one that those kinds of things happen too. I can never seem to act fast enough to grab the good deals or take advantage of out-of-this-world offers. You found this one, maybe you will be able to find another one.
The Frugal Samurai
I know, speed is the essence here… as you’ll see in part 2! I certainly hope there’s another one… but it’s been 5 years between drinks so far 🙁
Daniela Flanders
Oh man! I feel like everyone has an interesting story with buying a home – I know we did! It never goes quite as planned, but when you find THE house, you just know it 🙂
The Frugal Samurai
I know right! What’s your story? And totally agree that it never goes quite as planned, just gotta pull that trigger right? Thanks for reading!
lsharzer7
This might encourage you: I had a very similar experience with my husband when we were in the market for a house – we found what we thought was the most perfect one and were beat to the punch on it. We were heartbroken. Fast forward one month later, we found an even more perfect house and bought it. Fast forward again two years later and zero regrets. My husband is especially happy because “the one that got away” would have added 20 minutes to his commute each way to work, so he’s mentioned a few times how pleased he is that we decided on a better house that also saves him 3 hours of driving a week! 🙂
The Frugal Samurai
Nice one! There’s always a better one around the corner aye! Very happy for you guys and for your husband also, can just imagine him grumbling (like I do) for a longer commute! Thanks for the message, was a great pick-me-up!
dominique tavaris
lol. That’s funny because that’s how I feel with the apartment I’m about to move into. It’s just perfect. Great read.
The Frugal Samurai
Thanks for saying so, and good for you for finding the one! Perfection is hard to find but you’ve got it – lucky you!
Naamiyah
You made me think about a car I was interested in buying several days ago. It was perfect,but out of my reach per say. It’s interesting how things doesn’t work out the way you want it to. Anyways, thanks for a great read!
The Frugal Samurai
No problem, aw what car was it? I hope you find another one soon, my thoughts for cars though is that as long as it can get from A to B, that’s good enough for me! Haha, each to their own as they say, thanks for reading!