Reading Time: 6 Minutes
What’s up guys!
How’s everyone’s weekend?
Thanks for coming back to your favourite Frugal Samurai.
We continue today with the story about how I let the one (ring) to rule them all slip through my grasp.
If you haven’t read the first part – do so here.
If you have read the first part, you’ll notice that it’s overwhelmingly emotional and yes I may have been blindsided by the superior numbers on offer such as the 13% gross yields or $70k asking price below my perceived value.
So why didn’t I pull that trigger then?

You snooze you lose!
Technically this is true as I did sleep on it prior to calling the agent…
FIRST thing next morning.
Ring, ring
“Hello?”
“Hi, this is TheFrugalSamurai how are you…”
Here’s the summary of that conversation:
- The property vendor is “very, very, very old”(agent’s words) and is looking to finalize his estate.
- The online listing has only been up for a day or so and already there were 14 enquiries.
- The agent knew it was under-priced, but an independent valuation had confirmed a value of $300,000 based on the fact one of the previous tenants (unit 2) had punched a few holes in the walls (as you do). Insurance claim was underway but hence why it was vacant and valuation came in low.
- A couple of offers were presented already – one from a gentleman who just sold a land lot in his portfolio and had offered cash to settle by Xmas.
- The first open viewing was on the weekend, no special viewing times before that.
- The real estate agent had just returned from Fiji, and whether I had ever gone to Fiji? (No, but I hope one day?)

Lessons:
In hindsight, following on from that convo – there were a fair few things to take away.
- Always, always, ALWAYS find out WHY the owner is selling.
- This is absolutely paramount in negotiation and determining your offer. If they disclose the 4 D’s – Death, Divorce, Debt, Disaster, as the buyer you’re in a good spot.
- If you think it’s a good deal, don’t be naive enough to think that no one else would spot it.
- See why I got so emotional (in part 1)? I can guarantee that there were 14 other prospective buyers who were equally as emotional and seeing the dollar signs, just like me.
- The valuation.
- Even though this one was an independent valuation – do valuers act in the best interests of the owner? NO. The valuer’s first interest is their own – that is, to not be sued.
- You see valuation reports often end up in the court of law to determine formal estates and proceedings, go too high and BAM someone can sue the valuer for misrepresentation of value. Best to err on the side of caution.
- Usually the valuer can only assess if properties are fit and habitable to live in – given unit 2 has issues with holes being punched in or other issues (agent didn’t say) it may be that unit 2 was heavily discounted or only assessed on land value, or even factored out altogether in the final value.
- As buyers this is where a significant arbitrage opportunity exists between what the assessed value is pre-renovation, the cost of renovation and the added value post-renovation.
- There’s already a precedent set with the offer of cash to settle by Xmas, that is a significant offer to better.
- Hmm I wonder how Fijian coconuts would taste…

Food for thought?
Needless to say that after this conversation with the real estate agent I was thinking over and over in my head whether I should just make an unconditional cash offer to settle by Xmas without inspecting it.
The pros of the deal were evident on paper, in the numbers and through the research I conducted in the moments following.
But there was this nagging thought of the issues of going unconditional:
- Unlike the other buyer, I haven’t sold any land lots, (or any other lots) recently and certainly don’t have a spare $300k lying around for moments like these.
- I wasn’t 100% confident I would obtain the finance for this either in such a short time-frame.
- Without inspecting the properties, I wouldn’t have a clue what works are required for unit 2 (or unit 1 and 3 even). Last time I checked if someone punches holes in walls, they usually do some other naughty stuff as well. The cost of renovation could far exceed what I anticipate.
- Instead of being the deal of the century there’s a chance this could be a significant cash drain (although mitigated by unit 1 and unit 3 grossing 9% rental yields).

So I played it safe, politely asked my existing property manager to have a look at the first open on the weekend….
What happened next?
Suffice to say that on Wednesday night, I checked the listing again.
Lo and behold!
It went under offer.
A quick call to the agent confirmed that the buyer (whoever they are) had offered unconditional without inspecting the unitblock at all.
Cue my ramblings and tantrums which MrsFrugalSamurai put up with.
And you know what she said?
“Why didn’t you just buy it, I buy stuff online all the time”.
Yes dear, but a Tom Ford “Nude Dip” eye-shadow palette is somewhat different to a $300k unitblock.

~~~
Looking back, I can appreciate the fact that yes this was a fantastic opportunity to get ahead in our financial goals.
And to be fair, it would appear that the agent didn’t exactly do the right thing by their vendor – they priced it wayyy too cheap.
In my opinion, a longer, more-drawn out campaign (certainly not over Xmas slow-down period) or perhaps even go to auction.
But maybe the vendor was one of those adamant old-school types of doing things their way; or the agent wanted a quick and easy commission; or all parties involved wanted an early Xmas present.
Whatever the reason, I’m very disappointed but can’t help but feel a bit optimistic of what’s coming next.
You see, in the grand scheme of things – there’s a generational wealth shift coming from the asset rich, cash poor baby boomers – and we are on the cusp of that.
So who knows, perhaps deals like this will pop up more and more?
You won’t find me so cautious next time!
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. MrsFrugalSamurai has always been the wiser one of us two, and she always says there will be another good deal. And you know what? She’s right! We might be onto one right now… but shhhh it hasn’t been finalized yet, I’ll be sure to let you know if it does!
26 Comments
Hugzy
Read every word… took notes *adjusts glasses and puts fountain-tip pen back in shirt pocket
Btw is the current mystery deal you are referring to getting Raheem “the Dream” Sterling off poor Mr Taylor for James Milner and Gigi Whynowdum? If so, not so FAST leisure suit larry >:O(
The Frugal Samurai
Hahaha, who is Mr Taylor – is that an alias for that FIRE’d guy we both know? The one with a loving wife, two kids and a steady $180k job?
Dwight Alleyne
Buying property or a house is always stressful. Sometimes I don’t think you even have time to think and before you know it you miss out on a good deal
The Frugal Samurai
Yeah I know right, it just goes like hotcakes sometimes! Thanks for reading, I’ll be sure to be a bit more speedy next time!
Konstantina
I couldn’t agree more. You always need to know why a property is for sale. A good friend of mine was lost a ton of money w 2 years because she didn’t ask some of these very important question 😕
The Frugal Samurai
Ouch that really hurts, is your friend OK now? Honestly though it’s never easy to see someone lose in investing, especially if they worked and saved hard for a significant amount of time – hope they can pull through!
Bee - Bites 'N Pieces
Laughing at your wife’s comment of “why didn’t you just buy it.” Thanks for the informative post!
The Frugal Samurai
Yeah she’s like that actually, just knows EXACTLY what to say… “shakes head”. Thanks for reading though! Hope you enjoyed it 🙂
Rachel
I don’t ever invest in property. It hasn’t been something that is a reality for us. IT seems scary!
The Frugal Samurai
It CAN be terrifying, especially with such a large amount of cash at stake. You’re like MrsFrugalSamurai – she invests in… bags and shoes… “sigh”
Silvia
I have not idea about the 4 D’s, interesting stuff! I’ll remember next time.
The Frugal Samurai
No problem, hope you enjoyed the post! Thanks for reading.
Vanessa Delia
I have to say that there is wisdom in the saying “better safe than sorry”. It may not have turned out to be such a great investment. You came across this one, there will hopefully be others.
The Frugal Samurai
This is so very true, I think that there will be others and yes you’re right, rule number one is to never lose money! Er on the side of caution I’d say, thanks for that!
Dani Flanders
I love your writing style and humor! Great advice as well 🙂 We learned a lot of this through our first experience in buying a home and now know how we would do things a little differently next time 🙂
The Frugal Samurai
Thank you for saying so, one of the very few haha! I know right, buying a home can be absolutely terrifying but it’s a baptism most people should go through once so they’ll never be scared again! Thanks for reading 🙂
Brittany
Oh I wish I knew more about this topic. I know nothing about real estate and property value and speech like this surrounding those kinds of decisions.
The Frugal Samurai
That’s OK, you’ve come to the best place to learn it! Good luck with the learning, TheFrugalSamurai.com can help (if I say so myself!)
Batiste Ladonna
I totally agree with you. It is so true that you need to know why the property is for sale. Asking the right questions is important.
The Frugal Samurai
100% agree with you that you agreed with me! But honestly, not many people ask the simple questions – could shave tens of thousands off the final price, money for jam really! Thanks for reading.
Bindu Thomas
I totally i agree with you. I haven’t invested in any property yet. These are some great advice.
The Frugal Samurai
No problem, thanks for reading! Maybe you can start soon!
Echo aka The Mad Mommy
They always say you have to jump in, take the risks and spend the money to make the money, but that can be absolutely terrifying. I would have had your same hesitations, if not more!
The Frugal Samurai
Thanks for the affirmation and yeah there’s always risk in investing! Gotta spend it to make it huh? Thanks for reading!
AnythingRad.Com
It’s always best to check on the details and all the hidden agenda from the sales. After all, it’s moneyw e’re talking about. Thanks for all these insights!! Better to be vigilant than sorry
The Frugal Samurai
Yes, they say that it’s better to be safe than sorry and that’s what’s happened here – thanks for reading!