Reading Time: 5 Minutes
Gday everyone, writing this at Melbourne airport at the moment.
Been a bit of a whirlwind weekend as a tag-along to MrsFrugalSamurai.
She’s got a work conference here so thought I’d come down and see how our Melbournian cousins are doing.
In a word?
GREAT.
Really good vibe every time we come here, people are more chilled and the food? Superb as always.
We also caught up with a few friends – some of whom have been following the last couple of posts about our most recent purchase (read here and here) AVIDLY.
Last time I disclosed the prices which I tested the waters for the fab four.

What do you think? Any thoughts on which ones would get accepted?
Here are the responses, in chronological order.
Property 2
Asking $359,000 – offered $300,000.
The agent came back immediately and stated that she presented $300,000, but it is just too low and that the owner would not consider this.
This is because it was the cheapest 3 bedder at that price and the owner could always put It back into the rental pool (it was an investment). He wouldn’t budge much at all from the asking price.
Ah darn it, at $350,000ish, in its current condition, there’s not much value in that.
Puts arms in a cross in front of chest.
Oh well, still 3 left right?
Property 1
Asking $399,000 – offered $360,000.
Property 1 was the next agent to respond, she advised me to put in a formal offer IMMEDIATELY.
I was a bit taken aback by the timing and urgency of her response… did I offer too high? Should I go lower? How much more fat can I trim?
So, being the shark buyer that I am, I put in the formal offer at $320,000… with the excuse saying the broker re-calculated and $320k was the max.
What the hell right? I mean, let’s just squeeze the lemon until there’s no more juice left to squeeze.

And you know what the agent said?
“Thanks for the offer! It is lower than we discussed but I’ll present this to the vendors and come back to you shortly”.
Desperate times call for desperate measures – poor girl.
There was also another reason that I offered lower than the initial price – that is because in Perth, there’s no cooling off period or any way to back out of a formal contract unless specified in the conditions.
So technically if you are making multiple offers, and they all accept – you’re on the hook to committing to the purchases.
That means I had to be extra careful to not put ourselves in an awkward position as we only had enough borrowing capacity.
At $360,000 – I thought it was a good price, but at $320,000 I know it’s a great price.
Property 3
Asking $298,000 – offered $210,000.
Whilst I was waiting for the response from Property 1, Property 3 came back to me also.
During the inspection for this property, the agent was very forthcoming (that’s what I’ve found odd, the transparency of Perth agents) in detailing the reasons why the owners needed to sell; they were elderly and needed cash funds to transition to a nursing home hence were in the process of liquidating their portfolio.
She also remarked in passing something about future development – but I didn’t pay much attention to this at the time.
Although I could see that the immediate area was in the midst of a construction boom, with high-rise residential towers newly and being built.

So when she texted me for an offer, I just plucked a figure of $210,000 – no one could accept such a discount from $298,000 right?
Actually, the agent did respond back – but somehow confused me with another buyer for another property.
She was also a bit dyslexic, because some of her responses made zero sense to me, I’m reading back on them now:
“Yea, offer on hand?”
“What price for the house?”
“Look out the window.”
Anyway when I FINALLY conveyed that my offer was $210,000 on the correct property, she said to “leave it to her”.
After this, Property 1 came back and stated that the owners were actually going to pull the listing off the market, they didn’t think it was the right time to sell (D’UH!) and were going to hold onto it.
I kinda had the feeling, because when I received the documentation for the property, the title deed (legal document showing legal ownership) showed that the owners lived in one of the most affluent suburbs of Perth, with no mortgage attached, so they should be able to hold onto it without too much pressure.
Sigh, 2 down, 2 to go.
Property 4
Asking $149,000 – offered $105,000.
I was actually keen on this one the most, because earlier I inspected another unit in the same complex, asking for $179,000 and rented out at $270/week.
And remember how I mentioned in Part 1 that it was a bank repossession and the agent stated that the bank would probably accept a price $15-20k below.
Whoa from a peak of $280,000 (when previous owner bought) to an asking price of $149,000 less $20,000 – that’s… that’s… $139,000, $119,000?, a lower figure.
And at $270/wk, a whopping 11% yield.
Note: be very careful with this as just because one unit is rented at this level doesn’t mean it will. The market dictates the rent, in this case being $190-$200, same with the price (past performance is not an indicator of future performance).
Still, even at $190 that’s almost 8% yield.
Unfortunately there was a catch and that was the bank only accepted an “as is, where is” offer – meaning that what you see is what you get.
And I saw a large crack in the bedroom wall from window to ceiling… as well as what appeared to be leaking water run-off from the unit upstairs, in the kitchen.
Now I’m not a builder, but anything to do with water damage and cracking in walls, you have to be extremely careful. This is because it can cause all sorts of structural issues – the ones which cost a bomb to fix but don’t add any value (as it’s usually unseen).
I paused in my enthusiasm.
Luckily the strata were very friendly and approachable and I managed to ask them about fixing these issues and whether there were any other future issues with the complex?

Oh yes, they said, any costs would be shared, and did you know about the special levy they are raising in the next 6 months to fix concrete cancer in the car-park?
Ummmm.
So I went back and did some more numbers, and came up with $105,000 to factor the cost of fixing everything as well as foreseen maintenance levies.
At this time, the agent also disclosed there was another interested buyer – a doctor from Adelaide, but he had made an offer sight unseen (meaning without a visual inspection).
Which is why the bank rejected my offer as being too low, and were inclined to accept his.
I wasn’t too disappointed actually, it was always going to be a cash-flow play and if the numbers didn’t stack up, well they didn’t stack up.
~~~
But I was becoming a little bit antsy, would have been a shame if we didn’t secure at least 1 of these properties.
That’s when the agent for Property 3 called back and said it was one of the hardest conversations she’s had in her career, but the owners accepted our offer.
At $210,000.
WOOP! WOOP!
Come back next time and I’ll share more about this property, as well as the pros and cons that I can see with it!
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 at the top right. 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!
58 Comments
kinanthiayusg
I know nothing about property business but you seem to be good at it..I found this post is quite entertaining, the way you write it makes it feels like I am hearing you speaking. The picture of the lemon and the lemon reference really made me laugh..keep up the good work (both with the business and with the writing)..
The Frugal Samurai
Haha, I’m OK, know a thing or two! Thanks for saying so, I aim to please 🙂 And yeah I do talk like how I write, it’s an affliction you see… Thanks for the kind words and for reading.
crisshex88
I am admired by your courage and your wit, I would always like to understand more about this world and start to invest in this field too.
The Frugal Samurai
That’s very nice thing for you to say, not everyone admires my wit but I am glad there are the wise few who do haha! Yeah sure, investing doesn’t have to be hard but we can just take the first step!
Gavin McMaster (@GavinMcMaster1)
Congrats on the purchase. What an amazing deal!
The Frugal Samurai
Thanks Gavin! Too kind, too kind.
Courtney
Thats super exciting, congrats on the new property. It sounds like you had a great agent that went to work hard for you. It sounds fantastic too!
The Frugal Samurai
Thank you, it is very exciting! Although here in Oz, the real estate agents work for the seller (buyer’s agents are still a novel concept here!) But I agree, am pleased with it 🙂
myweethoughts
Glad that you got another property for a decent amount of money. This is really helpful for the prospect buyers or investors.
The Frugal Samurai
That’s why I wrote it, to help people! That’s just how I am you see… hahaha, thanks for reading!
Fran Jorgensen
Thank you so much for sharing your experience! I would love to see what each property looked like to be able to compare! Looking for a new place to live can be so stressful! Good luck finding your forever place!
The Frugal Samurai
Oooo GREAT idea! I’ve got the photos somewhere and will get onto it. I know, a forever place is damn tough… luckily this ain’t it! Just a wee investment for the time being.
kumamonjeng
Plenty of learn from your list of property here. I am actually quite surprised at some of the property is quite cheap and can rented out at 270 per week. Thats pretty amazing.
The Frugal Samurai
Yeah, in Oz especially there’s a misconception of expensive properties – but just get out of Sydney and Melbourne! You’d be surprised at some of the prices… SIGH, I know – $270 per week is a ridiculous yield!
Tasheeni
Congrats on purchasing your new property. Can’t wait to see more content from you!
The Frugal Samurai
Thank you and yes indeedy, it’ll be coming out in a jiffy!
matthew
This was a great read. Interesting post, i can wait to read through the remaining part of this property.
The Frugal Samurai
Thank you! I’ll be posting more so come back and find out more! Thanks for reading.
crisshex88
A great advantage and gain from an adventure that did not seem to have been born under the best aids. Congratulations on the wit.
The Frugal Samurai
Thank you for saying so, yes I congratulate myself on the wit also hahaha – thanks for reading as always 🙂
Fred
Thanks for sharing your journey in purchasing real estate. I’ve been considering it for some time now and it helps to read how other people make it work.
The Frugal Samurai
Why I wrote it! Thanks for reading, and hope you can take that first step on the property ladder!
scrapbookadventures365
The properties look and sound amazing, I can only dream! Well done you!
The Frugal Samurai
They were all pretty good to be fair! Thank you 🙂
Fly Away Godddess
Woah! Congrats are in order. That is such a great feeling I beat. I can’t wait to hear about the future of your investment.
The Frugal Samurai
Thank you for your kind words, I aim to share more as our journey progresses!
BMB13
I don’t know much about real estate. There are so many factors to take into account.
The Frugal Samurai
There are indeed, but the first step to take is always education! Get on it, thanks for reading!
leah
how fun and I wanna see photos now for sure!
The Frugal Samurai
No problemo, photos will be coming in a jiffy! Thanks for reading.
kidneyfornikki
This was fun to read! I didn’t know about being on the hook for all accepted offers! That would make me nervous! Congrats on getting the correct offer!
The Frugal Samurai
Thank you! Glad you enjoyed the read and yeah… was a bit nerve-wracking at times but WHEW (wipes brow), glad we got there in the end!
reikamisakisan
I think we have to look into it more before we buy something. Great post, though!
The Frugal Samurai
Thanks for saying so! Yeah let me know if you guys need any help, be glad to assist 🙂
themamicam
wow! love this kind of stories with a happy ending (LOL) can’t wait to see your next post!
The Frugal Samurai
Haha yeah! Story’s not over yet but boy are we glad that we managed to secure it! Thanks for reading.
Bismah Abdelgawad
Congratulations on your new property! I look forward to hearing more about how you make out with it. There seems to be so much work involved when purchasing property.
The Frugal Samurai
There is heaps of work! Thank you for reading and yes will be sharing more for sure!
Brittany Vantrease
House hunting was stressful when we were looking. There were so many houses that were priced more than they were worth and almost as soon as we would put in an offer, the house would be snatched up by someone else that same day. It was awful! I’m glad you got an accepted offer!
The Frugal Samurai
Whoa, how long ago was this? That sounds like bubble territory! Thank you for saying so, and for reading!
Ahsimply
It was interesting to see your point of view. We are in the same business:)
The Frugal Samurai
Oh really! How are you going with your portfolio, all the best!
Jelena
You`re indeed Frugal samurai! Great deal. Congratulations. I can`t wait to see that property!
The Frugal Samurai
Hahaha this made me laugh, yes… sadly indeed the FRUGAL samurai sigh… hahaha – thanks for reading!
themommyspice
Congratulations and yay! Always love getting a good deal!
The Frugal Samurai
Indeed, it’s an awesome feeling!!! Thanks for reading 🙂
Becca Wilson
I have never really seen an in depth posting about what this would be like. It was definitely very interesting to see the process unfold.
The Frugal Samurai
Thank you for saying so! It is interesting ain’t it, I’m glad someone agrees with me! Thanks for reading.
Tadpoles And Mud Puddles
My parents have a bunch of houses that the rent out. They would have jumped up and down for a deal like that. Many of their purchases were made in similar ways. Someone who wanted to get rid of it is usually the one willing to make your bargain.
The Frugal Samurai
Whoa a bunch of houses, NICE! Maybe I should be learning from them instead, they sound like they’ve been in the game for a while… I know, desperation makes the best buys 🙂
briebrieblooms
This is such a fun format and definitely keeps me coming back for more, I can’t wait to see what you do with the property!
The Frugal Samurai
Thank you for saying so! Glad you enjoyed the read.
toastycritic
It was kind of an interesting adventure in through the market. Get a little behind the scenes look at the thought process and making money on properties.
The Frugal Samurai
Yeah it is aye? That’s what I try to do these days… ENTERTAIN (does a Russell Crowe impersonation).
Cindy Ingalls
Seems like the market is much better where you live. A friend of mine is trying to sell their house and the market for their price range is not good. It’s definitely a waiting game.
The Frugal Samurai
Yeah, Sydney is much, much better than Perth at the moment – but everything is cyclical! Ah yeah… property usually is because of the liquidity aspect of it!
aia
I know nothing about property. I have been planning to buy my own house and lot but im having second thought. haha. Congratulations to your new property.
The Frugal Samurai
Thank you, come back to learn and good luck with your search!