Laurie and Trish’s bargain deal grossed $150K on profit

By Nila Sweeney | 12 May 2016

Aiming to build up a portfolio that will provide passive income for their retirement and support their children in the future, Laurie and his wife Trish had several investment properties under their belt when they spotted a three-bedroom, one-bathroom listing waving the red flag of a motivated seller.

“I found the property online, and saw the words ‘reduced again’ and ‘owner needs to sell’,” says Laurie. “I knew the area the property was in, which was a popular spot on the Gold Coast. So I lined up an inspection.”

Quizzing the real estate agent on site, Laurie discovered the property had been on the market for nearly four months, with two price reductions already. “I asked when the property was first listed and how much. I was advised it was listed at $429,000, then $399,000, then $369,000,” Laurie says. “The agent also told me the owner was over-committed and needed to off-load the property.”

While other potential buyers may have been dissuaded by the appearance of the house, Laurie looked past the problems and visualised its potential. “The property was about 35 years old, and had some cracks in the brick work indicating subsidence issues. Clearly this had put many previous buyers off,” Laurie explains. “Plus, it had purple carpets and green wallpaper... It was ugly!”

The combination of obvious vendor incentive, earlier price reductions and possible structural issues were a sounding board for Laurie to construct an offer for the buyer. After an initial bid of $300,000, both parties negotiated a final sale price of $315,000, pending a building inspection – a whopping 
$114,000 less than the owner’s original asking price.

Fortunately, the building inspection revealed that the subsidence was old and had stabilised, which was a huge saving for Laurie and Trish and they finalised the deal. After researching similar houses up for sale, the couple decided to add an extra bathroom in their renovations to line up with the needs of the market and increase the value of the property.

“Renovated houses in the area were selling in the high $400,000's,” explains Laurie. “I calculated a $50,000 budget to add an ensuite bathroom, plus cosmetic changes including new carpets, render and paint. I estimated this would increase its market value between 

To free up some funds to renovate their own home and reduce debt levels against other investments, Laurie 
and Trish decided to sell the house 
12 months later.

“In the end, we sold the property for $530,000, which was a good price for the non-waterfront side of the street,” says Laurie. After spending a bargain 
$370,000 including renovations – which was still far below the median value of $420,000 for similar properties – the couple successfully walked away with $150,000 in their pocket. 

Expert tips for finding a bargain

Buyer’s agent Wendy Chamberlain, co-founder of Amalain Buyer & Vendor Advocates in Melbourne, says finding a motivated or distressed properly is simply about research, resources and keeping an eye open at all times.

1. Know the product in the market

Find out what that particular property, in that street, in that condition, of that age and in that suburb sell for normally. You need to be able to quickly spot the abnormalities and calculate the discount versus potential.

2. Ask probing questions 

Always find out the history of the home, and the reason for the sale. Some real estate agents will be close-lipped, but some will tell you a lot. Identifying the level of seller incentive gives you a jumping-off point for negotiations.

3. Look for tell-tale signs on the property

Properties that appear to have been vacant for long periods of time without maintenance, and with signs of damage to the premises, are good indicators of a motivated sale.

4. Track properties with falling prices

Keeping an eye on properties sitting stagnant on the market for long periods allows you to monitor how flexible - or motivated - a seller is. There are websites that track these properties for you, including

5. Use the internet as a resource

Consider joining investor forums and checking sale-by-owner sites. Some states also post court proceedings and judgments for foreclosed properties online.

6. Use key words to sift out motivated sales

A powerful tool for separating motivated sales from the rest are online data research companies, such as SQM Research and Real Estate Investar. Search for emotive keywords, such as fire sale, make an offer, vendor wants out slashed, owner must sell, liquidate, bank says sell.

When you find a bargain that tocks all the boxes, you’ve discovered the treasure investors everywhere are looking for – and once you’ve been there, you'll never want to pay full price again.

Data Sources 
• CoreLogic RP Data


Top Suburbs : canterbury , coburg north , rockville , newtown , coorparoo


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