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When an experienced investor scanning the national market identified Melbourne as his next growth opportunity, he came to us for guidance on how to approach it with discipline. The result was a purchase well below the comparable benchmark, secured with full comfort on the asset.
The Property
A well-positioned apartment in a modern inner-Melbourne building, in a suburb offering strong rental demand, lifestyle amenity and sound long-term capital growth fundamentals. The unit was the mirror image of a neighbouring apartment in the same building, which made market benchmarking unusually clean and the strategic opportunity unusually clear.
The Challenge
A mirror-image apartment in the same building had sold six weeks earlier for $385,000, setting an obvious market reference point. On paper it looked like a straightforward comparable purchase. In practice it was more complex. The building had a history of combustible cladding which had since been fully rectified, but the paper trail was long and the remediation history required careful review. A buyer without full comfort on that history could find themselves holding a stigmatised asset and facing a harder resale down the track. Moving without doing the work was not an option. Moving too slowly risked losing ground to less informed buyers willing to pay the benchmark price without the scrutiny.
The Strategy
We investigated the cladding remediation thoroughly: strata minutes, engineering certifications, insurance position and the funding history of the works. That research did two things. It gave our client genuine comfort that the issue was resolved and the asset was sound. It also gave us a defensible negotiating position. A building with a documented remediation history attracts a smaller buyer pool, and the vendor was aware of that. We guided the client on offer pricing and structure, anchored on the evidence we had gathered, and advised on pacing that respected due diligence without letting competing interest build. The market was in a seasonal lull, which worked in our favour.
The Outcome
The apartment was purchased approximately 12% below the comparable benchmark set just six weeks prior. A material saving in dollars, secured on favourable terms, with our client fully informed on the building’s position before exchange.
How We Did It
Patient research, honest use of what that research uncovered, and disciplined timing. Three things that sound simple but require the right kind of experience to execute together. That is where PROPOHOLIC adds value.
