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We recently purchased an investment property for Jack and Tuna. They work in busy jobs; an ad agency copywriter and lawyer. This was their first property purchase, so they had no idea where to start and engaged Milk Chocolate to handle the entire process for them.
Thier brief to us:
- Total Budget: $500k - $600k
- Renovation Allowance: Circa $30k, depending on the purchase price
- Property Type: House
- Capital Growth Target: 5 - 10%
- Rental Yield: Enough to cover each month’s mortgage repayments
After an extensive period of research (both data-driven and on the ground in different cities in Australia), we presented back three areas we felt best matched their brief. In this case, the process took three weeks, which we feel is a necessary time to avoid rushing into recommending a certain area. After presenting each area; the numbers and district profile (which we call ‘Suburb Due Diligence’) - we agreed to proceed with our recommended region. From here we pounded the pavement, letterbox dropped, used social media and began talking to our contacts to find off-market and pre-auction properties. Our clients were happy with this process to take as long as it needed until we were comfortable presenting back options. Not rushing through this phase is important and in our experience always leads to a better outcome.
Two weeks later we presented back three on-brief options with a detailed analysis of all projected costs, rental yields, occupancy rates and dozens of other investment indicators. Our client took some time to think about the options and decided to go for option 1. We set our target purchase price between $420k-$440k and as we’d found the property before it had been listed for auction, we submitted an offer of $420,000. The agent advised they’d since received an offer of $440,000, meaning anything higher would fall outside of our recommended target purchase price. We made the decision to not proceed. It meant another round of researching, liaising and inspecting, but our service includes this at no extra cost to the client (another key point of difference between us and other buyer’s agents).
We then presented back options, one of which had just come onto the market and was by far the standout. Based on data, inspections, our forecasts, and analysis, we set our target purchase price at $515,000. Our clients didn't have the time to inspect the property themselves but were comfortable for us to make an offer based on the extensive photos and videos of the property and surrounding neighbourhood that we’d uploaded onto their bespoke website. Upon further conversations with the agent, we sensed the owner was keen to sell quickly. We placed a tactical bid of $503,000, which was accepted. Happy days.
Our initial presentation had forecast the rental price to be $470/wk, which based on the data we forecast would rise to $520/wk post-renovation. We set a renovation budget of $55,000, which again based on data we forecast would see the property re-valued at $580,000. We then worked with an interior designer to present options for the different aspects of the reno and got multiple quotes from different suppliers, tradies, and builders. This was all tracked on the client’s website, which we updated daily. Once the different parts of the renovation were agreed upon, we took care of the entire process: organising and booking painters, builders, and landscapers - project managing the entire process and being onsite to inspect the build and take photos and videos for our client to view from afar. The reno ended up costing $57,650, which, was slightly over our budget estimate, but due to unforeseen complications with the wiring of the house (something that could only have been discovered once the electrician had begun work). We were incredibly pleased with how great the house looked post-renovation. It was quickly snapped up by tenants at $520/week (5.37% yield) bang on our forecast.
Our process is different from other buyer’s agents – mainly in that we use data, technology and creating a bespoke webpage for each individual client so they can easily track every stage of the research, buying and renovation process. A no-stone-unturned approach. We start by taking a relatively broad brief from clients that we turn into a reverse-brief, which informs a number of macro area recommendations, which get refined into specific property recommendations.
Overall, this was a great example of helping a time-poor client build a property portfolio by proxy. The old saying goes ‘the best time to get into the property market is yesterday’, which we reckon holds true. So if you’ve been thinking about buying, renovating or would simply like to find out more about options for something potentially down the track, please get in touch. We’d love to hear from you and see how Milk Chocolate can best help you on your property journey. View more client stories here. As they say, the proof is in the pudding.
Here's what Jack and Tuna had to say about working with us:
"My partner and I recently used Milk Chocolate to purchase our first property (an investment property). The team at Milk Chocolate managed the process every step of the way - from conducting the due diligence to managing the purchase process and renovating the property. In fact, their support did not end there - even after the engagement had been fulfilled the team were still on hand to assist with any questions we had. They made the process of buying our first home as stress-free and enjoyable as possible. They are a friendly and communicative team but also serious about the property business. Whilst they have a lot of expertise to share they were always prepared to listen to our concerns and preferences and take them into consideration. I couldn't have asked for more in a partnership and I could not recommend them enough!"
Tuna, Lawyer / Jack Art Director, Advertising Agency
Milk Chocolate was founded seven years ago by Richie Ragel and Michael Cleary, to purchase residential and commercial property in Australia on behalf of our clients, looking for a home or investment property. To see how we can help you get in touch here.
Cheers Richie
#onthehunt #milkchocproperty #propertyconcierge
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