Real Estate - Is there something shifty about this? (1 Viewer)

[Leggy McLegs]

http://www.feldiproperty.com/feldiproperty.aspx

I don't know if there is anything shifty about this at all. I mean, just put down a $2000 deposit, and don't pay until 2008, but what do you think of these sorts of deals? Would the interest rate be a lot more or anything? Would they increase the price of the property, or do a shit job of it?

I want to hear from anyone who has any sorts of these deals. This might be a stupid post, but I never trust these things.

 

[ND]

Two words:

Compound interest.

 

[redruM]

Two words:

Compound interest.

yeah.

what they are basically doing is getting you to put a deposit down now ($2000 is quite a small deposit) and they will use your money to invest (in ing i recon!) giving them a greater realised deposit at the time of sale.

either that, or they want to pay lower interest themselves.

not sure how much you are getting screwed over, but you'll be helping them out.

 

[ND]

yeah.

what they are basically doing is getting you to put a deposit down now ($2000 is quite a small deposit) and they will use your money to invest (in ing i recon!) giving them a greater realised deposit at the time of sale.

either that, or they want to pay lower interest themselves.

not sure how much you are getting screwed over, but you'll be helping them out.

What i actually meant was that the fact that you only have to pay $2000 does not benefit you in any way. Say the apartment is worth $200k. After your initial $2000 deposit, and the accumulation after 2 years (till 2008), your debt will have increased from $19800 to about $240k (assuming 10% interest rate).

 

[redruM]

What i actually meant was that the fact that you only have to pay $2000 does not benefit you in any way. Say the apartment is worth $200k. After your initial $2000 deposit, and the accumulation after 2 years (till 2008), your debt will have increased from $19800 to about $240k (assuming 10% interest rate).

oh yeah. i get ya, but "opportunity to secure at today’s prices" and "nothing more to pay until settlement in 2008" seem to suggest that you dont have incur a debt till 2008, hence no accumulation of interest?

 

[ND]

Nah i really doubt they'd do that. That would be like $40k if interest you're saving. If that were the case, you could take the deal, collect 2 years worth of rent then sell it, incurring only transactions costs.

 

[whsmith]

You can't rent it/

You pay a deposit - Doesn't mean you own the property. Deposits are just 'good faith', that you will buy it.

1. You will own the property in 2008, at SETTLEMENT.
2. The values given are future dated, or 'hypothetical' valuations. Read all the print. These are 'off-the-plan', As in, Not evenj build yet. and they don't say this but 'we hope for your sake the property actually equals this price in the future' - it a gamble. Its like buying futures. Could be more, Could be Less.
3. They DO have properties for sale now - BUT - the ad copy aludes to the $2000 deposit being only related to the off-the-plan purchases.

Its not actually a bad system - Nothing wrong with it - Just know what they are doing.

If you want, pay the $2000, and save save save SAVE for 2 years, and fork over the full costs [which you have agreed on] in 2008. THEN you own it. Also, if you can't afford it you could always just bail, and leave your deposit with them. $2000 isn't much of a loss. [They might have some tricky contract stuff here which says you will pay 5-10% of purchase price - but of course, get a lawyer to always read your contracts].

Hope this helps!

[I am a Qualified: Real Estate Agent, Strata Managing Agent, and Business Broker]

Note: All comments above where made over a quick 'skim' of the site. take with a grain of salt.