I have identified a serious diamond in the rough in the jhb CBD, its a run down building situated directly on the university bus route! perfect for student accommodation, which is in shortage at the moment...i established that the building has multiple owners, but i am yet to investigate further. Its location is perfect, i have no idea why its just sitting there getting run down. Theres a pad lock on the front door, and its a 4 storey building, no roof etc. I had one client of mine who suggested we form a co-operative and buy the building...i am thinking of at least getting the owners details etc and establishing if they are willing to sell, if yes, its about funding the project etc...what do u guys think? my problems are 1: financing such a large scale deal will be difficult unless there are certain ways around this 2: how do i do all the spade work, and not get skcrewed when i try introduce investors...assistence please....
The first thing I would do is to speak to the council. Take down the physical address and go chat to them. They should be able to tell you if the building is in arrears on service charges (bargaining chip if you negotiate price with the owners). Secondly make sure that it has not been condemned i.e. not suitable for use. It might not be such a good deal if it needs major investment to get it to be fit for use. You could also run a deed search on it - should reveal whether of the banks hold bonds against it and all the current owner particulars should reflect as well. Best to do some homework on the area as well. Why hasn't it been used for the purpose you want to use it for? Could be a safety issue for the students or some other reason. Worth looking into though because you can use the experience to explore properties close to other universities as well. Might be a good idea to explore Mayfair as well (not too far from Wits and close to University of JHB) - could maybe find a nice old house to set up a commune in.
I would rather look for a few smaller diamonds in different blocks that are well maintained by property management companies. There are plenty out there especially around Wits. I picked up one on auction in Milpark Mews for R370K. 2 bed unit in well maintained newish block next to Milpark Hospital. Got the same students sharing the unit for second year running at R5500pm. Go to the sheriff auctions at 69 Juta Street in Braamfontein every Thursday @ 10:00am(don't be scared by the way the place looks)
not only does it look dodgy but there is a group that sits by the door who act as a cartel minipulating prices and making a farce of the process...but if you lucky you do get really good deals but the key is to do your research make sure rates and taxes are not gona bite you
Mr.s I specialise in renovating old buildings and have upgraded many in JHB even Standard bank bldgs. I would tread carefully as the big companies started buying all the worthwhile bldgs several years ago and it is very unlikely that one slipped through their fingers.If you ever get to the stage where you need to carry out a feasibility,post your request and i will find you..........
Yes I noticed these guys at the Juta Street and JHB south auctions. I agree very unprofessional. But there are bargains in between. I now only go to the Randburg Sandton Midrand auction. Very professional. Some price manipulation from the bigs guys but there are certain properties that they are not interested in and these are the ones I try to go for.
Thanks guys, ill take that into consideration, as the building will take quite a bit of money to fix...I was thinking that i would go get a pre-approved bond from the bank etc and start looking at auctions. How do you guys mitigate against tennants who dont pay their rent, because its pracically impossible to evict...also, i was thinking of having a cash balance equivalent to 3 - 4 months worth of costs toward the property in case i cannot find tennants for that period. Im really trying to diversify from this garden maintenance cash cow i have because the stress is really too much to bear!