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Purchased
Rare sub $1m freehold investment
Our client was looking to purchase a commercial industrial asset with some land. In the sub $1m range this is very tough to find but after many months of looking we secured this investment that met the goals of the client. They are now in the process of purchasing another even larger asset with Rethink Investing.
Purchase Details
Asking Price
850000
Purchase Price
780000
Deposit (assuming
70
% debt)
234000
Stamp Duty
30735
Building Report*
700
Solicitor Cost*
4000
Valuation*
2000
Other Costs*
Other Fees* (Depreciation
report, bank fees)
report, bank fees)
850000
Total Cash Required
271435
Purchase Price + Purchasing Cost
817435
Net Annual Cash Flow Return
50000
Net Yield on Property
6.41
%
Net Yield Accounting for
Purchasing Costs
Purchasing Costs
6.12
%
Cash-OnCash Returns
Deposit Needed =
% + Costs
271435
Cost of Loan
(Assume
3
% pa on
70
% debt)
16380
Return of Equity
(Pure cash flow return)
12.39
%
Return of Equity with a
5% Capital Growth Rate:
26.75
%
Return of Equity with a
7% Capital Growth Rate:
32.5
%
Return of Equity
10% Capital Growth Rate:
41.12
%
*approximate number
Key Highlights
• Building Area: 762m2
• Land Area: 282m2
• $50,000 income per annum
• 3+3 year lease
• Freehold investment
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