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Purchased
High-yielding Industrial With Upside
This is our clients first purchase with Rethink Investing. They were looking for a high yielding investment with upside. This property had a great initial yield plus it was under rented. This means there is upside in the numbers once the lease expires. The due-diligence uncovered some small discrepancies with the numbers which allowed us to negotiate another $30,000 off the price.
Purchase Details
Asking Price
2200000
Purchase Price
1955000
Deposit (assuming
65
% debt)
684250
Stamp Duty
100336.32
Building Report*
5000
Solicitor Cost*
7500
Valuation*
4000
Other Costs*
Other Fees* (Depreciation
report, bank fees)
report, bank fees)
2200000
Total Cash Required
801086.32
Purchase Price + Purchasing Cost
2071836.32
Net Annual Cash Flow Return
142552
Net Yield on Property
7.29
%
Net Yield Accounting for
Purchasing Costs
Purchasing Costs
6.88
%
Cash-OnCash Returns
Deposit Needed =
% + Costs
801086.32
Cost of Loan
(Assume
5.75
% pa on
65
% debt)
73068.13
Return of Equity
(Pure cash flow return)
8.67
%
Return of Equity with a
5% Capital Growth Rate:
20.88
%
Return of Equity with a
7% Capital Growth Rate:
25.76
%
Return of Equity
10% Capital Growth Rate:
33.08
%
*approximate number
Key Highlights
• Building Area: 917m2
• Land Area: 2,750m2
• NET Annual income of $142,552 p.a + GST (after rental management and land tax)
• 4 year lease with annual CPI increases
• Proven tenant with 15 locations
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