Industrial property, Melbourne · 2024
$1m of equity on day one.
A freehold industrial property bought off-market, valued a million dollars above the purchase price at settlement. A conservative structure the client's own bank was comfortable with, and the wealth-outside-the-business play in its purest form.
The situation
A freehold industrial property in Melbourne, purchased off-market in 2024 for $6,000,000. The bank valuation at settlement came in at $7,000,000: a million dollars of equity on day one.
The client wanted a conservative structure their own bank would be comfortable with. Consulting and finance documents by Nick and his team; the client's own banker funded it.
What we did
A deliberately conservative structure, documented so the client's bank could move:
- Client capital in of $2,710,000 at a conservative 55% LVR at 6.6%, funded by the client's own banker
- A stamp duty exemption secured via the CIPT transition
- Passing rent of $325,859 net a year (a 5.5% net yield), around 30% under market rent of $430,000
- Rent projected to reach $517,000 a year by 2028, a projected 8.6% net yield
The outcome
A strong-profit owner, a conservative structure their bank was comfortable with, and a million dollars of equity before the first rent cheque. Cashflow after debt is projected to grow from $108,050 a year to $299,200 a year, on a modelled projected IRR of 32.2% at 7% annual growth.
A real matter, published with the client's consent. Identifying details are withheld and no third party is named. Figures are the client's own; every projection is labelled and is an estimate only. Past outcomes do not indicate future results, and any transaction depends on individual circumstances and lender criteria.
The servicing verdict, as the worksheet showed it
Purchase (off-market)
$6.0m
Valuation at settlement
$7.0m
LVR (own bank)
55% @ 6.6%
What the client got
Equity, day one
$1.0m
Projected rent, 2028
$517k pa
Projected IRR
32.2%
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