Property mogul’s shock $200k Costco-style Aus unit discounts

A millennial property buyer has shared how he landed units for up to $200k below bank valuations, using Costco for inspiration.

Eddie Dilleen and wife Francesca have been among those joining the bulk buys.

A savvy Aussie property richlister has shared how he’s slashed unit purchase prices up to $200,000 less than bank valuations – opening up for everyday Aussies to cash in.

The Costco-style bulk buying discount is revolutionising the housing investment market for Aussie buyers, helping pool together the total buying price of an entire building from as many as 10 people a a time.

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Eddie Dilleen has published several books and created an agency to get more everyday Aussies into the property market.

The St Kilda bulk buy which saw individual units purchased for $200k less than bank valuation.

Eddie Dilleen of Dilleen Property, who has over 100 properties of his own, said he started making the offer to clients after finding his own buying power restricted.

“When entire existing complexes of townhouses, villas and unit blocks need to be sold in one line (one transaction) and I can’t personally buy them all I bring clients into the deals.”

“I’ve been doing bulk buys for a while now over 4-plus years but lately it’s been a lot more frequent,” he said. “I got the idea when there was a strata titled block of 10 units. I personally wanted to buy the entire block but at the time I couldn’t find a way to make the deal happen as I was buying too many other properties and my cash was tied up.”

“So I thought, wait a minute, these are individually titled. What if I brought other buyers into this deal and we all win together and make instant equity gains?”

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This Zillmere Road, Brisbane bulk buy saw individual units purchased for $100k less than bank valuation.

This Brisbane property was part of the bulk buy deal, each unit purchased $100k less than bank valuation.

First home buyers and investors have been among those taking part in the deals, including a St Kilda bulk purchase in Melbourne and a Summer Hill bulk purchase in Sydney where each unit was bought for $200,000-plus less than bank valuation, he said.

“Two bedroom, one bath, one car units (Summer Hill), individually we got for $765k a piece and they were bank valued at $1m-plus prior to purchase. Comparable sales show sales between $920-$1.1m.”

A Matraville bulk purchase in Sydney also saw each property come in $200,000 under bank value, he said. “Two bedroom, two bath, one car unit individually for $677k a piece and they were bank valued at over $900k prior to purchase. Comparable sales show sales between $820-$1.1m.”

In Queensland, a Zillmere Brisbane deal saw each property secured for $110,000-plus under bank value, he said. “Two bedroom, one bath, one car unit individually we got for $422.5k a piece and they were bank valued at over $550k prior to purchase. Comparable sales show sales between $500-550k.”

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This Bunnerong Road, Matraville, Sydney bulk buy saw individual units purchased for $200k less than bank valuation.

Units like this bought in bulk deals have five times as much interest as properties available though.

Mr Dilleen said the method has seen buyers land discounts of up to 30 per cent on what banks value the property at, an incredible saving that has seen the initiative develop a large waiting list.

“We’re absolutely overrun with clients who want to be a part of the bulk transaction discount method,” he said, adding “where there was roughly 10 properties in one group buy, we often had 50-plus people want one of those so it was 5 to 1 ratio.”

He believes the basic idea of “buy in bulk and get a discount made it easy to digest”.

“Most of these deals have to settle simultaneously at the same time,” he said. “It adds a level of complexity to the transaction as we have to ensure all buyers are able to settle without delay.”

“It requires more organisational work, and yes I’m on stand by myself – if buyers aren’t able to settle then I personally have to be able to take over the purchase myself.”

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This Kensington Road, Summer Hill, Sydney bulk buy saw individual units purchased for $200k less than bank valuation.

Mr Dilleen buys into the bulk deals as well, in most cases they’re ones he would have loved to buy for himself fully.

“I also have to usually front up 5 per cent of the entire purchase price, for example the Summer Hill unit block was $11m total, and on the day of sale I had to front the 5 per cent $550k to secure the sale.”

Mr Dilleen said the buyers agency clients pay his firm a fee of circa $25k for the service.

“Most have an immediate $200k instant equity within the deal, based of individual valuations,” he said.

“For example the $677k deal, 5 per cent deposit, stamp duty, buyers agency fee comes to less than $90k but they received $200k equity in return, essentially more than doubling their return on capital instantly”.

His tips for anyone looking to get into such deals was to always be ready and get on waiting lists.

Buyers need a “minimum of about $100k savings or available equity”, Mr Dilleen said.

“This strategy is extremely niche and people can’t do this alone as it requires having unconditional buyers ready and the know how of how to legally structure the deal.”

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Originally published as Property mogul’s shock $200k Costco-style Aus unit discounts