I have previously mentioned that I’m in the midst of doing DD on a distressed commercial property, with a view of investing. (Track Record Of Dividends From 2012)
After assessing the merits of the situation, I’ve somewhat reluctantly, decided to forgo this opportunity. Let me share the details, and perhaps someone more well versed in property investing can share insights. Afterall, I’ve always maintained that this is not my forte.
The property in question, is a freehold, ground floor shophouse with an attached 2nd floor residential unit. The property is situated in the heartlands, in a built up area within the town centre, with good foot traffic. It has been rented out to an eye care / spectacles business, which in turn sublets the residential unit above. The owner currently only deals with the business owner.
The asking price of the property is $2.3mil, but in my ......
Don’t think your scheme will work.
First, when one borrows from banks, licensed moneylenders and any financial institutions, they will caveat the property. When you buy that caveated pty, your lawyer( it’s mandatory in Spore) will take a series of actions to legally transfer the title deed to your name and to ensure no encumbrances. Your lawyer will need to remove the caveats before he can successfully transfer the title to your name.
Before the caveater agrees to the removal of caveats, it will demand the owed money.
If the current owner also owes any G, esp. IRAS, it can by law appoint your tenant to be its debt collector. In other words, all your rental monies will go to IRAS not you.
This is from the licensed bodies, now how do you want to settle with those from the unlicensed moneylenders who will hound your current tenants till they are forced to depart from the premises. You heard of loan sharks demanding payment from neighbours of debtors? They use peer pressure of neighbours, relatives, biz associates and friends
Hi Fred
1stly, it’s not a scheme. I laid out the details for discussion. But I get what you are trying to say, thanks for pointing out the error about the repayment to bank.
There has already been quite a bit of discussion about this in the post “Comments” section on SG ThumbTack Investor site, so I won’t reiterate what the other readers have already said.
As for your 2nd comment about the unlicensed moneylenders part, as I mentioned in the post, it is the main stumbling block. Other seasoned property investors who have commented seem to think it’s not a big deal and it helps in lowballing offers.
I have no experience in this regard and am just happy to listen to opinions.