FLIPPED

• A family of seven sold their Papakura home for $819,000 but it was "flipped" by an investor on the day of settlement for $900,000.
• The on-sale only emerged when the couple's lawyer was mistakenly faxed confirmation of the deal by the investor's solicitor.
• The real estate watchdog is looking into the case.
• The investor says he declared the $81,000 instant profit to IRD.

A young couple selling their family's South Auckland home were shocked to learn the property had been "flipped" by an investor on the day of settlement for an additional $81,000.

They only learned of the rapid on-sale when the investor's law firm mistakenly sent a fax revealing the whirlwind transaction to their own solicitor.

Hua Wu made $81,000 on the deal in May last year without ever taking possession of the five-bedroom Papakura house, CoreLogic property records show.

And the subsequent buyers agreed to purchase it without ever having set foot inside, an agent says.

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The real estate watchdog is now looking into the deal, one of countless cases of investors cashing in on Auckland's bloated housing market.

Former owners Joanne Booth, a 41-year-old estimator, and her husband Nick, a 39-year-old assistant branch manager, said the extra money Wu made on their old home would have made a "huge difference" to the couple and their five children.

"Another $80,000 would have been amazing," Joanne Booth said. "We would have no mortgage now at all."

Wu is no stranger to making fast money on Auckland properties.

The Herald revealed in January that Wu was linked to two neighbouring Mangere Bridge homes that sold five times in four days last year, and that he made nearly $1 million profit on one of the properties in just six months.

The Booths bought their former 1960s Papakura home in 2011 for $410,000 but decided to relocate to Levin last year to escape the big city and give their family a better life.

They listed the house with Tall Poppy Real Estate for $815,000. Wu signed a sale and purchase agreement for the quarter-acre, subdividable property a year ago on March 8 for $819,000. Settlement was to occur on May 24.

But just days out from settlement a group of Chinese turned up to inspect the property with Wu, accompanied by the Booths' agent, Newman Hoverd.

The Booths now believe the group were the new buyers.

A day before settlement, the Booths met their lawyer to sign paperwork.

20 Don Street Papakura sold twice on same day netting an investor $81,000
20 Don Street Papakura sold twice on same day netting an investor $81,000

He informed them he'd mistakenly been faxed a letter from Wu's solicitor revealing the property was being on-sold for $900,000 on settlement day to investors Su Feng and Feng Yu.

"He said he thought he should make us aware of this documentation he'd received," Joanne Booth said.

"That kind of put a dampener on everything. We were so pissed off. We've got five kids. That's money we could definitely have used."

Their property appeared on Trade Me for rent before settlement had even occurred.

Hoverd told the Herald he had nothing to do with the on-sale.

Wu, who had earlier indicated he planned to subdivide the property, found the buyers through his own networks and sold the house privately, Hoverd claimed.

He only learned the house was being re-sold when Wu brought the Chinese group through during a final inspection and it emerged they were new buyers.

"It was really odd. They hadn't actually even seen the property and they made a wild offer. They saw it from the outside but that was it."

The Booths' $819,000 sale price was "pretty good" and higher than they what they had marketed the property for.

"There was nothing in recent sales history anywhere in the neighbourhood that was indicating a price around that figure [$900,000]."

In an email last night, Wu denied having any prior relationship to the subsequent buyers.

He had planned to rent the property out but the purchasers made him a good offer so he decided to sell.

Wu said he had declared the $81,000 profit for tax purposes.