The Somersoft Development

OK, here we go. Jump on if you’re game and enjoy the ride...

This is the thread where I intend to report every step of the way on the development of my newly acquired development site in Mona Vale on Sydney’s Northern Beaches. I purchased it in June 2006 and it will settle in September 2006. I'm locked into a 12 month lease with the vendor as part of the negotiation process so can't start developing until at least September 2007, but there's a fair bit of work to do before then. Here’s some background for those interested:

Somersoft thread: Just bought my new development site in Sydney

I will also be asking many a question of the seasoned developers here at Somersoft, and looking forward to sharing all of their excellent guidance along the way.

The intended development at this stage looks something like this:

3x3 bedroom townhouses of about 150m2 each over two levels.
Each townhouse to have a single garage and ensuite to master bedroom.
Full landscaping of the site on the non-built areas.
Separate courtyards for each townhouse.
Building standard to be at a premium level but within sensible cost constraints.

My rough budget is:

Land $690K (done)
Conveyancing purchase $1K (done)
Stamp Duty $27K
Stamp Duty on mortgage $5K
Finance Establishment $2K
Demolish costs $30K
Build costs $600K
Consultants $60K
Rates and Taxes $22K
Selling Fees $15K (one only)
Contingency $28K
Borrowing Interest $100K
TOTAL Costs $1.6M

Value on completion at $700K each $2.1M

Profit Margin $500K

Those numbers are still rubbery and I won't have a firm handle on the development cost and associated interest costs until I've finished the design phase.

I’ll break this development down into five major stages and report on each as we go. These stages are:

1. Design the development
2. Achieve development approval
3. Finance the development
4. Develop the site
5. Sell and/or Lease the completed development

So, in the spirit of getting right in to it lets kick off with Stage 1:

Design the Development

To that end, might I start by asking fellow forumites if they have any preferred architects / building designers that they have used in the past that might be suitable for designing this development on Sydney's Northern Beaches? I’ll see what feedback I get and do some research of my own then post on which direction I decide to take.

Oh, and by the way, this is the first development I've done so have I bitten off more than I can chew? Is this likely to end in unmitigated disaster?... Maybe, but where would the fun be in not even giving it a go! Who knows, I might get 12 months down the track and decide I'll make a better margin by selling the site with a DA approval than by developing it myself, but at this stage I want to build it so am moving in that direction.

Thanks in advance,
Michael.

Love the thread title MW, tho I was expecting the "X-files" theme playing in the background.

Seriously tho I look forward to the thread developments (pardon the pun)

It is great to witness your excitement Michael-- I have sent this link to a v good architect who incidentally is living locally to your dev site. If they can help I will p.e.m you .I would hope to get them to the July meet at Glebe for a chat- Cheers.

Costs might be underestimated

At first glance, I think you might need a bit more for:

1. Borrowing costs (given an era of rising rates, budget for another two rate rises of 0.25% within the next 12 months or fixed rates).

2. Selling costs seem a bit low for 3, but you state "one only?"

3. Construction costs seem a bit low, especially when costs are rising.

Apart from risk of costs overruns, partly covered by the contingency item, you will face the inherent market risk of falling prices (but you already know that).

Good luck.

Personally, I'd be allowing at least 10-20% of the building price for "Contingency".

May be a little light on consultants as you have to allow for engineers, hydraulic engineers, council fees, solicitors fees (strata title), surveyors, architects etc.

There are so many unknowns in the development industry. It is better to ensure that you have sufficient capital in place to be able to fund the entire development from onset to completion to reduce stress levels.

Make sure you do a full feasibility study then you should have a fair indication of costs/anticipated profit margins.

Best of luck with it all

BUNDY

Hi Michael,
3 * 150m2 townhouses will show a floor space ratio=66%. I know you keep mentioning the 50% build area, however I think you should definately confirm any FSR restrictions. 28k contingency on a 1.6M development seems way too low. Please don't take these comments negatively. I am sure your reason for starting this thread is to gather a vast array of opinion and then make your own decisions. Good luck and keep us posted.

Regards
Andrew

AndyB,

If council only allows you to build on 50% of your block, you can achieve larger floor space by building 2/3 stories. The ratio is dependant on the ground floor level compared to the size of the land.

It just depends on the design of the project to maximise the use of space.

If you maximise the ratio on the ground floor (50%) then build up, you are able to double/even triple the size of each unit. (pending other elative council regs (height limits, no. of stories etc)

MichaelWhyte may be able to elaborateont his further for us re his particular block.

Cheers

BUNDY

MIZBUF said:

It is great to witness your excitement Michael-- I have sent this link to a v good architect who incidentally is living locally to your dev site. If they can help I will p.e.m you .I would hope to get them to the July meet at Glebe for a chat- Cheers.

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Awesome! Many thanks and fingers crossed...

Bundy / AndyB, the following is an extract of the development control plan that applies to my block:

Pittwater 21 DCP said:

The dwelling density of development shall be as follows:
Primary street frontage (width) Dwelling density
25m or greater 1 dwelling per 200 sqm
18-24m 1 dwelling per 250 sqm
17m or less 1 dwelling per 300 sqm
The re-subdivision of individual or groups of dwellings subsequent to development consent may be carried out by any method of subdivision including Strata Subdivision, Community Title Subdivision, or Torrens Title Subdivision. Parking spaces, loading bays, and space for any other purpose forming a part of a sole occupancy unit are to be allocated to the dwelling. Landscaped areas, access areas and signage not forming part of an individual dwelling must be included as common property.

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My street frontage is over 40m so I am entitled to put three on there based on this control.

Pittwater 21 DCP said:

D9.4 Height General: The maximum height of a building or structure shall be 8.5 metres

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This general control applies to my block so I can go to two stories maximum which I plan to do.

Pittwater 21 DCP said:

D9.10 Site Coverage General: The site coverage shall be in accordance with the following table.
Maximum site coverage (%) Minimum landscaped area (%)
50 50
Where the existing site cover is greater than the above table, any additions/redevelopment cannot extend the footprint of the building by greater thanthe existing site cover.

Click to expand...

The existing dwelling does not cover 50% of the site so I am limited to developing only 50% of the site with the new development and maintaining 50% as landscaped area.

These are the only controls I could find which limit my building envelope, so I intend to build to the full 50% and to two stories each. 50% site coverage is 689/2 = 345m2. As I'm building three, the maximum footprint for each is 345/3 = 115m2. This footprint has to include the driveway access too so the actual building footprint will be dependent on the actual architectural design but should be about 100m2 minimum. I'll add a second story so am aiming for about 150m2 minimum for each dwelling.

Just my current thinking. I'll refine the design further taking account of all the applicable development controls and then know exactly where I stand. Hence the need for an architect / building designer up front.

Thanks for all your help. Oh, and:

AndyB said:

I am sure your reason for starting this thread is to gather a vast array of opinion and then make your own decisions.

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Spot on Andy! I'll take absolutely no offence at all with members pointing out potential issues or over-sights, that's why I'm running this thread. If I've already considered it then that's fine, if not then even better. If I look like a goose for not considering it then that's fine too, I get that quite a bit anyway...

Thanks everyone,
Mike.

All,

Here's a link to the listing on Homehound for my development site for as long as they leave it up there:

1636 Pittwater Rd, Mona Vale

Don't know that it will add too much, but some people might like to see the photos!

Cheers,
Mike

thanks for the photos link - got nice fall on the land for stormwater too. we're hitting a bit of a snag with our block having fall to the back so may have to either build up a bit at the rear or try and get stormwater access through back neighbours to the road.

got my 3xtownhouses footprint plans (conception plans only) yesterday so will have a fiddle this weekend and go back to the architect next week.

the house almost looks to nice to knock down! are you going to try and salvage some of the fitting, like those really nice floorboards, or is it not worth it? i have a single dwelling with cedar ceilings i'd love to salvage and put in the new place when we eventually knockdown/rebuild that one but not sure it it's worth the effort.

i'll stop hijacking your thread.

Hi Michael,

Thx for putting all this up front.
I'll get in touch 'wit my cuzen'....he is an architect.....no seriously
But he is at Noosa working on the Noosa Springs dev't.
Will see if he knows anyone down there.

Could I suggest you get in touch with the major architecture school in Sydney, and see if there are any up and coming creative students that would like to do a job for minimal commission. They might produce something that wows you. And you may only need to get a draughtsman to sign off on the plans, and the builder to get them approved. I'd be careful not to go overboard on architects and design though. You don't want to overcapitalize for your site's potential.

I'd also suggest you start getting out and looking at as many designs as possible. Checking what's for sale and rent (and inspecting), especially at and above your price range is a good idea to get the juices flowing.

Talking directly with building supply companies is also a good idea. They can tell you about all the latest construction techniques and materials, and give you an idea of costings, for free. i.e. hebel block, rendering (dulux have a newish product that gets painted on onto hebel)...

BTW, along the lines of not overlooking your own back yard, why not ask some of the guys at work if they have contacts.... you are after all in the building materials business You might be surprised what you'll find... If you guys sell to hardware suppliers in Sydney you could also ask those customers for guidance and recommended builders....i.e. ones that always pay their bills on time and have a good rep....with lots of work on...

BTBTW, have you considered using Michael Yardney to guide you through the first project?

TFB,

All very good points. Kay had already planned on dropping into UTS and going to see the architecture department and suggesting just that. She is alumni there now and still in tight with a lot of her legal faculty. We're also planning on spending a few weekends doing inspections of existing stock in the area that's for sale now and taking lots of photos. We're also going to ask the agents who the developers were and try and get some information from them on how they went about it. If nothing else we'll get some design ideas.

I hadn't thought of my work colleagues and customer base though so thanks for that one. I'll have a word to a good mate of mine who's the Manufacturers segment sales manager. We supply direct into some big building companies and he knows them all. Might get an angle that way too but they're mostly project home mobs.

Thanks,
Michael.

Michael,
Seems like you have got the local DCP all sorted. (I am very jealous of these minimal restrictions!). Something else you may want to look into is wether council will allow vehicles to exit the property reversing. I am unfamiliar with area, however if it is a busy road, they may require you to allow for 'turning' room on site ie vehicles exiting front first.

Andrew

good point - where we are any development that has more than one dwelling must be exited forwards so turning circles are required, and if you have 3 or more dwellings then visitor parking spaces are required on site. this really chews up your land space.

Hi,

Is it possible to use the roof space ? Higher pitch with small circular stair? i.e. turn the roof space into a sun room (have skylights etc) or a spa (tiled floor)

Kids room?

Maybe from that height there's decent views and you could have "large" skylights that in fact open the side of the roof like a picture window (image sitting in sunlight in winter out of the wind with great views?

Just a thought
Michael G

lizzie said:

good point - where we are any development that has more than one dwelling must be exited forwards so turning circles are required, and if you have 3 or more dwellings then visitor parking spaces are required on site. this really chews up your land space.

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I was going to attempt a development once. Found the land a good price but what stopped me was the parking. You may be surprised how much of a killer this can be. You'll probably find you have to allow for something in the range of 9 or 10 parking spots for the development you want to do, plus have to allow fo turning circles...

Your local council will have regulations you have to stick to regarding this. Failing that have a look at the Australian Standards for parking. This over rules anything the council stipulates.

hint hint... you can get it for free from any library instead of paying for it from the australian stanrdards website

Update: Conducted preliminary market research this weekend

Kay and I spent most of Saturday visiting current developments in our street. There is a heap of townhouse developments all along the street we’ve just bought in, with the cheapest finished product retailing for $650K. We got lots and lots of pamphlets from the developers with floor plans and architect names etc. We also got loads of good ideas and took heaps of photos. There is a very simple layout which seems to be common across several developments that has three bedrooms upstairs and a split living / dining+kitchen downstairs. We think we’ll adopt this blueprint for our townhouses and tweak it with an architect.

To that end, we scanned one of the ground level floor plans in then scaled it to our site. From there I tried a heap of different orientations on our site before settling on a simple staggered terrace sort of layout. The attached pictures show our current thinking on site utilisation. The first assumes we can build a single garage for each townhouse and avoid doing excavation, the second assumes excavation and the building of full double garages below ground with basement access to the townhouses. There is significant added cost to the excavation but it would definitely result in a higher valuation at completion. Also, the council regulations might require double garages for each townhouse and/or prohibit reversing out onto Darley Street anyway. So we might be forced to go the excavated basement parking route.

Pictures attached showing our current thinking for the site.

Regards,
Michael.

hi michael
have a look at styrocon.com.au
we are building in it there are a few tricks with it but it is a lot cheaper then brick and I think the first plan is the best with the two garages together and the one at the top.
try to use the roof as a dorm will get you more space but have a look at the council requirements for fsr and see if balconies and veranda count as part of fsr if they don't then have alook at the following.
I have a few architechs that work with me and one is a specialist in minimulisation that is getting the largest usable unit in the smallest place.
and what he has done is gives whopping great balconies some are 50 to 60 sq ( doesn't come in fsr) and then tracks the tv etc and uses the out door living space he even puts in a commecial s/steel kitchen to alow for the whether changes and uses louvers that can be closed off.
a 60sqm turns into a 110sq and no fsr change
also I would look at a flat roof instead of a pitched roof and have the roof with planters and have it a viewing deck and have deep planter boxes this gives you both views and also these planter come as part of your landscaping so the building can be bigger you can cover the whole site and have the garden on the roof.
we do in commercial.
I think you come under pittwater council and they are very lax and relatively easy to work with so if its is them you are very lucky.
my .002

MichaelWhyte said:

We also got loads of good ideas and took heaps of photos. There is a very simple layout which seems to be common across several developments that has three bedrooms upstairs and a split living / dining+kitchen downstairs. We think we’ll adopt this blueprint for our townhouses and tweak it with an architect.

Click to expand...

Michael, where do you propose to locate the bathroom(s)?

If only one, I'd imagine downstairs would be cheaper for plumbing, especially if it's near the kitchen.

But for maximum liveability (especially for someone sick in bed) upstairs might be better.

One townhouse I saw before auction had a toilet (only) on the bottom floor and a bathroom/2nd toilet on top. The problem was that there was no wash basin or bathroom on the bottom floor so one had to go all the way into the kitchen or upstairs to the bathroom.

But if the ground floor toilet was slightly larger than normal and had a handbasin then I think this arrangement (bathroom + WC upstairs, toilet/basin/towel rack downstairs) could work well.

Peter

Michael

You may consider using a draftsperson rather than an architect to save costs. Drafties can design just as well as architects and generally have much more local Council knowledge and building experience. They will give you a set price for drawings rather than using a percentage of the final building costs (like architects generally do).

As a drafty myself, I have worked for project builders for 20 years and am now working for a large developer (mentioned in this forum various times - heheh), so any information you require re plans, getting the job through Council with DA/CC and basically up to building stage, just ask me. I'll also be at the next SIG if you or anyone else wants to catch up. Have just purchased my first development site too (dual occ) so will be heading down the same path as you and many others here. All my previous buys are buy/renovate/holds.

Not sure what Council you're in, someone mentioned Pittwater. I have dealt with them over many years and found them to be a stickler for the rules. Good luck and let me know if you need any info (this goes for anyone doing a development - if I can't help, I'll try to point you in the right direction).

Anyway, gotta go out on a work site inspection now - love getting out of the office.