Kit Home Duplex Development - Rockstar No.3

Been a bit slack on the update. Well the scaffold is gone and landscaping has begun. Fix out is almost complete as well as slatting downstairs. Picked up kitchen today and will be installed tomorrow. Bathroom will be waterproofed tomorrow and painting inside will begin on Wednesday. Hopefully tiling will begin next week. Front stairs, rear and front deck still to finish.

Here are some pics from a few days ago. Have started my rockmaking and will show some progressive shots as I go along.

Rockstar had a visitor or two

Hubby and I wondered over to Rockstar's neck of the woods to see how the project was progressing this afternoon. Looks like everyone works 7 days a week when on a project.


Interesting to look at the kit home development and the landscaping, we then went over to checkut his mates deplex wich has been sold again impressed with these go getters


Given us something to think about as I believe there is a market for two bedroom duplexes for single or DINK families.


Kind Regards
Sheryn

Ohh..,
Just remember the frozen humble pies are still in the ute

Sheryn said:

Looks like everyone works 7 days a week when on a project.

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Hey I had the morning off Sheryn. But, saying this, you are making a valid point. Building and project managing does consume your life for the 3 mths or so during construction. Something for the newbies to take into account. Even more consuming if you have no experience. Nevertheless, managing a project can be very rewarding.

Had our first offer of 365k today followed soon after by 370k. We rejected both as there are 2 people interested at present. The lady who made the offers had inspected for the first time around midday today and seemed very keen on the place. We are on the market at 389k so will see how close we can get to asking price.

Expecting to have our final occupation certificate in 2 - 3 weeks.

The people making the offer were they the ones who were waiting outside on Sunday while we were there?

Rockstar
Take the money and run (build the next project which is duplex no 2 in development no 3). A bird in the hand


Sheryn

Opps just reread your post - the lady only inspected today.

Hi Rockstar,
I've been following your posts....it looks like your duplex has been coming along nicely.

I was wondering if you would mind sharing some details about the general location of the project, size of the land and any planning issues that you may have had with the local council.

I built some townhouses in the Hunter (Cessnock) and had some issues getting a strata titled duplex approved on my 980 sqm site - even though the Local Environment Plan (LEP) allowed it (Cessnock council took it upon themselves to prohibit duplexes)...anyway, thats a long story. I'm interested to hear if you had any issues with your local council or if things went smoothly.

You must be happy about nearing the end of your project.

Regards
Nick

NickZed said:

I'm interested to hear if you had any issues with your local council or if things went smoothly.

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Hi Nick,

It pays to get acquainted with the Duty Planners and Head Planner in council who specialise in your development type. You must study the DCP and then meet with the planners to have a preliminary overview of your plans. You will hopefully soon find out what their interpretation is of the development controls with regard to what is acceptable and what is not. I always try to keep them on side and informed. By the time it goes to DA stage they are already familiar with the proposal and have agreed in principle on any variations. If there are any submissions/objections to your DA they would most likely be rejected by the planners in my favour. This has happened once to me over a side boundary setback variation.

The determination of this current dual occ DA is due on June 3rd. Any sale/contract of the current dwelling will be subject to this approval/ consent and registration of the strata plan.
This development type is called a warranted development where there is already an approved single residence and a portion of the block is to be strata titled with approved plans for the 2nd house. Those house plans must be built on the site with little or no variation.

ps: the development is in Byron Bay Shire

Rockstar,
thanks for the info... thats great.

To be honest, I have never heard of the term "warranted development" - this give me another thing to do some research on.

It's interesting hearing your explanation about how to keep Duty Planners (etc) on side. I totally agree. I faced an interesting situation, where the local council (the council members, not the duty planners) took it upon themselves to effectively ignore the legal requirements in the LEP. They asked for any "dual occupancy" DA's to be passed up the chain to the council members for review, instead of letting it all happen with the Duty planner. It was an interesting process, I knew what was going on and it ended up delaying my project only by about 3 months... The other interesting thing, the Draft LEP for Cessnock council now prohibits duplexes in the area where I built mine...

A question for you: What do you mean by the statement "Those house plans must be built on the site with little or no variation"?

Thanks
Nick

NickZed said:

A question for you: What do you mean by the statement "Those house plans must be built on the site with little or no variation"?

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Sorry Nick, a bit ambiguous that surely is.

If you want to strata off a second piece of land from the existing (which already has a house), then you need to submit a DA for the second dwelling. This needs to have all relevant plans and elevations, cut and fill, statement of enviro effects, stormwater retention plans. etc. In a warranted development the original owner can sell off the strata'ed block with DA approved plans. The catch is that whoever buys the block must build to those plans and specs. ie: it is extremely unlikely for them to be permitted redesign the house to a different floor plan. This may depend on the local council though. They don't allow it at all in our shire as far as I know.

nice one... thanks for the explanation.

Another thing I forgot to mention is that the council requires the owner to present letters from the local service providers that there is a connection point to service an additional dwelling. eg: power and telephone. Council will itself know if there is water and sewer connections that are adequate to service additional dwelling.

We now have power and lights on in the house. Decks are in progress and tiling is done. Material for front stairs and railings being delivered today so hope to have them up by Monday.

We rejected an offer of 375k and still have not budged on asking price. Will warm up once we get an offer over 380k. Another inspection on today.

Week 12 and we are almost there. Will be getting my final cert as soon as the front stairs and ballustrades are built - just waiting on the chippies' kids to recover from some sickness so he can resume. Also need the letterbox and clothesline in to get the final.

New offer of 377k yesterday but agent feels they have pre-approval to go to 380k. Some swift negotiations with the agent has set up a discount on his commission to get the buyer in at 380k with us receiving 370k and the agent 10k (he was due to get 12.5k). I promised him Sole Agency on the next house if he would cut the 2.5k off his commission. No worries so hoping to proceed to contract next week. Buyer is, of course, keen to exchange before end of month in order to get the 50% SD discount. Suits us as we can sell them in seperate financial yrs thus reducing tax burden.

380k offer came through yesterday and we accepted - as long as purchaser will move in under licence and rent back off us until settlement which could be 3 mths away. This results from the time it takes to finalise the strata title.

The newly announced stamp duty exemption for OTP houses has put us in a great position to sell the next unit before construction begins.

When the current contract goes unconditional for purchaser we will be going shopping for our next duplex site.

Will post the final figures and photos in the next couple of weeks.

Carpet went in today and fences went up. Site fence and hire dunny have gone and landscaping is underway. Still to build front stairs when chippy returns on Monday.

Will start smiling when contract goes unconditional.

Great result Rockstar, looks like the market may be easier at the lower end of the property ladder.

I for one will be really interested in your figures

Sheryn

Hey Rockstar,

Has been a great and detailed story... Congrats on the developments!!

I had previously looked at using Valley Homes but never had time to proceed with the idea... It's back on the aganeda though... Do you have any pricing for 4 bedders? I see there are no prices on the website... And you feel the $10k in labor has been about right for the builders??

Dos said:

Hey Rockstar,
Do you have any pricing for 4 bedders? I see there are no prices on the website.

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Yeah Dos, There are 9 designs in my book. Just email VKH to send you out the book and price list.

Dos said:

. And you feel the $10k in labor has been about right for the builders??

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No. I have not included my labour as project manager and site worker. I would say you could add 15k to cover my work. (the builder had it very easy with me being on the job - actually he was hardly there at all )
I will estimate my costs in the final figures.

Been cruising the last 2 weeks. Buyer has put down a deposit and we are waiting for section 149 cert from council to finalise contract exchange.

Final inspection by council is on Tuesday afternoon.

I am attaching a copy of our Development consent for the dual occupancy. Some interesting reading for beginners. We are doing a staged development in this scenario. The first stage involves strata titling the block with approved plans. The second involves constructing the dwelling.

Have also attached some forms that are required for Final Certificate to be granted.

Received Occupancy certificate on Tuesday. We are required to complete the landscaping to get our final approval as it relates to the bushfire asset protection zone for Level 1.

Contracts are now issued and we expect to exchange on Monday or Tuesday. I have attached the Strata Development Contract which is necessary for the subdivision approval from council. It was accompanied by the surveyors strata plans and was submitted today with a $465 fee. Council will take 6 - 8 weeks to process it and it will then be sent to LTO for registration. Only then can we settle on the sale. In the meantime the purchaser will move in "under licence" and pay us $290/wk for rent until settlement. They will be required to move in 3 weeks after the contract goes unconditional with regard to their finance. This allows them time to give 3 weeks notice to their current landlord.

hey Rockstar

I've been following this thread and reading with interest. Great to see you taking action and making it happen. It looks like the profits are worth the efforts

If you get the time, I'd love to see photo's of the house with the landscaping done.

Also I'm thinking about quiting my job and moving back to Oz, how much capital do you think someone would need to buy and construct kit duplexes? And how much could I count on borrowing from the banks?

Really interested in seeing your final figures

dave_olol said:

If you get the time, I'd love to see photo's of the house with the landscaping done.

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Photos will come soon.

dave_olol said:

Also I'm thinking about quiting my job and moving back to Oz, how much capital do you think someone would need to buy and construct kit duplexes? And how much could I count on borrowing from the banks?

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Depends how much you have to borrow and the type of loan you are after. If you have no job you will find it harder to finance. You will need to go for development finance or Lo doc investment loans I would imagine. Go to a broker and work this out early in the peace. I have used lo doc loans - borrowing 80% of land and construction in the past. I can't get construction loans at present so my next two projects will be 80% loan on the land only. I will have to fund the construction myself. This is why I have been forced into building a cheaper, lower end product. This has had no impact on my profit margins. Demand has been strong in the 45 - 55 yr old single occupant market. Seems to be a niche that we have stumbled across - babyboomers downsizing to a simpler life.

dave_olol said:

Really interested in seeing your final figures

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Will post them soon as well.

Thanks Rockstar,

That helps, I think I should have enough for construction costs based on the research I done on costs and your very helpful figures. I should have a safe contingency I think depending on the funding I can get for the land. If I can get 75-80% then that looks possible.

Rockstar, do your profits depend on the sub-division, or are the profits okay just not as good if you don't do the sub-division. As the strata/sub-division looks a bit more complex than what I'd want to begin with. I think I should probably learn to crawl before working.

Thanks very much for the advice.

Cheers,