Explain how one can keep accumulating property
- Thread starter Mustang
- Start date
Rain...
Had a friend do a develpoment about 15-20 years ago in Castle Hill, Sydney (before the drought). Turned out to be some record breaking rain during March and April.....He got out by the skin of his teeth, but others who stayed in got creamed because of the lengthy delays.
2c,
JB
Had a friend do a develpoment about 15-20 years ago in Castle Hill, Sydney (before the drought). Turned out to be some record breaking rain during March and April.....He got out by the skin of his teeth, but others who stayed in got creamed because of the lengthy delays.
2c,
JB
HEY..how come RJ gets Mentor
Gotta get me one of those..
Must be the Paint fumes
Sounds interesting though RJ
It was condition of sale .It stops investors/speculators flipping or sitting on a block for a couple of years then selling.The entire release of blocks had the same condition placed on them. It sort of quarantees the development will be completed within a certain time frame also.
cheers yadreamin
This thread is great!
I'm currently trying to get as much info as possible regarding development - my style of development would be something like 3 townhouses on an inner city block...
Please keep the anecdotes coming, good and bad, it's great to be able to learn from others' experience.
Also, if anyone has a spreadsheet with an example of a feasibility study, I would be interested to have a look, just to help me kick-off my own.
Cheers
I'm currently trying to get as much info as possible regarding development - my style of development would be something like 3 townhouses on an inner city block...
Please keep the anecdotes coming, good and bad, it's great to be able to learn from others' experience.
Also, if anyone has a spreadsheet with an example of a feasibility study, I would be interested to have a look, just to help me kick-off my own.
Cheers
I have been involved in a number of projects, admittedly they have not been resi, they have not been funded by my own money and they were backed by public listed companies. As people here would know its a whole different game when you bet your own money.
However having been involved in the devt process from conceptual design throught to finalisation of defects I know that if I were to take on a devt I would want a substantial financial buffer in terms of costs and cashflow. I would also prefer to not be doing it while undertaking full time work.
My preference is to attain my wealth objective without getting into devts, I would only be interested in doing refurb works to my properties.
There is more than one way to skin a cat, and I believe that devts are not for me at this stage.
However having been involved in the devt process from conceptual design throught to finalisation of defects I know that if I were to take on a devt I would want a substantial financial buffer in terms of costs and cashflow. I would also prefer to not be doing it while undertaking full time work.
My preference is to attain my wealth objective without getting into devts, I would only be interested in doing refurb works to my properties.
There is more than one way to skin a cat, and I believe that devts are not for me at this stage.
Reality check
Your earlier , but deleted comment implied it was really easy to make money from developing. It's not .It's hard work and has significant risk if you don't do it well.
I know / know of more people who have had bad experiences from developing than good ones. When we did our first subdivision , I don't think we heard one , " that's an easy way to make money ," comment from friends about doing a development. All we heard was " you're game , we had friends who did that and blah , blah , blah ... bad news " . I heard many specific stories about people who were already successfull in other walks of life who had bad experiences from property developing.
While we know many people who have made money from property investing , the same didn't apply for developing. Subsequently we do know people who have made money from developing, but these all occured at a time when the property market was booming and that covered up many mistakes.
See Change
Nigel,
That's just the cash I've got lying around, and that was a typo (edited in that post now), its actually $180K. That should cover the shortfall between our combined incomes and the servicability through the development year with plenty of change left over. The land is purchased and will settle next week and we can afford this under current cash flows. Its just the incremental $60-70K of interest on the development loan that will be a stretch for that year until its finished and we can sell some and rent the balance, then our cash flow will be fine. We think we can meet that incremental $70K odd out of current incomes but its good to have a cash reserve for emergencies. That interest is also staged as the development progresses based on loan drawdowns to make milestone payments. So most of it will occur at the backend of the process when we're close to exiting some of the properties and clearing our debt.
So, $180K should be plenty. The trick will be to try and finish the development and still have the $180K in reserve. I reckon we'll finish and have about $150K in reserve, but when we sell some down our cash position should increase significantly.
Cheers,
Michael.
McBrain, I'm in much the same boat, looking to do a dual occupancy dev.,
& trying to get as much feedback & information as possible. Reading old threads etc. A feasibility spreadsheet would be great to use as a possible template.
I had a feeling that my posts would have perhaps triggered some interesting comments. Im certainly not implying that developing is "easy" by any means, and I dont want anyone to think Im being niave about it. Its something that I think Id like to pursue and learn more about.
I retract the comments about "negative posts" and would certainly like to hear more actual stories or experiences about developing.
I just find it difficult at times to read over "the sky is falling" type threads.
RJ
I retract the comments about "negative posts" and would certainly like to hear more actual stories or experiences about developing.
I just find it difficult at times to read over "the sky is falling" type threads.
RJ
Not a spreadsheet but may be worth a look for you
http://www.eckmaneng.com/portfolio.htm
note: I have no connection with these guys just came across this one arvo browsing...
Rory
RJ I know it's prob not in the same league as you're considering but we're about half way thru a metro hammerhead subdivision in which we're building a 3brm house on the back lot and renoing the front. Will be cashflow neutral after all is said and done (fingers crossed)...
Have done one other subdivision in a more rural area so sort of knew the timeframes and costs involved as far as just the subdivision of the land. The building part is all new to me but things are ticking along at a steady-ish rate. The one thing I am learning is that when you estimate the timeframes you're working on it's prob double what you'd expect. Minor hurdles here and there that have taken time to overcome and councils as a rule work at a snails pace. Constant chasing of people becomes a bit grinding after a while. The process is so slow and I'm a bit of a go getter much like yourself so perhaps a reno on the go at the same time might be a game plan...
Looking to do some smaller developments in the future but baby steps for us for now. The risks are a bit too extreme early in our investing lives...
Rory
Edit: just thinking...one thing I can recommend tho is a Peter Comben's DVD workshop. Purchased it a while back. Has alot of really good info...
http://www.smartpropertydevelopment.com.au/
Again I'm not associated with him in any way...
Have done one other subdivision in a more rural area so sort of knew the timeframes and costs involved as far as just the subdivision of the land. The building part is all new to me but things are ticking along at a steady-ish rate. The one thing I am learning is that when you estimate the timeframes you're working on it's prob double what you'd expect. Minor hurdles here and there that have taken time to overcome and councils as a rule work at a snails pace. Constant chasing of people becomes a bit grinding after a while. The process is so slow and I'm a bit of a go getter much like yourself so perhaps a reno on the go at the same time might be a game plan...
Looking to do some smaller developments in the future but baby steps for us for now. The risks are a bit too extreme early in our investing lives...
Rory
Edit: just thinking...one thing I can recommend tho is a Peter Comben's DVD workshop. Purchased it a while back. Has alot of really good info...
http://www.smartpropertydevelopment.com.au/
Again I'm not associated with him in any way...
RJ I know it's prob not in the same league as you're considering but we're about half way thru a metro hammerhead subdivision in which we're building a 3brm house on the back lot and renoing the front. Will be cashflow neutral after all is said and done (fingers crossed)...
Have done one other subdivision in a more rural area so sort of knew the timeframes and costs involved as far as just the subdivision of the land. The building part is all new to me but things are ticking along at a steady-ish rate. The one thing I am learning is that when you estimate the timeframes you're working on it's prob double what you'd expect. Minor hurdles here and there that have taken time to overcome and councils as a rule work at a snails pace. Constant chasing of people becomes a bit grinding after a while. The process is so slow and I'm a bit of a go getter much like yourself so perhaps a reno on the go at the same time might be a game plan...
Looking to do some smaller developments in the future but baby steps for us for now. The risks are a bit too extreme early in our investing lives...
Rory
Edit: just thinking...one thing I can recommend tho is a Peter Comben's DVD workshop. Purchased it a while back. Has alot of really good info...
http://www.smartpropertydevelopment.com.au/
Again I'm not associated with him in any way...
Arjay, have read the old threads re. Peter Comben, good feedback & have been considering doing his Dec.(melb) seminar. If any one else is interested please PM me we should be able to split costs.
Any other comments, good/bad/indifferent would be appreciated.
Acr
I found this thread interesting - particularly since ACR was brought up as one of the vendors of Cashbonds....hope no one got burned when they blew up.
I found this thread interesting - particularly since ACR was brought up as one of the vendors of Cashbonds....hope no one got burned when they blew up.
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