26 Unit Development Windsor

[Sailesh Channan]

After several months of searching and making offers we have finally managed to secure a DA approved site in Le Geyt St Windsor.

Since establishing Developers Edge we have managed close to 70 small development in the outer suburbs of Brisbane. Prior to that I was involved in recommending splitters, sliders and other small developments in the inner city suburbs between 2000 to late 2003.

The outer suburbs where better value in 2004 to 2008 however, after that I could not see value so I stopped recommending sites to our clients and concentrated on my building company. However, with the recent correction I have started looking again. I also have to adjust my investment strategy to achieve the best possible return on equity to our clients.

The property at Windsor was acquired for $73k per site and the current feasibility and due diligence done to date shows a MDC being over 20%.

This deal is being acquired in a joint venture with several of our regular clients. We are currently on the look out for other similar properties so we can repeat the process.

PS I am running a Specialist Property Development Workshop on the 18th April at the Broncos Leagues Club for investors wishng to learn more.

 

[Rockstar]

All the best Sailesh, How's the other one going you were posting on the forum? Haven't seen an update for months?

When will construction begin for this one?

 

[Sailesh Channan]

I will post an update on that soon. We are working on the internal fitout at the moment so we are not far from finishing.

The Annerley construction was contract work for our construction company.

The Windsor project is being managed by our project management business where we source the property, carry out due diligence organise JV partners and company structures, funding, construction and sales.

As we are involved in the project management the bank will consider us as a owner builder and therefore reduce bank leverage. Therefore, we are currently tendering the work out to other builders.

Our initial estimate was that we would need $2m of own funds to complete the deal however, this has now been halved. Based on conservative estimates the project currently shows a profit of over $2m which means the return on equity is phenominal.

 

[Sailesh Channan]

Settlment on this deal is 29th June. We hope to start construction a month later. Naturally, this is dependant on achieving a minimum of 10 presales.

Anyone want to buy a well located boutique innercity appartment

 

[NBS]

Hi Sailesh,

Nice to see you out and about, have not spoken since meeting you and your wife at Indooroopilly with a few others off this site.

Will try and get along to your thing at the Broncos.

Brian

 

[Sailesh Channan]

I guess most investors have been in hibernation while we weather the negative growth storm.

There are some bargains around and we are now looking for a cash flow strategy rather than buy and hold. However, investors looking to buy an hold will do well if they focus on inner city suburbs as long as they have a medium to long term view.

 

[Sailesh Channan]

Gave the finance broker the go ahead to start valuations which will be used as part of the finance application. Commercial valuations cost around $7k however, they value all aspects of the project.

The main aspects being the land value, construction costs and end values of the units. This will then be used cross referanced against our feasibility report. Our report is in a format that is familiar with the banks and valuers so it makes the process a lot easier and makes us look professional.

The broker is very confident that we will pass so we have also started working on formulating a marketing program to get the presales.

 

[Sailesh Channan]

DA approved plans attached. I love the layout and the generous unit sizes. The top two floors should have city views.

We have priced the two bedders from $465 to $480k in our feasibility which is below the current competetion. I feel that only 3km from the CBD it has to be good value. Units further north are selling for more so I hope the valuers confirm our assessment.

What do you think?