A deal worth considering?

[triggerhappy]

Hi everyone.

Am very new to the forum but have really enjoyed reading and learning via others comments and experiences. So, I thought I would post some details re my situation in hope of receiving some guidance and suggestions because I think I'm going to need all the help I can get for this one. Yes, I'm also new to developing.

I own smallish block zoned B3 (Mixed use) in a medium size NSW coastal town. The block is rented commercially atm with good returns but only takes up approximately half the bock - 400m2. The block is quite thin (12.5m), so will keep the architect busy. I am considering developing the rear of the block by adding 4 or 5 units (reasonably) and everybody I speak to considers it a great opportunity, if done right. I'm sure alot of them are initially!!

I've been told by a builder after a informal site inspection that I could potentially fit 6x2 bedroom units (<100m2) over 3 levels on there but personally I feel this is probably too much for the site and more importantly me. I'm thinking 4 and a penthouse?

I have approached council and spoken briefly to 3 different planners who have flagged parking and the proposed residential entrance as serious considerations. Otherwise, they are promoting this type of mixed development. Currently the rear of the block is used for staff parking for the commercial properties and the odd customer but as it is an unnamed rear access lane it has not street frontage, no numbers and therefore considered by council as not ideal for residential units due to the rear lane access. I have approached council and in the process of a proposal for the naming of the rear lane. If successful this could possibly alleviate one of the issues they've raised.

I did not want to go into too much detail too early but wanted to give you an idea of the project and welcome all comments & suggestions. Like other "green" developers I have read about on these forums, I intend to share my experiences throughout the process.

Thanks in advance!

 

[triggerhappy]

With all the knowledge and experience around on the forum, any suggestions would be really appreciated. Thanks.

 

[westminster]

It sounds exciting and I hope it all works out.
I like mixed commercial and resi -

The only things I'd be worried about at this stage is:
- how to get a loan for it
- how will it affect what is currently there during construction
- if more units gets more money - not always the case. Sometimes 3 units and less height is the same profit as 6 units and a longer build time and more risk

 

[baby blue eyes]

Sounds like a great opportunity for you. No ideas to add as not experienced in this kind of build, but definitely sounds like a great value add to an existing property.

 

[triggerhappy]

It sounds exciting and I hope it all works out.
I like mixed commercial and resi -

The only things I'd be worried about at this stage is:
- how to get a loan for it
- how will it affect what is currently there during construction
- if more units gets more money - not always the case. Sometimes 3 units and less height is the same profit as 6 units and a longer build time and more risk

Thanks for your comments.

1. Have spoken to my bank and would seem that the loan should not be too much of an issue however, construction of 4+ units will require commercial lending.

2. Construction should not affect the current businesses as there is a front and a rear access and in any case would work with the builder to allow an access road from the rear for the business owners only. I intend to ground level as car parking and work up from there.

3. Have put all the various scenarios into a very basic excel spreadsheet to allow comparison between number and type of units. Currently 3 units and a penthouse over 3 levels seem to have the most favourable figures. I would like to go at least 3 stories to take advantage of the harbour views as much as possible.

Thanks for your comments, look forward to any/all suggestion and similar experiences.