Anyone been down this road??

I have a couple of sites which I am currently getting plans and permits together to onsell.

Site 1 - 8 units, Cost $597,000, with plans and permits will sell for $960,000.

Site 2 - 4 units, Cost $300,000, with plans and permits will sell for $500,000.

Instead of selling both, which was my initial plan I thought I could possibly sell to a builder and workout a plan where I keep a couple unencumbered from each site.

I have no idea how this could work or whether there are builders interested in this type of arrangement, but it could be a win/win.

I can not do the developments myself as the properties are in Melb and I am in Perth, no experience in multiple developments and funding these could be a major issue. My situation may change over the next 12 months, but at the moment I am looking at all options including minimising my risk.

I would be interested in anyone who has made similar type of arrangement with builder to give me some tips.

Cheers, MTR
 
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Is it possible to sell one and use profits to fund the other? Profits from Site 1 could wipe out purchase price on site 2.

Then 4 unit development could be ~ $660k which should be easy to fund and you have 4 units with a $660k debt. Assuming units rent for ~ $320/week looking at $62k rent a year vs $660k of debt generating $43k of interest? Should be fine to hold?

Edit: Back onto point though there are developers that would be interested in a JV. Where are the properties located? Talk to the local agents about builder friends. Some would be looking for the profit without having to outlay for the initial purchase.
 
Hi Belu
Yes, I could use the funds from site 1 to fund site 2, would be easier to manage and I may be able to do this using a project manager in Melb.

These properties are in Broadmeadows. Developers have been active in this area, also the Council is easy to deal with, well this is what my architect tells me. They just got permits for a 12 unit site for another client and found it was quick process.

I will start looking at my costings if I were to build on site 2 as per your suggestion, see how this pans out.

Though, I must say I like the idea of perhaps going JV with a builder and not having the headaches and risks associated with building.

Thanks

Cheers, MTR
 
HI MTR,

A JV would help with your funding. You would really want to be certain of the builder though, alot of homework there.

Regards JO
 
MTR i sold to a developer/builder in Melbourne. I know they are looking for more - could be a buyer or a JV although these guys are a bit rough around the edges!
 
Hi Belu
If they are rough around the edges I will give it a miss.

I thought I would contact my architect as I know he will be able to give me some names of good builders in the area that may be interested in a JV.

I think it will also be a matter of timing the market, if the market continues to rise as is the current situation I should do well, if on the other hand it slows down I may then look at just sitting on it for a while.

Thanks, MTR
 
MTR there is about to be a lot of development going on in an area already with high development.

Personally i am not sure if the dev prices are sustainable but i could be very wrong. I sold out in Glenroy as i didnt have the money to do anything with it and have taken the profits and bought elsewhere.

I would also be looking to do a JV with a builder if possible - will drop you a message, always good to talk with like minded people.

Ben
 
are you paying interest on it?


It is costing me about $6000 pa to hold site 1 and $1500 site 2, have not included any tax deductions, it's not killing me so I can afford to hold these properties.
 
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Thought I would post the progress on my 8 unit development.

Plans etc submitted to Council.

I have received 2 objections, one is in relation to privacy regarding a balcony the other is additional traffic and noise in street.

Objections were from neighbours on each side of the property.

I am still very confidentent that I will get this one over the line. The Council is in favour of this development. Worst case scenario it will go to VCAT, there is a 9 month waiting list.

Architect tells me that you are 80% there if Council approves.

Will keep you posted.
 
good to hear.

would you mind PMing me with what your architect is charging for the work?

i need a decent contact for Melb deals and this thread is very timely.

Cheers and good luck!
 
Thought I would post the progress on my 8 unit development.

Plans etc submitted to Council.

I have received 2 objections, one is in relation to privacy regarding a balcony the other is additional traffic and noise in street.

Objections were from neighbours on each side of the property.

I am still very confidentent that I will get this one over the line. The Council is in favour of this development. Worst case scenario it will go to VCAT, there is a 9 month waiting list.

Architect tells me that you are 80% there if Council approves.

Will keep you posted.


Hi MTR,

Have you decided on selling, building, JV as yet?

Cheers

BT
 
good to hear.

would you mind PMing me with what your architect is charging for the work?

i need a decent contact for Melb deals and this thread is very timely.

Cheers and good luck!

Hi Aaron
will pm you some details over the next couple of days,

cheers, mtr
 
Have received a reasonably good offer from a builder am waiting for it to go unconditional. Settlement is 6 months though, but am very happy to take the money and move onto another project

Cheers, MTR
 
Hi MTR,

I only just stumbled across this thread. Congrats for receiving a reasonable offer.

Out of my curiosity, when you did you acquire the two 2 sites? How did you find out the estimate value of the property when selling them with a DA approval? I'm very interested in the property development side of things, but I am not sure if it is financially viable for me to do this at this stage in time.

Thanks.

Catherine
 
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