Armadale Development Site

[snappyman]

Hi Guys,

I found this nice development site in Armadale...

http://www.realestate.com.au/property-house-wa-armadale-116065931

It's R15/40, so I was thinking of 15 3x2 villas on the site with roughly 200m2 blocks and 120m2 building area.

Lots of existing examples of similar sized villas selling for around $300,000 - $320,000 mark.

There are currently 72 units on a 2.5 acres being built right next door to this site.

What do you guys think?

 

[mrdobalina]

Watch out for the clay in Armadale. Walk the site next door and you can see all the clay in the soil.

 

[westminster]

What do I think?

- How much does it cost vs the $300-320k value?
- If there is 72 villas next door I'd be wary - that's a potential glut right next to it.
- if it was that good, the guy building 72 villas would have bought it so it might be overpriced

At the end of the day, it's a big project with plenty of risk and wouldn't suit my risk profile unless the feasability was rock solid with profit over 35%, I had rock solid finance lined up from the beginning, due diligence clause in O&A and a direct line to Jesus.

 

[snappyman]

Yep, there is lots of clay for sure, certainly adds to development costs. But even with that factored in there are resonable margins.

There will be lots of similar villas on the market in 12 months, but I still reckon they will do quite well. Should generate good income if can afford to hold on to a good percentage of them.

Anyway, he who dares wins!

 

[Rixter]

What do you guys think?

Thanks for the heads up.

 

[mrdobalina]

This block has been on the market for a long time. I remember looking at it about 6 months ago. You might be able to sneak in a bargain deal!

Good luck. Let us know how your feasibility goes.

 

[snappyman]

I have it on good authority that the developers of L300 Albany Hwy, did try to aquire this site in 2011 for $950,000, but were unsuccesful.

They paid 2.7M for their 2.56 ha site back then.

 

[mrdobalina]

A project like this will cost about $4m total. If need you need to borrow to fund it, then it'll be commercial loan, and will require a lot of pre sales.

An alternative is this block in kelmscott, which may not come with the clay issues (or as much anyway):
http://m.realestate.com.au/property-house-wa-kelmscott-115747855

 

[snappyman]

Yep, the Kelmscott one looks promising too, maybe location not as good.

Gee for $925,000 you could almost get a 700m2 devvie block in Belmont

 

[perthguy]

Yep, the Kelmscott one looks promising too, maybe location not as good.

Gee for $925,000 you could almost get a 700m2 devvie block in Belmont

910m2 R20/40/60 From $680000 - http://reiwa.com.au/Buy/Pages/More-info.aspx?listingno=3411683
746m2 R20/40 FROM $639,000 - http://reiwa.com.au/Buy/Pages/More-info.aspx?listingno=3420185
797m2 R20/40 Buyers over $649,000 http://reiwa.com.au/Buy/Pages/More-info.aspx?listingno=3428875
766m2 (corner) R20/40 $750,000 http://reiwa.com.au/Buy/Pages/More-info.aspx?listingno=3428619

The R20/50/100 blocks are more per m2 though.

 

[mrdobalina]

Hey snappyman. Here's one in Armadale that might interest you.
3149m2 for $639k R15/R40

http://reiwa.com.au/Buy/Pages/More-...1&listingid=10426909&listingno=3428720&puid=0

 

[D.T.]

and a direct line to Jesus.

What kinda LVR can i get on one of them?

 

[mrdobalina]

What kinda LVR can i get on one of them?

infinity + 1

 

[snappyman]

Thanks for the heads up Mr D. I didn't see that one!

Entrance from Albany Highway is the only downside compared to the Owtram Road block.

I wish I had been looking last year, I would have bought this one...
http://reiwa.com.au/real-estate/Armadale/3383068
Sold for $790,000