We have just commenced construction on our latest development in Baulkham Hills so I thought it is something worth sharing the details with my very good and supportive friends here on the forum.
Purchase:
DA approved site for 4 x 3 bedroom terraces (on a corner block and 3 levels) went for sale on the internet around June 2014 advertised offers over $950,000. I ascertained the DA and plans from the agent and crunched the numbers and it looked ok. I did not physically check out the site and replied on my old friend google maps.
The DD process took me a week (mainly because I was busy with work) and by the time I called the agent back the property was under offer.
I told the agent to keep me number handy in case the purchase fell through during off the cooling off period. Fast forward the following Friday ? I was driving to see a client and the agent called me at 10am and said the purchase fell through (ironically due to finance) and asked if I was interest in purchasing it. I told him to sit tight and I would be there in a few hours to sign the contract. So I did and signed the contract later in the day.
I purchased the site for $970,000. Later that week I went and saw the site and luckily its s beauty ? its perched on the high side of the street with a gorgeous outlook. I also went home and had to explain to my wife that I dropped $1mil on a property that I hadn?t seen yet (she was surprisingly understanding)
I requested for a 3 month delayed settlement so that I could have time lining up all my ducks (CC, construction, finance, etc). They accepted and we settled in August 2014.
I engaged Mflying from the forum to ascertain the CC for me and this took approximately 4 months due to the complexity in the project (it has Basement parking and thus added construction requirements).
We commenced construction in March due to the Christmas shut down period in the construction industry and adding more items in the building contract.
The construction is a lightweight construction (concrete transfer slab and timber floors) and lightweight cladding. The property is nicknamed ?Tribeca Townhomes? and as such the interiors have a very new york feel.
Numbers:
Purchase Price: $970,000
Stamps and Legals: $45,000
CC and s73: $50,000
Bank Fees: $5,000
s94: $10,000
Holding Costs: $75,000 (approx.)
Construction: $1,405,000 (including GST)
Total: $2,560,000
Resales @ $800,000: $3,200,000
Gross Profit @ $800,000: $640,000
Resales @ $900,000: $3,600,000
Gross Profit $900,000: $1,040,000
The resale numbers when we bought the property in August 2014 were $800k for each townhouses however comparable sales support a resale value of $900k.
Lessons Learnt (so far):
1. Project home builders do not do basement builds ? you will need to engage a private builder
2. Basement builds are particularly expensive as evident in the end cost. This is not just the basement itself but also added components such as HVAC systems, extra fire exits, etc)
3. It is really important to engage a good engineer to ensure that the structural and hydraulics are designed efficiently and are not going to cost a bomb to build.
4. You have to get your hands dirty and provide suggestions to design, construction and documentation. Don?t expect the professionals to get it right or to be proactive in providing solutions. Essentially question everything and its never a silly question.
I will add to this list as we go through the construction process as this is where a lot of issues come about.
Where to from here? Im already working on purchasing another site to move to as this one finishes up.
Purchase:
DA approved site for 4 x 3 bedroom terraces (on a corner block and 3 levels) went for sale on the internet around June 2014 advertised offers over $950,000. I ascertained the DA and plans from the agent and crunched the numbers and it looked ok. I did not physically check out the site and replied on my old friend google maps.
The DD process took me a week (mainly because I was busy with work) and by the time I called the agent back the property was under offer.
I told the agent to keep me number handy in case the purchase fell through during off the cooling off period. Fast forward the following Friday ? I was driving to see a client and the agent called me at 10am and said the purchase fell through (ironically due to finance) and asked if I was interest in purchasing it. I told him to sit tight and I would be there in a few hours to sign the contract. So I did and signed the contract later in the day.
I purchased the site for $970,000. Later that week I went and saw the site and luckily its s beauty ? its perched on the high side of the street with a gorgeous outlook. I also went home and had to explain to my wife that I dropped $1mil on a property that I hadn?t seen yet (she was surprisingly understanding)
I requested for a 3 month delayed settlement so that I could have time lining up all my ducks (CC, construction, finance, etc). They accepted and we settled in August 2014.
I engaged Mflying from the forum to ascertain the CC for me and this took approximately 4 months due to the complexity in the project (it has Basement parking and thus added construction requirements).
We commenced construction in March due to the Christmas shut down period in the construction industry and adding more items in the building contract.
The construction is a lightweight construction (concrete transfer slab and timber floors) and lightweight cladding. The property is nicknamed ?Tribeca Townhomes? and as such the interiors have a very new york feel.
Numbers:
Purchase Price: $970,000
Stamps and Legals: $45,000
CC and s73: $50,000
Bank Fees: $5,000
s94: $10,000
Holding Costs: $75,000 (approx.)
Construction: $1,405,000 (including GST)
Total: $2,560,000
Resales @ $800,000: $3,200,000
Gross Profit @ $800,000: $640,000
Resales @ $900,000: $3,600,000
Gross Profit $900,000: $1,040,000
The resale numbers when we bought the property in August 2014 were $800k for each townhouses however comparable sales support a resale value of $900k.
Lessons Learnt (so far):
1. Project home builders do not do basement builds ? you will need to engage a private builder
2. Basement builds are particularly expensive as evident in the end cost. This is not just the basement itself but also added components such as HVAC systems, extra fire exits, etc)
3. It is really important to engage a good engineer to ensure that the structural and hydraulics are designed efficiently and are not going to cost a bomb to build.
4. You have to get your hands dirty and provide suggestions to design, construction and documentation. Don?t expect the professionals to get it right or to be proactive in providing solutions. Essentially question everything and its never a silly question.
I will add to this list as we go through the construction process as this is where a lot of issues come about.
Where to from here? Im already working on purchasing another site to move to as this one finishes up.