Breakthrough with my development!!

[morty]

Hi Guys!

I just couldn't help but post this as i am so excited my development is getting close to reality!

Basically i had a DA approval for 6 apartments in Brunswick. After getting all my quotes back, due to having a basement carpark the deal wasn't good enough for the banks. There was money in it but just not sweet enough, especially in this financial climate.

My saving grace was i had 12 carspaces (more than enough) and all the apartments were massive.

So after really pushing my limits with both the architect and townplanner i have just got back my amended plans with 9 apartments! Now i have to still submit this as an amendment to council so it's not a done deal yet but the townplanner is confident to get it through in around 3 mths.

My big question to them was why the bloody hell didn't we try this at the start? They can't really answer that and really i don't mind as long as i can get this through.

Anyway just couldn't help but post as i may now get to finally kick off my first big develpment, fingers and toes crossed!!

Morty

 

[Dazz]

Great stuff morty - you certainly sound excited. The passion seems to be there - so that's always a good start.

Would it be possible to post up a PDF plan of what you are proposing to council for all on the forum to have a squizz at ??

What do the numbers look like ??

What is your intention upon completion ?? Sell the lot, sell a few or hold the lot ??

 

[Belu]

Hey Morty - sounds great mate!

Can you provide some more details? size of block, construction numbers, etc please? I am looking to get into this once I have some capital from my first townhouse development so would be very interested to see the numbers!

Cheers

Ben

 

[morty]

Hi Guys,

A few extra details.

I bought the house for $375k. Old house rented out to various tenants, some good, some deadbeats over the last few yrs.

All up for DA and holding costs including plans, engineer, council etc will be $100k.

I'm still waiting for final building cost but early indications brings it to around the $2m mark, for everything. Still working out sub-division and holding costs (depends on the build contract) but i'll say $200k.

So all up around the $2.7m mark and my valuation has come in at $3.5m.

My current plan is to sell the 5, 1 bedders off the plan for $300k each. My research indicates strong demand for 1 and 2 BR apartments in the area.

My business banker at westpac has said that with 3-5 pre-sales we could start the process straight away.

That would leave me with a $1.2m debt on the remaining 4 apartments which are currently valued at $1.9m.
I've tried to upload a view from the street so hopefully it works.

Anyway guys that's a bit more info, let me know what you think...
Morty

 

[Dazz]

Hi Morty,


I'm having trouble reconciling a 1 bed flat selling for 300K in the same street and suburb as what you just bought a 3 bedroom house on what is obviously a decent block of land for only 375K.


To me, something just isn't adding up. Your land cost is only 10.7% of your GR for the project.


Either you got an absolute screaming bargain on the land, or your expected sales prices seems way too high, especially given that you increased the number of flats from 6 to 9, therefore I would assume that the size of the flats have come down somewhat in size, and therefore attractiveness.


Does any of that make sense ??

 

[Belu]

dazz i think the block was bought some time ago and has risen in value since.

 

[fernfurn]

He would have bought the house at $375 some time ago as anything like that in Brunswick would be way over that now

 

[morty]

Correct guys.

I bought the house around 6 yrs ago for a reno project, to buy the same house now would be up around the $700-$800k mark. It was only due to a conversation with a valuer who had done a similar development that planted the idea to develop the land.

Morty

 

[Dazz]

Righto - no worries. Thanks for bringing me up to speed on Brunswick residential prices. I am obviously showing my complete lack of knowledge in that particular market.