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OK I get it , so it what you can offer or sweet talk to the land developer.
I know that there are other companies/individuals who are not builders themselves. But do many house and land projects than on sells them.
I wonder how they manage to do this so well?
-Do you know what margins they try and target?
-Do they build in the inner city areas or only in new land estates?
Also If I build the house has an individual and then sell it new on completion.
-IF there next buyers is a first home buyer will they be eligible for the FHOG ?
-Or must I build it under a company structure?
I understand that 20% should be the profit margin, but its seems very hard to get 90k profit after expenses if you selling the project for 400k that would mean you would have to buy the land and build at less that $320k .
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I reckon looking at a % profit in this climate is fruitless, and probably why a lot of develop/builders are pulling out of the market for a bit.
As I described with my mate; he is happy with $20k for sitting on his big fat @rse and doing not much. His profit % may be horrid, but he's not having to outlay any cash, or is outlaying very little, and is doing no work.
I, happily, have his mindset - I'll take a $20k profit on a speccy that everyone else does the hard yards on.
I'll take a $20k profit on a speccy that everyone else does the hard yards on.
BV, what Margin for error do you leave yourself if you go into a development expecting $20k profit? Surely there would be no margin for error. Very dangerous in this climate don't you think?
Or do you and your mate go into them expectnig more than $20k?
You're trying to tell a novice that that sort of margin is ok. That's crazy. You may have the resources to get your fingers burnt but I would ask the OP to carefully consider his options if he can't at least get any sort of return >15%.