Building a Duplex

[baylinerman]

I am ambitious to build a duplex to live in and would be interested in hearing from others who might wish to join me.
After selling my house I will have over $1.1M to invest. I want to downsize to a Duplex but to undertake the project on my own is not feasible. After land and building costs a good sized duplex will cost $1.3M. But will be worth $1.5-1.6M. So $750-800K each. This makes getting the property I want and a modest profit very feasible.
I plan to undertake this in the Sutherland Shire so if you wish to join me please raise a hand....
PS I am not a developer, just a downsizing baby boomer with some good business skills

 

[Ray butters]

Are you planning on owner building or using a builder? How much money are you looking for? Very interested

 

[Ace in the Hole]

I am ambitious to build a duplex to live in and would be interested in hearing from others who might wish to join me.
After selling my house I will have over $1.1M to invest. I want to downsize to a Duplex but to undertake the project on my own is not feasible. After land and building costs a good sized duplex will cost $1.3M. But will be worth $1.5-1.6M. So $750-800K each. This makes getting the property I want and a modest profit very feasible.
I plan to undertake this in the Sutherland Shire so if you wish to join me please raise a hand....
PS I am not a developer, just a downsizing baby boomer with some good business skills

Sure you can do it yourself, why is it not feasible?
You got 1.1 mil, you only need 1.3 mil.
Why share the profit and go through the headache of a JV with 1001 conditions?
Get an easy loan for the last 200k at the tail end of the development and you're done.
If banks won't give it to you there are other places that will.
Build, sell and profit.

 

[Scott No Mates]

I am with the ace, once you sell, you should be cashed up. Rent somewhere handy to the site. Go to a project builder eg Rawsons, Mastertons etc.

The bank will want you to use your funds first then will fund the balance.

If you decide to sell you will need to subdivide (so check this out before committing).

If you want to build and get an income from the other property you should get enough to well and truely cover the repayments and keep some in your pocket (CF+)

 

[burnside]

Building a duplex Sutherland shire

I have a 16.8m wide,728sqm flat block at Oyster bay with large mortgage, it is currently tenanted, I am thinking about a duplex development although ideally would see myself going alone.
Any idea what type of Duplex you are considering building ? something basic ? how many beds ? Have you looked at designs ? I think you may struggle at $1.3M, but yes it could be worth $1.7M + depending on location and finish.
Caringbah seems popular for this type of development, but the block alone could be $900 000 at the moment ?
Probably not a worthwhile scenario as a JV for me, could be complicated ?,the only difference to me would be an IP which could be rented for a bit more,and no maintanence cost ? and I would not have to sell my home to fund the build.
Let me know your thoughts

 

[baylinerman]

I havent taken this idea very far yet but there are plenty of options. I don know a reliable private builder, but that would entail architect costs. Alternatively I have looked at a number of designs by project home builders eg Masterton and their designs look pretty good and project builders offer an economy of scale. As for investment $$ I am looking for someone who prefers to take ownership of the finished project (one half of the duplex) so I am expecting that the JV partner will put in the same as me (around $750K) maybe held in a lawyers trust account for the build costs

 

[baylinerman]

Thanks Burnside, I am looking at project builder designs such as Masterton etc as they have a good range and can offer good economy of scale. I prefer the top end of these project project homes as the finishes are good but nowhere near as exp as architect designer projects. At least 3 beds but an important factor for me would be a generous living space. Sure you could do it yourself, but why not share the risk / reward with someone with an ownership vested interest?

 

[baylinerman]

Sorry Ace, But I am risk averse and would prefer to work with someone who like me, owned the duplex at the end.

 

[Ace in the Hole]

1st things 1st.
Find out how much a suitable duplex block of land will cost in today's market.
Include buying costs, stamp duty + legals.
Then get an average price for a high finish duplex build from a project builder who does duplex designs.
Also allow for finishing cost because many project builders don't do full turn key, total completion including landscaping, blinds, driveways, fencing, flooring, etc.
Also calculate your interest cost or opportunity if using own funds during the whole construction process.
Then calculate the legal cost to initiate and complete the JV structure.
Add in strata subdivision costs and the considerable council contribution fees.
Lastly, determine a conservative value on completion of your proposed development.

That should give you a decent feasibility.
For a lower level duplex build in this market I'd say you could make a small gain based on valuation, before selling.
For a higher finish PPOR, not so sure the figures in your first post will hold up.
I've done a duplex in Miranda a few years ago, did ok, but I put a bit of work in myself and the market rose in the few years from purchase to completion.
Without growth, you'll have to do everything right and keep any unexpected costs to a minimum to get a good result, so watch out for variations.

 

[burnside]

Building a Duplex Sutherlandshire

Ok Bayliner just to expand, I am also risk averse but I already have the land,if location suits ? Current value ?
Similar to you I have looked at the project builders,and that's probably who I will go with, similar in budget to what you are talking, check out Champion & Kurmond designs who I have already been in touch with,my plan is to move to the duplex at some stage to avoid most of the CGT but until then it would be a rental.
Would probably go for a 4 bedroom but really want open space downstairs with alfresco and possibly a small pool (my preference).
As regards Masterton yes seem ok but not modern enough facades for me plus the process can be slow,which I need to consider as I will have no tenants for the build.
Not sure how the financials can be sorted out and the costs involved.
Thanks

 

[baylinerman]

Ok Bayliner just to expand, I am also risk averse but I already have the land,if location suits ? Current value ?
Similar to you I have looked at the project builders,and that's probably who I will go with, similar in budget to what you are talking, check out Champion & Kurmond designs who I have already been in touch with,my plan is to move to the duplex at some stage to avoid most of the CGT but until then it would be a rental.
Would probably go for a 4 bedroom but really want open space downstairs with alfresco and possibly a small pool (my preference).
As regards Masterton yes seem ok but not modern enough facades for me plus the process can be slow,which I need to consider as I will have no tenants for the build.
Not sure how the financials can be sorted out and the costs involved.
Thanks

Hello Burnside, It seems that we have similarities in objectives and principles so let me take this a step further. Since you own a suitable block, we would consider compensating you for say, half the valuation. We currently live in Sylvania and know and like OysterBay. Our property is going to market in days so we are ready to press on and will rent temporarily. I would suggest not a formal JV but a commercial agreement to develop and own whilst sharing costs, perhaps a Solicitors trust account to run the project. Lots of project builders have good designs and many are flexible about minor changes. Our needs are 3 beds and a large open living space. Design and Builder can be finalised later. I am retired but not retarded and had a career in retail development. Worth further discussion??

 

[burnside]

Bayliner having discussed the Pros and cons of this venture with a couple of associates, I will unfortunately not be developing at this time.I guess like you my perfect scenario is to move into a new house closer to retirement,which for me is a fair few years away.
Good luck with your proposal I will watch with interest on how you go.
Burnside

 

[veseli]

Hi There,

Im a builder, if its feasible for both parties i might be interested.
PM me site address so i can take a look.

 

[burnside]

Duplex Sutherland shire

Veseli,
Maybe you could PM me the addresses of some of your Completed Duplex for future reference ?
You know just to check on design type and quality of your work ?
Cheers
Burnside

 

[building design]

do you have the design/building approval... we can help

 

[Luckyfamily]

Hi, I notice this post was last year. Could you please advise if you went down the Masterton path, and how everything went? I am looking at doing something similar, and deciding whether I should employ a project manager, or just go with a Turnkey from Masterton. All advice welcome. Thanks L

 

[Brian84]

Lucky I just sent you a private message

 

[Roosters]

Duplex

Hi all,

I have just purchased a duplex site in Cronulla/Nth Woolooware and done a fair bit of due diligence on costs etc Looking at a Masterton Custom design with significant upgrades in line with local architect designed duplexes selling for $1.4 to $1.6. Would be interested to have a chat with anyone local who has done/is doing similar.

 

[Ace in the Hole]

Hi all,

I have just purchased a duplex site in Cronulla/Nth Woolooware and done a fair bit of due diligence on costs etc Looking at a Masterton Custom design with significant upgrades in line with local architect designed duplexes selling for $1.4 to $1.6. Would be interested to have a chat with anyone local who has done/is doing similar.

I'm in the Shire, did my 2plex apprenticeship about 6 years ago with a development in Miranda, a few hundred meters from the redeveloped Westfields, it's been a great investment. That was a customized project build job.

Would be keen to know your numbers.

There's another dude currently finishing off a duplex in Caringbah, bordering Woolooware, check the thread out.

BTW, you need to change your User ID to Sharks now instead of Roosters!

 

[Roosters]

I'm in the Shire, did my 2plex apprenticeship about 6 years ago with a development in Miranda, a few hundred meters from the redeveloped Westfields, it's been a great investment. That was a customized project build job.

Would be keen to know your numbers.

There's another dude currently finishing off a duplex in Caringbah, bordering Woolooware, check the thread out.

BTW, you need to change your User ID to Sharks now instead of Roosters!

Yes have been following Garrett's progress in Gannons Road with Kurmond Homes and had a chat to him. Will be interested in his final numbers.

Mine are very roughly;

Land purchase plus stamp duty Cronulla/Nth Woolooware: $1,180,000

Masterton duplex with high level finishes: $730,000*

Site Costs incl demolition/landscaping/driveways/drainage S.94 etc : $100,000

Interest (holding costs): $50,000

R/E agent costs if sell both: $40,000

Total costs: $2,100,000

*subject to meeting with Masterton designer this week will probably upgrade further.

3 bed well designed Duplex sold on corner of Flinders and Franklin with Highland R/E off the plan a couple of weeks ago for $1,400,000.

Estimate at least $1.3 each or $2.6 return with $500K profit before tax.

Happy to hear any view on whether I am being too optimistic on any costs!!

ha ha always the roosters well see tomorrow!