Can someone go through my spreadsheet?

Hi I have done my initial feasibility analysis on my project to sub-divide.

Please advise if i've covered everything.

I have few questions on the spreadsheet itself.

I would really appreciate your opinions from youre past experience and ur wealth of knowledge

Thanks
Manish
 

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I have had a look bearing in mind I have done so on my blackberry and not the pc.

What is your contingency if the build time runs over?
what is your contingency plan if it takes longer than 3 months to sell?
Have you got cash flow to pay the loan? Is it close to 5k a month?
Have you factored gst or cg where applicable?
Have you factored site costs incl slab or sub floor if applicable? Are you 100% that is included in the construction costs? I'm sure you previously mentioned that the costruction price was based on an estimate.
Does the construction cost include gst? Does it include the builders margin?
Do your costs include driveway and the usual stuff that builders don't include such as window coverings?
Will the site need a retaining wall? If so, it's an additional cost.
Sorry I can't remember but will each unit be on a seperate title and if so has that been factored?
Have you included soil report and site contours? This should be done following demolisment.
Have you factored in additional cost such as screw piles if they are required?

Most importantly if interest rates were to rise an additional 2 points can you cope with the additional cost?

Are there fees if you discharge the construction loan within the 14 months that you expect?
Have you factored LMI for construction loan?
Insurances if applicaple?
Solicitor and accountant fees on sale?
I'm most concered that you haven't included taxes on sale. That would put a pretty dent in the profits.

You have all the major stuff estimated, now I have provided the nitty gritty as food for thought.
 
i would allow say, 30k for unexpected extras , like over time on completion, and or unidentified issues with the project???? never , never know;)
 
Manish

I am in NSW but...

Putting in DA to Council cost +- 8k
Contributions after DA approved cost 19K to council

REA commission too cheap - expect it would cost double


Regards
Sheryn
 
In your "Total Outgoing Costs" - looking at the costs you included in your actual calc equation - you left out:

Soil test ($500)
Utilities and removal while renting ($1,000)
Contigency ($10,000)

Cheers,
Jen
 
You're saying two townhouses side by side - not sure what you mean, but have you considered building a duplex and *not* subdividing first?
 
2-storey Townhouse X2 - dual occupancy

Thanks for your inputs. Much appreciated

Can you go through my numbers and if there are any changes to the spreadsheet. Can you PM me plz with an attachement

thanks
Manish

I have had a look bearing in mind I have done so on my blackberry and not the pc.

What is your contingency if the build time runs over?
what is your contingency plan if it takes longer than 3 months to sell?
Have you got cash flow to pay the loan? Is it close to 5k a month?
Have you factored gst or cg where applicable?
Have you factored site costs incl slab or sub floor if applicable? Are you 100% that is included in the construction costs? I'm sure you previously mentioned that the costruction price was based on an estimate.
Does the construction cost include gst? Does it include the builders margin?
Do your costs include driveway and the usual stuff that builders don't include such as window coverings?
Will the site need a retaining wall? If so, it's an additional cost.
Sorry I can't remember but will each unit be on a seperate title and if so has that been factored?
Have you included soil report and site contours? This should be done following demolisment.
Have you factored in additional cost such as screw piles if they are required?

Most importantly if interest rates were to rise an additional 2 points can you cope with the additional cost?

Are there fees if you discharge the construction loan within the 14 months that you expect?
Have you factored LMI for construction loan?
Insurances if applicaple?
Solicitor and accountant fees on sale?
I'm most concered that you haven't included taxes on sale. That would put a pretty dent in the profits.

You have all the major stuff estimated, now I have provided the nitty gritty as food for thought.
 

Attachments

  • my development feasibility.xls
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Your real estate agent fees of $12k (cell C74) are based on your "profit" (Cell C74), I would have thought the fees should have been based on total expected sales (cell C72). This would increase them substantially.
Paddy
 
This might be a stupid question but you are claiming the First Home Owners Grant as you say it will be your PPOR but then you are including renttal income, as your are going to rent out the purchased house while you apply for development approval. I would have thought to claim the FHOG you would have to live in the purchased property for a centain period of time. You should probably include either the FHOG or the rental income but not both. Also you have included the FHOG as an expense in you Total Outgoing Costs (Cell C62), shouldn't this be a revenue?
Paddy
 
I usually look at total expenses for sales(legals,agents etc.) to be about 4% of sale price.

$15000 for contingency seems to be way under especially for a 1st time developer.

3 months to sell is(incl.60 day settlement) is optimistic.

You seem to be trying to make your figures give a predetermined outcome
which would be very risky on your part.

Cheers

Pete
 
You're saying two townhouses side by side - not sure what you mean, but have you considered building a duplex and *not* subdividing first?

why would a duplex be better than sub-dividing? I would have assumed that sub-divided / strata titles would be the way to go?
 
Discussing this with the other half this morning. He would like you to keep us posted.

Now some key things he picked up.
- civil engineering (works). This obviously varies but he has found on his jobs that they have varied from 8k to 20k.
- you are looking at around 90k of GST
- as Sheryn said, council contributions need to be factored.
- without a contract to build, you won't know what is included in the price and what isn't. I can bet your soil report will find your soil classification as P. You may need to spen a bit of $$ to do the things not included in the building contract.

I think your figures still need a bit more tweaking and they will be much clearer once you have the contract outlining the inclusions.

Best of luck
 
why would a duplex be better than sub-dividing? I would have assumed that sub-divided / strata titles would be the way to go?
I was thinking a single building with a common wall might be slightly cheaper to build than two separate ones.

Also I vaguely recall on some other thread someone was having issues with finance for two houses, would have to look into it more but banks will treat it different to do a dual occupancy (two separates, sudivide later) vs subdivide THEN build two, vs build an attached duplex and then strata/subdivide it. I didn't pay a huge amount of attention as I'm subdividing *then* building a second, so I can sell the first house to pay for the damn thing.

I think Rockstar was the one with the issues.
 
Is it just me but $40k agents commission to sell two townhouses at $675k each.

I reckon even at $20k for both is alot. Surely it would not take more than 6 weeks to complete the sales. I must be in the wrong game.
 
actually that is about right...marketing included

if you work an average anywhere in this country of 2.5% you'll find that comms on 1.35M will be about 35k

allow a couple of grand for advertising and 40k is about right
 
actually that is about right...marketing included

if you work an average anywhere in this country of 2.5% you'll find that comms on 1.35M will be about 35k

allow a couple of grand for advertising and 40k is about right

I dont agree with Marketing. I agree with Neil Jenman on this. All you need is a sign out the front, a listing in the RE window and a listing on realestate.com.au

Any serious buyers will do the drive down suitable streets and make themselves known to agents.

How many houses would you expect a standard agent to sell in a year?
 
I have a premonition that this is going to start world war three again with the agent bashers on this site - however, here goes...

agree all you like with Neil - I like a lot of what he says - but i disagree with him on this point.

you cannot sell a secret. too bad if the street the house is on is a back street that no-one traffic drives down. It would prevent it being seen.

Window cards are almost a thing of the past - the numbers you see at your window now are maybe 10% of what existed even 5 years ago.

As for RE.com - yes a necessary evil, but marketing requires a broad approach and developing attraction strategies includes many media. I am not talking about a full page ad in the Sydney Morning Herald, but certainly each property should have a tailored marketing plan developed to attract the largest number of buyers to the property to increase the chances of finding a buyer and perhaps even creating that sense of urgency or multiple offers...

this point alone (marketing) is why the majority of jenman agencies do not compete well on a local level - they tend to have their support in a very localised area due to the methods of marketing their services (doorknocking etc), but when there is a coupe of competitors close by they struggle. I have worked with Jenman, non-Jenman independent and franchise agencies - so am not pulling this out of my rear...

A good agent won't touch a listing without marketing - reputations are everything in this game and when you develop a reputation for being able to sell quickly at a good price, you don't want to risk having a property sit on the market for a while due to either high price expectations by the vendor or them not willing to "put it out there!"


as for your question about sales per year - difficult to answer with market fluctations and types of agencies, locale etc - but one a fortnight gives a good income. Any agent pulling over 100k could be GENERALLY considered as having a clue.

hope this helps...
UC


(ducks preparing for the barrage from agent haters)
 
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