DA Approved - Now Stuck and looking for options

[Daveh]

Your PM is doing you a disservice re the presales, get a second opinion.

It sounds like you got a DA for the whole site when you prob should have got a DA for rear lot and then a separate one for the front. Did the PM advise you to do the whole lot at once? Did they know of your intention to do the development in 2 stages?

Yeah they (PM) knew it was always our intention to build on the rear first. However they also made it clear to Council that this was our plan. I don't know how they made this clear but I understand they've got a good working relationship with the council. However on all the applications it was always for 6 units.

However if they made Stirling know they must have also made the WAPC know as they(WAPC) are letting us do it in stages.

 

[Daveh]

If we were to meet council, should I take a professional so they can understand the jargon better than me? Maybe a mortgage broker? Also want to appear humble so maybe just my wife and I?

 

[westminster]

If we were to meet council, should I take a professional so they can understand the jargon better than me? Maybe a mortgage broker? Also want to appear humble so maybe just my wife and I?

I would just go yourself. The duty town planners are usually very nice and will explain everything and your options.

As this is Stirling just start with the duty town planner to talk it through. You can just rock up and take a ticket and wait your turn to talk - usually around a 10-20 min wait. If you want an official appt at Stirling it will take forever.

 

[Daveh]

good advice, thanks Westminster.

 

[Daveh]

So I called Stirling Council.

They said they cannot budge on conditions and the build of the two dwellings must happen simultaneously. Also 28 days is up for appeal so I now have no option but to continue or to complete a new DA, which might not get approved anyway.

They also let me know they would never have approved the building of just the rear dwelling as there are to many issues such as visitor car park bays, bin stores and laundry areas. So much for my PM telling me this would have been approved.

Also I asked my current broker to give me a pre-approval for a commercial loan so I could at least verify if I get a JV going that the banks would actually give us the cash, only to be told by my broker that a pre-approval is not possible for commercial, however when I told Shahin (Elite finance) this he told me he had just got one.

I'm not feeling too comfortable with who I'm dealing with at the moment

On a positive note however Danmar homes and Shahin are now looking at my options. We'll see what happens.

Anybody else received pre-approved commercial loans?

thanks
Dave

 

[MTR]

I am pretty sure this is normal.
I know investors who get pre-approvals for commercial loans for his developments and extends when necessary. I was also sourcing commercial loan and given same info.

I don't like BA who have PM model as part of their service, especially when the client is paying big $ and they get it wrong, it's not the first time I have seen this happen.

Hope you can find a solution to this issue some how.
Finding JV partner will be dependent on profit?? I would also be doing your homework again on end values, as there is more volume/properties on the market this will effect end values and of course loan is dependent on outcome of this.

Another option, not sure whether its worth it but what about selling it with DA in place, you purchased at early part of the rising market?? It is easier for you to just take you money and run and move onto another project where you are cashed up. Of course this is dependent on profit%

MTR

 

[Aaron Sice]

Apply for the build license for both at once.

Lay both slabs at once.

Start construction on the rear then substantially commenced.

 

[MTR]

Aaron
So you basically just continue building the rear as was the original plan.

I think this could create a world of pain, unless I have it wrong.

Dave is totally dependent on the value of the rear properties (3) so he can finance the front (3).

I don't think the banks will take too kindly when they view a project half built, if that makes any sense.

Wish I had an answer though, sell project - move on or JV??

MTR

 

[sanj]

There's a pretty simple answer, commercial finance. This of course assumes that the numbers support this and there's sufficient margin.


I'd also be getting on to the PM to ask why they applied for DA in that manner, it would surely be cheaper to do 1 building with 6 apartments if you're going to build all at once so the OP has ended up worse off on both accoutns

 

[MTR]

Sanj
I think Dave's issue was he could not fund 6, not enough equity from my understand??

 

[sanj]

Sanj
I think Dave's issue was he could not fund 6, not enough equity from my understand??

I read it differently, his PM, who sounds a bit rubbish frankly, has said he'll need 4 or 5 presales out of 6 for a commercial loan which doesn't sound right to me

 

[MTR]

All I know is that Dave had to build in two stages, there was no other way he could do it, that's why he went down this road, he pm me about this.

At the time I thought it was not a great idea, similar to what you are saying, I don't like staging a deve like this, not cost effective etc.

I agree the PM should be shot, and they are the arm of a large BA company, I also advised that this group got a feaso wrong for someone I know and if they had gone ahead with it they would have lost money.

I would be asking for a full refund for starters, don't like the chances though

MTR

 

[sanj]

Oh I agree, my point is that if dave needed to build in 2 stages he should have either done a green title or vacant strata subdivisoon and got plans done for the rear with a view to demolishing front later.

It isn't daves fault of course but the PM certainly dropped the ball here. If it's the company I'm thinking of they charge more than a pretty penny for their services so if they **** up they need to dip into their pockets imo.

 

[MTR]

Oh I agree, my point is that if dave needed to build in 2 stages he should have either done a green title or vacant strata subdivisoon and got plans done for the rear with a view to demolishing front later.

It isn't daves fault of course but the PM certainly dropped the ball here. If it's the company I'm thinking of they charge more than a pretty penny for their services so if they **** up they need to dip into their pockets imo.

I see, did not think of that, yes agree they charge a pretty penny

 

[Daveh]

hi folks,

I could rant and rave about what's happened with this block. To be honest I've probably pushed this too far when I should've been more cautious. I recon I've been hearing the dollar bills instead of being sensible. Don't get me wrong though, I thought I was being sensible by entrusting this to a qualified and professional outfit to manage. I was probably wrong and if I was to do it again I'd probably try to do it myself now that I've made some contacts.

Anyway here we are now.

I can't do that Aaron, the bank won't finance it, no way. The block will only have 3 units plus a slab with a debt of more than $1.4M. Plus we can't sell any units on the rear as they can't get titled.

I have called Danmar homes, they are interested in both building and JV. Have you guys dealt with them?

Shahin is looking at commercial lending for me, he'll get back to me early next week. We'll see how that goes.

thanks
Dave

 

[SOP]

have you thought about selling the block with DA approval and move onto the next project?

 

[Daveh]

Hi SOP,

absolutely have thought about selling it. However we've been told we'd only get $600K for it by my PM, even with the DA. That number is not substantiated though (I'm currently seeking it through the agent who's renting it out). At $600K we'd make no money and possibly a loss.

And I'd also be happy to change the plan so we keep it simple and put on a triplex. The profit isn't no where near as high but we can keep it resi. I just need to make sure we can't do the 6 units first (mitigating most risks) before we go changing everything.

rgds
Dave

 

[MTR]

I have heard good reports about Danmar, but never used them.
Hope it all works out for you.

All the best

MTR

 

[LeoT]

I agree the PM should be shot, and they are the arm of a large BA company, I also advised that this group got a feaso wrong for someone I know and if they had gone ahead with it they would have lost money.


MTR

That was my very initial gut feeling at the beginning of the thread - **** PM.

Anyway work through all your options and choose the best one, but make sure you actually HAVE all the options to weigh up. I feel your stress mate. Just keep the momentum going. Its definitely a learning process. you seem much calmer than I was on my first project.. I was a bloody headless chicken..

 

[boeman]

In the past few years I haven't heard a bad word about Danmar.

In fact they were one of the first builders I noticed tackling low rise apartments on R40 etc.

From everything I hear through the industry they are doing quite well for themselves indeed.