Developing 101

Huss,

I was in a same situation a day before!

Anyway, we spoke to fair trading and told builder that we are going to report him and he refunded money.

Wish we had Huss and/or oscar in NSW!


Thanks. It all comes down to understanding your rights and obligations. I always say don't be afraid to seek, and if need be, pay for good advice.

Huss
 
One other thing to consider, especially in Vic over the next 6 months, are future changes to zonings and overlays. Land-banking is generally a popular strategy but it can backfire just as easily.
 
This is a wonderful thread, thanks!

As a potential newbie developer I would like some hand holding with a first project. Someone suggested I speak with a group like Stratawise (I'm in Perth).

What kinds of costs will be involved having someone help me, ie how much will it cut into the profit bottom line?
 
I know a guy (I meet him at a tennis court) who does all the paper work as well as buy the site. He has a builder who cost it up and give him a fixed price. Friend pays him in installments. Finally they both share the profit. Then they repeat. I thought it was a nice working relationship.
I want to ask him if I can learn from him somehow... but I'm not close enough to put that request forward.
 
Thanks OC1 for sorting out my plans and permits for my 4 unit site looks like it is all going ahead, nice work:)

Cheers
MTR
 
This is a great thread. I am a very new, potential developer down the track. Thinking of developing the land my family live on in Reservoir (Melbourne).

Excuse the basic and probably ignorant question, but is there some kind of clause you can put in the building contract that stipulates that the total cost cannot vary by a certain percentage of an agreed fixed price?

Also, Oscar, I read your thread on your development in Epping. Well done! Question, do you always list and sell after the development, or do you ever sell off the plan pre-build? I'm thinking along the lines of being able to show a lender you have pre-sales in order to get finance.

Cheers
Dom
 
Also, Oscar, I read your thread on your development in Epping. Well done! Question, do you always list and sell after the development, or do you ever sell off the plan pre-build? I'm thinking along the lines of being able to show a lender you have pre-sales in order to get finance.

Cheers
Dom

Dom, you'll find having pre-sales once you are building 4+ can help you obtain finance. Plus, it's always nice having one sold before you start; goes a long way in paying for your construction costs.

If it's a rising market and you have the nerve to wait till the end to sell you could be better off. I like a combination of both.

You're FIXED price building contract shouldn't increase in price, unless you make changes (variations) or there are unforeseen circumstances eg. hit rock

Oscar
 
Dom, you'll find having pre-sales once you are building 4+ can help you obtain finance. Plus, it's always nice having one sold before you start; goes a long way in paying for your construction costs.

Oscar

Thanks very much. If building 2 or 3, and with no pre-sales, is it difficult to finance?
 
Thanks very much. If building 2 or 3, and with no pre-sales, is it difficult to finance?

Why not try and do it under residential lending. 2 is easy and 3 is slightly more difficult but work with a banker or broker that has experience with these sorts of applications.

You should really only go to commercial for valuation purposes or when you hit 5 + unit constructions.
 
Thanks very much. If building 2 or 3, and with no pre-sales, is it difficult to finance?

Great thread oc1.

You can do three under residential to 95% LVR under $1M and four to 80% LVR.

Nice chunk of equity in an existing property and a decent income (with surplus) will help your cause.
 
You can do three under residential to 95% LVR under $1M and four to 80% LVR.

Nice chunk of equity in an existing property and a decent income (with surplus) will help your cause.

Thanks. We do have a good chunk of equity in our home.

Sorry for the basic question but in terms of beginning from the start, is the first step to engage an architect who is familiar with the council we are in to advise us of what we can and cannot achieve with our parcel of land? I am assuming once we know what we can achieve, we can then carry out a proper feasibility study.

Secondly, how do developers finance a loan during the period of construction and subdivision? Obviously the loan can be paid out at the point you sell the dwellings but if you borrow say $1m for TDC, how do developers fund the interest on this?
 
Most builders should be able to supply you with a standard build specification for their construction items so you can see if their build specs are what you want.

This is the hardest part of it all though trying to compare builders and pricing and what you can't see. It takes the longest time.

In wa it's a little easier (perhaps) as there is quite a bit of commonality with base level specifications but there is an infinite amount of things which you can specify and not specify.

I found it easiest to get the specs from all the builders then the quotes for any upgrades I wanted. I had to see about 5-10 builders to bring it down to 3 then go a bit further along the process and then pick the final.

Some days the less you know/think the better it is ;) I don't want to choose between metal or wood roof trusses I just need to know that it's suitable for my roofing and meets HIA standards.

After that its choosing the level of construction and specification which is right for the area you are building in. Lower socioeconomic or higher?

hi i'm newbie and plan to have my first project this year.
do we get builder to quote us first or do we get land first?
builder or drafter then find builder?
do we inspect the builder progress from time to time until it complete? eg. visiting the site weekly?




thanks!
 
Sorry for the basic question but in terms of beginning from the start, is the first step to engage an architect who is familiar with the council we are in to advise us of what we can and cannot achieve with our parcel of land? I am assuming once we know what we can achieve, we can then carry out a proper feasibility study.

Correct. Engaging an architect or designer who knows the ins and outs of the locality is one way to go about it, particularly if you are new to developing and planning. There are also development planners and project managers who can also assist you here. I've worked with a couple of planners at Darebin CC and they are 'generally' alright.
 
Couple more ideas. Checking council meeting documents and the minutes is useful. You can find it on the councils website. This will give you an idea of what applications get approved and those that don't. You can see the plans, types of objections and the outcome. The applications that get knocked back sometimes become a political decision rather than a planning one so bear this in mind.

Also, in Victoria you can do a search on VCAT's past planning hearings and see which applications were granted a permit. You can spends days reading past hearings. You will then get a better feel for what Is acceptable for the area.

Oscar
 
One other thing to consider, especially in Vic over the next 6 months, are future changes to zonings and overlays. Land-banking is generally a popular strategy but it can backfire just as easily.

So I see Council still trying to get their act together on this....:rolleyes:
 
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