Development JV's

Discussion in 'Innovative Techniques' started by seank, 5th Apr, 2015.

  1. seank

    seank Member

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    Hi all,

    My ultimate goal is to get into property development, starting off small boutique developments of 2-6 townhouses or units then progress onto larger projects. After speaking to my broker I know this isn't possible from a finance point of view. The only way forward is to form a partnership JV with another person with similar goals to me. Does somersoft have the facility to link like investors this way? or does anyone know how this is possible through other avenues? Can anyone with experiences with this shed light on how I can get this off the ground?

    My details:
    34 years old
    3 IP's all in Brisbane cash flow positive
    Good equity position
    Decent income

    Development will be in Brisbane within 30km of cbd- ideally buy LMR site which has approvals done already. Not looking at keeping any stock just want to build then sell for profit, then go again.
     
  2. bumblegoodie

    bumblegoodie Call me BG

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    iam in the same boat like you wanting to JVs....

    As you can see no one wants to JV with someone who does have experience....

    I interested but i think we might end up "blind leading a blind" !!??!?!

    hahaha


    Maybe we should start off JVs for newbies who are hunger for success!!!!

    Is a great idea!!!!!
     
  3. oc1

    oc1 Developer

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    It really depends what you bring to the table. An experienced developer wouldn't go in for a 50/50 split. Then, as bumblegoodie stated you don't want to be in the blind-leading-the-blind position either with someone inexperienced.

    One way would be to find a cracker of a site or currently own one.
     
  4. nowork

    nowork Member

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    I would like to get into development jv's as well, but have no experience.
     
  5. Mick C

    Mick C Mortgage Broker

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    You have servicebililty/ income - Tick
    You have equity/ Cash?capital - Tick.


    Not sure why you can't do this development yourself...especially if your planning on doing a small 2-4 unit one ...The only thing stopping you would be either one of the 2 OR the big one - Experience/unknown.
     
  6. TomVoyageWealth

    TomVoyageWealth Tom@VoyageWealth

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    Maybe rather than a JV you'd be better off using a project manager. From the sounds of things it's more of a comfort and experience factor coming into play here.

    Sure it'll cost you a bit of coin however you can be comfortable that they will know what they are doing (provided you choose wisely) and will deliver the project with minimal hassle. You could even ask for a "road map" and sort of follow along with the intent of having the exposure to the processes without the risk of missing something yourself.

    Cheers,
    Tom
     
  7. Coxy89

    Coxy89 Member

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    In a similar position but not as far along as you are. I want to start doing small stuff as soon as we have the equity. Plan is to buy PPOR and IP3 this year and then start looking for a development site.

    I'm in brissy too, happy to meet up n have a chat even if its just to bounce ideas off someone.
     
  8. jamontoast

    jamontoast Member

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    I too am in the same boat.

    The blind leading the blind isn't always necessarily that bad. I mean we're educated people who strive to make a difference - we're already taken that next step by being here in this forum.

    Even if we do loose out.. Split between 2 or 3/4 etc. How much could you really be loosing except for time. For the most part, i'd assume we'd break even or make very little money. ;)
     
  9. seank

    seank Member

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    I have equity, however I spoke to my broker and don't have the serviceability to fund the builders loan.

    An example is recently my friend who is on high income over 150k+ p/a was going to go in partnership with me, however this has not eventuated.
     
  10. seank

    seank Member

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    Breaking even or make very little money is not my intention here.
     
  11. seank

    seank Member

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    I may just bite the bullet and buy a good site, I'm just scared to take that initial step of buying a sight and it never getting off the ground, and then having to sell for a potential loss.
     
  12. bumblegoodie

    bumblegoodie Call me BG

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    Hi OC1,

    yes, maybe my step now is to find a cracker site. Any way you could give me some hints? are you refering to medium to high density sites?

    BG
     
  13. bumblegoodie

    bumblegoodie Call me BG

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    Hi Mick C,

    agree.

    can one person on a average income obtain a loan for both the land and construction costs?

    Just say now days the land cost $1 mill and duplex costs $600K

    that $1.6 mill is that realistic?

    BG
     
  14. bumblegoodie

    bumblegoodie Call me BG

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    Hey Jam,

    since we have similar interest ... wanna catchup?

    send me a PM?

    BG
     
  15. mflying

    mflying Property Developer

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    600k build won't cut it.

    You looking at around 1.8m...650 700k build n rest soft cost(holding, professional fees,contrui etc)

    I am in Sydney too if you want to catch up.
     
  16. bumblegoodie

    bumblegoodie Call me BG

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    Hi Mflying,

    Sure, will pm u .... We can have a chat during lunch

    BG
     
  17. Claire90

    Claire90 Member

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    Hi All,

    I'm also looking to do a small development at some stage. I'm not sure I'd do a JV, but happy to chat and share learnings with anyone in Syd.

    Also, anyone in Syd, there is a great meetup group for developers. Everyone is relaxed and supportive.
    http://www.meetup.com/Sydney-Property-Developers-Group/

    I really like the idea of using a Project Management Group. A great way to manage the risk in the beginning. Can anyone recommend one?
     
  18. Shahin_Afarin

    Shahin_Afarin Finance Broker

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    Thanks Claire - I've been keen on a catch up which focuses on development so I will come along to this one.
     
  19. Qlds007

    Qlds007 Broker,full time investor

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    If you have the site and it is Brisbane based and are looking for someone to build it and finance the development we might be able to help.

    We are starting to do more and more deals this way.

    We both make money and we dont have to spend time looking for the site.

    Cheers
     
  20. willair

    willair xx

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    Maybe bring the development range into the 10klm from the CBD.LMR SITES for 2-3 townhouses depending on the area start from 600k upwards
    depending on site-plumbing elec problems new power poles ect and are sometimes you will find out later if you walk into development blind ,talk to any old Greek developer and all will tell you ,you make the money when you buy the site..