Hi guys,
This is probably going to be quite long, so I apologise if its massive, but i'll try to give you all as much information of my situation as possible so that any advice which you have for me is as relevant as possible.
My situation is that I'm currently employed full-time as a carpenter for a small construction company. I'm on $26/hr. I take home around $900/wk. I've been with this company since mid-2009.
I have 4 investment properties solely in my name.
2x 3 bed 1 bath on 1000m2 in Inglewood Qld
1x 4 bed 1 bath on 2000m2 in Inglewood Qld
1x 550m2 vacant block on Russel Island
2 Properties in Joint Names with a mate of mine.
1x 4 bed 1 bath on 405m2 in Coorparoo (Currently my PPOR)
1x 3 bed 1 bath on 870m2 LMR in Zillmere (planning to build 5x 3bed, 2.5 bath townhouses in approx. 18months-2years)
We've just recently purchased Zillmere, and this is negatively geared by almost $400/wk. I put in $200 and so does my mate.
As you can see, my wage is extremely low, my boss has offered me a pay rise, but I cant imagine that it'll be more than $60 or so per week and I really feel like I need to start making a lot more money.
My employment options are:
*Take the pay rise and keep the full-time position
*Start subcontracting for my current boss, in the hope I can make more money. (I would hope to gross $1600-2000, by doing a lot more hours)
*My mate works in the mines in Port Headland and hes confident he could get me a job if i submitted an application along with my resume. (net weekly wage approx. $2500)
I kind of feel like my best option is the mining company. However I do like my current employer, and in the future i would like to set up a similar construction company to his, and atm I'm getting really good experience which will make the transition into me having my own construction company that much easier.
My other concern is that in approx. 1.5 - 2 years we will be trying to borrow in excess of $1m to do the townhouse build. So i have plenty of questions for borrowers about how exactly we need to position ourselves leading up to the application process for this loan. (this is probably 1 of my biggest concerns). I'm happy to sell everything else i own in order to come up with a cash deposit for the townhouse loan.
We paid $500k for the Zillmere property, and we borrowed $530k. (Cross collateralised with the Coorparoo house which we own together also)
Questions in relation to borrowing for the townhouse build
1. How much deposit do you think we will need?
2. Do the council fees, drawings, engineering etc need to be paid from cash or is there a way that we can include this into our borrowed money?
3. With this type of loan, is my employment situation just as important as if i were doing a standard home loan? (If i was working as a sub-contractor would that pretty much write off any chances of us getting the loan?)
As for the development side of things
The land has cost us approx. $540,000.
We've talked to a designer who thinks we can get 5 x 3bedx2.5 bath townhouses approx. 125-130m2 each. I would say current market value for something like these is around $420k, but we are hoping for a small amount of Capital Growth over the next 2years.
I understand council charges around 26k per additional dwelling which will add up to around $100k. What other significant council charges will there be? We're hoping to get the designs passed through councils risksmart application process.
Does anyone that's done something similar know rough cost of well everything, eg. designer, plans, council fees, engineers plans, build cost, Holding cost, marketing costs, etc etc etc...
We have obviously run some reasonably loose numbers which seem to stake up reasonably well for us. But yeah, i'll be very keen to hear to any feedback either negative or positive, as to your thoughts about the whole project, also any advice which may even seem blatantly obvious.
Ah, and yes, i almost forgot, Matt and I also need to set up some type of structure, whether it be a trust or company. So advice on this will be helpful also...
Clearly this is our first development so any advice would be wonderful.
Many thanks,
Clint.
This is probably going to be quite long, so I apologise if its massive, but i'll try to give you all as much information of my situation as possible so that any advice which you have for me is as relevant as possible.
My situation is that I'm currently employed full-time as a carpenter for a small construction company. I'm on $26/hr. I take home around $900/wk. I've been with this company since mid-2009.
I have 4 investment properties solely in my name.
2x 3 bed 1 bath on 1000m2 in Inglewood Qld
1x 4 bed 1 bath on 2000m2 in Inglewood Qld
1x 550m2 vacant block on Russel Island
2 Properties in Joint Names with a mate of mine.
1x 4 bed 1 bath on 405m2 in Coorparoo (Currently my PPOR)
1x 3 bed 1 bath on 870m2 LMR in Zillmere (planning to build 5x 3bed, 2.5 bath townhouses in approx. 18months-2years)
We've just recently purchased Zillmere, and this is negatively geared by almost $400/wk. I put in $200 and so does my mate.
As you can see, my wage is extremely low, my boss has offered me a pay rise, but I cant imagine that it'll be more than $60 or so per week and I really feel like I need to start making a lot more money.
My employment options are:
*Take the pay rise and keep the full-time position
*Start subcontracting for my current boss, in the hope I can make more money. (I would hope to gross $1600-2000, by doing a lot more hours)
*My mate works in the mines in Port Headland and hes confident he could get me a job if i submitted an application along with my resume. (net weekly wage approx. $2500)
I kind of feel like my best option is the mining company. However I do like my current employer, and in the future i would like to set up a similar construction company to his, and atm I'm getting really good experience which will make the transition into me having my own construction company that much easier.
My other concern is that in approx. 1.5 - 2 years we will be trying to borrow in excess of $1m to do the townhouse build. So i have plenty of questions for borrowers about how exactly we need to position ourselves leading up to the application process for this loan. (this is probably 1 of my biggest concerns). I'm happy to sell everything else i own in order to come up with a cash deposit for the townhouse loan.
We paid $500k for the Zillmere property, and we borrowed $530k. (Cross collateralised with the Coorparoo house which we own together also)
Questions in relation to borrowing for the townhouse build
1. How much deposit do you think we will need?
2. Do the council fees, drawings, engineering etc need to be paid from cash or is there a way that we can include this into our borrowed money?
3. With this type of loan, is my employment situation just as important as if i were doing a standard home loan? (If i was working as a sub-contractor would that pretty much write off any chances of us getting the loan?)
As for the development side of things
The land has cost us approx. $540,000.
We've talked to a designer who thinks we can get 5 x 3bedx2.5 bath townhouses approx. 125-130m2 each. I would say current market value for something like these is around $420k, but we are hoping for a small amount of Capital Growth over the next 2years.
I understand council charges around 26k per additional dwelling which will add up to around $100k. What other significant council charges will there be? We're hoping to get the designs passed through councils risksmart application process.
Does anyone that's done something similar know rough cost of well everything, eg. designer, plans, council fees, engineers plans, build cost, Holding cost, marketing costs, etc etc etc...
We have obviously run some reasonably loose numbers which seem to stake up reasonably well for us. But yeah, i'll be very keen to hear to any feedback either negative or positive, as to your thoughts about the whole project, also any advice which may even seem blatantly obvious.
Ah, and yes, i almost forgot, Matt and I also need to set up some type of structure, whether it be a trust or company. So advice on this will be helpful also...
Clearly this is our first development so any advice would be wonderful.
Many thanks,
Clint.
