Highgate WA: let's build a baby apartment block thread

[propertyVIC]

A few more queries....

Who is doing the design for you?
And can you give us your thinking in why a baby apartment block rather than one or two larger homes?
Are you planning to sell these off or keep them?

 

[westminster]

A few more queries....

Who is doing the design for you?
And can you give us your thinking in why a baby apartment block rather than one or two larger homes?
Are you planning to sell these off or keep them?

The design will be done by my builder who I have used for other projects. If it is too niche for them, then I will get Aarone Sice to do it.

Why not one or 2 larger homes? Because the block at 249sqm is only large enough for one house under current single or grouped dwelling R codes. I could go spend $600k (total 1.1m) on a building a 2 storey house on it and it would be pretty much worth the amount I spent or at risk of less.

If I use the Multi Dwelling R codes then for my 1.1m I can build the 3 flats and come out with a product worth $1.5

So the risk is actually less for the apartments than doing single house. In my opinion you would only put a single house on there if you wanted to build your PPOR.

The plan is probably to sell one and keep 2.

 

[westminster]

It might all be over before it even began

We've run into a rather major hurdle which may or may not be insurmountable. Basically due to the Vendor being really tough over terms I ended up agreeing to a 14 day finance clause (which ends this Friday). It wasn't my preference, I wanted a long one, so that I could do a construction loan bundled together with the land loan. We would then have it valued on that plan not the land by itself.

However due to the 14 day terms I had to go about doing it land by itself. So the Valuation has been ordered and the Value is unable to find comparable properties to justify it's selling price. The property is in a very very well established inner city suburb and there has been 12 sales in the past year - and none of them were land. So they have looked at surrounding suburbs but the land there doesn't have the same density zoning.

The Valuer went to the Council to see if they could assist with valuation and they have basically said that unless there is approved building plans then the block is not worth anything more than a normal block. Valuer is now worried.

Basically the Valuation will be coming in on Friday and we are 99% sure that it won't meet my buy price.

Finance clause finishes Friday. We won't be able to make it with this delay and of course the valuation is not going to support what I need it to say.

It's not over yet though. Options are:
- get Vendor to drop price (wouldn't that be nice!!!) to valuation
- I make up the short fall between valuation and contract price
- extension granted to have plans drawn up and priced and then get bank to look at it as a total project not just land.

 

[Aaron Sice]

Myf,

IIRC correctly, there wasn't a bucket load of interest in this site - prob is now though!

Just tell the agent the time period was too short to organise finance because of council's zoning of the land, which put a spanner in the works.

If he'd have given more time like you originally asked for, you would have had no problems whatsoever.

That way, you're likely to get your 14 day extension - put the blame back on the vendor.

 

[westminster]

Myf,

IIRC correctly, there wasn't a bucket load of interest in this site - prob is now though!

Correct! Never post on Somersoft until property settles lol!

There was one other buyer but they will likely have the same problem as me with valuation not coming up to price.

The fat lady aint singing yet. I am a tenacious terrier - if only I didn't have to deal with the umm delightful Vendors REA.

 

[malaga]

Well I am not surprised the valuation came in low. I live one footy kick from that site and it is not worth $2000 a sqm. I also wonder how the vendor of the front house feels about trying to sell a house for $1.2 with plans for three units in their old back yard.

 

[westminster]

Well I am not surprised the valuation came in low. I live one footy kick from that site and it is not worth $2000 a sqm. I also wonder how the vendor of the front house feels about trying to sell a house for $1.2 with plans for three units in their old back yard.

The people selling the front house sold me the rear block - they will of course hate plans for the back garden.

I would prefer to pay less than $2000 per square metre and there are larger blocks which are selling for less per square metre but I am after a small block and the location is premium.

As land I know it's not probably worth the asking price, as a package deal it is but I didn't have time to present whole solution to bank.

 

[MTR]

Well I am not surprised the valuation came in low. I live one footy kick from that site and it is not worth $2000 a sqm. I also wonder how the vendor of the front house feels about trying to sell a house for $1.2 with plans for three units in their old back yard.

Hi Malaga
Building three units is not something you would broadcast or the vendor needs to know. The owners are moving on anyway.

Westminster
I don't understand why you will not get an extension, unless there are cashed up investors queing up for it, is this the case??

Are you dealing with Andrew, if so, I think he is not that bad from my detaling with him. You want to try dealing with T8by, one of natures a...holes

Cheers, MTR

 

[westminster]

Hi Malaga
Building three units is not something you would broadcast or the vendor needs to know. The owners are moving on anyway.

Westminster
I don't understand why you will not get an extension, unless there are cashed up investors queing up for it, is this the case??

Are you dealing with Andrew, if so, I think he is not that bad from my detaling with him. You want to try dealing with T8by, one of natures a...holes

Cheers, MTR

Hoping for extension - that is most probably outcome - if everyone is behaving reasonably
I'm not sure what the other Buyers finances were like but they were scared by the sewerage line.
Yes dealing with Andrew in the absence of Garry (original REA) who is on hols. Andrew has disappeared to Bali though so not sure who is left? David?
I have miscalculated - finance clause is Monday - still not going to make it but seeing as we are still chasing Vendor up to see if titles have been done yet they might be on the back foot due to that.

 

[sanj]

Haha good ol T0by, reminds me of David A**old, another one I'm not too fond of

 

[westminster]

The fat lady was unable to sing!!!!

Surprisingly the Valuation problem was a storm in a tea cup. We (REAs, myself and broker) were all prepared for the worst and today the Valuer has sent the valuation in and agreed with sale price. The non comparables were sorted by providing comparables with houses on and deducting the price/value of the house/improvements (I don't care for this method but it has worked in my favour)

It's gone off to Mortgage Insurers for next stage of approvals.

Phew.

Some days I feel I shouldn't have posted anything until we settle the property but on other days I think it's educational for everyone to hear about the trials and tribulations that happen before the good news. Plus it's fun to laugh at me stressing over everything !

 

[Blacky]

Wm
Glad to hear you got over that hurdle. Unfortunatly I dare say it will be one of many to come (arent all developments).

I too have the habit of only updating SS when things move forward. I don't like sounding like a whiner or problem monger when things jump around. But maybe some of my trials and tribulations could used by others for learning purposes.
Also - I dont like people telling me what I SHOULD have done. Yes, even I have perfect vision in hindsite

Good to see that once again you are showing the SS community how it should be done.

Blacky

 

[westminster]

Sigh
Next hurdle. It went to LMI Insurers as I wanted to try and do this at 10%. QBE (LMI) have refused the deal due to lack of comparable sales and that they consider me to be a developer (even though the bank has agreed to consider me non developer).

Options:
A. to 80% LVR so I don't need LMI which is doable but I didn't want to
B. Go to another lender but I would then need a finance clause extension.

So I think I'll go A. Eddie lock in A. Who wants to be a millionaire? I do

 

[Aaron Sice]

make sure it's not a commercial lend because it's difficult to get commercial refi'd to resi at the moment.

 

[westminster]

make sure it's not a commercial lend because it's difficult to get commercial refi'd to resi at the moment.

Ugh good god no - resi all the way

 

[westminster]

Ok we are down the wire.

It seems the other buyer is keen to jump back into the ring and has gone direct to the Vendor as they said the REA was a so-and-so. They are prepared to make an unconditional offer at 4.01pm when my finance clause runs out at 4pm.

Cmon Choicelend - approve the darn thing! 2hrs 43 mins to go. tick tock!

 

[MTR]

WM

So, your broker pushing them hard.

I need some popcorn, we get over one hurdle and yet there is another.

Oh well...... "what does not kill you makes you stronger"

 

[Aaron Sice]

i know someone who uses this tactic - i wonder......!

 

[MTR]

i know someone who uses this tactic - i wonder......!

Geez... Aaron, you can't just write a one line and leave us hanging....... who?????

 

[westminster]

Wooohooo APPROVED!!!!