House with approval & plans for duplex- where to start for newbies?

[staceyo]

Hi

I'm really interested in a property which has an existing house and approval/plans for a duplex out the back. I'd really like to do a project like this, however having never done anything like this where do you start? Or how do you work out whether the asking price is ok, ie whats plans and pre-approval worth in terms of both money and time.

The property is in Rockhampton, CQ, I'm trying to google to see what sort of Construction Consultants etc are available. Ideally I'd love to have someone else (an independent third party) oversee it, while I watch and learn. I'm in SA but it's an area I used to live ( awhile ago!) and have family nearby. So I could take extended trips up there.

Appreciate any help.
Thanks
Stacey

 

[lizzie]

is it da approved or construction cerficate approved.

the da comes first - and can add up to $10,000 to the vendors costs (architects and council fees). however the construction certificate is the expensive one at council, as that is when the levies are applied (and further architect fees) - so - can add another $10-20,000.

so, it depends on how valuable having the approval is, compared to not having the approval - and what they will take. don't immediately think you're going to give them an extra $20,000 just because they have approval.

my advice is to not let on that you are interested in the development, just negotiate as if you were only after the block. what are similar blocks selling for in the area? - and be prepared to add a little bit.

as far as the building ... why not go with a reputable building firm? why do you need the 3rd party? the builders supervisor would let you watch, and if you're friendly and genuinely interested then i have always found them to be more than informative and a fount of information.

 

[staceyo]

Hi

It's DA approved, the construction cert where you pay all levies is yet to be done. The asking price is quite high for the area and the existing house is in very average condition. I would say it's about 80k more than the average price.

The reason I want a third party to oversee it is because I won't be there, so I'd like someone to make sure it's all going to schedule and plan who isn't part of the building team. Someone who would be working for me rather than the said builder.

Thanks for your info
Stacey

 

[Rockstar]

Hi Stacey,

You are not in any position to make a decision until you are quite certain of the construction costs. An extra 80k for an approval of duplex is way over the top in my mind. You need to carry out a detailed feasibility. I really cringe when I hear that you are willing to let someone else manage the project especially if you are totally inexperienced. You are leaving yourself wide open unless you can get someone that you know and trust.
Are you aware of end values and likely yields on completion?

Be careful and do some serious DD.

 

[Player]

You've already answered your own question. If the asking price is way above comparables for the area and loaded to the tune of 80 K, then.......next!

Agree with Ian, in light of the distance between you and the site, using an external project manager is risky. How about starting with a simple duplex build in your locality first and as you gain experience look interstate.

Superintending a development interstate without prior experience is difficult unless you are doing a JV with someone you get along with and is local to the site.

In addition to the suggestions above wrt end sales value and likely rental yields, you may (in the absence of prior experience) wish to make any contract subject to bank approving acquisition and construction finance and even get yourself a formal valuation and make any contract for such purposes contingent upon that valuation. May well be the best several hundred dollars you ever spent if it keeps you out of a stinker deal.

IMO, stay local with your first one and gain knowledge on the steps involved with developing.