Is 50% ROI REALLY obtainable in this market?

LOL, I'm scared you had to ask:confused:

If I had a development that had a 50% ROI I'd be keeping it to myself.

Be very careful, especially in the NZ IP market atm.
 
Sorry didn't notice the link with other info - clearly if you are unsure you should order the due dilligence packadge and read it carefully.

At the end of the day look at the fundamentals of supply and demand - where are the units located? How do the costs and sales estimates line up with existing local real estate. If they are up on the hill at Mount Hutt then it looks interesting as I have skiied there and there is no other accomodation up there (read no competition and limited supply) however if its down in methven somewhere then look at the local market to see if 480k is realistic, it sounds very high to me but Im no local.

If they are down in methven then you are competing with every other house, b and b, hotel, motel etc for commanding ski holiday accomodation from a limited pool of tourists. What sets this apart?
 
They have based that selling price on selling shares/leases in the property's, they say a 4 week share sells for 20k - 12x20k = 240k x 2 apartments = 480k nzd remebring there are 13 x 4 week periods in a year, this is were they make thier money, they get to keep one of the 4 week shares and is specified as peak time for the selves, no doubt this will be over the holiday season when demand is highest.

Are they serious? they are pitching them as ski lodges, the montains only have snow on them for half the year how are they going to convince some one to buy a ski lodge share that they only get potentially half there time there when the snow is there? You would have to allow for selling say half that amount of shares and that would bring the sale price down to 240k.

Not a deal I would be going for.
 
Eh? We're expecting far more from our current project (probably won't sell though). Purchase $65k, spend $7-8k, expected value to be $130k-ish, then build a second house for $100ish (I haven't really looked at the cost of building a new, smallish project home so this may be an underestimation) and that would be worth $200k-ish.

Although buggered if I know where I'm supposed to get the money to build, but it does look good on paper.
 
Hi Elf,

If you haven't yet looked at prices of smallish home by project builder them maybe you don't wanna! If you do manage to find someone who'll do a 3x2x2 18sq approx for under $145k in S.A will you please ask them to make themselves known to me! Footings alone down south are now being quoted around $20- 25K for this size home :eek: steel crisis I'm told.

All the best with whatever you opt for.


Regards Jodie
 
If it sounds too good, then it probably is.......

Ask them to provide a written guarantee that the investment will provide those returns.

The again, if the investment vehicle goes broke, your guarantee is worthless.
 
silversands said:
If you haven't yet looked at prices of smallish home by project builder them maybe you don't wanna! If you do manage to find someone who'll do a 3x2x2 18sq approx for under $145k in S.A will you please ask them to make themselves known to me!
Click to expand...
Eek! So all those ads in the Sunday Mail for $90,000 houses are missing something important and are just false advertising then ... figures.

Actually we're spending so much time at the IP we're currently leaning towards getting a transportable delivered there for us (transportable companies dont list their costs on their websites of course, so nfc what the cost is there) as a new PPoR for us.

Why do people build new then if you can get a big established house for so much less than a built one? I'm expecting to sell my PPoR to fund this build - its a 4br fully renovated house on 1/2 acre - for $70-90k, but by the sounds of it there's no way that'll cover a new house .... bah. Maybe I should list it for $120k and hope some sucker from interstate is willing to pay such a fortune ...
 
Hi Elf, good point!!! Why build indeed, when in S.A at least, you can now by well below replacement cost.

I'm as miffed as you - that so many think it's so attractive to build a shiny and new home as opposed to buying " barely lived in " 12 month old house for $20 plus grand cheaper without the 15 month or so wait time 'til completion. In so many areas, you really can buy much cheaper than building. Especially, I don't understand why this option would appeal to 1st home buyers who will spend $12k - $20k in rent whilst they wait :eek:

I was recently shown a plan by a salesman ( okay it was 198m ) he said it was great buying at a basic house only price - 107k. He then spoke sooo fast as he added a few other neccessary costs:

Insulation.( What the? It's mandatory, why should it be extra.) Rainwater tank and installation, gas boosted solar (again mandatory requirement now) Render, (alternative fascade required by builder) extra for colour bond roof, $20k plus estimate for footings above standard, extra for a flat bkfst servery in kitchen, (coz I detest raised bkfst bars)xtra for dishwasher provision.extra for extra for flyscreen door to slider. Extra for rollerdoor to be one large single instead of two smaller, (neccesary because it's the narrowest double garage you can get) and then even more if you want remote for it and lets face it, a double span single is heavy to raise manually. Extra for rendered portico to make the plan fit the developers guide lines. (yuk I don't even like portico's)

The list went on. Extra for corosion zone. ( within 1K of the beach. Extra for wind category compliance. Extra for robe provisions ( just the nib walls ) etc. etc.

By the time he finished he was up to $163k . That was without frilly upgrades like chrome taps or nicer tiles, vitreous china sinks and loos instead of plastic. Not to mention if you wanted a trendy front door let alone if you wanted a rear access rollerdoor or high ceilings or overhead cupboards
that many would call basics. Oh, and you'd like heating and cooling as well? hmmm. :rolleyes:

Are you bored reading this yet? Just thought you should know what you could be in for. Makes your transportable house idea look really good huh? :D

But again I digress, what was the theme of this thread again???

Regards to all.
Jodie
 
Hschmid

Dont do it. If you want to be a developer - make your own deals.

The only guarantee if you go into this is that you will lose money.
 
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