Life - its not all beer and skittles
- Thread starter Blacky
- Start date
What do you think the original house would be worth if you did nothing?
The vals are in.
They came in at exactly $825,000 each. I dare say that the valuer is lazy and the bank said what value was 'needed' for the loan approval - and guess what the value came in at? I think if push came to shove I could get a higher value, but its fine for now.
So the final numbers
Purchase $711,500
Purchase costs $50,000 (includes stamps and BA)
Build costs $1,300,000
Other costs $130,000 (design, subdivision etc)
Holding & Other costs $35,000
Interest $220,000
Total costs $2,446,500
End value ($825k x 3) $2,475,000
Grand total profit $28,500 (1.16%)
The "other costs" include project management charge, as well as re-applying for building licenses etc which is why it is so high.
I settled on the block on the 29th August 2008, construction started in about April 2013. Total build time was a touch over 12months (after loosing about 12weeks to rain).
So with selling one, and keeping 2 I will at least get a good chunk of the equity back. Plus given my gearing they will be about neutral CF.
Its taken 6 years to come out with a total profit of under $30k. I could have put the money in the bank and earned more... however, wouldn't have learned anything and in many aspect I think the learning is invaluable. Its been a journey, not always a fun one, but Ive learnt a lot and come out the other side without going broke. So thats got to count for something right?
Its all onwards and upwards from here
Ill keep the thread open until we have them sold/rented. But otherwise, thats about all folks.
Blacky
My REA is confident of hitting $850k. They will hit the market at that level.
I have done my numbers at this stage on $825k.
Rents around $750/wk.
They were advertised already, and generated a lot of enquiry. REA must have shown about 10potential buyers through while it was still in construction. Now they are finished, will be interesting to see, as the finishes make a lot of difference (esspecially THOSE floors).
Im keen to see the vals later today.
Its a bitter sweet victory. Myf beat me by about 2 weeks
I look forward to buying her lunch on the 26th.
Though I do take a 'technical' victory in that my titles are already issued...
Blacky
Congratulations Blacky, it certainly has been a journey for you. But you survived at the end, well done.
I just read this thread and wanted to say a massive congratulations on your effort and perseverance! The finished result is immaculate and you still managed to walk away with a profit. Looking back at your first posts you were expecting a loss but I am guessing did not take into consideration how much the property market would move in your favor over the years.
I admire you for taking on such a large development first up. I myself am currently in the process of sub-dividing my PPOR and building at the rear and that is already challenging enough! To do what you have done, and all the way from Kazakhstan is super impressive!
It's obviously very easy to put value on the figures and yes if you divide your profit over the 6 years it would have been a huge $4750 a year.
But to me the value of the development knowledge you now have is worth a heck of a lot more. I tell you right now, if someone walked up to me and said, you can have $28,500 OR the amount of knowledge you now have, I know for sure I wouldn't be taking the money.
I admire you for taking on such a large development first up. I myself am currently in the process of sub-dividing my PPOR and building at the rear and that is already challenging enough! To do what you have done, and all the way from Kazakhstan is super impressive!
It's obviously very easy to put value on the figures and yes if you divide your profit over the 6 years it would have been a huge $4750 a year
.But to me the value of the development knowledge you now have is worth a heck of a lot more. I tell you right now, if someone walked up to me and said, you can have $28,500 OR the amount of knowledge you now have, I know for sure I wouldn't be taking the money.
I'm sitting in the lounge in Singapore so just a quick post.
http://m.realestate.com.au/property-townhouse-wa-yokine-117406547
Professional pics make a big difference.
Blacky
http://m.realestate.com.au/property-townhouse-wa-yokine-117406547
Professional pics make a big difference.
Blacky
Hi Blacky
Do you end up getting an inspector to look at the build? Were they of any assistance?
Cheers
Aaron
LW - most certainly am.
Given the way things went I think its a pretty damn good result. Im happy Im in the '+ve' side of the equation. It was very close to being a big '-ve' loss making venture. It very nearly sunk me financially (ie - it nearly sent me broke - very nearly).
Can I ask - Why do you ask?
Blacky
This one was im my personal name.
Yes - I sourced the initial finance while I was in Australia. I moved overseas between the purchase and the finalised design/build contract, despite doubling my take home salary - the bank wouldnt finance it. Which is when the problems started.
Blacky
Forgive me because its been a while since reading the start of the thread. But did you consider just selling the land after you Subdivided it and couldn't get finance for the construction instead of having it sit dormant for so long?
Cheers for all the insights by the way, the end product is something to be proud of!
Cheers for all the insights by the way, the end product is something to be proud of!
Mate, I am in the early stages of feasibility of my own site.
So trying to learn as much as possible.
Its been a while since I re-visited this post.
Thanks for the kind words people - Im glad that my sharing might have passed on some knowledge/learnings to others.
SOP - I think the block value now would be in the $1m range.
Albanga - thanks - Yes, you are right. I entered into it knowing that I would have a steep learning curve. However, I didnt expect it to be this steep. It certainly opened my eyes though.
I guess I could still have learned a lot and made a decent profit - which would have been nice.
VaSSago - no I didnt. At the stage I was at I was willing to just close my eyes and hope that there would be no issues for the next few years. I probably should have though, and will in the future.
Since my last update I have had them on the market. The interest has been strong, but as yet no serious offers.
I have leased 2 of them out at $650 and $670/week. Slightly under market value of $700 - but they were occupied about 2 weeks after hitting the market.
I am now considering holding the third one also for another 12 months and renting it out.
At this level they are cashflow +ve but with depreciation probably tax neutral/negative.
I have pulled out some equity to take them to 80% which will be used for BlackMinster - and my cash savings will be accumulated to turn to other investments.
At this level assuming they increase by 3%/year its a lazy $75k/year additional equity I am creating.
So - not all bad.
Lots learned. A bit of skin off my knee. My pride took a bettering, I learned to deal with stress but also I have come throught the other side still standing.
Blacky
Thanks for the kind words people - Im glad that my sharing might have passed on some knowledge/learnings to others.
SOP - I think the block value now would be in the $1m range.
Albanga - thanks - Yes, you are right. I entered into it knowing that I would have a steep learning curve. However, I didnt expect it to be this steep. It certainly opened my eyes though.
I guess I could still have learned a lot and made a decent profit - which would have been nice.
VaSSago - no I didnt. At the stage I was at I was willing to just close my eyes and hope that there would be no issues for the next few years. I probably should have though, and will in the future.
Since my last update I have had them on the market. The interest has been strong, but as yet no serious offers.
I have leased 2 of them out at $650 and $670/week. Slightly under market value of $700 - but they were occupied about 2 weeks after hitting the market.
I am now considering holding the third one also for another 12 months and renting it out.
At this level they are cashflow +ve but with depreciation probably tax neutral/negative.
I have pulled out some equity to take them to 80% which will be used for BlackMinster - and my cash savings will be accumulated to turn to other investments.
At this level assuming they increase by 3%/year its a lazy $75k/year additional equity I am creating.
So - not all bad.
Lots learned. A bit of skin off my knee. My pride took a bettering, I learned to deal with stress but also I have come throught the other side still standing.
Blacky
Spanna
I tried everything. Selling the land, selling off the plan, H&L packages, JV's. Nothing happening.
Probably in hindsite I should have re-visited the designs to de-spec them to secure finance. but little did I know how long it would take.
I guess being flexible is one of my learning points.
Blacky
Fair duce to you.
Start a thread and let the great minds of SS pull it apart and put it back together again.
Good luck
Blacky
Yup, will do once things take shape, at this stage still in the air
