Life - its not all beer and skittles

Blacky said:
Nope - I think I got a pretty good deal on the block. I would be surprised if a 910sqm block would be worth $900k now. The three individual lots are valued at $300k each - so I would think somewhere between 700-800k would be a fair price nowadays for a single title - though I could be wrong as I haven't been looking at this market recently.
Click to expand...

Hi Blacky
I had a RE agent value my property the other day and came in at $850-900K, I guess it could depend on location and the RE agent may be talking it up.

Also, I had a quick look at townhouses in the area, some of the new quality stuff going for $900K.

So you have learnt alot from this project/experience, will you develop again??

MTR
 
MTR said:
Hi Blacky

So you have learnt alot from this project/experience, will you develop again??

MTR
Click to expand...

MTR
Yes - I have learnt a lot. While it hasn't been overly profitable to date (it will actually lose money initially). I entered the project knowing it would be a steep learning curve.

Will I develop again? Yes - I have a block in Geraldton which I will build on when I get through this project. It has been put on hold while I complete this one. After that I will asses my situation. I have amassed some large debts which are heavily negatively geared at present. While I am covering the debts, they are not overly 'productive' as Im not a tax resident. My plan is to complete Yokine, complete Geraldton - then re-asses. It will include some re-allocation of assets and debts to reduce my out of pocket expenses. Then move forward again with asset accumulation.

I still believe that property development has place in my wealth creation strategy, if done correctly (I haven't done this one correctly).

Cheers

Blacky
 
Hopefully things will go smoother from now on in. Are the blocks now titled and ready to build on? The townhouses look fab and yokine is certainly going nicely up market.
 
Yep - all fully subdivided. Im the proud owner of three vacant blocks. All are fully ready to start construction, all I need is a building contract and Im off.

Blacky
 
can definitely claim your holding costs - you are a developer and the interest and everything else is a holding cost. don't forget to clain the GST on your costs too e.g. the demo, earthworks etc.

developing thru the last few years has been pretty challenging and if you haven't gone broke or lost millions you are doing ok.

would've thought you could come up with something to do with these - just flog them off as house and land and get out of there - are they survey strata?
 
Thanks Ausprop - I will be going back to my accountant to discuss this - with the info from Dazz in hand.

Yep Survey Strata with common driveway.

Definitely haven't lost millions, but wont break even (initially) but as Im planning to hold them for the long term I will at some point hit break even/profit. I think the more damaging thing is having so much capital tied up for so long, which cant be used. It has been about 5 years and the opportunity cost of that is huge - but hey, everything is clear in hindsight.

A couple of years ago I marketed them off the plan - but the only interest I got was from other developers trying to scoop up the property on the cheap. One guy verbally offered $500k for the land alone - which is probably worth about $900k :eek:. He was just fishing, hoping to take something away from a broke developer.

Cheers

Blacky
 
Blacky said:
Thanks Ausprop - I will be going back to my accountant to discuss this - with the info from Dazz in hand.

Yep Survey Strata with common driveway.

Definitely haven't lost millions, but wont break even (initially) but as Im planning to hold them for the long term I will at some point hit break even/profit. I think the more damaging thing is having so much capital tied up for so long, which cant be used. It has been about 5 years and the opportunity cost of that is huge - but hey, everything is clear in hindsight.

A couple of years ago I marketed them off the plan - but the only interest I got was from other developers trying to scoop up the property on the cheap. One guy verbally offered $500k for the land alone - which is probably worth about $900k :eek:. He was just fishing, hoping to take something away from a broke developer.

Cheers

Blacky
Click to expand...

Hi Blacky

Capital tied up is a big one.

Last Perth boom I got caught up with land and house packages and tied up lots of capital and unfortunately missed out on some great deals, that was the down side.

At that time it was taking 18 months to build an average home.:eek:

Cheers MTR
 
Time for an update.

Progress = slow.

In the last 8 weeks you could actually say that there has been no visual progress made - but this would be selling myself short.

After one hell of a lot of backwards and forwards we (the builder and I) have come up with a contract which we can both live with. Its not really ideal for either of us, but we have both been able to bend and fold in order to reach an agreement.
The new draft contract is now with the bank to make sure they are happy. It will see me tip a bit more cash in - to the tune of about $100k.

As an indication I will have put about $750k cash into this project to date and on the most recent numbers will either just break even or be down by a couple of %. Not much in it either way. So when I talk about requirement for cash - this project has been thirsty. However, it has also been this cash which has kept me from going broke.

My bank manager has advised me she will come back tomorrow with the banks answer. Im very hopeful for a positive outcome. Some good news just before christmas.

In addition - I have a job opportunity which I should hear back from tomorrow as well. I have been interviewed and have been successful, however, the company needs head office approval for the position prior to making a formal offer. I should here back from this either Wednesday or Thursday. Its a great position, with good future opportunity, 90days/annum leave - with the only downside is I need to stay in Kazakhstan for a bit longer. Will see what the final salary offer is, but if acceptable I will be taking it.

This week could shape up to be a big week. Not counting chickens, but certainly hoping for some long overdue 'good' news!

Cheers
Blacky
 
Good to hear you've sorted out contracts - bugger that it's even more money now.

Onto DA approval or is that already done? I can't remember.
 
Well - there it is!!!

I now have a contract which we agree to.
I have finance approved.
I have all my approvals.

Looks like Im going to start building early in the new year!

Happy Camper!!!
 
Suzy912 said:
My goodness what a saga! It is like a soap opera....thanks for sharing and I wish you luck!
Click to expand...

Well yes - its been a struggle. Im certainly up beat about it and I hope that this thread is not coming across as a "woe is me" saga. Not my intention. Im not looking for sympathy or "poor you". Just hoping that my tale will help others learn.

Blacky
 
Fantastic news and hope all goes smoothly from here on in. Survive this and you can survive any small development.

Not sure if I missed it - but what was the actual issue with the builder?

Why was there legal to-ing and fro-ing just to get a so-so contract? Why could you not go to another, more receptive, builder?
 
lizzie said:
Fantastic news and hope all goes smoothly from here on in. Survive this and you can survive any small development.

Not sure if I missed it - but what was the actual issue with the builder?

Why was there legal to-ing and fro-ing just to get a so-so contract? Why could you not go to another, more receptive, builder?
Click to expand...

well, I could start a whole other thread on that one.

Essentially the disagreement was over the use of caveats. Im happy for the builder to have a caveat, however, the wording of the contract must be very specific as to when/how a caveat is to be lifted.

In addition there were issues over a previous contract which I had signed, but never proceeded with due to lack of finance and the rights/obligations (if any) of the parties under the previous contract.

There has never been any bad blood between the builder and I. Essentially, as are most legal arguments, it was a matter of both parties defending their positions.

Cheers
Blacky
 
And we are off and running....nearly

Today is some great news.

All documents are now in place. Since the 19th December when I last posted everyone packed up and shut down for 3 weeks over christmas and new years (no surprise there).
So it has taken this long to get everyone in the one room and signing their life away. But it has all happened this morning.
I gave the builder a big fat bank cheque, he gave me a contract and a caveat lift doc and now its over to the bank to do their thing.
I still owe the Builder $20k, at which point he will start dropping bricks. This should all happen in the next two weeks or so (fingers crossed).

There was also a small hicup with the bank as they asked for updated council approval. This was not required as the project has started and the expiry date for council approval is expiry for commencement not completion. The bank were happy.

On a disappointing note, the job fell through. The company's excuse was that they are not doing the re-structure for another 6-9months depending on work flow. No biggie, cos Im still employed - but a change could have been nice. (anyone want to employ me? :D)

Hopefully this thread will keep moving forward at a rapid pace over the next few months. Photos and plans to follow shortly.

Blacky
 
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