Looking for a Development site that makes no profit??

So the standard call for developers is that they have to have a margin of 20% for it to be feasible. No developer would go under this number. Some wouldnt look at it even if it were 20%

Im looking for anyone who has done a feaso study and has come up with numbers inbetween 0% and 20%. Im even looking for small dev sites that you lose money on.

Im more of a CG never sell man. Anyone know of bird dogs that specialise with this. What happens to those "deals" that people through in the rubbish because theres not enough fat?

Your rubbish maybe my treasure. :)
 
So the standard call for developers is that they have to have a margin of 20% for it to be feasible. No developer would go under this number. Some wouldnt look at it even if it were 20%

Im looking for anyone who has done a feaso study and has come up with numbers inbetween 0% and 20%. Im even looking for small dev sites that you lose money on.

Im more of a CG never sell man. Anyone know of bird dogs that specialise with this. What happens to those "deals" that people through in the rubbish because theres not enough fat?

Your rubbish maybe my treasure. :)

Hi Reeco,
Do a search on RE.com of properties in Balga, Westminster, Nollamara, Innaloo and surrounding with land content over 720 sqm...just about every dev site that comes up in the results will yield between minus 5% and 10% (against asking price) if realistic numbers are used...

Just one problem with this is that most lenders class a 3 unit development as commercial and beginner developers (and some very experienced ones too) find it very hard to get finance on reasonable terms. So even if you were happy with a reduced return, your financier will almost certainly not share your sentiments

Boods
 
Hi Reeco,

Just one problem with this is that most lenders class a 3 unit development as commercial and beginner developers (and some very experienced ones too) find it very hard to get finance on reasonable terms. So even if you were happy with a reduced return, your financier will almost certainly not share your sentiments

Boods

Yes. Not a problem. You just do it in stages. If its a 8 unit site you just stagger it. Alot of developer rules wont apply to my strategy. Ive sorted that side out. I just need the site/s

Would love to go north but not my area of expertise. Might punch in the places you mentioned and see what pops up. Again id be happy with a 0% Margin. My strategy is out there but it works for me.
 
Cheers. Now i know why i stay away from the north. Cost is kinda through the roof. You can get some great deals for 850,000 in the south. Massive it seems in comparison to that.

Is this your property Chomp?
 
How far south of the cbd compared to tuart hill's distance ?
I know very little of south (and not much more of north either for that matter)
 
How far south of the cbd compared to tuart hill's distance ?
I know very little of south (and not much more of north either for that matter)

Ive found that strange about perth. The generalisation is that If your NOR one tends to know little of SOR and vice versa.

Anything really. Even land on Septic.(Good money to be made there. People love a real loo) Properties on Septic can be cut down very easly price wise.

Im no millionaire(not yet anyway) so im trying to keep the figure from going wild on purchase. 600 is a bit up there for me.
 
Cheers. Now i know why i stay away from the north. Cost is kinda through the roof. You can get some great deals for 850,000 in the south. Massive it seems in comparison to that.

Is this your property Chomp?


No Reeco, its not mine, that was just an example, took me five minutes to find that on the net.

To an extent sometimes very large, every suburb is different, so by comparing different suburbs you are not comparing apples with apples.

Remember the price is just the asking price.

Chomp
 
No Reeco, its not mine, that was just an example, took me five minutes to find that on the net.

To an extent sometimes very large, every suburb is different, so by comparing different suburbs you are not comparing apples with apples.

Remember the price is just the asking price.

Chomp

Different regions is what im comparing. SOR NOR. As with most things i speak in general terms.

The asking price is a given, It could be a billion dollars. I understand ecomomies of scale and the like very well. Its still a contrast that can be observed.

Entry point into the market is more important at a starting stage. Asking price is everything. Im planning to oneday enjoy the luxury of saying "Just an asking price" ...till then im crawling:) with my 500K beginner
 
Reeco why not find a site that does make money? i flogged a couple off last yer, pity you weren;t around then

Method to the madness ;) The sites im looking for would be profitable, but only to me. Ive got a different kind of feasibilty study :)

I see an oportunity where others dont it seems. Its tricky though and involves family. But is all above board.
 
why not trick up sites that do have the 20% profit margin..

theres plenty of them...

the problem isnt finding sites the problem is finding funding.
 
Certainly there would be a ton of potentially no profit sites. A given.

Hard to explain but again. Method to the madness. I wouldnt take any site. It would have to go through my list of inclusions/exclusions also.

The title of the thread is just a baseline for my investing strat
 
Yes. Not a problem. You just do it in stages. If its a 8 unit site you just stagger it. Alot of developer rules wont apply to my strategy. Ive sorted that side out. I just need the site/s

Again id be happy with a 0% Margin. My strategy is out there but it works for me.

Well it does'nt take much skill to lose money, which is why 90% of people end up negative or take 20-30 yrs to make a decent bit.
PT Barnum said "there's one born every minute", but these days it's much more than that.
:rolleyes:

Hard to explain but again. Method to the madness. I wouldnt take any site. It would have to go through my list of inclusions/exclusions also.
I never knew losing money could be such a hard thing to explain.
 
C'mon guys, give the guy a break. Just because he doesn't come on here and spell out what he does with these sites to make them profitable doesn't mean he can't do so. He might have something that requires bigger sites or whatever and is just looking for leads. He wouldn't do it if it wasn't turning a profit.

He's not obligated to spell it out for you guys just like you're not obligated to help him out if you don't want to.

I'd like to hear what he's doing but he might have reasons for playing his cards close to his chest. My developments are bog standard boring by-the-book townhouse / unit types. No clever tricks, just a good site and a lot of hard work. Sometimes I feel like the dumb one on these boards but you've got to learn somehow.

Cheers,
Michael
 
So the standard call for developers is that they have to have a margin of 20% for it to be feasible. No developer would go under this number. Some wouldnt look at it even if it were 20%

Im looking for anyone who has done a feaso study and has come up with numbers inbetween 0% and 20%. Im even looking for small dev sites that you lose money on.

Im more of a CG never sell man. Anyone know of bird dogs that specialise with this. What happens to those "deals" that people through in the rubbish because theres not enough fat?

Your rubbish maybe my treasure. :)

Hi Reeco
I am in the process of developing a property I have in Westminster, what works for me is just building at the rear for $180K, revalue at $400-420K. This will rent for $380-400 pw.

As Stumunro stated funding is the issue, why not look at properties that can make the grade. Have you looked at Balga? Better value here.

What I like about Westminster and Balga is that there is a market at the end of the day if you get the design right they actually sell well.

Cheers, MTR
 
C'mon guys, give the guy a break. Just because he doesn't come on here and spell out what he does with these sites to make them profitable doesn't mean he can't do so. He might have something that requires bigger sites or whatever and is just looking for leads. He wouldn't do it if it wasn't turning a profit.

He's not obligated to spell it out for you guys just like you're not obligated to help him out if you don't want to.

I'd like to hear what he's doing but he might have reasons for playing his cards close to his chest. My developments are bog standard boring by-the-book townhouse / unit types. No clever tricks, just a good site and a lot of hard work. Sometimes I feel like the dumb one on these boards but you've got to learn somehow.

Cheers,
Michael

Fair enough Michael, but it is difficult to give advice when you don't have a clear picture. Anyway I have tried.

Cheers, MTR
 
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