My development

Discussion in 'Where to Buy' started by Aaron_C, 19th Sep, 2011.

  1. Aaron_C

    Aaron_C Finance Broker

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    My development in Richmond

    Hi everyone,

    I have posted before regarding my own townhouse development (12 units) in Richmond, Victoria. Just thought I'd post up a few pictures of what the townhouses are going to look like as we are about to proceed to town planning, as quite a few people here are doing some developments as well, and I'd like to give some context to what I was discussing on my other thread.

    Please note, the TP file is quite large so it might take some time to load.

    Here's a link to the elevations: Elevations

    Here's a link to the actual floorplans and birds-eye view of the actual development: Town Planning Drawings
     
    Last edited: 19th Sep, 2011
  2. Aaron Sice

    Aaron Sice Seldom Seen Kid

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    looks good. I don't understand the architect mentality sometimes, but I guess that's why I'm studying it.

    what is the build material? it's a pretty decent development. did you manage cap int on the finance? presales? what percentage return are you looking at?
     
  3. Aaron_C

    Aaron_C Finance Broker

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    Probably going to go with conventional timber frames, but haven't decided on the external material yet. The interest payments will be capitalised to minimise negative cashflow, and as for percentage return - well hopefully I'll get more than 40% return on costs but it's hard to say at this stage.
     
  4. Melbournian

    Melbournian Member

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  5. bam*bam

    bam*bam Member

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    Have you had a price estimation from any agents as to what the finished product will be worth? And have you considered doing apartments instead? If so why/why not.
     
  6. letitbe

    letitbe Member

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  7. Melbournian

    Melbournian Member

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    the market is under pressure yes indeed but the issue is there is always the right buyers lurking around with cashflow which the typical suburbs/agents have no access or network.
     
  8. Aaron_C

    Aaron_C Finance Broker

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    Hoping to sell the large ones for $2m+ but will be seeing the agents soon. Benchmark is a new development near IKEA - http://www.riversiderichmond.com.au/ they want $1.9-$3m.

    I've considered doing apartments but it would be far more difficult to get approval due to the heritage overlay and residential 1 zoning
     
  9. Gentle_Chief

    Gentle_Chief Positive Cashflow

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    Hiya Aaron,

    I feel 2m+ will be pushing the limits with what customers will be willing to pay in Richmond Vic. Is there anyway you can look at reducing the capitalization and bring it down to the mid to high 1m?

    In the current climate you may have to resort to higher discounting and if you have the chance of reducing the input costs now would be a good time.
     
  10. Aaron_C

    Aaron_C Finance Broker

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    I've contemplated going for the cheaper option but given that the location of the property is in Richmond Hill (the premier part of Richmond), I think that going for a superior product is the way to go. You don't often hear about $2m+ houses in Richmond as you have pointed out, but that will change as other developments are being built around that price range. All the big townhouses will have CBD views with elevators, and the taller ones will also have panaromic views of the Dandenong Ranges.
     
  11. vicplanner

    vicplanner Member

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    Seems very impressive Aaron. I think you have gone for the right approach. The location is in a premier inner city pocket and has some real scope for high end townhouse developments. Good luck!
     
  12. veseli

    veseli Member

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    Terrible plans to read i'm sorry i had to say it.

    Where is the garages? visitor parkings? outdoor areas? deep soil zone? In NSW there is no way this would pass any Council regulations.

    2m each, did i understood correctly?

    Wasn't that in Richmond where the last block was and they couldn't sell fully renovated houses for 900k? Something just doesn't add up here...

    Good luck.
     
  13. Tools

    Tools Member

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    Waltham st is only a few hundred metres from the block but not really comparable. The block was in the shadows of the high rise commission flats and what you couldn't see on the TV was that it is opposite the entrance to the shopping centre car park.


    Tools
     
  14. Aaron_C

    Aaron_C Finance Broker

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    All parking is underground in the basement, it's not shown in the plans because I don't have the archicad version (2 carspaces each).

    There will be a soil zone for the plants above the basement (can't remember how much exactly but sufficient for trees).

    And yes, it is in the same Richmond as The Block. But you ask any Victorian here and they'll tell you there's a very big difference between Richmond Hill and That Dump where The Block was.
     
  15. UltraProperty

    UltraProperty Member

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    Can I ask how much you paid for the site?
     
  16. Wise1InOz

    Wise1InOz Member

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    Just saw this. Very impressive!
     
  17. Gentle_Chief

    Gentle_Chief Positive Cashflow

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    Hi Aaron,

    I still dont see how anyone would part with 2M for a townhouse. I am sure you would have thought about it.

    Even if it had all the Bells and whistles and if it was across from Kirribilli with views to the Sydney harbour, REAs will tell you it will be a hard sell.

    The market absorption rate is going to be slow. I would hang on to Loads of cash after the build to keep the banks at bay.

    On a quick look at the listings in Richmond on RE.com.au just now, I feel you are overpriced by about plus 1,000,000 each unit.
     
  18. Aaron_C

    Aaron_C Finance Broker

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    You're right - it would be far more difficult to sell than a normal $900,000 townhouse just based on the price alone. But I am not comparing my properties to the random 150sqm townhouse next to the Housing Commission. There were two sales of townhouses (7a & 7b) literally just around the corner for $1.5m each (both are identical):

    http://www.realestate.com.au/property-townhouse-vic-richmond-107466620

    People pay for quality - especially as the area is quite popular with Gen-X who are now earning decent money as they advance up the corporate ladder into senior roles.
     
  19. Hulkster

    Hulkster Member

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    I actually went to the auction of this property when it was passed in on a vendor bid of $4 million.

    Are you renovating the derelict cottage? I hope so, it certainly had cute potential
     
  20. Aaron_C

    Aaron_C Finance Broker

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    Yes we are renovating it. Too much hassle with heritage to try and knock it down (and it will look nice when it's re-done anyway)