My Duplex Development near "parramatta"

[LeoT]

The progressing feasibility.


Realistic and conservative end valuation will be over 950k each

We have DA (deferred approval) and hopefully soon will get Unconditional Approval.

 

[Shahin_Afarin]

Have you factored in the following costs:

1. CC Costs (Hydrualics, Structural Plans, etc)
2. Section 94 Fees
3. LSL Fee
4. Section 73, consultancy, design and fee
5. GST
6. Selling Fees
7. Misc costs/fees like Dilapidation Reports, Geotech Reports, etc
8. Demolition
9. Gas, Electrical, and Phone Connections

Also how many sqm is the total building? Construction costs seem very low. Does it include fencing, driveway, landscaping, OSD, Stormwater, retaining walls, etc? Does the construction include GST?

 

[LeoT]

Have you factored in the following costs:

1. CC Costs (Hydrualics, Structural Plans, etc)
Yes in Contingency. usually I put it in DA costs which makes more sense.

2. Section 94 Fees
Its actually in the feasibility
3. LSL Fee
In contingency


4. Section 73, consultancy, design and fee
All in the feasibility

5. GST
Not selling


6. Selling Fees
NA

7. Misc costs/fees like Dilapidation Reports, Geotech Reports, etc
I have contingency of 100k in there.

8. Demolition
Included

9. Gas, Electrical, and Phone Connections

Didn't include this one (thanks for pointing out)

Also how many sqm is the total building?
Each duplex is 170sqm. Spoke to a few builders plus my building broker and the construction amount allocated should be more than enough.

 

[Shahin_Afarin]

Not trying to be pessimistic but I think your figures are very optimistic. I can't understand how you can get 340sqm built turnkey (i.e. fencing, landscaping, driveway, demolition, excavation, OSD, etc) for $550,000 including GST.

Having said that good luck and look forward to the updates.

 

[LeoT]

Not trying to be pessimistic but I think your figures are very optimistic. I can't understand how you can get 340sqm built turnkey (i.e. fencing, landscaping, driveway, demolition, excavation, OSD, etc) for $550,000 including GST.

Having said that good luck and look forward to the updates.

Shahin,

I actually have 700k (not including gst), not 550k strictly. No gst not selling.

 

[Shahin_Afarin]

I know man but what I'm saying is that the builder is going to charge you GST on whatever the build cost is $500k or $700k.

What I'm basically saying is that you have factored $700k for CC, Construction, OC and subdivision and I don't think this figure is close to what it will cost. I reckon it would be approx $100k more depending on various things like how much you need to dig, whether you will hit rock, OSD design, Hydraulic requirements, etc

Anyway its just my 2 cents - doesn't mean I'm right.

Thanks for sharing and it will be awesome to track the progress.

BTW - builders will need CC plans to provide a quote so don't read too much into quotes given by builders off DA plans.

 

[LeoT]

What I'm basically saying is that you have factored $700k for CC, Construction, OC and subdivision and I don't think this figure is close to what it will cost. I reckon it would be approx $100k more depending on various things like how much you need to dig, whether you will hit rock, OSD design, Hydraulic requirements, etc

Time will tell mate. But I have seen similar projects like mine have similar Total development costs.


Anyway its just my 2 cents - doesn't mean I'm right.

Thanks for sharing and it will be awesome to track the progress.

BTW - builders will need CC plans to provide a quote so don't read too much into quotes given by builders off DA plans.

Yup I agree, I actually got some quotes from a previous CC, not exactly the same but similar.

Do you do developments yourself as well mate?

thanks

 

[neK]

The progressing feasibility.


Realistic and conservative end valuation will be over 950k each

We have DA (deferred approval) and hopefully soon will get Unconditional Approval.

Thanks for sharing the numbers.

I am curious though, how would this have looked if the market didn't take off in 2013? When you purchased, were you expecting such an increase?

I did buy in 2013 and I was expecting it to move up.... just not by the magnitude it did. Ignoring any renos, I would have expected a jump of 5% over a 12 month period, instead i saw a 35% jump (with hindsight i would have bought another 2 sites and completely over extended myself, sold them then retired in 2 years from now LOL).

 

[LeoT]

Thanks for sharing the numbers.

I am curious though, how would this have looked if the market didn't take off in 2013? When you purchased, were you expecting such an increase?

Based on the end sale numbers at the time, it would have been OK, but not as great as now, that's for sure. Our decision was that even if we didn't decide to develop it now, its still a great place to buy at the price we bough it for and we knew medium term the future value would be great, considering the land size (almost 800sqm) and the location to the Sydney CBD.



(with hindsight i would have bought another 2 sites and completely over extended myself LOL).

lol me too!!

 

[Shahin_Afarin]

yes mate I'm 1 month away from starting a 4 x townhouse development in Baulkham Hills. Im keeping track of it on Facebook.

 

[westminster]

yes mate I'm 1 month away from starting a 4 x townhouse development in Baulkham Hills. Im keeping track of it on Facebook.

Shahin - I'd love to see it.

 

[westminster]

Thanks for sharing LeoT.

I love a good thread from the beginning. I have no idea about your costs seeing as it's very different in Perth but we have headworks costs for sewer, electrical and water which can be $50-100k depending on the project.

 

[LeoT]

Thanks WM,

Ive allocated 50k for head works. If need be ill use some of the contingency. What typical (rough) costs for head works on a duplex have you incurred?

thanks

 

[MTR]

Thanks for sharing Leo.

Look forward to the progress.

Cheers
MTR

 

[bumblegoodie]

thanks for posting.

May i ask how you came up with $60,000 interest? is that for a duration of 12 months construction period?

is the interest combined for the construction and property loan?

not sure how lending works for duplex development?

Step 1: brought the property under a investment loan?

Step 2: apply for another construction loan ?

With combined loans wouldn't this put a lot of pressure to your serviceability?

 

[westminster]

Thanks WM,

Ive allocated 50k for head works. If need be ill use some of the contingency. What typical (rough) costs for head works on a duplex have you incurred?

thanks

I haven't done any duplexes but I would assume around 50k but it really depends on how far from sewer, power, etc the block or connection point is.

 

[LeoT]

gfg

thanks for posting.

May i ask how you came up with $60,000 interest? is that for a duration of 12 months construction period?

I didn't, my wife did. I suck with numbers. She's the chartered accountant. Ill just blame her if its all wrong.


is the interest combined for the construction and property loan?

Yes.

not sure how lending works for duplex development?

Lend on land, then lend for construction . This will differ for commercial loans though.

Step 1: brought the property under a investment loan?
yes.



Step 2: apply for another construction loan ?

Eventually, yes.

With combined loans wouldn't this put a lot of pressure to your serviceability?[/QUOTE]

If you are single income on 35k a year then yes. But banks wouldn't forward the money to you in that case. It just depends on your income to service.

That's one of the great features of commercial loans, The interest is capitalised. Would have to be really.. as commercial projects tend to have a lot more interest charge due to their larger TDC.

Im proud of myself for being able to answer your questions, as I suck on the finance/accounting part of development. My wife does that mainly, as my area of 'expertise' is to get all the consultants together and manage the project Whip them now and again

 

[bumblegoodie]

Thanks LeoT you are awesome.....

Luckly you have your wife to look after the financials.

May i ask what is the minimium around of cash one would need to do a duplex?

and for the borrowing?

1. Investment loan - is it at 95%?

and

2. Construction loan - lending at 95%?

so really you will need 5% + 5% deposit for both loans to get started?

 

[LeoT]

[QUOTEbumblegoodie;1221881]Thanks LeoT you are awesome.....

Can you please tell my wife that!


Luckly you have your wife to look after the financials.

Shhh.. don't want her knowing that!


May i ask what is the minimium around of cash one would need to do a duplex?

More number Questions? Sheesh. Look from my experience, generally, (not always) you need at least 20% deposit for most development projects.

and for the borrowing?

80%


1. Investment loan - is it at 95%?

and

2. Construction loan - lending at 95%?

so really you will need 5% + 5% deposit for both loans to get started?[/QUOTE]

God more finance stuff... ok..

1. Land acquisition loan would be normal loan say at 88-90%.

2. Construction loan would be..well depends because the value of the house doesn't count as its going to be demolished. So this is a little tricky as some banks will only take land value, and others are more business like and will be flexible.

Overall, there needs to be about 20% fat in the deal to make finance work, (generally).

Now all the mortgage brokers on here are gonna come and kick my *** on these numbers.. (disclaimer: I did fail maths in school.)

 

[bumblegoodie]

thanks LeoT.

I have so much to learn before i ever get to where you are

property development is very asirping and maybe i will be a builder one day!!!

I think the builder course will generally takes two years + years of experience before getting a license.....