My little Mona Vale development update - Phase 3
- Thread starter MichaelW
- Start date
Hi MTR,
All moving along nicely now. Just finalising the detailed design collaboratively with the builder and my architect. Hopefully will have finished the drawings and engineering next week or the week thereafter so we can finalise the contract and then work to commencing construction. I have to give the tennant 4 weeks notice and it will take that long to get finance final approval too so its still looking like an early April commencement.
As I mentioned earlier, the numbers have improved significantly since I purchased the site in 2006. My gross valuation is now closer to $3M against a total project cost of around $2.1M. I might sell one at completion to reduce my debt load and improve my cash flow. Alternatively I'll sell my former PPOR in Narrabeen for the same CG Tax free outcome.
All good and looking forward to kicking off the construction at last. I'll post updates along the way with photos and milestones achieved right through to completion and either letting or sale of one.
Cheers,
Michael
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Giday Michael
Only just noticed this thread. What the latest? All sounds good!
And are you affected by the new/ proposed up to 4% levy (read tax) on developments approved for Council by the State Gov. or is that for only old approvals. I tried to find info on web so perhaps it died. Was reported a month or two back.
And the small but another 0.2% Sales Tax for sales over $500k also courtesy of your development friendly NSW Gov.
http://www.smh.com.au/nsw/new-tax-on-property-under-fire-20100512-uxhx.html
And some others, small but add up – especially if demolition and asbestos apply
http://news.smh.com.au/national/swag-of-new-laws-come-into-force-in-nsw-20070629-l87.html
Ahh, NSW open for business!
Regards and hi to family
Peter 14.7
Only just noticed this thread. What the latest? All sounds good!
And are you affected by the new/ proposed up to 4% levy (read tax) on developments approved for Council by the State Gov. or is that for only old approvals. I tried to find info on web so perhaps it died. Was reported a month or two back.
And the small but another 0.2% Sales Tax for sales over $500k also courtesy of your development friendly NSW Gov.
http://www.smh.com.au/nsw/new-tax-on-property-under-fire-20100512-uxhx.html
And some others, small but add up – especially if demolition and asbestos apply
http://news.smh.com.au/national/swag-of-new-laws-come-into-force-in-nsw-20070629-l87.html
Ahh, NSW open for business!
Regards and hi to family
Peter 14.7
Hi Peter,
Contract took longer than hoped but is now signed. Had to do all the detailed CC drawings and engineering to reflect a change in construction technique which all added time. Just waiting for finance to be finalised and then we can kick off. WBC running the numbers and vals at the moment.
All in place now just waiting on the finance green light. Tennant is out mid-June and we are having the house removed end of June. Should start the excavation in July provided all goes to plan.
Cheers,
Michael
Contract took longer than hoped but is now signed. Had to do all the detailed CC drawings and engineering to reflect a change in construction technique which all added time. Just waiting for finance to be finalised and then we can kick off. WBC running the numbers and vals at the moment.
All in place now just waiting on the finance green light. Tennant is out mid-June and we are having the house removed end of June. Should start the excavation in July provided all goes to plan.
Cheers,
Michael
Well done. 
Your thread should be linked to all the newbies on SS who coming with " I want to be developer" to illustrate the stress, costs, time and risk involved in even a small 3 apartment development, albeit on the North Shore.
In a year or so when you have $1M in the bank and someone says "you were lucky" direct them here!
I assume the Yacht is on the cards in 2012
Peter
Your thread should be linked to all the newbies on SS who coming with " I want to be developer" to illustrate the stress, costs, time and risk involved in even a small 3 apartment development, albeit on the North Shore.
In a year or so when you have $1M in the bank and someone says "you were lucky" direct them here!
I assume the Yacht is on the cards in 2012
Peter
http://www.smh.com.au/business/zero-stamp-duty-lure-as-nsw-posts-surplus-20100608-xs4u.html
May interest you Michael.
Tweak the apartments to target over 65 in the area?
Peter
May interest you Michael.
Tweak the apartments to target over 65 in the area?
Peter
Hi Peter,
You're right. The amount of work involved in even a small development like this is unbelievable. Here's an email back from my private certifier to give you an idea. This is what is outstanding to allow him to issue the Construction Certificate:
And the list goes on...
I've spent all morning chasing third parties and writing documents. And of course it all adds cost. The Accessability Certifier wants to charge me another $1,900.00 to assess it for CC now. The Section 73 requirements from Sydney Water require me to increase the outlets to mains and sewer and I've got three quotes in between $8,000 and $16,000 to do the work. And, I'm not even allowed to go direct to the plumbers, I have to go through an approved Sydney Water Coordinator (third party) who charges me another $1,000 just to coordinate the over-priced quotes!
Development is absolutely insane. Anyone contemplating doing it should get their heads checked.
Having said that, I'm getting there... Finalising all of the above with a great deal of blood, sweat and tears. The banks are still giving me grief and have changed their stance to a commercial lend at 65% LVR and 8.79% interest. That adds $12,000 to my interest costs and pushes my LVR to the absolute limits. Might have to even tip some of my own cash into the build contract now too. I've spent all the LOCs on my former PPOR so have it hocked to the eyeballs now too. Wouldn't you know that they'd do that when push came to shove and they actually looked like having to finance the deal. Well that's today's stance, who knows what it will be when they come back formally with a no-doubt understated valuation and rental assessment.
We're almost across the starting line. 4 years and over a hundred thousand dollars and we're almost ready to commence. I can't wait to see how much fun actually building turns out to be!
As to Kristina's little trinkets for builders, they won't directly impact me as my gross valuations on each unit are $900,000 $950,000 and $1,050,000. So none of them come under the $600,000 state government cap on all those discounts on stamp duty. As always, they pander to the masses and cap it so the silver-tails miss out. Anyway, hopefully there's a trickle effect causing some movement in prices for my offering upwards.
Another day, another bill...
Cheers,
Michael
You're right. The amount of work involved in even a small development like this is unbelievable. Here's an email back from my private certifier to give you an idea. This is what is outstanding to allow him to issue the Construction Certificate:
PCA said:
And the list goes on...
I've spent all morning chasing third parties and writing documents. And of course it all adds cost. The Accessability Certifier wants to charge me another $1,900.00 to assess it for CC now. The Section 73 requirements from Sydney Water require me to increase the outlets to mains and sewer and I've got three quotes in between $8,000 and $16,000 to do the work. And, I'm not even allowed to go direct to the plumbers, I have to go through an approved Sydney Water Coordinator (third party) who charges me another $1,000 just to coordinate the over-priced quotes!
Development is absolutely insane. Anyone contemplating doing it should get their heads checked.
Having said that, I'm getting there... Finalising all of the above with a great deal of blood, sweat and tears. The banks are still giving me grief and have changed their stance to a commercial lend at 65% LVR and 8.79% interest. That adds $12,000 to my interest costs and pushes my LVR to the absolute limits. Might have to even tip some of my own cash into the build contract now too. I've spent all the LOCs on my former PPOR so have it hocked to the eyeballs now too. Wouldn't you know that they'd do that when push came to shove and they actually looked like having to finance the deal. Well that's today's stance, who knows what it will be when they come back formally with a no-doubt understated valuation and rental assessment.
We're almost across the starting line. 4 years and over a hundred thousand dollars and we're almost ready to commence. I can't wait to see how much fun actually building turns out to be!
As to Kristina's little trinkets for builders, they won't directly impact me as my gross valuations on each unit are $900,000 $950,000 and $1,050,000. So none of them come under the $600,000 state government cap on all those discounts on stamp duty. As always, they pander to the masses and cap it so the silver-tails miss out. Anyway, hopefully there's a trickle effect causing some movement in prices for my offering upwards.
Another day, another bill...
Cheers,
Michael
Actually you are right which is stupid. Why cannot someone sell thier home in the North Shore for say $2.5M and downsize to a $900k apartment. The objective is to keep local in the areabut free up 99% empty houses.
Disappointing. The amount of those over 65 buying over $600k would be minimal so little impact on the budget.
Peter
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Hi Guys,
Yes, it has been a bit quiet in this thread lately, but thankfully I finally have some positive news to post. We've commenced! And in earnest...
My builder just called today to let me know they've started the excavation on site. They've been clearing the site and getting the site shed in place this last month but are finally digging now. Woohoo!!
We had a few hiccups during the site clearing which I'll post about in a little bit when the dust has settled so to speak, but its all done now and we're on to the build proper. I'll be getting monthly reports from my builder with digital photos so I might blog the build in this thread for those who want to follow the ups and downs along the way.
This development gig is not for the weak hearted. Even getting to this stage has been very difficult. The argy bargy about what is and what isn't included in quotes is the killer. Misunderstandings between both parties which inevitably lead to cost additions are painful. You don't learn this stuff without doing it and so far they haven't been too bad.
For example, there's this big tree that overhangs powerlines adjoining the property that has to go as part of the landscape plan. My fixed price contract included all site clearing, excavation etc. but in a bid to save a few bucks I got site clearing excluded and got credited the $11,500 quote my builder had for site clearing. Didn't sound like enough at the time but I was assured that was it. I then sold the house for $7,000 and had it removed. I got a new quote for the site clearing with the house gone for $6,000 and pocketed the $1,000 difference and the $11,500 credit. Happy days! But... The new site clearing quote excluded this tree. Quotes to have it removed came in around $4,000 because they need to turn off the high voltage power to have it removed. Also, my house remover is hitting me up for $2,000 in other tree removal costs which I never authorised but he reckons we had a gentleman's agreement about. So, that's $6,000 of my pocketed savings gone.
Thankfully I'm a clever vegemite. I thought, "so, that tree is expensive because its overhanging power lines is it? OK, I've got an idea" and I googled Energy Australia and found this link:
Energy Australia
which had this nice little bit of information in it:
You beauty! So, I call Energy Australia and explain my very dangerous tree is overhanging their high voltage power lines and my arborist has reported it has some internal rot and it is high risk. Could they please clear it to the sky as per their policy. No problem, they put a call in and a team go check it out. I get a call from the guy who's their external subcontractor saying it would need to be felled as the whole canopy overhangs the lines. You bloody beauty!! Can I please write a letter authorising its felling and he'll raise the request with Energy Australia. Should be gone in March/April.
So, for a few phone calls I get out of a $4,000 felling fee!!!
All good. On another win front, I also got involved in the quote process for my internal lift recently. I got quotes from my builder back at $67K each for three different suppliers against my provisional sum of only $45K, not happy. So, I call another lift company and ask what the cheapest solution is for my property. They go with something which is borderline compliant but only cost $52K. There's all sorts of issues around AS1735 Part 16 etc and the difference with BCA section 4.3 from memory which I won't bore you with except to say I did a lot of reading and a lot of talking to my builder and certifier. In the end we agree this doesn't cut it but I've built a relationship with this guy who then drops his price on the really good compliant lifts to $59K to try and win the work. That's still $8K less than the original quotes from my builder. She shops this quote and gets her preferred supplier to beat it by $500 and throw in fire rated doors to the basement and also throw in the $4,000 worth of stainless steel finish package! Bonus!! So now its only $14K over budget and is the ants pants. I put my $10,500 credit on the demolition towards this variance and I'm only $3,500 odd out of pocket for a much better lift and I dodged a potential $23K cost overrun if I'd relied on my builder's three quotes and not done my sideline to sell the house itself and get credited for the demo costs. $20K for a few months work with a lot more to do through this build...
Its a tough game, but God its fun!!!
Cheers,
Michael
Yes, it has been a bit quiet in this thread lately, but thankfully I finally have some positive news to post. We've commenced! And in earnest...
My builder just called today to let me know they've started the excavation on site. They've been clearing the site and getting the site shed in place this last month but are finally digging now. Woohoo!!
We had a few hiccups during the site clearing which I'll post about in a little bit when the dust has settled so to speak, but its all done now and we're on to the build proper. I'll be getting monthly reports from my builder with digital photos so I might blog the build in this thread for those who want to follow the ups and downs along the way.
This development gig is not for the weak hearted. Even getting to this stage has been very difficult. The argy bargy about what is and what isn't included in quotes is the killer. Misunderstandings between both parties which inevitably lead to cost additions are painful. You don't learn this stuff without doing it and so far they haven't been too bad.
For example, there's this big tree that overhangs powerlines adjoining the property that has to go as part of the landscape plan. My fixed price contract included all site clearing, excavation etc. but in a bid to save a few bucks I got site clearing excluded and got credited the $11,500 quote my builder had for site clearing. Didn't sound like enough at the time but I was assured that was it. I then sold the house for $7,000 and had it removed. I got a new quote for the site clearing with the house gone for $6,000 and pocketed the $1,000 difference and the $11,500 credit. Happy days! But... The new site clearing quote excluded this tree. Quotes to have it removed came in around $4,000 because they need to turn off the high voltage power to have it removed. Also, my house remover is hitting me up for $2,000 in other tree removal costs which I never authorised but he reckons we had a gentleman's agreement about. So, that's $6,000 of my pocketed savings gone.
Thankfully I'm a clever vegemite. I thought, "so, that tree is expensive because its overhanging power lines is it? OK, I've got an idea" and I googled Energy Australia and found this link:
Energy Australia
which had this nice little bit of information in it:
Energy Australia said:
You beauty! So, I call Energy Australia and explain my very dangerous tree is overhanging their high voltage power lines and my arborist has reported it has some internal rot and it is high risk. Could they please clear it to the sky as per their policy. No problem, they put a call in and a team go check it out. I get a call from the guy who's their external subcontractor saying it would need to be felled as the whole canopy overhangs the lines. You bloody beauty!!
Can I please write a letter authorising its felling and he'll raise the request with Energy Australia. Should be gone in March/April.So, for a few phone calls I get out of a $4,000 felling fee!!!
All good. On another win front, I also got involved in the quote process for my internal lift recently. I got quotes from my builder back at $67K each for three different suppliers against my provisional sum of only $45K, not happy. So, I call another lift company and ask what the cheapest solution is for my property. They go with something which is borderline compliant but only cost $52K. There's all sorts of issues around AS1735 Part 16 etc and the difference with BCA section 4.3 from memory which I won't bore you with except to say I did a lot of reading and a lot of talking to my builder and certifier. In the end we agree this doesn't cut it but I've built a relationship with this guy who then drops his price on the really good compliant lifts to $59K to try and win the work. That's still $8K less than the original quotes from my builder. She shops this quote and gets her preferred supplier to beat it by $500 and throw in fire rated doors to the basement and also throw in the $4,000 worth of stainless steel finish package!
Bonus!! So now its only $14K over budget and is the ants pants. I put my $10,500 credit on the demolition towards this variance and I'm only $3,500 odd out of pocket for a much better lift and I dodged a potential $23K cost overrun if I'd relied on my builder's three quotes and not done my sideline to sell the house itself and get credited for the demo costs. $20K for a few months work with a lot more to do through this build...Its a tough game, but God its fun!!!
Cheers,
Michael
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Homer Simpson: Weaseling out of things is important to learn. It's what separates us from the animals!... except the weasels.
Must be great to start Michael!
Will watch with interest the wins and losses as that is the development game.
Peter
Will watch with interest the wins and losses as that is the development game.
Peter
Yeah, especially after the toughness comes.
Glad to hear of some action mate. Keep taking those "equanimity" tablets and you'll be right.
Hey Michael
Nice to hear an update finally on this dvpt- been a long time coming and it's sounding outstanding!
And I can empathise with you over hiccups! I'm currently involved in a simple land subdivision (6 lots) project and you're certainly spot on about dvpt not being for the faint-hearted! The hoop-jumping and bureaucracy can be very stressful at times leading one to ponder simpler projects next time around.
Well done on the progress and I look forward to seeing the finished products when they're done. Make sure you have a launch night for all us Sydney BA's!
Nice to hear an update finally on this dvpt- been a long time coming and it's sounding outstanding!
And I can empathise with you over hiccups! I'm currently involved in a simple land subdivision (6 lots) project and you're certainly spot on about dvpt not being for the faint-hearted! The hoop-jumping and bureaucracy can be very stressful at times
leading one to ponder simpler projects next time around. Well done on the progress and I look forward to seeing the finished products when they're done. Make sure you have a launch night for all us Sydney BA's!
Thanks everyone!
Yes, it is great to finally be underway. It surprised me how much effort and time was required just to get started but we're there now and not looking backwards.
There is still some teething problems. Its a fixed price contract but there's enough ambiguity in the finish that my builder keeps managing down my expectations. Its a fine line. I don't want to burn our relationship but I do want my project built to the quality spec it needs to be as tendered. Not sure yet how this will all pan out, but I'll let you know how it goes.
And, yes, a grand Somersoft opening at completion is a good plan. Just don't damage anything alright!
Cheers,
Michael
Yes, it is great to finally be underway. It surprised me how much effort and time was required just to get started but we're there now and not looking backwards.
There is still some teething problems. Its a fixed price contract but there's enough ambiguity in the finish that my builder keeps managing down my expectations. Its a fine line. I don't want to burn our relationship but I do want my project built to the quality spec it needs to be as tendered. Not sure yet how this will all pan out, but I'll let you know how it goes.
And, yes, a grand Somersoft opening at completion is a good plan. Just don't damage anything alright!
Cheers,
Michael
