My little Mona Vale development update - Phase 3

Michael - your an absolute legend.

Thanks so much for these posts - you really have given an insight into the world of property developing for someone like myself without any personal experience.

I hope your around for a number of years! As I probably won't be able to do any developments for at least 3-5 years. Please keep posting and keep developing.

I am also in the Brisbane/Gold Coast area so that by the time I am ready I can hopefully buy you a beer and tap into your wisdom and experience.

I am finishing a town planning degree and there are plenty examples of DA process and time frames on various council's PD online's as well as the various developments that my work is involved in.

But seeing the next step where the operational works begin through the view of the client/property developer with all the ups and downs, delays, cost breakouts, etc. is extremely interesting for me.

Keep up the good work mate, everyone here is loving this thread.
 
YPG,

You're most welcome and I look forward to that beer in due course... :)

Developing is not easy by any means and definately not for everyone. But for those with the gumption and discipline it can be a profitable way to add value. In retrospect, I've found that acting as the "builder" and not the "developer" is where I add the most value to my properties. As a developer I am too much in the hands of my builder and their profit margin. So, despite them being a fantastic builder, I still don't have the degree of control that I prefer to ensure the most profitable outcome is achieved.

I've loved this Mona Vale development process and it will definately be profitable and look after me in retirement, but I don't think I'll be doing something this big again any time soon. As mentioned in my other thread, my next project is another PPOR for my family in Brisbane where I will be doing it as an Owner Builder. I've already negotiated some excellent quotes to get it constructed to frame complete saving me $40,000 over a full service separate quote delivering less than what I have had quoted. But that's a story for that other thread.

I'll keep updating this thread and look forward to posting the final completion photos and details when complete. At this stage March/April 2012 is the anticipated completion date.

Today's issues are around the definition of "double glazing" which appears to be ambiguous from my builder's perspective and could be read to mean single glazing. As well as getting supply and install quotes for the ducted air conditioning below my provisional sum allowance. Another day, another drama, but all par for the course.

Cheers,
Michael
 
Well done Michael.

The saving you have gained in chasing quoting and sourcing shows what time and brains can achieve.

Sadly, it also shows the building industry is in decline when it comes to paperwork and attention to detail and duty of care. The builder should have time to do this for you but they are too flat out with regulation and other issues to make it happen.

Contract Wise: where do you stand on supplying other products like the turntable, does the builder cover the warranty or so you?

Regards

Peter 14.7
 
Peter 14.7 said:
The saving you have gained in chasing quoting and sourcing shows what time and brains can achieve.
Click to expand...

That's spot on, and its why I've decided to remain more hands on in my future projects. When I get involved the quotes come down considerably. I know my builder is dotting the I's and crossing the T's, but negotiating the lowest possible price on a provisional sum item doesn't serve their purpose at all. I have to get in the middle of it and look at alternatives to keep the provisional sum expenses to their lowest possible level.

Peter 14.7 said:
Contract Wise: where do you stand on supplying other products like the turntable, does the builder cover the warranty or so you?
Click to expand...
A good question, and I don't know the answer off the top of my head. I could look in the contract and find out but I'm tipping I'm liable for the warranty on owner supplied items. The turntable is the only item I have sourced and supplied so I'm not too worried. Its a low-tech item and relatively low cost. Replacing the entire electric motor would not be a major expense if I had to.

Piston Broke said:
Thanks for a great thread.
Click to expand...
Thanks, much appreciated. I'm just hoping it doesn't get too "interesting" from here on in...

Cheers,
Michael
 
Well done. MW.

Price chasing is worth it and really:

  1. who looks at turntables to see where they are made
  2. it is only three cars so it not gong to work hard
  3. very likely with modern cars they will be able to turn without the turntable anyhow (back in my design days turning circles are based on a massive 1985 "pontoon" Mercedes fyi)

I.e. I recently put new tyres on our Forester. BFGoodrich Sport TA Sport 215 as recommended by Choice review.

Made two calls:
Bob Jane $760
Jax $520

A saving of 33%.

When you put that to $100k of PC items, thats $$$$$

Well done, Peter 14.7
 
Thanks for the thread Michael, I read through a few days ago and learnt a lot.

It's looking great and coming along nicely.

:D
 
Wow, looking fantastic now! Just got back from spending Saturday in Sydney and thre place is looking really good. I'll try and remember to upload the photos off the camera, but the 1st floor brick cladding is almost complete and they've started the plumbing rough out now too. They've backfilled the earthworks around the basement now and levelled the site. They've knocked down the old fence and put up temporary fencing getting ready for the new fence.

I spoke to the builder today and the roof is going on next week and its looking like we'll be at lock-up before Christmas. We've agreed the 1st floor glazing standard as a laminated glass which will achieve excellent noise reduction. There's three ducted air conditioning companies quoting the supply and installation of the air cons now too. So moving forward on all fronts.

Did I also mentioned that I got in the middle of another quote process recently and saved a whole lot of money again. This one was not anything to do with my builder though as it was for gas connection to the site. I went through AGL and they quoted $8K. I questioned this so they went back to Jemena who confirmed that was correct and it was because they had to bring it across a major road. I mentioned there was existing gas on site previously but they said they couldn't use that connection. I got jack of that so went to Jemena direct and had them quote me. First quote came back at $3,500 which was much better. I went back and asked the question about using the existing connection and mentioned it was three units so they quoted again and it came back at $600. Ripper!! From $8,000 to $600. Now, THAT's why you never accept a quote which just feels too big. Push and push, dig and dig until you get the number you need.

Happy days, can't wait to see it at lock-up.

Cheers,
Michael
 
MichaelW said:
Ripper!! From $8,000 to $600. Now, THAT's why you never accept a quote which just feels too big. Push and push, dig and dig until you get the number you need.

Happy days, can't wait to see it at lock-up.

Cheers,
Michael
Click to expand...

AWESOME!

Ok, I said it first and expect a 10% finders fee.

Here is my idea to save you even more Money!

Write a book on the project, warts and all, do and don;ts and then do the morning shows, etc...

Make say $100k I think so I expect $10k in small bills. Peter like cash;)

Again, awesome, you are even getting me keen to get back in, just don't tell your wife who will tell mine!:eek:

Peter 14.7
 
Hi Everyone,

Time for another update!

We're coming down to the wire now. Lockup is complete and the render is on. The inside is all gyprocked with the plumbing and electric rough out all complete. The kitchens have been measured and are being fabricated as we speak. The next stage involves finalising the exterior with the downpipes connected to stormwater then painting, ballustrading, screens etc. Then the scaffolding can come down and we can get on with the landscaping.

I anticipate about three months left to run. There's still a lot of interest in the area. We were down for a site meeting two weeks ago and a random genteleman leaned over the fence and asked if we were selling off the plan. :D Put a smile on my dial.

We are having some minor difficulties finalising the landscaping costs against the provisional sum. Its working out around $85K when the provisional sum only allowed $45K. So we'll probably have to comprimise on the fence we wanted to have built to bring it in on budget. But the flipside is that we'll push it back out 1m to the actual property boundary and double the size of the enclosed yards for the downstairs unit and townhouse. At present its a 1.8m brick and timber fence 1m in from the boundary. We will probably change this to a 1.2m timber paling fence on the boundary. With a 76m boundary that's 76m2 more enclosed yards between the two downstairs properties.

Here's some update photos.

Hmmmm.... Well, maybe not. The gallery isn't working at present to upload photos so I'll try again later and edit them in.

Cheers,
Michael
 
Hi Beorn,

As much as I sympathised a lot with that posters points of view, I must admit to not being the "Michael of Sydney" guy that used to always pop up on SMH a lot. I do read the comment sections only to see where the masses' heads are at, but most of the time it seems to be ill informed posterazi killing time running their group think mantras.

I've given up trying to predict now and just stick with what I know how to do.

On that front though, and back on topic for my thread, I can admit that it is tough going at present. Still kicking along with the development and have now achieved almost full lockup and the outside completely painted. They're working inside now doing the tiling and other floor finishes.

I ran with strandwoven carbonised bamboo in the end which I think is a beautiful product with great durability properties. I kept tiles in the wet areas and carpet in the bedrooms but used the bamboo almost everywhere else.

The garage door is going on tomorrow, and the kitchens are getting their final measure before offsite fabrication. The turntable has been delivered to Australia from China and is now in off site storage until the garage door goes on. I've organised for an appropriately skilled installer to do the installation and he'll start as soon as I arrange delivery to site from storage.

We're working through all the costings for the landscaping at present and reconciling it back to the provisional sum.

At present we're estimating an August practical completion date. Woohoo! Been a long time coming but finally getting there. I'll arrange survey shortly for my strata certification and engage another private certifier to do that work for me.

I have learnt an absolute MOTZA from this development. So much so that I'd hesitate in advising others to follow in my footsteps. Its such a big challenge that I'm tempted to shy away from ever doing another one, but then again that would be a great waste of all the learnings I achieved out of this development. But as an owner builder I have more control, so for now I'm pursuing that path. My next project is my new PPOR in Brisbane as an owner builder which is ticking along slowly until I get tennants into Mona Vale in August and improve my cash flow to the point where the banks will come to the party on funding the new Brisbane PPOR.

But footings are complete in Brisbane so I qualify for the building boost grant. Blockwork going in next week, then the garage slab. I'll have all the concrete down and already have the frame all quoted good to go as soon as the bank refinances Mona Vale then lends against Brisbane.

All good, but its a hell of a lot of hard work. Will try and get some more photos up soon.

Cheers,
Michael
 
MichaelW said:
I have learnt an absolute MOTZA from this development. So much so that I'd hesitate in advising others to follow in my footsteps. Its such a big challenge that I'm tempted to shy away from ever doing another one, but then again that would be a great waste of all the learnings I achieved out of this development. But as an owner builder I have more control, so for now I'm pursuing that path. My next project is my new PPOR in Brisbane as an owner builder which is ticking along slowly until I get tennants into Mona Vale in August and improve my cash flow to the point where the banks will come to the party on funding the new Brisbane PPOR.
Click to expand...

It's great to hear Michael things are coming along with potential finish in Aug.

Regarding your comment about hesitating on advising others to follow in your footsteps. Do you think if you were doing it full time as project manager things would have been easier rather than doing another full time job and project managing development that too in a different city?

Cheers,
Oracle.
 
Hi Oracle,

Most definately.

Some of the major mistakes I've made so far, which I offer just as learning advice for others even though some might use it to have a dig...

1. Use professionals extensively until the project is contracted. I swapped architect from DA to CC to save about $30K. This was probably a good decision, but it meant I had to use another company to assist with the tender process. They under-quoted and pulled out before assisting with the contract production. As such, the builder produced the contract and swapped it to a HIA contract which is significantly better suited to the builder than owner. It lacks any clauses allowing the owner to appoint an agent arbitrarily, or hold them to a project plan, or demand a project plan be produced. It is a builder's contract.

2. Additionally, the contract I signed had lots of holes in it despite my working to limit these. Ambiguities were introduced around definitions for some of the provisional sum elements and ambiguities equal dispute which equals delay and cost. I'm working through some of these ambiguities right now, but even the effort of doing so is draining.

3. Project management oversight is invaulable. My contract has been dragging on for 18 months now on what was supposed to be a 50 week build. There has been a lot of rain in Sydney, but not that much. Even now, we're estimating August completion which will be nigh on 2 years to do a simple build. We've been watching complex commercial builds go up in Brisbane in half this time. Part of the issue is the inability to appoint an agent or project manager without the builder's consent due to the HIA contract. The builder has not once produced a timeline and the contract has no clauses allowing me to insist one is produced. Work ticks along slowly so technically they're not in breach of contract for suspension of works, but one trade at a time sequentially is killing the timeline. I have LDs in there, but capped at $10K and I spend that much a month in servicing costs.

4. Managing a project remotely doesn't work. I knew it would be hard having moved to Brisbane, but not this hard. I fly down periodically for reviews, but its not the same as being next door for daily oversight and weekly catch ups. I'm in the hands of the builder.

There's more specific learnings I could elaborate on. But that's where my head is at right now. We'll get there, but its hard work and has been a hard slog. The end product, however, looks like being exceptional.

Thanks for your comments.

Regards,
Michael
 
Michael deserves big Kudos for being so honest and open about his project.

Developing is NOT for the faint heartened and it is frustrating to see PI mags giving glib one page review on someones project, at the end, when all is good. We never see one where they lost the lot? What we read here is the real world.

MW has show amazing persistent, can do, and guts.

Whatever the outcome he is winner.:D

Well done, Peter 14.7
 
MichaelW said:
4. Managing a project remotely doesn't work. I knew it would be hard having moved to Brisbane, but not this hard. I fly down periodically for reviews, but its not the same as being next door for daily oversight and weekly catch ups. I'm in the hands of the builder.
Click to expand...

I project manage my duplexes. I am on site every day ensuring things are running to plan. I live a few minutes away and it's still very consuming. I can only imagine how tough it has been for you mate. Just hope for your sake that the results still yield well for you. Thanks for the candid reflections and experiences.
 
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