My small development journey so far..

[rof521]

subdivide Builders

I have two builders, one private builders that I knew and had done work for mor me. He also told me to get draftsman, town planner company to do this work. He will just do the building once it get approved.
Similarly, a constructions property developer also told me, I have to organise the subdividing myself, then the will do the building application to build...
I am not really familiar with this.
If there is any builders reading this wo would do all of this, please let me know. HELP!

 

[Annietom]

builders

hi rof, I think it is so important to do research (ie. get lots of quotes) before you decide on anything "property". The money involved is huge, and mistakes are easily made by novice investors. I suggest you talk to building companies, and maybe another builder to see exactly what you are getting for your money and if it is good value. It's great that you know this guy, but why not be sure he is not overcharging you. Make sure your arrangement with this builder is in writing (ie. contract) and all matters involved with the build is specified in your contract.

 

[devo76]

Still moving foward.

had a bit of a scare with an indicative quote blow out. Initially the sewer encasement was priced at just over $10,000. now 6 months later they wanted closer to $30,000
I crapped myself and chased other quotes. Got another company locked in at $13,000. just $1,000 over my budget.

now the sewer encasement engineering wise is approved with CC given.
As is the extention with CC given.

Plumber to start on the sewer any day plus the builder to start on the extention also.

Ohh and a $14,000 donation to council water

All in all i should see some foward movement in the next few weeks with the actual house build following close behind.Actually ill be finalising internal colours etc next week.

most unkown prices are sorted now and im still looking at around 25% to 35% profit at this stage on a conservative valuation( price correction excluded).

Not sure if anyone is interested in this but it may help some people out there considering a small block subdivision. I know im learning thats for sure.

Cheers

 

[Marty McDonald]

Devo,

Very interesting, its great reading... keep it up.

Don't forget to whip it good.

 

[The_Bludger]

Not sure if anyone is interested in this but it may help some people out there considering a small block subdivision. I know im learning thats for sure.Cheers

Definately. I'll be starting my very first subdvision in a few months and I'll be posting here too.

Sounds like you're on top of it! The first one is always the hardest.

 

[devo76]

Well we have actual movement now.
Sewer encasement is underway right now and the extention that attaches the garage to the existing house has also started. Good to see some actual work taking place.

Cheers

 

[devo76]

Sewer line is done.

big job at over 3.5 meters deep.They had some luck with the pipe being concrete not FC so no replacement required.
And also due to the pipe being on a hard rock bed. less concrete was required to encase. All savings passed on to me so happy its all done.

Stage 1 complete now to crack the whip on the guy doing the original house alterations and chase the garage builder to start.

as soon as this is done i can clear the site and start the build.

 

[devo76]

Next drama

now the sewer line is done. The garage should be starting. I even planned this well before the sewer was complete but the garage builder is not returning my call and im getting the run around. This holds me up a lot because when they do finally come and measure up it will be another 4 weeks minimum before they start.

But plan B may be better. Im getting the builder who is doing the extention to quote on a garage this afternoon. if the quote comes in close i will go for it. The big plus is he can start straight away.So may be a good thing.

Keeps you on your toes this stuff.

 

[Rockstar]

Well hopefully the builder will be cheaper Devo. Gotta keep jumping over those brick walls mate. It's all great experience despite the dramas. Sometimes it is worth paying a bit extra to keep things rolling along. That's what contingency allowances are all about. There are always a few blow outs here and there.

 

[devo76]

Well hopefully the builder will be cheaper Devo. Gotta keep jumping over those brick walls mate. It's all great experience despite the dramas. Sometimes it is worth paying a bit extra to keep things rolling along. That's what contingency allowances are all about. There are always a few blow outs here and there.

Thanks mate. Good news on the garage front.
A custom built garage in weatherboard to match the extensions has come in at over 4 grand cheaper. And better still he can start straight away.
So this hickup has turned into a cost and time saving with a better looking end product. Nice little win.

 

[jeffb5ltr]

Great Read Devo

Thanks for posting all the hurdles and pitfalls that pop up when doing this type of project.

 

[devo76]

Great Read Devo

Thanks for posting all the hurdles and pitfalls that pop up when doing this type of project.

No worries mate. I have a few more ups and downs to go yet.

 

[devo76]

The extention( enclosed hallway) that connect the house,granny flat and new garage has started this week. Happy about that. Slab for new garage starts this friday and when the extention is done next week he will roll straight into the garage.

Almost time to start organizing the demolishing of the old garage and a site clear ready for construction of the new house.

Quick look at the financials and im still traveling ok .

Still within 5% of the expected finished product budget i wrote on the back of a piece of paper way back at the start.
End value is still looking good. Maybe 5% down with the current slowdown.
Rents are still climbing steadily

Cheers.

 

[Rockstar]

Good to see things are moving along closely according to plan. When are those photos coming mate.

 

[devo76]

Good to see things are moving along closely according to plan. When are those photos coming mate.

Yes photos. Will do. Atleast now there is something to see.

Steve

 

[BV]

Atleast now there is something to see.
Steve

Sounds good

 

[devo76]

Extension of the existing house half done.
Slab for garage on existing lot started today.
Expect this stage to be complete within two weeks now.


I was just having a bit of a scratch around with the numbers as im atleast halfway through now with all future costs locked in.

Rough numbers

original house ( 1000 sqm corner with granny flat) $300,000
rental return 8.2%

Connect granny flat to existing house as per DA requirement $16,000
New garage including slab driveway and fencing $18,800

New value of existing house $334,800
New return 7.3%

LOT 2

sewer line encasement $13,300
Water and sewer contributions $14,000
Council and town planner costs $14,000

new 4 bed double story 195 sqm house finished $181,000
Finish off $15,000

Rough total cost of new house $235,000


So projecting foward at completion in 6 months i should have a new IP valued at approximately $350,000 with $115,000 equity straight away.
expect a rental return of 7.7% on build cost.

So two properties returning 7.7% and 7.3% and over $100,000 equity.

These figures may still move a bit but plenty of margin.
i could have improved return buy not building the new garage and going a cheaper option with the extension but in the end these add value to the existing property hopefully cancelling out the loss in value by slicing up the land.
I could have also done better buying in melbourne but this is a learning curve and a good setup for any future projects.

 

[devo76]

Photo time.

Not much to look at but it might give you some idea.
Attachement shows the sewer line part way through. Went smoothly with a couple of lucky parts to it that saved some cash.

Cheers

 

[devo76]

Ok

This shows the wall of the granny flat. The new garage will butt up against it and overhang at one end. At this overhanging end is the start of the enclosed walkway that is now getting built.
I could have gone a cheaper way to connect the flat to the house but in the end i went a more expensive direction that i thought would be more usable and add more value.

Cheers

 

[devo76]

OK

From here i am basically standing at the corner of the (yet to be built) garage. This will form the new subdivision boundary.This shows the lay of the now encased sewer and the edge of the garage that is to be pulled down creating a 20mx20m block.

Cheers