Hi all,
thanks for all your thoughts, it's great to know you all care enough to reply to my post and to also help us understand our options.
Just to put you in the picture this is our first development. We didn't come into this lightly and knew it was going to be tough, but that's where having the best team and having support really matters I'm sure you'll all agree. Let's hope I can stay this positive throughout the build
Mattnz, your idea re wadrobe space is great, something I'll defo put in as I think the more storage in these smaller apartments the better. I do agree that bed 2 is fairly small but I don't assume it would be used for a double bed as these units are only 2x2's. I suspect it would be used either as a study or single bed.
To everyone else, the idea of 3 villas was where I was at 6 months ago. I was planning to build one at the back then when finished demolish the front house and build another 2. I couldn't ever build all 3 at the same time, this was due to lack of funds. We were always going to be reliant on the front house giving us income. When I engaged Momentum Wealth things got interesting, here's the figures...
Building 3 villas stage 1...
Total House Value: $840 - (1 x $400 + 1 x $440 existing house)
Loan: $750 - ($500 (initial purchase + costs) + $50 (Subdivision) + $200 (Build costs))
Equity: $90
Rent: $800/wk - (2 x $400)
Building 3 villas stage 2...
Total House Value: $1.32m - (3 x $440 includes 2 years of inflation)
Loan: $450 - $50 (Subdivision) + $400 (Build costs)
Total Loan: $1.2m - ($750 (Stage 1) + $450 (Stage 2))
Equity: $120
Rent: $1200/wk - (3 x $400)
OR
Building 3 apartments
Total House Value: $1.55m - ((3 x $370) + $440 Existing House)
Loan Stage 3: $1.06m - ($500 (initial purchase + costs) + $50 (Subdivision) + $510 (Build costs))
Equity: $490
Rent: $1520 /wk
At this stage I have way more equity than building 1 house at the back and can move on in the market now that these blocks are A. harder to find and B. more expensive. You may ask however where am I getting the funds for this if I haven't got them to build 3 houses, well were going to refinance once the DA and subdivision is complete, this should give us enough to pay the deposit for the construction plus some of the construction re-payments.
Once I've done a couple of these I will then re-visit Nollamara and complete stage 4 (this may be 6 years down the track)...
Adding 3 Apartments to existing 3 rear apartments...
Total House Value: $3m - (6 x $500 includes 6 years worth of market growth)
Loan Stage 4: $590 - ($80 (demolish and site works) + $600 (Build costs + inflation))
Total Loan Stage 3 & 4: $1.74m
Equity: $1.26m
Rent: $3000/wk (6 x $500)
For us this works really well, we can gain access to equity now and land bank for the future.
I agree it's a large undertaking however I've got a strong team with the guys at Momentum Wealth, good mortgage broker plus great accountant.
PHEW!
Anyway any more thoughts on the designs? Or on my calculations
?
thanks
Dave