Not sure which way to go??

[Blair007]

Ahh just look at the post above and HD_Ace has already beat me too it. it sounds like you got the place for a pretty good price and if up spec villas are getting mid 700's then it just seems too much equity would be lost subdividing and selling land only.

 

[MTR]

Ahh just look at the post above and HD_Ace has already beat me too it. it sounds like you got the place for a pretty good price and if up spec villas are getting mid 700's then it just seems too much equity would be lost subdividing and selling land only.

Yes, I think you are both right, the thing is I actually was not targeting this area, so I am still learning and working through the scenarios.
Thanks

 

[westminster]

Always helps to work through all the scenarious and think outside the box.

 

[MTR]

Yes, the penny has dropped, will be vigorously looking at all angles.

 

[INVSTOR]

I have another idea. Don't sell the property just fix it up for now and access the equity.

The property in question has great development potential, the house is solid, however needs lots of work, there are 2 entries to the property, front and side entry.

I believe the previous owner was working on separating into 2 dwellings as its 5 bedroom x 3 bathrooms, 2 kitchens (1 an absolute basket case), the problem is they never completed the work, so some areas do not even have carpet, really just cosmetics in some cases, sheets on all windows.

If I throw $40,000-50,000 at it I think I could get it looking very nice. All we need to do is partition it and we have 2 separate homes.

I believe I could rent 3 bedder for minimum of $450-480 pw and 2 bedder minimum of $300 pw. (conservative figure I believe)

This would cover the mortgage and I believe the land will continue to rise in this area as mentioned its built up, near Uni and ticks many boxes.

On completion of reno would be looking at $610,000 mortgage and around $780 pw rent. This should not slow me down, once the reno is completed I would expect higher bank value.

This also gives me an option to develop down the track, they are selling nice spec villas for around $750K today, but I expect they will only increase in a couple of years.

Thoughts???

I thought about purchasing a similar property in GFc, 2 kitchens, 2 living area, 2 bathroom 4 bed, corner 800 and something block. I thought it would be great for two couples to split bills. My hubby thought it was a bad idea - who wants a property with two kitchens? My sis who has rented heaps suggested kitchen was the hub of the home - suggesting bad idea.
I feel spending $50k could be a waste. They couldnt sell during GFc but it sold quickly when they tarted it up a bit and put back On market 18 months ago. I thInk they may have demolished one kitchen to sell...or maybe left one out of adverts as I was over east, I didn't view.

No I don't think so.
I really did not pay any attention to the home whatsoever, I now need to go back and make sure it would actually work, have a friend who can work out whether its worth going down this road.

Cheers
MTR

That sounds like my last purchase! I was so focused on block size, slope, shape and house position I wasn't too sure what the house was like.

 

[MTR]

I thought about purchasing a similar property in GFc, 2 kitchens, 2 living area, 2 bathroom 4 bed, corner 800 and something block. I thought it would be great for two couples to split bills. My hubby thought it was a bad idea - who wants a property with two kitchens? My sis who has rented heaps suggested kitchen was the hub of the home - suggesting bad idea.
I feel spending $50k could be a waste. They couldnt sell during GFc but it sold quickly when they tarted it up a bit and put back On market 18 months ago. I thInk they may have demolished one kitchen to sell...or maybe left one out of adverts as I was over east, I didn't view.



That sounds like my last purchase! I was so focused on block size, slope, shape and house position I wasn't too sure what the house was like.

Very interesting.
I am also going to run the numbers again on building 2 houses 4x2 with end value of $750,000, this would be high end spec, but its really not that difficult to get this happening, just not sure of the size and cost.

May be best to go down this road, my head is hurting.

 

[carllarz]

Hi All
Just secured a development site, corner lot for $550K, will settle in 2 months, subject to finance, DD clause.

Have just found out from a local agent that sells to many developers that in today's market he has buyers/builders/developers at $690-720K, I am new to this area, however I thought it was a good buy, but did not realise how good, agent was also gobsmacked at the purchase price.

My question is, what if I flip it, I don't want to pay stamp duty which is close to $30,000 anyone get around this??, of course my profit will be cut by 50% CGT, however, I can offset some of this to a degree.

Thanks
MTR

My opinion: if you are saying you've already effectively made $150k, your risk element is low... develop the block and go for gold!
If other parties are willing to pay that much, there must be huge development potential.. why let someone else cash in on it when you already have the property and have room to take a gamble???

Carl

__________________________________________________
www.loansource.com.au | Comprehensive Loan Mortgage Calculator.
Extra Payments, Stamp Duty, Capital Growth, LMI, Compare Loans, Amortisation, Graphs, Time & Interest Saved & Much Much More !!

 

[MTR]

My opinion: if you are saying you've already effectively made $150k, your risk element is low... develop the block and go for gold!
If other parties are willing to pay that much, there must be huge development potential.. why let someone else cash in on it when you already have the property and have room to take a gamble???

Carl

__________________________________________________
www.loansource.com.au | Comprehensive Loan Mortgage Calculator.
Extra Payments, Stamp Duty, Capital Growth, LMI, Compare Loans, Amortisation, Graphs, Time & Interest Saved & Much Much More !!

Agree with you, that is why I have now decided to build 2 good size homes, probably sell 1, keep 1 and will be cash flow positive around $10K pa, then we have depreciation. My strategy with developing is sell a few, hold a few, build cash streams, also mitigate the risk, in other words take some money off the table as markets change.