Quick turnover property development

[Bmok]

I'm thinking of doing a quick turnover property development using a 1% option where I buy an option to purchase a property with the intention of redeveloping it.

I'd like to on-sell this property to a builder after I have obtained D.A. approval for x number of units/ townhouses etc. I know that I would have to get an architect to help me get the D.A. approval through council before I could offer the site for sale to the builders (long before my option runs out hopefully).

One of my initial concerns is that I don't know whether I have to remove the existing house(s) or whether the builder would do this.

Any developer able to advise on this?

Many thanks,
Bmok

 

[frenzy]

ask your self would a builder pay $$ for this service ie what all your expenses are .. i would say that in you city most builders are flat out just doing their own thing..

why dont you do the whole project as even builders have to get loans to do this sort of thing.

 

[Bmok]

Thanks Frenzy,

We are now following your suggestion and are looking at doing the whole thing ourselves. It will be a very steep learning curve for us.

The viability of the whole thing will depend on whether the land owners (5 - Sydney based) will be prepared to go in with us for a 20 - 25% bonus on land cost, or whether we have to buy the land outright and our borrowing for the land is separate from the construction loan.

Hopefully the banks will look at the project and not us when assessing the construction loan.

Cheers,
Bmok

 

[frenzy]

if you put a good case to the 5 owners they should finance the dev..

going to the bank we require a builder to be involved.. but you may find a builder who will put his name to it..

by the way look at "kit homes" as the architect will work on around 10% of your budget then blow your budget by 100% ..

btw l am doing my first dev see the photo gallery.

 

[Temple Dog]

Try this - get a project home builder to plan it and submit to council. Once approved, sell the concept off the plan using "pre-approved" finance - subject to normal lending criteria of course. This way, anyone buying off the plan can secure it with a refundable nominal amount - once you have enough sold "off the plan" go to your financier (who is more than happy to be the one providing pre-approved finance for your 10-20-30-whatever townhouses) and get 100% for the outright purchase of the land. Exercise your option on the land. Then call in your buyers for their 10% deposit - this is surety on your construction. Hopefully your builder/partner will not require progress payments, but will cover construction costs for a percentage of the profits. Otherwise, your buyers can be contracted to maintain progress payments.

Sounds complicated doesn't it? Well it is! And it's a lot of hard work, stress, and headaches, begging, pleading, and borderline insanity ( but then again, so is genius). In the end, what do you expect for the amount of money you will make? It won't be easy, but it will be worth it!