R25 Zoning - 2 survey strata lots

[MTR]

Hi All

Here is my Kardinya project, I settled on this property in March 2014.

I expect my strata costs on completion may be closer to $45,000, however this does include demolish costs.

Currently, I am considering selling one block and building on the other.
My bank loan is $440,000 (80% LVR), so if I sell one lot I can pay the bank debt off and then submit plans and permits to build on the other block.

Costs to date -
Purchase Price/stamp duty - $570,000
Costs to data (water, surveyor, demolition etc) - $37,664
Only costs outstanding to finalise this is fencing, I need one fence to separate 2 blocks perhaps - $3,000-5,000?

Total - $570,000
$ 37,664
$ 5,000 Fencing??
$612 ,664

Current value of the blocks, have had 4 agents look at these and realistically I think $450K and $420K- Funny enough bank valuations came in at $480,000 and $415,000, I am currently looking at accessing equity and using the funds for the build, if I go this way.

Lot 1 - $450,000
Lot 2 - $420,000 (bigger lot, but close to busy road)

I have not included selling costs which will be $6,000 per lot. Holding costs, should be around $1756 per month, and would take 2 months for titles to be issued, I would expect sold during this period.

This is my surveyors diagram (corner lot), we have gone for survey strata, just received conditional approval. If I went green title I would be paying an additional $10,000 in fees.

Thanks Myf and Lee, IT support

 

[HD_ACE]

Looks good and a very quick turn around for you.

Colourbond fencing supplied and installed around perth is average $75pm but have found at least one willing to do for around $65pm. So you would be looking at 1500-1700 for the 22m boundary.

 

[MTR]

Thanks HD
I have allowed plenty of fat then.
Know any good contractors??

Also, another option that I may/may not consider - a brick wall, lot 2 is close to a busy road and I think the brick wall would be ideal, but then again if I am looking at it costing an arm and a leg I wont do it.

 

[HD_ACE]

Thanks HD
I have allowed plenty of fat then.
Know any good contractors??

Also, another option that I may/may not consider - a brick wall, lot 2 is close to a busy road and I think the brick wall would be ideal, but then again if I am looking at it costing an arm and a leg I wont do it.

I will pm you.

Brick walls can look great and effective on corner blocks. But pricey.

 

[MTR]

I will pm you.

Brick walls can look great and effective on corner blocks. But pricey.

I threw a figure of $10K at it, just a guess, that is a lot of money, however if you pay $10K to make $20K then is there really an issue??

Thanks, appreciate this

 

[HD_ACE]

I threw a figure of $10K at it, just a guess, that is a lot of money, however if you pay $10K to make $20K then is there really an issue??

Thanks, appreciate this

Nope not all

Will you be keeping the corner lot block? Or advertise both and see which sells first ?

 

[LoneWolf]

Wow, land in WA is so expensive, you can basically just keep recycling this strategy to increase equity, sounds so simple, buy house with land, subdivide and sell land.
If my memory serves me well, this is similar strategy to another poster
No wonder so many WA developers on SS

 

[MTR]

Nope not all

Will you be keeping the corner lot block? Or advertise both and see which sells first ?

Hi Chase
Have no doubt which one will sell first it will be lot 1, better/quiet location.

This is what I am thinking, sell both, move on to other projects, however if I have a problem selling lot 2 then I will just build and probably hold it and access equity from it, due to tax etc. may be the way to go. Still have to have that meeting with my accountant.

My plan is to continue to also develop in Melb, then again there is currently nothing on the market, its very tight at the moment.

I just settled on Willagee, yes, I have said it now..... hot hot hot, did I say hot hot hot, well its probably gone up around $50K since I settled 2 months ago. The trick is to buy potential R40 site, rezoning confirmed for next year some time, sandwiched between blue chip areas, around $200K below median price of surrounds, does not get any better. The figures stack up well for villas and apartments even better. Was thinking of buying again but its moving too quickly and I want stuff I can also develop now.

Cheers
MTR

 

[MTR]

Wow, land in WA is so expensive, you can basically just keep recycling this strategy to increase equity, sounds so simple, buy house with land, subdivide and sell land.
If my memory serves me well, this is similar strategy to another poster
No wonder so many WA developers on SS

Hi Lee
Perhaps that was the guy building in Booragoon??? Not sure I think there was around 25%.
Still have to find it and secure it, there are always good deals when you are looking.

But you guys in Melb are fortunate to be able to put plans and permits together and on sell to builders, this is a nice and simple strategy, however I don't believe it works here in Perth from what I can see, yet easy money in Melb.

I suppose different markets have difficult strategies that work, just a matter of sourcing them.

Marisa

 

[eyespy]

Always in awe of what you can achieve MTR, thanks for sharing !

 

[eggnog]

What is green title?

 

[HD_ACE]

What is green title?

This is the norm for title in wa where the block is not affected by any of the ajoining blocks.

If something is shared ie services or driveway then it would be survey strata. A survey strata with no comon property is effectively percieved as a green title that share the services under the ground therefore the value between the two is not alot compared to the extra cost to go green title.

 

[catsteve]

therefore the value between the two is not alot compared to the extra cost to go green title.

Value to whom?

rightly or wrongly, green title are perceived more desirable by buyers. might be worth the $10k investment.

Advertised as 'green title street front lots' and my feeling is they would sell better.

 

[HD_ACE]

Value to whom?

rightly or wrongly, green title are perceived more desirable by buyers. might be worth the $10k investment.

Advertised as 'green title street front lots' and my feeling is they would sell better.

You are right but I dont see this to be the case anymore. In the areas I watch anyway. Survey strata with no common property has become quite acceptable. Obviously in the more prestige areas this may not be the case.

Ofcourse dd for your areas required.

 

[MTR]

You are right but I dont see this to be the case anymore. In the areas I watch anyway. Survey strata with no common property has become quite acceptable. Obviously in the more prestige areas this may not be the case.

Ofcourse dd for your areas required.

That's right.
The Chinese like green title, plenty who buy in Kardinya, but I did my homework and strata survey acceptable these days, seems plenty developers/investors going this way. As you can see by bank values perhaps they think the same way, also real estate agents who also gave me an idea on what people want and also achievable price.

At the end of the day they are not making anymore land in these areas. What is desirable is parcel of land big enough to build single level home, cuts costs immensely as opposed to double storey. Not too much stock in built up areas, most in this area are under 400 sqm with narrow frontage, once again adding extra layer of building costs.

Cheers
MTR

 

[eggnog]

Ahhh, I see. Different terminology here in Brizzy.

 

[DexV2]

Looks good Marisa, that's a fast turn around! So this is the project you were referring to. What's your timeline like since settlement to now (for subdivision and getting the titles etc.)? Roughly when do you expect to get everything ready to sell?

 

[MTR]

Looks good Marisa, that's a fast turn around! So this is the project you were referring to. What's your timeline like since settlement to now (for subdivision and getting the titles etc.)? Roughly when do you expect to get everything ready to sell?

Settled on 20 March
Demolish after 20 September (this month)
Titles 2 months off/sell during this period

Yes, I really pushed it through as I will be using funds for other builds or purchase another deve in Melb.

Cheers
Marisa

 

[MTR]

Am watching this area closely as will be offloading shortly.

For those looking at developing, reno/adding value.

This market is moving again, if you can find something which is R20/25 house at front, build at rear, or sell the block at rear for around $400K, achievable is worth a look at.

I think one of the drivers for this market in Kardinya and surrounds is the Fiona Stanley Medical Centre, opening in October which I believe pushing prices/demand up

MTR

 

[Aaron Sice]

Looks great Marisa. Great numbers indeed.

You're in good hands with Joel.

It's the only way up and up. not much under 600k now.

A.