Reality shock - development approval granted

https://pdonline.brisbane.qld.gov.a...tyMaster/default.aspx?page=wrapper&Key=454207

So, after running head first into the excitement of 'developing' and getting a reality check of just how difficult things can get, albeit we definitely didnt take the easy route! now left with the difficult decision of what to do now and accepting the fact that I know very little and could really do with your help.

We bought in June 2013. House in DCP, agent said couldn't get demo, no use to developer etc and it had a lot of retention issues that we renegotiated purchase price on.

I did some checking on the city plan (after purchase, had no previous experience with this) and acceptable solutions seemed to say we could. Spoke to some town planners. We lodged to demo in aug 2013 and got knocked back. Planner said not to lodge demo and dev at same time, good advice! We got lawyers involved and after 10 long months and lots of costs, got approval for demo
Selling agent came back and offered us 1.2 when we hear we got the demo but so keen to build we said no.
Lodged for 13 2 beds.
We have had many, many bumps in the road and we were sure it was not going to get across the line, several times...

Cannot look like 3 story and must have character, fit with streetscape etc this was in meetings before we even lodged so complete redraw!
More natural light
Bin collection not feasible
More deep planting/ would have halved the size had council landscaper got that one
Make it look like 3 story???!!!!

We were watching the market going up and up very unsure if this would get across the line and didn't want to miss out any longer so bought 2 properties using herston rd as security.
We are now a mill short on build costs with what we can borrow (est roughly 3m for total build and costs add to that the purchase and demo costs) but very unsure of what it would take to get someone interested in JV (my project manager suggested this) and if we want to stay invested in it, such a great location for units, we think!
If we sell, not sure what it is worth as have had 3 agents say anywhere 1.2 to 1.5, how to put a price on it?
How difficult would it be to sell by 'trading' for some units and is this feasible?
(This was our pension plan originally, to hold all)
Land banking ? Until hubby gets another job! (YEP, he wants a break for a while)
What other scenarios can we look at?

We only got approval yesterday (almost 2 years later and so much has happened to affect our plans) and my mind is just racing with what to do so am throwing a lot of mixed thoughts around and would love some grounding!!
 
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Hi Mitch, Not having the finance to complete the development would be extremely frustrating.

A JV could be the way to go.

What are the expected numbers such as end values and over all margin if the 13 2 beds are completed?
 
I think RPI is a town planner/developer in Brissie area with experience in larger projects. Perhaps you could contact him, he may be able to provide some information to help you move forward.

All the best

MTR:)
 
Est figures

Hi Brendon,

It is no longer 13 2 beds unfortunately! If we got that approval I would be begging, borrowing and stealing to complete the build :)
Bit by bit, we lost some GFA due to trying to get it over the line, though in fairness we applied with 110% GFA, now down to 89.7%

We eventually settled on 11 2 beds and 2 1 beds
End val estimates from several estate agents have been 495k for 2 bed mid spec and 395k for 1 beds which would give 5,245,000 val

I feel this is a tad optimistic and worked my figures on 480k and 380k and end val of 5.08
This gave us approx 30% less holding costs and what not but we do not have the benefit of the builder margin at 30% so a builder would stand to gain more. Though they also have to account for selling costs and what not in their end val!
 
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I think RPI is a town planner/developer in Brissie area with experience in larger projects. Perhaps you could contact him, he may be able to provide some information to help you move forward.

All the best

MTR:)

Hi MTR, I have spoken to Darryl before on putting it into a trust (it's still in my name until we figure out wether to hold or sell though) and found him to be really good and quite innovative.
We have so much going on in the background (may have to leave Brissy for employment) that I am struggling with wether or not it is too complicated to try to deal with remotely along with finance etc would we be mad to sell, what is it worth, should we do silent partner JV type thing I am not sure anyone would have the patience to help decide!
I guess finding out
A. what it is really worth selling now with DA
B. Can we make more than this with a JV making it worth keeping our money in the game for a longer term (locked up and holding costs etc)
Will be the crux of our decision!
I will pm him tomorrow and see if he can bear to deal with me :D
 
.. is there another option, hold ...?. Do nothing, this is gambling on growth, when do permit expire?

If you can on sell with a nice profit I would be jumping at this and moving on, less stress/risk
 
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https://pdonline.brisbane.qld.gov.a...tyMaster/default.aspx?page=wrapper&Key=454207

So, after running head first into the excitement of 'developing' and getting a reality check of just how difficult things can get, albeit we definitely didnt take the easy route! now left with the difficult decision of what to do now and accepting the fact that I know very little and could really do with your help.

We bought in June 2013. House in DCP, agent said couldn't get demo, no use to developer etc and it had a lot of retention issues that we renegotiated purchase price on.

I did some checking on the city plan (after purchase, had no previous experience with this) and acceptable solutions seemed to say we could. Spoke to some town planners. We lodged to demo in aug 2013 and got knocked back. Planner said not to lodge demo and dev at same time, good advice! We got lawyers involved and after 10 long months and lots of costs, got approval for demo
Selling agent came back and offered us 1.2 when we hear we got the demo but so keen to build we said no.
Lodged for 13 2 beds.
We have had many, many bumps in the road and we were sure it was not going to get across the line, several times...

Cannot look like 3 story and must have character, fit with streetscape etc this was in meetings before we even lodged so complete redraw!
More natural light
Bin collection not feasible
More deep planting/ would have halved the size had council landscaper got that one
Make it look like 3 story???!!!!

We were watching the market going up and up very unsure if this would get across the line and didn't want to miss out any longer so bought 2 properties using herston rd as security.
We are now a mill short on build costs with what we can borrow (est roughly 3m for total build and costs add to that the purchase and demo costs) but very unsure of what it would take to get someone interested in JV (my project manager suggested this) and if we want to stay invested in it, such a great location for units, we think!
If we sell, not sure what it is worth as have had 3 agents say anywhere 1.2 to 1.5, how to put a price on it?
How difficult would it be to sell by 'trading' for some units and is this feasible?
(This was our pension plan originally, to hold all)
Land banking ? Until hubby gets another job! (YEP, he wants a break for a while)
What other scenarios can we look at?

We only got approval yesterday (almost 2 years later and so much has happened to affect our plans) and my mind is just racing with what to do so am throwing a lot of mixed thoughts around and would love some grounding!!

Great post -thanks. I enjoyed reading the Urban Planning Assessment Report for the DCP. Well done if you did that all yourself.

Why is it not a good idea to lodge the demolition application and the building application at the same time if I can ask?
 
Great post -thanks. I enjoyed reading the Urban Planning Assessment Report for the DCP. Well done if you did that all yourself.

Why is it not a good idea to lodge the demolition application and the building application at the same time if I can ask?

Hi there, no, honestly, apart from attending the many meetings involved and loving the various solutions to the never ending issues! (particularly the bin collection issues as once you go over 9 units it is major street pick up etc so changing driveways car parking etc to allow a truck to turn safely)

I had some really good people with great expertise who also knew other good people we had to get on board along the way (lawyer/heritage architect/environmental planner/traffic engineers) in addition to a town planner, project manager and architect who were full time

The advice on not lodging both at the same time was good (in my opinion anyway) as if you lodge both and demo gets knocked back the development application is obviously also turned down which was approx 15k in savings...I think this has pretty much been used to pay the architect for all the changes, some of which we were not even allowed to put forward :rolleyes:

I wanted to learn along the way but protect myself from myself and it was a great learning experience .... Patience was high up there on the learning curve! :eek:
 
.. is there another option, hold ...?. Do nothing, this is gambling on growth, when do permit expire?

If you can on sell with a nice profit I would be jumping at this and moving on, less stress/risk

Hi MTR, yes, we could hold for a bit, recent approval is 4 yrs though demo is less now as that came through last year.
It would be a great profit after 2 yrs and very relieved/elated to have got it over the line. there are new apartments/hotel etc going up in the Showgrounds but I think herston will do even better with something like this as there will be retail/restaurants etc which will be great for the area.
It is the gambling on growth bit though ....:)
 
If you can achieve $1.5m by selling the plans as-is, after cost, you effectively achieve 100% return or made 700k in 2 years. Awesome result!!

Think if I was gaurenteed 1.5 I would seriously consider it but that was the top end value we were given so not sure on it! Wouldn't be 700k profit though! We had some of those fairly sizeable cost thingies on the way through :rolleyes:
 
Hi,

congrats on getting through the long haul process.

Is there an option to sell the other 2 properties that you purchased 'just in case' so that you have money again to finish this project?

Take your time on making the decision. I know you've spent a long time pushing it to this point and now that it's happened it does produce a feeling of panic as to what to do.
 
Hi,

congrats on getting through the long haul process.

Is there an option to sell the other 2 properties that you purchased 'just in case' so that you have money again to finish this project?

Take your time on making the decision. I know you've spent a long time pushing it to this point and now that it's happened it does produce a feeling of panic as to what to do.

thanks Westminster, if anyone knows this stage you do, love your dev posts!! we purchased the other 2 near uni for a bit of preplanning from a personal point of view
if we have to leave qld which is quite likely with hubbys job, (lack of)
we have 2 older girls in uni who will not leave brisbane.(the 2 younger ones have no say ;)

we got a good solid cash flow pos older strata townhouse with tenants who leave in nov. quick reno to increase rent and daughter 2 goes in there and advertises for a couple for the other 2 rooms

the other is a 3 bed on a 405, converted rumpus to a 4 bed and daughter 1 just moved in there with 3 mates, all on a lease
we had to secure some place for them (yes they contribute to the rent, they did at home too from when they started working part time) but they couldn't to do this by themselves really and we would have left them high and dry as would sell PPOR to buy where we go. so this is a personal safety net for kids and our peace of mind, if we have to scoot off!
a joint venture (working on the numbers) would not get us much more than we would get now selling, if even to make it profitable for the other party also.

I am leaning towards selling with D.A. and buying in other states at the moment, but that is todays thought ;)won't act on it just yet!
 
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