Richmond Development #2

Hey Aaron, look into that union issue a little closer. I don't know the exact details, but the site next to us was shut down for 2 months soon after work began. Something to do with unions is all I was told about it....
Aaron... Have you checked out that property in Lennox St for $1.5M+? Biggin and Scott so probably about $1.7M. Stunning street appeal. I guess it was a shop at some point.

Hi RedCat,

Unions only get involved I think if the construction is 6 or more levels and/or is within the Melbourne CBD. As everyone has pointed out here, they are a big pain in the *** and I would never want to deal with those crooks.

Yes I've seen that Lennox street place and it looks beautiful - maybe you want to up the budget and buy this one instead? :) I'm going to have a look this weekend just for fun.
 
Good points about risk vs insufficient margins especially with finance hard to come by. Agree that no-one on this board is a big kahuna developer as i doubt they'd have time to spend half their day posting in the coffee lounge. Is Harry Triguboff a member here.. i wonder what his nic is :D

Finance per se isn't hard to come by - it's that the conditions of the finance are harder to fulfill. Most banks would happily lend for any commercial construction project as long as pre-sales cover 80-100% of peak debt. Pre-sales are so hard in this environment so most developers are just stuck.
 
Red - I dont know how you handled living so far out in Fitzroy! How is inner city living these days ;)

Haha. No we DID move out for a couple of years, I was just trying to keep the story short. Lived in Chelsea for a bit, but had to come back into the city. At least I tried the outer suburbs for a bit.
 
Yes I've seen that Lennox street place and it looks beautiful - maybe you want to up the budget and buy this one instead? :) I'm going to have a look this weekend just for fun.

I seriously did consider it but not right for my intended purpose. If it was for a PPOR I'd do it in a heartbeat. As I'm getting older (40) I'm getting a real appreciation for the older character properties. Maybe because they are like us as we age or something :D
 
In the scheme of things 12 townhouses is not a big build so you won't have any union issues. For a job like that you would be engaging a small builder that you have probably never even heard of yet, not Multiplex or Watpac. The unions like to go where they can influence hundreds of people in one hit, not your job that has 20 guys on it. It is much more difficult these days for unions to come on to your site than it used to be.

Tools
 
**Just an update - Council has come back requesting more information. We are responding now and hope to have it back in town planning next week.
 
best of luck.

Friend of mine bought a new town house in sth melbourne, very near the South melbourne market.
He bought during the GFC period and picked it up at a believed 'bargain price of around $1.1million (builder needed partial completed sales to finance the bank). Says its 'worth' near $2 million now.

Very nice, i think 3 stories, beautiful fit out, two car parks, internal lift as well, 2 car parks.

Of course its an owner occupier.

Both he and is wife are high income earners, around $350k combined

So there is definately demand for this section of the market.
 
Impressive project. You've got balls! I don't yet...

Have you ever done any other kind of development before? If so how did it work out. If not you have even bigger balls than I thought!
 
Aaron, I had a look at a development round the cnr from me in Brighton, all were 2br, the "penthouses" were 2br 21/2 bth with a large balcony. Fit out was ok, price was 2.2+
2 br with small balcony was 1.8. All on busy rd.
I'd much rather Richmond in the config you describe.
 
best of luck.

Friend of mine bought a new town house in sth melbourne, very near the South melbourne market.
He bought during the GFC period and picked it up at a believed 'bargain price of around $1.1million (builder needed partial completed sales to finance the bank). Says its 'worth' near $2 million now.

Very nice, i think 3 stories, beautiful fit out, two car parks, internal lift as well, 2 car parks.

Of course its an owner occupier.

Both he and is wife are high income earners, around $350k combined

So there is definately demand for this section of the market.

that must be dorcas st on the side of the south melbourne market. 3 story townhouse it was going for 800-1.2m couple of years ago. it still sells 1.6-1.7million nowadadys. not really 2 million. you would have to go further into albert park area.
 
Unions only get involved I think if the construction is 6 or more levels and/or is within the Melbourne CBD. As everyone has pointed out here, they are a big pain in the *** and I would never want to deal with those crooks.

I remember a few years back talking to a developer who was about to embark on a multi level project around Doncaster way.

He said the QS's thought it would cost about $7m, yet all the quotes from the builders were around $11m.

The difference apparently was the union factor.
 
Top