Rip down one and build many

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From: Garry T


Hi all

I did some chatting with a friend today about IP. We ended up having quite a bit of a discussion about becoming developers. It did however bring up lots of questions that we could not answer.

I'm hoping that some of the some people here could add their 2 cents to my thoughts, perhaps answering some questions or posing more for me to have a think about.

The discussion with my friend started when we went for a drive around and found lots of land with old houses on them listed for around the $330k mark. Most could be demolished and replaced with 3 to 4 townhouses or 6 apartments. Small new townhouses are on the market in the area for $280k+ and small new 2br appts for $220k+. So it seemed to us that developing could be worth looking into.

Biggest immediate problem is that we have no idea how much it costs to construct dwellings . If someone out there can give us a rough guide it would be enlightening and appreciated.

The other issue is that for me it would be my 1st RE venture and the 2nd for my friend so it has the feel of trying to bite off more than we can chew. But it still seems like an idea worth spending some research time on, particularly as the average rental yield in the area we looked at was barely over 5% yet dwellings on the market seemed to be turning over quite rapidly.

On the plus side we both have project management experience though not in the RE field.

I really could use your thoughts.

Regards


Garry
 
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