Our Agent has a vendor who loves some of the work we do. He's got a 700m2 cnr block that he's currently subdividing.
He works in Country SA most of the time and is only here in Adelaide every 3-4 weeks so what he's asked our Agent is to see if we would be willing to build his house for him and in exchange he would offer the 2nd allotment he's creating out of the subdivision, for free. Initially the offer sounds really good but after 5mins punching numbers in the spreadsheet it soon becomes clear it doesn't really work - well not that easily anyway.
He wants a house around 200m2...that'll cost us around about $200K to build (includes extra footing costs, stormwater, fencing, retaining, etc). Our new allotment of 350m2 (worth $200K) would have an end value with a house around 180m2 with double garage on it around $500K.
We'd be making literally nothing because we have to spend $200K building his house.....
Any suggestions as to how we could take advantage of this offer and make it work for the both of us (i.e he gets his house and we get a profitable development site)?
He works in Country SA most of the time and is only here in Adelaide every 3-4 weeks so what he's asked our Agent is to see if we would be willing to build his house for him and in exchange he would offer the 2nd allotment he's creating out of the subdivision, for free. Initially the offer sounds really good but after 5mins punching numbers in the spreadsheet it soon becomes clear it doesn't really work - well not that easily anyway.
He wants a house around 200m2...that'll cost us around about $200K to build (includes extra footing costs, stormwater, fencing, retaining, etc). Our new allotment of 350m2 (worth $200K) would have an end value with a house around 180m2 with double garage on it around $500K.
We'd be making literally nothing because we have to spend $200K building his house.....
Any suggestions as to how we could take advantage of this offer and make it work for the both of us (i.e he gets his house and we get a profitable development site)?