Sunshine Development Diary In Detail

[Mindmaster]

Brendon

Awesome looking homes you have there mate and well done.

Could I ask about the tiles you've got in the kitchen? are they porcelain and what size?

Hi Stumpie, the tiles are 400*400 ceramic.

Brendon,

what unexpected expenses cropped up?

were they within your contingency?

EDIT: and how is the tenant search going??

Unexpected costs include
-change in design, big but value adding so good
-clay soil so more expensive concrete slab
-sewage and water connection (kind of expected)
-driveway pit pump
-doubling of open space levy
-extra holding costs and lost rent from a string of delays. Not builders fault, mainly due to bureaucratic stuff, weather and other uncontrolable factors.

Contingency was $15k which was wiped out with the first extra expense

Tenant search consist of these listings which are not inspiring due to lack of out door photos. The pics will be updated after landscaping is finished.

http://www.realestate.com.au/property-townhouse-vic-sunshine-414575111
http://www.realestate.com.au/property-townhouse-vic-sunshine-414575287
http://www.realestate.com.au/property-townhouse-vic-sunshine-414575719
Let me

 

[pasey25]

fingers crossed you get a tenant or two before Xmas.

 

[hpresident]

great post! What's with the red carpet?

 

[ChrisA1]

great post! What's with the red carpet?

mmm???

I'm not sure about the photo of the corner of the room?? Leave it out if it doesn't show anything important and let the prospective tenants see the room when they inspect.

 

[Mindmaster]

Completion

All works were completed yesterday and certificate of occupancy was issued today... Yyyaaaayyyyyyyyyyyyy

Landscaping has started and due to be finished by the weekend.

Apart from tying up a few loose ends, all that remains is
-getting tenants in - should happen by mid Jan
-bank valuation - no idea how long this will take

Once the valuation results are in, I'll summarise the numbers for this project and finish off this thread.

 

[ChrisA1]

Brilliant stuff!!

Along with the numbers, it would be good to know lessons learnt, what you might do differently etc etc (apologies if you've already posted this, I haven't reviewed the whole thread recently)

 

[Wanderer]

Congrats on the Certificate of Occupancy !!

Well Done and thanks for sharing

 

[Mindmaster]

Landscaping was finished a couple of days ago which leaves only the the electicity meters that Origin Energy will install by the 13th at the latest.







That leaves getting tenants in and a bank valuation.

One of the agents from the real estate office that are PMing the units gave the following estimated values

Unit One $420,000 - $440,000
Unit Two $350,000 - $370,000
Unit Three $340,000 - $360,000

Looks very nice but much higher than expected so I remain skeptical. Will see what figures the bank gives in the valuation.

 

[stumpie]

Landscaping was finished a couple of days ago which leaves only the the electicity meters that Origin Energy will install by the 13th at the latest.

That leaves getting tenants in and a bank valuation.

One of the agents from the real estate office that are PMing the units gave the following estimated values

Unit One $420,000 - $440,000
Unit Two $350,000 - $370,000
Unit Three $340,000 - $360,000

Looks very nice but much higher than expected so I remain skeptical. Will see what figures the bank gives in the valuation.

These villas are looking very schmick Brendon, awesome results. Have all costs been tallied up yet? would be very interested how it turned out from initial feaso numbers.

 

[westminster]

I just caught up on the thread (was a few weeks behind) and it's all looking great. Thanks for such a well detailed and documented thread - I love all the photos along the way.

I hope some awesome tenants are just around the corner.

 

[benofbrisbane]

Congrats mind master they look v nice. Look forward to the final wrap up. Have you got that next site yet? Congrats again.

 

[Mindmaster]

A tenant has signed up for unit 1 at $380 a week and will move in once the builder has the unit ready next weekend.

Rents are $350 for Unit 2 and $320 for unit 3 (no garage or carport).

Waiting for my MB to get back to me about valuations. Need to work out if I can go for a valuation without subdivision. May have to finish the subdivision paper work and pay Brimbank Council $19k if the banks don't play nice.

Congrats mind master they look v nice. Look forward to the final wrap up. Have you got that next site yet? Congrats again.

Nope. Need to find out where I stand in terms of finance and what I can afford before I can shop for another site. That depends on the valuation so need to wait.

 

[kristaje]

Congratulations! The new units look superb!

 

[Brady]

Just read through the thread, get read thanks for sharing.

This is a great example as to why developing is best in rising market.

Costs have gone up a great deal, but by the sounds of things end value is up a lot as well. Would be surprised if you're going to get best bank val without subdivision.

Interested in hearing the figures.

 

[westminster]

A tenant has signed up for unit 1 at $380 a week and will move in once the builder has the unit ready next weekend.

Rents are $350 for Unit 2 and $320 for unit 3 (no garage or carport).

Waiting for my MB to get back to me about valuations. Need to work out if I can go for a valuation without subdivision. May have to finish the subdivision paper work and pay Brimbank Council $19k if the banks don't play nice.



Nope. Need to find out where I stand in terms of finance and what I can afford before I can shop for another site. That depends on the valuation so need to wait.

I did subdivision then reval as they were worth more on their own titles.

 

[imbi3]

May have to finish the subdivision paper work and pay Brimbank Council $19k if the banks don't play nice.

Lower valuation and LVR if you don't get it subdivided

 

[Mindmaster]

Received bank valuations earlier today so time to do the final numbers and wrap this thread up.

Costs
$350,000 Land value (bought for $190,000 around 2005
$476,000 Building Cost
$33,000 Planning & Building Permits and related costs
$11,000 Demolition
$28,000 Subdivision costs
$15,000 Misc costs such as pit pump and sewerage connection
$25,000 Estimated holding costs

$938,000 Total development costs

Bank Valuation
Unit 1 $435,000
Unit 2 $360,000
Unit 3 $350,000

Total $1,145,000

Profit $207,000
Margin 22%

Note: This is without CGT, GST or sales expenses so profit if these units were sold, profit would barely break 10% and $100k if that

Rent
$1,050 for the 3 units with units 1 and 3 already rented

$0 Weekly Project Cash Flow
$870 loan repayments at 4.8%
$180 expenses such as PM fees, insurance etc

Timeline
March 2013 Started Development
November 2013 Town Planning Permit granted
December 2013 Tenants leave property
March 2014 Site set up complete
May 2014 City West Water causes change in plans
May 2014 Work started on site
August 2014 Lockup stage
October 2014 Permits for subdivision issued
December 2014 Certificate of occupancy issued
January 2014 Units completed & ready for occupancy
First tenant moved in
22 MONTHS From start to finish

Portfolio after Development
Just under $1.5 million with an LVR of 0.52
$595 positive weekly cashflow
5.6% Gross yield

What Next
Depends on finance which is looking good but not certain. Ideally do a
4 unit town house development with a cost of $1.2 million or bit over at 16-20% margin
Failing that, then a subdivision, possibly in Sydney.

THANK YOU TO
a great team that made this development possible while dealing with a client living overseas. In particular
CDS & Oscar - The development company that ran the whole development,
Peter T - The MB that organized finances, valuations and kept the banks inline
Bells RE & Denisa - Provided valuable info during feasibility, is dealing with new tenants and being a top PM
Builder (no name due to privacy) who produced 3 top units, had no cost blow outs, was easy to deal with and very cooperative.
Forum Members - Who were very generous and helpful with advice and information in this thread, by PM and by email.

 

[J_aco]

well done Brendon! Really happy for u mate!!

 

[eyespy]

Thanks for sharing the whole breakdown.....very informative and congrats on your achievement.

 

[Tranquilo]

Note[/U]: This is without CGT, GST or sales expenses so profit if these units were sold, profit would barely break 10% and $100k if that
.

Thanks Brendon.

If you hold these properties say 5 years is GST still payable or reduced?