Hey guys,
This is one of my newest developments which is about to commence. It’s a 4 townhouse/unit development – 2 townhouses and 2 single story units located in a decent suburb of Melbourne. As a result it will have a pretty good finish. Last week the existing house was demolished so it is vacant land now.
I bought this mid last year with an 8 month settlement and obtained the Town Planning Permit during this time . At the moment the numbers look like this:
Land & Town Planning costs
Land: $570,000
Stamp duty/legals: $31,000
Permits, surveyor, council application fee, engineering etc: $30,000
Total Costs: $661,000
Construction
Total build: $625,000 (I’m a registered builder so my costs are naturally lower than a developer)
Subdivision (open space levy in Victoria): $28,000
Interest: $35,000
Bank app fee: $5,000
Titles & legals: $2,000
Total Construction cost: $695,000
COMBINED TOTAL (LAND & CONSTRUCTION): $1,356,000
The dwellings today would have a combined value of about $1,840,000. I’m allowing 6-7 months to build. They range from 11-18 squares and rents would be around $1,730 pw. I’ve attached images of the house during demolition and after demolition. Blocks look so much bigger when vacant!
The plumber is in next week to do the underground work, followed by the concrete guy right. I’ll upload images as it develops. Any questions feel free to ask.
Cheers, Oscar
Hi Oscar
What's the block dimensions looks like over 1400 sqm ?
How did you buy the site, on the market or off the market?
What were some of your negotiating strategies to get your long settlement?
Planning to sell 3 keep 1 ?
Thought i would continue on from your developing 101 post. Good information for people to read.
cheers wilko
Oscar, what is the $5,000 bank application fee all about? Also, where is the development draining to? It looks like it slopes to the back of the property.
AC, mine is a commercial loan. So the app fee is a % fee based on the total loan amount. If it was a 3 unit development then my loan would be residential and the app fee nominal.
Oscar
Oc1, did you consider Commbank, they do residential lending up to 4 units on site before switching to commercial.
So do many many lenders and some lenders go higher than that.
All depends on your equity position etc.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Wilko, no I didn't. Path of least resistance for me, so i stick to what has worked for me in the past and keep repeating.
I always hear that Bank X can do XYZ. Rarely does it happen in my experience.
Oscar
Oscar, on your developments, do you have remote controlled garage doors?
That's an odd question
Most of the time yes.
Oscar
Hi Oscar,
if you don't mind me asking, how much of your own money will you need to put in for such a development? Will your firm be interested in JV for similar like developments?
Good luck with it, i will be following your progress.
They only cost around 250-270 extra to add. I would
wilko1 wrote:Hi OscarWhat's the block dimensions looks like over 1400 sqm ?
How did you buy the site, on the market or off the market?
What were some of your negotiating strategies to get your long settlement?
Planning to sell 3 keep 1 ?
Thought i would continue on from your developing 101 post. Good information for people to read.
cheers wilko
Hey Wilko, i missed this post. Block is about 1100m2. It hit the market and sold within a week – 3 offers plus mine where on the table. It helps buying unconditionally
.Cheers
Oscar
What about washing machines, do you usually include those?
Hi Oscar,
As you bought unconditionally I am guessing you did a bit of research as to the development potential beforehand? What did this involve? or did you just know from your past experience that this block could be further developed?
Does unconditional mean without the subject to finance clause? Even though you were applying for finance?
Cheers,
Nope, never had. No reason why you can't though. A mate of mine who's building at the moment has included a washing machine on his current build. Can't say it's made a difference or not. I'd rather spend that money on landscaping.
Oscar
Well done Oscar,
What you have done is nothing sort of fantastic. Wishing you well on your development endevors.
Gerrard.
Even if you plan to rent them? Tenants don't expect washing machines?
No not really. It's depends if your renting them say as serviced apartments. Or independent single bed units.
I know a couple other guys who include them but they are building sets of 10-12 single bed for student accom.
Its like a fridge. You would expect tenants to bring their own fridge. You just have to provide the plumbing and waste pipes
Wilko and Oscar, you guys are legends. Thankyou.
Last question I promise. What about screen doors at entrance to house? And blinds/curtains???
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