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IBHF
"lawyers are not supposed to advise on how to negotiate a commercial deal"
If you are dealing with a general practitioner then yes that can be true, but negotiation is a huge part of a commercial lawyer's practice. We negotiate and put together deals constantly.
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Qld Max is
$28k per lot for 3 bed or more
$21k per lot for 2 bed or less
Varies council to council
regards
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If you are willing to do long settlements, and subject to DA's you may get a better price.
A developer will have a set price per lot or per site that they would pay in that area. Remember there are no emotions with developers it is straight numbers.
Are you wanting to circumvent an agent and not pay seller's fees?
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HI
For rough numbers you will be looking at
$2200 for planners fees, around the same for council
$3-$5k for surveyor
$2-$5k each for sewer and water hookups
$28k for infrastructure contributions
If the blocks slope away from the street stormwater will be extra.
If you split front to back you will also need to provide driveway, underground power, telecoms, and possibly a fire hydrant
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I deal with agents, buyers and sellers everyday. Stuff is selling very quickly in Brisbane at present.
Agents are struggling to get listings, we are seeing a lot of multiple offers for properties that we draft contracts on.
It is a very active market in the sub $800k price range at present.
Whether that translates to growth or not I am not in a position to say.
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In QLD you doing the negotiations is sufficient to trigger the Real Estate Agent Licensing requirements
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Planning $2200 plus $500 per lot over 3 lots if it is already master planned, once you get over 30 lots we will price it up on a per job basis, on your 373 lots you are probably looking at $75-$100K. Master Planning will be around the $100k inc outlays for hydrologists and arborists etc.
Surveying depends on how many trees, sight lines etc. But quite a lot.
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Hi Catts
I deal with Buyer's agents almost everyday. The clients we share really like what they do and I have never heard a complaint.
Most common reasons they use buyer's agents
-time poor
-don't know market
-not good negotiators
regards
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Terry once again provides a very comprehensive response.
Maybe you should bundle them up together and write a book.
D
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Cheers
And is the water overland flow, waterway corridor or creek flooding?
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Yes you need to setup the trust before signing the contract.
Protection is done by separation of assets, if you have assets in your own name then you are going to have personal guarantees for the development funding and if it goes wrong you may well go bankrupt. If you have assets in discretionary trusts but nothing in your own name, you can go bankrupt and although inconvenient you are much better off, can still receive income have the benefit of trust assets etc.
As rough figures go you are not far off. On small subbies you can get in at 60K inc council contribution, which is only $26k in Brisbane City, $28k is state maximum.
I have not personally done sites that large, I like sub 20 lots, quick in and out stuff as I make a large part of my money on the change of use side, rather than the actual construction side.
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Hi Donnie
There are multiple ways to structure this depending on the situation.
I would normally draft a contract like this that has 60 days due diligence and 12 months settlement, need to included consent to advertise and sell proposed lots prior to settlement also. I would not normally include a subject to DA clause initially, it will help with negotiations. You would have a pre lodgement meeting with Council during the 60 day period and then if you can not have high levels of conference of an approval at this stage you then go back to the vendor and and say that you will only agree to DD clause being satisfied if they make contract subject to DA. Vendor is already committed by this stage and if PLM shows issues it is usually easier to get consent at that stage then straight up.
Firstly, do you need to JV it? Could you do a staged subdivision where you sell off the lots that do not require streets etc in stage 1 and then use those funds to complete the works required to sell off the next stage. Can be more expensive than all in one go but then if numbers still work and it means you don't need investors.
If you only have 1 or 2 investors than it may be desirable to investigate the use of partitioning. Partitioning allows people (or entities) to buy one lot and then leave the development with owning the same percentage of the finished development without paying CGT or stamp duty. They can then sell or hold their share and it is not affected by the other parties.
Otherwise buying in a unit trust structure which allows the sale of units later on, a comprehensive unit holders agreement would be necessary. You would also establish a separate entity that would be the project management entity that would contract with the owning entity to do the development. You control that entity. Need comprehensive contract also.
I have bought a similar site this week but will be doing so without investors, am trying to buy the 15000m2 next door also. Have also negotiated 3 other contracts for clients lately.
DD has all been 60 days
Settlement 6,10 & , 12 & 12 months
Consent to advertise and sell
If it is an Emerging Community zone your largest initial expense will be the Structure Plan. You should not scrimp on this, a comprehensive structure plan includes preliminary approval for the different zoning, this allows you to change the assessment levels (eg impact to code) for the blocks as well as vary the conditions, setbacks, density etc. A structure plan will cost you around $25k in planning fees alone, plus hydrological, civil, arborists, surveying etc. Can be $100k. Then you have the subdivision fees after that.
If not EC, you would be looking at around $2-$2.5k + $500 per lot over 3 lots. Infrastructure contributions are $26k per lot.
Don't forget that you may have to dedicate some land to parkland, detention pits, road dedications, conservation easements etc.
PS, I always aim to get 50% gross profit on estates of this size. They are not without risk, delays, cost overruns etc. There should be substantial coin in it to make it worthwhile unless it is extremely straight forward.
regards
D
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Interesting,
Logan City Council planning scheme states that an annexed unit must be used by the one household . Table 5.5.16 s1.1 (f).
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Get an experienced solicitor (OTP experience) to go through the contract with a fine tooth comb and see whether they can tip it more your way. How well the building is selling will have an influence on your ability to push for changes to the contract.
You need to ensure that clauses are drafted in the contract that means that if the building does not start or finish construction on time and that this stops you being eligble to either the concessions or the grants the developer will cover your costs. Again market conditions influence the likelihood of success, but if you are relying on those things and they want include them walk away.
D
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What sort of development, this will greatly change the outcome.
In an estate development you can use the roads to collect water, swales to catch it and detention pits to retain it. 400m block with a house on it is a very different story.
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No. All over the shop and make no sense to me.
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What state are you in?
I will leave the lending to the experts on here.
Remember to allow for council infrastructure contributions. They would be up to $28k per lot in Qld.
regards
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I deal with a load of brokers, talk to them every day of the week.
Could a Mortgage Choice broker be a good one- yes.
BUT, are they going to be as good as some of the ones on here, extremely unlikely.
There are not many people who have the talent and experience of some of the brokers on this forum. I would use them everytime.
regards
D
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Home Renovation shows were the problem
There was a lot of money in doing renovators before these became popular. Now there is often too much potential included in the price.
Also be careful with the 12mths and CGT discount. If your intention is to buy reno and sell then your income is business income not investment income and you should not get the discount. That is one of the reasons we get clients who are developing property and intend to hold some of the development and sell some to buy the site in 2 separate entities, 1 development entity, 1 investment entitiy. We then use partitioning to separate out the completed components without stamp duty or CGT issues.
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Mortgage Broker every time.
A Mortgage Manager is legally obliged to look after the interests of the bank. A Broker is legally obliged to look after your interests.
PS there are some amazingly experienced brokers on this forum, you would be hard pressed to find a better source than right here.
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