Also make sure the lender is ok for you to build 2 dwellings on the title based on your LVR. For example, ANZ does max 70% LVR on 2 dwellings on a title.

@ Yoly – I don't think Freckle's post was to insult. I actually agree with his post. Do plenty of research before jumping in.

Hi Ballerina,

$70k is a huge amount. Did the council give an explanation? The councils usually work off a schedule. 

Regards

Shahin

It comes down to the numbers. Generally speaking the numbers make more sense (especially when it comes to equity) when doing this in areas that have higher land value. I have done this to 2 of my properties (one was side by side and the other was a battleaxe arrangement). Made good money on both but only sold one as I had a good offer on the table…[Read more]

I don't think it will 2% and if it does then Freckle has summed it up really well particularly the point 'property values will be the least of your concerns'. I actually think it will climb back up to close to 4% towards the end of 2013 and early 2015. Well im hoping anyway.

Ascertaining a DA can be liking pulling teeth depending on the council. You will need a lot of time so it may be worthwhile engaging a professional but make sure that its a townplanner.

Hi Waz,

Are you familiar with the area? Pros; Good cashflow. I think they have been modest with a return of $32,000 per annum and you will get good depreciation on the back dwelling however Luxford Rd is busy road and too be honest not a pleasant rd. I also don't think that you can subdivide the dwellings at a later stage due to the land size.

I…[Read more]

Fair enough but you need to ensure that its a top notch building inspector. Like anything there are good ones and there are bad ones. Its worth investing in a bit more and getting a good building inspector.

The banks will take the expected rental letter as per the agent's letter however in most cases and particularly when servicing is tight – the bank will take the valuation on the valuation that is conducted. 

Also think about the bigger picture – for example, can i build a second dwelling in the back? Back I build a GF in the back? If so what are…[Read more]

Hi Aloha,

Who is the project manager? Are they a PM or a town planner?

Make sure you get yourself a good local town planner who knows the area. Also make sure you re-run and verify your numbers a thousand times and factor in fat and spillage. I just finished a development on Sydney's North Shore and we had to excavate only to find sandstone. It…[Read more]

Hi Dale,

Apologies for the delay in responding but this time of the year is pure chaos. I have just responded to your questions. 

Regards

Shahin

Circumstantial but I agree. I think its worth a spare $500 to jump on a plane and back. Even if its just for re-assurance.

I agree with the above however crime rate is a bit debatable. Places like Mount Druitt, Doonside and Harris Park in Sydney are examples. All 3 have very strong and good performing rental and sales markets based on yield and how quickly they rent the places out.

That's fine you can give me a call and yes our office is in North Sydney.

Ok problem is with the loan amount – some lenders such as Westpac go to 70%. You have 2 options:

1. If you need to use your current lender for any specific reason then you may need to provide a term deposit as security to mitigate the LVR or 

2. Go with a different lender that will go to 80% like NAB. NAB also has room to move on higher loan…[Read more]

Make sure your solicitor is across this before you commit to anything. Also what credentials does the developer have?

Hi Lilian,

There is a number of reasons why the bank with restrict your LVR. I dare say that it is due to the type of property you are purchasing or the loan amount?

Also re the sunset date – this is a date that the developer's bank will give the developer to complete the development. In other words, the developer does not have an infinite time…[Read more]

The post above really doesn't make sense for a lot of reasons. A good broker is one that knows which lenders offer upfront valuations? Really? What about one that knows complex structures? Policies? Can educate the purchaser and make sure that they are in control throughout the purchase process? 

Hi Aloha,

You can borrow 100% of the construction costs so long as your overall LVR falls under 95%. 

Have you done developments before? I do and from personal experience I always find the need to have liquid cash due to an unexpected cost. The lender will always lend you the funds in progress payments, i.e. $15k for demolition, then $20k for…[Read more]

Hi D,

If you know how company titles works then that's great but if you don't please ask away.

To answer your question re the finance side of things, due to the risk (resale) associated with company titles many lenders will go up to 80% as the maximum LVR however St George will do 85% on company titles. 

Regards

Shahin