Anyone done a deal in Balga, developing triplex sites or subdividing? Could you tell me how it went, what your profit was, etc? Whether you will do again, etc?
MarieLockymacMember@lockymacJoin Date: 2009Post Count: 78
We organised a house behind a house scenario for a client early this year. The numbers work out well, this may be because they owned the property for a number of years but the bank valuation on the back property came in at a price everyone was happy with. The council was relatively easy to deal with. So I would have no problem working in that area again.
Hope it helps
Thanks for getting back to me. I have been thinking (also) on the possibility of the above scenario. The problem with this deal is there is still $275000 owing on the property so I am not sure what is going to work, what will be worthwhile, etc. Can I ask what the back property was valued at in the above scenario?
Can anyone tell me where you would go to find information concerning who is building at what block, etc ,etc. Is this information available? I thought I would see what is similar in the area and try to get the information from another developer as this is my first attempt. Your thoughs are appreciated!
Good on you for trying to get as much info as possible. On the council website (if it is a good site) it should have a list of recent development approvals in the area, the addresses, how much they are costing and what exactly is being built. You may have to dig for this info. Then you could go for a drive and have a look. Why don’t you ring a few architects/draftsman etc and get some prices and ask if they can help you through this as well as help you crunch them numbers. You might get fobbed off by a few but you might find someone who can hand hold you through it. Good luck.
Here look I’ll save you 3 minutes!
Check it out dec 2008 There should be more, somewhere.
Thank you for your help, once again!
OK, so now I have another question I have been talking to a few people who have suggested that going with a separate architech and building designer/builder is recommended. However, this seems to be quite a bit more expensive. If, say, a BGC company, like Commodore Homes could do the whole job would there be anything in particular to watch out for?
You need to investigate both options. Get your phone and start making some calls. Call Commodore Homes and find out exactly what you get. Call the architects and find out what you get. Personally I have gone with the architect and separate builder option as it is more flexible and they were comparable on price. Now you need to go and make some phone calls, there is only so much info you can get here from people who are not even in the same state
Ask all the questions you know and you might find out some more to ask that you didn’t know. Don’t worry about looking or sounding like you are silly or you don’t know what you are doing, you just need to get started.
Here is my favorite quote at the moment and it really applies to developing,
“If we wait for the moment when everything, absolutely everything is ready, we shall never begin.” Turgenev.
Get as much information as you can and get started.
Get your sales price in the area. Get the cost of the block. Get a build cost. Get all costs for planning/DA. Take costs from sales price, if there is a good profit (at least a 20% margin) then run with it. If there is anything less that 15% don’t do it.
This project will eat up 18 mths to 24 mths of your life so getting started sooner rather than later is advisable. If the numbers work.
Thanks D!! You are most helpful.
Can you tell me of a development you have done, recently? Not for my research, just for interests sake.
Bye for now.
PS. Love that quote. I will have to steal it for my Facebook status lol
Sure we finished our first one in March which was a 3 unit site in Box Hill South. We are putting one of these on the market soon. We have also picked up our second one which is a 12 (or hopefully more) apartment block in Eastern suburbs of Melbourne. We have a nice long settlement because the older lady that lives there is going into a retirement home later this year. We are selling one or more of our 3 unit site to free up cash to build the apartment block.
Steal the quote, I stole it from a real estate spam email.
DAlasdairParticipant@alasdairJoin Date: 2005Post Count: 34
I have done rather well with renovating existing homes / subdividing blocks, in both Balga and neighbouring Westminster.
Although Balga / Westminster properties are triplex blocks, if possible I prefer to retain and renovate the front home and build one new home at the back.
Obviously there is more profit with a triplex development but the holding costs are significant.
Triplex development including siteworks, finished to turnkey is about $480K to $520K.
Renovating front home, building one new home at the back (site works and turnkey finish) cost me about $260K.
Try not to spend more than $15k – $20k renovating the existing home.
Another option is to renovate the front home and just subdivide the back block, creating two titles.
Thanks so much for your help. I am glad you saw this to comment on. I would love to see some of your work. Are you doing any subdividing/reno's at the moment?
Since I wrote my first post here I have been looking at the sums for what you have recommended (subdividing and reno). I didn't think that the Triplex idea was worthwhile – esp. given the market is over populated for Triplex dwellings and the holding costs, also. I have seen a few realestate agents taking photos on my drive bys around this way lately but haven't seen any "sale" signs up – I guess that might indicate they sold quickly. I have two just down the street from where I am, one duplex reno and a subdivision/reno, I would like to nosey in the window to see what they have done.
I must admit I was a bit blown away by your recommended $15-$20k for renovating. I guess it would depend on the house, I don't know. I was looking at something like $40k for the house I was thinking of renovating. I think the bottom figure <profit> was roughly $90k providing demolition of the granny flat was $10k and subdividing costs were just $20k. Have you got any ideas on those costs? One person I spoke to recommended I allowed $30-40k for subdivision.
I would look at subdividing only, creating two titles. I have seen that there isn't that much land for sale in the area, so that might be a good or bad thing, I don't know. Either way it would save me money in the short term and as this is my first ever project, that I can't seem to get my A into G over, it might be the way to go.
Thanks for your thoughts S!