I have a good-sized portfolio of over 10 properties and have done a few renovations in the last year but in 2014 I'm ready to step it up to the next level. I want to make $1M in a single deal. This could be cash or equity, it doesn't matter. I would love to hear everyone's approach to doing this. As I do, please assume you:
– Have $5M in cash/equity
– Want to do something in Sydney or Brisbane
– Work a current full time job (i.e. can't spend 40 hours a week project managing)
Of course I could continue to buy and hold one property at a time, but that's boring. Excited to hear your ideas, whether it's something to do with a block of apartments, commercial, development, etc.
Thanks!TheFinanceShopParticipant@thefinanceshopJoin Date: 2012Post Count: 1,271
I recently had a client get DA for 2 detached dwellings on a 280sqm block in eastern suburbs syd. She will clear at least $800 profit. Purchase price of $1.5mil and DA fees of $150k.
Good town planner and understanding of planning requirements is a must.Jacqui MiddletonParticipant@jacmJoin Date: 2009Post Count: 2,539jfk_oMember@jfk_oJoin Date: 2013Post Count: 11
Review house prices in China, multiply it by 80%, put deposits on off the plan apartments at that price in areas Chinese are buying or with projects aimed a Chinese buyers. As unemployment rises in Australia its probably your safest bet. But that's all speculation of course. And 20% is a big ask on the back of a cycle.
Shahin, that's interesting. What kind of dwellings are they then if not attached (duplex)? Also which suburb if you don't mind me asking? I'm on lower north shore.TheFinanceShopParticipant@thefinanceshopJoin Date: 2012Post Count: 1,271Richard TaylorParticipant@qlds007Join Date: 2003Post Count: 12,024
Look at taking a Call Option on a potential development site.
Last one we did netted over 1.2 M in the year and we use it as a secondary income to our buy and hold rents.
Yours in Finance
Great, thank you.
I didn't get it. Can you send again please?jfk_oMember@jfk_oJoin Date: 2013Post Count: 11
When you say call option what are the formalities for locking down legally such an option? (Contract, Caveat?)
Is there a usual way that an owner of a property would be approached to make an offer to enter into a call option over a particular property?
What sort of terms would be in such an offer?
What are the key things to getting development approved?andkozParticipant@andkozJoin Date: 2006Post Count: 10
You may be interested in developments, as this way you can accelerate building your equity. In my case, I am looking for a suitable site in Brisbane (< 10 km) to develop townhouses. Land should be $150k – $180k per townhouse. Building cost $250k /townhouse. The townhouse would typically consist of 3 bedrooms, 2 1/2 bathrooms and single garage. This includes all costs, such as professional fees, council fees, finance cost and building cost. So cost per townhouse is $400k to $430k. Sale price should be $480k to $560k per townhouse. Time frame: 3 months start up (DA & BA), 8 moths construction, 3 months sale. Profit $80k plus per townhouse. I would be interested in sites suitable for at least 4 townhouses. The more townhouses the better economy of scale. I would build the townhouse myself, as I am a builder and investor.
M: 0418603958wilko1Participant@wilko1Join Date: 2010Post Count: 510
How much Servicablity do you have ? 1-2 mil or more. With 5 mil / cash (not equity),
I think you can make a bit more then a million in a 18 month-2 year period. Plenty of medium/ high density developments in good areas, 20/30 2 to 3 storey houses. That would bet closer to 2.5 mil.-3 mil (depending on intrest for loans if required or not) With land at 1 mil purchase price. 5 mil of construction 1 mil of development costs: 10 mil end value. You could gear at 40-50 % LVR and not require any presales. Could sell 15/20 houses and keep 8-10 houses free hold (end value 300-320k a home 3bed / 1 bath. Subdividing land as well instead building a apartment building is going to give you that extra equity before you commence building.
Pm me and I can show you some of the types of sites I have been putting offers on with my business partners, sites are in Adelaide even though u said Sydney. But money is money.