1420sqm in Croydon: Options please

The saga continues...........JV Res-Dev of 1/2acre block. Novice, need help please, many thanks.

One year later we are in a better position because the sub-division restrictions in place 12 months ago have now been lifted. Also my dad has finally realised he won't have much income left in a couple of years when his super runs out, so he want's to do something before it's too late.

Double block on main road, rail line directly at rear. 1km to main st and Station. Bus stop directly at front door.

Residential zone 3
Significant vegetation overlay
Surveyor report says it can be sub-div into 4 lots only because of 3-4 significant gum trees put a stop to more lots.

Two developers have keen interest to pursue it and my father, the owner, has two very important goals that must be reached, whatever the method to get there.

Goal 1: to generate at least $400k cash from the sale and development of the block - to live off.
Goal 2: to build a NEW 2/3br unit on one of the newly subdivided lots as his PPOR and live there.

Would you:

a) Sell it as is, asap, no DA, no plans & permits (Note: pre CGT purchase circa 1978) and take advantage of an inflated market?

b) Go to town planner and get it all divided up and then sell each separately. How much does this process cost and how long does it take? Who can "guide me through the process"?

c) As (b) above, but keep 1 lot for himself to build on at some later stage - sell 3 lots only and need funds to build new dwelling (maybe $150-$200k).

d) Suggest something easy and straightforward which could bring about a good outcome for him.

Extra details: at present, the property is uninhabitable because of hoarding, at least one building (large 10sqm shed) has asbestos which may add $$ to demolition costs. A main 2br house, bungalo, double car port and couple of extra sheds are also on the property.

A local real estate agent has sourced two potential developers who would be willing to take on the project (build 4, sell 3 and leave 4th one to dad). Additional cash is still up for negotiation. The developers are visiting the site today with an arborist, assess whether it will be a deal-breaker with the typical gum trees present. I will be better informed after we get the aborist's report and can let you all know what they found

@MTR you have mentioned your dev project/s in Croydon previously, do you have anything to add?

All comments from PC members much appreciated. I really do value all the combined wisdom the forum shares. Thank you.

Loansharkjr

 

Selling as is means that there is some uncertainty as to what can actually be done. This means the price would normally be negotiated down. Selling with a planning permit creates certainty (no need to subdivide - you'd be selling an enhanced value property). Planning permit an subdivision (with the view to keeping a lot) maybe allow 9 months.

 

A friendly arborist's report will help but how many more blocks are achievable?

What will the zoning allow - small lot subdivision, townhouses/villas, units? (not being familiar with Vic planning - is it up to 13m/3 storeys?).

 

I would talk to someone like this to get an idea of costs, time frame and town planning risk to get plans and permits organised.

Property Subdivision in Melbourne | Land Subdividing Services

 

Agreed

 

Thanks @Hamish Blair, the real estate agent has done prelim investigations for us, he says he is happy to pass on all info he has collected so far. I am also getting the names of the developers and what company they trade under so I can check out their reputation.

 

Either side of the property are multi unit developments. To the left are three double storey TH and to the right are four lots (2 x 2br ss unit and 2 x dbl storey TH)

It's quite obvious that if the trees were not there, it could be more than four But Maroondah council has restrictions on the land portion of each lot not being less than 300sqm so that is a spanner in the works, maybe negotiable perhaps.

 

A town planner can assist in getting this over the line.

 

Thanks all, after a friendly chat with a PC member who was extremely generous with their time, we will most likely be pursuing the most appropriate developer and not doing plans/permits ourselves. Nothing is without risk, we believe we have done as much as we can so far, to mitigate that risk. Always a comfort to get your thoughts, they have been invaluable.

 

Just 2 storeys I believe

 

I sold my Croydon development to a builder with a DA in place, huge demand for this product.
You are on a winner here.

Keep us posted on the arborist report. Will comment further once this comes back

MTR

 

Aborist initial findings: 4 trees of interest. Two are snowgums in front and side boundaries and are not a hindrance to subdivision. Snow gum in centre of property is in good health and one monster gum(species uncertain) is in poor-fair condition therefore will be removed. This leaves us with the one snowgum in centre that will be a problem but it could most likely be removed via application to council on the grounds of "it's just one tree" standing in the way of it going from a two lot to four lot site. Positive feedback I'd say.
Developers have requested drafting of rough plans and costings and will have that info next week perhaps.

 

ARENA EQUITY PTY LTD (developer) good/bad reviews
Your thoughts?

 

Have you contacted a private planner to assess the site based on current rules? There's been some changes over the last 6 months. I also wouldnt rely only on a surveyors report on what can achieved with the site, unless a professional planner that works at the survey firm wrote it.

 

So you are on selling the land, placing it on the market?

 

@MTR that is one possibility. We will always keep our options open until the most suitable position for us to take, however doing a deal with the developer is looking more attractive right now.

 

We had the real estate agent talk to a surveyor for the initial subdivision guide. Following that the arborist report has worked (somewhat) to our favour and currently developer is using his draftsman to do a "mud map" a rough plan how it may look. Still early stages.

 

I would not rule out going to auction, there is a demand for these sites and you only need two people in a hot market and there is little stock at the moment. This may work very well for you, with little work

MTR

 

Beware of free advice via REAs and their associates. I'm not saying that they are dodgy but free advice is quite often not as good as paid advice.
It sounds like you've paid for an arborist and that has been quite a good move but I would have serious discussions directly not via a REA for town planning and surveying.

Also an introduction from a REA to a developer can mean a kickback for the REA from the developer. Ensure that everything is clear and transparent and all motives are put on the table.

Personally I'd either sell as is as the market is quite good now or get DA yourself and then sell. Unless your Dad absolutely loves the area I think getting into some sort of JV is just too risky and opening a can of worms that doesn't need opening. Take the money and run. KISS (Keep It Simple Stupid) is a very good motto if you have never developed before.

 

I would absolutely not get into a JV, especially considering the lack of experience. Also putting a DA together in Croydon wont be a walk in the park, Council are tree huggers. I had 12 objections with my DA, what does this mean?? it could take months to get it over the line, worse you go to VCAT and waiting list is around 6-8 months and then there are no guarantees, not to mention the cost involved ie lawyer fees, VCAT fees etc.

Time is of the essence IMO, the markets been hot for 4 years, who knows what will happen to this market in 2018, not saying it will correct, but we don't know. If it does then it will go from low stock, to... too much stock, oversupply and very difficult to sell.