4 Townhouses development - Melbourne

Its not really bad news imo. As long as the numbers stack up then I don't think its an issue what the infra fees are.

A good deal is a good deal, whether its with high or low infra fees imo.

 

An update:

We are now close to achieving closure with this project.

Statement of Compliance will be issued by Council on Monday, which basically means all the major trades, ie electrical, plumbing etc have signed off on work completed.

The 4 townhouses will then be strata titled.

All the townhouses have gone unconditional so technically they are all sold.

I will post the link/address of the property once this has been finalised.

The timeframe blew out by 2 months, so it has taken 11 months to complete this project.

Builder has overall finished to a high standard IMO, we flew to Melbourne to view these. All good, except raining, mud on my boots.. I don't like working sites...hehe


Sales Price -
villa 1 $370,000 (Front)

villa 2 - $355,000

villa 3 - $340,000

villa 1 - $310,000

Total Sales - $1,375,000

$276,000 gross profit (25%)
(for numbers, refer to figures on first page)

Worse case scenario tax at 40% which includes 30% tax rate, and 10% GST.

However we reduce tax by buying in a Trust, we use the margin scheme/GST, also have a project management company. There is also another way of reducing tax significantly which involves my USA interests. Sometimes you need a creative accountant but make sure its legal and all above board.


MTR

 

Good work. I can't wait to see the photos of inside.

 

I was hoping to do this when in Melb, but it had not been completed at that stage.
I will have some photos soon, and also the re agent link will give a very good idea on the location etc.

Thanks
MTR

 

Hi MTR Great thread - lots of information. Good starting point for new developers.

 

I could not share this earlier as I was not in a position to do so until I met with my accountant.

I can not stress the importance of getting the right professional advice and to strategise, regardless of whether its developing and holding developments or selling, this is critical and will most certainly change the bottom line.

One strategy we are using is to settle 2 of the townhouses in the next financial year. That gives me 2 years breathing space, and lots can happen to improve my profits during this period.

Buying in a Trust the way to go, in my situation I am able to distribute profits/funds to my 2 daughters, significantly reducing my tax bill on this project.

I am also placing lump sump into my SMSF once again significantly reducing my tax bill.

I have also another strategy that will significantly reduce my tax but I wont be sharing this on the forum.

The key is to plan ahead.

MTR

 

One of the many great joys of having children I suspect

 

Absolutely - have your accountant on speed dial before buying, before selling and before thinking

 

Doesn't have to be children though - anyone that is a beneficiary of your trust can have funds distributed to them. The lower their income the more you can utilise their tax free threshold - pensioners (aka parents), siblings that aren't working, children over 18 who are studying etc etc

 

pensioners aka parents - good if they agree

 

Yes, we are hurrying along the applications to get my in-laws to live here! I need more ppl dammit.

 

Great results MTR

 

Good stuff.
I'm not super familiar with the trust business, but I will have to get into it at some stage.

 

Congratulations MTR, thanks for sharing.

 

Make sure you do it before you start developing

 

Photos to be drip fed, I will be in Melb next week.

This is pretty much the kitchen colours etc for each townhouse, solid oak floorboards.
The specifications I believe are pretty good for this area. Most developers seem to go cheap and tacky/cheery.

 

Love the floorboards.

 

Looks great MTR!

 

Yeah, that's on my list too.
Maybe next year.

 

@MTR I like that you've put in a nicer square angled, lever type tap. Very contemporary and adds height and some 'wow' to the sink.

Something like this would just look terrible imo.