4 Townhouses development - Melbourne

Hi Raydar

Been to Melb 3 times, meeting builder, town planner, architect and will be going again in February when the project is at lock up stage. We can claim on this and it also generally becomes a holiday for us. My daughter is moving to Melb so now we have a better reason to go over, other than looking at our project/s. I love Melb, so I have no problem with this.

I employed a building inspector who is a registered builder, he provided extensive reports at the end of each stage, this was co ordinated with my builder who has been excellent and only cost me around $250 per inspection, last one was only $200, gave me a discount. I located this guy through another contact, well worth having this in place if you are not located in the State.

MTR

 

It's interesting to see how 2 bedroom townhouses are quite popular in Melbourne yet a rare beast in Perth. I believe they will come into their own here but it's just one part of the equation where if you develop interstate that you need to know what that state wants and not what you yourself are used to.
I certainly love Melbourne construction prices and how they are much more willing to have a single car bay or carport rather than the whole double garage mentality of Perth which drives up construction prices and affects plot ratio.
Well done @MTR for getting near to the end on this project. I can't wait to see the completed pictures.

 

Why would you be discouraged by solid numbers instead of these general numbers?

Without every cost, we are not seeing true profits of the deal.

pinkboy

 

Not solid numbers per se, but saying things like, "you only get a 15% return". 15% of 3mn is still 450k, it's a decent supplemental income for me.

Agreed on the need for solid numbers, but I think that's for the individual to come up with. Posting in public is risky, and I don't think anyone is obligated to share their numbers.

 

Thanks

I have been upfront with what I have posted and the figures are accurate.

I was originally not sure whether I should post anything but as I said I got started because members were posting their projects and it inspired me to do the same.

I will continue to post my projects and for those who find value in these then great, keep reading, those who are not interested then find another thread that is your cup of tea.

MTR

 

Thanks its a different beast.

Though my next build will be larger townhouses perhaps 18 sq, what this particular market dictates. The profit margin will be greater because the end values will be much higher and land was relatively cheap.

I wish we had a different mindset in Perth, you know the one, DOUBLE BRICK...LOL

 

To be honest with perth lazy developers are as much to blame for the double brick prevalence, especially nowadays when buyers are actually more open minded than in the past.

A friend built some 2 storey townhouses 5 or soyears ago using hebel, she was worried when she sold then in 2014 people would value them less than similar brick ones but it proved to be a non issue.

 

@MTR how much would the build cost if it's in WA? Just curious. It seems like there are big build price differences between states

 

I think you are right.
Things are slowly changing in Perth.

 

That selfie doesn't look real to me.

Which proves that you're really just a fat dude sitting round in his underwear, making stuff up

 

I would guestimate at around $670K for turnkey in Perth, this would be a different construction, double brick

 

Hope its changed in the next 12-18 months

 

MTR, I think what you've achieved is absolutely amazing. You are an inspiration to those of us thinking of developing.

Victoria has the best home-builder protection laws in the country by far. Canberra has none

Thnks Serenity for your questions. As a prospective developer, they are the questions I am asking too.

MTR, did you go out to tender for your builder? How did you source your architect/draftsman? Was it important for you that he be local (or at least that he/she be familiar with the local council zoning requirements)? How did you assess what the up-take would be from potential buyers; ie how did you determine how many 1, 2 or 3 bedders to build?

It is extremely generous of you to post your numbers. I don't know that I would. I don't care how precise they are; people just need to get a general idea.

Kudos to you lady!!

 

Thanks BK

Basically I paid someone who was then operating a business processing plans and permits, they had their own draftee in place and builder. We knew what the cost to build was per sq and the builder had the runs on the board. Did not go to tender, the builder has proven to be excellent.

Designs etc. was determined by what is being built in the area and also we were trying to fit 4 townhouses on the block as the numbers worked on this.

MTR

 

MTR - sorry as I just read this now, great job and great success, it is great to do - the only issue at the moment is town planning, the ol'6 week approval is taking up to 12 months, either due to lazy town planners or ******** neighbours.

Great you shared your results! We do this rinse and repeat in Noble Park, can't fail, difference is we build ourselves which obviously improves the bottom line and we used to do the bricklaying but ran out of time and now do the landscaping which is great for fun....All contractors are ours - so you get a quality product.

Great you shared results, and look forward to your next success story.

Cheers Ivan

 

Thanks Ivan

I had no idea you were developer.
I must check out Noble Park.

I agree about town planning, what's going on in Melbourne at moment?

MTR

 

Well done MTR. You are an inspiration to everyone. Looks like there is light at the end of the tunnel and not having to slog away day in and day out working 9 -5pm.

i think my biggest hurdle is finance to do this - meaning serviceability and sufficient cash/ equity available in the bank.

Could you please tell me what LVR for the land and construction loan ?

Land - 80% Loan / 20% deposit?

Construction - 80% Loan / 20% deposit?

thank you.

 

I gave away the day job 9 years ago, however I started developing 3 years ago, another way of creating chunks of cash which I funnel back into future developments/projects. I don't live off the income I generate which helps me maintain my stress levels.

Servicing has been an issue for me too and I should be out of the woods this year as I now have 2 years of income from this.

Where there is a will there is a way, there are always challenges and I think financing deals seems to be pretty common with most developers and also cash buffers

All I can say is start small, do what you can afford, it could actually be a house and building at the rear of the property, selling off the front and keeping the rear. If you sourced the right project this could be a very low risk proposition and lower entry level.

All 20% deposits

 

Have you had a chat with a broker regarding finances? Banks are often more generous if you sell OTP. Although you will need a fair bit of cash on hand or have access to it for contingencies

 

Well done @MTR. I enjoy reading your posts. Have you ever developed with friends (with the same mind set) or strictly no partnerships? I am contemplating developing with friends but am not sure if this is wise.