$500K equity $300K cash - and ready for a development

$800,000 is a decent amount...providing you can get other funding.

Can probably do a 2-2.5m project if you stay under resi lending making it easier.

 

Both @sash and I are making this work for us with similar profit margins to multi unit development with arguably lower risk (lower dollars, debt, planning risk) and considerably less time with money out equals a much higher IRR. works best in a rising market though.

 

Yes, this is true. My mate did hers when the market was rising strongly in Perth. She would not be able to duplicate now and have moved on to other areas.

 

$60k/pa. $300k cash and $500k equity?
The numbers are 'odd'.

Tell your friend to ignore property development and keep doing what ever he is doing. It seems to be working just fine for him/her.

With that cash/equity/income there's not much in development which will work (maybe a Reno/subdivide or single build) the risk of anything larger is significant as there is no leeway to fund delays/cost over runs.


High risk proposition imo and there is more to lose than gain.

Blacky

 

I would be suprised if they are able to borrow a further 1.2-1.7mil on $60k income.

 

I started my investment journey doing exactly what you are doing and everything is great in a rising market.

However, I would not compare multi unit development with house and land packages, which one is better is dependent on many factors, profits and ROI, returns will vary dependent on market conditions, which seems to be ignored and the most important factor IMHO

There is risk with both regardless

 

Of course, no risk no reward!

I am doing both.

 

Thats why i wrote.....providing you can get other funding

 

Those ebooks cost $147 each, published in 2007 and sold on clickbank. I know a good book can be worth way more than this but a little dubious about these ones.

 

800k is enough for the property development.
What sort of development and profit you are after ? what is the end result/profit/build do you want to achieve.
Start small and get involve and understand all the process before taking on bigger stuff.
Start small such as putting a granny flat at your backyard, putting a house on a piece of land, maybe a duplex build as well.

Check the number, build cost, plan price, end sale price, end rental price, council cost, interest cost, various consultant fee....etc.

Also factor in some sleepless nights throughout the process.

 

Agree I have almost completed a two unit build and subdivision and spent around $550k will make $110k profit. Now I had around $485k debt, but this person could do it with equity instead.

 

yes, definately factor in some sleepless nights, I have had a few, lucky I have Foxtel, presto, stan and Netflix...

 

...or you can go to a free seminar by some well known spruiker and get sold on a course for '000's of dollars....still with no guarantee. In my reply below in the last point, the ebook shows how to do that
How to do a) quick, b) preliminary and c) professional feasibility assessment

 

Glad I'm not the only one that losses sleep. I go to sleep no problems but when I wake up at 1/2/3am I can't get back to sleep for hours with mind racing about everything I have on and timing and don't forget that. Last night I wrote a list of things so I could go back to sleep. Type A personalities...

 

A retainable PPOR ideally but not necessarily could easily be done.

I made a 7 figure gain on a staged project with zero capital growth and had only 500k cash in total. Grant3d that was after years of experience but I'm kinda shocked with the general consensus there isn't enough to make it work here.

First project I ever did all i had was 80k to buy, retain and sundivide and from memory that was around 200k gain, he or she could easily do this, it's a matter of working out the specific strategy best suited for experience levels and most importantly that can be done on current income and cash in bank level

The knowledge gained, especially the realisation of just how much more of a lucrative approach cr3qting more money vs hoping and praying for the market gods to shine on you would be priceless too.

 

Sounds like the "profit" was creaTed by the rising market, or at least a good portion of it. 8 don't consider that to be a successful example because the result relies on factors out of your control