Are these guys legit? Dual occ advisors

Did some research and talked with these guys, apparently stephen mc carthy is the only guy who works with master builders owned by simonds.
Dual Occ Advisors | Experts in Luxury Dual Occupancy Developments
Masterpiece Dual Occupancy - luxury duplex home builders in Melbourne.


His big thing is with his development strategy is to go with a volume builder so that you know the costs upfront and also because it is cheaper to build. Apparently if you go with an architect then go through the tender process, it will be a year before you know your costs and the costs goes up 10% a year(?)
He quoted "you will end up paying $400-500k more if you go to an architect and a local builder".

He told me to find a feasible site you need to first work out what the resale value is for one of the subdivided blocks then work out how much is the land, holding costs, build (which is fixed) and therefore profit.

He has a display home on reserve road beaumaris which he owns and I can see on rea.com that he bought it for 1.25m, but he claims each one is worth 2.25m on a 900k build so he pocketed around 1m.

I'm not a seasoned investor so I'm wondering, does this sound legit or am i fed some bs here?

 

Yes.

Plenty of master builders out there, maybe he only deals with that mob?

If there was that much margin in it, then owner-builders would be saving squilliions.

 

Not their margins, he is saying the cost of build difference from a local builder vs volume builder is around 400-500k

 

Probably not comparing apples with apples -totally different products and outcomes.

 

You are right but in the end if its an investment losing 400-500k in the build would will blow out the feasibility of most projects which i believe was his point

 

He is absolutely right is that to have a feasible project you need to know all your end values and how uch things cost.

He is absolutely wrong that an architect and local builder is $4-500k more. It's possible, but it's also possible that some spruiker will suck you in saying that they will save you that and end up going over budget too. Small boutique builders can often be competitive to volume builders because they don't have the overheads that large builders have (no sales reps, no BMWs for the MD, no assistants, no large commercial offices etc etc)

 

Absolutely disagree. If the homes are well designed (and I don't mean in an appearance sense), have regard to construction methods and materials etc, the costs can be kept low (eg a few we are looking at now $2500k a square metre, including driveways, services etc etc). Depends on the product and expectations. Bear in mind the promoter is selling a product, his product, not assessing the market place etc

 

Absolutely, he does seem like he knows something but I am skeptical about some of what he says

 

Yes indeed. My small boutique builder delivers our Dual Occs turnkey for @ $1670 per M2 in Goulburn and $1649 per M2 in Dubbo. Volume builders such as Hotondo or GJ Gardner are well over 2K per M2 in each location , without turf, fencing, downlights etc.... @Tufan Chakir has suggested $2500 M2 turn key is competitive... highlighting exactly how wide a range of pricing exists out there ....

We deliver at such a low price for two simple reasons - a lack of overheads and a standardised design where we don't do variations or custom builds. My builders still make a profit ( I assume ) but the model is very flat. They build a very specific product for me and I sell that very specific product for them... there are no other staff, no commercial premises to lease, no fancy /glossy sales collateral etc.... and we dont mess with the successful formula - ever. This is how we deliver our product at a price no one can compete with... or at least, no one has been able to compete with so far.

Many many many people have come to me ( including several from here) then tried to take our idea and do it themselves - I guess they believe they can do it cheaper or better.... and they almost always come back to me and tell me they cant make the numbers work, and buy from us. So just as westmyfster has outlined, when you strip out the overheads, sometimes there are smaller operators who do it much better for much less... ultimately, what you want to look for is a small builder who only does duplex builds. You'd have to work within their available templates/designs.... this is where the economies of scale will make you the big savings . No money or time is wasted. I believe this is where the biggest mistakes are made by investors seeking to be developers. They over think, over build and over capitalise, because they tinker and tweak and redesign , treating the dwelling as their own dream home .... each change of mind chipping away at their profits.

 

@euro73 Hi Euro if you don't mind me asking, how do you get paid? You say you sell the builders product for them. I assume builder pays you a commission???

 

I hold a RE licence.... I sell the property, yes. The builder pays me, like any vendor would. You don't.

 

Volume builders are definitely cheaper when they are building in volume - i.e. an estate where they have worked with the developer on the subdivision sizes and have created or amended their existing product to suit the lot sizes. But for a one off, it isn't necessarily the case as they'd still have to customise their template to your land.

Getting an architect likely would cost more, just by the fact you are paying for an extra consultant, but in terms of the build its really just going to depend on the design and inclusions of the architect designed homes vs the builder's amended template and inclusions. So it could cost $500k more if the architect spec'd it much higher, but if its on par, it definitely isn't going to have that much of a cost difference. It also will not have such a time difference.

As others have mentioned, likely just trying to scare you into using them. You definitely do need to know your numbers before you buy, which is definitely some sound advice, but pretty obvious.

 

What is a D. O. adviser?

He quoted "you will end up paying $400-500k more if you go to an architect and a local builder". Sounds like bull *****

 

Apparently a guy who managed the dual occ build from start to finish including plans, permits to the finish of the build.

 

Dubious Overhead?

 

Agree with comments about volume builders - use their plans and specs - cheap. But also their quality etc.
TOTALLY disagree with the wide sweeping comment about architects - depends on your brief and objectives. we design lower and higher end projects. Our lower end house behind a house or two on a block, simple housing comes in at around $250/sqm - based on a few recent projects costed by a builder. I know for a fact that the same project(s) costed by volume builders (the client took the "initiative") came in at twice that rate. A good architect, cost conscious can design costs out, rather than increasing costs. Not all architects, or designers are created equal, but please don't generalise.

 

I was always of the knowledge that if you had your own detailed plans, you can tender to a number of builders which you could then compare apples to apples the cost of the specific level of build. Rather than cold calling on a per sqm ball park figure. Anyway, it is good to know that by going through a volume builder to skip the architect and save time is not necessarily the most economical option.

 

You sure about the price 250/sqm? did you mean 1250?

 

I would LOVE for you to pay me $2500 per m2, my clients are whinging and moaning at $1500 per m2 and want bigger discounts. This is in Sydney.

 

I think where he is confusing the $400k to $500k more is in that a volume builder has a set catalogue with set selections and costs and sizes. You cannot deviate too much from it without major financial penalties. An architect doesn't work like this and generally design whatever you want. You aren't exactly comparing the same products. If you were to get both builders (project and spec builder) to do everything like for like I can guarantee you that there may be 5%-10% in it at most.