Best areas for investment in Land and Duplex

Discussion in 'Development' started by innovatism, 23rd Sep, 2019.

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  1. innovatism

    innovatism Well-Known Member

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    It is but I didn't find anything against them yet.
     
  2. Paul Mete

    Paul Mete Well-Known Member

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    One important factor to remember is that property development is in essence based on the concept of dramatically and artificially escalating the value of a given property therefore if done well this should insulate any investment against mummers in the market or minor errors.

    You need to get the right people involved, you need to originally buy well, pick areas where the numbers stack up and where councils are reliable, you are right in focusing on Dual Occupancy (the simplest form of development) and if you get the builder right this should be a great success.

    Assuming you get the right professionals involved and you buy well, the only dangers to be wary of are market collapse or a failed permit.

    PAUL
     
    Last edited by a moderator: 26th Sep, 2019
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  3. innovatism

    innovatism Well-Known Member

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    Thanks Paul !
     
  4. Milo16

    Milo16 Member

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    I bought a house and land when he used to be the buyers agent at Positive realestate.
    Terrible experience I lost $50k.
    The rent was $150/week under their appraisal and the build quality was pretty bad.
    I had 7 lots of tenants in 2 years and the place is still worth less than it cost me to build it in 2012.
    I also put a deposit on a unit in Newfarm which lucky I got out of.
    The funny part is that he bought the same deals, so not malicious.
     
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  5. innovatism

    innovatism Well-Known Member

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    Thanks for sharing your experience? Where did you buy? Current deals they are giving seems not too bad. I still didnt buy anything.
     
  6. Milo16

    Milo16 Member

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    Thanks
    I should have known better but I bought Gunnedah. I did their mentoring program and thought they new what they were doing?
    They slammed my other Sydney investment that’s now since gone up around $700k.
     
  7. innovatism

    innovatism Well-Known Member

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    Thanks for sharing, as I said their current deals seems not bad, but I am still doing my research and didnt buy anything. Hoping for the best.
     
  8. innovatism

    innovatism Well-Known Member

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    Which is the other area in Sydney? And It's ok if you dont prefer to share it on public forum. :)
     
  9. Tenex

    Tenex Well-Known Member

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    to OP, only if it was as easy as just posting on here and hitting the target :)


    With regards to duplex, to my knowledge, there is very little outside of certain pockets of Sydney and Melbourne metro that you can buy and make a profit from it. The cost of build, regardless of what you are building, varies very little from one point to another in particular if you are looking in NSW and VIC.

    What you want to buy therefore is in expensive land areas where there is demand and there is money to be made from it.

    Regional areas is a lot like other capital cities, they have bought and crossed their fingers and there is yet any real money to be made from it.

    I suggest you start with a reno project and think long term. Do your research and buy in Sydney or Melbourne where you can add value. If you have to rent it for a bit do it and sell when the time is right. I have done one project like this which I have just sold and I will try to post on it
     
  10. Leo111

    Leo111 New Member

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    @Deepak my situation is quite similar to yours. I am new to this forum. I am also considering Caifu for a Duplex project. So far haven't found anything against them. Their past examples look good. If you don't mind me asking, how did your research into Caifu go? Do their numbers add up and have you signed up with them?
     
  11. gach2

    gach2 Well-Known Member

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    any of these characters offering buyers agents servicing and selling you land in a land release should be avoided
     
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  12. Thomacino

    Thomacino Well-Known Member

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    Engage a property professional to do a hypo/feaso study..

    Recently did some work around Fairfield Heights, Canley Heights and Cabramatta.. this area is famous for old single dwellings on triple/double lots with DA readily attainable for duplex/triplex dev..
    With P&R I personally don't think you would be getting 20%, realistically would be 10%
     
  13. vudu

    vudu Well-Known Member

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    Hi Deepak

    I'm a little late to this one but soon to complete a duplex build in SE QLD. Budget similar to yours. Numbers stacking up so far but yet to complete so will reserve final appraisal.

    Have been working with Josh at Assetbase. Pleasant experience to date. AB Team are competent and responsive and I am provided regular updates via email with pics. Construction is progressing at a solid pace. Of course I'm interstate. Did my own due diligence prior to commencement and make regular site visits / market appraisals.

    First development for me but thinking I'm on a winner and looking to go again. No association with AB other than a happy customer. Plenty of naysayers but my strategy is based on building the team and be realistic. Have a fantastic mortgage broker who was able to secure finance late last year when the market was in turmoil and banks difficult to deal with.

    I'm sure your goals are achievable. Good luck with your endeavours
     
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  14. innovatism

    innovatism Well-Known Member

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    Thanks ! Any suggestion for a good mortgage broker? My current one seems not that good and I am.already getting better deal than what he is proposing.
     
  15. vudu

    vudu Well-Known Member

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    Sent you a PM but realised it should be no secret. Mireille Lahoud - All Loans Financial Solutions. Good luck!
     
  16. sash

    sash Well-Known Member

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    100% agree....to many people start with complex strategies.

    Doing a simple house and land in the correct area you could walk away with over 40-150k profit.... most people can make 40-60k comfortably even in today's market.
     
  17. Brady

    Brady Well-Known Member

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    Most people don't especially those new to build/buying process.
    Many overpay for land that needs works (sewer, fencing, retaining)
    Many overpay for builds that aren't complete (flooring, window treatment, landscaping, a/c, light fittings, paths, driveway, rainwater, stormwater...)
     
  18. sash

    sash Well-Known Member

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    Correct...that is why you need to buy wholesale..... but you need to understand how to do that.
     
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  19. gach2

    gach2 Well-Known Member

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    I do not think there is money in H+L. The moneys already been made by the developer that sold you the land. Im sure you and many others made money but I believe you made money on the land component not the package (probably broken even on building or had a easier sale)
    40-60k in any market is nothing (entry and exit fees will eat that up).

    Though in saying that developing is another beast involving a lot more complexities which most people don't understand the backend work required (will end up being a part time job - that said my building side was pretty much close to perfect - so imagine what happens if you end up with a nightmare builder). If the patient and understanding is there very rewarding.

    In saying that this thread is a joke - Developers version of BA that buy their mates land developments at inflated prices with a kickback
     
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  20. sash

    sash Well-Known Member

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    Yes I have here is how:

    1. Buy the land cheap.... bought some land at 139k and 155k...land is now worth 230 and 260k respectively.

    2. Built 4x2x2 homes...locked in prices 3 years ago for 215k (21.5 sq) and 238k (25sq). Build costs now 230-240k and 255-270k respectively. These were turnkey.

    Vals on these now 560k and 630k respectively. Doing the numbers:

    1. Increase in land value 91k and 105k respectively.

    2. Build cost increase - 15-20k and 17-32k

    So there is another 80-100k in increases which is due to other factors.

    This can be done....but the skills need to be honed. The estates I have built with are now also experiencing rent increases.

    For example in one estate property rented out for 390pw...4 years ago....now rent is 435pw..still about 5-10pw under market. Same estate build completed 2.5 years ago...rented for 365pw...now 380pw (market). These were built for 335k and 260k as H&L packages between 2.5 and 4 years ago. Vals on these would be 550k and 410k respectively. So yes there is money in H&L with the right due diligence and selection of builders and building the right product. Unless you goals are lofty on both these products total spend was about 605k including stamps (land was only 96k and 97k). Value now for both is 960k. Which presents a 60% increase in asset value. Add to this another say 40k and 50k in depreciation. That is another 45k (assuming top rate of tax) in your pocket.

    Agree to many BA sharks...who are overselling their products. I tend to source under market.... even cheaper than they originally bought the block for and can't settle.

    I am keeping these as the developer used the margin scheme on the land. So based on that..I would be up for about 30-35k in GST. That would reduce my profits to about 170 and 200k respectively. But I would also be up for tax on the full amount of these if I sold immediately. I have worked the depreciation on these there is about 55k and 65k respectively on depreciation on these over 5 years. So that is another 30-33k per property in my pocket. Plus rents which makes these slighly CF positive around 25-40pw...or $1300 to $2080 positive per annum. This is a no brainer.


     
    Last edited: 21st Jan, 2020
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