Brisbane 2 homes development

... for this reason I have my female friends named as "The Electrician", "LJ Hooker" in my phone contacts...

 

What's the backup plan @Leo2413, sorry so many questions...

Selling, holding
If holding will the rents cover the interest rates??

 

All good no worries @MTR . There is really 3 possible plans:

A) is to develop 2 lots and homes.
B) is to completely renovate the existing home and add a level above (feasibility works with this scenario but more risk as its an even smaller market to cater to)
C) is to terminate contract before DD period is up.

We'll most likely hold one and sell one.

 

You are a true inspiration for the rest of us here Leo! I'm looking at doing something similar later on with subdividing and building 2. Though my numbers would be smaller than yours.

Is that one purchased in your name or a trust? If trust is 50% CGT discount applicable in this case providing you sell one after 1+ year?

 

Hi @Observer,

There is so much inspiration from posters on PC, I love it!

This one is purchased in a trust mate. If the entity that owns the asset is an individual or a trust, the capital gain will be halved under the 50% CGT discount and the remaining amount will be the net capital gain that is subject to tax. But I'm no expert in this area whatsoever so I wouldn't trust me on this, I leave it all to the wife who is a CA and takes care of it.

With your plans, do you already have the land?

 

Pay CGT on 1 with the 50% discount, and rent the other, then revalue to extract equity.

 

I still need to finish house construction in Sydney. In about 6 months will be looking to pick something up in Brisbane to develop. Have an area in mind where the numbers seem to work fine (at least now).

What are the advantages of trust over personal name purchase?

One more thing about tax Leo. Do you know if gst is applicable in your scenario providing you sell one?

Hope you don't mind lots of questions .

 

Are you able to buy now and hold/rent, then develop when ready? Finance permitting you could also use an extended settlement to help. Just an idea.

Again no expert here but my understanding is the main advantages are:

1. Control/asset protection – You own nothing, but control everything. Offers a legal layer of protection against lawsuits, minimizing your vulnerability.
2. Income distribution – You can at your discretion legally distribute profits in a more tax effective way (always a good thing unless you like paying more tax. Believe it or not some people on here do enjoy paying more tax. Insane I know.)
3. Succession planning: allowing for assets to benefit generations without the need for ownership to change from one individual to the next

No we will only pay CGT with the 50% discount. It's all about intention. I don't want to try to explain it because i'll just waffle on and trip over myself. @York is a gun who can answer well on this. The guy is pretty low key on here but has an amazing amount of accurate knowledge. As always though, seek expert advice from a qualified accountant for your own situation.

 

Unfortunately not able to buy now because of finance. Have to finish the house construction first and rent it to be able to borrow.

Extended settlement is an option to consider. Not sure if vendors will be happy about 6 month settlement period though (however if it works for both parties then why not) .

On the other hand I still have a bit of time to learn from all you guys until my current construction is completed.

 

@Observer your house construction, is it just a build on land ? Are you project managing the build with the builder?

 

@Leo2413 Yes, just a straightforward build on land. The builder will be doing pretty much everything. I'll only inspect the stages on completion.

 

You have started another new development. Good on you.

 

Hi Leo

During the due diligence period, do you get final financial approval?

I have just got offer accepted yesterday. I wonder if I should done some due diligence before sending contract to the lender for final finance approval or get final finance approval ASAP.

What happen if finance approved but I pull out the contract due to due diligence issue.

 

[ melbourne171, post: 276179, member: 6920"]Hi Leo

During the due diligence period, do you get final financial approval?
Generally most times, yes Subject to finance. Also subject to whatever else I need at the time of the deal.

I have just got offer accepted yesterday. I wonder if I should done some due diligence before sending contract to the lender for final finance approval or get final finance approval ASAP.
Get finance approved asap. As long as you have done overall DD and know that the deal 'could work', sometimes its beneficial to get the property off the market in a DD clause of X amount of days and then do more detailed DD then without worrying that someone else will grab it from you. Just make sure you have adequate DD days ,especially for development sites.

What happen if finance approved but I pull out the contract due to due diligence issue.
Nothing. It just means you have finance ready for your next deal as long as it hasn't expired.

 

Update:

The DA for both lots has been electronically lodged and we are waiting for a date from council to attend a prelodgement meeting. We want to make sure we wont have any issues with the lot design later on. Fingers crossed our lot design plans will get approved with minimal issues.

 

Good on you Leo.
Keen to read along how this one goes as well.

 

@Azazel Thanks mate. I appreciate your support. In all honesty every development is scary for me

 

Yep just said to my wife Leo's at it again

 

That's good I suppose, it means you're not being flippant or cavalier about your decisions.

 

what else am I gonna do...

That's what my partner says to me, it's good to have a healthy level of fear..."so I still have a home to come back to at the end of the day"..hehe..

Sometimes I feel its like playing with a lion.. you never know when it's gonna turn on you..