Carnage in NW Sydney.

Over the last few hours I have been made aware of developers in this area defaulting on optioned and exchanged development sites totalling over 1400 building allotments.
One of the developers had 945 lots under option and part paid exchanges at a cost of $89 million dollars. Vendors now get to keep the money ( in my case of 35 lots, I have received about $1.4 million on a sale of $8.3 million, plus I receive the contracts of 23 of the 35 presales and all DA and CC drawings ready to complete the subdivision)

Already one parcel of 400 lots has been put up for resale, expect the rest to come up very soon.

As to prices? Who knows how these defaults will affect the market!

But there are a quite a number of very excited vendors who have received large payments towards their sites, have had all the paperwork and drawings approved, pre sales made and then received the property back ready to resell.

In most cases, the problems are that China won’t release further funding to the developers.

 

Not bad if you weren't dependant on the sale.

Out of curiosity how would that be treated from a tax perspective?
Does it stay on Capital Account or change to Income?

 

By 1400, do you mean 1400 units/lots or sites? And for apartments or land subdivision?

 

1400 lots after subdivision. All are for single family accomodation

Very good question!

 

Sounds great! Provided the new price you sell for isn't less the original price minus the deposit you got back...

 

@Car tart - that's been going on for quite a while but hadn't heard of it up your way.

An acquaintance had been tied up on a very similar amount and the developer was stuck paying penalty interest. They were lucky to get the funding out of China at the time but it was several months delay.

Sounds like you could JV the rest of the development. With over 65% sold, it may not be a hard task.

 

I don’t need finance or jv. But I’m going to find someone to get the quotes and take the hassle away.
Anyone looking for a part time position.

 

Would love to learn happy to help for free.
Pm me if interested

 

Where abouts is the subdivision?

 

Happy to assist for free to learn some new things!

 

256 Garfield Road, Riverstone NSW 2765 - Off The Plan Land For Sale | Domain

 

All sounds rather alarming to me, I'd be hitting the first bid and GTFO!

 

I’m amazed it’s possible to be a successful property investor with that attitude.

You don’t “win” on every deal! I like to think that only about 1 in 10 go bad, 2-3 break even and the rest are profitable.

The biggest mistake in life that most people make, is “I shoulda”

I always say better to make a decision and then fix it if it’s wrong, than making no decision.

 

100% of something is better than 100% of nothing... gotta be in it to win it... nearly never got there .... shoulda woulda coulda ......

people spend far too much time in analysis paralysis, procrastinating over their decision... and as often as not, they make no decision and get nowhere .

 

PM, me. Happy to help you out free of charge in the weekends in return of learning some unknown facts.

 

I'm free day times. It could be interesting.

 

Ok. I’ve got a friend to do the run around work, so I’ll do a blog on what happens.

At present, I’ve instructed lawyer to cancel the sale as a default. The property has exchanged but not settled.

The idea is that all approvals, construction and engineering drawings and pre-sales are to be signed over to me in consideration for me not pushing for a completion. Waiting for their agreement could be the longest part.

Costs so far to me
Purchase and incidentals $1,800,000
Agents commission for sale (paid on exchange) $150,000
Total costs $1,950,000

Money received.
Deposit on exchange (10%) $827,000
Penalty interest for not settling $375,000
$1,202,000

Net costs of property $748,000.
Approximate sale value $9 million as a development site
Approximate sale value as 35 lots $21 million (ex gst)
Construction costs estimate is $3.5 million
Contributions estimate is $1,600.000

Property is not under finance and my daughter owns 10%, I own 90%.
No legals are due as the purchaser in default paid for them, land tax and council rates. House has been vandalised whilst empty, so cannot be relet. Purchaser paid rent until 30/6/2019.

 

Maybe, I spent my life trading financials and derivatives, learned to spot when something was not right, my survival was all instinct, and my instinct says this is a dog with fleas. But then again, different markets, so good luck, jump in with your boots on!

 

Or don't sell at all and wait a few years for the next boom to pick up eg 10% deposits are a nice little earner for empty land sitting there in what would have otherwise been a down year

 

Is this u r selling 650k $ for the land only?