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City of Parramatta duplex development

Discussion in 'Development' started by Leo2413, 27th Jul, 2015.

  1. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Location:
    Sydney
    Site: 784 sqm Single Res Dwelling (duel occ potential)
    Where: City of Parramatta
    Purchase price $ 744,000
    Conveyancing $ 3,000
    Stamp duty $ 28,990
    Mortgage insurance etc. $ 13,196
    Total purchase costs $ 789,186
    DA Costs
    DA application fee $ 2,869
    Council contribution $ 7,500
    Construction Certificate $ 5,000
    Easement application, administration, legal and valuation $ 6,928
    Easement grant fee $ 5,500
    Total DA costs $ 27,797
    Holding Cost, $60,000
    Consultants cost: $28,626
    Construction Cost: $745,000
    Contingency $55,000
    Total Development Cost $1,709,605
    End value at time of feasibility: $2,000,000 (for both)
    Current end value: $2,400,000 (for both) strong chance at time of completion would be $2,500,000 based on current sales in the area.

    Based on feasibility at the time we were looking at a 20% return on total development costs (would have gone lower specs at that time, but since the market has moved and specs in the area, we decided to increase the level of spec to current figures. It has taken a year to get almost full DA due to an easement we had to get from council which was a challenging process, but well worth it.) We are planning to rent both. When we bought the land the numbers made sense for us at 20% but we were hoping that Sydney would have some good growth and as a bonus for us it had!

    Estimated gross profit at time of feasibility: $400,000 (about 20% return)
    Current estimated profit: $690,000+ (40% return)

    We are about to start construction hopefully shortly. Will keep this thread updated but I need to balance the privacy of my family's request too.
     
    Last edited: 27th Jul, 2015
  2. S.T

    S.T Well-Known Member

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    This is like Groundhog day.
     
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  3. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Whats groundhog day? Not sure what you mean by that but its so easy to make cheap comments on this forum, when others are genuinely trying to share.
     
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  4. gach2

    gach2 Well-Known Member

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    1.2 mil for a duplex!!!

    Im guessing this is north east of parramatta (towards carlingford)?
     
  5. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Carlingford according to google is 27km to the city CBD.

    This site is only 18km to Sydney CBD mate.
     
  6. gach2

    gach2 Well-Known Member

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    I meant is it that direction from parramatta,
    based on 18km best guess would be towards west ryde (ermington? i believe thats the last suburb that direction in the city of Parramatta)

    How much do you think your site is worth as it is? I have a feeling 1.2 - 1.3 mil based on what you said.
     
  7. gach2

    gach2 Well-Known Member

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    Also mind if i ask what consulting costs are?
     
  8. Leo2413

    Leo2413 Well-Known Member Premium Member

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    yes around Dundas mate.
     
  9. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Building designer, arborist, engineer, interior designer, Land and title office, surveyor, just off the top of my head mate.

    We had a valuation on the place recently and it came back at $1,000,000. the house on it is in quite bad shape too. Probably if it went for sale could hit the 1.1 mark I think.

    We have been contemplating selling it with DA but we know we'd make more if we see it to the end and want to further our experience too, so its worth it for us.
     
    Last edited: 27th Jul, 2015
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  10. gach2

    gach2 Well-Known Member

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    ahh thanks for sharing that.

    I guess the bad shape wont be much of an issue now the DA's completed.

    Definitely a good buy, havent seen that price in the area in atleast the past 12 months
     
  11. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Thanks @gach2. There are some investors buying dual occ sites at prices north of 1.3m...would have to be a builder/developer and even then its gonna be a close call imo.
     
  12. S.T

    S.T Well-Known Member

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    Funny movie with Bill Murray, should watch it one time. This thread reminded me of it as I seem to have seen three threads now for development's in Parramatta across the two forums.

    Cheap comment? Just something I found funny, that's all. Carry on Leo!
     
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  13. Leo2413

    Leo2413 Well-Known Member Premium Member

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    OK I have an apologising theme today for misunderstanding posts so my apologies @S.T!

    I did watch the trailer to try and work out what you meant by it though...:oops:
     
  14. Louis XIII

    Louis XIII Active Member

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    Good Luck Leo, hope all goes well with your build, and I'm sure your numbers will stack up fine.
     
  15. neK

    neK Well-Known Member

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    I think its better you work on Total Cost Based using the current value of the property (even though its not what you paid), its a more realistic assumption. Its like someone purchasing a property 30 years ago and developing now and claiming a massive 1000% profit.

    If the same site was purchased today, it would cost you $1m as you said, stamp duty of $40,500, assume mortgage insurance remains the same, $3k conveyancing
    Therefore $1,056,696 (difference of $267,510).

    Total development cost would be $1,977,115.

    Based on this, the return should be closer to $423,000.

    So return would be closer to 21.4%.
     
  16. Leo2413

    Leo2413 Well-Known Member Premium Member

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    hi Nek,

    I was giving the numbers based on the original feasibility done about a year ago and then an updated feasibility on the numbers now. We were very happy with the 20% return a year ago when we did the feasibility. Since then the market has changed and ive also shown the set of numbers to reflect the current realistic return. But I'm not taking 'credit' for it.

    As I said It has been a bonus to get the 40% return as it stands now, all I was expecting at the time of crunching the numbers was around 20%.
     
    Last edited: 27th Jul, 2015
  17. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Thanks mate! I tend to be very critical of myself and go over things many times again and a again even when I'm happy with it. Never happy at times.. but thats a work in progress for me :)

    Thanks again
     
    Last edited: 27th Jul, 2015
  18. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Looks like this one will work out pretty well for ya!
     
  19. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Thanks @Steven Ryan! Been a complicated/stressful process to get the easement from council on their land but its worked out well so far mate.

    Btw don't know if others are aware but you wrote an interesting piece for YIP magazine recently on Air BnB :D
     
  20. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    I didn't write it—a jouro did ;) I just had a chat with her on the phone.

    I have plenty of stories from my experience but I'll save those for in-person sometime!
     
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