Developing - Where do the numbers stack up

Anyone have any suggestions?

Looking at what investors are buying now/today that stack up, the numbers with a minimum of 20-25%, not holding/selling.

I am toying with the idea of doing a development at the moment in Australia.

Would be keen to hear from those who are making it happen today. Where did you buy and what are you building? If you care to share

MTR

 

You first

 

OK, Our project in Atlanta stacks up nicely around 30%, but that is not Australian market.

I am always looking for leads.
Not seeing too much on PC at the moment, is it a sign of the times? or investors not posting the numbers?? If you have to hold the product then its not going to work for me.

Perhaps this is a goer???Where is Marty building? I know Adelaide, within 12 km from CBD, lower end product.

Tips & Tricks For Developers: Overcoming Finance Challenges - PropertyInvesting.com

 

Had a quick look through that, I don't think he mentions which area its in does he?

As far as I can tell, developments here don't stack up at all right now. Instead, what some people are doing is developing the rentals they've already owned for years, or buying rentals on development sized blocks and renting them for a few years first. Luckily the yields are decent here, which makes holding on a lot easier.

 

Hi MTR,

I am in Perth and recently purchased a few sites that would fit that criteria. As long as you are developing the right product for the market and managing your costs the returns can be reasonable.

The problem is not so much finding the deals, but rather getting finance for projects >4 dwellings and estimating retail values when there are such low volumes of stock that are moving.

My brief to agents when I'm shopping is:
-R40 (medium density, can be townhouses or low rise apartments)
-1000+sqm
-Retainable house
-Near to the usual amenities (shops, schools, transport etc etc)

A few projects I am working on at the moment:
-Marangaroo (low rise apartments)
-Armadale (affordable, single bedroom accommodation)
-Yokine (executive villas).

Hope this helps.

Regards,
Angad Singh

 

Great, would be interested in whether you have actually sold off a deal in current Perth market? and returns?

Are you working on builders margin?

Lots of stock on the market in Yokine, executive villas?? I would be concerned whether this market would work?? Just from my observations, perhaps I have it wrong

MTR

 

Bank the land for development under $500K - 1973m2 -R40

69 Owtram Road Armadale WA 6112 - House for Sale #125248526 - realestate.com.au
Armadale address available on request - Duplex/Semi-Detached for Sale #121860890 - realestate.com.au

Cannot believe houses in Armandale are priced sub-$300K?

 

Not a great idea, you need deep pockets, rents in Perth have been hammered a drop of perhaps 25% try holding these in current lending environment. Will you be able to move on and keep investing???

I started this thread to find out what developers/investors are building today that makes sense, buying today. Twelve months ago in Melb and Syd market is a no brainer.

 

Holding cost for less than $500K is not much. Even though, development right now for this type of land may make some decent profit if carefully planed

 

I know a place (sorry I can't say the location) where the numbers stack up well. It's a niche area I am extremely familiar with, basically buying older semis, renovating them plus adding another level on top and resale. Cost of semi around 2.3m, then reno/add floor approx. 4-600k, then end sale value 3.5-3.8m, I have 2 such projects we are getting organized now (a JV with my dad, gawd help me lol) and I will post the details in the future when we start it.

 

Why not shared? You have not answered MTR questions yet.
In other topics, other members also said "I knew the magics, but I would not tell you" lol how do you feel?

 

Sydney. Higher end markets. Coastal areas. High(er) risk deals so needs to meet your risk profile. More than enough info there to investigate.

 

Thanks. You are always generous sharing your experience to others.

 

This market has tanked, by this I mean oversupply

 

@MTR :

I haven't sold anything the last 12 months. I was caught up at SAT over one of my approvals .

The costs I use are full retail construction costs. Although our company is very lean, and only focuses on developments so we tend to be about 8-10% cheaper than competitors on this type of project.

I'm not sure if 'executive villas' is a great description, but ultimately only time will tell Agents I trust seem optimistic, but you are right in that in this market you should not be relying on a quick sale. I'll do a little post at the end of the project with photos and things to show people.

@PropertyInsight

The property on Owtram is not connected to deep sewer, is likely to be clay and the house is in really bad shape. I had a look at it a few years ago, and then again more recently. Doesn't stack

The property that says 'address on request' is on Benjamin Street, Armadale. The two titles are on a Survey Strata with the two adjacent townhouses, meaning you can not subdivide/develop without cooperation from at least two other parties. Also, its not worth anywhere near 700K.

 

I mentioned this in a Perth thread,
North Coogee looks to stack up for multi dwelling.
Lots of R40 zoned parcels of land.

 

Something like this, however this has own frontage and on just over 400 sqm block


8a Virgil Avenue Yokine WA 6060 - House for Sale #123353638 - realestate.com.au

 

It's definitely got the beach vibe plus the bonus of new amenities. I don't know if it stacks up feaso wise but it's a good pick for something to look into.

 

Yes, we have friends who live in this area, its good, same though I just don't know whether apartments would stack up in this market.
Proximity to beach is great, also have some nice cafes and relatively close to Freo

 

Pretty much anywhere in Sydney stacks up at the moment though would put a 24 month timeline on developments

If time is a key factor Logan council is a place where things can get done easy and quick and there is some money to be made (low investment - low return - but % are still same)