Development potential

Keep pushing (gently) for the Council decision). Objections can be lodged right up until a decision is made (not only in the advertising period). It only takes one stray objection to stuff up timing!

 

Congrats Pacman. Great work so far. The designs are great for the area IMO and will sell well.

When will you start to get construction estimates?

 

I have a reputable commercial/resi builder who will provide us estimates soon but we will get him to cost it for us after working drawings and engineering has been completed as I want a turnkey build contract.

 

Yes, I know all about this one.

 

Most people don't, and assume once advertisgin is finished it's a home run....

 

Sorry I haven’t been able to provide updates for a long time now.

The main challenge was getting the funds organised to kickstart this project.

We always knew that we had a shortfall to be able to meet the bank lending requirements both because of serviceability and equity.

Market appreciation helped build enough equity to meet the bank funding requirements.

The finance was approved around November 2017. We then signed a rent-ready fixed cost contract for $960,000.

We are now nearly one month from lock up and the project has been going smoothly. The detailed plans/specification supplied at the start of the build has really helped the builder and made the process straightforward for us and so far we have had only minor issues that have been resolved swiftly.

The exception was the amount of extra concrete poured due to extreme rainfall eroding the trenches. We received a $7000 variation invoice for the extra concrete that had to be poured.

I’m estimating a conservative GRV of 2.1 million which equates to 35% margin on TDC. Portion of that is due to Melbourne market performance but being our first project we are happy that we have learnt so much from it while still making a decent profit.

I have been busy learning to use Estate master in the last few months and excited to attend a development master class that is coming up in May.

 

Frame stage photos

 

I love the location opposite the park! It's almost a shame you couldn't get a 3 bedder in there to really hit the family demographic that would appreciate it most.
A 2 bedder could still house a family with 1 child (or 2 sharing) though

 

i drive past this block occasionally on the weekends - southern rd is the better part of HW. you got the block at a good price - hence the dev will always yield a profit.

 

@melbournian are you also developing in the same area?

 

not in HW - though i was looking to buy in HH

 

Fantastic work @PacMan. Is Heidelberg West still a hot market? or has it started to cool now?

 

probably it went to peak last year and now going side ways a bit. 2016/2017 - was the year of HW went to its highest

 

@Perthguy thanks, I would say the steam is running out. But according to CoreLogic and few other sources the area is still under valued.

I have been looking at purchasing another block, land cost over 800sqm is approx $1100 /sqm

 

I have interest in the area because I looked to invest there in 2007. I think it's a great area but there were a lot of very rough areas. I didn't have time to get to know the suburb well enough so went with Heidelberg Heights instead. HH did ok but HW was really spectacular from 2007 to now.

I figured it would run out of steam at some point.

 

Big blocks over 650 still selling fairly well but under 600sqm is off peak.
Market was super hot here for a while there. So much development going on. I have seen some decent deals back on around here, definitely off the peak though. that place for 1.2 million was probably the high mark.
I think HH might be better bet now as HW has come up so far.
I'm putting a 3 bed in our back yard here, got permits etc. First development so keeping it a bit simple and affordable.
Could actually use some advice about accountants and building contracts etc if anyone has some knowledge and some time.

 

Hi PACMAN, If you dont mind me asking, who are you getting to build these on Southern rd and are you happy with them so far?
We are building a 3 bedder in our back yard here and I'm gathering quotes and info at this stage.
PM if possible but no stress if you don't want to.

 

Pm me your details and I’ll have a chat with them. If they are interested they will get in touch with you.

 

@PacMan - how much did it cost you for your 3Ds?

 

A friend did it so it was good deal. I think 1200 including floor plates.