Hi guys, I truelly need some valuable advise on financing a property for subdivision I own, that has been issued a planning permit - two lot subdivision. Both lots have existing dwellings, one is residence (lot 2) other unoccupied.(lot 1) , established circa 1910. There are 17 conditions in total imposed, more than expected. Storm water management plan = contracting Civil Engineer & Open Space Contributation on Lot 2, Building report health safety, other conditions are utilities. Propose to sell off lot 2 and retain lot 1 to develope into a residence. After speaking with two realestate agents, finance by way of contract of sale! Subject to conditions, once a buyer is secured, speak to bank they will provide a bank guarentee for works? Is this right? And how does this work? Unable to finance using equity - equity is available to the sum of $65k but my income will not support additional borrowings. Which also rules out personal loan, overdraft, credit cards. Would going to a broker help? Contracting a civil engineer for project managing the subdivision? Would they do installment payments ( upfront payment, middle payment, then completion payment) this would help as I can access small amounts. Or do you pay at the end? Appreciate any advise thank you for reading.
you need to do a feasibility study, establish what the costs are and the likely return, the project may not be worthwhile get a quote from an engineer for an initial costing of the development conditions
Thanks Hebro, fesability is very good, return is worthwhile, happy to get a quote from a engineer for initial costing.....my main concern is financing the subdivision.
When we got our DA through, I received several letters from people offering to be joint venture partners. They are out there, but you may have to search for them. I wasn't meaning just the people you know personally. And I never did anything about those letters because it wasn't something we were ready for. So I cannot help you with how this would work. But I do know that when we did think about JV partners, I googled for them, and there are sites that actually gave real life scenarios about different ways they'd structured joint ventures, for some people who had land but no money, others who had land and some money, but not enough. If this interests you, it is just a matter of finding the right person or company, and then making sure you do a lot of due diligence, see lawyers etc to protect what is yours.
Its interesting you have to pay public open space contribution. Normally two lotters are exempt, unless they can be further subdivided. If you are subdividing existing dwellings the sub requirements are usually not very expensive. Reading the permits always look like there is a lot to do and pay for, but it might not be that bad. We do a fair bit of smaller subs in regional areas in vic (i work in a surveying/engineering/planning) firm. The engineering design requirement might be 2-3k. The works could be 8 - 15k. The biggest cost will be the open space contribution if its required. Have your permit reviewed by the above mentioned consultants and a cost estimate provided. Some consultants will agree to later payment for an increase on fees, especially if your lawyer states there fees will be paid as part of the settlement process when you sell.
Lot 2 with existing residence, will retain 860 sq mt of land, I spoke with planner, open space contribution applied to lot 2 because of size & if residence was bulldoze further subdivision can be proposed. I will be asking for condition to be reviewed, residence circa 1890-1900, recommendations from heritage consultant, Helen Doyle, (council HO reference, Helen Doyle Study) was to protect from development. HO studies are incomplete for Koroit, last reviewed in 2013 - 2014 which did not cover street where this residence resides. Live in hope. You have got me thinking on your feedback........'Some consultants will agree to later payment for an increase on fees, especially if your lawyer states there fees will be paid as part of the settlement process when you sell'....... So, see if I have this right..... I find a consultant who agrees to later payment at a fee; I have solicitor/lawyer draw up statement of agreement/contract.........cool! That makes so much sense thank you so very much, sounds like a plan!
