Full time developer timelines

I have sold 3 townhouses OTP, this is a 4 townhouse deve in Melb,
I will probably keep one

View my figures on my 3 villa development in Perth, sold last year
search Spearwood on SS

From my experience house and land packages work well in rising markets as prices are rising quickly and buyers want to lock in prices

 

Some people might be happy with a DA approved site that could generate 15% return in <12 months, as opposed to 25-30% returns in 24 months.

Saying that, I've yet to see a da aproved site worth buying.

 

@mrdobalina me eigher. I know they are around becasue i know people who have bought DA approved and made a decent return... but everytime i had a look it just didint stack up and or the approved DA was a mess.

 

Adam

Read through the thread - I pretty well explain the outcome.
"did it all work out?" well. I didn't go broke if thats what you are asking. Probably more of good luck than good management as it was pretty close at times.
I got through the development and still hold the three properties. They are slightly positive cashflow.

Developing from home is not easy. Developing from abroad is harder.

Blacky

 

Seen some sold with DA, where the value was in the demolition permit for a character/heritage property which would be uncertain or a lengthy process otherwise. Whoever bought it proceeded to submit a new DA.

Example: Sold Price for 41 Ninth Ave Maylands WA 6051

It was in a rezoning area too, so the hard work getting the first DA (building height, plot ratio etc) didn't need to be repeated for the second DA.

 

Blacky
I could be totally wrong, but I think what saved the bacon was the fact that the land was purchased prior to the rise, then the market started rising and perhaps the end values were higher than anticipated ?? Not sure

MTR

 

I don't know who buys these sites for those prices. Maybe my back of the envelope assessments need fine tuning cos I can't see the numbers working.

$850k for 596m2 R40. 7 multi units presumably 1 bedders at 50-55m2 internal living each. Works out to be $127k of land per apartment. Cost to build (with basement carpark) would be close to $180k; so $300k cost for finished product.

I wouldn't have thought end value for a 1 bedder in Maylands is much more than that.

 

This is the end product, 2br sold for $495k - Sold Price for 1/41 Ninth Ave Maylands WA 6051

I think it was rezoned to activity center or something similar. They got a lot more plot ratio in and hardly any restrictions on building height or setbacks. End was 8 largeish units of 2 bedders (most were double storey).

They used the slope to advantage as carpark.

 

Nice. Great that they took advantage of the rezoning to activity centre. I guess you gotta know to look beyond the info that's right in front of you, and know the ins and outs to make best use of the site.

 

I believe the buyer ended up changinf the plabs significantly or starting again, i nearly bought this site myself and i believe its close to completion

 

@mrdobalina - Yes, more than meets the eye. Do agree with the general consensus that most sites sold with DA aren't worth it.

@sanj - Did you think the site costs would be huge due to slope? Obviously wasn't a concern for you. In this case, a newbie like me would also be wondering how much extra it would cost going 3 storey over 2 storey.

Here's the final layout, totally different to DA that was sold with site. They're mini terrace townhouses, with "under" undercroft parking. Great way to get square layouts with the carparks out of the way.

 

The outcome was the outcome. Yes, increased end values helped and ensured I wasn't sitting on losses at the end of the project - however, over the duration of the project everything changed. Building costs increased, land values increased, end values increased.

What saved my bacon was my ability to continue to service the debt through cash-flow. I wasn't reliant on initial capital (or increased value) to see things through. I wasn't servicing debt via either by a loan or cash. So until I could sort everything out, I was able to keep the banks happy.

Blacky

 

I've driven past this site and the design looks great. I'm potentially considering developing a block of land and would like to know your opinion of the builders (Blok) you've used.

 

The builders didn't do the design. That was done but a seperate entity which has since closed.

The builder was pretty good to work with. I would use them again.

Blacky

 

Yes, of course Actually, I cannot find a website or contact address for Blok. Would you be able to direct me to where I could find their contact info? Thank you.

 

I didnt use Blok and dont know who they are?
You have either confused my development with another one, or have the incorrect builder.

Blacky

 

The builder for 41 Ninth Ave is Blok. We have a couple of blocks in this street with the same zoning and attempted to start looking into the developments last year before my desk job became overwhelming. In hindsight it might be a good thing as the market is still tracking down.


CPD built 39 Ninth Ave apartments - 8 units for about $2m and Blok 8 units on 41 Ninth Ave for a similar type of cost. We are finding the capital costs for constructing apartments are still to high and would appreciate any leads on builders with can do a class 2 building, 2 storey plus loft with underground carpacks.

 

$250k per apartment is pretty good considering that slope, basement parking and their size. I'd be happy to pay that if that $2m was turnkey including siteworks.

 

Thanks for your thoughts Myf, I'm not farmiliar with apartment construction costs just yet but knowing that you have done a number of such developments I will reconsider my expectations.

 

I can only comment about Melbourne:

1. For H&L packages 9-15 months...depending on the builder. The contract process with some builders can be mind numbingly slow.
2. For developments (ie. duplexs or units - less than 4) - allow 18-24 months.

The slowest process for non-H&L is council approvals anywhere from 5-8 months.

The other issue is getting the profitability correct..a lot harder than people think. 200-300k might sound like a lot on say 4 unit development worth say 1.1-1.3m...but the question is if you could get that margin on a H+L package why would you bother?

Sometimes the best deals are well deisgned duplexs in established areas...profitability is also good and approvals on the right land much easier.