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Hoping for some direction from the wiser. Gearing up to get into development.

Discussion in 'Development' started by Attila Zoltan, 8th Jul, 2015.

  1. Attila Zoltan

    Attila Zoltan Active Member

    Joined:
    8th Jul, 2015
    Posts:
    37
    Location:
    Sydney
    Hi all. I have just joined the forum and will hopefully be around a bit.
    The jist of my situation is i am pretty eager to get into property development, and have taken some baby preparation steps down the path. Im hoping to get some direction from you guys on whats next. What do I have to learn more about, what should I read, maybe a few basic lists of learn about this, this and this.
    Theres a big difference between people saying 'Steps 1-20: read, read, read!' and 'Read a few DCP's, find out what Geotechnical engineers do, find out about whats required for a Construction Certificate, learn about exactly how refinancing your current loan works'.


    First up some background info on where I stand, and then a request for you guys to help fill in the blanks and point a few fingers to sections of the library.


    I live and work in Sydney. I work in Acoustic Consulting, so I am exposed to the basics of developments as I have to do testing and prepare reports for developers that get submitted to Council.
    I have a basic knowledge of things like the Building Code of Australia (BCA), each Council having a Development Control Plan (DCP), the basic council approval process (apply for Design Approval, get Council Consent Conditions back, then address issues and apply for a Construction Certificate, then once built apply for Occupation Certificate).

    I have studied Mechanical Engineering at uni, and just finished a degree in Project Management. This Acoustics role is my First job in the development Industry.

    In March I bought a property in the Blue Mountains in Sydney. I was looking to use this place as my step into the world of property development. It was structurally sound, in need of a freshen up as fittings remained from the 80's. It is on a downward sloping 1200sqm block with zero landscaping. One or two retaining walls out the back creating one small unused level area. Front yard is also not landscaped that much. So a lot of adding value potential :)

    My plan is to keep this house. Mum is moving up there to retire soon. So my intention was to renovate the property myself, get the bank to revalue it (hopefully at a decently higher price), and use the equity I generate to refinance and take me toward starting my first property with the intention to develop and sell.

    I have had so much fun renovating this house, and have actually moved up there permanently (working in Sydney CBD 2 hours away), purely so I can finish the job quicker, spend more time working on it, all while saving money by not paying both rent in the city and a mortgage on the mountain house. I figure in 6 months time it will have been the wiser plan. Rather than drive, I get the train so I can spend the time reading/learning.

    SO
    At this point I am very excited about getting into property development, with the intention of one day maybe doing it full-time, maybe even running a development company doing small jobs. For now, its on the side, like most.

    I have been putting together a 'cheat sheet' of the development process, but dont know enough yet to complete it. As mentioned earlier, if you dont know what you dont know, you cant help yourself.
    I spend 4 hours on the train every day now, commuting into the city to work and back. I am keen to build up a collection of things I need to learn and be on top of before I jump into the deep end (I hope to revalue my renovation before Christmas and start my journey then).


    I might make the next post my current 'cheat sheet' for what I currently understand of the development process. Please guys can you have a skim through, and pull me up on any steps ive skipped or have the wrong way around. I will number everything to make this easier.

    Hopefully after discussing a few points with you guys, and filling out some of hte blanks, I will have a better idea of what I dont know, and have some direction for my reading on the train :)

    Thanks in advance everyone,
    Attila.
     
  2. Attila Zoltan

    Attila Zoltan Active Member

    Joined:
    8th Jul, 2015
    Posts:
    37
    Location:
    Sydney
    General small residential development process

    TOTAL PROJECT ESTIMATE (18-24 months)

    Finding a Place

    1. Talk to finance broker see what kind of finance you could get in your situation

    2. Talk to Accountant decide on how to do it all (structure as individual or company?)

    3. Prepare a preliminary Team (might change depending on location)- Accountant, Builder, Architect/Draftsperson.

    4. Find an area based on the finance I can get.

    5. Find a suitable property

    6. Talk to Real Estate Agent about what kind of development would be desirable in the area

    7. Seek Finance and purchase the property


    Planning the development (6 months)

    8. Talk to Local Council about Plans (not sure what the first step is? Go in and talk to someone?)

    9. Meet Draftsperson and Builder to set up a plan. Take existing plans. (Do I find ideas, and take them to the Architect saying I like this house, I want to subdivide this land into two, help me make up drawings and plans?)

    10. *NOTE= try organise a ‘turnkey’ contract with the builder. So any extra costs are on them. Also makes banks much happier to lend you the money.

    11. Prepare drawings (4-6 weeks). I assume there will be a lot of back-and-forth action between myself, the architect, and the builder until we are set on a final plan.

    12. Optional to also get rendered drawings prepared to impress council/neighbours

    13. Prepare documents for Council (Is the first thing I prepare a DA? Do I go to the council website and they list what is actually needed for a DA?)

    14. Wait for Council response to DA. Address any concerns and potentially make alterations to plans/drawings.


    Demolition + Building (6 months)

    15. Demolition (can I do this? or are there demolition restrictions/rules? Is this usually part of the builders package?) Anything need to be done before demo? Locate pipes or something?

    16. Prepare Construction Plans. Im guessing the builder starts taking control here. I assume DA comes back from council, they give a bunch of conditions of consent. (Does the builder deal with the conditions of consent, or do I? Just wondering who really is controlling the job from here).

    17. Internal selections (discussions with the builder on all finer details of the house).

    18. Soil checks (I read this somewhere. Not actually sure what it is. After demolition what kind of engineers and other people do I need to get to come and do things?)

    19. Engineering (As above, this point I know nothing about, just read somewhere this is where some form of 'engineering' slots in. What kind of Engineers/Surveyors do I need? Who for? Is all that stuff in the council consent conditions? Details like 'you need a surveyor to come and check exact position of site boundaries'?

    20. Contracts. (This one is also from a list that I slotted in and am not sure what it is. I assume it means this is hte point where myself and the builder write up a formal contract that locks everything in and decides price etc?)

    21. Build House.

    22. Occupation Certificate. (All I know is once a building is built, we need to get an occupation certificate from Council before it can be sold and/or people move in. This as far as i know is a certification process. Thats where my work often comes in doing Acoustic tests to make sure windows comply etc. Is the occupation certificate something standard, or again at the discretion of each Local council?

    23. Get a real estate agent.

    24. Sell house/ rent it out.





    Thats my current list im hoping to refine/fill out.
    I have no idea where to start reading :)

    I have heard the terms 'geotechnic engineer' thrown around before, and know they have to come at some point to survey how the water/electricity supply will be split. Where does that slot in? Also who actually does that work in the end and when? After demo/before any construction?


    Thanks again,
    Attila.
     
    Chabs, Boorune, Starlite and 5 others like this.
  3. SimonKia

    SimonKia Active Member

    Joined:
    8th Jul, 2015
    Posts:
    25
    Location:
    Brisbane Southern Subs
    I would also like to know this.

    I think the steps you have listed have a few issues, hopefully someone who knows can help.

    As I understand it: council don't give a crap about subdivision of a single property and building of a dwelling house and will not be interested in talking to you about it.

    If you have to subdivide I think your first step is to get a rough layout of the size of the house and go to a town planner. They should be able to know what building can fit and if there will be problems with sewer, storm water, etc. The builder can also do an initial site survey at this time. If the town planner says it looks good, then you go ahead with the soil tests. Then you get agreement with builder. Then you go ahead with sub dividing and once the title is stamped: the builder starts?
     
  4. Ichigo

    Ichigo Well-Known Member

    Joined:
    21st Jul, 2015
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    Location:
    Perth
    Dial Before You Dig (http://1100.com.au) to locate water, gas, electricity and communication links/pipes/wires.
     
  5. Leo2413

    Leo2413 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
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    Location:
    Sydney
    Great list you made!

    I think number 5 is one of the most important from my perspective. A suitable property to me means the feasibility stacks up and the profit is there. Now all you gotta do is make sure you keep as much of it as you can, as you go though the DA/construction process.
     
  6. mrdobalina

    mrdobalina Well-Known Member

    Joined:
    22nd Jun, 2015
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    Location:
    On the ski slopes
    Great stuff. The more preparation you can do, the better you can manage the risks. Don't get dogged down in analysis paralysis though.
     
    Jessproperty likes this.
  7. bob shovel

    bob shovel Well-Known Member

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    Location:
    Somewhere in the land of Oz
    Geotech eng is for testing the soil you'll be building on. check what's under your feet to know what you'll be up against, rock clay sand etc. this will be of use for designing and structural engineering sides

    Water and elec you'll talk with the supplier in the area.they'll come along and provide a service connection, then when you'll get a Plummer/sparky to run the service to the house.
     
    Attila Zoltan likes this.
  8. Attila Zoltan

    Attila Zoltan Active Member

    Joined:
    8th Jul, 2015
    Posts:
    37
    Location:
    Sydney
    Thanks for that info. So the water and other services I organise myself after the development has been drafted up, so I know where I want to take the service to.
    Who does the geotech stuff? The builder? Or do I do that? At what stage does this happen? After demolition when the builders engineers are planning concrete substrate etc?
     
  9. TML

    TML Well-Known Member

    Joined:
    4th Aug, 2015
    Posts:
    113
    Location:
    Sydney
    Nice thread Attila. Recently joined this forum and have great interest in property development.
     
  10. Jessproperty

    Jessproperty Well-Known Member

    Joined:
    21st Jul, 2015
    Posts:
    49
    Location:
    Sydney
    A Geo tech report is good to have once you have DA approval and are at tender stage so that the builder knows what soil he is working with and can quote the build appropriately.