large subdivision project strategy

Hey Guys,

I have come across an interesting development opportunity, Approx 5.4 hectare of bare land in QLD, good area close to all amenities, public transport etc. Plan is to complete all civil work and subdivision ready for sale to builders/investors and home buyers.

After digging deeper into this development, numbers look to stack up nicely when subdivided into 35 lots of various sizes including duplex/dual occupancy lots, overall 35-40% net profit conservatively.

So, I haven't previously undertaken a development of this flavor and size and unsure of the best strategy moving forward in regards to financing, jv etc.

Has anyone been down this track before? Any advise and knowledge would be greatly appreciated.


Many thanks,
Mark

 

I'm confused, so you have some experience as a developer but not to this size?
What is your question? Are you looking for advice on how to proceed in property acquisition or if your hypo stacks up? or if you are looking for brokers for financing the project?

Not sure what your actual question is...

 

Hi Mark,

I’d be happy to assist and sounds like your feaso might need a review.

Cheers
Matt

 

Exactly this. Sounds like you need to speak with a development manager.

 

Hi Mark, sounds like fun.

Numbers need to be looked at, land subdivisions are different to other developments, in that with a townhouse/apartment development the build costs are more important and if its in an urban environment the services are almost assumed to be abutting/nearby. For a land subdivision the services are the most important element (in my opinion). If your site is 'out of sequence', and the services need to be built up in abutting sites to get to yours, then you could easily lose a lot of money on holding costs waiting the years for it to happen, or spend big to connect early.

I do full feasibilities on 2 to 5 land sub sites a week, and can tell you most dont make an acceptable profit. To clear '35 - 40% profit conservatively' on a 35 lot subdivision sounds amazing. I would be checking, and double checking your numbers, because it almost sounds too good.

How are you preparing your feasibility? The way i would recommend would be to get a sub design/concept done, have a guess of the levels and fall of the site, get a mock engineering design done (remember generally drainage/sewerage falls downhill/ do a dial before you dig to see where the external mains are), then ask the engineer to cost up the roads, services, contributions etc, then add your admin costs, sales, marketing, professional fees, finance, gst. Dont use standard construction costs per lot, as it can vary. Im looking at one at the moment that will be under 40k a lot, and have looked at others that are up over 120k per lot.

Good luck, keep us posted, and reach out if you want to discuss.

 

Hey @Mark_y , any progress yet?

 

Hi Tom, no significant progress at this stage

 

Not sure how you would get a loan if you have never developed??