Mindarie WA: Blackminster Joint Venture 4 apartments

So far our 2 buyers are in the downsizer demographic.

First sale was to some local empty nesters (50+) who already live in the suburb.

Second sale was to a country retiree (60+) who wants to move into the area.

Neither buyer was concerned about the any lack of elevators and are happy to travel the one flight of stairs from their garage to their unit.

So that is the top 2 sold. Now we need to sell the bottom 2 which are the 2 storey almost townhouses. The pressure is greatly reduced with 2 under contract though

 

Must be a great feeling, well done Myf.

 

Well all our units are now sold or under offer. Settlement on the last 2 haven't happened yet and we are still conditional but I wanted to do an update.

Back in 2014 our feasibility used the following data

As you know 2014 was a much better time for the Perth market but we used ultra conservative figures to mitigate risk and I'm glad we did.

As we haven't settled the final 2 yet I will just give total sales figures achieved which is $2.57m.

The first 2 sold quickly and then it was a very quiet 3mths of mild interest but no offers. Then the last 2 went under contract in the last two weeks. Thankfully the sale of the first two almost paid off our commercial loan so the bank was ok about extending our loan term.

I'm sure @Blacky will come in and share some thoughts but for now providing everything goes well with finance with the last 2 contracts we are almost ready to end our JV

I will say that we have had a fortunate JV relationship. We hit a lot of speed bumps along the way but neither of us are panickers and we dealt with it all in our stride. @Blacky is a rock

 

now all i can think of is Black Rock. Also, congratulations to the both of you and thank you for keeping us updated.

 

Great project and shows that you can make money in a falling market.

 

Thanks for sharing with all of us Black n Westy.

 

“Ready” in terms of the project... yes.
It’s a bitter sweet moment really.

It’s been a really great JV. The project has thrown us plenty of curveballs but we have got through each one without too many scars.
Our skill sets compliment each other very well I think. Which is more luck than good management.
JVs are always risky. Finding the right business partner is never more important. You literally are attached at the hip. Trust is 100% paramount as is communication.
I couldn’t have found a better partner if I dreamed one up.

Personally I think we built a fantastic product which will stand the test of time. Disappointingly the market moved against us at the end. However we still hit our Feaso spot on target.
I wish we had of kept that napkin from when we first visited site, walked to the pub for a beer and chat and mapped the numbers. From my memory it was more accurate than our detailed analysis.

Despite some early cost blow outs (mostly due to a far more challenging engineering requirement than we initially thought and hitting the mother of all rocks) we were able to contain costs fairly well. Spending your contingency the first week on site is always nerve wracking.

Everything was slow. From the planning and approvals, to the builder to the banks. Yet - we managed through it.

For me, watching the development from overseas was a test. Not knowing fully where things are at at times, and relying on email, pictures, txts and phone calls tested my personal control issues. However having a trust worthy partner and my brother on the ground was very reassuring.

I think one thing which really helped was an early document we drew up which clearly detailed roles, responsibilities, and decision making protocol.
When we hit rock, a cost of about $50k, WM had to make the call to remove it. No time to consult with me. Make the call and inform. Im not sure how she felt making that decision, however she knew it had to be made and just got on with it. Manage the crisis and let us know once sorted. The decision in hindsite is easy. There’s no option but to proceed. But committing to a large bill, is never easy. Made harder when it’s not (entirely) your own money.

WM’s eye for detail and taste for completion items is second to none. The finishes on these properties are excellent. I learned a lot from her on how to add touches, small cost, but really adds value. An more honorable member of society you would be hard to find.
‘A rock’ doesn’t start to describe her.

Like I say. A challenging yet thoroughly enjoyable project. I’ve learned a lot and am very proud of the development.

I’m relishing the end. But will miss it.

Blacky

P.s once we settle, and have paid all expenses I’ll update on final numbers.

 

Got to love those napkin numbers

Congrats great outcome

 

Well done guys. Imagine the profit if you didn't hit the contingency budget and the market wasn't so bad.

Was this limestone cap rock from the beach nearby? Would a full 2k geo report found it?

Probably trying to ask how would you mitigate risk when buying a lot near a costal or any other area? 50k is a large blowout.

 

To mitigate risk I think the follow items should be carefully kept in mind
- slopey blocks - building on a flat block is much less problematic
- cutting into slope is what undid us. The issue would have been much less if we hadn't cut back further into the block
- land developers will always go cheap and try and get away with stuff. Even in Catalina you can find largish limestone boulders less than 1m from the top when you are trenching/footings

 

Well done Blacky and Westy! Great result, looked great!

 

To be honest I think even if we had of known about it we would have proceeded in any case. As the numbers still worked.

Or, it may have scared us away completely and we would never know.

$50k blow out on a project this size really isn’t hard to achieve. You just need to be prepared for it.
Fortunately the bank stumped up 50% of it. But we still had to dive into our pockets for some cash.

All part of the game.

Blacky

 

This is true - the numbers still stacked up if it was in the budget or out of the budget. So we probably would have proceeded if we had found it during our due diligence period.

We had a choice between this site and one in Coogee. I'm still glad we chose Mindarie over the other one.

 

Just found the 2 townhouses on RE.com.au. Great location and Stunning finishes!! Loving the timber overheads. Bravo!!

 

Bit of an update on this.

One of our subject to sales has fallen over. Quite a shock as they were a low risk (to us) buyer. The buyers were a mature couple in their late 50s/early 60s and their marriage has broken up after 36yrs of marriage.

Back to the drawing board to find another buyer for that apartment.

 

Seems to be more buyers in mindarie at the home opens from what I’ve seen, with a few going under offer last week.

 

Its unfortunate to hear. Have you started having home opens again? and if so, is there more demand than a few months ago?

 

New buyer has been found and we're back under offer as of Friday.

The buyers who had to sell their house have finally managed to do that and so they are unconditional now.

 

Best of luck with this buyer Myf.

 

Great news.
One less house in Mindarie that my reno has to compete with