Officer South House and Land Deal - using very little deposit

great reply.

would you care to estimate the profit breakdown for the land and house component?

are we making the builder rich, even in a rising Melb property market?

 

this was also a good read New vs Old - What do you think?

 

Just working on a pearler of a deal at the moment.....400sqm block of land for 185k.....build cost about 190k turnkey for a 4x2x2 in Vic.

Rent about 450pw.....end value on completion 450-480k.

The issue is I am in a ballot for the land!

 

I can you give you my real life point in time example in pt cook

Land around 195K -- 350sqm, then Build was around 145K (167sqm home) 4X2x2. I sourced the builder myself and did some minor outdoor stuff etc. Build and land purchased without loan. Also some mis exp say 5K. Total was 345K. The total selling at that time was around 385-395K for that size and lot (home and land together).Hence when I found out a logan granny was 160K you can't blame me for thinking it is exp. Approximately made 35-40K. and it was hanging there for a while. Fast forward 2 odd years it can now be sold low to mid 500K

with H&L there is build (home and land bundled together from developer and builder - say a Simmonds, AV Jennings, Burbank). Or you buy the land and do you own build (other custom builders, negotiations with the volume builders or even undertake some of the building work like landscaping or fencing or driveways) that is where the savings are. Also you have the time (1.5 years till being titled to do your groundwork etc)

 

you sure you not one of those guys camping outside rockbank dev office in the queue? was in the news of some guys doing that.

http://www.heraldsun.com.au/news/vi...1/news-story/c4427a6a3d20eccf0342fd2c52137b85

 

Hey Melbournian...no need...I looked at your deals and they seem fair dinkum.

Just has a friend from Sydney fly down to Point Cook...and you are looking at high 5s for a house and land package.

I feel that Werribee....over time will also go this way. I remember saying this about 12 months ago and I got laughed at and trolled....now the laugh is on those who laughed.

Keep doing what you are doing...there are others like Cactus, Connor, etc who are quietly going about their business and making money.

From some like Cactus....I think I have counted about 5-6 developments either done or underway....that is about 500k in about 18 months. How many people can do that?

 

That is pretty damn good in 18 months..... go Melbourne you beautiful thing..... I used to say that about Perth....

 

I'm out of the H&L game, that was a couple of years back. Trying to do some other stuff down north side.

Nah dare say you're on top of your game Werribee, Hoppers, Geelong . I did go a few times to look how officer is doing - they are selling for those prices and renting for that ranges. A family area. I call it as it is better than being in denial on places that are crap and talking the opposite. Population growth is still booming in melbourne. I went to my double block which I rented to 10 Indians and they're asking if I have another house they want to rent it as they have mates coming in through AirAsia (those who mock that it ain't worthy enough to fly to brisbane don't realize that it connects just about the all the major cities of Asia from the non main cities in likes of Indonesia, Cambodia, china and india etc)

 

I agree about what you are saying below...access routes are really important for example...Airasia....Jetstar...Tiger....and I believe now Scoot fly out from Melbourne.

The Asia dollars are a serious advantage....the Indians are going to push up the prices in the Western suburbs of Melbourne significantly.

Looking at more deals...and 85% of them are in Melbourne...the issue is getting land...

 

Yup when you got people camping, auction rates 70-80%, huge population growth (I don't see why it would be flat in some of these H&L areas. When PC ppl think Overseas - they always related to mainland china ( cashflow restrictions) when a lot of big buyers of real estate in Melbourne are from Malaysia, Singapore,Hong kong, india, Sri lanka etc. One indian family i know from Malaysia dropped by and put a deposit on 10 H&L packages with and/or nominees (and onsold them before to all their relatives).

Popular land estates sell at breakneck speed across Melbourne - realestate.com.au

I went to one of those western estate earlier in the year, and there were people camping (outside) for the next release of development estate. Back in 2008/9 GFC time, you could buy it in the office,and the sales agent would be giving you coffee and cake and throwing some bunnings vouchers to seal a deal.

 

Granny flat in Brisbane.. we don't have any info from the poster the details so we shouldn't go into details of our debate. The rental is $450, could possible have 2 kitchens and firewall etc to increase cost, and frankly I don't know the sqm...poster calls it granny flat, but it could be a 2unit+ studio...

Thanks for clarifying. I am not to discredit any of your numbers, but just wanted confirm the gain is coming from Land or the House... I am really saying the growth is mostly from the Land and not from the house construction that's what I am saying.
Your numbers are better that the example we were talking. your increase is over 50% Versus the Point Cook house median increase was about half of that..... If this represent your land as comparable
Lot 2735 (26) Coastwatch Road, Point Cook, Vic 3030 - Property Details
Then I would think you made $100k from the land and $100k from the build, the times you held .

 

all good man I'm all for learning - that why if i see something amiss like those granny flat in logan(you question or challenge them hence you only learn from that experiences of others if it was ex or not). I myself have done a bit research on grannys as I have a big block and examining putting 2 X grannys in the back though for 80K (2 bed units around 80sqm each)

Different estates different prices though some estates maybe higher and I was really hands on (I really pushed the price down on the build by getting my kitchen from overseas, doing some landscaping myself with hired help) but we will see I am putting one ip on the mkt this month for sale.

 

This.

Sometimes it can be a long wait though. From initial deposit/s to an actual tenanted property. Sometimes years.

This is one of the advantages of buying established. Settle on it rent it.

A lot can be said for doing both though. Buy a couple of established properties elsewhere while you wait for the Land to Title or the new build/s to complete. Funding permitting of course.

 

For record....the one I am building in Geelong is 118 sqm inclusing garage it is a 3x1x1.

I will have this built turnkey with landscaping, fencing, letter box, clothes, AC, etc line for less than 160k.

The land cost me 97k.

SO total for H&L was 257 odd and just got assessed at 330-350pw rent.

 

You are right.
I should mention that i already have 2 in progress and i need atleast a 9-12 month wait until i settle or start to build the third one. Hence the above said strategy suits me.

Also, if u need to find something ready to build,you are paying premiums.

Regards

 

Agreed, i really don't mind the wait till titles.. Just a 5% deposit and getting the benefit of nice equity gains without spending a cent on holding costs... Can't complain.

 

what's the difference is this approach to OTP then? You're playing market direction arnt you?

What is the exit criteria if suddenly the market turns, and you can't offload and the land component is discounting? and that your time is up and you have to build or sell the land at a lost?

 

build and rent it out like I did in pt cook

To be honest, I am surprised at the growth of H&L - it wasn't always the greatest growth option but when you have huge population growths (and people who can only afford 300-500K) and want a house and got kids - these areas. you got people camping out to buy land lots. I reckon @sash is in this ballot.

--------------------------------------------------------------------------------------------------------------------------
Woodlea - The community, which will be eventually home to 20,000 people, was originally sold via a ballot system, but reverted to the standard sales method for the fifth release because Mr Dean assumed the high demand had been fully absorbed. He was wrong.

“We had people camping out for days, which was great PR for us, but not great for the buyers,” he said.

Since then, Woodlea lots have been released via online registration. The process works like this:

• A couple of weeks or so before a new release, buyers who have registered their interest are notified of the release date, which is always on a Saturday.
• On that Saturday, blocks are released online at noon and would-be buyers compete online to be the first to secure an appointment that will give them first dibs at buying the block.
• Would-be buyers are then issued an appointment time to finalise the sale for the following Saturday.

 

I'd build and rent

It's not different to any market...any suburb can turn, as they many have done.
Also if my figures don't work the the climate when I initially purchase the land, ie acquisition costs VS yield.. i don't buy it.. The capital gain of this strategy works in a rising market, so you need to get your DD right. Just like any other investor, in any other market.

 

Clearly it has been spectacular, population growth, immigration number 1 at the moment, but that goes for Melb market, anyone developing is going to be making money.