Hey Thunder great story so far. It looks like you bought the land with 10% deposit is this right? Is this advice your broker gave you or a personal decision, I'm getting advice to come in with 20% across the board, can you shed any light here? Also running your original estimates to calculate profit margin, I came up with 22%, what did you get on your original figures? Cheers
What stage you up to Thunder? Mine is starting the 2nd story frame - it's taking longer than usual because of this weather, told you it's very unpredictable lol.
Hello all, Apologies for not updating our thread, it’s been a challenging 6 months but we’re finally moving forward on our project. Excavation for the sewerage and storm water started last week and we have today received our building permit. So we have a block of dirt with a trench woohooo! The project was hit with 2 significant delays, the first was a rookie error on my part where I let the draftsman fit as much onto the lots as possible and I lost sight of my budgeted sqm. Turns out to keep the design with the extra 4 sqm’s per lot would have required the sale prices to break some tough records to achieve 20% return. So we swallowed that pill, learnt a lesson and went back to council with a smaller version of our design. It still looks good but that timing put us back about 2 months. On top of that I injured myself and had to go through a lengthy legal battle with my employer so we decided to put the project on hold so as not to overextend ourselves while I was unable to work. I’m still only at half capacity for the foreseeable future and all the insurance in the world didn’t protect us. Thankfully we had deep pockets to fall back on to cover our holding costs, and gee whiz bummer I guess I’m now officially a part time developer as well J With that all now in the past we had been busily trying to finalise the working drawings and builders contract to get our finance ready to go. All is well and we are moving forward. I’ll update my figures shortly but we’re pretty much still in the same profit ballpark. We plan to hold one and sell one, so I need to recalc the tax’s which were overestimated, plus with having my income reduced by half the tax brackets will change also. To summarise, it’s a moving feast and as long as our numbers are still showing a profit, we’re content to get the first one under our belt reasonably unscathed (fingers crossed). Another learning along the way was with the team we picked around us. You just don’t know how they will perform until they’re put to the test. We now have a new lawyer and mortgage broker, but on the upside, our builder has been just fantastic in teaching us the ropes. We’re also working with a family member (who is an REA) to select and negotiate with a local REA so we can be arms length. I think this has been one of the best decisions to date as the discussions are positive and we have a potential buyer.
Lots of ups and downs by the sounds, hopefully the ups outweigh the downs by the end. Thanks for the update.
