Perth Triplex Development Diary

Hello folks

I joined the forums back when it was 'Somersoft' when i had just bought a duplex in Carlisle as my first IP.

Intent was to originally build a new unit in the battleaxe and retain the existing 2 units but due to alot of factors (which i can explain later) we finally decided to completely knock down and build 3x New.

Have been spending the last year getting WAPC & DA and after 12 months we are finally ready to go into scheduling and start building in about 6 weeks.

Happy to share our journey, experience, lessons learnt etc and hopefully learn a few things from the experienced developers here!

Will share some project details soon.

 

Good luck with the build!

 

Good stuff @wrexter. I remember when you bought the duplex.

The timing of this project seems good to me. The market is finally showing early signs of picking up but we are at a 20 year low for building commencements. You will hopefully be able to pick up some quality trades. I am just finishing up a build in Cloverdale and some of the trades were sensational!

Who are you building with?

 

Hi @Perthguy.

Yes time has flown by. I've been busy developing my mother's property for her which took a lot of time and effort. Battleaxe build and retain in the front.

Based on another members feedback , I signed up with PRD to get plans drawn up and then went to tender to 3 builders.

Based on all the specifications and costings, I ended up choosing New Choice Homes. They are part of thea Spadaccini Group. So far the experroence has been good. Can't wait to start on site!

What trades are you using. The builder is pretty much doing turnkey, except for follpwing:

- demo and fencing removal
- main floor tiling
- Lighting install
- Landscaping

I costed a bunch of other works too but the savings we're not work the risk and convenience of having builder doing them. All up saving would of be 2-3k for Alot of effort and risk of project delay.

 

Goo luck with the development mate. What return on TDC are you currently looking at?

cheers

 

@wrexter, I was actually referring to the builder's trades. On our job the brickie, plasterer, renderer, ceiling fixer and the grano worker for the garage were all outstanding! Quality trades mean a quality job, so I am very grateful we had so many amazing trades.

 

Oh i see, yes quality trades makes a big difference. Especially brickies, plasterers, renderers, tilers!

From what i hear NCH is a quality builder so hopefully end product is good!

 

Thanks @Leo2413 ! i will throw up costings in the next couple of days and outline all costs and expected sales.

 

Quick questiosn all, i want to edit my first post to add project details, is it possible to edit a existing post? I cant seem to find the edit button

 

Got final finance approval, development is go go go.

Ran into issues with bank as upon valuation of the development, GST was exlcluded in the valuation which meant we were 75K short. GST was exluded because we are are developing on 1 title.

Managed to convince bank to give us approval on finance based on condition that the builder wont invoice final payment until titles are received (the builder worked with us to agree on this). We should have titles well before then.

 

Awesome! What happened with the valuation?

 

Shahin, as i mentioned in your Development finance thread, our bank excluded GST from the overall development valuation because we are building on 1 title (subdivision and split in 3 title occurring during/after construction). This meant that we were short $75K in terms of how much they were willing to approve to complete the development. This was a suprise to my broker because she had not seen this ever done before.

We decide to propose an alternative solution to the bank. The builder agreed that they would not invoice the final 10% of the construction invoice until titles are received. I guess the builder was happy with this to reduce their risk and they approved our application.

I have checked with builder & local council and all subdivision conditions can be met during first month or so after we start construction. I also supplied a letter to bank from council confirming that common driveway and crossover (conditions) can be covered with bond payment but we expect this to be done before we apply for subdivision clearances.

 

The banks excluding GST is not that uncommon for developments. They assume that you will be claiming the GST back from the builders invoice via BAS so won't lend it.

Glad you could come to an arrangement.

 

From our understanding, our broker explained that it was excluded because GST would be applicable to the Bank should the development fail and they need to offload/onsell the properties.

 

That's not my understanding but could come into I guess. Generally when they value in one line (all on one title) they will lend 80% of the construction costs. With a commercial loan it is pretty much always ex-GST but with resi lending it has gone both ways with me.

If you could prove you weren't selling and not registered for GST then a work around like you have found would suffice. You should meet your WAPC conditions as you say during construction so don't need to wait until the end to get titles.

 

Thanks Westminster

Just happy a workaround was found and we can go forward.

Only condition that was placed on our loan was that the bank want us to pay for ~$40K of development costs upfront from our savings and will only pay out from loan once titles are issued. Small bump but manageable.

Should be about 2-3 weeks before demolition can begin and another 2 weeks before earthworks can start!

 

Exciting times!
So you've done prestart and selected everything?

 

Yes i have! was done months ago, was just waiting on Finance approval to kick of development (demolition, paying Western Power & Water Corp fees etc.)

Currently in scheduling stage with builder, should be able to commence earthworks as soon as demo is done!

 

So good to see the old place gone, its time to get to work!

 

yay!

Keep an eye on the selections you made as some of the items may now be discontinued and the builder won't tell you until last minute and you'll need to quickly choose another tile and it will do your head in trying to make it match to the cabinetry which has already been made etc.