Property Dev in south east suburbs - Melbourne

Discussion in 'Development' started by nataasha, 24th Jul, 2019.

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  1. nataasha

    nataasha Active Member

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    Hi All,

    I am so excited to be a part of this forum. I am really looking forward to connect with you all :)

    My partner and I have bought a land ( 890 sq m ) with a old house in the south east suburbs ( GRZ2) of melbourne. There is a house exactly opposite the house we have bought with 3 townhouses on it, so we are looking to replicate that. We are absolutely new to property development, so appreciate any help you can provide us.

    I need to know where to start.

    - We are looking into a 3 unit/townhouse development

    Some questions we have

    1) Should we do the project on individual or company name.Can anyone here share details of an accountant who has expeience in this space?
    2) Architect or draftsman: We have heard that a draftsman can do the drawings as well, what are the pros and cons of using an architect vs draftsman?
    3) Do we really need to engage a town planner or we need one only to get VCAT approvals?
    4) What would be the overall break up of costs of building 3 townhouses ( 4 bed , 2.5 bath) , we plan to keep one and sell 2.
    5) Should we submit the plans first and then organise our construction loan or should we get the finance pre - approval first? SHould we go through a bank or privately ? Pros and cons of going via bank vs privately ?
    6) Any other hidden costs besides engaging a accountant, architect+council fees, demolition costs, builder , sales fee, GST on sales? Do we have to pay 5% extra to the council if its a commercial project of 3 and more?

    If anyone here who ahs experience can throw some light on the above and share contacts of accountants/ architects/ townplanners/builders etc. Please.

    Regards,
    Nataasha
     
  2. S.T

    S.T Well-Known Member

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    Look up the people who did the development opposite from council records, should help answer quite a few of your questions.
     
  3. nataasha

    nataasha Active Member

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    How do I get their details?
     
  4. Mike A

    Mike A Well-Known Member

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    @nataasha structuring from the beginning is extremely important.
     
  5. The Y-man

    The Y-man Moderator Staff Member

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    I'd suggest calling the council in the first instance.

    The Y-man
     
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  6. S.T

    S.T Well-Known Member

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    Some councils you can look up planning permit details from their websites, might depend on how long ago it was - or just contact the council.
     
  7. Sackie

    Sackie Well-Known Member

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    You don't absolutely need one but if you want to mitigate alot of risk for various reasons I'd be engaging a good town planner. It's a no brainer to me.

    Also I'd be wanting to make sure you can get finance for the project before wasting too much money on plans etc. Don't forget soft costs aren't included in finance.

    If you can get a good developer from Melbourne to hand hold you along the way then it'll reduce alot more of your risk.

    Enjoy the rollercoaster.
     
  8. nataasha

    nataasha Active Member

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    @Sackie: what do you mean by soft costs?
     
  9. Sackie

    Sackie Well-Known Member

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    Costs which are not considered part of the direct construction. Soft costs include architectural, engineering, engaging consultants pre-build, legal fees, and other pre- and post-construction costs which won't be included in your loan and need to be paid from your own money.
     
    Last edited: 24th Jul, 2019
  10. shorty

    shorty Well-Known Member

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    It's difficult, you have to take some risk.

    Maybe find a design and construct builder and have a chat about options and potential costs. That will give you a ballpark. Or get the plans from across the road and ask a few builders to give you a rough quote. Add 10 per cent to that and then see a good mortgage broker and see if your can borrow that.

    Then check out a few drafties, pay them a few hundred each to come up with a site plan so you can at least set what's achievable. Your site might be more limited, or you might have more freedom depending on things like power poles and trees. By sitting with the drafties you'll also get a feel for which ones you can work with. Builders too. If you have the slightest uncertainty about a builder think very carefully, because once that contract is signed you're basically at their mercy .

    Do tons of research.
     
  11. Eleven

    Eleven Well-Known Member

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    Too early to be talking to a builder unless you want design and construct from them....at a small cost to you.

    Stick with drafts person, they are generally cheaper. A good drafts person that knows the area, does not need a town planner. I.e. will satisfy conditions of res code and councils interpretation without help from others.
     
  12. nataasha

    nataasha Active Member

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    Thanks so much for your responses so far. Is it better if I do everything through a builder design + condstruction or is it better to rope in an architect or draftsperson.? What are the pros and cons of each approach?
     
  13. nataasha

    nataasha Active Member

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    @Eleven : What are the benefits of doing everything through a builder? Will it be more expensive?
     
  14. Eleven

    Eleven Well-Known Member

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    Yes, possibly more upfront. However it may save you time and money overall. As we can identify cost savings and help clients minimize build costs. I.e. design and/or materials listed on both engineering and architectural drawings etc.
     
  15. Tufan Chakir

    Tufan Chakir Well-Known Member

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    Architect - Drafter - Planner???
    How much is the development worth? What are your expected returns?
    Ask that, then ask who or what combination is best suited to meet your needs. Ball park costs are going to be about the same, and in the overall, big picture they will be tiny.
    Get a planner involved from day 1 to help - or run it. Assess the site, input to the designer (architect OR drafter), run the application. Council planners treat planners differently to others and there will be a benefit. Yes, anyone can lodge an application, but simple advice - horses for courses, and do it right from the start.
    No, you don't need a builder at first, unless you want to talk to one of the "specialist" unit builders about a package deal.
     
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  16. Sackie

    Sackie Well-Known Member

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    Something you may want to consider at some point is using an estimator. I'm not too sure how many ppl engage them but I like to use estimators to reverse engineer a tender so when I send it out and quotes come back, I will know what's good value and what is expensive.

    The estimator can also specify cost effective materials to use, design ideas etc. So all the builders will be quoting for the same specs. I also state if they use similar but different specs for certain items which will cost them ( and me ) less, then I'm happy to have it in as an option.

    I find this approach is a great way to get builders quoting apples for apples, control the build cost and much less wiggle room for variations later on.
     
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  17. frank22

    frank22 Well-Known Member

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    Hi Sackie
    Do you have any estimator you can recommend and how much do they charge
    I am building a single storey 177 Sam dual off
    Thanks
     
  18. Paul Mete

    Paul Mete Well-Known Member

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    Building Designer in tandem with an Expert Town Planning Consultant is a very good start.

    Should be a cheap toe in the water price exercise to get the property fully assessed via. a design.

    You might be surprised by the results as often the other side of the street can yield different solutions. If north is now to your rear then this site is effectively more ripe for development. Conversely, if north is to the front it is less "developable" (sorry I invented this word).

    Get it fully assessed!

    PAUL
     
    Last edited by a moderator: 26th Sep, 2019
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  19. Tufan Chakir

    Tufan Chakir Well-Known Member

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    Try Bluelevel Estimating - fixed pricing for various standards of estimates. we've used them a few times. Figures seem reasonably accurate
     
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  20. Redwood

    Redwood Well-Known Member

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    Hi there

    Congrats on your purchase.

    Too many questions to answer and you need specialists in this area to assist. The structure will depend on your strategy / intention.

    For a building permit get a couple of quotes and estimate a 12 month timeframe and ensure they have done something in your area.

    If the house is in liveable condition you should be able to get an investment loan not commercial as no planning permit in place.

    For a construction loan you will need the process up an running - planning permit, building contract, feaso etc. Banks are very picky about construction loans so you may need to go outside big 4.

    I believe you are a couple of months in so good luck as it will be a rocky ride!

    Cheers Ivan
     
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