Some SDA Properties facades

Discussion in 'NRAS & NDIS SDA' started by RPI, 23rd Dec, 2020.

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  1. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    Hi All
    Here are a few of the properties we finished this month in QLD and VIC. A couple of them were almost finished for several months but we could only do the finishing touches and move in this month. There was another half a dozen that just finished but I haven't got the final photos on yet.

    We moved more than 20 people in so far this month, another 5 on 28 December. 131479735_2812369925688353_9150819748454978917_n.jpg IMG_0364(1).jpg 20201221_174008.jpg 20201221_165840.jpg IMG_2300.jpg sandtone rear.jpg Rosebud_Outside - 13.jpeg
     
  2. Foxy Moron

    Foxy Moron Well-Known Member

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    Nice work @RPI thanks for sharing.
    I am quite intrigued by that second one, in that it appears to be very spacious / generous yard size compared to what I mostly imagined SDA housing to be, and also it has a pool.
    I am wondering if this is in a regional area (just cos of the yard size) and I'm guessing the pool is purposefully aimed at a specific type of client who might benefit from swimming as therapy ? As an investor could you expect extra return for having a pool in your SDA property ?

    My question is - is there much demand for this unique style of offering, or is it more of a once off ? I am in a region where larger blocks are readily available, but falsely(?) assumed you might have to squish people on top of each other to make the numbers stack up for an investor. Cheers.
     
  3. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    Hi Foxy

    That one is in Bundaberg. It's 2 X 1 bed villas and a 3 bedroom house.

    The pool is very attractive for many people in chairs. This place also has a 45m2 rec room.

    We worked with a wonderful group of carers on this one. They really make it a home.

    There is no extra return for putting the extra in. But the returns are very generous so it's worth doing it well.
    This is Bundaberg.

    Each of the villas return $55k a year

    The house $125k.

    So for $235k a year in Gross rent it has outstanding returns. The pool and rec room make it a nicer home and more attractive.
     
    Foxy Moron likes this.
  4. Foxy Moron

    Foxy Moron Well-Known Member

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    Outstanding.
     
  5. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    It's very rewarding in my side.
    These guys and girls lived in a terrible housing commission duplex with a hole cut in the wall between the 2 tiny living rooms.

    We moved over 30 people in during December which was lovley, but Covid delays meant I didn't reach my goal of 500 people moved in last year . Although that target gets reached with all the development we got contracted.

    Really need to get up around another 1,000 this year and somewhere in the 3000-5000 by 2025 depending on what others build.
     
  6. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    There is massive demand but you need to get it right.

    The right design is paramount. The design standards are the minimum to pass. They are too small to be usable.

    We normally only do.sole occupancy units or villas with this many people on one block. But with the right care organisation it can work. I'd never build this style specualtivy. And I'd need to be very comfortable with the care organisation before doing so.
     
  7. felar

    felar Member

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    Hi RPI,

    Thanks for sharing of your information and great experience in this area.

    However, I got confused regarding SDA demand when browsing the Quarterly Report from NDIS official website. Here is the details :( https://www.ndis.gov.au/media/2801/download)

    On page 555 there is a table named:
    "Table P.10 Number of Participants with identified SDA needs by status and SA4 Region as at 30 September 2020"
    It is said there: Total number of participants need SDA housing is15,931, among which14,964 are currently living in SDA dwellings, leaving only less than 1000 with their demand not fulfilled.

    Could you please shed more light on the number provided in previous posts e.g. 28,000; 60,000 etc.

    Thanks again
     
  8. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    Hi Felar

    The way they present their reports are not always the clearest.

    28,000 dwellings was the original estimate based on 6% of NDISP participants being eligible for SDA

    Whereas the feedback we have from people (eg those writing the SDA applications, specialist support coordinators, etc) is somewhere between 13-15% of participants eligible or around 64,000

    p.10 includes people in legacy dwellings that have been classified as SDA for funding. Terrible old buildings in the main. The NDIS, as far as I am aware, will only find out someone wants to move to a new dwelling when they apply to do so. If they are vocal enough in their plan review about their current situation then that could also identify them, but most people only tell them when they are looking at moving and to be looking at moving then they need somewhere to move to.

    In reality we meet people every week who are desperate to get into a new SDA and have nowhere to go. We can't deliver them fast enough. BUT there is empty stuff sitting around. Meeting the standard doesn't mean that the building is actually fit for purpose, or that it's in the right location.
     
  9. felar

    felar Member

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    Thanks for this clarification!
    I am also coming across with opportunities that guarantee 8% return p.a. for 7 years with options of 7 years x 2 extensions.

    Do you think this is viable or sustainable for the guarantee plan to continue into 10 years or 20 years as advertised?

    And what we need to do to reduce the risk when making decisions.

    e.g.
    1, How can we study on the qualification of the relevant organizations e.g. builders, developer, SDA providers.
    2, What kind of standards do we need to factor into the contract clauses when signed building contract (House&Land Pack) with the builders. e.g. SDA enrolment guarantee as High Physical Support or whatever?
    3, Do we need a special builder or developer to do this job?
     
  10. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    We do offer 8% for 10 plus 10 guaranteed, but I wouldn't take it as an investor because the returns are much better. I've never seen anyone else offer that, mostly they say the amount of rent is guaranteed for 20 years because the price is set by the NDIS for that long.

    1. There are lots of people in this space that are sales people or ex NRAS sales people. If they are going to outsource management to a real estate agency then run.
    2. Enrolment is easy to achieve, but it still doesn't mean its fit for purpose. We say no to dwellings every week that are finished but don't suit participants. The majority of HPS stuff we see is rubbish.
    3. Not if you work with a decent provider
     
  11. felar

    felar Member

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    Thanks for your instant reply!
    I might need to clarify a bit.
    1, 8% is calculated based on the total cost of the H&L package e.g. 200k land+400k construction = 600k. We get returns 600k*8% = 48k p.a. And it is said we can finance up to 80% to the valuation from lenders nominated by them.
    The investment is too good to be true considering this financial lever.
    2, If enrollment is not a problem. How to differentiate "fit for purpose" from "normal HPS"?
    3, Why the NDIA does not issue a standard higher to "fit for purpose"?

    BTW: these questions are only to trigger discussion. Apologies for any offence that may incur.
     
  12. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    1. $400k for a HPS house is too low, as is the $48k. $48k is one bedroom in a HPS house. But if guaranteeing it then maybe it's a 2bed plus OOA house and you could be doing that for $400k ish and then allowing for 50% occupancy. Do they give you the upside too, as in more rent if it's full. The way we structure our fixed stuff is it's not just a guarantee, we lease it from you at the 8% on a 10 plus 10 on title. But even in a 2 bedroom you can have 50% vacancy and still get that return.

    2. Extremely different. HPS chairs can rarely even fit past the end of the bed in a HPS standard house. No automation etc.

    3. It's the minimum standard. It means it works for a minimum of people. And in some parts of the standard we would do the minimum, but if every part is the minimum then you run into trouble.
     
  13. felar

    felar Member

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    1, The upside of 8% guarantee is that they also handle the financial part and we can borrow at a similar LVR with the normal residential house from lenders. So this friendly for investors that are not holding a lot of money in the pocket.
    2, I watched several videos from your website and I am clearer on the difference between normal HPS and the house you are building. Apparently, you integrate the available new technologies into the dwelling to significantly improve the livability for the niche social groups.
    3, The standards is only a guarantee for a dwelling to enter the market. Foreseeably, It will be difficulties for the minimum house to sustain its occupancy in the long run when the market is more saturated.
    However, normal HPS builders are likely holding another strategy. It might be easier for them to sell their houses on a broader market, as their construction is less different from normal residential buildings, comparing to yours.

    BTW: Are there any lenders available there to support the constructions if I want to build with your company?
     
  14. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    1. If you are building a 2 bed house you can get finance at 80%LVR anyway. But I get the attraction. As long as the person giving the guarantee has enough runs on the board and is large enough to fund it, plus if they are compliant on the management side and have been through their NDISQSC audit. You need 115 properties under management just to break even in this space.

    2. HPS participants can't move in without the technology. Crazy not to put in, it costs you way more in delayed income if you don't.

    3. Standard builders and the markeeteers don't care whether your SDA house is empty in 2 years time, they already have their comms. Whereas a proper provider is looking at 20 years of management, vacancy hurts.

    Multiple banks lend fine on the houses as long as you can service based on normal rent.
     
  15. felar

    felar Member

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    I am not financially strong enough to play without the bank. Could you please let me know how to build a 2 bed+OOA with 80% LVR support from banks?
    If possible please find someone in Victoria to contact me. Thanks
     
  16. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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  17. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    Make sure the guarantee is rock solid otherwise it's pointless as sounds like the spend is too low to be successful.
     
  18. felar

    felar Member

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    Hi RPI,

    Thanks for your sharing!
    I am really inspired by your vision to build a real home for those people in need.
    And profit is just the by-product on the way and no one can beat this model in the long-run.

    How much for this Bundaberg SDA house cost to construct estimatedly.
    And the breakdown of the cost for 3-bed house and 2*1 bed villas.
     
  19. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    I think it was $1m ish inc the land
     
  20. felar

    felar Member

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    Thanks RPI,

    Do you have any breakdown data of this

    1, Cost of the 3-bed house construction
    2, Cost of the 2*1 bed Villa construction

    Besides,

    How much will lenders value this property both commercially and residentially?