South Brisbane Splitter development

Bought the place on a 'for sale' basis. Managed to buy it waaay under market value.

 

Do you mind giving a idea on the location on the southside?,and how did you buy it under market value,well done..

 

Yeah thought it musnt of been auction. How much of your own cash have you put into it?

 

I have to be careful about this because at the time of purchase there was a little bit of a 'war' going on between the vendor, another buyer and myself. Moorooka is very close.

I was able to get it BMV via same strategies I've spoken about on here but I can't go into detail. But broadly speaking:

1. Be 100% ready to go and make sure the agent knows it
2. Be quick, strong and decisive
3. Work the agent. I basically worked out the vendor's true motivation of why they wanted to sell, then worked out what the agent wanted for himself (imo the agent doesn't always want the same thing as the vendor in a deal...insane i know and highly unethical but that's the reality in many cases) and then devised a strategy to make the agent happy and hopefully he would convey my case to the vendor in the best possible light.
4. Good ol 'Goodluck' never hurt eigher

 

My own cash zero, but used approx 40k of equity. We worked out that we likely already made 400+% gross return on equity as is.

 

Leo,thanks for the area,i thought that may be the location,that area as i know a few that have back too back 2 street frontage blocks still with 70's style 3 bed above 812sqm's on them and some it took 12 years to buy one then the one behind,good area Leo if the numbers are right..

 

@willair woah waiting 12 years is awhile...but yeah i agree there were some great blocks to buy. Not sure how many are lef,t if any, that can be bought at a price that makes development sense.

But yeah as you said if the numbers are right it could be a good deal. I think for us the biggest challenge/risks will be the site costs for this site. Based on initial feedback from builders/engineers it should fall within the realms of 'feasible'...but we'll never know until they lift soil...hopefully the contingency will cover it if need be.

Now if Brisbane has a 'boom' in the mean time..i wont complain about that


cheers

 

You may well time it right Leo,within a klm's of moorooka there is talk of a ten level not sure on the unit numbers but over 150 carparks development on a 1000sqms site ,from what i'm told
in tarragindi,might not go ahead,but i have never seen some many above ten level multi level unit development going up at the same time in the inner south side in my life,and they only stop building when people stop buying,and most of those unit development are sold off the plan..

 

massive.. will be interesting to see if it goes ahead.

 

Pretty full on.
But I remember someone saying they didn't make any money on their 1st development - but they didn't lose any money either. Their point was that they learnt so much during the process, that it was invaluable experience.
Probably had other purchases that made money concurrently though.

 

I think it defientely is good experience...but i would hate to not make a decent margin at the end after all the ups and downs you go through.. But 1 thing i know i personally definetly wouldnt go into a deveelopemt with the attitide that 'if i dont make money at least i learnt alot'....I think the risks are too high to mess around like that really.

 

So how are you going with/paying for holding costs for the project? Eg interest on loan every week

Is this through your normal job every week?

 

Its about negative $80/week which is factored into the holding costs of the project. Gets paid from other business income.

 

Thanks for sharing. Looking forward to your updates. Is this your first project? Are you doing this with a business partner or on your own?

 

Leo be watchin 2 many nathan birch videos. BMV

 

Thanks mate. Have done other small projects with a business partner before but he was really the more hands on one. This is my second project undertaken completely by myself mate.

Cheers

 

I actually haven't seen any of his.

What's wrong with BMV?

 

Yeah, I wouldn't be aiming to not make money on anything - except education I spose.
This will be almost free education for me, keep up with the updates!

 

Nice Leo. Thanks for sharing.

 

All the best for your project.

Pending final signoff by one of my neighbours I hope to be a few weeks behind you in the council queue.

Please keep us updated on your build quotes. We were going to build on a 8m slope in Sydney and site costs between builders varied by 200k. If your market wants it, it may be worth considering adding the extra storey. As the site costs would be the most expensive part it may end up being more cost effective to go to the extra floor.