South Brisbane Splitter development

pommy, post: 143057, member: 3720"]
Hi Leo, do you mind if I ask a few questions: @pommy No problem but I’m only an amateur at this game mate.



Is this your first property development? Have done a few in the past with a partner but he was the much more hands on one really, probably he was 80% hands on so I didn’t really learn much, I was more or less a money partner. In the last couple of years to now I have taken on 3 projects by myself, not including quite a few complete cosmetic renos and 2 structural renos. (btw i dont like structural renos.. would rather just do a development).


How many properties did you have to inspect before seeing this one? The exact number I honestly can’t remember, but I know it would have been between 10-20. I just made sure I knew the area really well so when potential deals came on the market i could do a quick feaso to see if it was worth further investigation.


Any tips for selecting a site for development when you are live in another state (says you live in Sydney in your profile)? Did you keep flying out and viewing lots of different sites?

Well this is what I did for my Brisbane developments:

1. Absolutely first thing is to determine realistically what finance you have available for the development because this will determine the size of development you will be targeting. This will save a lot of wasted time from looking at sites that go way past your finance ability. (assuming you want to take it all the way from DA, Build to hold/sell. Because some people I know get DAs for sites they know they can never finance the build but want to on sell it to a developer for a profit.)


2. Once I had a good idea on finance, I did some research to see how close I could develop to the CBD of that particular state, where the size of the deals matched my finance and the overall numbers of the deal made sense profit wise. (rough feaso done here)


3. Once I had chosen say 2 or 3 areas tops and knew them well from REA, reports, forum chatter etc, it was much easier and faster to see a potential site advertised, and be able to pounce faster than others. Both of my recent sites in Brisbane i bought site unseen. I based the decision on 1.The site was in the right area, 2, met the zoning requirements (spoke to council over phone about the site and also flicked it to a town planner to have a look). Also used maps to check site slopage, Dial before you dig to check locations of services, easements etc. 3. The initial feaso seemed to stack up when i put in all the numbers I had plus a contingency. This also means i knew it was very important to buy the site at the right price. There are generally 2 major costs to the development, the land and the build components. I offered quite a low price for the house (and to my amazement it was accepted). But i guess the important thing that i took away was that you really make your money when you buy the place. So buy well and at a good price. It can take awhile sometimes, and be very frustrating... but whats more frustrating is rushing into buying a site, spending 1-2 years on it with all the stress etc and not making any profit. So don’t rush.



How did you know this is a block you can likely split? I was roughly familiar with the LEP, basically size and frontage. Then when i thought i had a winner, quickly checked with council via phone and town planner.

Just a call to the council with the address? Look at similar lots that have been split in the area and check out zoning maps? Yes and yes. Perfect. Rp Data also shows this. Say you want to develop in Chermside, just pull it up on RPdata and have a look on the cadastral view to see what developments are in the area. Gives you a great idea of not only what is being built in the area, but most likely what type of product will be most profitable for the demographic in the area. Cos if it wasn’t, you wouldn’t likely see so many of that type of development in the same area. So it’s kinda an extra confirmation to you during you DD stage .


Sounds like you are adept at negotiation to get a good price - did you learn this through real estate or other business or just that way inclined? Any tips, books to read etc. for this?

I don’t know about other people but for me, this is what i did. I bought some books on general negotiating and also property specific negotiating and studied it, made notes and then tried to apply what i learnt in a practical sense. After a few times it got easier and easier. I also think the market is really important. If you are in a boom market, ACR are at an all time high, people are going nuts buying, then obviously its going to be much more difficult to negotiate strongly (and you wouldn’t want to be buying at this time anyways). When markets are in the 6-9 o’clock phase i found it is 'easier' for negotiating in your favour to work generally. But here's the thing i also found. Even in investor-favoured markets eg 6-9 o’clock, great deals generally wont just fall in your lap time and time again. So having some understanding of negotiating, tactics, some strategy can really help. Even if it helps only 20%, in the grand scheme of things when you have millions upon millions on the line in say a 10 year period... it can really add up massively imo. Also, i think partly being a good negotiator is an innate talent some have. But that doesn’t mean you can’t develop good negotiation skills via books, experience and anything else to help you along the way.


Sorry for the long response... hope it helps.

 

Hey Leo, can you tell us if they gave you any indication how long it usually takes, and how long it's been?

 

From what the town planner tells me on this proposal, should be between 1-2 months. It’s been a month already... but Xmas was in the middle too... so yeah... I know I’m being impatient..

 

It's understandable.
I wonder how some of these government processes get done at all. It's good when you get on to someone who seems to know what they're talking about.

 

Watching with interest Leo. I'm hunting for a splitter (easier said than done when the world is doing the same), but also waiting for my town planner on a FNQ project.

Amazing how hopeless town planners have been in responding to someone (me) with itchy fingers and big aspirations.

 

Hi Leo

Thanks for your detailed reply. It is great for me to get that level of insight. I have not decided whether to make my first IP a development or simply a buy and hold. I was leaning towards buy/hold but stories like this are quite inspiring. And I guess you have options at the various stages e.g. buy BMV then rent it out and you are up. Then you can split it and then sell and you are up. Or go the whole way and develop.

Good luck and hope you get that approval very soon.

 

Yeah I've learnt to expect a certain level of laziness and incompetence from govt organizations now.

 

@Bran The problems town planners face sometimes is many people wanting free advice from them time and time again without actually ever engaging their services so really wasting a lot of their time.....so i'm sure they get frustrated and lose interest at times..Just gonna convince them your a serious buyer and wont waste their time really..

Where are you looking for splitters? If its Brisbane.. i'm not sure I have seen any stack up for a long time really... would need to be bought at a really good price ..because going from 1 into 2 from what I have seen in Brissy just isn't profitable enough at the moment.. Unless its really bought at a good price and in a good area that will be able to get you that 20% plus return..But if others know of places where splitters stack up in Brissy atm i'd love to know.

 

@pommy Well for a first IP, I would think going straight into a development is quite full on really. Not saying you cant do it, but just make sure it matches your risk profile so you know what your in for. Also, if you don't have the finance for it, then you don't even need to contemplate it anymore. You will roughly need about 30-35% of total costs. So yeah, see what level of risk your willing to accept and then decide what strategies are all good for your situation to get you started in the right direction. Then choose the strategy that most suits your situation/level of knowledge at this point in time.

Good luck mate

 

No, not Brisbane. Although I do look all the time.

One town planner hasn't even responded to my email query, two phone calls and a follow-up email. He's off my list forever.

The other rang me today and had a good excuse. I wasn't bothered except she set the deadline, then didn't meet it. Mind you, her second deadline (today) hasn't been met yet either.

This is like my current building work - I'm slowly building up a team, albeit with small jobs initially. I'm not interested in a big project with people I haven't worked with before (although my 7 unit development became a potential 21 last week after a cohesive meet-up with someone I've never worked with)

 

Woah!! Potentially huge difference... did it stack up on the 7 units? And if it did.. then I can only imagine if you can get 21 in....would love to know how that turns out @Bran . Are you OK to finance the build for 21?Do you have a development thread about it on PC..? would love to follow it.

 

Leo, I might post. I'm trying to explore the options, but no I can't finance it, or the 7.

 

Have you considered doing a JV with a money partner or some kind of variation..? Have you already bought the site?

 

Ill start a thread - because I do need some help.

@Leo2413 - I think I did post, but I cant find it. It may have been in somersoft.

 

I think BCC have been reading my posts and requests for approval!

Subdivision approved today! Yippee-ka-yay

 

For those interested, this was the proposed subdivision.

 

Geeze, that was quick!
Good stuff.

 

So how long did your approval take, including the Christmas break? My town planner may be submitting mine on Monday so it would be good to get an idea of the wait time.

 

@beachgurl Including Christmas is took 34 days! Brisbane Council kicks ass to NSW, that's for sure!!

Are you doing it through risk smart? Is it going to be code assessable? Yours is reconfiguring into 2 lots right?

 

That's a great turnaround! Mine will be code assessable. Yep, a 600sq block into 2.