Spearwood Project - done and dusted

Just thought I would post an update now that this project has been completed and all now sold.

Here is the link from the advert, by the way staging cost me around $2000, pretty cheap compared to other quotes I received. We staged villa 1 because the design of this villa was I believe not as well designed as villa 2 and 3.

Also, interesting Homes west purchased villa 1, never dealt with a government department, cash offer, however you need structural, building, white ant report and needs to be signed off by the Minister, lots of paperwork.

By the way the block fell back from the road 1.5 mtre to 2.5 mtre, who said you could not make a daggy slopping block look good with the right elevation????

http://www.realestate.com.au/property-house-wa-spearwood-119276119

This falls into this tax year and my accountant has not even started these yet, but I can certainly give you some numbers which should be very close, not as impressive and MrMs recent post, but none the less a profit is a profit

Purchase Price /stamp duty etc - $541,000
Building cost - $579,000 (turnkey
Headworks etc - $60,000
Holding costs - $65,000
Selling costs - $30,660 @ 2%
TOTAL - $1,275,660

Sale Prices
Villa 1 $520,000
Villa 2 $503,000
Villa 3 $510,000
TOTAL - $1,533,000

Profit $257,340
( CGT and GST have not been deducted)

I will not be paying CGT as I have losses to carry over from our business, but will need to pay GST, I am estimating around $30,000??

We purchase all our development sites in our Trust.

May also be interesting to know that during the early stages of the building the villas in Spearwood were still holding strong, however mid way through the project everything started going sideways and though there was not an oversupply I noticed that there were not as many buyer around, FHB had dropped off. Just my luck

MTR

 

Congrats on finishing this project, was it your first triplex development? You've been on a roll since then!

I suspect your gst will be a fair bit higher btw

 

Great work MTR! It must feel good to bank some profit.

The units look amazing.

 

Thanks Sanj
Yes, first 3 villa development. Last boom was land and house packages, but this is new.

I have no clue how work out GST, last year when discussing this with my accountant he came up with these figures, I hope you are wrong, how much do you think???

 

Thanks.
I will be strategizing moving forward dependent on market, tax, profit etc. what I hold and what I may sell.

 

selling costs and taxes really are a huge part of it.

on a project i recently completed for an investor they were thinking of selling one or 2 apartments to free up some cash. we worked out it would have cost around $68k in selling fees, GST and income tax PER APARTMENT.

theyve decided to keep them all as per intial intention

 

i could be wrong so dont want to alarm you. $10k per unit seems pretty low though. r u using the margin scheme?

 

What a great result. I love seeing people take a punt and pull off these sort of successes.

 

Ouch

 

Nice

 

agreed but on the other hand it was a very good outcome for them, over 600k from a 4 apartment project and very strong tenant demand even in current market. id be pretty happy with that!

im moving into 1 unit an 2 other friends have been found for the others so only 1 left to lease

 

Looks good MTR, staging really makes a big difference. Based on our previous developments using the margin scheme on a 500K villa the nett GST payable has been 9-10K per unit so I think 30K is about right for yours.

 

Hope so, it is margin scheme. Thanks
Yes, recommend staging, probably best marketing tool IMO

MTR

 

Thanks for sharing MTR

What were the biggest challenges you had to overcome?

What would you have done differently?

 

Hi Brady
Challenge was keeping builder the builder on track to complete job on time.
We don't have liquidated damage clause in WA contracts.

MTR

 

Did the builder come in at the fixed price?

 

Well done MTR. A good solid 20% at the end of the day with a market coming off the boil which is a job well done.

Have you been claiming GST the way along or doing it all at once? I think the $30k is about right once the GST credits and debits are all sorted.

I agree that staging is money well spent. Villas and small units are by nature small and can seen rather pokey. Specific shaped and sized furniture will make it seem larger, furnishable and homely.

 

Good work @MTR!


Thanks for sharing numbers...

 

@MTR, looks great. Can you provide a summary of the timeline?

1. When you bought the site
2. When you achieved an approved DA
3. When you started construction
4. When you sold the properties (May 2015)

What was the toughest part of the project?