Starting Out

We have been looking for our next IP and have opened our minds to buying a site for future development.

We have been navigating DCP's, LEP's, land zoning maps etc. but have no professional knowledge, experience or prior exposure to this field.

It normally takes hours upon hours to find anything slightly resembling the information we need from each council and even then there are knowledge gaps.

Any suggestions for development resources, information sources, self-education or anything else would be appreciated

 

Timbo, you're doing it. Zero in on a couple of areas and get real familiar with the DCP's.

Also budget comes into it. Personally I am not into banking sites for a fairytale future date, try to buy something that is profitable from day one. If you had deeper pockets it's a strategy to look at for sure but when starting out you need to make fast money to get the snow ball happening.

 

Find an area where you can afford and stacks up back of envelope. Drive around get a feel for what developments are being approved by council. Speak to council planners about the costs involved do they have area maps showing density expectations, no go zones ect Become an area specialist in your chosen area. By reducing your zone of interest you can be an expert. Once you've completed a successful development you can open up your search area and knowledge base.

 

Also in Victoria Google planning maps online you can run a quick planning report and find quickly the relevant schedules for consideration.

 

The opportunity cost did come to mind but I've recently seen the value of properties around Penrith sky rocket due to zoning changes e.g. a fibro place on roughly 700 sqm block being turned into a 3 storey mixed use development - shops at street level, 2 levels of units.

I guess it's a bit of a lottery and if I tie too much up of our already scare serviceability I might kill the dream altogether.

I was thinking along the lines of buying a 1000+ block with a well positioned house, submitting DA to split and sell off the vacant land. Haven't found anything suitable yet (most buildings span across the blocks I've seen and the price premium normally kills the deal). What are your thought's on this strategy? Am I chasing a unicorn?

 

Maybe. Not sure what you can borrow and what you can service. Regarding properties that got rezoned, to make a killing on that you either need dumb luck or get cosy with the town planners to try and find out what is happening down the track. A subdivision as you said is probably the easiest/cheapest thing to do but as you said, not easy to find that right block at the right price. At the level you're playing at there is mega competition.

 

I was all over the Penrith LEP and DCP a few years back but we were tied up with 2 IP's, 1 income and no borrowing capacity.

Now I'm trying to get my head around Moreton Bay Regional Council. Bit more difficult to navigate than Penrith was, the info is all over the place and each document tends to reference another document which references another and so on.

Sorry, very new to this 'stacks up back of envelope'?

EDIT: Google gave me the answer to back of envelope

 

I gathered this was the case, it was actually part of the reason I started to think about a splitter to get into a less competitive field.

I'm also concerned that I may end up with analysis paralysis, wait too long and miss the boat.

 

Doing a feasability by putting a few numbers together on a bit of paper - purchase price, potential sale price, cost of titling, contribution fees. If it looks like deal you can get into specific numbers

 

Thanks @beachgurl

I'm still trying to get my head around how many TH's can go on a site, which zoning allows medium density (there seems to be a disconnect in Moreton bay between zone and allowable density), I am on the cusp of figuring it out but am waiting for council to get back to me for confirmation.

Once I have that figured out I can get more into the costs and return. My gut feeling is there isn't much on the market in Moreton Bay with that sort of potential, probably gets sold off market at lot of the time.

 

If you have already seen the growth in this area then you risk paying too much for the land, and therefore won't stack up and instead of making money you will lose money.

Rooky recently posted a project where he actually lost money because he purchased land at peak

MTR

 

Also if looking at Qld for developing, infrastructure costs are far greater than Melb and Syd?

 

We've given up on that idea for now @MTR. We're in cooling off for a 5/3/3 duplex in QLD now, flying up on the weekend for an inspection, baby sitter booked in. Exciting times!

 

Congrats!

Is it seperate living for 2 families? I'm guessing the yield is good then. Do you mind saying what area?

 

Interested to know also @Tim & Chrissy. By the way did you give any thought to buying the second one you mentioned in your other thread?

 

Separate for two families, yield is 6% but there is also a good depreciation benefit in it as well and historically good CG.

Happy to share the area......next Monday when cooling off expires

I previously found a similar place with over 7% yield but it was an illegal dual occ and at a guess there was at least $15k work to get it compliant, multiple offers, other party went higher.

 

We are maxed out on serviceabilty so anything to do with buying the second was tounge in cheek

Even if we had the funds I wouldn't buy the other, we are just starting out and I want to build a solid foundation and spread the risk a bit more.

 

I'm hoping its within 15km of the CBD on at least 600sqm... but I am very biased to that criteria so never mind me Well done mate!