VIC Thoughts on Rockbank h & l

Wow...what did he do...did he put hits on his partners?

 

Who do you use?

Yer no point sweating, they'll take how long they'll take. At the end of the day they don't want to take any longer than you want. They'd rather finish and move on. It's just if problems arise.

 

Yep...I use Houspect....

 

I think he just traded his wife in for a newer sportier model when the lease was up. Expensive hobby but each to their own.

 

Developers do increase at different stages but I use my example in pt cook. What was build mid to high 300Kish in 2013/14, was around low to mid 400Kish in 2014/15. I thought that would were it was settled. Then out of nowhere suddenly it is now mid to high 500Kish. not talking about 1 or 2 sales but basically every week there are prices in that range. Developers couldn't really just bump up Land value + buildby 180-220K.

To do a H&L and make some coin in my experience having done a few is to build the land and negotiate price. Then separately shop and keep shopping fro a builder (volume or spec) who will build for you cheaply. No different to shopping for the best price for a car, TV or computer. THis isn't exactly Louis Vuitton handbags where there isn't a sale (so you can find a cheap builder).

 

Point cook is a great example. As supply eased, valuers had trouble recognising the new values. As the suburb became established, and more resales confirmed the new price level, valuers had an easier time. Now point cook is valued as a suburb fairly close the city/transport. It's now an established suburb. It's not old fibro, or weatherboard or ex commission houses on the valuers comparable sales, its house built in within 5-7 years recently resold.

 

Not really - if you asked me I felt the supply is still there and growing, there are more estates paragon, Upper point cook coming up (which is why I thought the price was at its peak at 400Kish) The reason why this suburb has done well is partly due to affordability and demographics. People on incomes (say 50-70K of husband and wife) and easily afford the 400-500K home brand new too. Secondly, demographics (there were next to no Asian migrants when I bought the land ) but now the whole street is either Asian dominated. Not the ones you see in balwyn or doncaster but ones who can afford a home with a large enough deposit. as for weatherboard - that seems to be in demand (for Californian bungalows). Ex-housing comm - you only need to go to port Melbourne, Ashwood and Chadstone (now within the million range),

 

This clients land is now ready. Ordered an upfront val with a couple of lenders, expecting issues. First one back today, land $175 came back at $190. Build at $230 came back at $240. Client excited as we were expecting the worst. 95% lend can now proceed at 90% saving the client some LMI.

The land contract signed in October 2015. I haven't checked, but usually the builder will be able to pass on any increase in costs since the build contract signed (mid 2016).

So, this client did make some money. He had $8,750 tied up for two years, and made $15,000 'equity', $12,000 borrowable. Pretty good return. (I'm just counting the land value increase here as above the builder will most likely be able to increase their contract price for the build now the contract is almost 12 months old)

Still to my mind pretty risky, and if the client had actually settled on a similar value apartment/old house in 2015, I'd say he would have the same if not more equity growth since, even counting any cashflow, negative gearing shortfalls in the meantime.