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WA - West Leederville 6007, 3 unit development

Discussion in 'Development' started by Skuttles, 4th Mar, 2016.

  1. Skuttles

    Skuttles Well-Known Member

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    Hi all

    Has been a while since my last update, has been good to write down some of the main aspects encountered on the project over the last 12 months. While the project is steadily progressing along, it definitely hasn’t been all sunshine and rainbows to date.

    We’re about to start construction so it will be exciting to start seeing the tangible results of all the outgoing costs we’ve incurred.

    Following on from this Somersoft thread;

    http://somersoft.com/forums/showthread.php?t=103628

    More posts to follow.
     
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  2. Skuttles

    Skuttles Well-Known Member

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    Getting DA approval - Town of Cambridge

    Standard assessment of our application by the council’s planning department took the expected 10-12 weeks. Our original application was given a recommendation of ‘approval’.

    One of the more amusing neighbour objections was a demand from them for a ‘shadowing assessment plan to be drawn up to show the affects how this two storey monstrosity was going to block out the sun’ for the neighbour. The entirety of that neighbour’s block is directly north of ours…sigh.

    After the standard assessments all multi dwellings applications then must go through the Cambridge Development Committee, comprised of 4-5 councillors. This committee have veto power over approving/declining applications based on whatever whim suits them at the time.

    Specific to small scale multi dwelling projects their development committee prefer a ‘traditional’ footprint as a block of units, with open space around all sides of the building (welcome back to a 60s/70s school of thought). This was despite one of my neighbour’s single residence being built up to the boundary for approx. 15m+ of length. As I wanted to build up to about half of the length of that boundary wall (which was well within planning guidelines), this was the main reason my application was bounced around for approx 6 months before getting approved.

    The final design is three single level apartments. One 3x2 on the ground floor with six carbays behind (three tandem), then two 2x2 apartments located above, the upper level accessed by a shared central stairway. We received approval for this design in August 2015.

    Learning - Its an obvious one but when dealing with Councils you will encounter bureaucracy, red tape, delays, more bureaucracy and at times a lack of logic and common sense. Learn to play by the rules of their game, then try not to get too frustrated when those rules dont apply to them.

    One large regret I have on this project to date is bending too easily on our design principles in the hope it would get it through council quicker (it didn’t), plus being on contract work I had timing concerns around my ability to get finance (which never materialised). While not unhappy with our final designs (now all single level apartments), I really believe our original design of two storey apartments was better, with more points of difference to other ‘regular’ apartments in the area. In hindsight I would have ignored the wishes of the vocal committee members, kept the majority of our original design in place and taken my chances appealing through SAT.
     
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  3. Skuttles

    Skuttles Well-Known Member

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    Getting construction finance approval

    Getting residential finance approval went relatively smoothly, only one speedbump in relation to the valuations.

    Use conservative valuations when assessing a project’s viability, but use VERY conservative valuations when working out if you can finance the project, as that’s what the banks will do, especially in a declining market. The initial valuations for finance that came back meant we would have had to tip in an additional $35k cash to meet the minimum LVR. We appealed the valuations based on comparables sold in the area and were fortunate to get them raised up a little higher, meaning we didn’t have to tip in any cash to finance the project (just!).

    Learning – getting finance in a declining market is much tighter/stressful than in a rising one….duh :rolleyes: Having a good broker is essential!

    The bank vals coming back lower at $575k, $575k & $625k ($150k total less than my initial feasibility calcs in Aug14) and while I think these values are quite conservative, it was a good reset point to reassess what options I have with the project. I revisited the various scenarios such as selling the land with DA approval (at a loss) or doing a duplex development (maybe break even) but decided to stay the course with the current plan.

    My strategy remains being a long term hold for all 3 apartments, so a smaller paper profit instead of a reasonable paper profit, while not ideal, seems the current best option for me.

    Learning - cashflow really is king. I have read it many times on this forum, but now I fully understand that you do need a good war chest of cash to enter into something like this, and not just for interest repayments or items that cant be financed. For example, even though you can have something included in your finance amount doesn’t mean you may not need to stump up the cash for it temporarily for some time before being reimbursed (eg the $40k builders deposit).
     
    Last edited: 4th Mar, 2016
  4. Skuttles

    Skuttles Well-Known Member

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    Getting building permit/to site

    Getting from DA Approval to receiving the building permit took longer than I was expecting, approx. 5 months all up. Blame was passed from the builder mostly onto other external parties (engineers, FESA assessors etc) plus the Christmas break.

    Learning - No one will push your project along for you. Do not assume others have similar motivation in pushing your project through as timely as you do. Always remember its your money on the table, not theirs.

    Pre start went quite smoothly, only a couple revisits to the builder for certain selections that were no longer available.

    Siteworks started last week, where they encountered peat (swamp) in the soil on portions of the block plus a fair amount of rubble buried. The block has been vacant for approximately twenty years so the rubble wasnt surprising. The estimate for siteworks will increase by about $10k due to removal and replacement of soil, never ideal, but exactly one of the reasons for having a proper contingency fund in place.

    Slab should be going down in the coming week, if not done already.
     
  5. sanj

    sanj Well-Known Member

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    thanks for sharing.

    did u get a design done independently or was it done in house by the builder? who is the builder if u don't mind me asking?
     
  6. Skuttles

    Skuttles Well-Known Member

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    The design was done inhouse via the building broker I used, though I didn't have to go with their designer to use the broker.
    In general I liked his portfolio of designs, plus he had experience with small multi-dwelling projects.

    Builder I went with is Inspired.
     
  7. sanj

    sanj Well-Known Member

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    ive just finiahed a project with them, enjoy the ride...
     
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  8. Blacky

    Blacky Well-Known Member

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    ? was it a smooth ride sanj?
     
  9. Big Daddy

    Big Daddy Well-Known Member

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    How do you push the project along ? Keep bugging the builders or find out the road block eg fesa and keep bugging them?
     
  10. Skuttles

    Skuttles Well-Known Member

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    Just keep following up the designer, Council planning officer, broker, builder liaison rep etc etc politely and professionally.
    Is sometimes treading a fine line between being a squeaky wheel who's request gets attention vs gets put to the bottom of the pile.
     
  11. sanj

    sanj Well-Known Member

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    put it this way, i started 2 projects in early 2014, inspired one in jan, another builder in march, both 2 storey multis, admittedly the inspired site was more difficult althoufh the other site was tighter.

    one builder had a very strong backend, 1 consistent supervisor throughout and contact person throughout, communication was excellent and id happily deal with again.

    the other was one of the most painful experiences of my property career spanning nearly a decade.

    atm i wont post publicly who was who (happy to in future) but it just reiterates so many things i aleady knew and stupidly let slide this one time, based on a couple of recommendations from people who normally would not get something so spectactularly wrong.
     
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  12. mrdobalina

    mrdobalina Well-Known Member

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    Did your build go out to tender via the building broker? Was Inspired the best option?
     
  13. Skuttles

    Skuttles Well-Known Member

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    Yep and in my opinion yep.
    More details are in the Somersoft thread.
     
  14. MTR

    MTR Well-Known Member Premium Member

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    Thanks for posting this thread, its very interesting
    I agree with the cashflow is king/queen, need good buffers.
     
  15. MTR

    MTR Well-Known Member Premium Member

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    Know this one, I was the project manager for my Spearwood project because the project manager was too busy managing his own personal development, I even collected tiles, but timeframe was blowing out ... nasty stuff.
     
  16. Skuttles

    Skuttles Well-Known Member

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    Hi @sanj

    Sent you a separate PM.

    Without naming names, what specific issues would you consider contributed to it ‘being the most painful experience’ for you?

    Was it a general lack of communications between site, admin and yourself…or were there specific examples throughout the build that you felt they dropped the ball?

    Obviously if the latter it’d be great to know so that I (and others) don’t potentially have a repeat experience to yours.

    Thanks
     
  17. Westminster

    Westminster Tigress at Tiger Developments Business Member

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  18. Skuttles

    Skuttles Well-Known Member

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    Not yet, formwork/reo on site but no pad yet.
     
  19. Skuttles

    Skuttles Well-Known Member

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    Siteworks variation has come through, $15k more than was provisioned for (and a $5k increase on the verbal quote increase given).

    Just spoke with site supervisor re delay in getting the slab down, says he missed on the construction plans the engineers wanting extra courses in the slab at certain points so he is getting a couple more quotes = the reason for delay + maybe more costs.

    Slab now scheduled to be laid mid next week, 3 weeks after earthworks completed.
     
  20. mrdobalina

    mrdobalina Well-Known Member

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    Did the builder miss it or the slab comapny missed it? I would have thought the builder sent the plans to the slab company to quote. If they missed something or didn't pay particular attention during quoting, and only realised now when they've gone to do the work, then tough bikkies. They should absorb the cost.

    Could also be the builder trying to squeeze extras from you.
     
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