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we sold our paddock in town for 450,000 and the developers made and sold 120 house blocks at 110-130

Discussion in 'Development' started by Thomas, 11th Aug, 2016.

  1. Thomas

    Thomas New Member

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    We sold our family paddock in town for 450,000 and the developers made over 120blocks of land and sold them all for 100-130,000 , I think we got screwed?
     
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  2. LifesGood

    LifesGood Home Building & Development Consultant Business Member

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    What stopped you from developing yourself? The cost? Probably. Could cost $50k per block to develop the whole thing. Still a tidy profit though.

    Have you looked at investigating this further? Did you sell through an agent?
     
  3. Phase2

    Phase2 Well-Known Member

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    So you sold $12m-worth of land for $450k? Unusual for a first post.

    In the case it's a genuine first post, creating 100 or so house blocks is basically an estate development. How many $millions did you have to put in for engineering, roads, street lights, curbs, sewage, electrical, gas, telecoms, water, block retaining etc?
     
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  4. Blacky

    Blacky Well-Known Member

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    I don't think you got screwed at all.

    I just think the buyer had more resources than you. (Money, knowledge,ability).

    They probably paid about market price (why would you have sold it otherwise) and then leveraged their resources for their own benefit

    If it was so easy - why didn't you do it?

    Blacky
     
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  5. Phase2

    Phase2 Well-Known Member

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    oh.. and welcome to PC :)
     
  6. sanj

    sanj Well-Known Member

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    If the figures are right and youre talking no capital growth etc then it is a decent possibility he got screwed. I can't think of too many instances where a potential 100 plus lot site with end values over 100k.per site sold for 4k per raw site. There would have had to be something really unusual because if the area supports 100k smaller individual lots there woulf have been developers lining up to create say 10 or 20 large lots at a much cheaper cost and selling at say 200k a pop (who knows even 5 lots at 250/300 each, without knowing suburb details it's guesswork) where you might not have to put in major infrastructure involved in doing 100 lots
     
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  7. sanj

    sanj Well-Known Member

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    The thing is you don't have to do that if the other option is taking 4k per raw site.you'd find it hard to double your in hand $$ by spending a small amount of money creating just a handful of large sites and flogging them off to either people wanting large sites to live on or other developers.
     
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  8. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    How did you get screwed?
     
  9. Joynz

    Joynz Well-Known Member

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    Where is this paddock (which city or town and which suburb).

    Was it recently?
     
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  10. Scott No Mates

    Scott No Mates Well-Known Member

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    • Were you happy with the price you achieved at the time considering the market conditions at the time of sale?
    • Did you list it or did a developer approach you to buy?
    • Had you taken any advice prior to the sale? Eg. Valuation or market appraisal, town planner, taxi driver, MIL?
    • Was it raw land/Rural/non-urban? Or was it gazettted/earmarked for rezoning?
    • How much work did the developer need to do to get it to market? Services town water; gas; power; sewer, headworks/roads/kerb & gutter/street lighting/sub-station dedication or kiosks etc
    • Timeframe to bring it to the market?
     
  11. Cactus

    Cactus Well-Known Member

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    What location?

    After taxes (stamp duty, GST, developer contributions and area charges, income tax) and infrastructure (sewer, water, drainage and elec) consultants fess, agents fees and marketing I doubt you got screwed.

    All that happened is the developer took on a capital risk and hopefully received a good profit.

    You took on no risk and got paid upfront.
     
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  12. sanj

    sanj Well-Known Member

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    How is everyone so sure that OP got a good deal without knowing anu details?

    Ultimately if it was a really tough site, took years and 60k per lot to develop then sure, seems far when you consider profit per lot post selling fees and gst etc.

    At first glance though there does seem to be a huge anomaly between 1 large site selling for. 450k and site in the same location, developed, less than 1% the size selling for over 100k.

    I do echo everyone above in asking how the sale occurred though, if it was marketed well, independent advice sought etc. If seller didn't act in their own interest there should be no surprise at buyer acting in their own.
     
  13. Skilled_Migrant

    Skilled_Migrant Well-Known Member

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    Was the land rezoned after the transaction ?
     
  14. mrdobalina

    mrdobalina Well-Known Member

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    There is a wide spectrum of you getting screwed really bad to getting an awesome upfront deal. Based on the information the OP provided, it's probably somewhere in between.
     
  15. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    And how much did it cost for roads, power, sewer, drainage, titling etcetcetc. 120 blocks isnt a small site dev
     
  16. JDP1

    JDP1 Well-Known Member

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    that's not bad for inner Brisbane. Just yesterday, that same paddock would have had sheep, chooks, and cows from the ekka.
     
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  17. Blacky

    Blacky Well-Known Member

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    Some time ago a friend of mine sold a peice of his farm in Margaret river. It was an undeveloped paddock On the edge of town.
    He was shocked at the selling price (about $2mil if I recall correctly). The paddock was good for about 100head of cattle year round. Or +/- $50k/pa profit.

    It was a no brainer in his mind. He figured the buyer was some rich (dumb) citi slicker who would build a house and have a hobby farm.

    A couple of years later the paddock sold to a developer for about $25mil.
    All the previous buyer had done was push through the rezoning from Rural to Resi-development.

    He learned from his mistake. Pushed the remainder of his property into resi zoning and sold all but about 10ha where his house is. Bought a nice boat, new car, and lives off interest payments.

    It is possible from time to time.

    Blacky
     
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  18. Azazel

    Azazel Well-Known Member

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    Good to hear he still had plenty of land to do it again and make some money.
    Can't be easy to change the zoning surely, but I guess it becomes more likely over time, as houses get further out there.
     
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