SA Adelaide - Will they make money?

Would like help analysing the deal with some napkin maths for this block in Hillcrest, SA

https://www.realestate.com.au/prope...Element=avm-currently-advertised-view-listing

It just sold at auction for $1.21 mil for a 950sqm corner block. So probably can be divided into 3 plots, and then build 3x 3 bedders with 2 baths. That's what, another $300 - 350k per build?

So 1.21 + 900k + other fees (~150k) = ~$2.3 mil all in for 3 houses at 760k per new house which would sell around that price. Where's the meat in the deal for all the work?

 

Wonder how much of development profits is from rising markets?

 

u can build 4 i think.

 

Hardly any profit it in though for all the work. Or is there something missing in those numbers?

 

Development is a funny beast. Sometimes numbers stack up, most of the time they don’t. The money is in buying the land, holding and developing when it makes sense.

In my experience you need to find a 1 into 4 at a minimum for numbers to stack up.

 

That location, given it’s on main north east road may also have commercial or high density zoning.