We have 100 acres with unable to be built out views. Bought the property 4 years ago FROM a developer who went bust. Another developer has just put a contract on the block beside us (views not as good) which is the only land between us and the township. Council says developer is discussing purchasing our block too. This could be a while off yet.
We know enough to know we’re sitting on a gold mine and would be happy to sell. We would prefer to sell sooner rather than later, and so wondered how we would go about finding a developer interested in this area, which is experiencing a 35% growth, we’ve been told. Residex predicts more than 90 percent increase over 5 years for our other investment property just down the road,
and council townplanning shows the area will double within 2 years.Our other option is to develop it ourselves but at the moment financially that is out of our reach.
Hope someone has some ideas. I wonder if I should go to the council and get some developer contacts from there??
Thanks,
Redhaven
Hi Redhaven
our group is currently doing a 50+ section development in Nz which is a first for us as we are spec home builders.
we formed a small group of 4 investers who each have different skills to bring to the group as well as security.One of the most important partners is an accountant,he saves us a lot of money,also bankers will feel you are less of a risk and are more willing to fund you.our input is more on the technical side which gives us the ability to project manage ourselves.another partner owns a real Estate agency so the sales and marketing is covered by someone with a vested interest not just looking for a commision.
you already have the land,we didn’t.We bought low and are selling high and that’s what any developer will do.The person we purchased off regrets the sale because he couldn’t see what we could.
We have now presold enough lots to begin and the banks on the strength of these contracts fund the contractors.
I might have made it sound easy but it’s not, we have had a steep learning curve.If you can’t form your own group join somebody elses your the man with the land,your holding the cookie.
your potentual returns are way higher than selling it as is.
regards QueenstownerThanks Queenstowner, I appreciate the feedback. I hadn’t thought of going in with partners…so used to us doing everything ourself I guess. So if the developer who bought the 300acre lot next door paid 3.3 million how much can he expect to make? Ball park of course…? Both the lots cover 3/4 of a small mountain, we’ve seen much steeper slopes all sliced up into 1/4 acre lots. Figure it would probably be cut into 1/2 or 1 acre lots to tie in with the semi-rural area.
1/2 acre lots here are going for 75K and upward, and 8km away, 1/4 acre lots are 100K. Roughly what does it cost to service a development? It’s interesting to consider your idea…certainly food for thought. Thanks!
Redhaven.
Costs will depend on what it already nearby/in place to some extent. If you are remote from built up areas you may be looking at 25k-30k per block in costs to connect services etc. It may cost a little more per block with surveyors fees, building roads, installing streetlights etc
Also consider that with a development next door of a minimum 300 lots plus your 100 lots – is there enough demand to absorb this level of development?
Check the local council’s development plans too – they may deny your development based on their strategy, considering there is another development next door.
We are very, very blessed in that the main township is only 1.5km down the road, town water 1km, although would be at the corner post when the neighbours block is developed. No probs with demand for our blocks, the views are absolutely breathtaking and there’s nothing like it around. Yes the development growth predicted by council would certainly cater for far more than 400 blocks……far more. Other developments around the place but nothing offers what our block has in the way of views…
A person from the forum has offered to notify a couple of developers he knows, and this morning a real estate agent from the coast rang me regarding a property down there, and is going to tell a couple of developers she knows plus come and view the property????? so it looks like things are moving……..whether we take up any of their offers remains to be seen. I haven’t discounted the idea of getting some partners in.
Thanks.
Redhaven.
Hi Redhaven
I can’t really give you any idea of your costs or what the developer next door might make,apart from i’m in a different country, there’s too many variables.
Over here consulting surveyors oversee the whole project.If they do the same in Oz they will be able to tell you how many lots you can subdivide and give a costing per lot as he will liase with roading contractors,utilities contractors and most importantly the district council.
He should also put you in touch with landscapers.You need to develop a style for your subdivision, you hopefully would be doing something that your proud of not just a case of how much i can make.
Another option, if that might cause too many sleepless nights is to go ahead and get the land subdivided into whatever size lots your allowed,put the whole thing on the market.might be worth double it’s current value to a developer.
good luck
QueenstownerHi Redhaven
I do bookkeeping for some developers – if you PM me I can put you in touch with them if you are in the right area.
I don’t know alot about the developing side but have learned enough to know it is a helluva lot of work and you need a lot of expertise to try and do it yourself!
Shary
Thankyou EVERYone for your input and advice, it’s certainly great to hear your thoughts. So far we have a lady from the gold coast coming up tomorrow to view the block as her developer contact is interested, and another developer in Vic is interested.
We are taking this very slowly, one step at a time, because we know what we have is very unique, and in demand. But we would be happy to sell “for the right price”. Developing it ourselves (with or without partners) will remain an option until we assess what offers they come up with, if any.
Again, thanks heaps, it’s great to know I have plenty of brains out there to pick [biggrin]
Brett and Kerrie (Redhaven)
Redhaven
You should get about 350 house allotments out of your 100 acres, at a cost of approx 25 to 30,000 to develop each block.
Do it in stages, a surveyer will know how many.Anyhoo 350 blocks with a profit of around 40,000 = 14 million dollars.
If you let a chance like that slip through your fingers, I for one will never speak to you again.
Red, have you ever thought of asking a developer to partner with you and allow them to develop all the land for a share of the profits, etc. You could ask for a few of the properties along the waterfront with the best views and a cut of all the other sales. This would cost you nothing as they are being offered a gift!
Robert Bou-Hamdan
Mortgage Adviser
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Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty LtdThanks guys for the wisdom. We currently have an interstate developer researching our block, with some possibility of perhaps doing a deal. I know we have something very, very valuable and we would be reluctant to let it go unless they made it worth our while. At the moment we are digesting all this information and checking various avenues as they open up.
Thanks again
Redhaven.
Hi Rob,
I thought there was such a thing as a gift tax….. just something I heard many many years ago.
*thinks of The Taxman by the Beatles…..*
If you try to sit, I’ll tax your seat,
If you get too cold, I’ll tax the heat,
If you take a walk, I’ll tax your feet……Cheers,
Linden
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