first time developers need help

With regards to the deposit, you cannot access it. It will have to be held in the solicitor’s or agent’s trust account.

You try and protect yourself by signing a fixed time and fixed price contract with the builder.

But there are always contingencies and PC items and provisional sums that they can add to the contract price.

Protect yourself by having an accurate feasibility before you start, strict budget control measures and an elemnt of luck[biggrin]

Michael Yardney
METROPOLE PROPERTIES
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To ptotect yourself from time and cost overruns you must know your contract conditions like your builder would.

You basically have to know how to play the game and have systems in place.

if you need more info, email me – [email protected] and I’ll try to help.

Regards

Landbourne

hi wullah
couple of things
1. luck I wouldn’t work on kuck oh sorry luck you need to make sure you have a min profit margin of 21% or don’t do it.
2. fixed price and time are the way to go and put it in the contract contingency,
the contingency only come into place if you run out of money and you don’t want to get there its usually 5% and this should be included in your budget and is calculated as part of the cost of construct and the 21% is on top of this ( if you don’t use it fine you get 21% + this 5%)
3.the depositis usually between 5 and 10% you can ask to have it released but in this market you can also ask the buyer to give you the keys to there car to run around in each day, its not going to happen I have had them ask for the deposit to be help with there solicitor as they don’t trust ours or the real estate but usually the real estate holds it in there trust account and you don’t get access to it( and if you have done your figure right you don’t need to either)
4. I don’t sell of the plan for a couple of reasons A. you dilute the value or price of your product you are giving a reduced price to get a sale but if you have done you work your don’t need to change the price( in this market that is supposed to have fallen a 2br unit in marrickville that has taken 12months to construct and finish was budgetted with suncorp at 480k on my budjet spread sheet and that was a projected price.
it has sold for 480k, on the dot and in a supposed fallen market hence suncorp don’t ask me for presales)
and the other thing is if you sell a product off the plan you have set a price, if the area changes while in construction you can’t meet it because of this pre sale price,
you can’t increase the value, as a valuer will go off comparative sales.
and if you discount it, its worse.
also If a person does want to sell out of my projects as I hold my properties I don’t need a discounted valuation to be logged.
lender love it because it gives them a warm inner glow well buy them some ovalteen and go with no presales.
my .002

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If you want to get involved in some of the projects I’m involved in email to [email protected]