Hi
I am very new to all of this so please bare with me. My husband and I have just signed a contract for a block of land with a house on it we are considering, getting rid of the house and building townhouses to sell of. If anyone has any advise on this, whether it is relating to banks or legal rights or whatever i would love to hear about it. IT is very much up in the air but i believe financially we could gain nicely if done right.
cheers Pete[exhappy]Hi Pete
Good for you both and if you have done your due diligence and the deal stacks up go for it.
With regards to finance dependant on the number of townhouses you are looking to construct on the block and the value of the total deal will determine amongst other things what Loan to Value the lender will go upto.
Financing a Commercial development is totally different to a small residential investment property and you need to consider many things before proceeding.
If you want to share a little more information we might be able to assist you further.
Richard Taylor
Residential & Commercial Finance Broker
**NODOC loans from 7.14%**
Licensed Financial Planner
http://www.yourstatefinance.com
[email protected]
Ph: 07-3720 1888Richard Taylor | Australia's leading private lender
I was wondering things such as How big is the block and what is the zoning?
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorHi, just a word of caution. Impt stuff to consider :
a) purchase price [you know this]
b) cost of building : $150000 per townhouse approx. [depends on who the builder is]
c) the sale price : IMPORTANT. Most of us especially novices (I’m one myself even though I bought my 4 properties before the boom) tend to inflate the sale price. Look, it might even be that they can’t sell. Then you have to look at the rental yield.
d) the holding period is very important. This is where you pay interest costs without any income.
e) tax considerations are also importantGood luck
Kum YinDeveloping is not really an excercise for teh unexperienced.
While it can be profitable; very ,very profitable – most begining developers don’t make money and frequently loose substantial amounts.
Do lot’s of due dilligence (as you have started to do by asking these questions) and get advice form people who are actually doing what you want to achieve and are successful at it.
Here are some links to artcicles that could help you.
The Benefits of becoming a Property Developer
http://www.propertyupdate.com.au/articles/19/1/The-Benefits-of-Becoming-a-Property-Developer
The Risks of Property Development
http://www.propertyupdate.com.au/articles/70/1/The-Risks-Related-to-Property-DevelopmentThe Property Development Process
http://www.propertyupdate.com.au/articles/19/1/The-Benefits-of-Becoming-a-Property-Developer
I hope these help and good luck with your project
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 11,000 readers each month.
FREE subscription http://www.PropertyUpdate.com.auDepending on how big the block is and what your financial position is. The council will tell you how many you could fit, but if you want to start off small with your feet on firm ground with each step like I did, heres how I did it. Rent out the house while you design your own townhouses, or if you dont have any expertise in that area, suss out some small townbousesby a volume builder that would fit on the block. Build the first townhouse in the backyard and either live in it or rent it out. If you got enough money first off fine, or refinance on the now value of the back townhouse and then build the front townhouse
Fern
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