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Currently selling newly constructed 3 bed villa two doors up for 520K. We will be selling a detached (only joined by the yard/Fence) 4 bed with double garage. So hopefully all this will be worth while and even then we have increased the equity we have even if we break even.
Qlds007 wrote:Yes there are lenders that will lend on the gross realisation of the completed project however one issue i can see is that when you knock your current house down for a period of time you will only have the land and this may well be worth less than the current mortgage.This will make lenders nervous however as anything without more information difficult to give you a definate Yes / No answer.
Thanks Richard,
your correct – the mortgage would be close to or a bit more than the land only value. If you have any suggestions of lenders I would apporciate that in a PM as I suspect your not alowed to post here.Cheers.
DWolfe wrote:Hi,Sorry I'm not going to comment on the finance part, I'll leave that for Richard and Terry.
Where is the site? depending on where it is having separate dwellings may have higher resale. The other thing is depending on where you are you may be able to get 3 dwellings on it. I know this adds a whole other dimension to it such as having to borrow more for building and that sort of thing but it might be worth checking it out. The only problem I have with only doing two is that they will be basically worth the same as the loans you have on them when all is said and done. Either that or townhouses are selling for awesome prices like 600k and up in which case I'll be there too! Just some thoughts. Have you approached a planner to see what you can fit?
Let us know how you go.
D
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Thanks D,
A bit nervous about doing two – let alone three. I don't think we have enough equity to stretch to three. It is possible my mother would go guarantor with her house but that also makes me nervous. Once we get to DA apporval (wollongong council – NSW) as the bank pays the builders I can't forsee any reason for things to go pear shaped – except one of us losing our jobs I guess. Then we can't service the loan.
We plan to keep one and get a new house out of it – so even if we only break even that would increase our equity and value of our property we keep.I have been told that if I knock down our old cottage and build two new strata free standing homes I can live in 1st one (have mail directed etc) rent out the 2nd one for 3 months. Then decide to move to the 2nd one – send letter saying have moved due to noise, privacy etc etc to tax office, move to 2nd one then sell 1st and avoid CGT.
Does that sound like it is true!So we have a firmer quote for 511K for demolition and everything except carpet, landscaping etc. Might look at own demolition (another independent dem co.) so see if we can keep the costs down. We have for this price for building 2 x two storey double garage 2 bathroom houses. One is 197 sq the other 201 sq. So I think the price based on the above comments is fair. Top level inclusions also. They would share a common fence only – so dual occupancy rather than duplex which I would think would give us a better re-sale ie selling a free standing new house as opposed to townouse. It is so far looking feasable to get a loan. I have calulated a worst case scenario on interest payments of 11 months even though quoted 30 weeks build. Oh and we woudl then do the strata ourselves at then end which would cost another 2K or so I am told. Suggested that we may be able to sell off the plans once approved – but I believe if we can see out the build and holding costs that it will benefit the sale price as we are going for top level finishes – and to see it in real life should assist the sale. any thoughts…..
Thanks all – very informative. As it is our first attempt and we have two yound children we are mostly inclined to go with an all in quote and build to finish and see how the quote looks. We have heard only very good things from many sources for one of them. SO we shell take another small step or two and see if we are brave enought to take the plunge. Thanks for all the info and ideas. Lots to think about!
No living costs and moving into mothers house. Some great suggestions there. Thanks. I hadn't though of a commercial builder. I had though of buidling using and ICP (insulated concrete form) to speed up the build process. selling now for about 480K to 550. I will keep investigating. Hopefully the market will rise also while we are building – ever hopeful.
I am 41 hubby 48 with two x two year olds and no super much as we lived in the UK until 3 years ago. So this is all about making some inroads/investments and getting rid of our mortgage ASAP.
