Yeah, I'm looking at doing a straight backyard split (maybe) next to get some cash in. Even a cheap property requires 70k worth of cash even before you get into the subdiv  which is really annoying. Good luck with finding something, it takes a while to find something that's right!

D

Yet to have valuation done but looking like 300k-350 hard to compare since there isnt much that is exactly the same in the area.

$1.3ish Cost (at this stage)
$1.6 (conservative valuation)

Then will be enjoying hopefully quite a lot of depreciation on top of the equity.

300-350? They should be finished in Jan. The builder is pulling out all the stops but I don't think well be done b4 xmas. Fencer is a moron! That's holding up driveways etc. Hopefully better valuation next yr anyway. Market went down temp while building but has picked back up due to scarcity (thank god!)

D

Hi,

So for demo costs allow about $6k just in case. For all the subdivision costs = plans, council, working drawings, etc allow up to 30-40k if you get the architect to do all of it, Which i would go with if it is your first one. You might be able to squish it into 12 mths depending on the council but don't believe them when they say 3 mths for planning approval (ours still took 8 mths through Whitehorse when they said 3) A more realistic time frame  for completion is 18-24 mths just in case. Construction should take 6-9mths, 6 if its nice and easy.

I have to say I don't know what the bonds are either.

 Give the council a ring and ask them if that particular block is ok for subdivision they can usually tell you if its ok. (this is not a guarantee of a yes to permits) You'll still need to pay for meters etc for gas and power (not up to that yet).

Allow 200-250k constructions costs with a 50k contingency. Landscaping, blinds, things like that are often extras. Call some builders local to u and get prices, call architects and get prices even before you look at your land.

Remember you can always get the plans through the flog off the block which may work better money wise if construction doesn't.

Feel free to message me if you need anything

Enjoy its a lot of fun

D

Well! The owner must be right so there! Beware….. I would run a mile with my barge pole dragging behind me if they had no proof, no proof was obtainable and there looked like major structural infestation. Are you able to tell or find out from the general era the house was built as to whether they would have used steel? Just for more info for you before the pest guys get back to you.

You've gotta love it when they say to you hey you don't need to do due diligence coz Bob reckons it's fine. Thanks for keeping us updated and somewhat intrigued.

D

Hi,

I don't think you are displaying poor form. Any reasonable person would have the expectation of the vendor either repairing the damage or if they choose not to then discounting the property to offset the cost of repairs. It is your first purchase and it is a pretty steep learning curve. Remember if you don't ask you don't get.

If the vendor understands that there is a serious pest problem then they may be even more willing to offload something they think may sit on the market for ever. Don't hesitate to go a fair bit lower on your next offer (if you still want to go with it of course) to take into account for interest you might pay if the repairs happen after settlement, rent you might lose if the property is empty for say 2 mths while being repaired and any other costs not just the actual repair costs. Even negotiating on the settlement terms may save you money for instance longer settlement, access and ability to undertake some of the smaller parts of the repairs.

If you still want to go ahead after all is said and done don't be afraid of offending the vendor or upsetting the vendor, yes a win-win is the desired outcome but your financial future is what you are setting up now. I  don't think I've met anyone who got into property investing to make friends…… 

Good luck, thanks for letting me learn about termites

D

Hi,

Can you delay settlement? You may have to pay the vendor but this may save you many dollars later. If your accountant is any good they should be able to set something up for you reasonably quickly (week or 2) If you search on the forum you will find other posts on transferring between u and a trust/co/etc and it will cost you a bomb!

Good Luck,

D