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Illuminati or Matt007 or others do you know what the present Council charges are to vacant land? Is it around $25 – 30K?
I have been looking at property options and have been reconsidering getting the options to split the block myself, then sell the land and keep the original house or something like that… The figures look good even if I just sold 3 blocks of land at $50K each.
I had another proposal given to me by the PDeveloper which was not as interesting as I had hoped – saying the new house would have a mortgage of $190K and not the $100K – so the whole deal has got me thinking…
I will be meeting the PD tomorrow and this seems to be crunch time as far as he is concerned since other of his properties are waiting to be worked on – a tactic to get me to do irrational things maybe?!
Anyway if you do have some figures on Council charges to split land that would be useful and if you have any experience of splitting land and using property options as a means to create profit?Thanks for your thoughts and comments, Illum & Matt I really appreciate them – particularly the one on treating it all just as numbers and so not being emotionally attached. The good thing about the deal would be that I would by-pass estate agents and their % fees.
Once the PD has given me his figures for the deal and the contract I will get them checked out with a lawyer. I will keep you posted.Thanks for all of your comments since they have helped me prepare for the meeting I had with the property developer.
The PD didn't know about my mortgage ($240K) and has revised his offer to providing me with a new house with a mortgage of $100K which is positively geared to the tune of about $100 per week in my pocket – so this includes all costs from Rental Managers to Council Rates. They are still doing feasibility studies and fine tuning their offer and will be getting back to me this coming Monday 1st Nov.
So as I understand it from Illuminati : New House is worth $330K; Mortgage of $100K; Equity $230 – this is still better equity than what I have at present ( the house at present is not estimated at $400K but more like $380K) which makes the equity $140K…
The question I pose to Illuminate, Matt007 & Redd & anyone else is if the PD is paying off my mortgage of $240K – he is basically getting my house and land for that price which is damn cheap ( I bought it at $266K 5 years ago) – Ok he is doing the yards to get the permission and build but is this good for me to get a new house and still pay a mortgage on it while he goes ahead and sells the other 4 at what he estimates as $70K profit? We both have to be happy with the deal and we understand this – should I be happy? What do you guys reckon?
I would appreciate your thoughts on this matter before Nov 1st.
Many thanksThanks Illuminati, Matt007 and others – I go to a meeting with the Property Developer tomorrow, Tuesday, much more prepared and more clear. I will listen and ask for clarity and if you are still interested in my little bubble I will let you know what transpires. I can see that my equity does increase with a new deal so I will have to tread as a pack leader so as not to be snared as the submissive one…
illuminati wrote:equity is basically the money that would be yours if you sold the property. So if you had a deposit of 100,000 and purchased the place for 300,000 with a 200,000 loan and it went up in value to 400,000. then your deposit 100,000 plus the increase in value 100,000 is your equity. or you can say the value of the house 400,000 minus your mortgage 200,000 is your equity. if you pay down the mortgage = more equity etc so… using the numbers i just made up…. your equity is 200,000. the equity of this new house and land, according to you is 300,000. as you will have no mortgage.. so that is an increase of 100,000!! or if the developer is correct 150,000! BUT thats using the numbers i made up, so check with the real numbers. 300sm places near me atm are selling for 600,000 plus… so their value really depends on the area, type of building, demand etc. and the shape of the 1400sm block determines how best he can subdivide that space. how much is street frontage etc.Thanks for your comments Illuminati and Matt007 – can you help me further?
I have been told to look at the build proposals and choose the best house!
If the house is worth $400,000 what is the equity from this.
The developer rekons the new house will be worth $350,000, but his is probably exaggerated since to get 5 houses to fit on 1472m2 is quite tight even as double stories – so if the new house would be worth $300,000
How does this look as a %?
I appreciate your help, thankyou
I meet the developer on Tuesday so I need to be armed with clarity!
