Yes, but apparently tickets are likely to be quite limited if you don't already have one as part of an earlier package deal. It will be in Melbourne.

Your negotiations will be driven by the various tender responses you receive for your build from each builder, not by what the posters at Somersoft forum have estimated.

They should be able to provide you with a breakdown of the cost drivers and you can reference the cost base of each component of all of the builder's offers to negotiate the best deal.

For example I am currently negotiating with builders for townhouse construction. One of the better priced builders had a high price for concrete compared with the other quotes, so I got him to go back and find a better deal for concrete. Seeing a breakdown of the cost components also allows you to understand whether paying $x for security screens or sprinkler system or stone bench tops adds enough value to include it in the final build.

Note that the objective in negotiations isn't to screw the builder, it is to work with them to find the lowest cost possible to maximise your sale value.

Christian, your earlier post was spot on, it aligns exactly with my post here https://www.propertyinvesting.com/forums/property-investing/value-adding/4343689 but explains it better.

BTW I am currently doing 3 bed, 3 bath, single garage townhouses which are 125 sqm, in a location where the builld costs $1,800-$2,000 per sqm turnkey. 200 sqm may not be the optimal size, even if you can fit them on the block. For me it makes the difference of a 40% profit on costs at 125 sqm, whereas probably no profit at 200 sqm.

Note also that profit isn’t the only factor. For me with a limited capital base, I reviewed and discounted some larger build configurations that may have had a higher profit margin, but had a prohibitive cost base.

For argument’s sake let’s say your 200 sqm townhouse costs $300,000 and at 125 sqm it would cost $187,500. You may get an extra $120k in sales value for the larger build, so in theory you get an extra $7,500 profit per townhouse, but you have a much higher build cost and it will be much harder to fund.

I am trying to work on the theory that for every extra $0.65 I spend, I need to be getting back $1 more in sales value. This is in line with the lending requirements of the banks which will fund a maximum of 65% of the final realiseable value (net of gst). By following this simple formula, I ensure that I can still fund the build with a limited capital base. If alternatively you are funding based on 20% of the costs, it becomes even more important to minimise them where ever possible.

Cheers,
Matt

Would be a pretty short list:
Moranbah
Dysart
Blackwater
Newman
Port Hedland
South Hedland
Karratha

All make the list comfortably at 10%+ yields and near 0% vacancy rates. Go the mining boom

Some do. There are tax advantages in building townhouses, selling some and keeping some.

For example if you build 4 townhouses for $1 million including land cost and can sell 3 of them for $1 million, you can retain the 4th one without having made a profit under ATO rules. You can then leverage off that asset by borrowing against it, to get your equity out tax free and use the rental income to service the loan.

I have built in Melbourne before. You can do turnkey project homes for $1000/sqm, but 2 storey off the plan is $1500+ for everything.

60%?? Is that now their standard?

Is there a table that someone could point me to of all the bank loan criteria, or is it a closely guarded secret?

Moranbah is a market where there is an extreme shortage of housing. How does rent capping encourage the desparately needed investment in housing?? Who would build a negatively geared house that could never achieve market rent?

Talking to people in the know in major mining companies there, the key issue is how slow the government agencies are to approve more accommodation that is so desperately required.

I have over $1 million profits lined up on the 3 deals. That was all the motivation i needed. I am doing all 3 concurrently in the same market. I got jv partners onboard to assist with financing them. I actually met the jv partners for the 3rd development on the course with troy harris. I am doing huge hours to do the developments, but the key is getting a pipeline of projects underway, then eventually leave the day job to do developing fulltime.

How much do you have to invest?

Hi elmodogg,

Also look into Troy Harris from Rookie Developer. He develops in North Melbourne and runs a bus tour of his development sites, as well as a 1 year mentoring programme.

I’ve done the bus tour and it is worthwhile.