Forum Replies Created
I entered into a similar deal in a corner block 2 townhouses, in Mckinnon, VIC a few years back. It was a good option for me at the time, where 2 projects came to a point where I required funding for construction loans at the same time. I financed one myself, the other was done as a joint venture with the builder.
I owned the land, and was paying a mortgage on it. The builder built the houses.
– Specification list specified what fixtures and fitting, and materials went in my house. What he had in his, what was up to him, so long as the exterior matched the town planning permit, and endorsed plans.
– My original strategy was to buy /demolish / develop / sell. The numbers wouldn’t have worked for me unless the builder paid me a “balancing figure”. This took into account the expected end selling price of “my” house, and all my costs up to that point, including holding costs until build end, legal, and selling costs. From memory, the figure ended up being around the 120K mark. He was happy to do this, as the deal was stil worth it for him. Win / Win.
– As I owned the land, the builder was effectively pouring money into building on land he didn’t own. Of course, he put a caveat on the land.
– When completed, a contract of sale was drawn up for the transfer or ownership for his house. A theoretical fair dollar value was put on the house, the builder would have had to pay stamp duty on it. The actual figure was the “balancing figure” I mentioned earlier.An agreement was drawn outlining all the above to cover the plan. Overall, the project was successful, build completed in quick time (5 months for 2 double storey 25 sq townhouses) as it was in his interest to finish to enable transfer of ownership. Build quality was top notch, and my townhouse sold for 80K over my expected price. He have since built other projects for me.
In this case, my builder was cashed up and financed the build himself. You need to make sure your builder has strong cashflow, or can secure lending on it. I believe it is possible with some banks for builders to lend based on this type of deal. Check it out.
Good luck.
Propertyboy
I have a property in the area, managed by an Agent based on Church St, Brighton. I presume you are talking about Vic.
Managed for three years, rental of $565 per week currently, I've had 2 excellent tenants, mgt fee of less than 7%.
The Property Rental director is very professional, and himself involved in the development/investment game. He recently passed my account to an offsider who is equally as good to date.
PM me if you want to know details.
Thanks freckle.
the job has been done, as a variation – and the price was a lot more than I expected. (Yes should have checked price before going ahead…) You're right I should call some tradies and get some firm quotes, was just hoping there might be some out in the forum that may be able to quote me per square metre as a rough comparison.
Thanks again!
Ok Michael,
the firb link was the website I was seeking. ie rules and regs surrounding tax and law.
My uncle wishes to put an offer in very soon, it sounds like he may need to fill in some paperwork first……
Thanks, plenty of reading for me.
Michael just wondering, given your client base, any good info resources for guidelines on purchasing in Australia as an overseas investor?
Cheers
Thanks Michael. Great info.
It sounds like this area has been popular with asian buyers. Any particular reason? Schooling? Other?
BTW, His 2 daughters study in Adelaide, one has just graduated, and they are intending to live there.
Yes, cash buyer, and is really keen to secure something in the next week! any comments?
Agree with Fredo.
Loads of investors (mostly mum and dad investors) were sold into the idea of building in Point Cook through a number of companies in the name of “wealth creation”. Point Cook has enjoyed substantial growth in recent years. Many of these houses have now been completed, the investors are realising the consequences of an oversupply of housing with regard to sales and renting. Add to that, a general flat market. Which is why Point Cook is now flooded with houses for sale. Investors can get better returns elsewhere right now, rather than having to wait those extra years for the balance of demand and supply to come back.
That’s great. Thanks for clarifying.
mccoz
Scott No mates,
Can you define NOE? BTW we are in Victoria.
From my understanding, the builder has organised the point of attachment, but we are all waiting for Jemena (distribution co) to come in and install the meters.
The builder’s electrician then organised the paperwork for Jemena to make the final connection. It sounds like both the builder and I are waiting for this third party to complete the works.
mccoz
Thanks JacM and Rarahprincess for your comments. Hopefully this will be in a non issue and electricity will in next week, in the meantime, I’d better confirm my understanding of where i stand.
mccoz
Hi JacM,
No not yet. Just wondering whether any one in the PI community had any experience on this one. You’re right though. The solicitor will be the final call.
mccoz
This year I’ll be:
– finishing a rear s/s storey unit development
– starting build on a 3 unit res .development in , and be close to finishing by the end of the year. Permits pending any day now. (famous last words)
– hopefully ending a vendor finance deal (client is finally ready!) so I can release cash for the next deal.
– finding the next deal.
– trying to get my personal / family / work balance in better order. Need to get fit, and am aiming for the Run Melbourne half marathon in October.
– taking the family to Hong Kong at Easter
!
Now I’ve made myself accountable by sharing with you…….. Agree with DWolfe, will be great to see how much we’ve achieved at the end of the year.Thanks for your comments so far. Much appreciated. I’ve left a message for Alistair to call back for further discussion.
In the meantime, are there any developers who have recently taken out loans for a 3 unit development, and who did they end up choosing and why? Res/commercial/which bank? etc. Would be interested to hear their stories.
Thanks again
That’s a good point Alistair. I’ve just been assuming that a residential loan will cost me less overall. i obviously need to do the comparisons and work out my priorities eg. less cash in vs higher interest rate etc etc.
i’m building in the Se Suburbs in Victoria.
Are there any particular competitive products that come to mind as a starting point?
mccoz
Thanks Richard.
Can you clarify what a GR loan is? I assume it’s a loan that is based on end value.
mccoz
Hi guys,
I joined up back in November and have been receiving information on a monthly basis since then.
Regarding value, for a newbie who intends to be active in property investing, I think it would be excellent value. You’ll get access to a wide spectrum of property related info.
As someone like myself who has attended a few PI seminars in the past, and already purchased products, (have been developing for about 6 years now), I am receiving a mix of information I already have (or videos of seminars attended), plus new bits.
Overall then , in terms of value for me, I would consider it reasonable.
so far, I’ve got value from from some USA content. Also, two free tickets to each of Steve’s regular live updates, which I always like to attend, plus other perks, including a 16GB Ipod when joining, so you can download all new information pretty easily from the website (info is mostly in video and pdf format), perfect for listening on car trips etc. Really handy and keeps up the motivation levels.
ZacJ, in answer to your questions,
– some USA stuff (tax liens) has already come out. I believe there’s more USA related info to come in March.
– haven’t bought any more deals since, but I’m pretty busy at the moment with the 3 residential developments going at the moment. As I said, it helps keeps up my motivation levels, and if I’m frequently tapping in to my Ipod, it actually encourages me to keep above that complacent zone that we can all get comfortable in.mccoz
Thanks everyone for providing some options and I can direct the way I'd like to go. NAB looks like a good overall product.
'
KimandGlen, the contract does state 6.55% but thanks for flagging. i will ask the question.I don't think what I am seeking is anything out of the ordinary (except maybe vacant land limits my choices?), I do feel dissapointed about the lack of choice provided to me by this particular broker. I feel he thinks he can lure me in by providing lowest interest rate options without considering the overall product to fit my needs. Anyway, I have the choice to to vote with my feet.
Thanks again,
Mccoz
You'll should only get back your deposit as a buyer, if you have specified in your Contract of Sale, that the purchase is subject to "building/pest/ finance" or whatever item. Even then. the purchaser needs to be specific in how he/she words these "conditions" of sale.
For example. simply " subject to finance" is very vague.If for example, the sale was condition was worded eg "subject to finance being to the purchaser's satisfaction", this should be sufficient for the buyer to get his/her deposit back.
mccoz
