Hi all,
I am tempted to purchase an inner city res block, which currently houses a delapidated old fibro home, bulldoze the house and build a duplex or 3 townhouses (depending on zoning)and sell them. Has anyone in the forums had a crack at this kind of project? I’d love to hear about your experiences and particulary the kind of pitfalls to avoid.Thanx
there’s actually a NSW developer called Jason Whitten who lectures or maybe mentors through the richmastery crew. You should just book a day with him for a grand or something and pick his brain.
maybe??Hi Bigbux,
Every time I come up with crazy ideas about developing my Mentor/business coach reminds me of the same thing or rather the same person, Henry Roth.One of the Sydney’s eastern suburbs premier property developer who ironically never built any of his developments. Rather he bought and sold options on properties and at most obtained DA approval.
Perhaps this shuold be somenthing to look at instead of overcommitting to a highly risky venture with little experience.
My First property development was buying a 2%option and selling it 4 months later for 1000% profit (that is 10 times on the option fee)
Kabung, many thanks for your comment re options and Henry Roth.
I am also interested in options, then either selling them, or using the new equity to possibly develop myself.
What was the option that you took, and what was involved? (ie I assume that you had to do survey, then go to council with plans for either a subdivision or units/etc)Wrappack,
The deal that I was posted about earlier was my first ever successful deal, which went a little something like this.
Unemployed and on my way to join the dole que, I walked past and noticed a property in the window of a R/E agent not too far from the centrelink office.
I walked in told the agent that I was interested in the property, she told me that it was sold but may have something coming up in a couple of days. After about 2 weeks she called me back and told me that she had something on the market that would interest me. After giving the details of the property, I gave her an offer of a 2% non-refundable option for 12 months which she took to the owner who readily accepted.(note that i did not negotiate down the price knowing that if i bought it at that price it was well under the prices being paid for land with townhouse/villa zoning and worst case i could subdivide into a battle axe and probably break even or make a small profit (but this would have increased the risk))
Now there are a few key aspects to this deal that need to be discussed.
1. I knew my area very well and the exact property that the agent was talking about. Although obviously any buyer would need to check the property first.
2. I knew all the council regulations that pertained to all the developable land within my local council.
THE DEAL ITSELF
The property was about 1357sqm and had a house with a swimming pool. The demensions were 17.56mX76m. Due to restrictions because of the width of the site it needed to be amalgamated. knowing that the properties next door was a derelect house that had been on ‘A Current Affair’ for the worlds worst tennant, I assumed that the person who owned next door was holding the land to amalgamate it to develop.
After holding out on paying the option for seven days i talked the agent into not advertising it for about ten days. This move turned out to be decisive in enabling me to make profit on the property. During those 10 days I asked the agent to find the owners next door. However she was unable to do this because all the agents use the same system, “RP Data”.
So I made my own enquires through my own resources and within 2 hours i had the mobile ph number of the owner next door who was an accountant for the eventual buyer. We set up a meeting and after some tough negotiations and me threatening to subdivide the land into a battleaxe which would cost him more to purchase in the long run he agreed to purchase the property at a profit that suited me.
If the agent had advertised the property I would not have made any money because the eventual buyer lived one and a half blocks from me, and wold have seen any advertisment in the local paper. hahahaah (thats how the cookie crumbles)
My next 2 deals that im working on are even better than this first deal.
4 blocks of land with 3 houses on them (one sits on a double block) in one of NSW premier tourist and holiday destinations. 200m, 500m, and 1km from 3 respective beaches and panoramic view from the mountains, to the river, to the ocean. I just secured options on them with exercise prices that are less than both the median and average prices in the postcode. The land can be developed into between 20-24 units. If I told you the price i paid for the option fee you’d probably think either I was lying or the owners were a few sandwiches short of a picnic.
Regards
KabungKabung, congrats on your departure from the dole que!.
You mention that it was your first successful deal. Did you have a few options expire, or go sour through council?
I just secured options on them with exercise prices that are less than both the median and average prices in the postcode. The land can be developed into between 20-24 units. If I told you the price i paid for the option fee you’d probably think either I was lying or the owners were a few sandwiches short of a picnic.Please, do tell, do tell us how. Did you source them yourself, and tie up with the option from phillips street, or were they advertised from rea?
I have negotiated deals since my first deal but the exercise price on tne options were to high to re-sell and needed to be amalgamated to maximise their potential. This is because I was focusing on sydney CBD.
My current ones were negotiated through a REA.
Technically there were three (3) contracts covering four (4) blocks (one is a double block). I paid $1.00 per contract, so $3.00 in total. Like i stated in my earlier post, its about being able to make a decision and secure the deal before agent puts it openly to the public.
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