Hi guys
I’m doing my first development this year. I’m planning on making approximately 25-45% equity on completion, and it being cashflow positive from day one.
How do you like my chances?
(hee hee)
I’m taking bets….
cheers-
MiniGoodmorning Mini Mogul,
I tell you what I think. I think your chances are extremely good because your a legend. I also think you will have to change your name to AKA mighty Mogul.
Godbless & thanks for coming!
Originally posted by MiniMogul:Hi guys
I’m doing my first development this year. I’m taking bets….Cheers-Mini
Hi Mini
This thread is “My Mission”. Are you building a Mission or something? [biggrin] Have you gone all religious on us? [biggrin]
Just joking! I’m betting you’ll make a squillion! My motto these days is to “Buy Wholesale, add value with my knowledge, sell Retail.” That’s what being a developer is all about, so …
…Welcome to the ranks of “Developers Inc.” [cigar][cigar]. Our Rural Residential subdivision is going nicely; we’ve just formed a broader group of investors and are currently buying the 40 acre block next door to the 60 acre block we already own. This will give us a total of around 50 bigger blocks of land. The bigger builders like bigger subdivisions better than smaller subdivisions, plus we get to build our road along a higher contour rather than across a lower lying area which we’d have to build up /put water pipes underneath etc etc. A win/win outcome all round.
Cheers
GregMini,
Congrats – I think you will do well..
Question for you : Is this development in NZ?
I too am doing my first development this year – in NZ. Would be lovely if I could make that sort of profit margin….
Good luck with it
Waz11…
What sort of development are you doing Mini – residential or commercial, single unit or multi?
I’ve got a dirty great hunk of land I have to do something with so I’ll be interested in a few progress reports.
Cheers
JeffOriginally posted by MiniMogul:Hi guys
I’m doing my first development this year. I’m planning on making approximately 25-45% equity on completion, and it being cashflow positive from day one.
How do you like my chances?
(hee hee)
I’m taking bets….
cheers-
MiniHI Mini
I think your ambition is great and I do not want to deter you, but I do wish to bring a little reality to the situation.
I am speaking from experience. I have been doing developments for over 17 years (and been in property for over 30 years.)
I am currently involved in 80 residential development projects for clients (www.metropoleprojects.com.au)
I am not telling you this to impress you, rather I want you to understand where I am coming from.
At some stages of the property cycle your “mission” is possible.
BUT….
At this stage of the cycle with high building costs, rising interest rates, flat or falling end values and banks and valuers that put low figures on your end product, I am sorry to say you dream is unrealistic.
I have my own construction company and a team of seasoned professionals behind me.
Our best projects are returning 20% equity and still some negative cashflow.
But at other stages in the cycle you may be able to achieve what you are aiming at.
Again, I’m not trying to deter you. Learn a bit more, do your sums very, very carefully and go for it.
If you want to learn more you may find this link useful
http://www.metropoleprojects.com.au/html/s02_article/article_view.asp?art_id=107It’s our once a year property development workshop with 8 top property experts teaching you all you need to know about property development
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auHi Everyone,
and thanks for your vote of encouragement.>… end product, I am sorry to say you dream is unrealistic.
Ooh, goodie, a throwing of the gauntlet….>At some stages of the property cycle your “mission” is possible.
Yep and I didn’t actually disclose that me development is in NZ which I daresay is a completely different kettle of fish compared to where/how you do yours.> BUT….
> At this stage of the cycle with high building costs, rising interest rates,
> flat or falling end values and banks and valuers that put low figures on your
> end product, I am sorry to say you dream is unrealistic.If I was developing down the road from you I’m sure you’d be correct but where I am doing it two of those don’t apply. The other two risks I have mitigated if not completely eliminated.
I wouldn’t be silly enough to risk being a first-time developer in a market where end-values are falling – and I am not surprised you sort of red-flagged me for that. Also I am not really into negatively geared investments, however I have been known to make deliberate and speculative exceptions to this rule (just don’t tell Steve McKnight, OK!) and bought for capital gains alone, when according to my research and comparitive analysis the market is my analysis heading in only one direction which is UP.
Yes, neg gearing has it’s place – but I so wouldn’t do it in the market conditions you describe and I certainly wouldn’t develop, especially when the market is flooded with developments sort of maybe with a risk of going down in value, an oversupply, and developers of long experience such as yourself with the market basically covered. I reckon if I tried to do that it would be a fatal mistake that could wipe me out.
> I have my own construction company
me too!
>and a team of seasoned professionals behind
> me.Me too! I mean, I won’t be on site with a hard hat on, put it that way – I don’t think that would suit me somehow (and read that last remark to be as shallow or as deep as you want!)
> Our best projects are returning 20% equity and still some negative cashflow.
I don’t want to say that I am going to out-perform the best project of a company with 80 developments and 30 years of experience under it’s belt in case I fall flat on my arse with banana skins, egg on face and the whole bit – but I will say that it is my MISSION to do this!
However I am keen to pick your brain some time and I would be more than happy to pay you for an hour of your time as a consultant if you do that sort of thing.
There is a ‘certain construction method’ that I am just crazed and itching for information on.>> It’s our once a year property development workshop with 8 top property
>> experts
>> teaching you all you need to know about property developmentI will check it out for sure
cheers-
Minimini – care to expand on your construction method? I have an interest in this. We have looked at standard double brick, tilt concrete, new ideas for walling (fillable foam), steel frame etc
The reality in the market I am in is double brick is the cheapest material (due to economies from the big manufactures) and also the most highly prized by the retail market. Buyers will pay for tilt though it is not really much of a saving to use.
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
Hi AusProp
I am crazed on tilt-slab over brick for various reasons.
I am not doing tilt-slab for my first development, but looking at it for the next – I think it suits the slightly bigger development such as six townhouses on a city block kinda thing. But in the end it will depend on the site and so on, and that’s months down the track anyway. My Project Manager does quite a few different construction types.
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