i’ve just put an offer for a property, with a view to knocking down the original house, and putting on 4 townhouses/units.
The offer includes a long settlement (9months) , so I can use the time to push the plans through the council.
Numbers look good. With a property price at $540K, I will need to source a money partner to develop the town houses. My other option is to do a deal with the builders, in which they put up the costs to build the properties, then get payment buy owning one (or more) of the units. i’ve already spoken to a few contacts, who, on the numbers provided seem open to the idea. obviously to be put into more detail once the plans have been drawn up, and approved.
In the meantime, has any one experienced a similar set up (they are not uncommon apparently) and if so, do they have a template contract that I could assist me in drawing one up? There are a few ways that I could do this, what I’m looking for is a fair deal (which house do they get?, or do they get a median house price sold etc etc).
Any views anyone?[eh]
Thks
Mee CheeHello,
I have recently bought a block of and also with a house ($430k) on it in view of building 3-4 townhouses on it and either selling one or two of them or renting them as cashflow positive. (I have tenants in currently whose lease expires in oct – gives me time to go to council) although is negative cahsflow to me at the moment as their rent only pays half the mortgage.
I have approached a major builder (part of Simonds) to ask them how much they would construct for (works out at $5k per square compared to $10-15k with private builder). With them all I have to pay is $1000 upfront to do soil tests, surveys and draw plans. Then I can submit this to council for approval. Once I have approval I can show it to my bank who said they will lend me 80% (i think) of the value of what they would be worth in the marketplace after they have been contrsucted (say $450 ea).
This way I have only laid out $1000 and council fee intially and that’s all. Then I get the rest from the bank to start contruction and they handle all the construction payments. This definitely helps my hip pocket as I have nothing but lint in there [blush2]
Hope that helps you a little.
Regards AndreaI have recently bought a block of and also with a house ($430k)in view of building 3-4 townhouseswhat they would be worth in the marketplace after they have been contrsucted (say $450 ea).So an existing house on a decent sized block is currently worth $430k? Then why on earth would anyone pay $450k for a ‘townhouse’ on a piece of land1/5th the size?
Are you sure you’ve thought this through?F.[cowboy2]
thks foxyac
Hadn’t thought about funding from the bank using 80% of the perceived value of land plus plans with permit. i will certainly look into this.
Thks for the tip
Mee Chee
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