Hi there,
I have been looking at development opportunities as a strategy to pursue in a few years after I have built a bit of a bankroll. As I work in construction and have a pretty good eye from my entrepreneural background, I have quickly found some nice niche market opportunities.
What I would like to hear is someones story of a development that they put together, the steps that they went through and the lessons that they learn’t along the way. I’d like to get a bit of a feel for the process from a few different people. Is there anyone willing to share their experiences ?Sean Mulligan
NE Sales Consultant
Otis Elevator Company Pty LtdHi Sean,
Would be glad to share but could you please tell us are you referring to developing raw land (ie. subdividing) or property development?
AmandaBS
http://www.propertydivas.com.au
FREE online Property Resources“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”
Property Development. I would love to share a few stories of my own to get things rolling but unfortunately I’m a bit light on experience at the moment! [blush2]
Sean Mulligan
NE Sales Consultant
Otis Elevator Company Pty LtdHi Sean,
My wife and I are in the middle of a small development (front reno, rear subdivide and build) and I’m happy to share our experiences so far.
Also, I have a mentor who has his finger in pies ranging from 3-6 unit subdivisions right up to multi million dollar land banking (he’s putting one of these together in WA as we speak) so I’d be happy to talk to him about sharing some of his stories as well.
Oh, and if you haven’t come across it already there is an interesting quarterly mag called Residential Developer that’s into its 3rd or 4th issue now. I pick it up at my local newsagent. It’s mainly focussed on large development (communities and highrise) but apparently they are going to start showcasing smaller projects in coming issues. There’s also lots of development-related news which is what I find interesting.
Feel free to PM me or we can converse here in the open for all to benefit (and have their 2c worth).
Cheers,
Art‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
Hi Sean,
Probably the most experienced Property Developer on this forum is Michael Yardney so perhaps try dropping him a PM (personal message)
If you’re passing a book store I’d recommend grabbing a copy of “Australian Residential Property Development” by Ron Forlee, published by Wrightbooks.
Best wishes,
AmandaBS
http://www.propertydivas.com.au
FREE online Property Resources“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”
Hi Sean
Property development can be very lucrative, but it’s interesting how many property developers go broke.
I am not trying to talk you out of it. I have been successfully developing proeprties for over 20 years and I am currently involved in 3 dffernt projects for ourselves.
Currently one of my companies Metropole Projects is involved in project manageing over 100 individual development projects for private clients.
I am just saying be cautious and the fact that you are doing your due dilligence is great.
Rather than re-hashing things that have been discussed before in other posts, may I please refer you to 3 articles that discuss….
The property development process (as you asked)
http://www.PropertyUpdate.com.au/articles/14/1/The-Property-Development-ProcessThe benefits of becoming a property developer
http://www.propertyupdate.com.au/articles/19/1/The-Benefits-of-Becoming-a-Property-DeveloperThe risks of becoming a property developer
http://www.propertyupdate.com.au/articles/70/1/The-Risks-Related-to-Property-DevelopmentI hope this helps a little[exhappy]
Michael Yardney
METROPOLE PROPERTIES
Publisher of Australia’s leading property e-magazine.
Join over 20,000 readers.
FREE subscription http://www.PropertyUpdate.com.auHi,
I’ve been meaning to ask Michael whether he does anything outside of Melbourne.Sean, property devt is far harder than a homeowner understands it to be.
I bought an old shophouse sitting on R-zoning to redevelop into 4 courtyard homes. The price was good – $260000. I had initial quotes for building which was at $95000 per house. I was told that infrastructure costs would be $100000. I had written estimates at $103000.
I was told that it’d take 6 months to build. Like the Adelaide man who told his story in API (Set or Oct issue), I budgetted for 18 months of holding costs.
Know what? The actual cost is $50000 more per house. The process will take more than 24 months.
Fortunately for me, I accurately forecast the area to go up in value because of the marina & other projects nearby.
To cut a long story short, I’m interested to ask Michael whether he can help me develop another property that I bought here in Adelaide. It’s an old cottage on 1350m2 of irregular shaped slightly sloping land near a railway track.
Anyone who’s interested can post a reply here or e-mail me.
Thanks for reading this long post,
Kum YinOriginally posted by kum yin lau:Hi,
To cut a long story short, I’m interested to ask Michael whether he can help me develop another property that I bought here in Adelaide. It’s an old cottage on 1350m2 of irregular shaped slightly sloping land near a railway track.Anyone who’s interested can post a reply here or e-mail me.
Thanks for reading this long post,
Kum YinHi Kum Yin
Sorry – we do not operate in Adelaide.
I don’t know of anyone who provides similar services to us there.
Martin Ayles is an Adelaide based developer who posts on this forum. Maybe he could help you
Michael Yardney
METROPOLE PROPERTIES
Publisher of Australia’s leading property e-magazine.
Join over 20,000 readers.
FREE subscription http://www.PropertyUpdate.com.auThanks for the response people[biggrin]
I”m starting to get my head around the process – and started to build my team of consultants. Keep the stories coming!
Sean Mulligan
NE Sales Consultant
Otis Elevator Company Pty LtdHi Sean, didn’t mean to doscourage you. My 1st naive foray into devt looks set to deliver some profits. And I don’t have your skills, building, renovating, earthworks etc. However, I have the reverse, financial resources.
A responsible person will tell you that the last is very impt. I have had to pull out cash from other property & borrowed from my Dad.
This post is to alert you to what I subsequently did. I tend to jump in at the deep end albeit not without fear.
I saw the cost of demolition so I said, “OK, look for something with no demolition cost”. AND I FOUND IT. So what was I to do? Buy it of course. I had no money – I asked my godson. He sent $35000.
Look at the score & if you find something like this …
1950s house on 800m2. Purchase price $223000, costs $13000
Rental = $220 pwBuild a new house along the side boundary [take away existing shed] = cost $150 – $160000 [This is a high estimate. The house can be built for $140000]
Once the house reaches lock-up stage, refinance. 80%LVR of $260000 = loan 208000. This leaves a residue of $48000, probably more.
The new house will rent for $260-$270 pw easily
This is the classic bird dog that doesn’t need to be sold, ever.
The heck of it is we have to find it first, and we do need to have some cash resources to complete it.
Sean, this property settled on 1 May 2006.
Hope this gives you some encouragement. Take care & good luck,
Kum Yin
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