Hi,
my ambition to grow my very small portfolio to one of a decent size has been eating away at me for the last few years. I would love to get into the area of subdividing but just don’t have a clue as to where to start.
I have an investment property that I’m thinking of selling which would fund the subdivision adventure.
My plan (which is by no means set in stone) is to sell property and by a block to subdivide 4 units/townhouses on. Rent 1 or 2 and sell the other 2.
Another idea is to build 1 at a time and continue after the sale of the 1st place.
What are the key starting points to this adventure/
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Hi Sash,
How's your subdivision going with PnP PropertySubdivision? Did you go ahead with them with the construction?
Hi kntan,
Yes I am still with PnP. I could not be more impressed with thier professionalism and genuine efforts to help find solutions. I have run into a few problems with council. The managing director has personally taken my project and is negotiating and dealing with council on my behalf, using his skills and reputation. I will tackle construction when it comes will refer anyone to them for subdivision help.
If you are in talks with them mention my name.
Let me know how you go should you choose to go with them.
Cheers
I am rather surprised the process is still going, this would have been almost 12 months since you started (reading the first post)? Came to find out about the 100% guarantee sub division. Are they quoting "fixed" price? I was a bit skeptical, but I am still exploring the various options at the moment.
Hope you get the approval soon.
Yes the process is taking a fair while as I said due to various things coming up. Outside there andy control- conveyancers and council large mistakes. Yes I believe it’s a fixed price although it may depend on the size and scale of the project. 100% money back guarantee.
Hi Sash,
I read your post with interest as I am considering meeting up with the "Property Subdivision" Company and found your post google-ing to see what experience others have had with them. Hoping your happy to answer some more questions.
How has your project been going since your last post (Nov 2010)?
What size of development is it ?
You mentioned that they said they 'make there money in the build', how have you found this?
Did you get them to source your property or was it one you already had?
You mentioned a $100k + profit – is this before costs or after?Thanks in advance!
MattHi Matt, My project is a pain. <moderator: delete language> Council, dodgy agents, dodgy conveyancers etc not doing there job properly. Still haven't started building yet because of drainage issues, infrastructure departments being uncooperative. It will come eventually, very unlucky but semi-fortunate in a way this happened on my first project. As for Property Subdivision – A flawless company. Everything they do is with the clients best interests in hand. I'm having all the issues being taken care of by the director. I speak with him every couple of days with updates and he makes sure he gets everything 100% correct before we move on to the next stage. Referring back to the 'money on the build quote', that was just what I was told, still haven't got there yet so I couldn't tell you. In reality though, it has bee a huge weight off my shoulders knowing that they are actually working for me and trying to get the most successful and cost effective outcome. Once again, I can highly recommend them. Let them know you have spoken with me. Sash. Want it. Own it. Enjoy it. Achieve it.
HI Sash firstly well done for having the balls to do somthing like this. Subdivisions are never easy.
I am tossing up whether to do a subdivision or buy a property in a hot spot high growth area.
You mention that you would make 100K plus. It has been over a year since the first post. Do you feel that you could have bought a standard property in Nov 09 and jumped on the boom train? Im not sure how much your initial purchase was but lets sat you bought a 500K property and got on the late 09 early 10 boom at 10-15%. You would have made an easy 50 – 75K without all the headaches.
What is your advice to someone looking to buy? Many people who have made bulk cash have done developments and it is a good way to move forward if your salary isn't extremely large to get the snow ball rolling.
Sash,
Thanks for your reply. Hopefully your project issues will get sorted soon and you can get on with building!
All the best
MattHi Fredo,
I bought a standard property and did enjoy some capital gains. I havnen't as such had it value but I have had 5 or 6 appraisals which indicate a good $40k gain or 12%. Yeah there are headaches however when I've finished: sold the front, kept the back, have a brand new positive cashflow property with a rental income of $350 p/w and an LVR of 50% or so enough replicate on 2 more properties – im sure they'll dissapear.
I bought the property for $310k. If you favour capital growth, you can still buy a property in a good growth area and still add value through a subdivision and development.
Good on you for taking the plunge. There are so many opportunities there for the taking. Have a crack!! I will only buy something that I can add value to. Capital growth is a bonus in my strategy.
Sash.
Want it. Own it. Enjoy it. Achieve it.
Hi Sash
have you finally got the permit? i’m interested in engaging PNP too…how does their money back guarantee work? how much do you have to pay upfront? like 100%? or in stages? and if no permit, they would refund EVERYTHING? including all the council fees..etc?
@ Sash has your SA application got approved by council.
I'm going to have appointment with Robert Lancaster of PNP group to talk about my subdivision requirement.
Has anyone else got SA (subdivision Application) approved from the same company and please tell me howz the experience like?I don't know about you guys but I feel $20k is way too steep for town planning service, and my understanding is that figure doesn't even include land surveyor and town planning application and advertising fee.
I have done 3 sub-divisions in the last 5 years and on all 3 occasions I have used an architect and the last one only costed me around $8k which I believe should be the market rate today. My architect is equally informative and proactive and on all 3 occasions I had my planning permit granted. I even got a good discount on my building permit application from hm. I hate to see people paying unnecessarily higher fee because some big brand just happens to be the number 1 search result on google. Please look harder people, and shop around before you choose someone!!! Believe me, you rather spend the extra 15k to upgrade the kitchens or something.
Well i have bought around 1620 sqm land in one of the eastern suburbs to build at least 6 townhouses.I have been quoted $49,500 by PNP inclusive everything for 6 townhouses. I work full time and I don’t have time for all the nitty gritty of the process, as spoken to other surveyors 5 townhouses are easy but putting six will require bit of skills and could be a bit tight.
I have asked them to put 6 on the block as the profit we get with 6th townhouse could justify this cost of subdivision. I know it’s lot of money but can be justified in a bigger picture.Muzz and Fergal,
The process of subdividing is not particularly difficult, but it is both time consuming and complex. There are a number of things that need to come together in the right order for a proposed subdivision to progress smoothly. Without getting into the finer points, this is how it works:
- You need to assess the technical, practical and legal constraints of your property. Essentially, you need to know that what you are proposing is legal and possible and there are no overlays, zoning issues or covenants that will preclude you from progressing your proposal.
- You need to devise a strategy for your property to make the most of the opportunities isolated in the first step.
- Turn these thoughts and strategies into concepts and gain some early feedback from the municipal planning authorities.
- Turn the concepts into a formal town planning application an ultimately have the application approved.
- Use the town planning documentation as the basis for creating working documentation so you can build.
- Find a builder that suits your needs and build according to your approved plans.
- Complete the subdivision registration and sell as required.
Sounds simple enough, but the advice you get early in the process will be the most telling. So put some effort into the first steps and the rest will follow more easily.
In terms of subdividing and selling the land only, generally speaking, the local authorities will want to know what will happen to the land after it's subdivided. They may request that you provide full documentation that shows what is to be built, and the subsequent owner would also be held to these. Alternatively a description (maybe in the form of a S173 agreement) might adequately describe how the land will be used. Or occasionally, the land can simply be subdivided and the new owner can deal with the town planning requirements.
I have finally decided not to go with PNP I m rather going with Miller and Merrigan based in the same suburb. They are charging 18,000 AUD for the subdivsion end to end. The main factor for going with them is not money but their extensive knowledge in the local council and development within the area, ofcourse money being the second factor.
Sash,
From reading your post I think it's sometimes good to pay for professional consultants. As you mentioned that you did not have any experience this this field. With the consultants that you have chosen it sounds like they have experience, and can assist you in the planning stage and right up to construction.
If you didn't get their advice than where would you start?
What is the process?
Which consultants do you need and when do you require them?
Is there any issues with the site such as flooding?There are many issues that could have arise along the way that were unknown and sometimes the only way to learn is to try it yourself.
I think the price of 21k is fair for their services, how much would it have cost if you went solo and how much time do you require to outlay?
Hi Guys,
Thanks for all the comments. I have only just had the application resubmitted due to massive stuff ups from the vendor that sold it to me, the agent, the conveyancer and the council.
Long story short, the vendor moved the fenceline back 3 metres. There is a rear laneway that runs through the back of all the properties on the street. The agent misrepresented the property, not informing me that the laneway was actually owned by council. The conveyancer's should have picked it up, there reply was that they dont physically look at the property so they can't see if a fence is in the right place or not. They didnt however tell me to measure the boundaries (simple thing that needs to be done). It could also lie with the surveyers that when they did there prelimiary measurements should have come across that the 32 was different to physical measurements. The council then decided to take 8 months to realised that the proposed development was actually on council land and should I wish to proceed wouldhave to purchase the laneway off them for $6k plus costs. This I finally did and the application is now back with council – a process that should have been well and truly finished by now has cost me 6 months in time plus another $10K before the permits are even granted.
There will also be another $10k to connect services and create new titles etc apparently.
So it has been a massive pain in the ass, unforseen costs (I thought of taking legal action against someone but wouldnt know where to to start) however I should still be able to pull $150K equity from the project.
Goodluck! I still highly recommend PnP.
Those are some issues, but luckily you have found a solution.
In my opinion these issues should have been picked up before lodging a town plan report through due diligence and site investigations. I wouldn't use the conveyancer again for any property dealings, its appears they didn't do their job correctly.
Next time it may be a good idea to get a soil report just to be on the safe side.
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