Hi All,
I have 2 IPs with a hold and pray strategy that in the current environment is not working for me. I want to get into property development and ask for your opinions on which course is ideal. There is Cherie Barber, Bob Andersen and Dean Parker. I am in Melbournes North and would also be keen to JV with anyone currently involved in small developments so I could learn from them.
ThanksHi elmodogg,
Also look into Troy Harris from Rookie Developer. He develops in North Melbourne and runs a bus tour of his development sites, as well as a 1 year mentoring programme.
I’ve done the bus tour and it is worthwhile.
I am also involved in larger scale property development, where we put our partners directly into projects. Larger projects produce larger profits especially with funding issues. Also if you go into a 2 or 3 unit developments the profits are not as large because you are competing against other investors and small developers.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
Hi mattnz,
Were you inspired by the tour to undertake any development work yourself?Hi Nigel,
Where are you located and what is the process of identifying what the potential investors want to achieve so they can be brought together. Is it a financial involvement only or can they be involved in the process?I already had 2 development sites and now have a third. Not investing in melbourne or sydney though, the returns aren’t high enough.
What prompted you to get into developments? Do you work on one project at a time if not you must be very well organised.
I have over $1 million profits lined up on the 3 deals. That was all the motivation i needed. I am doing all 3 concurrently in the same market. I got jv partners onboard to assist with financing them. I actually met the jv partners for the 3rd development on the course with troy harris. I am doing huge hours to do the developments, but the key is getting a pipeline of projects underway, then eventually leave the day job to do developing fulltime.
How much do you have to invest?
We are using LOCs based on our home and IPs and will sell one of the IPs. We should have access to about 300k to 400k after the sale. I must congratulate you on your achievements.
Matt,
Do many property developers develop to just hold for yield?
Some do. There are tax advantages in building townhouses, selling some and keeping some.
For example if you build 4 townhouses for $1 million including land cost and can sell 3 of them for $1 million, you can retain the 4th one without having made a profit under ATO rules. You can then leverage off that asset by borrowing against it, to get your equity out tax free and use the rental income to service the loan.
Is it fairly common for yields on newly constructed dwellings to be quite high (I mean rental income divided by construction cost, not land value) ?
I'm finding with some of my calculations that I could build a single storey dwelling for less than $200,000 (at the back of an existing dwelling) and achieve rental in some areas of $400 per week… Am I dreaming?
Sounds realistic.
I am building two townhouses on the back of an existing house in Gladstone. Total build cost around $600k, each will rent for $1,000 per week in the current market, for around 16% yield plus depreciation benefits of a new build
mattnz wrote:Sounds realistic. I am building two townhouses on the back of an existing house in Gladstone. Total build cost around $600k, each will rent for $1,000 per week in the current market, for around 16% yield plus depreciation benefits of a new buildthat's excellent Matt!!!!
when will you sell them?
Need to keep them long enough to avoid income tax and gst. I have plenty of exposure to the Gladstone market though… 14 townhouses currently planned.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
