All Topics / Help Needed! / How much profit does a developer want from a project?
I have the unenviable task of costing a development project for my father. He has a 1350sqm block 30m x 45m and I am trying to estimate how much profit each dwelling will realise when sold.
We need to do this as a JV, as my dad has no way to get this finance on his meager super (he is 73 years old). He would like to keep TWO Single story dwellings for himself.Here is what I have come up with so far, bare in mind I am a COMPLETE novice:
1.The no of dwellings I think will fit is 6 (mix of ss and ds)
2.The block has a mish-mash of hoarders rubbish, giant shed made of asbestos, rundown 2br house with bungalow = expensive demolition.
3.My estimate is based on a fictional 819sqm total building area, and $1500/sqm cost guide leading to a whopping $1228500 plus the addition of
Subdividing 6 allotments $30k
Bulldozing $30k
Plans/Permits $60k
Services: Gas, Elec, Water $30k
So, in addition to the construction costs, I have to factor in a further $150k, grand total $1,378,500.Now this block is in Croydon VIC, walking distance from main St, trains, bus stop literally at the doorstep, 5 mins from Eastlands shopping centre and Eastlink Tollway.
I have to figure out how much the developer wants to make on each unit for them to go ahead with it. After all, the cost is quite a nip in the pants. Also how long would all this take to build? I also presume it will need a strata title and costs involved with that?
Many thanks for all your helpful comments.Here’s something to begin with but I haven’t done any of it
http://propertyupdate.com.au/how-to-get-started-in-property-development-article/
I would engage a successful and experienced Project Manager to assist you. To many things can be missed by a novice, especially an uneducated one!
The more you self educate the better you will be at identifying good, average and bad advice.
I have a great pdf eBook I can email to you that is very practical info on property development – [email protected]
- This reply was modified 8 years, 3 months ago by Colin Rice.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
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