All Topics / Help Needed! / How much profit does a developer want from a project?

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  • Profile photo of LoanSharkJRLoanSharkJR
    Participant
    @equinoxonfire
    Join Date: 2016
    Post Count: 1

    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.

    Profile photo of StoreybuilderStoreybuilder
    Participant
    @storeybuilder
    Join Date: 2016
    Post Count: 45
    Profile photo of Colin RiceColin Rice
    Participant
    @fms
    Join Date: 2011
    Post Count: 338

    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, 4 months ago by Profile photo of Colin Rice Colin Rice.

    Colin Rice | CDR Finance
    http://cdrfinance.com.au/
    Email Me | Phone Me

    Perth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]

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