Here’s the deal!

The deal is a couple of kilometers from the Brighton beach as the crow flys. The feel of the area is tranquil, away from the bustle, not up market but working class,  you feel a sense of quiet once you get there. There is elderly neighbors and it seems owner occupied mostly in the street from the best I can gather. Thier is a huge natural bush park and swamp directly across the road and all along the other side of the street, nothing will ever be built there to take the natural bush and views away. There are about 174 hectares. Peace Park facebook page is here. The land is 1427 square meters. The strategy is to put two new blocks at the front and a battleaxe driveway block down the right-hand drive looking from the street to a 600-meter block at the rear. Sewage can go in the existing pipe through the center of the property. Stormwater through rear neighbors for 13k and the two front lots to the street.

As you know I’m a numbers man so here are some of the basic numbers. You can see more in-depth feasibility and a shared Google spreadsheet in this page made specifically to bring updates about the deal as it unfolds.

Deals like this are great to be involved in as a joint venture. For me, the deal “fits” because 1). I can reside at the vacant lot in my campervan. This doubles as security while I’m on site for the developer. 2). I get the first-hand experience learning on the ground. Always learning.  3). It moves the development forward for the developer faster. Time is everything in this game, which developments are by nature and council processes is always a slow one, moving things forward is always the best option to take.

These are the more refined numbers as the costs and details got clearer and the deal unfolds. The numbers always change in a deal what you try to do is get within 95% or real and the rest varying, either way, is acceptable plus a 5-50% contingency.

SALES VALUES
New house 570000
New house 570000
Old house 550000
TOTAL INCOME COSTS
$1,690,000
Purchase price 672000
Stamp duty on purchase 18063
Settlement costs, lawyers 1000 $691,063
Council fees:
Headworks charges 50000
QUU sewage 3000
Application fees 3150
Compliance 2000 $58,150
New houses:
Build 2x houses 340000
Build house 170000
Floorings 12000
Retaining walls 15000
Earthmoving/drott 10000
Patios 15000
Fences 12000 $574,000
Driveway services:
Plumber 1500
Power poles 3600
Driveway concrete 7000
Surveyor 2900
Water meters 3000
Stormwater 3000
Consultants 7000
Move house 0 $28,000
TOTAL COSTS $1,351,213
NET PROFIT $338,787
PROFIT % ON COSTS
25%
BORROWING RATIO
80%
RENTAL RETURNS
House 1 per week 550 $28,600 per annum
House 2 per week 550 $28,600 per annum
House 3 per week 550 $28,600 per annum
TOTAL $85,800 per annum
Less costs 10% $8,580
NET RETURN $77,220
INTEREST AT 4.3% $58,102 $1,117
SURPLUS/DEFICIT
$19,118 per annum
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