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Sub-Dividing a block of land

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Hey there Nun ...... yeah mate, slabs are down, bricks are loaded, doing battle with Western Power trying to get the subdivision powered up. :banghead: Council also got me a beauty with the retention of stormwater on the site !! Another $15,000 later ...... Harumph ! :mad:
 
Hey Trainspotter
Is that development in Geraldton (WA)? My old stomping ground - and a favourite town! I want to move back there someday.

Anyway - just wondering who you finance your developments through?
Reason being is that I am hitting a brick wall with a small development of mine :banghead: it is too big for resi - too small for commercial....

Anyone you could recomend?

Cheers
 
Greetings and salutations Investor82 .. it is indeed the little country hick town, sleepy little fishing village commonly known as Gero. Apparently there is a lot of mining happening in the hinterland (about 6 billion $$$ or so) and a deep water port called Oakagee about to begin construction (April 2011) but don't tell anyone ...... shhhhhhhhhhhhhhh ! They all might want a piece of the action. :D

Not into recommending anyone for finance as they are all a bunch of chocolate starfish's. You would be better off PM me and I can give you a bit of info on the pitfalls on the money market. Will need a bit more detail on the development from you prior to any guidance. ;)
 
I have heard some rumours like that, also rumours of a new marina development. But I dont like spreading rumours so wont tell anyone.

I have my "retirement" home up there (Im only 27) and love the diving and fishing (but of coarse I never catch any fish cos there are no big fish up there at all :D)

I sent you a PM on the other stuff.
Good luck with your development, I think your description of developing is pretty accurate!
 
Sub dividing a block of land

morning folks,

Have recently seen some land come up for sale in the street I live in and have been wanting to look into it further. Block is about 9700sqm and can be subdivided into 9 seperate lots(according to the agent's sign out the front anyway).

Current asking price for the land is 499K, and if it were chopped up into 9 lots, a block of land of roughly 1000sqm would currently be on offer for 200 - 220K(based on what I've seen others sell at). So the most obvious gotcha seems to be that it's going to cost a motza to get the land to a position where it can be sold as 9 seperate lots.

Whilst I think that this would be waaaayyyyy too big of a project for me to start off on, it has got me thinking about these types of opportunities a bit. Where would I go to get more information on taking on this type of project? Anyone know what sorts of costs can be involved in doing this type of project? What kind of a timeframe would I be looking at to get the job done? Any other comments?

Cheers
 
Re: Sub dividing a block of land

Sounds too good to be true? Purchase price 500k PLUS development costs of say 50k per block + settle fees etc x 9 = 1 million dollar spend.

Sell price of 180k x 9 = 1.62 million dollar return leaving 620k profit

Take out CG of say 50% and Interest component etc and alllow 18 months development phase = 25% RoR !!

Where do I sign? :eek:
 
Re: Sub dividing a block of land

I worked for a surveyor firm for a few years just out of school and this is pretty much what they do. They have knowledge of all the planning laws and can usually give you a rough idea about what you can do and estimate of costs from one meeting.

On face value though, unless the block has wide street frontage you may need to allow for some internal roadworks and consequent loss of saleable land. Council often also requires some work or contribution to improve roadworks and services.

In my area (rural residental) some time ago a developer had been coming in to do the earthworks and sales for about 50% of the sale price.

I'd say feel out a Surveyor who will give you a brief over-view specific to your proposal for little cost.
 
Approach the RE Agent involved and ask for the suporting documentation in regards to the subdivision potential. Take this paperwork to the local council and ask for a planning approval/decision WITHOUT actually applying for Development Approval. If council says it is OK to subdivide then engage a town planner to progress dealing for costing purposes. The town planner should be able to give you an average costing for development inclusive of headworks fees, internal road strucure if necessary, sewerage, eletricity blah blah blah.

If numbers stack up (which it looks like they do on paper to me) then contact RE Agent and place an offer on block subject to finance and a clause for 120 days DUE DILLIGENCE. Give listing back to RE Agent and get them to presell or obtain expressions of interest for at least 3 of the 9 blocks to cover development costs. Inside the 120 days due dilligence you should be able to figure out presales, sudivision costings, marketing etc.

More to come as I think this thing through ........ zzzzzzzz
 
Dunno how I missed this thread when I opened a new one this morning, thanks Bushman, all merged in now:)

Whiskers, trainspotter, thanks for the replies. The block would need roadworks to be able to divide it up(just over 60m frontage) so maybe the work involved in that is the reason for it going cheap:confused:

trainspotter said:
Approach the RE Agent involved and ask for the suporting documentation in regards to the subdivision potential. Take this paperwork to the local council and ask for a planning approval/decision WITHOUT actually applying for Development Approval. If council says it is OK to subdivide then engage a town planner to progress dealing for costing purposes. The town planner should be able to give you an average costing for development inclusive of headworks fees, internal road strucure if necessary, sewerage, eletricity blah blah blah.

If numbers stack up (which it looks like they do on paper to me) then contact RE Agent and place an offer on block subject to finance and a clause for 120 days DUE DILLIGENCE. Give listing back to RE Agent and get them to presell or obtain expressions of interest for at least 3 of the 9 blocks to cover development costs. Inside the 120 days due dilligence you should be able to figure out presales, sudivision costings, marketing etc.

More to come as I think this thing through ........ zzzzzzzz
Click to expand...

Is this a somewhat standard way of approaching these types of deals? It all seems to make quite a lot of sense approaching it in this manner, thanks again:)
 
professor_frink said:
Dunno how I missed this thread when I opened a new one this morning, thanks Bushman, all merged in now:)

Whiskers, trainspotter, thanks for the replies. The block would need roadworks to be able to divide it up(just over 60m frontage) so maybe the work involved in that is the reason for it going cheap:confused:


Is this a somewhat standard way of approaching these types of deals? It all seems to make quite a lot of sense approaching it in this manner, thanks again:)
Click to expand...

60m frontage is a bit of a hassle !! Would need diagram or rp data search to look at overall development concept. Could be reason as to why so cheap? Ask RE Agent why vendor selling as well?

Other concerns would be availability of water, sewerage, power etc. Might cost a fortune to get services to block, retaining could be a problem? Council might want compensating basin on property for storm water, Public Open Space for density of housing yadda yadda yadda ... the mind boggles.

HENCE why I suggest 120 day due dilligence on property whilst you have a motion of discovery to find out the facts prior to proceeding. NOT necessarily this property BUT any property you are looking at purchasing for development or subdivisional approval. Good luck !
 
professor_frink said:
The block would need roadworks to be able to divide it up(just over 60m frontage) so maybe the work involved in that is the reason for it going cheap:confused:



Is this a somewhat standard way of approaching these types of deals? It all seems to make quite a lot of sense approaching it in this manner, thanks again:)
Click to expand...

You may get away with a short cul-de-sac especially if the block is wider at the back. Short frontages down to maybe 6 or 8 meters are often allowed in cul-de-sacs... or sometimes they will allow easements for shared access behind.

Alternatively, it may be the sort of block that is more economical to build units or strata title on where any access is shared property rather than reverting to council roadway.

Many options to consider. The lay of the land, surface/storm drainage and sewerage are probably the other main determining factors. Town water, phone and power are usually less of a concern.
 
9700sqm in a reasonable size - the council may even consider doing a re-zone, meaning that you can squeeze another couple of blocks into it? Worth asking.

Depending on where you are based, there are some companies which can help you do all of this.
I am not a full time developer, and unless I was, I will always use the services of a 'professional' do not underestimate the time required to under take a project of this nature, at times it is a full time job in itself. If you think that you are able to maintain a job, a family and manage a large development, I would strongly advise you to reconsider....

I personally use Momentum wealth based in Perth (find them on the web if you are interested).

Hope this helps?
 
gday I82,
Just signing up for an info pack from Momentum Wealth after a newsletter was posted in another thread.
Any more info on how you have used their services etc.

Thanks a lot,

Sparfarkle
 

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