Delicious Developments

Delicious Developments

www.renos.com.au | [email protected] | 1300 550 656

• Case Study 1: Developing the Undevelopable

• Case Study 2: BTR• Case Study 3: Developing the Renovator

Introduction

Case Study 1: Developing the Undevelopable

Number 20 Number 18


Look at my new land sizes:


Site Plan Street Elevation


You just heard about scrapping

From this… …to this


Equals this!


Summary• Non-development sites can often be development sites if you think outside the square• The best place to buy is often in your own backyard…like your neighbour!• Employ the experts• Have at least a basic understanding of the rules• Demonstrate what you want by showing similar projects• If you believe something is possible but you are told ‘no’ ask again another way or ask someone else• Scrapping is great!• Opportunities exist everywhere!

Case Study 2: BTR

Case Study 2: BTR

This property made me over $1 million…during the ‘worst financial crisis since World War 2’

Let’s take a look at how I did it.

Case Study 2: BTR

I’ve done my research

Case Study 2: BTR

There were two reasons why I was keen to buy this despite the other client’s poor feasibility1. I already knew I had made 98k!2. I used a different feasibility

Case Study 2: BTR

Build to Sell doesn’t work for me…it just creates a tax problem!

Capital gains taxPLUS

I have an existing land tax issue

Case Study 2: BTR

So I want to…

B.T.R. …and

If building to HOLD then design to HOLD!

Case Study 2: BTR

And thanks to a comment I heard from Michael Matusik…

I decided to build 10 x 1 bedders to rent!

Case Study 2: BTR

The Construction – flats removed

25th March 2008

Case Study 2: BTR

The Construction – basement dug

17th June 2008

Case Study 2: BTR

The Construction – heading up

2nd September 2008

Case Study 2: BTR

Full height scaffold – roof time!

9th December 2008

Case Study 2: BTR

Walls battened and ‘rough-in’ complete

28th January 2009

Case Study 2: BTR

Rendering and painting

11th February 2009

Case Study 2: BTR

The finished product – July 2009

Case Study 2: BTR

So what went wrong?• I designed for fully furnished but no one

wanted furniture!• As a result…washing machine…

fridge..queen bed• Bloody energy saving light bulbs• Storage area vs water meters• Broadband cable• Ponding• White courtyard tiles

Case Study 2: BTR

COSTS $Purchase 532,000Costs 26,000Consultants/Appl. 72,215Build/Inf. Charges 2,191,158Holding 89,115Total 2,910,488

Case Study 2: BTR

END VALUEValue @4.5% yield

$3,952,000Equity $1,041,512or 35.8%Rent $3,420pw

$177,8406.11% gross + Dep.

Case Study 3: Developing the Renovator


Paid $514k as a renovator…worth $580k as a development site!


• Develop• “The price reflects the need for lots

of work”


• 592m2 corner site• Zoned for units/townhouse/SUDs• House must be kept• Can build to 2 storeys


The site


The numbers:

TOTAL COSTS $1.095mEnd value renovated house $575kNew house $775kTOTAL END VALUE $1.35m

Equity gain $255kReturn on development costs 23.3%

That’s the power of a quick reno and a small development.

Summary

• Employ the experts• BTR or BTS• RDC!• Look for development sites at non-

development prices for long term gains and options

• The 20% margin rule is misleading

Delicious Developments

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