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• 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
Case Study 1: Developing the Undevelopable
Case Study 1: Developing the Undevelopable
Look at my new land sizes:
Case Study 1: Developing the Undevelopable
Site Plan Street Elevation
Case Study 1: Developing the Undevelopable
You just heard about scrapping
From this… …to this
Case Study 1: Developing the Undevelopable
Equals this!
Case Study 1: Developing the Undevelopable
Case Study 1: Developing the Undevelopable
Case Study 1: Developing the Undevelopable
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 feasibility
1. 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 tax
PLUS
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
The finished product – July 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 VALUE
Value @4.5% yield$3,952,000
Equity $1,041,512or 35.8%Rent $3,420pw
$177,8406.11% gross + Dep.
Case Study 3:
Developing the Renovator
Case Study 3: Developing the Renovator
Paid $514k as a renovator…worth $580k as a development site!
Case Study 3: Developing the Renovator
• Develop
• “The price reflects the need for lots of work”
Case Study 3: Developing the Renovator
• 592m2 corner site• Zoned for units/townhouse/SUDs• House must be kept• Can build to 2 storeys
Case Study 3: Developing the Renovator
The site
Case Study 3: Developing the Renovator
The site
Case Study 3: Developing the Renovator
Case Study 3: Developing the Renovator
Case Study 3: Developing the Renovator
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.
Case Study 3: Developing the Renovator
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
