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stui magpie
Prepare for the worst, hope for the best.
Joined: 03 May 2005 Location: In flagrante delicto
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Post subject: How the f*ck do they make money? | |
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Property developers I mean.
Example.
This place sold earlier this year for just over $1m just down the road.
https://www.realestate.com.au/sold/property-house-vic-watsonia-122202690
It was bulldozed and they're building 4 x 2 storey townhouses on the block. You know the ones, the front is basically a brick garage, a front door entering into a hallway and if you're lucky a narrow living space.
Behind the garage space is a kitchen / lounge area and the bedrooms are upstairs.
great location in one way, right behind the supermarket and shopping strip, walking distance to the train station and primary school, but seriously shit view.
So let's do some math.
$1,055,000 for the property. I assume stamp duty is on top of that which would be another $60k, so that's $1.1M
Planning permits, architects fees, demolition of the old house and disposal of the rubble, potentially subdivision of the property into 4 if you want to sell the freehold, NFI what that would all cost but it couldn't be cheap. Let's say $50k so we're up to $1.15M
Median prices for 2 bedroom units in the area is just over $500k but these are usually single story and have enough dirt around them for a garden and clothesline. If these things go for more than $400k each the buyer should either be drug tested or they're looking for a tax write off.
So that would mean they'd be looking at around $1.6m in income from selling before tax.
If you can build 4x 2 storey units fully kitted out with fixtures etc for $450k, (which takes you to expense of $1.6m, same as your sale price) you're seriously doing it on the cheap. So in order to make $200k on the deal before tax, you'd either need to knock them up for around $50k each or sell for $450 each.
For perspective, I had my house extended over 10 years ago and that cost me around $25k. That was using cash tradies, recycled weatherboards that I put on myself, and doesn't include the cost of fixtures, painting ( I did that myself), floor covering (I did it myself) or doors and windows (got them myself)
That's a lot of financial outlay and risk for not much more reward than you'd get for pushing a broom on a union building site and I haven't even factored in the interest you'd be paying on the money you'd have to borrow to do this.
So can someone explain it to me? What's wrong in my calculations? How do these buggers make enough money to justify the outlay and risk? _________________ Every dead body on Mt Everest was once a highly motivated person, so maybe just calm the **** down. |
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think positive
Side By Side
Joined: 30 Jun 2005 Location: somewhere
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Your calculations are way off, the town houses would be worth maybe 500-600 sub division cost is off, and you claim everything against sale price and you get the gst back on the land instantly, and you claim the rest back as you build. _________________ You cant fix stupid, turns out you cant quarantine it either!
Last edited by think positive on Wed Dec 14, 2016 10:34 pm; edited 1 time in total |
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stui magpie
Prepare for the worst, hope for the best.
Joined: 03 May 2005 Location: In flagrante delicto
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If those things sell for $500k each I'll kiss Tannins arse,
I'll happily take your word for it on the costs etc, I have generally NFI about this stuff.
Developer who owned the place my son lies in (2 storey town house in Mernda) just sold it. A few were on the market in the same estate at the same time and the asking price dropped from $400k to high $200k in days. _________________ Every dead body on Mt Everest was once a highly motivated person, so maybe just calm the **** down. |
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Morrigu
Joined: 11 Aug 2001
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stui magpie wrote: | If those things sell for $500k each I'll kiss Tannins arse |
And if they do pics please _________________ “The greatness of a nation and its moral progress can be judged by the way its animals are treated.” |
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think positive
Side By Side
Joined: 30 Jun 2005 Location: somewhere
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think positive
Side By Side
Joined: 30 Jun 2005 Location: somewhere
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Post subject: | |
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https://www.realestate.com.au/property-unit-vic-watsonia-124185974
Hmm, this is that block in the link!
buy off the plan, 2 already sold 2 left! 3 bedroom, study/rumpus, and pretty nice looking, I reckon he could cash in to the tune of $2,400,000 plus before he even starts on them. And don't forget trade price! build 4 the same, maybe $180,000 each, and that's with nice fittings, $720,000, so 1.8 mill I reckon he will make minimum $600,000, build them in 9 months, that's a pretty good wage! _________________ You cant fix stupid, turns out you cant quarantine it either! |
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watt price tully
Joined: 15 May 2007
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Morrigu wrote: | stui magpie wrote: | If those things sell for $500k each I'll kiss Tannins arse |
And if they do pics please |
Me too
What are Tannin thoughts? _________________ “I even went as far as becoming a Southern Baptist until I realised they didn’t keep ‘em under long enough” Kinky Friedman |
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watt price tully
Joined: 15 May 2007
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Post subject: Re: How the f*ck do they make money? | |
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stui magpie wrote: | Property developers I mean.
Example.
This place sold earlier this year for just over $1m just down the road.
https://www.realestate.com.au/sold/property-house-vic-watsonia-122202690
It was bulldozed and they're building 4 x 2 storey townhouses on the block. You know the ones, the front is basically a brick garage, a front door entering into a hallway and if you're lucky a narrow living space.
Behind the garage space is a kitchen / lounge area and the bedrooms are upstairs.
great location in one way, right behind the supermarket and shopping strip, walking distance to the train station and primary school, but seriously shit view.
So let's do some math.
$1,055,000 for the property. I assume stamp duty is on top of that which would be another $60k, so that's $1.1M
Planning permits, architects fees, demolition of the old house and disposal of the rubble, potentially subdivision of the property into 4 if you want to sell the freehold, NFI what that would all cost but it couldn't be cheap. Let's say $50k so we're up to $1.15M
Median prices for 2 bedroom units in the area is just over $500k but these are usually single story and have enough dirt around them for a garden and clothesline. If these things go for more than $400k each the buyer should either be drug tested or they're looking for a tax write off.
So that would mean they'd be looking at around $1.6m in income from selling before tax.
If you can build 4x 2 storey units fully kitted out with fixtures etc for $450k, (which takes you to expense of $1.6m, same as your sale price) you're seriously doing it on the cheap. So in order to make $200k on the deal before tax, you'd either need to knock them up for around $50k each or sell for $450 each.
For perspective, I had my house extended over 10 years ago and that cost me around $25k. That was using cash tradies, recycled weatherboards that I put on myself, and doesn't include the cost of fixtures, painting ( I did that myself), floor covering (I did it myself) or doors and windows (got them myself)
That's a lot of financial outlay and risk for not much more reward than you'd get for pushing a broom on a union building site and I haven't even factored in the interest you'd be paying on the money you'd have to borrow to do this.
So can someone explain it to me? What's wrong in my calculations? How do these buggers make enough money to justify the outlay and risk? |
Is this the same developer that killed off the trees in the green wedge that is (fast becoming was) Eltham just the other day? _________________ “I even went as far as becoming a Southern Baptist until I realised they didn’t keep ‘em under long enough” Kinky Friedman |
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Mugwump
Joined: 28 Jul 2007 Location: Between London and Melbourne
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Morrigu wrote: | stui magpie wrote: | If those things sell for $500k each I'll kiss Tannins arse |
And if they do pics please |
I'm tempted to buy one for 501k for that reason alone.... _________________ Two more flags before I die! |
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stui magpie
Prepare for the worst, hope for the best.
Joined: 03 May 2005 Location: In flagrante delicto
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Post subject: | |
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think positive wrote: | https://www.realestate.com.au/property-unit-vic-watsonia-124185974
Hmm, this is that block in the link!
buy off the plan, 2 already sold 2 left! 3 bedroom, study/rumpus, and pretty nice looking, I reckon he could cash in to the tune of $2,400,000 plus before he even starts on them. And don't forget trade price! build 4 the same, maybe $180,000 each, and that's with nice fittings, $720,000, so 1.8 mill I reckon he will make minimum $600,000, build them in 9 months, that's a pretty good wage! |
Interesting work with the photoshop, at the moment they are just frames and bricks for the garages _________________ Every dead body on Mt Everest was once a highly motivated person, so maybe just calm the **** down. |
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HAL
Please don't shout at me - I can't help it.
Joined: 17 Mar 2003
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How much does it cost? |
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stui magpie
Prepare for the worst, hope for the best.
Joined: 03 May 2005 Location: In flagrante delicto
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Post subject: | |
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think positive wrote: | https://www.realestate.com.au/property-townhouse-vic-watsonia-123696778
1bed plus a study, $399,000
That block of land for the million is massive, they will be big town houses with gardens, you might wanna get your lips ready! |
I had a close look just now, called in the supermarket on the way home.
It's a long skinny block, the garage is on the side of the units facing into the lane and you aren't going to fit 2 real cars in there. Maybe two Fiestas or something. Probably 2m from the back door to the back fence.
That nice little road down the left of the picture is the access lane to get into the above ground car park which you would be looking straight into from your front door. The lane is 1 car wide and used all the time _________________ Every dead body on Mt Everest was once a highly motivated person, so maybe just calm the **** down. |
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5150
Joined: 31 Aug 2005
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watt price tully wrote: | Morrigu wrote: | stui magpie wrote: | If those things sell for $500k each I'll kiss Tannins arse |
And if they do pics please |
Me too
What are Tannin thoughts? |
I heard he is practicing his dummy bids... |
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think positive
Side By Side
Joined: 30 Jun 2005 Location: somewhere
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Post subject: | |
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stui magpie wrote: | think positive wrote: | https://www.realestate.com.au/property-townhouse-vic-watsonia-123696778
1bed plus a study, $399,000
That block of land for the million is massive, they will be big town houses with gardens, you might wanna get your lips ready! |
I had a close look just now, called in the supermarket on the way home.
It's a long skinny block, the garage is on the side of the units facing into the lane and you aren't going to fit 2 real cars in there. Maybe two Fiestas or something. Probably 2m from the back door to the back fence.
That nice little road down the left of the picture is the access lane to get into the above ground car park which you would be looking straight into from your front door. The lane is 1 car wide and used all the time |
Better warm the lips up, and charge the camera battery!
The two that sold went for $700,000 and $715,000 the other two are expected to bring in $620,000 to 700,000, they will be finished in February!
So say 2 @ $650,000 = 1,300,000 plus $1,415,000 = a cool $2,715,000
Around $900,000 profit! Yeah not bad!
https://www.realestate.com.au/sold/in-3+tennyson+st%3b+watsonia/list-1
https://youtu.be/T09jXq4SQ3I
And no I wouldn't want to live there either, but then I wouldn't live in toorak, etc either, I hate traffic and I also hate squished up real estate! if I could buy any house I wanted it would be on the esplanade in altona or willi, or a house with land for rescue animals overlooking the sea near Portarlington! _________________ You cant fix stupid, turns out you cant quarantine it either!
Last edited by think positive on Thu Dec 15, 2016 7:34 pm; edited 2 times in total |
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stui magpie
Prepare for the worst, hope for the best.
Joined: 03 May 2005 Location: In flagrante delicto
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Post subject: | |
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^
The buyer is on drugs. That's ridiculous. Have a look on that link, $715k for one of those shitholes and up the road $710 for a 4 bedroom renovated house with an actual back yard.
Tannin, at least get a wax _________________ Every dead body on Mt Everest was once a highly motivated person, so maybe just calm the **** down. |
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