Sasha gives us a brief tour of one of our client’s development sites in Geelong, Victoria. He also reveals some great info for those who are interested in getting into property development…
Morning guys, Sasha here from the A Team, hope you’re well, Saturday morning, excuse my gangster casual attire. It’s a bit cold here and it’s also quite windy here in Melbourne, so apologies if you can’t hear me very well, I’ll try and speak close to the microphone.
So I’m actually standing here at the front of a development, in Geelong, so, it’s a triplex development that is nearly complete, and I’ll give you a walkthrough of it now. So I’ll just switch to the front camera.
Right, awesome, okay. So this is the existing glowing that we have done renovations for as you can see. A nice garden here. Walking down the driveway, still a little bit of work to do here on the existing driveway. But, it’s a lower socio area, so the finishes don’t need to be as high end, obviously that would be more blue chip. So what the development is, is retaining the existing dwelling and then subdividing and building two double story townhouses at the rear.
Alright, so, as you can see the driveway got layered I think last week. They’re basic units but still decent enough, so, this is the carport, so we’re not doing garages, because it’s at the bottom end or low end of the seller here in Geelong, so carports for the left hand side, the existing, this is for this one here, and then we’ve got a carport here at the back.
So, still as you can see, maintained the landscaping and tidied it all up, it should be complete fairly soon. So they’re double story, I’ll show you through maybe a little bit later, to sort of see a little bit inside there. Not really.
So yeah, so walking through, out the back, little bit of a backyard or courtyard here, which will be closed off and turfed with some landscaping, similar for the other property, so you can kind of see. Over here, over the fence I should say, there’s a little bit of an inside shot.
Walking back down the driveway, you can see basically there’s the front house there, fully fenced off. So this development I purchased a while back now and just decided to, to finish it to be honest. And the outs getting finished, so it was a very low end purchase. I purchased the property originally for $180 K. And, look, it’s probably, the un-completion value now, with the two townhouses and keeping the existing dwelling is going to be somewhere between $750 to $800.
My total debt across this will be 560, so, you can see a little bit inside here. So total debt will be around 560, the profitability, I only actually put in about 75 or $80 K into this dwelling including the purchase and the DA cost. So, not bad, this is when I could get much better financing methods from the bank before they made all these changes. So I’m going to switch back to this camera.
So, not bad, a total profitability, I’d be saying, would be a minimum of $250 K. And that’s not a bad return based on an under $200 K purchase. The mart I was in a little bit ago from the market which, it could be as high as $300 K, but I’ll get the properties revalued obviously once we’re done. So, as I said, this is a triplex development, taking the existing building, two townhouses at the rear, and then, they all have individual titles. I’ll be just developing and holding these, because they’ll be positive cash flow probably by 200 bucks a week at least.
So, not a bad little entry point. We don’t generally do these ones for clients because they are low end and there’s Melbourne cancels stuff, that’s why we do them elsewhere. It takes too long. We can get the same amount of effort put in, we can create a higher return in other markets, in other areas.
But yeah, a good little walkthrough. Basic sort of development, and very decent profit in the end. So, guys, yeah, that’s a little Saturday before 8:00 AM, or we’re at an 8 AM walkthrough, meeting the builder on site to talk through what needs to be done next, and that gives you an idea of what these development projects are all about. So, any questions, reach out. If you want to do something similar, then, we’re the people to help you. Have an awesome weekend, and I’ll chat to you next week, we’re off video.