Blackminster JV: 4 apartments in Mindarie WA

Blacky and Westminster have combined super powers and in depth knowledge in fork ups to do a project together.

Mission: get in, get out with minimal dramas (oh mwahahahaha)

Site: found. Under offer with due diligence clause. Had been for sale for approx 2 years. We got a great discount (listed from $565k and offer accepted at $480k)

Plans: we have a concept plan to build 4 apartments which are 3 x 2 with marina views. Each apartment is around 120-130sqm. Due to the slope of the block, lower at front, high at back, units 1 & 2 are 2 storey more like townhoues, and 3 & 4 are narrow side by side apartments laying over. Parking is from the rear laneway.

Due diligence / finance: these clauses are concurrent. We have 21 days left on this. Finance will be a commercial loan

Costs:

Very rough at the moment but

Land $480 plus stamps (let's say $500k)
Construction turnkey plus all works $1-1.2m
Total Cost $1.5-1.7m

Values
Ultra conservative (15% drop in market) $600k each = $2.4m*
Conservative (5% drop) $650k each = $2.6m
Happy as Larry (known sales in area) $700k each = $2.8m
OMFG (hit target market & market up) $725k each = $2.9m
OMFG ...............

* this is the value we are using for all ROI.

Risks:
This is a riskier market being so far from Perth. It's more volatile so we are using very conservative figures before proceeding.

Demographic Target:
Mindarie is mainly UK and South Africans - almost 66% are non Australian. We are thinking these apartments will appeal that demographic and/or downsizers in the area who want to still have the marina life but not the upkeep. They will also appeal to investors who want to do short term stay lets.


Views: taken from our next door neighbour

Our neighbour
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Middle floor views

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Top Floor View

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We hope to get some ocean views too

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How much to get in? Im sure you don't want 12 people putting in $10k each.

Its just the two of us...

We are trying to keep things simple - so the less people involved the better.

We should be able to source the finance without the need to fund holding costs ourselves (int cap). In addition given there is only 4 units we shouldn't need any pre-sales.

The first round of concept drawings have been completed - though need some changes. Initial indications show that we should be within the ball park of our initial estimates. Which is good.

With WM's history and my history we figure "what else could possibly go wrong". Im going on its a numbers game - the more times you shoot, the sooner you will hit your target.

So far so good. Here is to smooth sailing :eek:

Blacky
 
Exciting times!

What will be happening with the vacant block of land on the waterfront?

Any chance of the views being built out?

Yes there is a chance.
It is zoned mixed commercial/residential like our block with R100.

There are no current applications for it under consideration. I believe that there was a concept drawn up for it that didn't go ahead. I don't think the current owners have any pressing desire to develop it.

So we plan to get in and get out before that happens. It's one of the risks with this site.
 
Geez, you don't take a rest for a single minute do you

Will follow this with interest as well, can't wait to get into developing myself!
 
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