Yes!! We got unconditional approval! 4 villa development in Gwelup WA

[westminster]

nice find, and nice block.

Sounds like you have had previous project/s?

How did they go. Any chance of sharing the rough numbers?

Hi Matto,
Only one other project which is the one 2 posts above in Westminster.
Rough numbers is total cost $1.08m, current value $1.2m , rent $74k/pa, yield 6.8%
Current value is poor but I knew that going in, I chose to build in poor market conditions as building is cheaper and quicker (no labour delays etc) and I knew that we would be holding. Building increased our yield from 3.5% to 6.8%

 

[westminster]

Update 26-SEPT-2012

Our formal approval letter came on Monday. No one senoir enough was at Heritage on Friday to sign our letter.

Therefore settlement is scheduled for Monday 8th October.

I still don't have any loan documents from Heritage yet though....sigh.

I have signed everything for my Settlement Agent though so she is ready.

I am secretly hoping that Settlement will be late so that if RBA drops rates and banks pass it on that my fixed rate component will be at a lower rate. RBA meets 2nd October. My project will then be CF+

 

[MTR]

Hi Matto,
Only one other project which is the one 2 posts above in Westminster.
Rough numbers is total cost $1.08m, current value $1.2m , rent $74k/pa, yield 6.8%
Current value is poor but I knew that going in, I chose to build in poor market conditions as building is cheaper and quicker (no labour delays etc) and I knew that we would be holding. Building increased our yield from 3.5% to 6.8%

Good work, and congrats on both projects.
Would be interested to know when you purchased this property in Westminster?

Cheers MTR

 

[westminster]

MTR - Westminster was purchased in 2007 - Westminster was on the downhill slide then. The property was initially listed at $540k and we bought it for $450k. I would say it stayed around that value (up or down $15k) until we demolished and built the triplex.

 

[westminster]

Second Update 26-SEPT-2012

Heritage have said that the loan documents need to come from lawyers etc etc and won't get to me until Wednesday next week considering Monday is a public holiday.
So we have applied for an extension to settlement and it will now be on 15th October.
Fingers crossed RBA meets, drops rates, banks decide to pass on.

 

[Blacky]

Congratulations on the approval Westminster!

Look forward to following this thread as it progresses.

Blacky

 

[westminster]

Congratulations on the approval Westminster!

Look forward to following this thread as it progresses.

Blacky

Hopefully we'll be building at the same time as your project in Yokine.

In hindsight after reading your post I'm glad we rolled it into land and construction all at once. At one stage when it was getting difficult to get finance I thought "hmmm I should just get the land and sort out construction loan later" but I didn't like the risk. It certainly did mean that finance approval took longer than normal.

 

[westminster]

Update 27-sept-2012

Yay I have more plans
I requested a few tweaks from the plans we gave to the bank and they are ready. One set has my tweaks and the other is Option B the architect came up with which swaps some living areas around to make it more open together with my tweaks. Option B is really appealing to me.
It's such a shame the file is 1Mb so I can't upload it.

We should be applying for DA (Development Approval) in 1-2 weeks (before Settlement) as DAs are taking quite a while at City of Stirling and so we want to get it in as early as possible.

Prestart might be as early as next week as I'm going away and don't want to delay anything.

Not sure when we will start to build - I haven't asked the builder yet as DA might take a month.

 

[Blacky]

Westminster
I would be interested to know more about how you structured your purchase contract.

From your posts it appears that you have included a lot of conditions to enable you to prepare drawings, approvals, and finance for the full project prior to settlement. The settlement time seems long.

Anyway - sounds like things are progressing nicely for you.

Blacky

 

[westminster]

Westminster
I would be interested to know more about how you structured your purchase contract.

From your posts it appears that you have included a lot of conditions to enable you to prepare drawings, approvals, and finance for the full project prior to settlement. The settlement time seems long.

Anyway - sounds like things are progressing nicely for you.

Blacky

Blacky,
I have purchased a deceased estate and they didn't want an offer until 1st July so I had quite a bit of time to do lots of due diligence and talk to my builder about possibilities. We put the offer in on 1st July and the Vendor accepted and they wanted 2mths to Settlement (1st Sept). This should have been plenty to organise a house and land loan but my first Mortgage Broker wasn't up to the job and stuffed me around a lot and I got a decline from the bank. I was sure my deal was good though so I talked to another recommended Broker and they thought the deal was strong so we got an extension with the Vendor. It turns out that we needed to do a lot more planning and get more financials done etc etc We had arranged for a further 21 days for finance and then settlement 14 days later. That 21 days ran a bit late due to stupidly complicated requirements from the bank but finally we got our approval last week and now we've realised that 14 days isn't going to be enough to get the loan documents done as they won't come from the lawyers until next week. Sooooo settlement is now 15th October.
3.5mths all up - I can't believe it ended ok. It wasn't be choice or good planning thought. My lesson learnt it to make sure I have a good broker and if I want to do a land and construction loan to make sure there is plenty of time to do that and wrangle financial reports from accountants.

 

[Blacky]

Interesting. So you had organised your builder before selecting a block? How did you get finance approval for the development without plans/costings - or was it "in principal" approval? Or could the builder complete the plans/pricing within the two months?

I went down the other path of selecting the property, then getting drawings done, then selecting a builder. I wanted to own the drawings - which allowed me to have builders compete. It also means that if the builder pi**es me off I can walk away and re-bid the work. It is a longer process.

Clearly your way holds less risk as you know the finance is approved prior to committing to the development. Amateur mistake on my part (add that to the list).

Cheers

Blacky

 

[westminster]

Interesting. So you had organised your builder before selecting a block? How did you get finance approval for the development without plans/costings - or was it "in principal" approval? Or could the builder complete the plans/pricing within the two months?

I went down the other path of selecting the property, then getting drawings done, then selecting a builder. I wanted to own the drawings - which allowed me to have builders compete. It also means that if the builder pi**es me off I can walk away and re-bid the work. It is a longer process.

Clearly your way holds less risk as you know the finance is approved prior to committing to the development. Amateur mistake on my part (add that to the list).

Cheers

Blacky

Blacky, I used my builder that I used on my last project. When I saw the block and wanted to explore its potential I sought input from my builder as I wanted to make sure I could do 4 villas on it. It is only 24sqm over the allowable for 4 and an odd shape so I wanted to make sure I could do a viable development.
He had a look at the block sketch and came up with a very basic design in less than a week. I didn't have to like that design - just know that it was possible.
So then I put my offer in. Then my builder did better plans - more accurate pricing, elevations and more design work. We had to have a building contract in place (a subject to finance building contract) for the bank to approve the construction part of the loan.
Now that everything is approved I can tweak a little to get it to how I want it as long as I don't vastly change it from what the bank has approved - it still needs to be the same level of spec, same number of rooms and size but I can do a little massaging of the layout.
It is a risk for me trusting my builder. I couldn't shop around as there was no time but he did an awesome job on our Westminster project and I'm happy to continue the relationship with him. He has also given me a lot of advice in the past 2 years about developing as well as he and much of his company staff also develop for themselves.

 

[westminster]

Just trying to put up some plans. These aren't final but they are at maximum size so the only changes I can make is internal tweaking.

The block is a diamond shape with the access leg at the point of the diamond. Fairly odd - it's in the corner bend of a road.

Thoughts, comments.

The area at the back next to the Alfrescos won't be paved it will be grassed for the units which have access to the backgarden and artificial grass (I think) for those that have no access.

 

[Blacky]

Westminster

They look good!

In lot B is it possible to move the Master Room to the Living Room, the theatre room to the master and the living room to the theatre.

I think this would open the living/kitchen/dining area right up and make it appear larger.

Just an idea.

Blacky

Edit - have just looked and units C & D and you have done it to those ones.

 

[westminster]

Correct Blacky. I'm to decide whether to do it to Unit B or not as B and C are exactly the same size lot.

 

[westminster]

I had a fun morning at Inspired Homes finalising the plans and messing around with elevations. All elevations now chosen and plans laid to rest. I should have final plans sometime soon and the plan is to apply for Development Approval next week (I think). I'll be OS so I have signed all the forms today and written cheques for verge bonds and DA application.

I even got to meet Somersoftian, Jeffp, there as he had the appointment before me.

Next up colours! I drive myself nuts with this second guessing myself

 

[Blacky]

Awsome!!

Being male, (ie colour blind) - I paid an interior designer to do my colours/matching for me.

So much less stress

 

[westminster]

Awsome!!

Being male, (ie colour blind) - I paid an interior designer to do my colours/matching for me.

So much less stress

I may have to quiz you on your choices!

I know the roofs will be Colourbond Surfmist and most likely the rendered fronts will be some sort of cream. The bricks will be double height Trealla Limestone.

The render colour will cause me the most grief. I think I'll choose a colourbond colour so that it's really easy to get my downpipes to match. Perhaps Headland, Dune or Evening Haze.

 

[westminster]

Frustrating day
I was finishing off signing loan documents when I realised that there was a pile had hadn't looked at. I realised that they needed DH and I to sign, with a witness and then even better there were 2 Stat Decs in there which needed a JP to witness.
I left work at lunch, got DH and raced to JP to get that done. Then took all the papers to the mortgage broker who checked them over and said OK. Then took our 2 Titles over to Settlement Agent for her to hand over at Settlement on 13th.
At 6pm I get a call from the Mortgage Broker to say that the JP had missed one section and it needs to be done. Sigh. JP only works 11-2. I have to pick papers up from Broker take to JP and back to Broker. Another fun lunch time scheduled for tomorrow then.
This wouldn't be so bad if we weren't flying out Wednesday morning.
Ommmmm 2 more sleeps and I will be on a plane away from it all. Come settlement day (13th) I'll be nursing a cocktail on a beach and becoming a debt squillionaire in paradise.

 

[westminster]

We decided to go with Fixed Rate (3yrs) for our land component (roughly 40%) and Variable for our Construction component.

I have been watching, waiting to see if Heritage would move their Fixed Rate from 5.85% before we settle on Monday 15th.

Today they announced a drop in the variable by .2 which will be nice for my variable but I was really hoping for a drop in the fixed.