Block of Units - where to start?

[amywinehouse]

Hello Auckland Property Gurus,

I have a concrete block Unit in Ponsonby area, Auckland, one of 12, built in the 60's. The land is about 1800m2 and in a prime location. I have a bit of time on my hands and am wondering about managing the redevelopment of the property to larger, more upmarket units (demolishing the old units). I know most of the other owners and they are nearly all in favour, but someone just needs to drive the project. I am wanting to get some general suggestions on what the correct sequence of steps would be to get started. Most units are tenanted.

is there a company that specializes in managing this type of development? What are some smart options for financing (given 12 separate Unit titles)?

Any thoughts on where to start?

Cheers

[Viking]

Buy all the ones you don't own then do what you like.

[Nick G]

I guess it depends what you want to do. Are you each looking to turn your one unit into 2 or 3, using equity to fund it, from where you can each chose to hold, sell, whatever?

[amywinehouse]

I guess it depends what you want to do. Are you each looking to turn your one unit into 2 or 3, using equity to fund it, from where you can each chose to hold, sell, whatever?

Thanks Nick. These are still open questions and I am really a newbie.

You raise the question of funding and that is probably a big part of the puzzle. 12 owners, so up to 12 mortgages - that sounds like a difficult way to get funding. Do you think we could turn each unit into 2 or 3, sell off the plans and fund that way? Current owners would have first option to purchase (subject to arranging their own finance), or just take a profit.

Or is there a way to form a seek funding as a single entity? For example, form a company to obtain funding, buy all units, do the development (current owners become shareholders).

Thoughts?

[amywinehouse]

Buy all the ones you don't own then do what you like.

Thanks Viking! I wish I had that kind of cash to play with. Alas..

[PTILoveYou]

12 owners

So you need to set up some kind of legal arrangement first, maybe like memorandum of understanding.

Get quotes and estimate for the whole project.

Chose an architect jointly

Chose a contractor jointly

Sounds mightily complicated with 12 owners who are/may not specialised in developments!

[investorak]

Agreed, sounds very complicated and stressful. Imagine how the allocation of apartments would work in the end

Find out how much a developer would pay for a site as is, let them do all the hard work

Is it possible to keep the 12 that are there and subdivide the other land off?

[jappronz]

sounds very messy!

[Nick G]

Basically you're looking at a complete demo + rebuild. You can sell the end product off the plans and use that funding to pay for the development but you would want to partner with an experienced development company who can manage the project.

What does the Unitary Plan say about your site in terms of density and height?

First step is to get everybody in agreement. Some who live there might like their current unit! You could all chip in to hire a designer or architect to view the site, research for half a day and give you some rough ideas. Then at least you have a starting point. From there you could look to sell the land to a developer or partner with one through the project.

[amywinehouse]

12 owners

So you need to set up some kind of legal arrangement first, maybe like memorandum of understanding.

Get quotes and estimate for the whole project.

Chose an architect jointly

Chose a contractor jointly

Sounds mightily complicated with 12 owners who are/may not specialised in developments!

Thanks for your comments Gary and I was interested to hear that you think it will be complex. I believe you!

[amywinehouse]

Basically you're looking at a complete demo + rebuild. You can sell the end product off the plans and use that funding to pay for the development but you would want to partner with an experienced development company who can manage the project.

What does the Unitary Plan say about your site in terms of density and height?

First step is to get everybody in agreement. Some who live there might like their current unit! You could all chip in to hire a designer or architect to view the site, research for half a day and give you some rough ideas. Then at least you have a starting point. From there you could look to sell the land to a developer or partner with one through the project.

Thanks Nick, your comments are consistent with what I have been thinking. Will check the Unitary Plan.

[PTILoveYou]

The beauty of residential investment is I can do it all alone.

The only partner I would partner up for a project would be my wife.

12 different owners, omg I just think that would be a nightmare!

[Wayne]

The beauty of residential investment is I can do it all alone.

The only partner I would partner up for a project would be my wife.

12 different owners, omg I just think that would be a nightmare!

I'd agree with that.
Control would be very difficult - too many conflicting voices in the process doing that.

[Nick G]

In hindsight, yes. In the meanwhile considering what 1800sqm in ponsonby might be worth I don't think OP will come out of this too badly.

[Wayne]

In hindsight, yes. In the meanwhile considering what 1800sqm in ponsonby might be worth I don't think OP will come out of this too badly.

The Op doesn't have 1800sqm - they have a 1/12th share.
The best suggestion is to buy the lot.
I think another option would be to form a company of the current owners for the redevelopment - the issue will still be getting common ground, design and a clear way forward.