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  1. #771
    Join Date
    Sep 2004
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    Hastings
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    Quote Originally Posted by DaveW View Post
    Did John Bolton factor in the costs before settling on the land, perhaps the price of the land needed to be re-negotiated? Did he communicate his intentions with council during a feasibility study before going unconditional purchase of the land? You make your money and setup the plan at time of buying.
    Where was commercial Property investing mentioned in the discussion about John Bolton?

    You're fudging the matter - at best.

    Any money received as in advance, to be paid out on a construction project is not 'making money' in the sense you & others ascribe to that phrase. (I.e. profit)
    Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

  2. #772
    Join Date
    Apr 2009
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    Quote Originally Posted by Perry View Post
    Where was commercial Property investing mentioned in the discussion about John Bolton?

    You're fudging the matter - at best.

    Any money received as in advance, to be paid out on a construction project is not 'making money' in the sense you & others ascribe to that phrase. (I.e. profit)
    You're the one who changed the discussion from John Bolton's construction to PI and now back again to construction?

    *sigh*

    Do you still not see he failed at the buying process ? 8%, are you kidding.
    If you can't make money from the first phase of land subdivision and pre-selling the lots then the construction clearly shouldn't had gone ahead. John got himself into a pickle but has learnt from his ways. Whereas it looks like you haven't fully grasped it.

  3. #773
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    Sep 2004
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    Hastings
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    Bolton was constructing residential units - as a form of property investment.

    What I fully grasp is:

    No PI (of any sort) makes their money (profit) when they buy.
    Last edited by Perry; 05-10-2019 at 02:30 PM. Reason: fixed typo
    Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

  4. #774
    Join Date
    Apr 2009
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    Quote Originally Posted by Perry View Post
    Bolton was constructing residential units - as a form of property investment.

    What I fully grasp is:

    No PI (of any sort) makes their money (profit) when they buy.
    Residential construction is a commercial activity.
    Last edited by Perry; 05-10-2019 at 02:30 PM. Reason: fixed typo in quote

  5. #775
    Join Date
    Nov 2006
    Location
    Cyberspace
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    5,883

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    I would venture to say, property investors lose money when they buy. Mostly they gain money when they sell.

  6. #776
    Join Date
    May 2008
    Posts
    3,691

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    "Make money when you buy" is a cute saying by the snake-oil merchants - usually to their victims as they flog off mediocre deals.

  7. #777
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    Apr 2009
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    Quote Originally Posted by Bob Kane View Post
    "Make money when you buy" is a cute saying by the snake-oil merchants - usually to their victims as they flog off mediocre deals.
    How about "you make your money during due diligence". Is that better, or worse? Or "you set your profit margins and exit strategies during DD".

    I would rather not be too direct commenting on John's work he should had known what he was up against with the council. A project that size requires at least 3 months DD, a much bigger margin than 8%, a serious look at outgoings, and a deal structure that minimizes the risks and involves other stake holders. You really need to know what you're doing, many an amateur developer goes broke.

    For the record I'm no snake oil merchant and I don't flog off deals. I have been investing in NZ real estate for nearly 30 years, pretty short compared with others but I'm still very much active investing and developing. Along the way I've sought advice with experienced investors which has certainly helped, and yes I do believe in giving back.

    I get that a large portion of people remain cynical and that's just human nature.

  8. #778
    Join Date
    Feb 2015
    Posts
    123

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    Quote Originally Posted by BlueSky View Post
    Land + build will alone set you back $2.5-$3M (quality house)
    Council will then bury you in the paperwork(costs)

    But seriously can anyone share their experience of building townhouses/Terraces , what is the optimum or min units to make it worthwhile.
    I know John bolton build built 11 Terrace houses before the boom and he barely broke even Never again he said. Of course the price has gone up significantly know so have all the costs.
    Going through the process right now. Depends on the risk/margin but I couldn’t do it easily with 12 on 1,500 m2...needed to increase density to 14 units (16 units would have been more profitable but would have led to council issues and issues in marketing and/or less than desirable ‘estate’ like environment). i also needed to meet the affordable price range. Seems it can be done for 2K m2 but of course depends on soils etc. land 1m, spend for design etc through to submitting BC is around 400k inc GST. I am mostly hands off due to location. Probably Have to use a procurement based approach to make the margins work. 2.5k m2 kills the project unless you go to a 2nd tier lender and are happy with a low margin (not worth it in my books: no 2nd tiers and no single figure margins for the work involved).
    Last edited by Minz; 13-10-2019 at 06:30 AM.

  9. #779
    Join Date
    Apr 2009
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    Quote Originally Posted by Minz View Post
    Going through the process right now. Depends on the risk/margin but I couldn’t do it easily with 12 on 1,500 m2...needed to increase density to 14 units (16 units would have been more profitable but would have led to council issues and issues in marketing and/or less than desirable ‘estate’ like environment). i also needed to meet the affordable price range. Seems it can be done for 2K m2 but of course depends on soils etc. land 1m, spend for design etc through to submitting BC is around 400k inc GST. I am mostly hands off due to location. Probably Have to use a procurement based approach to make the margins work. 2.5k m2 kills the project unless you go to a 2nd tier lender and are happy with a low margin (not worth it in my books: no 2nd tiers and no single figure margins for the work involved).
    What is the figures for procurement approach and what are your projected margins ?
    Have you already bought the land ?

  10. #780
    Join Date
    Feb 2015
    Posts
    123

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    Yes, I own the land. The figure I have used for the land is the recent independent valuation (ex GST with RC issued). My margin range is 25-30% depending on sale price and assuming I meet the build budget. Currently, we are changing from an ‘all-in-one’ builder approach to procurement. Had a bit of a punch with that where the contractor had indicated all was well with budget only to come in with vastly increased pm2 rates. Have budgeted 2,000 m2 excluding P&G (c220k) and excluding rib-raft foundations (c200k). Numbers show (using the QS and adjusting the inflated contractor prices) that it should meet budget. (All figures ex GST).


 

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