WHY NATHAN SCRAPPED THIS PROPERTY DEVELOPMENT PROJECT
Sometimes, things don’t end up exactly like we plan them.
Nathan purchased this block of land with the view to build a dual occupancy, but was forced to abandon the project.
Did he lose out on making money? Of course not!
Here’s what happened instead…
PURCHASING THE LAND
Initially, Nathan purchased this block of residential land for $465,000.
Within 12 months he got a Development Application approved, allowing a house and granny flat to be built.
NEXT STEP, FINANCE…
In order to push on with the build, Nathan needed a loan.
The build was going to cost around $450,000. This would have meant a total project cost of just over $900,000.
However, changes to the finance environment mean lending criteria had changed since he embarked on this project.
Since Nathan already had a few of these builds in motion, he wasn’t able to get finance for this additional project.
THE MISSED OPPORTUNITY
If Nathan had of been able to complete his plan, the house would have been worth about $900,000, while the two-bedroom granny flat would have been valued between $600,000 to $700,000.
The total value of the property would have been from $1.5 million to $1.6 million – meaning he could have made up to $700,000 in profit.
So, did he lose money on the deal?
THE SILVER LINING
Even though he couldn’t see his vision through to the end, he still made profit on it.
Nathan sold the land with the development approval on it for $680,000 – $230,000 more than he bought it for a year ago.
That’s still not a bad effort…and certainly didn’t put him at a loss.
WHO BOUGHT THE PROPERTY?
When it comes to selling his own properties, Nathan doesn’t offer them to clients.
Instead he lists them with a real estate agent who can get him the highest price possible in order to maximise profits.
Unlike many other so-called investment companies, we don’t sell our own properties to clients. We buy them properties, for a low price, by sourcing and negotiating a good deal.
WHAT’S IN IT FOR US THEN?
Obviously to avoid a conflict of interest, we don’t make a profit on the sale of any properties to our clients.
So you may be wondering what’s in it for us? It’s true we do have costs to cover which is why we charge a fee for our services.
This ensures we work solely for the buyer to find good, cheap investments that will make our clients profits.
Have you made money by selling DA approved land? Please share your experiences in the comments section below.