Real Deal Duplex Development in Yeppoon With Ben Markwell

Why a Duplex in Yeppoon? Knowledge & Experience 1. Worked for Builder in the area 2. Built design before 3. Success with layout / plan before 4. Land opportunities The Market 1. Price point 2. Ageing population looking to downsize 3. Strong rent (yield) 4. Capitalise on Government $$$$$

Start with the end in mind Plan Sell 1, Keep 1 Strong Rent Why Mum had no principle place of residence at the time – Capital Gains Exempt 7% rental return Depreciation and tax benefits for keeping 1. Not flooding market and sell at later stage Specific Intent – Make some cash NOW & receive cashflow and tax benefits

The Block

Why that block?? Pro’s It was BIG!! 1,268m2 Each unit would have large side access for boat, trailer or caravan Within few klm to Beach and Marina for Boats Great aspect / Breezes / view Surrounded by large, new homes priced $500k + Con’s Distance to town? New estate was slightly on outer section of town Block over road was doing Duplex as well Surrounding homes…. Would it fit in and work?

The Design

Budgeted Numbers Cash Out Land Price $182,000 Construction Costs $350,000 Contributions $21,000 Fence, landscaping $10,000 Stamp duty, legals & council $7,725 Surveyor $2,500 Holding costs $13,000 Total costs $586,225 Cash in Sale Price (each) $380,000 Building Boost Grant $10,000 Total $770,000 - Agent commission $19,000 - Legals & marketing $1,500 Sales Proceeds $749,500 Expected Profit $163,275

Council Simple Material change of use (MCU) applying for dual occupancy Due diligence – although may seem simple check everything. Meet with council – Build strong relationships with town planners.

Bring on the TEAM Builder – Got multiple quotes Don’t go purely on price Who do you relate to, trust and feel that you can work with Surveyor / Agent / Fencer / Contractors – It’s not whatyou know but WHO you know…. ITS WHAT YOU KNOW & WHO YOU KNOW!! !

So we started

Learning Lessons Don’t Rush just to do a deal – Are you spending enough time researching the deal? With work, sport, socialising, partying and just being a typical 25 year old I rushed it. I wanted to have my next deal underway that I missed some crucial areas. Example…. Zoned rural – First town planner said NO!! Could have tweaked plan – Made 2 separate small stand alone houses??? Mistakes Contract terms – Not skilled and knowledgeable enough at the time to negotiate Place as much as possible in builders contract. Don’t try to project manage yourself Marketing – RE.com / Paper invest wisely. There is value in the right plan

Final Result

Final Results

Final Figures Soil Test$ Material Change of Use - Council$2, Preliminary Solicitor & Searches$1, Costs Stamp Duty$4, Rates$1, Operational Works App - Council$ Land$182, Construction - Building Contract$354, Contract Overs (PC Increase)$6, Construction Costs Garden$ Fence$7, Interest on loan$12, Gas Bottles$ Surveyor$3, Completition Council Headworks$21, Costs Endorsement fees (Bank & Council)$ Mowing / cleaning / garden care$ Body Corporate Insurance$ Total Expenses - $599,678

Final Figures Sale Contract - $365,000 - Agent Commission - $10,037 - Advertising - $500 - Legals/finance fees - $950 After Sale costs $353,513 + Build Boost Grant - $10,000 $363,513 Total Gross Profit Over 2 Units - $127,348

Final Figures Unit 1 - Sold Debt (val of $370k) - $283,000 Sale Proceeds - $363,513 Net Profit - $80,513 Unit 2 - Rent Debt - $296,000 Equity - $74,000 Rent - $410 per week Yield – 7.2% Depreciation - $9, Positively geared by approx $65 per week after rates and insurance. Not inc depreciation

Hints and tips… 1.Do you have spare equity? We used equity access loan to fund 2.Communication plan with agent First contract on property was for $380,000 This lost me $30,000 Fell over on finance and they where a couple both working in the mines. 3.Build strong relationships Agents – Market Knowledge Contractors – Help beyond their call of duty Local business people – what is happening in areas Property Investors – Tips, hints and market knowledge Professional – Can be hard but free advice

Thank You Ben Markwell