Real Deal Presentation… “Splitter Block” 99 Uplands Tce, Wynnum Qld 4178 By Jason Marianoff

DISCLAIMER: No part of this presentation is intended as advice. Please seek independent financial advice to suit your own individual situation! Just my experiences and opinions…

Jason Marianoff – a brief history: Bought my first property privately (age 21). “Buy & Hold” strategy until 4 x properties. At age 29, sold a property and gave-up my business… (Pondering my future career?) During the following 12 months, bought & sold several other properties and began to learn about property development…

Wynnum “Splitter Block” An old house on 830m2 corner block (2 x lots)... Asking Price = $459,000 During one of my visits to a real estate agent, I discover a brand new listing…

99 Uplands Tce, Wynnum Put “under contract” within 24 $453,000

The House:

Can I create a 400m2 spare block?? Problem: An extension at the rear of the house was too big to allow a 400m2 block. Options?

What Would You Do? (Factors to consider include: Cost, Profit, Demand, Timeframe, Risk, Complexity) Modify the covered patio area to reduce it? Shift the house elsewhere on the block? (Perhaps raising it to legal head height under?) Forget developing and renovate it instead? Pull out of the contract?? Something else???

Bending the Boundary… Creating: 400m2 rear vacant block 418m2 house block 8m2 truncation of corner req’d.

Aerial Photo (Thinking outside the “box”) 400m2 rear vacant block 418m2 house block A solution that leaves the existing house “as is”.

Stage 1… Prepare and Lodge a Development Application (DA) $3, = Survey + Cost to Prepare DA $1, = Council Lodgement Fee $5, DA lodged 12 June 2007 (whilst under contract). Settled 2 July 2007; DA Approval took 4 months. After settlement, I had the carpet removed & polished floorboards (cost = $2,189.00).

DA Approved, 12 October 2007 (exactly 4 months from lodgement) My first thought was to simply re-sell the site (with the DA Approval) and let someone else finish it. Meanwhile, I paid some more expenses: $1, = Sewer Design Fee (BCC) $ = Water Design Fee (BCC) $ = Compliance Fee (Energex/Telstra) $3, After about 4 months of “trying” to sell the site, I decided I should complete it myself instead!

Stage 2… Completing the realignment to create 2 x Titles. I outlayed these additional costs to complete Stage 2: $10, = Sewer Construction Fee (BCC) $3, = Additional Plumbing work required $1, = Install Water Service/Meter (BCC) $3, = Demolish Garage from backyard $3, = Survey Pegging $1, = Install timber fence at new boundary $ = Truncate existing fence (corner) $2, = Other compliance costs (inc. BCC fee) $27, $3, (carried from previous slide)

Let’s review the numbers so far: $453, = Purchase Price $2, = Polish Floorboards $5, = Stage 1 (DA Approval only) $30, = Stage 2 (Do realignment) Estimate of additional costs incurred (e.g. Stamp Duty, Legal Fees, Interest, etc): $25, ; Grand Total = $516,571.70

A Variety of Possibilities… Renovate the existing house? Sell both the land and the house? Sell the land and retain the house? Keep both the house and land? Keep the land and sell the house?  If keeping the land, build or relocate a home? (then hold this as a rental, move-in or sell??)

A photo of the 400m2 block 19.4m frontage (15.8m width after bend in fence)

So, what did I choose to do?

My preference was to sell it all! I listed the house for sale prior to finishing Stage 2 (boundary realignment) and it sold for $370,000 subject to title being issued. Several months went by and I still hadn’t sold the land... I started wondering if it’d be worthwhile for me to relocate a house on to it? I was almost going to, until…

… someone else had the same idea (i.e. relocating a house) A real estate agent contacted me from an online private sale Ad I had placed for the land, saying he had a buyer who wanted to relocate a house… I signed an “Open Listing” authority and he promptly obtained an offer in writing. The sale price of the land was $280,000.

Aerial Photo (after the house was relocated on to the 400m2 block) $280,000 sale price for the block (400m2). $370,000 sale price for the house (418m2). $631,135 total (after agent’s commission)

So, was it worth doing?? With a net sale price (after commission) of $631,135 and outlays of $516,571.70, that leaves a total profit of just under $115,000. Later, when I reviewed everything in detail (inc. bank interest & fees, council rates, water rates, land tax, legal fees, etc), the real profit was about $80,000.

I’m glad I did it… I was paid well & learnt some valuable lessons: I managed the whole project far too slowly. It took 2.5 years from initial purchase, until the final sale settled! (Time = Money) It may have been better to sell the vacant land first, reduce debt & retain the house to renovate and rent (positive cash flow). “I’d rather half the profit in half the time”

I realised something interesting: My strengths include recognising ways to add value, being creative and negotiating. However I have LOTS of weaknesses, too!  I’ve reached the conclusion that it’s impossible to be an expert in everything – we need others. When we are conscious of our Strengths and Weaknesses, we are then able to find ways to maximise our ability to achieve profitable results!

“The Property Deal Chain” Identify your Strengths & Weaknesses with this 30 minute self-assessment tool, designed to help you maximise your profits & minimise the unknowns! Introducing…

The Property Deal Chain How valuable would it be to know in advance if you are likely to get “stuck” along the way (at the start, end or during your own property deals)? Considering a Joint Venture? Create a strong foundation for everyone’s success by identifying each other’s Strengths and Weaknesses first! Available as an interactive MP3 Audio (use in the privacy of your own home)… Interested?

Thank You! Questions? For other valuable resources, visit: Favourite Idea or Insight?