Developers profit margin

Kaiser74

J.pilkington wrote: »

Jesus I've underestimated the advice of boards

@midnight


@ 2am



I suppose your "account" did the drawings overnight and got planning permission too. We need more people like you!

Now for the Nigerian prince to wire you that €20m! You'll have to pay him €50k in admin fees before he releases

Ok pilko.

Kaiser74

pilly wrote: »

He meant it was past his bedtime.

Why are people feeding this crap.

As already stated In previous posts - builders lined up, ongoing with architect and accountant, land obviously not bought yet as loan not secured. Site with planning. Got it now pilko?

J.pilkington

Kaiser74 wrote: »

As already stated In previous posts - builders lined up, ongoing with architect and accountant, land obviously not bought yet as loan not secured. Site with planning. Got it now pilko?

So you have a builder lined up to start work in a few weeks on a site you don't own with no planning (you can not possible have planning if you don't know what you are building!!).

Is this builder related to the Nigerian prince who is funding your project. No builder would go near your imaginary project, here are some reasons why

- once they talk to you they will realise you haven't a clue what you are taking about (other than basic junior certificate terms)
- you will point in at a field you don't own
- good builders for €20m projects aren't sitting around waiting for a call to start a project on a weeks notice
- they will have nothing to do once they come on site, you have zero ideas of what you are doing
- they will look for confirmation of funding, other than an email promising you €20m from a Nigerian prince you have nothing
- you will have to back to school next week

I don't even know why this thread is still open it's clear as day from your ever moving dream and 14 year old language that you are just wasteing peoples time

Regards, mr.pilko

kieran.

Just as an example I looked at a house for a client recently the site had planning for a nice modern 180m2 detached home in a leafy south Dublin area, price was €475,000 for the site.
We worked out build costs to be in the region of €450,000 all in for a mid spec turnkey finish. There were similar sized houses built in the area selling for approx €900k for his expected yield on his investment we reckoned he needed a sale price of €1,125,000 which simply was not achievable at this time.

There are plenty sites that you could not turn on profit out there presently, my advise would be to start smaller before hitting the big money one of sites.

K.Flyer

J.pilkington wrote: »

...
Now for the Nigerian prince to wire you that €20m! You'll have to pay him €50k in admin fees before he releases

The head of Nigeria's national intelligence agency has been suspended after $43m (£34m) in cash was found in an empty flat in the capital Lagos.

Hmmmm

tomwaits48

Boards.ie definitely the place I would come to looking for fundamental business model advice at this level. Yes indeed.

Bigus

tomwaits48 wrote: »

Boards.ie definitely the place I would come to looking for fundamental business model advice at this level. Yes indeed.

Especially at 2am

Kaiser74

Bigus wrote: »

Especially at 2am

How old are you pilko ??
All of your questions have been answered in previous questions wise up.

Back to the issue at hand. Thanks for site development suggestions and examples

Kaiser74

kieran. wrote: »

Just as an example I looked at a house for a client recently the site had planning for a nice modern 180m2 detached home in a leafy south Dublin area, price was €475,000 for the site.
We worked out build costs to be in the region of €450,000 all in for a mid spec turnkey finish. There were similar sized houses built in the area selling for approx €900k for his expected yield on his investment we reckoned he needed a sale price of €1,125,000 which simply was not achievable at this time.

There are plenty sites that you could not turn on profit out there presently, my advise would be to start smaller before hitting the big money one of sites.

Thanks.
We will look at all sites to see which Will provide a sistainable profit.

Kaiser74

Kaiser74 wrote: »

Thanks.
We will look at all sites to see which Will provide a sistainable profit.

In that example you would go for a site at that price..

Kaiser74

Kaiser74 wrote: »

In that example you would go for a site at that price..

Typo.. Wouldn't purchase at that price.

gavmcg92

I hope I'm not too late. I have taken the liberty of asking some of my people to do up some plans for your project. They don't come cheap though. I'll do you the favor and cover this set on my side.

Mellor

Kaiser74 wrote: »

As already stated In previous posts - builders lined up, ongoing with architect and accountant, land obviously not bought yet as loan not secured. Site with planning. Got it now pilko?

How did you get planning for your project in a few hours?

Kaiser74 wrote: »

Site with pp for I large house.

Kaiser74 wrote: »

Also looking at converting large house to 2 bed apartments- selling at 450k+ depending on location

Graham

Mellor wrote: »

How did you get planning for your project in a few hours?

It's a moveable site that appears to have been granted planning permission for any type of residential development that meets the OPs as yet to be decided profit margin.

Mellor

Mellor wrote: »

How did you get planning for your project in a few hours?

Sites are often sold with planning permission secured. The building permits is the tricky part after that.

Some good points in this thread. You won't make a profit with current costs if you are doing groundwork - as someone pointed out its cheaper to buy then to build right now. But a conversion would be doable, I've done the numbers profit is there.
Not at a ridiculous 12% lending rate though lol, you should be looking at 5-6% or less. And once you have bought your site, your going to need to personally be able to service the loan for the duration of the construction and for a period afterwords, otherwise a bank isn't giving you money.

And most of all you'll need to be ruthlessly efficient and be willing to be an absolute prick to get to the end and make a profit. There are more moving parts then a swiss watch, and huge stress levels especially if you don't know what your doing.

But even if your totally green which I was when i did my first project on the other side of the world, you can make a profit. But as Kieran pointed out, buying a site with nothing on it, the numbers don't work right now.

Mellor

Deleted User wrote: »

Sites are often sold with planning permission secured. The building permits is the tricky part after that.

I'm aware sites can sold with planning.
Check the two posts I quoted. Like a game of spot the difference.

But a conversion would be doable, I've done the numbers profit is there

Not really enough info to say that.
How much is the property, how much work needed, how much will it sell for.
All variable case by case.

antoinolachtnai

This may be a dumb question, but the right people seem to be on the thread to ask:

Why won't the owners of the land sell it cheaper so that building can be more viable?

Mellor

Mellor wrote: »

But a conversion would be doable, I've done the numbers profit is there[/quote]
Not really enough info to say that.
How much is the property, how much work needed, how much will it sell for.
All variable case by case.[/QUOTE]

I do have enough info to say that as I've crunched the numbers on various buildings and am actively looking at projects in Dublin. There is money to be made now. Hence the amount of cranes mobilised in the city being comparable to the boom.

Your stating the obvious work needed etc - Of course it needs to be a good deal, its far from a foregone conclusion the model Im talking about would work without the right building. But it can work, mostly because much of the risk of property development is taken out if your avoiding the groundwork and permits. Its hard but not nearly as hard as buying a site and starting from scratch.
Still though if the OP wants to pursue this he needs to be ok with losing if the situation arises! Even with the a project that looks like it ticks all the boxes still very easy to lose.

antoinolachtnai

antoinolachtnai wrote: »

This may be a dumb question, but the right people seem to be on the thread to ask:

Why won't the owners of the land sell it cheaper so that building can be more viable?

In that situation, for me the approach is a JV with a profit share.

Unless the landowner is under pressure unlikely they will reduce price right now with everything going in the right direction at the moment....

And besides theres probably a few people like the OP around who don't know how to crunch the numbers properly and will buy it at market price!

pilly

antoinolachtnai wrote: »

This may be a dumb question, but the right people seem to be on the thread to ask:

Why won't the owners of the land sell it cheaper so that building can be more viable?

That's a trick question right?

Mellor

Deleted User wrote: »

Your stating the obvious work needed etc - Of course it needs to be a good deal, its far from a foregone conclusion the model Im talking about would work without the right building.

So profitable if you find a building that can be profitably converted. Stating the obvious indeed.
Plus a steady supply of these places to service the loan.

Did you spot the planning issue?
More importantly, has the OP.

The_Pretender

antoinolachtnai wrote: »

This may be a dumb question, but the right people seem to be on the thread to ask:

Why won't the owners of the land sell it cheaper so that building can be more viable?

They don't want to sell the land because they think it'll be worth more if they hold onto it for a while longer, which it could well be.

Mellor

Mellor wrote: »

So profitable if you find a building that can be profitably converted. Stating the obvious indeed.
Plus a steady supply of these places to service the loan.

Did you spot the planning issue?
More importantly, has the OP.

Not sure I follow you, or if we are on level 5 sarcasm here. Obviously he's looking at different sites.

Mellor

Deleted User wrote: »

Not sure I follow you, or if we are on level 5 sarcasm here. Obviously he's looking at different sites.

Earlier you replied "sometimes sites are sold with planning" to my post about planning permission.
I said see the two post I quoted for the issue.

You deleted that part above and I'm wondering if you spotted the issue. And has the OP.
Maybe he has and has left relevant info out. But given the radomnness so far I'm not sure.

You've lost me mate!

As i understand hes looking at a site and building a house that has existing pp. and another building that would be converted

Kaiser74

[Deleted User] wrote: »

Sites are often sold with planning permission secured. The building permits is the tricky part after that.

Some good points in this thread. You won't make a profit with current costs if you are doing groundwork - as someone pointed out its cheaper to buy then to build right now. But a conversion would be doable, I've done the numbers profit is there.
Not at a ridiculous 12% lending rate though lol, you should be looking at 5-6% or less. And once you have bought your site, your going to need to kpersonally be able to service the loan for the duration of the construction and for a period afterwords, otherwise a bank isn't giving you money.

And most of all you'll need to be ruthlessly efficient and be willing to be an absolute prick to get to the end and make a profit. There are more moving parts then a swiss watch, and huge stress levels especially if you don't know what your doing.

But even if your totally green which I was when i did my first project on the other side of the world, you can make a profit. But as Kieran pointed out, buying a site with nothing on it, the numbers don't work right now.

Thanks.
Sites would have planning, as I already stated.
This is not a bank and interest repayments can be paid p/a.
Refurb may the way to go.. Will see how the figures stack up.
Intelligible and informative replys only..
Thanks.

antoinolachtnai

Even if you have everything else solved, the problem is that it is very difficult to do land development with a 12 percent interest rate. The financier will end up owning everything.

antoinolachtnai

antoinolachtnai wrote: »

Even if you have everything else solved, the problem is that it is very difficult to do land development with a 12 percent interest rate. The financier will end up owning everything.

Yeah if all the money is at 12% its pointless unless you find a serious bargain that can be turned over very fast

Kaiser74

[Deleted User] wrote: »

Yeah if all the money is at 12% its pointless unless you find a serious bargain that can be turned over very fast

A possible senario as previously mentioned could be rolling projects over 3 year period.. ie profit from project(s) after 6 months ploughed back in for next six months. Possibly doing 4+ projects per 6 months..

Kaiser74

Kaiser74 wrote: »

A possible senario as previously mentioned could be rolling projects over 3 year period.. ie profit from project(s) after 6 months ploughed back in for next six months. Possibly doing 4+ projects per 6 months..

6 months is unrealistic. Very unrealistic.

Scenario 1 with site, it might have planning but then you need permits. 8-12 weeks rights there before you can even start (thats with sailing through the process and no objections)
If you are doing groundwork and building a house you need 18 months with a small contractor doing the work to cover everything from start to finish.

Scenario 2 doing a conversion, 6 months would be possible if you had all your ducks in a row and the building was already approved for splitting into apartments. But if not 8-12 weeks just for that part. And your not going to get multiple apartments done in 3 months no way.

In my experience you have to at least double the timeframe you expect to get finished in. And if you are paying high interest rates that puts your risk over the top for any sort of project. There will always be delays, theres too many moving parts and people to manage for there not to be