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Unfinished projects

Discussion in 'Real Estate' started by ramone_johnny, 4th Dec, 2006.

  1. ramone_johnny

    ramone_johnny Well-Known Member

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    Hi all,
    Just out of curiosity, how many members have taken on an unfinished project? A steel frame house has come about just recently and I believe it could be a great investment. Its going to auction December 16 and from what Ive heard could sell at 400K. Houses either side are for sale at 1.1mil.

    Ive been down to look at the house and basically everything frame wise is in place, however theres still a great deal of work left to do. Its basically just a shell.

    Has anyone experienced anything like this before or taken on a project of this nature? What are some considerations to take on? Costs involved? What are the likelihoods of finding a builder to finish the house?

    Thoughts anyone?

    RJ
     
  2. Jacque

    Jacque Team InvestEd

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    Hi RJ

    My first port of call would be a local builder (preferably one experienced with steel frame houses) who could provide you with an idea of what it's going to take to finish the project.
    Have you asked the REA for the plans and the name of the builder who began the house? This would give you some much needed info and it may even be better to talk directly to the builder who is more likely to know more accurately what type of costs you're going to be up for.
     
  3. ramone_johnny

    ramone_johnny Well-Known Member

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    Hi Jacque,
    I have the plans, but am yet to receive the engineers report. Can the houses legally go up for auction without this report?

    RJ
     
  4. Jacque

    Jacque Team InvestEd

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    Probably best to speak to the builder on this one, RJ, and also ask BCC- they might be able to assist.
     
  5. ramone_johnny

    ramone_johnny Well-Known Member

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    Hello again!

    I have decided to organise an independant assessment of the property with STA. These guys will be able to inspect the properties and provide written documentation that oultines the buildings integrity and structural condition.

    Will be sure to keep everyone informed of the outcome.

    RJ
     
  6. See Change

    See Change Well-Known Member

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    Is the current builder ( if there is one ...) happy to continue with the work ? That would be the easiest option.

    Just looked at a partial completed property where the builder is still working on the property . Havn't looked into things in great detail but I assume any builder completing the work has to take responsibility for what has been done .... Need to make sure all the correct certification is available for work done etc.

    See Change
     
    Last edited by a moderator: 6th Dec, 2006
  7. ramone_johnny

    ramone_johnny Well-Known Member

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    Gday See Change,
    Mate I was thinking the same thing, problem is though - getting in touch with the current builder. Seems the business is no longer. Ive tried the phone numbers on the signs out the front, the yellow pages, directory assistance - seems this company has just vanished.

    Im getting the inspection done in an hour or so. Will let you know how it eventuates.

    RJ
     
  8. ramone_johnny

    ramone_johnny Well-Known Member

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    Engineers have given this the ok. Trying now to source a builder to quote completion of the project.

    RJ
     
  9. MichaelWhyte

    MichaelWhyte Well-Known Member

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    RJ,

    As I just posted in another thread, Kay and I took over the building of our PPOR from lock-up and finished it ourselves. It was a piece of cake and saved us a motza and drastically improved the quality of the finish achieved. Lock-up is a bit further along than framed, but not too much. If I were personally in your shoes I'd buy it and finish it myself by sub-contracting to the appropriate trades.

    PS To fit-out our place in Nth Narrabeen from lock-up to completion cost about $100K. But this included plumbing and wiring which were the biggest two subbie bills. The plastering was only $10K and we did all the painting and flooring ourselves. I even did some of the internal carpentry building the three staircases, and I also did all of the external balustrading in stainless steel stringers myself. Tiling was a pro and that was about it. Doing the flooring alone myself saved us about $20K. We sourced the Blackbutt T&G from an auction and laid it over a weekend with a compressor and a specialised nailing gun. Was great fun and added heaps of value for an absolute fraction of the professional quotes.

    If that $400K to $1.1M margin is realistic then you'd nail it I reckon. But I don't know the specifics so take my opinion with a grain of salt.

    Cheers,
    Michael.
     
  10. ramone_johnny

    ramone_johnny Well-Known Member

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    Hey Mike,
    Things at this point are simply a waiting game. Ive organised a builder to come and inspect the property and offer some advice as to the costs associated with completing the project.

    To be honest I wouldnt mind doing *some* of the work thats required, but must remain mindful that I am relatively time poor. Id rather get tradespeople in to complete the work for me.

    I wouldnt mind project managing the house and organising sub contractors myself though - that would be fun! :D

    Ah well, gotta get it first right?

    RJ
     
  11. TryHard

    TryHard Well-Known Member

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    RJ

    If you can find a trustworthy builder prepared to take on someone else's leftovers, that'll be the biggest hurdle.

    (you might be able to track down the previous builder's status via the QBSA perhaps ? - it would be really good to talk to someone who was involved on the job initially if you could find a subbie or someone via the neighbours ?)

    Frame stage is from memory 35% of the standard contract progress payments (too lazy to go look :p) ... and many builders don't like the unknowns of inheriting something partly done. In my experience frame stage is a long way from lock up, but I guess that kind of depends on the nature of the construction.

    I sort of was on the receiving end of something similar when the builder of my pole house bailed and filed bankruptcy with mine and 7 other houses part completed. While it was 80% complete at that stage, and 80% of the price already paid, it cost nearly the same again to finish the house to specs using other builders. They all factored in risk and 'desperation' in their quotes :-(

    Traps to look for are the various council inspections - are there recorded frame and footings inspections and were they satisfactory ? Probably your engineer report overrides any lack of these, but it would still be good to know.

    Do you have the homepriceguide/registered valuer stats on the area to confirm $1.1M is a realistic sale price once complete ? (assuming the ones next door haven't sold at those asking prices ?)

    Good luck !
    Carl
     
  12. ramone_johnny

    ramone_johnny Well-Known Member

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    Yep found one! He came out yesterday afternoon and carried out an inspection - now that we have the engineers reports that puts us in a much better position. He said the task was definitely do-able and would take roughly 9 weeks, weather permitting.

    Done the QBSA thing already. The company is listed as "CANCELLED". Cool huh? :D

    True that. The initial frame stage from Ive been told also is only the "beginning" of the expenses and makes up a small percentage of the overall costs. Apparently its the finishings that add up.


    I have been lucky to find the original inspections and report certificates. Everything has been approved - however they cannot disclose this information until I actually "own" the property. Does this sound correct?

    The houses either side are listed at 1.1 and 1.3 million, although they are currently vacant and havent sold. Im thinking somewhere in and around the 800K mark should be a safe bet.

    RJ
     
  13. TryHard

    TryHard Well-Known Member

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    Excellent !


    Yeah that does sound right - luckily you were able to find the reports anyway hey ? Great news :)


    Cool - is that based on some recent sales data for similar properties ? I've been told the $750-$1M market is kind of stagnant at the moment out this way, just wondering if it might be similar in the area you're considering (ie. its a big ticket item to be sitting on if sales are slow ?). Would you need to put in pool etc. to suit that end of the market too ya reckon ?

    Anyway, sounds like fun ! Good luck at the auction :p

    Cheers
    Carl
     
  14. ramone_johnny

    ramone_johnny Well-Known Member

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    Im not overly familiar with sales in this particular suburb TryHard, but have looked on RP Data and can see the biggest sale to date is a $800K property in the area of interest. I think youd be right in saying things are slow for this price range though. Still be a nice bit of property to have!

    A pool is a definite and has been factored into the project.

    See how things eventuate at the auction.

    RJ
     
  15. Chris.R_WA

    Chris.R_WA Well-Known Member

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    Good luck

    Best of luck for this Saturday mate, be sure to post the results up as soon as you can! :)

    Regards, Chris