&nbsp;

A local Australian has spent a Lower North Shore record $15.1 million at <a href="https://www.apartments.com.au/new-apartments/elevate-hume-place-crows-nest-25-hume-street-crows-nest-nsw-2065">Elevate Hume Place</a>, the new TOD above the recently opened Crows Nest Metro Station.

The buyer amalgamated a penthouse and sub-penthouse to create the triplex apartment that will have five bedrooms, five bathrooms, a private rooftop pool, expansive terrace, and panoramic views of Sydney Harbour and skyline. The building is being created by burgeoning developer Third.i, alongside joint venture partner Phoenix Property Investors.

The buyer was drawn to Elevate’s unrivalled connectivity, situated directly above the&nbsp;<a href="https://www.apartments.com.au/developments/crows-nest-nsw-2065">Crows Nest</a> Metro Station, and the vibrant lifestyle precinct that surrounds it. The Metro connects to the CBD in just seven minutes, and Chatswood in four.

[smartcode_project:default project_id=142550 project_image_fid=309367]

Designed by internationally acclaimed architects <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a>, Elevate draws inspiration from the ancient blue gum forests native to the area. The building is a Net Zero development, created in consultation with Indigenous communities and exceeding sustainability benchmarks. Interiors feature chevron-engineered timber flooring, natural stone benchtops, and premium Sub-Zero Wolf appliances, delivering timeless elegance and next-level comfort.

The exchange of the $15.1 million apartment, follows a recent $5 million sale, and over $30 million currently in expressions of interests. Interest in Elevate’s penthouse stock has surged, reflecting a strong appetite for ultra-luxury residences that combine design excellence with unmatched connectivity.

[smartcode_project:default project_id=142550 project_image_fid=309369]

“We’re seeing a significant uptick in interest from local and international buyers who are prioritising connectivity, sustainability, and lifestyle,” said Callum Billinghurst, Head of Sales at Third.i Group.&nbsp;

“These recent sales are a testament to the vision behind Elevate. It’s not just about luxury finishes or panoramic views, it’s about creating homes that are deeply connected to the city and the community. Buyers are responding to that. They want to live somewhere that offers more than just a postcode, they want culture, convenience, and long-term value. Elevate delivers all of that, and more.”

[smartcode_project:default project_id=142550 project_image_fid=297878]

As part of the Hume Place precinct, Elevate is transforming Crows Nest into Sydney’s most dynamic urban village. Elevate’s unique position directly above the metro, combined with its curated amenity offering, has made it a magnet for buyers seeking a future-proof investment and a vibrant urban lifestyle.

The next release at Elevate is expected later this year.

[smartcode_project_cta:default project_id=142550]

“We’re seeing a significant uptick in interest from local and international buyers who are prioritising connectivity, sustainability, and lifestyle,” said Callum Billinghurst, Head of Sales at Third.i Group


Joel Robinson

Third.i & PPI set Lower North Shore apartment record with $15.1m sale at Elevate Hume Place penthouse amalgamation

Sydney developer Deicorp is set to officially open its <a href="https://www.apartments.com.au/new-apartments/hills-showground-village-castle-hill-2-mandala-parade-castle-hill-nsw-2154">Showground Village</a> precinct in Castle Hill.

NSW Premier Chris Minns will attend the opening on Sunday August 31, alongside&nbsp;Minister for Planning and Public Spaces Paul Scully, The Hills Shire Council Mayor Dr Michelle Byrne, Landcom CEO Alex Wendler, and Deicorp Founder Fouad Deiri.

Located just moments from Hills Showground Metro Station, the centre spans 9,500 sqm across four levels and features 26 specialty retailers as well as a 1,400 sqm public plaza, creating a new community meeting point for shopping, dining, fitness, and everyday convenience.&nbsp;

Showground Village forms part of the Hills Showground Station Precinct, an urban renewal initiative led by Landcom and Sydney Metro that will provide for around 2,300 new jobs over the next 20 years and around 9,000 new homes.&nbsp;

Deicorp was recently approved for another new development next door to Showground Village.

The new five residential buildings in the East Showgrounds Precinct, will see another 873 dwellings delivered, as well as&nbsp;3,500 sqm of open public space in the form of landscaped courtyards, a public park and communal outdoor recreational space including a playground, barbeque area, and outdoor seating.

“This approval will allow us to start construction on a range of beautifully designed, conveniently located apartments and create another vibrant, walkable and well-connected community,” said&nbsp;<a href="https://www.apartments.com.au/developers/deicorp" target="">Deicorp</a>&nbsp;Founder Fouad Deiri.

“These new homes will provide their residents with a seamless connection to jobs and services along Metro North West, and the new&nbsp;<a href="https://www.apartments.com.au/new-apartments/hills-showground-village-castle-hill-2-mandala-parade-castle-hill" target="">Hills Showground Village</a>&nbsp;retail precinct currently under construction."

Deicorp has several thousand apartments in planning and under construction across Sydney, from Zetland and Five Dock to Crows Nest and Macquarie Park.

[smartcode_project_cta:default project_id=133881]

Deicorp, NSW Premier officially open Showground Village, new retail and hospitality hub in Castle Hill

ASX-listed developer Cedar Woods is progressing its plans for its Southbank arts precinct site.&nbsp;

The developer has filed plans, which are now with the&nbsp;Department of Transport and Planning, for a new 20-level tower at&nbsp;<a href="https://www.apartments.com.au/new-apartments/141-151-sturt-street-southbank-vic-3006">141–151 Sturt Street</a>, a 2,718 sqm block opposite the Habitat Filter sculpture.

The proposal seeks to demolish the two-level&nbsp;commercial building, including a small supermarket and medical tenancies, and create a new building with 180 apartments and a focus on an&nbsp;active public realm and arts integration.

&nbsp;

<img alt="Southbank site" data-entity-type="file" data-entity-uuid="76a72db6-91ef-43ae-827d-a9cfa72893d2" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Site.png?VersionId=DZgtB4K6BswVh0QtCs3iLjXaLp0CbcEb" />

&nbsp;

There will be a full mix of apartment configurations, including 28 studio apartments, 16 one-bedroom, 104 two-bedroom, and 32 three-bedroom units.

Retail, creative arts, and residential amenity functions are integrated across the lower levels. A food and drink tenancy is planned to front Dodds Street, while a retail tenancy fronting Sturt Street will be accessed via an elevated walkway. The first floor includes a substantial 734 sqm creative arts space, envisioned to support Melbourne’s growing cultural and digital industries.

Architecture firm <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has put together the plans. In their&nbsp;Urban Design Report they highlighted the project’s ambition to embed itself within Southbank’s evolving cultural fabric.

A central feature of the design is a through-block link connecting Sturt and Dodds Streets, landscaped with native plantings and embedded with universal access ramps.

“The ramp has been thoughtfully integrated as the primary access point, ensuring universal accessibility for all users,” the report noted, with the link offering “a direct response to the urban planning scheme of creating more green spaces within our communities”.

<img alt="Southbank podium" data-entity-type="file" data-entity-uuid="4d24b1b2-d69c-4a11-a11d-ec6df432221c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/podium.png?VersionId=geWoJyZDmPSLODZ_.PNJ0LvpOmyyCdpo" />

The building’s podium form responds to the mandatory height limits along Dodds Street and maintains a fine-grain interface to adjoining developments. Above the podium, the tower is articulated with recessed balconies and a focus on views toward the CBD and surrounding arts institutions. A communal rooftop recreation deck and indoor lounge are positioned on level four, adjoining seven apartments and providing over 900 sqm of resident amenity space.

Vehicle access and loading will be provided via Dodds Street, with 155 resident car spaces located across two basement levels and the first three above-ground floors. Bicycle storage is more generous, with 226 spaces distributed across resident, staff and visitor needs.

Rothelowman describes the architecture as “humanist,” with ground-level interfaces designed to encourage social interaction and provide a dignified entry for both residents and passers-by. “All street interfaces are crafted to invite and nurture human connections,” the design report states. “The façade transitions to a human scale, providing an approachable and engaging streetscape”.

Cedar Woods, while well-known for its large communities it develops outside of Australia's capital cities, they have recently developed in Melbourne's inner-ring before. They are approaching completion at <a href="https://www.apartments.com.au/new-townhouses/88-leveson-north-melbourne-88-leveson-street-north-melbourne-vic-3051">88 Leveson</a>, just 15 townhouses in the heart of North Melbourne.

Cedar Woods progresses with new apartment plans in Southbank arts precinct

Brisbane developers Core Property Partners and Vector Property Australia has teamed up for Brisbane's newest apartment development.

The duo identified <a href="https://www.apartments.com.au/developments/east-brisbane-qld-4169">East Brisbane</a> as their preferred suburb, on the fringe of the Gabba Precinct, where they've just revealed BANKSII, 72 apartments opposite Raymond Park.

[smartcode_project:default project_id=136432 project_image_fid=5481]

The one-, two-, and three-bedroom apartments will sit in a glass-wrapped building that will also feature a rooftop with an&nbsp;infinity-edge pool, a BBQ area and alfresco dining spaces, sun lounges, and a sauna, as well as a resident-only gym and a ground-floor cafe.

Rhett Williams, Director of Vector Property Australia, said the project will lift the quality of the East Brisbane community and set a new benchmark.

"In Brisbane’s current property landscape, <a href="https://www.apartments.com.au/new-apartments/banksii-east-brisbane-169-wellington-road-east-brisbane-qld-4169">BANKSII</a> stands out through its emphasis on lifestyle-oriented living, connectivity and sophisticated design," Williams says.

[smartcode_project:default project_id=136432 project_image_fid=5479]

The 10-level building has been designed by MAS Architecture. Their designs were inspired by the native Banksia flower, with the architecture and interiors reflecting the organic symmetry of its namesake flora. MAS has interpreted this throughout the building’s curved form, façade detailing and interior palette.&nbsp;

The building’s flowing geometry and natural tones are complemented by large balconies and floor-to-ceiling glazing, maximising cross-breezes, daylight and views over the city, parklands and river.

“Having a strong narrative for a building helps us architecturally,” MAS noted. "We can choose colours that come off that species of flowers. The trunk and the trees and the flower elements all are now visible in our joinery on the inside and in our architectural finishes on the outside."

[smartcode_project:default project_id=136432 project_image_fid=5485]

Apartments will feature timber floors, soft porcelain tiles, brushed bronze fittings, and stone benchtops with warm veining.&nbsp;

Kitchens feature premium SMEG appliances and generous storage, while bathrooms have been designed as calming retreats with curved cabinetry and twin sinks in the master ensuites.

The building will feature a suite of rooftop and wellness amenities. Residents will have access to an infinity-edge pool, BBQ and alfresco dining areas, sun lounges and a rooftop sauna.&nbsp;

A residents-only gym will be located on the podium level, while a ground-floor café and landscaped laneway will further activate the site and improve neighbourhood connectivity.

[smartcode_project:default project_id=136432 project_image_fid=5488]

BANKSII will rise from a prime Wellington Road site, with the building oriented to overlook the adjacent Raymond Park and take in extensive city views. It is also on the doorstep of key&nbsp;lifestyle infrastructure, including the future Kangaroo Point Green Bridge, The Gabba stadium, and the planned Brisbane Live arena.&nbsp;

Public transport options, including ferry, bus and rail - including the future Cross River Rail Woolloongabba station - are all nearby, supporting a car-optional lifestyle just minutes from the CBD.

Williams said the team spent over a year searching for the ideal site before securing this location.

"We were attracted to <a href="https://www.apartments.com.au/developments/east-brisbane-qld-4169">East Brisbane</a> as it is a vibrant and growing community that offers a perfect balance of urban convenience and natural beauty with the parklands and river on our doorstep.”

The project is part of the broader Woolloongabba Games precinct, which is undergoing significant investment in the lead-up to the 2032 Brisbane Olympics. This urban renewal, coupled with infrastructure upgrades, is expected to enhance long-term liveability and capital growth in the area.

Given the wide max of configurations, BANKSII is expected to suit everyone from first home buyers and investors to families and downsizers.

[smartcode_project_cta:default project_id=136432]

BANKSII sales launch in booming East Brisbane apartment market

The Minns Labor Government will deliver Sydney’s first new heavy rail station in more than a decade – enabling up to 10,000 new homes by rezoning land around Woollahra and Edgecliff stations, right next to the CBD, to tackle the housing crisis and rebalance growth across the city.

Recent reports by the NSW Productivity Commission have warned that Sydney is losing twice as many young people as it is gaining, while also finding that Woollahra is the most feasible Local Government Area (LGA) in New South Wales to build new housing.

Despite this, housing approvals in Woollahra consistently lag well behind other LGAs, and the population has declined by 11 per cent over the past 50 years while Greater Sydney as a whole has grown by 74 per cent.

The new station that will be an eight-minute trip from Sydney CBD, will be located on the Eastern Suburbs train line in Woollahra, where a station build was started in the 1970s but never completed.

To enable the delivery of new homes the NSW Government will lead a rezoning of Woollahra and Edgecliff stations similar to other state led rezonings to allow additional homes to be built around the stations.

Affordable housing will also make up a proportion of development on the site with the final amount of affordable housing required, to be determined as part of the rezoning process.

The area surrounding the new station is within walking distance of major green and recreational space including Cooper, Trumper, Rushcutters Bay and Centennial Parks.

The Eastern Suburbs train line between Bondi Junction and Sydney CBD also has the lowest passenger usage rates during the AM peak of any line on the Sydney network, with only 43 per cent of operating capacity during the AM peak currently being utilised by passengers.

Sydney Water and Infrastructure NSW have confirmed there is capacity in the water and wastewater systems to accommodate the proposed 10,000 dwellings without major upgrades.

The rezoning is expected to take around two years and will further support the Government’s housing targets that rebalance the delivery of new homes around existing infrastructure.

&nbsp;

&nbsp;

Next stop Woollahra train station - delivering up to 10,000 new homes in the heart of Sydney

Cash Flow

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The Agency Group has denied a Fairfax Media report alleging it had delayed acquisitions "as it scrambles for cash."
<div>
The burgeoning agency has told its shareholder it had delayed the acquisitions of two key real estate businesses.
The West Australian company was due to settle on its $950,000 acquisition of another WA estate agency Sell Lease Property last week.
The Agency was also expected last week to exercise an option to acquire real estate group Top Level, which operates as The Agency East Coast under a licence agreement.
Instead it extended a trading halt in place since Monday until this Tuesday.
The Agency Group acquisition of the ServTech Global Limited subsidiaries Sell Lease Property Pty Ltd, Complete Settlements Pty Ltd and Value Finance Pty Ltd had been delayed due to a "small number of conditions" needed to be satisfied prior to settlement. 
</div>
<div>
The acquisition of Top Level is reportedly delayed due to procedural issues relating to ASX compliance.
The AFR advised acquisition of the two businesses "would transform the cash-strapped start-up from a cash-flow-negative operation to one that is cash-flow positive."
The Agency released a quarterly update of its financial position indicating the first quarter of 2018 could see a negative cash flow position of $3.1 million.
</div>
<div>
The Agency raised $1.92 million through the issue of new shares. The acquisition of Top Level will be through the issue of around 366 million shares in The Agency which requires shareholder approval.
Previously called Ausnet Financial Services, The Agency is backed by mortgage broker Finsure, co-founded by mortgage broker John Kolenda.
An updated AFR report noted its report on the company had the words "as it scrambles for cash" removed from its online version.
In its half year report lodge with the ASX, covering the six month period to 31 December 2017, The Agency Group confirmed it had completed 322 settlements across their wholly-owned operations, valued at $190.5 million.
The number of listings grew to 492 listings during the period, a 30 percent increase on June HY2017.
Gross commissions for December HY2017 came in at $3.76 million, a 45 percent rise on June HY2017. 
“The six months to 31st December 2017 has been a pivotal time in the short history of the company as we continue our significant growth trajectory in both west coast and east coast property markets," said The Agency Group Australia managing director, Paul Niardone, adding that "the company’s unique business model works and will continue to provide significant revenues going forward.”
Top Level, which boasts some of Australia’s leading property professionals, is operating under licence to The Agency Group.
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j.ballantyne1990-6AQqhLzZaK

The Agency Group denies it's scrambling for cash

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<div>
The young high flying Sydney investor Nathan Birch has been quietly sued by a lender after his company defaulted on a $535,000 mortgage on a Gold Coast investment property.
Birch has confirmed he had "briefly" fallen behind on "one or two mortgages" citing increased lending restrictions arising from the much-heralded Australian Prudential Regulation Authority investor crackdown.
Birch (below), who proudly describes himself as a little bit bogan, drives a $200,000 Bentley bearing the number plate CSHFLO.
He was named Your Investment Property magazine's runner-up investor of the year in 2013.
The arrears situation is a small part of the portfolio built up by Birch who describes himself as "young, bold, brash" - and "one of Australia’s most successful, respected and listened-to property investors."
His $50 million portfolio of over 200+ properties, saw him tally a net worth exceeding $30 million dollars with a passive income after expenses north of $2 million since buying his first property at eighteen.
Court documents cited by the Australian Financial Review showed Birch's company HLG One Holdings Pty Ltd had failed to pay amounts owing on a $535,000, 30-year interest-only mortgage for 9 Victor Avenue, Paradise Point, which has three two-bedroom rental units on one title.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/1/8/nathan.jpg" alt="">
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<div>
HLG One Holdings, of which Birch is the sole shareholder and guarantor over the loan, was given 31 days to remedy the situation or be in mid-year default.
At the time in a <a href="https://binvested.com.au/nathan-birch-selling-properties/" target="_blank">blog post</a>, Birch announced he was selling down his portfolio.
“For a long time now, I’ve been collecting properties like kids collect action figurines in a Happy Meal,” he wrote. “I never like to see one go.
“But recently, the finance environment has changed. It’s a bitter pill to swallow for a buy-and-hold investor — but I need to optimise to [suit] the times we are in by letting go.”
Birch told news.com.au mid-year he was looking to offload up to 20 properties estimating he would reduce his debt to about $18 million.
</div>
<div>Birch blogged that he was adjusting his portfolio and riding the finance challenge "without breaking a sweat".</div>
<div>
"For years now I have been channelling equity into deposits for new properties, but it's no secret that equity is very hard to release these days – even if you have millions of dollars of it," he told his many devotees.
His recent HLG company sales include a Box Hill, outer Sydney holding which fetched $625,000 last November, having cost $567,000 in 2015.
Among the property HLG retains is a townhouse at Woodridge in Queensland which was <a href="https://www.realestate.com.au/sold/property-unit-qld-woodridge-120184193" target="_blank">bought in 2015 at $124,000 when tenanted at $220 a week</a>. Last month it sought tenants at $200 a week having sought tenants in November at $230 a week.
<div>Permanent Mortgages sued HLG One Holdings and Birch claiming repossession of the property together with $548,367 and interest accrued on the amount at a rate of 11.94 per cent a year from August. The claim was filed in the Brisbane District Court by solicitors Dunstan Hardcastle, acting on behalf of Permanent Mortgages, a subsidiary of non-bank lender La Trobe Financial.</div>
<div> </div>
<div>On October 24 Permanent Mortgages secured judgement against HLG One Holdings, but has yet to undertake any public sale. It <a href="https://www.realestate.com.au/sold/property-unitblock-qld-paradise+point-121557538" target="_blank">last sold in 2016</a> at $815,000, then returning a total of $780p/w.
</div>
<div> </div>
</div>
<div>In his recent emailed response on the court matter to the Financial Review, Birch advised 2017 had "more than anything highlighted just how important strong cashflow is".</div>
<div>
He said that he had had to adapt his investment strategy.
"As a result of the tighter lending practices, I have simply sold some smaller properties and purchased larger ones to set myself up for a development phase in my portfolio," he advised.
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Cash flow issues catch up with investor Nathan Birch on Paradise Point property

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<img src="/images/2016/05/25/Holdencapital_banner.jpg" alt="" width="603" height="127">
SPONSORED POST
The property development scene continues to evolve and developers are always looking to find new ways of improving their product and returns, however there are a number of commonly used acquisition strategies that they continue to utilise and I thought I would evaluate the 5 most common strategies and look at why they are effective.
1. Buy and hold strategy
This is where the developer purchases the property and holds on to it long term while waiting for the right market conditions to maybe reposition its use via a change of zoning and then redevelop it. To be effective there needs to be a cash flow generated from the property via a retail tenancy or similar that enables the developer to achieve a neutral cashflow utilising a level of debt funding that is prudent but maximises his effective use of his capital. Ideally if it can amortise some of that debt over time, all the better. Ideally this gives the developer the option to sell a rezoned site at a profit or assume the development risk and achieve an enhanced return. This strategy requires a significant capital outlay and the return may only be marginal if the full development strategy is not taken up. 
2. Buy and on-sell
The developer may purchase a property with an intention to purely on-sell it in the short to medium term. This could be due to identifying an opportunity to secure good terms or a low price enabling a profit to be made from a quick turnaround sale. This might be achieved by offering to purchase with a cash unconditional contract that might be attractive to a purchaser under financial stress enabling you to negotiate a lower price. Alternatively you might identify the ability to obtain a development approval and significantly increase the site value enabling a quick on sale where there is strong demand for the amended use. This approach is much smarter the being the biggest idiot who pays top dollar for a prime site already with a DA in the hope that he will then make a development profit. 
3. Option contract
A number of creative developers seek to secure a property by putting it under an option contract enabling them to then work up a strategy and either on-sell or develop. This is a creative way to acquire control of a property without having to own it. If they take the on sale route, there is the added benefit of a potential stamp duty saving (please take advise from your solicitor as there are varying state legislations in respect to this strategy), as the developer has not legally purchased or settled the property but has a legal right to deal with it including transferring their rights under the option agreement. This may include obtaining a development approval to increase its potential and enhance its value. This method of acquisition allows a developer to have control over the property buy not requiring to put much cash into buying the property until they have increased the value of the property, example by obtaining a DA. 
4. Buy &amp; develop
Clearly this is the most common strategy that a developer will utilise especially in a quiet market where there are opportunities to buy in at low prices. An example of this was in 2008 during the GFC here a number of developers needed to sell property at liquidated prices. Over the years the market improved and the property would have increased in value to either develop then or sell at a profit. If a developer has acquired a site in a soft market, then there could be good potential uplift in the land. However, if they are in a cooling market then they may have purchased a  site at top prices and find themselves in a challenging situation. The current market does indicate that sentiment is easing and that there may be risk of oversupply in some locations. 
5. Development agreement 
This is where a developer secures a deal with a land owner. This is typically called a Land Development Agreement (LDA), where the developer has the experience and skill set to obtain a development approval and complete a development. The land owner retains ownership of the land for the developer to develop and receives his land value along with a share in the end profits. This is a good win-win solution for both parties. This scenario occurs more frequently where the land size is large with multiple stages enabling the developer to undertake the project without the need to purchase and hold the balance land over an extended period. In most cases the land owner is not experienced in development and benefits from a share in the uplift in value created by the developer which they would not ordinarily get to do if they tackled the DA process by themselves. As always, you need to do your due diligence on who you do business with and take appropriate advice as different states have differing stamp duty rules which may apply. 
Conclusion 
Each of the above acquisition strategies have different pros and cons. There may be stamp duty implications that may or not apply to the purchase. The capital component is different for each scenario and market conditions can change as well, so a developer will need to be very mindful of current market conditions and be ready to adapt should conditions change and seek appropriate advice. 
For example, the construction finance with major banks has shifted from fluid to extremely limited within the last 6 months. Most developers who acquired their sites last year had expectations that their bank would automatically provide them with terms as they had done in the past. However, all major banks are now very cautious with their lending and are doing so at reduced levels of exposure with many developers now find themselves committed to their site but not having certainty of the funding required. 
Developers need to broaden their understanding of the growing number of alternative funding options that are available to them as the construction finance sector is rapidly changing. 
Just as you would normally take advice from an experienced town planner before lodging a DA, it pays to seek expert finance advice when considering to purchase a property to develop. By working closely with a specialised financer who understands your needs, the market conditions and the structure being utilised to acquire the site places you in a strong position to find the best construction finance solution for your next project.
This article was written by Dan Holden of HoldenCAPITAL, who are a bespoke construction finance firm, they arranged over $300 million of construction finance in 2015 across 52 projects. To discuss your project finance requirement please call (07) 3171 4200 or visit <a href="https://www.holdencapital.com.au" target="_blank">www.holdencapital.com.au</a>
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firstname-zEygzUaHDN

Top 5 acquisition strategies for property developers: HoldenCAPITAL

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GUEST OBSERVER
A few short years ago, locations like Port Hedland in Western Australia or Emerald in Queensland were offering returns of up to 15%.
Well, that was then, this is now and the dive in commodities prices has been mirrored in property investment returns.
Adding to the slowdown, most lenders have dropped the LVRs on higher returning investments such as student accommodation and serviced apartments to levels that would have left many investors scratching their heads and wondering if the extra deposit required was really worth the returns.
This raises the obvious question of whether cash flow positive investments are dead or at least, needing urgent resuscitation.
Having owned several cash flow positive properties in both Queensland and WA, I know firsthand how much it can hurt when rentals start to fall.
Yet, despite this, I am still adamant that positive cash flow is the right investment strategy for most investors.
So, that means the next question is where in the current market can you find cash flow positive properties?
The answer is quite simple. You have to create them rather than hold off in the hope they find you.
Duplexes and dual key properties are the best and safest cash flow positive property an investor can acquire, particularly in today’s tough economic climate.
They can be developed in most metropolitan locations which means you don’t run the risk of fluctuating returns based on local industry plus there’s the opportunity for two rental incomes under one roof which generally shows a profit rather than a loss.
Duplexes also have the added benefit of a potential development profit through subdivision.
And this potential for development is really worth considering because instead of sitting back and waiting for capital growth you can create and drive equity, in turn, becoming a master of your own destiny.
Here’s a checklist of issues to consider:
Location due diligence is still just as important as any other property investment so narrow your search to growth areas with high rental demand for three bedroom dwellings.
Make sure the land is subdividable before you purchase. It’s too late once you’ve signed so think about enlisting the services of a town planner.
Find an experienced builder that has undertaken these types of build before and don’t over pay. Sure, it’s a bigger build but it’s all under one roof.
If you’re thinking about planning and subdivision always refer to local professionals who know the intricacies of the council with whom you will be dealing.
Finally, remember that you don’t need to sell the property to make a profit.
When you factor in things like agent’s fees and capital gains tax, you can actually access the same, if not more, equity by simply revaluing the property and increasing your mortgage.
This type of  “equity release” can then be used to move onto the next project and the duplex could still be cash flow positive, depending on the rental income.
This is a very sound strategy as the property can still create an income and gain capital growth while you continue to build your portfolio.
Paul Bieg is the founder of <a href="https://www.bigpropertyinvest.com.au/" target="_blank">Big Property Investments</a>
<a href="https://www.bigpropertyinvest.com.au" target="_blank" style="font-size: 12.16px; line-height: 1.3em;"> </a>
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