Subdivisions Made Easy. Subd ivisions. Checklist. By Dyrnphna Boholt

Transcription

1 Subdivisins Made Easy Subd ivisins Checklist By Dyrnphna Bhlt

2 Subdivisins Made Easy WHA T TO LOOK FOR? Research Cnduct nline searches t determine yur areas f interest Obtain maps and zning infrmatin frm reginal authrities Visit ther subdivisins in the area Educate yurself abut the area and the real estate industry Search and Data Facilities PDOnline Real Estate websites Newspapers and real estate brchures Real Estate Agents Reginal Cuncils

3 Subdivisins Made Easy YOUR 'A' TEAM The Team Lawyer that specialises in develpment Mney Lender r Brker Civil Engineer that will help with design, planning, feasibility and cntracting Twn Planner Architect Land Surveyr Hydraulic Engineer Civil Hydraulic Engineer Electrical Engineer Quantity Surveyr (fr larger develpments) Landscape Architect Real estate agent I purchasing agent Graphic Artist Advertising Agency The Individuals Lk fr individuals that specialises in real estate develpment Ask fr references r examples f their wrk/clients Ask fr a schedule f their fees and charges Discuss the range f services that yu will require frm each individual Ensure that prfessinals are members f Prfessinal Assciatins where relevant. Eg. Building Assc., Institute f Engineers, Law Sciety, Institute f Quantity Surveyrs etc. Ensure prfessinals are cmpletely familiar with lcal and state regulatins Ensure all prfessinals have the necessary insurances and certificatin Dn't discuss the actual develpment during the interview prcess Ensure that they are in tuch with the latest laws, innvatins and develpments within the industry

4 Subdivisins Made Easy Ask what sub-cnsultants and cntractrs that they use Ensure the individuals n yur "A' Team understand yur time cnstraints Check n the prgress n individuals t keep them n target

5 Subdivisins Made Easy STRUCTURES Types f structures Cmpany Cmpany Discretinary Trust Cmpany Unit Trust Cmpany Hybrid Trust

6 Subdivisins Made Easy NEGOTIATlNG Negtiating the land purchase Prepare the cntract fr the purchase f the land Sign the deal there and then if yu have made a decisin Ensure yur cntract is cnditinal and include an 'pt ut' clause just in case Be specific abut the terms and make sure they are t yur advantage Make sure that all f the sellers are present when negtiating t sign Ensure that all names and addresses are spelt crrectly n the cntract Include a clause in the cntract fr the seller t sign develpment applicatins Negtiate directly with the wner f the prperty wherever pssible Building Cntracts Call fr Tenders and negtiate a building cntract with the best ne Ensure that yu understand yur cntract dcuments thrughly Seek legal advice if necessary fr anything that yu are unclear abut Clarify the terms f prgress payments in the cntract if any Clarify what the builders' insurance will cver Clarify cntract date cmmencement and cnclusin and yur rights Ensure that the cntract has been cmpleted prperly and there are n blank spaces Cntracts shu Id clearly state: Start and finish dates Rates fr variatins Liquidated damages if the prject runs late A defects liability perid A dispute reslutin prcess A clear and cncise cntract price A list f prime cst allwances

7 Subdivisins Made Easy FINANCE Securing Finance Lk fr a lender r brker that specialises in real estate develpment Ensure that yu deal with a lender / brker that understands yur needs Determine interest rates, charges and fees and negtiate the terms D. Ldge yur applicatin with a Cmmercial Finance Brker r Department Get Finance fr the entire develpment prject, nt just the land Make sure that yu include all the relevant dcumentatin in yur applicatin What t include in yur applicatin fr finance Intrductin Financial Prpsal/Cmmitment Site Infrmatin - Mapping, Descriptin, Zning Surveyr's plan f the site Envirnmental Factrs reprt -traffic flw, landscaping, land usage etc. Develpment Applicatin letter Building qutes r cntracts Cncept design descriptin and an architect's perspective drawings Demgraphic and target market fr sales Cmplete financial analysis f csts, expenses and prjected prfits Preliminary design r plans and submissin infrmatin Cash flw analysis Time Line f wrk flw Cnclusin

8 Subdivisins Made Easy Risk Assessment Supply a reprt f yur financial histry, assets and cash flw Get a cpy f yur credit reprt frm the CRA and make sure it is crrect Offer develpment land as yur security but be wary f crss securitisatin Finance Apprval Read and make sure yu understand yur lan dcuments and fees Instruct yur lawyer t perfrm Title Searches n the day f settlement Arrange a time and date fr yur lender t present yur cheque Organise a cver nte fr Public Liability Insurance upn settlement f site Instruct Engineer t cmmence wrk - ask fr written cnfirmatin Apprval may be granted n the cnditin that a percentage f lts are sld in pre-sales prir t granting further develpment finance. Purchasing and Finance fees and charges Cnveyancing and title search fees Stamp Duty (vary frm State t State) Legal Fees and Miscellaneus legal fees Cmpany establishment Fees Cuncil Rates and Lcal Authrity fees r adjustments Real Estate agent purchasing cmmissins Valuatin r Appraisal Fees by the lender Accuntancy Fees Interest n Finance Applicatin and Ldgement Fees Develpment and Sales Csts Plan Sealing Fees Mnthly cnsultant and cnstructin prgress payments Cnstructin f actual develpment (wrk ut a per lt rate) Landscaping Fees

9 Subdivisins Made Easy Legal Fees n the sale f lts Advertising and Marketing Csts Sales Cmmissins Maintenance upn cmpletin Annual Cuncil Rates Land Taxes (can vary reginally) Insurance t cver the entire develpment during and after cnstructin Develpment Management Fee - usually paid t yu, the develper Sundry Csts - allw a little extra fr any additinal csts that yu may incur Bdy Crprate Fees External rad wrks levees

10 Subdivisins Made Easy DUE DILIGENCE & FEASIBILITY STUDIES Zning Shire blck criterin - hw many blcks per land size? Zning Maps - available at planning departments at lcal shires Shire & Zning regulatins - available at planning dep't & shires Determine if the zning allws yur prpsed subdivisin Twn Plan - available at planning dep't & shires r nline Research yur area f interest What are the affluent areas r areas that are experiencing develpment? Indentify the price ranges f areas s yu can make cmparisns Keep a map with shires and cuncils mark and a list f cntact ffices Set up a spreadsheet with area infrmatin fr easy reference Visit subdivisins in yur area and recrd prices and marketing strategies Research the infrastructure; amenities, schls, transprt etc. Lk at changes in infrastructure planned fr the future Study the demgraphics and data prjectins f the area Chsing yur site Accumulate facts and details f the area that culd affect the develpment List yur selected sites in rder f preference Due Diligence Make sure a lawyer des a final Land Title Search the day prir t settlement Cnfirm all instructins in writing Create a time line f the entire cnstructin prcess and budget

11 Subdivisins Made Easy Feasibility studies Prepare several feasibility studies with varying ptins prir t cmmitting Always enter full amunts in cstings, nt ptential discunted prices D. Calculate legal fees and establishment cst as well as any duties r taxes Calculate expected sales incme and balance it against the expected return Des it meet a prfit return target f 33.33% - this is yur target fr viability Visit ther develpment sites and analyse their data; land price, lcatin, etc. Talk t Real Estate Agents abut develpments in yur area Make timelines realistic - allw fr inclement weather r unfreseen hld ups Estimate timeframes fr hw lng it will take t gain any returns If yur feasibility studies shw that yur prject is nt financially viable, review the cstings with yur Civil Engineer. If it is still nt viable - DO NOT prceed Assess what the Cuncil Planning regulatins and cnstraints may be Assess what the Civil Engineering requirements and cnstraints may be Once cnstructin csts are established revise yu initial feasibility study Asses what the tax implicatins f yur develpment may be

12 Subdivisins Made Easy DESIGN & MAPPING Mapping Enlist a Land Surveyr t establish the bundaries f any land purchases Land Surveyr will map ut the develpment site when apprval is granted Land Surveyr will check bundaries n plans and pre sales cntracts Initial Design Select a Civil Engineer Ldge a Develpment Applicatin fr the initial design Hydraulic Engineer plans drainage, water management and site plumbing Quantity Surveyr may establish a budget and time line fr the develpment Detailed Design Develp the detailed design fr Building Apprval Cnstructin drawings are submitted t cuncil by Civil Engineer fr apprval Electrical Engineer will crdinate their design with that f the Civil Engineer Meeting with the Civil Engineer - what yu will need t take alng Descriptin f the site Dimensins f the site Sme phtgraphs t indicate the lay f the land A design brief which includes infrmatin abut: Average Lt sizes Quantity f lts Rad widths Public pathways Cut and Fill Park designatins if required by Cuncils

13 Subdivisins Made Easy Cvenants Utilities access - water, electricity, gas, ptic cable Design features Landscaping Site Survey Plan Examples f any subdivisins r the cncept yu are wanting t create What the Civil Engineer will cme back t yu with: A design brief which includes infrmatin abut: Numbered Lts Lt sizes Rad layuts Designated Park areas Layut f Pwer Supply Layut f Water Reticulatin D~ Layut f Strm water and Drainage Time frame fr cmpletin Estimates cst f the develpment cnstructin

14 Subdivisins Made Easy APPLICATIONS, PERMITS & QUOTATIONS Finance Put tgether a Finance Real Estate Develpment Prpsal Include a Cash Flw Analysis &Financial Analysis Duble check that all figures are crrect Develpment Apprvals Ldge a Develpment Applicatin fr the preliminary design Submit Cnstructin Drawings fr building apprval Submit Electrical Engineers drawings fr building apprval Write a persnal letter t the Twn Planner stating yur specific requirements The Twn Planner will assess the applicatin in accrdance t the twn plan's zning guidelines. If it is satisfactry it will be presented befre the Twn Planning Cmmittee Develpment apprvals will be issued in writing frm the Planning Authrity Understand any Terms and Cnditins that the apprval may cntain Attend a pre-ldgement meeting with yur lcal cuncil prir t ldging applicatins Qutatins Civil Engineer calls fr tenders n cnstructin while awaiting building apprval Builder is selected frm tender applicatins and a cntract is negtiated Builder t supply cst estimates fr all design and building services Enlist a Quantity Surveyr t estimate and mnitr cnstructin budgets Electrical Engineers will prvide estimated cstings t the Civil Engineer Cmpare individual cntractr qutatins with the Civil Engineer's estimates Ensure Tender cntracts and dcuments dn't include any unusual clauses

15 Subdivisins Made Easy IMPLEMENTATION OF CAPITAL WORKS Cnstructin Phase Quantity Surveyr mnitrs Prgress Payments during cnstructin Ensure that Prgress Payments reflect wrk cmpleted n the site Once the building cntract is signed, the builder is in charge f the site Make sure yu always advise the builder when yu are n site Any cmments r cncerns shuld be made t the engineer NOT the builder Cmpletin Phase Civil Engineer and cnsultants carry ut a final inspectin upn cmpletin Cmplete a Builder's Defect List Re-inspectins f repaired defects Civil Engineer issues a Certificate f Practical Cmpletin t authrise the release f any Retentin Mney Quantity Surveyr prduces the final accunt reprt

16 Subdivisins Made Easy ISSUING OF TITLE Administrative Management Create a Bdy Crprate fr lt wners f Pre-sales t supervise fund budget Bdy Crprate Manager will assist with the first Administrative Budget Bdy Crprate manger can als prepare the 'Sinking Fund' Keep recrds f the 'minutes' f each Bdy Crprate Cmmittee meeting

17 Subdivisins Made Easy MARKETING YOUR SUBDIVISION Advertising and Marketing Csts Sign Writers r Graphic Designer t design signage / branding Perspective Artist t create an image f what the develpment will lk like Printers t print brchures r print media fr prmtin f the develpment Advertising Agency that specialises in Real Estate prmtin Media csts fr advertising in newspapers etc. Keep a recrd f advertising rates fr varius sizes Real estate agents will expect yu t pay fr yur wn advertising Cmmencement f Marketing Create a pictrial signbard f the develpment as sn as it cmmences List features that will attract buyers based n yur feasibility studies Print brchures r ther prmtinal media Prepare a Price List fr pre-sales Make sure yu direct ads at yur target market and they generate inquiries Site Sales Get lawyer t prepare a Pre-Sales Cntract s sites can be sld f the plan Ensure that any special clauses are included in this cntract A standard real estate Sales Cntract can be used nce the develpment is cmplete and the Title Plan is registered Understand what yur Sales Cntracts mean and ask questins if necessary Ensure that Sales Cntract are filled ut crrectly by yu and the purchaser Ensure that the depsit has been banked int the agreed accunt

18 Subdivisins Made Easy TAX Tax in general Enlist the services f a qualified accuntant that specialises in real estate Determine the tax implicatins prir t beginning yur develpment s that yu understand yur bligatins Put structures in place t minimise risk and maximise tax benefits Determine the Stamp Duty payable, if any, fr the area yu are lking at Capital Gains Tax Understand yur Capital Gains Tax bligatins Recrd all f yur expenses thrughut the develpment prcess GST (Gds and Services Tax) D Understand yur GST bligatins Keep a recrd f all GST paid and received Ldge BAS (Business Activity Statements)