house and land investment

Introduction

• builderbuilder provides House and Land and Dual

Occupancy packages

• builderbuilder uses REI online tools to develop

individually researched property deals

• REI members have the opportunity to opt in to

receive the pre-release of our deals via a Property

Investment Brief

House Overview

• A purpose built single home on single lot

• Widely accepted by all Town Planning Schemes

• Building regulations are Code Assessable

• Finance up to 95% LVR

• Can be valuations issues if dwelling or lot is too small

House Strategy

• Price point $350,000-$550,000

• Yields 4.75%+

• Some equity gain possible during construction

• Entry point for first construction deal

• Important to buy in the right area (in-fill) and estate

House Example – Rochedale

QLD

4 bed + Study, 2 bath, DLUG

Package Price:$949,000

Land Settlement: 06/05/2015

Construction Complete: 04/12/2015

Appraised Value on Completion

$1,200,000 - $1,300,000(03/2016)

= 26% - 37% Gain

Market Rent: $1,580/wk (8.3% Yield)

Dual Living Overview

• A purpose built house with two separate dwellings internally

• Cannot strata

• Town planning limited

• Building regulations same as duplex

• Finance similar to a house but better cashflow up to 95%

LVR

• Valuations issues if too large

Dual Living Example Plan

Dual Living Strategy

• Price point $475,000-$650,000

• Price 10-20% higher than a house

• Great cashflow with yields 30-40% higher

• Some equity gain possible

• Ideal to increase serviceability in existing portfolio

• Ideal for first home buyers who can rent out secondary

dwelling as an investment property

Dual Living Example –

Ipswich QLD

3 bedroom house + attached

2 bedroom dwelling

Land: $180,000

Build: $269,000

Total: $449,000

Market Rent: Appraised at $550-

570pw

Gross Yield: 6.4%

Total dwelling size 200m2

Duplex Overview

• Purpose built two dwellings on one property

• Strata title upon completion to obtain 2 dwellings

• Attached or detached

• Higher density zoning required

• Finance up to 90% LVR (half 80% half 90%)

• DA or MCU as of right

Duplex Strategy

• Price point $630,000 +

• Advanced strategy for a client who has already done a dual

living or house package

• Strong yields and cashflow

• Flexibility of 2 properties in 1

• Equity release upon strata title

Duplex Example – Pimpama

QLD

Attached 2 x 3 bed, 2 bath

single garagePackage Price:

$640,000

Land Settlement:

07/11/2014

Construction Complete: 24/11/2015

Appraised Value on Completion

$720,000 - $760,000

(03/2016)

= 12.5%- 18.8% Gain

Market Rent: $750/wk (5.9% Yield)

Key Considerations

Key Considerations

• Area

• Capital city versus Regional

• Greenfield versus Infill

• Design

• Valuation

• Builder

Area

• Capital City areas are more stable than regional

areas

• According to Core Logic’s Winner and Loser

Report for Dec 2015 the combined capital cities

percentage of losers for houses was 4.7%

compared to 11.3% for combined regional areas

• Due to location of infrastructure and population

Area

Area – Urban Growth Zone

Area – Urban Growth Zone

• Relies on affordability and development of new

infrastructure to drive median price growth

• Median price accelerates in the earlier stages

when infrastructure is being developed

• The ‘myth of over supply’ in master planned

estates

• What was once the urban fringe are now

established areas or infill regions

Area - Greenfield

• Relies on existing infrastructure and limited supply

to drive median price growth

• Larger lots are subdivided into smaller lots

surrounding by existing dwellings

• Median price growth varies considerably between

existing suburbs from year to year

• Price points higher than urban fringe

Design

• Investment design is all about facilitating

‘rentability’ and then the re-sale to an owner

occupier without over capitalising

• Functional designs with a 2nd living area

• Storage for livability

• Higher ceilings for volume

• Appealing façade

Design

Traditional

Investment Property

Owner Occupier

Home

Valuations

• Do not overcapitalise for the area

• Why are comparable sales so important and what

do they mean for houses and dual occupancy

dwellings

• Agent market appraisals

• Mortgage valuations and what it means for you

Builders

• We only work with reputable builders

• Have proven themselves to be reliable, quality builders

• Have proven in-house construction management system

• Standard pre-negotiated build contract terms • 16 to 20 weeks

• Liquidated damages

• Fixed price

• Turnkey

Property Strategy

Property Cycles

When to Buy

H&L Dual Living Duplex

Price $420,000 $475,000 $630,000

LVR 95% 90% 80%

Deposit $21,000 $23,750 $126,00

Rent pw $400 $630

Rental Yield

Equity $30,000 -

$60,000

Approval Period 8-10 weeks 8-10 weeks 12-16 weeks

Strategy Capital Growth Cashflow Equity

Product Comparison

Type of Investor

H&L Dual Living Duplex

- Low deposit looking to

get into a deal

- Looking for med to long

term capital gain

- First land and

construction deal

- Low income with minimal

serviceability

- First home buyer to rent

out secondary dwelling to

an investor

- Negative geared property

portfolio

- High income looking for

equity

- Turbo charge portfolio with

2 strata titled properties

- High income needing

deductions

- High borrowing capacity

- High deposit required up

to 20%

- More experienced

property investor who has

done a land and

construction deal

- Looking to recycle deposit

and move onto another

deal on completion

property investment brief

property

investment brief

Individually tailored

Exclusive property

Pre-release to REI members

who opt in

property

investment brief

Clear and concise summary of

the deal giving you a brief

snapshot of key investment

criteria

property

investment brief

Land and build information all

in one place for easy reference

property

investment brief

Floor plan, site plan and areas

Our Guarantees

• Insert screen shots of PIB

Expression of Interest (EOI)

• Submit EOI form at back of Property Investment Brief with

$1,000 refundable deposit

• Land and build contracts sent directly to you and your

solicitor

• Land contract subject to 21 days finance

• Build contract subject to settlement of land

Next Step…

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