Developments in Real Estate

Property Development can be described as :-
• Improving the Value of Land
• Profit from the Improvement

The main resources needed to do Property Developments are :-
• Time
• Money
• Knowledge
• Network

Pro-Active Investment Group describes Property Development as a Strategy to do the following :-
• Generate Cashflow (Develop and Sell for Profit)
• Capital Growth (Develop and Hold for Capital Growth)
• You have an opportunity to Pay Wholesale not Retail

Pro-Active Investment Group has a Team of Architects/Financiers and Builders who co-ordinates the whole property development process for the above results. We use various strategies in Property Development as below:-

• Vendor Finance (Some money now some money later)
• DA Uplift (Land is worth more after DA Approval
• Joint Venture with a Money Partner
• Joint Venture with a Land Owner
• Stock Back deal Capital Raising

Just as an example if you buy a property for $1,050,000.

To buy this, you use equity from another one of my properties. (Sort of no money down).

…but this property had a real cool twist.

This property came with a permit to build four town houses. Really cool.

We will help you contract a builder to project manage, build and look after it from start to finish.

Then we will help you go to the bank to finance the build at 100% of the loan. Which will be $890,000.

The end result?

All up, the costs will be:

• Purchase: $1,050,000
• Finance: $890,000
• Other: $ 75,000
• Interest: $110,000
Total invested: $2,125,000

Now the value of the properties…. A really important figure.

Remember, there will be 4 of them (3×3 and 1×2 bedrooms).

3 bedroom town houses in this area will sell for around $850,000 and the 2 bedroom ones will sell for $700,000.

The area?

Ivanhoe in Melbourne. A little boring and sleepy, but really expensive real estate. The median is way over the million dollar mark.

Total value of the project $3,250,000

So the bottom line is that there is $1,125,000 profit in this. In this case, it’s equity because you won’t sell the properties.

On average, you have created a property with an average value of $812,500 for an average cost of $531,250.