Financial Planning Adelaide Sub division loan Forestville Image

Sub-Division and Construction Finance

Posted on September 6, 2012 · Posted in General, Sub-Division

On Thursday September 6th I executed a contract to jointly purchase a vacant allotment in Forestville – some 3 kilometres from the Adelaide GPO.

I have assisted clients with funding such purchases since the late 90’s and witnessed both tremendously successful developments and unmitigated disasters.

Over the next 6 months I will provide a regular post on all aspects of the process commencing with the purchase contract and the tasks to manage during the settlement period.

But first an outline.  The site is a residential allotment comprising of 2 titles both 919 square metres.  We have purchased the southern allotment.  The Unley Council have a granted Building Approval for 2 semi detached dwellings; one on 402 square metres and the other on 517 square metres.  The aerial shot does not look like a vacant allotment but a commercial building.  The contract to purchase was originally signed over 2 years ago and demolition with appropriate EPA approval has occured since then.

The contract has been signed ‘and/or nominee’ allowing time to consider the appropriate entity.  The settlement date is in twenty-five days.  This is a short time frame owing to the fact that the the original purchaser was unable to obtain bank approval.  The deposit is $5,000.00 and cooling off will expire at 5pm on Monday September 10th.  A subject to finance clause is mandatory and we have a fort night to tidy up the finances.

The settlement period is critical and lapses quickly.  Once settlement occurs interest payments commence so efficiency is vital.

The tasks (not necessarily in order) in South Australia are as follows:

Obtain Planning consent – sounds simple but isnt.  These items are required – full working drawings including site plan, floor plan, elevations, specifications, timber frame and truss details, water efficiency provisions and wet area details, soil tests, engineers footing reports, energy efficiency report, appropriate fees paid and all applications accurately completed.  This information goes to either the council or a private certifier along with the original building approval and copies of those stamped plans.  Total cost @$12,500.

Each of these items have unique challenges and if you would like to know more just drop me a line.

Time frame 8 – 10 weeks.

Next week I will outline the finance process, the completion of the floor plan and the commencement of the building contract negotiations.