Case Studies Rescued
Below are Actual Projects We Either Saved OR Saved Our Client Money
Property Development Cost Savings
Cost is a major factor determining if a Property Development is feasible....we can agree on that.
Whatever the project, a very important aspect of our role as Project Manager is to save money and time for our clients.
Know what?.........We can do this on almost every project!
Listed below are some projects where we achieved substantial ‘property development costs savings’.
Some of these projects were doomed without those savings - they just would not have gone ahead otherwise.
We often save more than our fees - for Rob [see below] it was nearly $300,000
so if you get into deep water, rely on us to pull you out
This property had a DA approved under the previous town plan to subdivide one lot into 5 and it was still current. External works contributions totalled $166,000. We were asked to review the DA for our client, a management professional, with a view to proceed to carry out the subdivision. We advised our client to re-apply for a new DA as under the new regime external works contributions would drop to $108,000 and the same yield and general other conditions could be achieved. New application fee = $9,000, other costs = $3,000 for a total cost of $120,000 inclusive of contributions. Savings = $46,000
Note that we do not say “avoided” here because our client, an experienced finance broker, did suffer some pain which could have been avoided had we been commissioned earlier. How many times have you seen a property advertised as having “development potential”? This client contracted to buy one such property which at face value appeared to be capable of subdivision into 5 lots. When he contacted us he was on contract to buy this property and had gone unconditional but had not yet settled. The property had several issues affecting development feasibility severely. In fact the then current owner of the property had already approached us with a view to developing the property himself and only decided to sell it after having realised the additional costs and difficulties involved. Our client decided not to proceed with the purchase but forfeited his deposit of $25,000. This could have been avoided had he contacted us earlier.
We were appointed at the tail end of this job by our client, an armed services professional with a variety of investment properties around Australia. We were asked to handle the Plan Sealing only. We always conduct a site inspection as routine. When we inspected the job was pretty much finished and landscaping works were underway. Driveways and parking bays were set out ready to be poured. Under these areas soon to be concreted were water pipes to service the new townhouses. We noted that despite the Hydraulic consultant having specified a 32 mm service only a 20 mm service had been provided.
Thankfully this mistake was discovered in time to fix at minimal cost – a day or two later would have lead to a much more costly outcome to rectify and some very unhappy new residents when they discovered that they had little water pressure. We encountered other issues along the way that resulted in time delays and cost overruns which could have been avoided had be been appointed earlier.
We were approached by the land owner, a songwriter musician and small time property developer, who already had an approved one lot into three subdivision. The approval showed the stormwater pipe passing through a substantial stone retaining wall. It’s doubtful that whoever did the design actually visited the site. To implement the design would require partial demolition and then re-construction of this wall. A simple re-design organised by us avoided this.
This project involved construction of a pair of strata title townhouses & keeping the existing home. The owner, a medical professional, approached us at construction costing stage so DA was in place. The client was about to commission building plans ready to lodge for BA. Upon reviewing the plans we quickly realised that what was about to be built would be impracticable both from an end sale and also a rental viewpoint and would impact unfavourably on the valuation of the finished building. We organised changes to the design, keeping the same footprint and a ‘generally in accordance with’ approval. We then built the new building and renovated the existing house. Our client, who was from out of town had used a designer, also from out of town apparently unfamiliar with our local market. Result – better outcome – better rents and a happy client who is continuing to do more projects with us – these days from the outset, the most recent one, now completed successfully in Gould Rd Herston.
The partners of this project, an engineer and an accountant, came to us with a DA in place and with BA plans and hydraulics etc ready to be lodged for BA for 4 home units and 2 town houses. On review of the plans we were able to identify a number of areas that would have generated variations in any building contract. Variations are costly and besides adding to cost invariably cause delays as well. Changes were made to the plans prior to lodgement for BA and the project was built without any variations whatsoever.
This job, owned by a Sydney based small businessman, came to us after the DA had been issued & he already had the job quoted. It involved a one into 2 lot subdivision and moving and raising the existing house. The quoted costs of carrying out the works – $650,000 – were beyond the client’s budget capability and therefore they had been unable to do the project. We redesigned the project to incorporate an MUD and changes to boundary location. This resulted in major savings – new costs were $400,000 – which enabled the client to build a new house on the vacant lot.
This property was an inheritance owned by a family group who wished to build another house there for themselves to supplement the existing home and create a lot to sell to help pay for it. It involved a subdivision of 1 into 3 lots. Energex’s standard requirements are that all new lots can be provided with 3 phase power. One of the newly created lots only had 2 phase overhead power available in that street. Initial formal discussion with Energex proved fruitless. This meant that to comply our clients would need to spend an additional $13,000 for the upgrade. In this instance we were able to draw on our contacts within Energex to obtain the necessary relaxation. This highlights an important aspect of the difference between experience and inexperience and the benefits of the contacts one builds up over many years of practice.
Our client, a small businessman, bought this property with a view to subdividing a lot off the side on which to build his family home. He came to us with a DA to subdivide one lot into two and incomplete plans for sewer, water and stormwater design which not only required access to a neighbour’s property but partial demolition of some of the neighbours improvements. Plans had sat in limbo incomplete due to discussions with neighbours being sidelined by indecision and understandable reluctance on their part to co-operate. We appointed our own design team to review the project – the resultant re-design avoided the need for access to the neighbouring property and was cheaper to build than what would have been the case otherwise
When looking at this job we reviewed the approved sewer design. This had been designed by QUU which is not unusual, and sometimes, but not always, leads to cost savings. The QUU design involved constructing a complete new connection to mains on the opposite side of the road which not only involved a considerable amount of new construction but would also involve partial road closure and traffic control. Our new design made re configuring the existing connection which was simpler, quicker and does not require road closure or traffic control and was fully contained within the site.
As Told By Rob Swinton - The Owner: I started in 2013. I was keen to accomplish my project by myself and potentially save a few dollars along the way. Well that was the plan anyway – I thought that my experience in senior management roles would equip me satisfactorily to handle the tasks involved. So, I pressed ahead thinking “this can’t be all that hard, surely”!?
I managed to organise my own DA after a lot of mucking around but getting past that to the next stage proved a lot more difficult and time consuming than I imagined. Time flew by and before I knew it 2015 had arrived and all I had to show was some “estimated” project costs around the $1.1M mark which was not feasible. At that point, I gave up my project management aspirations and appointed SCM Projects and what a difference that made! Their methodical approach and knowledge came to the fore immediately. They tweaked a few things, gained some efficiency’s and presented me with a builder’s contract for just over $820,000 – a staggering saving of almost $300,000. That certainly changed its feasibility!
The job went smoothly enough and was almost complete when the builder went bust. Ownership of the business, a business that had traded successfully for many years, had changed hands during the currency of my job. Not to worry – SCM took charge and competently finalised things satisfactorily with little inconvenience to myself. The savings SCM generated for me covered the cost of their services many times over and I would happily use them again. My only regret is not bringing them on board earlier.
Rob's job involved moving the existing traditional home within the small corner site, renovating it, retaining the pool & building new townhouses.
Do You Have A Project That Needs To Be Rescued? Kerrie Did
THE SAVINGS WE GENERATE OFTEN EQUAL OR EXCEED OUR FEE SO WHY RISK IT?
After struggling [literally for several years] with all the necessary paperwork required to finalise my project, get plans sealed and separate titles etc etc I was recommended to SCM Projects. What a pleasure that turned out to be. They solved all the issues, were very professional, easy to communicate with and I would gladly recommend them to anyone contemplating a property development.
Elizabeth St., Paddington
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