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Investment FREE SOLID REAL ESTATE RELATED ADVICE

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takr
post Jun 16 2008, 03:36 PM

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1) What do you think about buying bungalow lot and building own place? Good for investment? Say in Putrajaya??

2) Typically, whats is considered 'viable' for corporate customer? Are there some number crunching etc. done to come to the conclusion?



takr
post Jun 16 2008, 05:02 PM

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QUOTE(looqsonline @ Jun 16 2008, 04:17 PM)
1.u want to buy and built for youjr own stay or buy build and sell? But putrajaya is hardly the place to build and sell a bungalow. but of course land prices there are cheap. again many factors come into play. Make your question more informative about what you want maybe i can give my opinion then.

ooo0o0o0 anyway love the idea. That's going to be my first project. buy bungalow land about 1 acre and build townhouses. Eying three pieces of land 1 in bangsar, 1 in old klang road and one in country heights rawang. Fast simple, small GDV small start up and also can put alot of my fancy ideas into work. all full steel structured. floor to ceiling glass paneling. then buy actual rainforest fully grown trees and plant around the place. o0o0o0o0 then hopefully can get achitectural recognition for that, then move to singapore and build modular offices sell it to some creative business in singapore. Get recognition for that then buiild a self contained mega city... muahahah ... tan sri RE!!

Yes there are but i leave all the number crunching to a few of my friends. But of course i share my comm with them la. Then along the way i learn abit here and there lor. Again when u say what is viable for corporate customer you need to know the customer only then u will know what is viable for them. question number 2 is to broad. For developers or maybe for a corporate client wanting to use for a certain number of years then maybe develop then. They all have different backgrounds thus have different needs and want different things.


Added on June 16, 2008, 4:21 pm

I guess your of a more mature age more realistic. For me still young want to take risks and make it big. Hopefully i do soon before my fire dies out. Everyday i still dream about my first project.

ok la .. i on you .... happy ending i pay.


Added on June 16, 2008, 4:23 pm

thanks for the heads up bro.
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Thanks for the quick reply, future tan sri wink.gif!!!

A bit of background.

Land cannot sell for the next 20 years. So its going to be rental first, but ultimately sell later.
Its a 6000 sqft lot at Precint 11. Can get for about good price. Did some homework, construction costs/architect etc. about 800 - 900 k. Got enough capital to cover about 65% of the cost only. The rest to finance with the bank.

Basically, if I want to break even / get higher return than say put the money is FD, die-die must sell for 1.8 million. With all this recession and construction costs going up and up, think my budget a bit streched la..

Think its worth it? Whats the market like in Putrajaya? Heard rental / capital appreciate moderate only - because gomen staff got special deal for rental etc... and hardly any corporate demand there..

For question 2) yup, its a bit broad... is there a standard-ish calculations done?? Some rule of thumb for corporate maybe.. something like ROI but > x% after xyz years etc.

takr
post Jun 16 2008, 08:41 PM

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QUOTE(looqsonline @ Jun 16 2008, 05:24 PM)
oh my god i don';t think iw ant to reply you laiw lar ... u are another ambitious developer .. dammit you are going to develop and inflate all the land prices for me la .... and what do u mean by land cannot sell for 20 years?

hmm 6,000 sf? mmm kinda small ... but assume u buy at 83psf or RM500,000 let's say you build a 3500 sf building at 250psf er cost all in about 1398,000. you finance 65% and the interest cost for 45% or 360,000 of construction cost is another 360,000 for the next assume 30 years. so . everything in plus  holding cost already  roughly 1.75 m plus 4% perannum compounded interest for cash lost to land 500,000 and lost to construction 585,000 equals 1m est. so 4% for next 25 years compounded ... 2.665m ... so you need to sell at least 4m at the end of the day... estimate. after 25 years.

so u need to rent out at about 2,000 to pay for bank install ment for 25 years and hope that capital app can get back your money at very minimal profit. not really worth the while ... there are other better options for your 1 million

all based on assumptions ....

er i can let u know one thing la . based on residential projects .. profit between 11-25% on GDV ... initial cost ... 10-15% of GDV ... usually 60 - 70% not losing or making money meaning by the time hit the previously mention figure can go full swing finish project to offset holding cost if any. So very subjective but basic rule of thumb. The real money is commercial prop at up to 48% profit on GDV.
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hehe.. that's what i thought also la... too much hassle for minimum profit and mucho risk.. plus got my day job to do also.. the land my father in law's one.. want to sell to me.... say good appreciation la, infrastructure good la....

great info looqs !! Appreciate it!!

PS: the land cannot sell for the next 20 years thing is a clause in the deal ... from Putrajaya Holdings one..





 

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