Corner Block Keepers: Profitable Development Strategies with Nathan Battishall of Duplex Building Design

[00:00:00] As investors and developers, we see the world differently.

[00:00:04] This podcast uncovers the untold truths of what it really takes to become a multi-million dollar residential developer.

[00:00:14] On Nathan Battishall, let's get to work.

[00:00:19] We're welcome to today's episode of the Residential Developer Podcast.

[00:00:23] My name is Nathan Battishall. I'm the host and today I'm going to do something a little bit different.

[00:00:28] Every now and then I'm going to just jump on and just talk from my experience, talk through some strategies,

[00:00:34] some ideas on different types of projects and just talk about different elements when it comes to residential development.

[00:00:41] So today I want to talk about Corner Blocks.

[00:00:44] Corner Blocks are littered all over New-Councils and suburbs and cities all across New South Wales.

[00:00:51] Now, back in the day when a lot of infill subdivision areas came about, quite often the corner blocks were quite large blocks.

[00:01:01] Not always, but you go if you look across six maps or you look across near maps or any different mapping software

[00:01:08] across many council and LGA's across New South Wales, you will see there's some really good sized corner blocks floating around.

[00:01:16] And these corner blocks are littered everywhere.

[00:01:18] And on these corner blocks, quite often there's a little small house.

[00:01:22] There's a house in a perfect location where you can potentially develop that site without having to knock down the development.

[00:01:30] Often developers and investors, the first thing they're looking to do is when it comes to infill development,

[00:01:38] is to look at a property they can knock down.

[00:01:41] For example, if it's a duplex, often they'll look at a site where they can knock it down,

[00:01:47] build two dwellings whether they be attached or detached and go from there.

[00:01:51] But a great profitable little strategy that it's been around for a long time, but I think it often gets overlooked

[00:02:00] and people see it as a too smaller project is the detached dual occupancy or the two detached dwellings on a site.

[00:02:10] But often you can find the right site where you don't have to knock down the existing dwelling that's there.

[00:02:16] It involves hunting for the right site.

[00:02:19] Often these sites, it's rare that these sites come up on the markets.

[00:02:22] So sometimes you need off-market strategies or you need different little strategies to source and secure these sites.

[00:02:30] But like for me, these sites are littered up and down New South Wales, the East Coast, inland, regional areas.

[00:02:39] They are everywhere.

[00:02:41] So I'm calling this episode today corner block keepers.

[00:02:44] Sometimes it's vital to keep a property, keep a dwelling on a property.

[00:02:49] If you switched on when it comes to running feasibilities, you'll often find that when you run a feasibility across being able to keep a dwelling and do another dwelling.

[00:03:00] The numbers are incredible as opposed to knocking down that existing dwelling to build two more.

[00:03:09] And as I said, these properties don't often come up on the market.

[00:03:13] If you do, you've got to be quick.

[00:03:16] But it's important to understand what you can and can't do and to understand the potential that is out there in finding these corner block keepers because they are all over the place.

[00:03:29] We've done a good number of them where we've seen clients really do well financially out of being able to keep these corner block dwellings.

[00:03:39] Now look, sometimes it's not worth keeping the dwelling.

[00:03:43] Often you'll see a really an infill site with a really run down house that just is beyond repair.

[00:03:49] Well, you need to run your numbers then against the feasibility of demolishing that house.

[00:03:55] And then can you do two?

[00:03:57] Can you do three?

[00:03:58] Are they attached?

[00:03:59] Are they detached?

[00:04:00] Because obviously every different type of product brings a different level of resale value.

[00:04:06] If you look at it like it, you could do three.

[00:04:10] I've seen it before where sometimes you could do three on a block of land.

[00:04:16] The numbers can look quite different from doing three attached like a triplex or three terraces, CDC for example, and then doing a corner block duplex.

[00:04:27] Or then doing the difference between a corner block duplex versus two detached dwellings is incredible.

[00:04:33] But I find the numbers are even better provided you get the site for the right price on a property where you've got a house that might be in fairly good substantial order,

[00:04:45] might just need a small Renault or a lick of paint, some new carpet, maybe just to tidy up, maybe redo the bathroom,

[00:04:52] maybe potentially do the kitchen depending on what's going to be required to get that resale of that property.

[00:05:00] But I find this little strategy I just want to spend a little bit of time in this episode talking about is a really good strategy for,

[00:05:08] especially for people wanting to do their first project, wanting to branch out and do a project where you're adding some value,

[00:05:17] getting more yield on the site.

[00:05:19] But also for an experienced developer who maybe wants to do a few of these things on scale.

[00:05:25] It's a really good strategy too if you're wanting to potentially hold a brand new property at the end.

[00:05:32] So generally, there's a couple of key things you need to do.

[00:05:35] You've got to obviously look for a site and I want to speak into detached dual occupancy under the low rise diversity code.

[00:05:42] And a lot of people don't realize this, but under the low rise diversity housing code, you can keep an existing house.

[00:05:50] Let's say for example a corner block, you could have a house that's really well positioned and located on a corner block where there is adequate room

[00:05:58] to put a second dwelling and then be able to subdivide, whether that be through a Torrance title or through a Strata subdivision.

[00:06:06] But there is lots of corner blocks especially out there where you have that potential to do that type of scenario because under the low rise diversity housing code,

[00:06:16] the two dwellings have to address the street.

[00:06:18] Now I get a lot of people come and want to do, they'll find a really long rectangular block with a house at the front.

[00:06:25] The typical, the great Australian dream was to have that quarter acre block where it's got the house on the front and the massive backyard.

[00:06:35] Now a lot of people come and they'll say I want to do a CDC dual occupancy, put a house on the back,

[00:06:40] but straight away that can't be done because under the low rise diversity code, the two dwellings have to address the street.

[00:06:48] So the moment you've got to put another dwelling in the back, that triggers a development application

[00:06:55] provided that the lot size is big enough, the width of the block, the size of the block, the subdivision size of the block is permissible

[00:07:02] within that particular council through the LEP. That triggers a DA.

[00:07:08] The other option is you can do a secondary dwelling which is we call them granny flats,

[00:07:13] provided it's 450 square metres, but the disadvantage of a granny flat, if you're looking to maybe lower the debt on the property,

[00:07:21] maybe you've got to sell one of those properties just to really lower down the debt.

[00:07:26] You might want to then hold a property with a small mortgage or maybe sometimes no mortgage attached to it.

[00:07:32] You can't do that with a granny flat. If you are looking at long term hold,

[00:07:37] maybe the granny flat can be great because you've got two rental incomes,

[00:07:40] but a lot of people like that opportunity to subdivide and especially if the blocks are substantial size.

[00:07:46] Sometimes it's not justifiable just to put a granny flat on it.

[00:07:50] So sometimes the DA pathway can be great, but for corner blocks and I'm obviously talking about corner block keepers today,

[00:07:58] these are ones you can really generate some incredible profit on,

[00:08:05] is to look for a site that first and foremost allows a dual occupancy.

[00:08:12] And you need to make sure it allows a detached dual occupancy.

[00:08:15] Some councils, not all councils, but some councils have a minimum lot size for an attached dual occupancy

[00:08:22] and a minimum lot size for a detached dual occupancy.

[00:08:26] Okay, and it's important to identify that.

[00:08:29] I've seen this before where people have bought a site thinking they could do two detached dwellings,

[00:08:33] but they didn't read the fine print in that particular council's LEP that said,

[00:08:39] for example, the minimum lot size to do an attached dual occupancy is 500 square metres.

[00:08:46] Then the minimum lot size to do a detached dual occupancy is 700.

[00:08:50] All of a sudden they're bought a block for 600 square metres, wanting to do two detached dwellings can't be done.

[00:08:56] So then they've got to attach those dwellings and you might say,

[00:09:00] well it's still a dual occupancy and still gets subdivision, you're 100% right.

[00:09:04] But depending on what you paid for the site and the numbers you ran,

[00:09:08] if you ran your numbers on two detached dwellings,

[00:09:10] you're definitely going to get substantially less for a duplex than you will to standalone dwellings.

[00:09:18] That's a very much a common principle in most parts of New South Wales

[00:09:22] that a standalone house will always be worth more than a dual lock.

[00:09:26] So that's a really key thing to look for that type of site.

[00:09:30] But again, you need to also make sure that this type of site can house the adequate size property

[00:09:37] and the reason I like going down the CDC pathway, if it's at all possible for this type of scenario.

[00:09:44] The corner block is perfect because if you've got the existing house, for example, facing this street,

[00:09:51] West Street for example and then the other street's North Street

[00:09:55] and you've got an adequate opportunity to put another dwelling detached on that site.

[00:10:02] You've then got two separate dwellings addressing different streets,

[00:10:06] which is a huge advantage but it complies under the low-rise code

[00:10:09] because those properties are addressing the street and you can do a detached dual occupancy under the low-rise code.

[00:10:18] A lot of people just think you can only do a duplex.

[00:10:21] You can do two standalone houses that are called detached dual occupancies

[00:10:25] and you can do the Torrens or the Strata subdivision.

[00:10:29] Although it's called a detached dual occupancy for an approval purpose,

[00:10:34] once it's built, once you get OC, once you get that subdivision,

[00:10:38] essentially they're like standalone houses.

[00:10:41] We can design those houses to look completely different because they're not attached.

[00:10:45] They can be designed to have their own roof lines, their own characteristics.

[00:10:49] They can be designed to literally look like two separate houses

[00:10:53] and the corner blocks are perfect because you might have a garage of that existing house facing West Street

[00:11:01] and then you can have this other house that looks completely different with its own garage

[00:11:06] completely detached facing North Street.

[00:11:10] It's a really good strategy but there's some really key things that you need to look out for,

[00:11:16] especially if you're wanting to do it under the low-rise diversity code.

[00:11:20] Some really key things.

[00:11:22] See, under most councils under a DA, when you detach two dwellings,

[00:11:28] you have to comply with the NCC for fire separation

[00:11:32] and that generally will require to have a 1.8 metre separation between the two buildings.

[00:11:40] A granny flat's the same thing.

[00:11:41] When you build a detached secondary dwelling, you've got to be 1.8 metres from the house.

[00:11:47] If it's closer than that, you then have to fire rate the wall.

[00:11:52] So same thing under the low-rise diversity code.

[00:11:56] It's a requirement under that code.

[00:11:58] If you detach those dwellings, you have to have a 3 metre separation

[00:12:01] and some people don't factor that in when they're running their due diligence.

[00:12:05] They're thinking the 1.8 standard that you'll do for a DA and as per the NCC

[00:12:11] but if you look in the set for the detached dual occupancy,

[00:12:14] you're required to have that 3 metre separation.

[00:12:17] So essentially if you've got a fence down the middle,

[00:12:19] you essentially get a 1.5 metre setback either side.

[00:12:23] So that's a key thing to factor in.

[00:12:27] But one advantage of having that 1.5 each side is that you can then use that set.

[00:12:32] All that separation can then become landscaping

[00:12:37] that you can use to meet your landscape requirement

[00:12:40] because that's another key factor for these corner block keepers is landscaping.

[00:12:47] A lot of people when they're running their numbers,

[00:12:49] when they're factoring in whether they can do a detached dual occupancy on these corner blocks,

[00:12:56] they haven't factored in landscaping.

[00:12:59] So you've still got to meet your requirement.

[00:13:02] You've still got to meet your 50% of the site minus 100 square metres.

[00:13:06] So you've got to meet that requirement.

[00:13:09] And a lot of people haven't factored in as well.

[00:13:12] When you're looking at the site, you've got to factor in what's the GFA?

[00:13:15] What's the floor space of the existing dwelling?

[00:13:19] What's the overall floor space that's allowed under the low-rise code,

[00:13:23] which is 25% of the site plus 300 square metres total?

[00:13:28] So you've got to factor in what's the existing house

[00:13:30] and then what's the proposed house to make sure you comply with both your landscaping

[00:13:35] and you comply also with your GFA.

[00:13:40] So it's really important.

[00:13:41] And another key factor a lot of people don't think about

[00:13:46] with these corner blocks is also your front setback.

[00:13:49] Obviously the existing house is set,

[00:13:52] but you then need to make sure that you,

[00:13:55] because you're creating a new dwelling, that detached dual occupancy,

[00:13:59] you're creating a brand new standalone house or detached dual occupancy,

[00:14:05] you need to comply with the low-rise diversity housing code for that setback.

[00:14:11] And under that code it says that you've got to comply.

[00:14:14] You have to get the average of your two closest neighbours within 40 metres.

[00:14:20] Now, you can't use that existing house that is within your lot

[00:14:26] because it forms part of the dual occupancy.

[00:14:29] So what you've got to do, you've got to look, if it's a corner block,

[00:14:33] you can't use houses on the opposite street.

[00:14:36] You've got to look at houses on that same street.

[00:14:38] Now, if it's sometimes, if it's across the road,

[00:14:41] and let's say we've got this house on the corner lot,

[00:14:44] and across the road there could be across the road, then there's a house.

[00:14:48] Sometimes that house might be actually facing the opposite street,

[00:14:52] so you can't use that house.

[00:14:53] Or sometimes the distance from your property across the road

[00:14:57] with a wider road might be more than 40 metres.

[00:15:00] Well then what you've got to do, you've got to use the two houses

[00:15:03] to the left, for example, of that property.

[00:15:05] So the two closest houses within 40 metres.

[00:15:10] Now sometimes you get lucky on a corner block,

[00:15:13] where there's actually not two houses.

[00:15:15] I've seen this where there's corner blocks where there's no neighbours

[00:15:20] addressing the same street.

[00:15:21] Well essentially then, if the block is less than 900 square metres,

[00:15:26] you can then revert to the 4.5 metre setback, which works quite well.

[00:15:32] Sometimes, especially if there is, you know,

[00:15:36] if it might have been a lot more otherwise.

[00:15:39] So, you know, there's great opportunities to do that.

[00:15:42] But sometimes that alone, that setback can discount

[00:15:45] the opportunity of doing a detached dual occupancy on a corner block

[00:15:49] is where those setbacks are too far, for example,

[00:15:53] like 12 metres, 6 metres, 8 metres, 10 metres.

[00:15:56] Sometimes those corner blocks might be 20 metres deep

[00:16:00] by, let's say, 40 metres long,

[00:16:02] where you've got a house already on that section.

[00:16:04] So you've got 20 metres of depth to work with.

[00:16:07] If it's a 900 square metre block,

[00:16:09] you've got a factory and obviously your landscape.

[00:16:12] But if you've got a 9, 10 metre setback,

[00:16:14] well straight away that potentially blocks out

[00:16:17] that side of being developable

[00:16:20] because you just don't have enough depth to work with.

[00:16:23] But another thing I love about these corner blocks,

[00:16:26] a lot of people don't realise is when you do a detached dual occupancy,

[00:16:30] under the low-rise code, if you do an attached dual occupancy,

[00:16:34] if you do a duplex or you attach those dwellings,

[00:16:37] automatically you have to have a rear setback

[00:16:39] that is obviously on the opposite side

[00:16:42] to the front setback.

[00:16:44] So you then got to have, if it's a 900 square metre block,

[00:16:46] you've got to have a 3 metre ground floor rear setback

[00:16:50] and an 8 metre first floor.

[00:16:52] But the beauty of when you detach these dwellings

[00:16:55] is all of a sudden you don't have a rear setback

[00:16:58] because those two boundaries opposite,

[00:17:02] parallel to the primary road

[00:17:05] and so the primary frontage and the secondary frontage

[00:17:07] in a detached dual lock case,

[00:17:11] you know, you all of a sudden you don't have a rear setback.

[00:17:15] You've got side setbacks.

[00:17:16] So that's a massive advantage,

[00:17:18] especially for your first floor

[00:17:20] in terms of being able to get a reasonable size dwelling

[00:17:25] on the property, not over capitalising,

[00:17:27] but to get a reasonable size dwelling on the property

[00:17:29] where potentially you could do like a full bed.

[00:17:32] We're often able to do like a full bedroom, double garage,

[00:17:36] you know, nice size living area,

[00:17:38] like a full-size house on these properties detached.

[00:17:42] So once you subdivide,

[00:17:43] you've got a really nice full-size house on the property

[00:17:46] and a lot of people think,

[00:17:47] oh, well that's potentially over developing the site.

[00:17:51] But the one good thing about the low-rise diversity code

[00:17:54] they're factored in is you've still got to meet

[00:17:56] your landscape requirement.

[00:17:58] So you can't just completely fill up a site

[00:18:02] and bulk out a site.

[00:18:04] You've still got to comply with your landscape.

[00:18:07] You've still got to have your private open space.

[00:18:09] You've still got to have your setbacks,

[00:18:10] your side setbacks.

[00:18:11] You've got to have that three-metre separation

[00:18:13] between the two dwellings.

[00:18:15] You've obviously got to get your average front setback.

[00:18:18] You've got to meet both your front and your rear landscape requirements.

[00:18:22] So 50% of the landscape has to be behind the front building line.

[00:18:25] So you still got to meet those requirements.

[00:18:27] So just because you essentially might have two,

[00:18:30] essentially two side setbacks and no rear setback,

[00:18:34] there's no guarantee that you can't just fill the site up.

[00:18:37] You still got to meet your landscape requirements

[00:18:38] and keeping in mind anyone who's doing developments,

[00:18:41] you're doing it for either a selling purpose

[00:18:44] or you may be holding some, selling some

[00:18:46] or holding it both, holding it all.

[00:18:49] You still got to make sure these dwellings are liveable

[00:18:51] because if you're designing two standalone houses,

[00:18:56] essentially you want to make sure that they have a feel

[00:18:59] that the indoor and the outdoor connection

[00:19:01] of these dwellings feels like a home.

[00:19:04] It doesn't feel like a unit.

[00:19:06] It doesn't feel like a townhouse.

[00:19:07] It feels like a fully fledged home

[00:19:09] because these corner keepers,

[00:19:13] these corner block keepers are really primed

[00:19:16] to be able to really create a product

[00:19:19] that is substantially different

[00:19:21] to maybe the typical dual lock

[00:19:23] or the typical duplex type scenario.

[00:19:28] So look, these blocks, they're really key.

[00:19:32] Like they, you've just got to make sure that you factor in

[00:19:35] a lot of these elements when you are sourcing these sites.

[00:19:39] You've got to make sure that there's some really key things

[00:19:42] to look for.

[00:19:42] So some of these things that I'm sharing today,

[00:19:44] it's very much to give you some initial insight

[00:19:48] and some understanding when you are looking for these sites

[00:19:50] because you are going to essentially cross

[00:19:53] a lot of these sites out.

[00:19:55] You're going to get excited

[00:19:56] and see a whole range of sites

[00:19:59] and straight away you'll be able to discount them

[00:20:00] for various reasons.

[00:20:02] Sometimes the existing house is just too central on the site.

[00:20:08] Sometimes there's just no avenue or opportunity

[00:20:11] for the driveway crossover to work due to street trees.

[00:20:15] Sometimes the fall of the block

[00:20:17] just doesn't particularly suit that site.

[00:20:20] But it's also important to factor in your solar access too

[00:20:23] because just because it's a CDC

[00:20:26] doesn't necessarily mean that you, you know,

[00:20:30] you've got to factor in that you've got to receive

[00:20:32] that adequate sunlight to comply

[00:20:34] with your design verification statement.

[00:20:37] You've got to make sure that, you know,

[00:20:39] you're not going to averse the impact or overshadow

[00:20:42] even though it's a CDC.

[00:20:43] You still want to tick those boxes

[00:20:45] and make sure that you factor those elements in.

[00:20:49] But these corner blocks are literally all over the place.

[00:20:52] Like I was looking,

[00:20:54] I was helping a client look for a site in Albury,

[00:20:57] a region, beautiful regional area,

[00:21:01] growing heaps of industry.

[00:21:03] It's a great regional area.

[00:21:04] And it was funny, like we were just chatting

[00:21:06] and literally like we're just looking at all the sudden

[00:21:09] all these really good suitable large corner lots came up

[00:21:12] where you could literally do like a full blown house

[00:21:16] like a nice size, family size, single story.

[00:21:20] Obviously single stories grade

[00:21:22] because that suits regional areas especially

[00:21:25] not having to go double story.

[00:21:27] But it was just terrific where you could fit

[00:21:29] like a full size four bedroom, two living area,

[00:21:32] double garage, CDC, so no council,

[00:21:36] fast track approval, Torrance title, flat block,

[00:21:40] you know, where you can do this type of scenario.

[00:21:42] And these are everywhere.

[00:21:44] Like I look at sites in Sydney,

[00:21:46] sites in Newcastle, Wollongong, regional areas,

[00:21:49] Wagga, Dubbo, Albury as I mentioned,

[00:21:51] Golbin, like we're talking like orange.

[00:21:54] All these areas, Cops Harbour, Port Macquarie

[00:21:57] is all these different areas where you can do

[00:21:59] these type of corner blocks, corner block,

[00:22:02] detached dual occupancies under the low rise code.

[00:22:05] And if you can find the right house

[00:22:07] where the existing house is orientated

[00:22:09] and positioned appropriately to allow for a second dwelling,

[00:22:13] it can be absolutely beneficial.

[00:22:16] And another great thing is often the,

[00:22:19] you can do the double garages too quite often.

[00:22:22] One of the things that on a standard 15.24 meter wide block,

[00:22:29] which is your typical block that I see right across

[00:22:32] New South Wales, which was the old 50 foot back in the metric

[00:22:36] when they used to do a lot of the 50 foot wide blocks

[00:22:40] when they used to do the subdivision layouts

[00:22:42] back in probably the 30s, 40s, 50s

[00:22:48] is that generally, especially under the low rise

[00:22:51] diversity code on that 15 meter wide block,

[00:22:53] you can only do the single garage.

[00:22:55] But the beauty of the corner block, quite often

[00:22:58] it's a more substantial width where for example,

[00:23:02] the block if it's over 25 meters

[00:23:06] you can quite often then do a double garage.

[00:23:09] And obviously from a resale point of view,

[00:23:11] a double garage can make a huge difference

[00:23:13] to the resale and to the value of that property

[00:23:16] than having a single garage.

[00:23:19] So there's some really massive benefits

[00:23:21] that you can achieve under this scenario.

[00:23:26] So there's obviously a lot of things at play,

[00:23:29] like have a look at the house,

[00:23:30] what's the condition of the house in?

[00:23:33] Quite often a lot of those older houses

[00:23:35] especially like the 1950s, 1960s type houses

[00:23:40] a lot of them had,

[00:23:41] especially on the corner blocks I find

[00:23:43] they had the house,

[00:23:46] but then they had like for example

[00:23:48] a big detached garage like right at the back of the block

[00:23:50] so there's the house, heaps of backyard

[00:23:53] then the detached garage.

[00:23:55] So obviously when you're looking at that site

[00:23:57] you're essentially getting rid of that detached garage.

[00:24:01] Obviously that's where you're planning

[00:24:03] to put that second dwelling, the new dwelling.

[00:24:06] But under the low rise code

[00:24:08] you've still got to have car parking

[00:24:10] for that existing dwelling.

[00:24:12] So that's another important thing to factor in

[00:24:14] when you're looking at is a site viable,

[00:24:16] is a site possible,

[00:24:18] is how are you going to address the car parking situation

[00:24:22] for the existing dwelling?

[00:24:23] And this is where some people again

[00:24:25] by not doing their due diligence,

[00:24:27] by not really cross-checking and making sure

[00:24:29] that you can factor that in

[00:24:32] is where can that car go?

[00:24:34] Like does that car need to go

[00:24:40] closer to the house?

[00:24:41] Do you need to create a new garage for that car?

[00:24:44] Or is there sometimes this adequate space

[00:24:46] down the side of the property

[00:24:48] where you can have the car

[00:24:50] just change the direction on the street,

[00:24:52] provided Council will let you put a driveway crossover in.

[00:24:55] So it's important to factor in that as well

[00:24:57] because that's a big key thing.

[00:24:59] But also you need to make sure the existing house

[00:25:01] does it have a private open space?

[00:25:05] Sometimes they don't have a private open space

[00:25:07] so you've got to consider that as well.

[00:25:09] Does the living area have the potential

[00:25:12] to open out onto that private open space?

[00:25:15] Sometimes you might have to demolish part of the existing house

[00:25:18] and I've seen this where there might be

[00:25:20] like a big large sleepout,

[00:25:21] but that sleepout's impacting part of the

[00:25:25] being able to put that new detached dwelling on

[00:25:28] or by removing that sleepout

[00:25:30] that really doesn't have a whole lot of purpose.

[00:25:32] There's a lot more value maybe possibly

[00:25:34] in putting that second dwelling on,

[00:25:36] remove the sleepout

[00:25:38] so you can get that through a middle separation.

[00:25:40] So there's lots of scenarios at play,

[00:25:42] but I find obviously it's important and key

[00:25:45] to have planners, designers and people

[00:25:48] who can help you with these moving pieces,

[00:25:50] but I find it's important when you're hunting for a site,

[00:25:53] when you're looking for a site,

[00:25:54] whether it be on market or off market

[00:25:56] to really brainstorm and workshop and play around

[00:26:01] with those ideas in your head,

[00:26:02] go through the code,

[00:26:04] get an understanding of the code

[00:26:06] so that you can find some of these hidden gems

[00:26:08] that are out there, they just have to be found,

[00:26:11] they just have to be looked for.

[00:26:13] Like I've had clients negotiate or go on buy a site

[00:26:16] with the view to live in that existing property

[00:26:21] and this is a really cool scenario where

[00:26:24] I've got a live project in Balgowni

[00:26:28] in the northern suburbs of Wollongong,

[00:26:31] beautiful couple, they bought a corner block property

[00:26:33] with the idea to one day develop that site.

[00:26:38] They weren't even sure what they could do on it,

[00:26:41] they bought the site,

[00:26:43] they lived in the existing dwelling

[00:26:46] and it was unreasonable, Nick.

[00:26:48] They lived in the existing dwelling,

[00:26:49] did a little bit, just gave it some TLCs

[00:26:53] and touch ups and they lived in that property,

[00:26:55] but then they decided, you know what,

[00:26:57] we want to do another dwelling.

[00:26:59] So we discovered for them, at first they were looking at it,

[00:27:02] they thought they'd probably have to do it

[00:27:03] and attach dual occupancy, so attaching it, doing a duplex.

[00:27:07] We looked at the site, we assessed it

[00:27:09] and then we determined that no, this site's big enough

[00:27:12] and adequate enough where we could do,

[00:27:14] we could detach these dwellings

[00:27:16] and you could actually, you know,

[00:27:19] you could actually have two standalone houses

[00:27:21] knowing that the standalone house will be substantially more

[00:27:27] than an attached dwelling.

[00:27:29] So they essentially lived in this property next door

[00:27:32] while we were doing the planning,

[00:27:34] getting the approvals for this full-sized house

[00:27:39] next door, completely detached,

[00:27:42] three meter separation to comply,

[00:27:45] setbacks all worked out fine,

[00:27:47] we're able to get the landscape to work,

[00:27:49] we're able to get a full-size brand new dwelling.

[00:27:51] So essentially we got the approval,

[00:27:52] again, they're still living next door,

[00:27:55] paying their mortgage off next door,

[00:27:57] they'd bought it some years earlier

[00:27:59] so they got it for a really good price,

[00:28:01] they'd already chipped away their mortgage.

[00:28:04] But the exciting thing was

[00:28:07] while they were living in that property,

[00:28:10] next door was being built

[00:28:11] and as that property was starting to get built

[00:28:14] it got towards the end of the process

[00:28:17] of building that property,

[00:28:18] they then put, because they had a CDC approval,

[00:28:22] you can literally do a presale,

[00:28:24] you can sell next door.

[00:28:27] We hadn't got the subdivision yet,

[00:28:29] so the actual settlement couldn't go through

[00:28:34] but they could exchange on contracts

[00:28:36] and essentially what happened is once the build

[00:28:39] got a bit closer to being finished

[00:28:40] on the property next door,

[00:28:43] they put the existing house that they're living in

[00:28:46] on the market.

[00:28:48] Again, next door hadn't been fully finished yet

[00:28:50] but they put this house on the market,

[00:28:52] they sold the house they're living in

[00:28:55] with a slight delayed settlement

[00:28:57] to give them time to finish the house,

[00:28:59] to move out of their current house

[00:29:01] to move into their brand new house.

[00:29:04] They were able to sell this house next door

[00:29:06] and this is the exciting thing

[00:29:08] and this is why I love this strategy

[00:29:10] of these corner block keepers.

[00:29:12] They were able to sell the older house

[00:29:14] for such a price

[00:29:17] that they've basically got the land

[00:29:19] for nothing next door

[00:29:22] and because they chipped away at the mortgage

[00:29:24] on this house, they got this house

[00:29:26] some years earlier, obviously capital growth

[00:29:29] it had grown in that time.

[00:29:30] All of a sudden a young couple

[00:29:32] went from being able to sell the older house

[00:29:34] and then move into a brand new house

[00:29:36] with absolutely zero mortgage,

[00:29:38] zero debt, zero mortgage, brand new house,

[00:29:42] nowhere and tear

[00:29:43] just by doing that one little strategy

[00:29:45] and these sort of sites are littered everywhere

[00:29:49] and you may be looking at it as a scenario

[00:29:52] to live in the older house

[00:29:54] while you get approval for the newer house,

[00:29:57] sell the older house.

[00:29:58] Sometimes you can virtually get the land for nothing.

[00:30:01] I've seen it where sometimes you can sell the house

[00:30:03] the existing house with maybe spend a little bit on a Renault

[00:30:07] sometimes I've seen it where you can sell that house

[00:30:10] back to the market for what you paid for it

[00:30:12] so essentially you're getting land for free

[00:30:15] for that new property.

[00:30:16] How much do you pay for land these days?

[00:30:18] Some places you'll spend 400, 500, 600, 700, 800, 900

[00:30:23] even over a million dollars sometimes

[00:30:25] for a block of land.

[00:30:27] So straight away you've got a huge upside

[00:30:31] in that brand new dwelling from the very outset

[00:30:33] if you've got that strategy to sell the older property

[00:30:36] and if you're looking at it from a development perspective

[00:30:39] you might be looking to sell that older house

[00:30:41] just to get rid of it, clear the debt

[00:30:43] or the lower the debt and hold a small mortgage then

[00:30:47] on that brand new dwelling.

[00:30:49] And the beauty of having that brand new dwelling

[00:30:51] you've sold the older property

[00:30:53] you've got that brand new dwelling on a Torrance title

[00:30:55] subdivision for example, is then if that's a brand new dwelling

[00:30:58] it might have a small mortgage

[00:30:59] or quite a lot of equity already in it

[00:31:02] is that it's already geared, positively geared

[00:31:06] but also because it's a brand new property

[00:31:09] then you can then claim depreciation

[00:31:12] you can really start to leverage that property

[00:31:15] but with a lot of equity in it then

[00:31:17] you can use that as a bit of a base then

[00:31:20] to start to go down that pathway

[00:31:22] and chatting with your broker

[00:31:23] and really investigating of what it looks like

[00:31:26] to do this as an ongoing strategy

[00:31:28] and then you might start to get to the point

[00:31:30] where you might look for a property

[00:31:32] where you can keep one house

[00:31:33] and maybe do two at the back as a DA

[00:31:35] you can start to scale that up

[00:31:37] and so don't ever discount keeping a property on a site

[00:31:41] this is just one example

[00:31:43] of a really profitable little strategy that's out there

[00:31:46] this particular one that I've spoken about today

[00:31:49] is through the CDC pathway

[00:31:51] it's obviously a fast track pathway

[00:31:53] it's something you can get moving quickly

[00:31:56] but it's one that requires a lot of skill

[00:31:58] a lot of expertise and precision

[00:32:00] but it also is highly profitable

[00:32:02] if you get it for the right price

[00:32:05] get it in the right area

[00:32:07] and you're able to create a product that the market needs

[00:32:10] and that the market wants

[00:32:11] and if you do it right you can then sell it back

[00:32:14] you can have a property that's no longer a dual occupancy

[00:32:18] it's more of a standalone house

[00:32:20] in terms of its value, in terms of the product

[00:32:23] and straight away you've got a product

[00:32:25] where you're able to put a lot of equity

[00:32:28] from the very start into that project

[00:32:31] so this is just one of many different little

[00:32:34] residential developer hacks

[00:32:36] and strategies that are out there

[00:32:38] that you can utilise

[00:32:39] so I hope this has been valuable

[00:32:42] I'm sure we've only just scratched on the surface

[00:32:44] but I hope you've got a lot of value

[00:32:46] out of this short episode just around

[00:32:50] corner block keepers being able to

[00:32:53] look at that as a strategy

[00:32:55] so I want to thank you for listening

[00:32:57] if you've got a whole lot of value out of this

[00:32:59] I want to encourage you to share it with your friends

[00:33:01] share it with your family

[00:33:02] share it with anyone who's interested in

[00:33:04] in dipping their toes into

[00:33:06] property development, property investment

[00:33:08] and yeah look if you want to get in touch

[00:33:10] all of our details will be on the show notes

[00:33:13] so thanks for listening and we'll see you again next week