Case Study: Strata Titling and Sale of 24 Birch Street, Amity Point, QLD 4183

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Project Overview

This case study outlines the acquisition, strata titling, and sales strategy for a unique property located at 24 Birch Street, Amity Point, QLD 4183. The property, consisting of four one-bedroom, one-bathroom units on a single title, was purchased for $1.28 million. The investment strategy includes a strata titling of the property, with a total redevelopment cost of $200,000, aimed at maximizing the return on investment through individual unit sales.

Financial Summary

• Purchase Price: $1.28 million for four units on one title
• Strata Titling and Development Costs: $200,000
• Total Sellout Value: Estimated at $430,000 per unit, totaling $1.72 million
• Gross Profit Potential: $240,000 (excluding transaction costs)
• Transaction Costs:
• Stamp Duty: $47,000
• Legal Fees: $2,000
• Buyer's Agency Commissions: $12,000
• Advertising: $5,000
• Net Profit Potential: $174,000

Investment Highlights

• Deposit Bond: The property was acquired using a deposit bond, demonstrating an effective use of financial instruments to manage cash flow and leverage.
• Market Positioning: With two units already under contract at $460,000 and $450,000 respectively, the project demonstrates strong market demand and pricing validation.
• Turnaround Time: The project is expected to have a 12-month turnaround, indicating a quick return on investment, which is critical in a fluctuating real estate market.

Strategic Approach

1. Acquisition: Leveraging a deposit bond allowed for a strategic acquisition without immediate cash outlay for the deposit, optimising the use of available capital.
2. Strata Titling: The decision to strata title and sell the units individually is based on market research indicating a high demand for one-bedroom units in Amity Point, QLD.
3. Sales Strategy: Pre-securing two contracts underscores the project's viability and the effective pre-marketing strategy employed by the team.

Conclusion

The 24 Birch Street project exemplifies a strategic approach to real estate investment and strata titling. By carefully managing acquisition costs, leveraging financial instruments, and executing a targeted development and sales strategy, this project is poised to deliver a significant return on investment within a compressed timeframe. This case study not only highlights the potential financial gains from well-planned real estate ventures but also demonstrates the importance of market research, strategic planning, and execution in property development.

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