A New Project: 19 May 2023
A new project and a new journey…
My fourth project has started… I am still rather too busy but when an opportunity presents. I have to grasp it.
I thought it may be interesting post this project from inception. No promises that my approach is the best way – it is my way for this particular project and it fits with how I work… just because I can, so why not, there is no guide book.
Excluded from these posts will be: my market position and what I want to ultimately achieve, my approach to finance, and my site selection process – the story is too big and I am aiming to share my technical approach and processes.
So, let us see if I can take you on this journey step by step, starting with three points and finishing this post with my feasibility.
First: my promise is to be ‘Responsible’. As with my other builds, the new houses will meet Universal Design principles (LifeMark 5*) and also Homestar 7.0 requirements.
Second: I am not building in South Auckland – I am crossing the bridge (that is a change for me).
Third: it is a joint venture where I have an landowner as my partner. So in the works of the Site Inspector… “let’s go!”
1.0. Feasibility
- Prior to offering on the target site
Land price and location is everything. Due to my experience, I knew how much we could pay for land based on myestimated build costs and estimated selling price (based on up to the minute gleaned market information).
My feasibility study was fairly standard (not rocket science at all), and I tested a range of inputs producing a sensitivity table. I stress tested for cost escalations (based on real historical data), premium build design, depressedsales costs. Additionally, I priced in the time cost of money, even if I am not borrowing and assigned it at 7% (that is a cost). I included my costs also as I could well be doing something else (assuming I am still employable). This means that if I meet my reward/risk targets, the project will be profitable (these projects are intense).
As part of my feasibility, and sticking with my trusted professionals (I assumed that they would be willing to continue working with me), they answered key questions on a theoretical basis. I was mainly concerned with the need for an uphill sewer line and the geotechnical report. Meanwhile, one of my key professionals viewed a site video and told me to keep the Lockwood on the site… move it into a corner and renovate. This was a significant win for the project’s feasibility – I didn’t think of it myself because I was too focused on building and failed to step back and look at the full opportunity – a special thanks to Mr Miller.
- Making the offer but prior to going unconditional
Here, I spent money and commissioned a team I have worked with on two prior projects to prepare a Bulk andLocation. This was money I could lose if I couldn’t do what I wanted but the loss would be far less than going unconditional on a site that was not likely to be viable.
I got bingo. The site fitted what I wanted it to plus a design that really satisfied me, and it needs to go through the resource consent process.
Importantly, it meets my promises: designed to allow accessibility (Universal Design principles); it should meet my environmental and energy targets, and can be built for a price that fits the market position I have identified.
Summary:
Of course, this all happened during March and April. I have moved on from that point. Where I am up to now can bethe topic of my next post: how I plan to deliver the project.
