25 Jul Duplex development tips – Brook Drake
Some property investors are making up to $100K profit by developing duplex properties but it does not work in all markets. Brook Drake has a business that helps investors identify the correct markets and the properties that will return well.
Kevin: One thing I do know is that any smart investor is always looking for the highest possible return they can get on their investment property. Have you ever thought of duplexes? Well, duplex development is something that requires a lot of skill, a lot of knowledge about where you can do it and how you do it. A man who specializes in that joins me now. He’s from Duplex Pairs. Brook Drake, joins me.
Brook, this does actually require a lot of due diligence – doesn’t it – to find the right site?
Brook: Yes, it does.
Kevin: Tell us a little bit about it. What sorts of areas are best suited to this?
Brook: There are a few. We concentrate on South East Queensland and certain parts of New South Wales. In South East Queensland, probably the best opportunity is in that Brisbane to Toowoomba growth corridor there. There are a couple of shires around there where we can do it.
What we’re looking for is to be able to find areas where we can buy the land and put the duplex on there, and create instant equity, instant profit of $100,000 once it’s built, once we strata title it. That’s including all strata titling costs.
We’re looking for a net gain of $100,000, so certain shires in South East Queensland and also the Newcastle area is a very good area in New South Wales. We’re talking west of Newcastle, a few areas around there.
Kevin: I’ve had a look on your site, and when we think about duplexes, we think of those old two side by side that were pretty unattractive. But nowadays, they’re really quite contemporary, quite nice in their design. Is one of the other attractions to it that it has some longevity in terms of its design?
Brook: Absolutely. We use a couple of builders, and we’ve chosen builders that are specialist duplex builders and they do an exceptional job. These are full turn-key packages, and the finishes are superb, probably the best I’ve seen, particularly one of the builders that we use. So, the tenants or the people who are going to move in, they’re moving into a very, very good product.
Kevin: What sort of investor are you finding is being attracted to this? Is it someone who wants to live in one and rent one, or is it building up a package and renting both out?
Brook: I think the whole thing about it is to make money. No longer is there the need for negative gearing. This is what it’s all about. It’s not about holding onto it and living in one and renting out the other; I think it’s more a choice of using property to make money.
With these duplexes, what we can do is we can build them over a period of six months. We can work on pre-selling the units before it even settles, or we can settle it and get a local agent to do it or we can do it, sell the individual units side by side as soon as we possibly can, and then move onto the next one. You could potentially be making $100,000 profit within a six- to eight-month period. Technically, you could.
Kevin: And there is obviously another advantage, too, in maybe holding onto it and gearing up on that because you’re getting an instant growth in equity. You’re talking there about netting $100,000, but you could then re-use that equity as well, couldn’t you?
Brook: That’s exactly right, but that would depend on your serviceability. Obviously, that would come into play as you’re building up. But if you have unlimited serviceability, then that would be the best way to go, as well.
Kevin: There’s a button on the homepage on Real Estate Talk that will tell you a little bit more about this. It’ll take you to the site where you can get in touch with Brook and his team if you want to know a little bit more about duplex.
It’s a great opportunity for investors. I strongly suggest you have a look at it. Get the info pack, which is absolutely free, Duplex Pairs, and just check out the button on the homepage at Real Estate Talk.
Brook, nice talking to you, mate. All the best, and thanks for your time.
Brook: Thanks very much, Kevin.