nzstato

Now tax.... tax is a curly one and this is a serious disclosure of DYOR... I'm just going to be brief on what I'm going with so a) I'm not providing advice on alternatives and b) I'm not broadcasting my tax position and I may still yet become unstuck. I've learnt that there is indeed a 'brightline test' which means if you have a regular pattern of buying/selling properties for profit (even ifs your own homes you are fipping) or sell an investment property within 5 years you are subject to income tax on the profit. This doesn't cover us. Also learnt that there is a little talked about 10yr brightline test equalivent for subdivisions..... this was a bit curly for us, however there are some excemptions if you had no intention of subdivision when you purchased your property and arent affiliated with a building company (i.e. builder yourself or work for one) plus a few other things. Needless to say I have a very expensive document written by one of the big4 accounting firms which outlines my position and why it is appropriate in our situation. This ensures that if there is some change in law interpretation it means I wouldnt face penalties as have received professional advice. What it means as my wife and I have registered a GST partnership, which means I can claim a GST refund on all of my expenses for the build. BUT I need to pay GST on any future sale of the property. So I end up paying a bit of tax, thats fair, I think I probably should... if I'd waited till that 10yr mark it would all be tax free... or if they were rentals and I sold after 5 years it would be tax free, see how the incentive scheme works.... Again, DYOR....

Now onto one of the hardest steps (and the most boring), paying for it all.... this is probably the steps that catches most people out.... First off, banks do not like financing speculative builds (like this), they finance property 'investment' involving renting houses to people who cant yet afford them... as a side note, through this process I have learnt that the $ side of things (financing and tax) is really geared towards a more favourable position for landlords rather than developers, its really no surprise we've had less building and a lower home ownership rate as our population grows.... Off my soap box.... So banks dont like people doing things like this, you can go to 'non-bank lenders' which are slightly less regulated, and in the development boom which is currently going on that is where most will get financing from. I have a mate who is my mortgage broker who has helped me with this and through his advise we are technically building this to rent but our situation may change when we gain code of compliance. I advise going to a broker as they can package up your position into a neat bow to present to the bank, we have a strategy to refinance in the future which I will also discuss. Lucky me started all of the finance application just after lockdown and prior to everyone realising the economy was fine so I virtually provided them with a pint of blood with the questions they had for me - I own a business and even though I dont draw a salary from it nor need the cash from it for this project they had lots of questions... Broadly you will need to be able to show that: a) You have enough cash/equity to come within their criteria, new builds dont come under the govt LVR limits (think rule of thumb is 10% deposit) so you have a bit of wriggle room. The bank made us do a valuation (man are they way more expensive than a few years back) of what our current home value will be after stage1 (i.e. build lot 1 but before lot 2/3) and the value of the new build - this is handy as they now calculate your net equity position after the development and like you even more b) You need to have regular income (of a decent amount) and less 'other' debt. My broker tells me its getting WAY harder for self-employed to get through this hurdle if you are close to the edge of your risk profile. c) Submit all of your project costings to them, ie. all of my above work. NB: we have our builder on a 'fixed price contract', if you're just buying materials and going to build yourself, expect a whole lot more questions and a tighter leash. d) They will also ask for a rental assessment, i.e. how much the new place would rent for. This is also as easy as finding your local friendly property manager (I just used the same RE firm I've been chatting to). With luck, they will then approve you for the amount you need which in our case needs to be used within 12 months of approval or else I have to go through the process again. My payments are staged in based on the progress of the build, basically it works out that the builder (or surveyor, or council) invoices me, I forward it to my broker, he arranges the $ from the bank to hit my account and I pay the invoice....

I feel I need to go a little step back... obviously at the start you need to have some sort of estimate on your sales price on finished builds/lots and a fair idea that you'll turn some sort of profit... Kinda went about this two ways - first is to get in touch with a friendly real estate agent (they're not too hard to find) to provide you with a market assessment, they tend to be fairly optimistic in their numbers so keep that in mind. There is now quite a number of websites whereby you can get value estimates on almost every address in the country (homes.co.nz for example), they collate council sales data (the DCC publishes it all online also) and run their own algorithms to provide estimates, doing some comparisons for similar new houses in your area can be helpful. You can also pay a valuer (I'll have to do that in the future, more on that) to do it or in my case its an opportunity for some DIY.... Being somewhat of a nerd I have been collating the last 2yrs of sales data of new builds from homes.co.nz for my local suburb (Mosgiel), being the major piece of flat land in Dunedin fortunately for me there are a number of small subdivisions and new build sales. I then ran some basic regression to see what were the features that went into sales value i.e. lot m2, house m2, 2br vs 3br vs 4br etc - tightest model is between house m2 and $, no surprises people pay more for bigger houses.... Note the slope and y intercept. Slope is roughly the value /m2 (we'll come back to my build cost/m2 in the future) where the y-intercept I think of as the section value including all services connected to house and foundations put in (but not floor poured) which is why its alot higher than our current market. Also note that all of these houses will come with attached garages which adds ~40m2 of size so my 124m2 can be thought of as in the mid 160s of this plot. Alot of the larger houses are on larger lots in greenfield subdivisions also. More to come, any questions I'll look to answer on here also...

Now you need to figure out your gameplan to do the whole thing, such that you can either sell the sections off, build and sell or build and rent etc... Results may vary but our approach is somewhat defined by our overall endgame and what you can swing with financing (more to come on that)... we really enjoy our existing villa (and have done a fair bit of upgrades) so ultimately want to take it off the section onto a rural block to complete an extension. As such we need to generate some cold hard cash to buy a rural block and pay for the move (banks dont really fund house relocations...). Answer was to do this all in two stages - it makes sense to complete lot 1 as we can get away with demoing only the 'lean-top' portion of the house at the back (it would have never moved with the house) and run all of the services out of it into lot2/3 - this will also involve reconnecting the house into the services (temporarily) which is one of the hassles doing it this way. Benefit is that we can stay in our home, sell of lot 1 in one form of another and then plan the next move, also it makes the financing easier as you don't need to loan as much. After running some of the basic numbers (numbers will all come at the end) it really made sense for us to do new-builds on the lots ourselves rather than just selling off bare sections. Likewise we have some moral attachment to the whole thing and have a bit of a vision for how we would like it to all turn out - briefly the aim has been to keep as much of the garden/trees/hedging as possible in the new lots as well as 1x of the garages, with the builds to be 'sympathetic' to the fact its in an existing suburb and the architecture of what was previously there. So then the next step is to find someone to do all of the services/siteworks and the build.... we thought of a basic scope that lot 1 would be a 3br of ~120-130m2 with keeping the existing garage, lot 2 a ~180-200m2 4br with garage and lot 3 a ~160m2 3br with garage For this step I really thought with the competitive nature of the house building sector (alot of different companies to choose from) I'd be speaking to some really savvy people who would be proactive in helping us execute on the project.... not so... I spoke to 4x different house build companies (3x franchises and + 1x private), one I'd had enough when they just talked at me for an hr without asking a single question, another I dropped when they offered plans which didnt work with the site and clearly hadnt listened to what I'd advised of and 2x which we went to formal offers with. Of these 2x firms I got them do to a basic quote on the build of lot 1 with an indicative on lot2/3, after looking at the concept of me having to arrange all of the subcontractors for the siteworks/services I went back to them both with the bigger job of managing the whole thing using their own subbies as a way to get some price efficiency. The franchise didn't budge on any of their build pricing (even though we're doing 3x houses not 1x) and proceeded to wack another 15% PM fee on it all while the private guy (who is an absolute GC) came to the party with a great deal which we took... Enough for tonight, tomorrow will be a bit on finance and tax...

By popular request this is my attempt to document our subdivision/build. Specifically the steps to go through the whole thing, my experience and how all of the $$$ stack up at the end of it..... First disclosure is I'm a newb at property development, probably made a bunch of mistakes and its all still a work in progress so no idea if it'll all work out in the end... First step is obviously you need to own some form of land larger than the 2x minimum lot size/density for your zone (more on this later)... This is what we are starting with... we have 1629m2 of a flat section (with my current house on it), in Mosgiel, Dunedin. We originally bought it in Oct 2014 with intentions that it would remain our family home for a very long time (this will become important when we talk about tax...). First step was to establish if/how we could loot to subdivide our existing lot, councils will have their district plans published where you can determine the minimum lot size for your zoning area. We are "R1" - General Residential which has a min, lot size of 500m@, so easy there we can make 3x from 1.... as a preamble, this is enough work as it is so everything we are doing is entirely within the zoning/build rules so we avoid having to go through notified consents which can cost $$$, take time (years) with only a chance of success (I know someone who has lived this for the past 2 years). Then its a question of how you want to split the section up (there are rules there also) and how 'hard' it will be to put in all of the services/entrance ways - ours is super easy as we have a corner section where each lot will have direct access to the roadway, with the rough rectangle of the existing lot it made sense to split one roughly N-S and 2x E-W to end up with sections which werent super narrow and had good layout to the sun. Fortunate the watermain/powerlines is close to our side of the road and (lucky us) we have a sewermain running through the corner of our lot which we can connect into. From a scenario like this everything gets much harder... you may have to put in a leg-in driveway, take connections from across the road ($$$ + traffic management $$$) or have to request it from a neighbour..... Easiest way to figure all of this out is to go talk to a surveyor (since you will need to anyway) and they will advise what you can do. I starting out talking to one surveyor who I got a bad vibe from (and who tried to send me an invoice for 2K, without outlining fees in a letter of engagement because a 45min meeting in his office was a 'consultation') and spoke to a few ppl who recomended another guy who is a GC. More to come...

Had it booked in back in sept but finally have a boat cover made for it. Good quality and thick one, pretty happy with the result.

Had a few good days up at Wanaka. Couldnt get up the Matukituki with the weather time frame I had but all had a great time... Speedo on my ph shows me that cruising is ~40-45 kph and tops out at ~70kph pulling 4500rpm. Added a little bit more juice on the warm startup map and now it starts hot/cold with a flick of the key and no throttle, still need to check out where I'm running on the accel/deccel map but feels sprightly and doesn't use all that much fuel for the amount of play I was having. Still chasing some minor leaks... found one dripping down the steering shaft, there is a small o-ring in there which I'll need to replace at some point down the track... Also got the word from the wifey I can shell out on a Trim Nozzle, turns out the kids don't like getting blasted by the jetwash while riding on the biscuit.... Some nice boats in the campground... chatted to a few owners as am thinking about re-hulling or buy new in a few years. Will collate a vid or two in the next day or so

Well played sir....

Getting some more of the pieces back together... Using lots of seam sealer with all of these panels. Ran some rivnuts into the B-pillar, made it heaps easier to bolt the sections up to there. Pulled the heater radiator so I can repair/paint the firewall and get the spare shroud I have to make it a complete unit Hiding behind the ID plate was this lovely hole.... I suppose thats one way to get to a leaking core plug

Handy resource if you dont have it. Includes all of the speed unrestricted (uplifted) rivers, conditions and launching sites. Halfway down pg4 is the Whakatane. https://issuu.com/nzjetboating/docs/jbnz_ybook_14 Local councils also publish marine bylaws. https://cdn.boprc.govt.nz/media/651889/navigation-safety-bylaw-book-2017-web-final.pdf

Short vid clip of some playing in Lake Waihola with the family. Spot where I ended up coming in a bit hot and ended up on the beach. Was difficult to restart a few times when hot, need to revisit the start map and maybe add a few ms back in the injection timing. Up in Wanaka in a few weeks so planning to push it a bit more up the braids.

Do you know what the specs are on the hull? Is it flat or have planing strakes? A lot of fibreglass boats handle loose as the have a shallow v to run in less water, old Jet44s were pretty slippy. Alloy you can get away with a bit deeper v since not as scared of rocks an strakes make a hell of a difference

Making some more progress... Welded up these sill/b-pillar/dogleg sections as one Started hanging all of the doors with new hinge pins Need to throw some diesel in it so I can move it to strip the rest of the firewall and get the rest of the colour going.

How long before you hit the Kaituna?

Choice ^ yep thats the same style one I had on the mk2 mini I sold.

I think the original engine had it on the block, but this being a Nissan I'll have to make do with something. You're right that a brass tap might just be the best idea, hopefully the existing hard fittings are NPT and I can screw it right in. Got it, found a few pics online of what I need to know Cheers

Round one. Ok, I might try that. Also, where would be a good source for a heater tap? Just a single in/out manual one would be fine.

Who knows about Smiths heaters? It has a good core/fan mounted in the truck and I think there is a good ducting body in the A35 I have in storage, cant find an exploded diagram anywhere though? Its is possible to still buy the coil reinforced hose to pipe the heat?

Gave the gearbox a lil clean and made a new gasket for the top cover (it never had one). The selector mech is still a bit sloppier than I'd like it but tough to make it much better with the current set up. Got alot of the sills/box bolted in. These dog legs are notorious for rotting out at the bottom (exposed to mud from the rear wheel). Got most of a repair done and checked the fitment. The b-pillars arent quite where they need to be so may need to be cut/re-welded. I'd love to replace the whole sill/b-pillar but at 3K plus shipping a side that isnt going to fly....

Got my dad to help me pull this round into my shed so I can start assembly - this ended up being alot easier than I anticipated.... You'll see in previous pics I had the tub hanging by the rafters with some rachet straps, sketch but quite effective. Its not too heavy, just bulky so again was straight forward to get into position. The frame/tub which I straightened more or less by eye looks to have lined up well, or no different than it would have left the factory.... Also loosely positioned the tub sides to get them out of the way more than anything... Was able to get the fuel tank mounted up before everything was set into place no problem... Planning to replace alot of the bolts with new metric so should start getting everything together pretty soon...

Shot some colour last night... super happy with the tone it comes out with.

Been a bit slow but painting isn't all that interesting.... Have all the major panels in epoxy now... Still making more of these skins, been surprised how popular they are, even sending a set to ozzy this week.

Went for a quick blat out to Lake Waihola The carpet has made a difference but it'll never be a 'quiet' boat. All in all happy. Since this is the thing to do...

So cool... they match Land Rovers nicely....

Yep... Also check your reverse bucket setup.... this accident investigation is a good reminder (in fact all of them are to see how bad stuff can happen on the water...) https://www.taic.org.nz/sites/default/files/inquiry/documents/04-208.pdf