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🎧 Real deals, real strategies, real results. Learn how to find, fund, and operate profitable property plays from someone who’s actually done it.
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I can think back, uh, one site in Queen Street, which was immediately opposite a cemetery and everyone that came in, "I don't wanna live here next to all those dead people across the road." Five reasons to walk away from a land subdivision site. One is access.
Contaminated soil is another one.
Three is extreme slope.
High voltage power lines is another big one.
When I had it under contract, I rang them and said, "Hey, did you... I'm just getting to know the neighbors. I bought this site there." And they actually tried to bluff me and said, "Oh, you can't develop that site. There's an easement through the middle which allows us to get to our land."
These are the things that you need to check out in your due diligence.
100%.
The fifth reason why you might wanna walk away from a subdivision site is
Hi, I'm Andrew Wright, Principal of Professional Southport, and this is the Andrew Wright Property Podcast. I've built a multi-million dollar property portfolio, delivering a seven-figure annual rental income, and led my real estate team through thousands of sale and lease transactions. In each episode, I share real deals and strategies that will help you find, fund, and operate profitable property deals.
The aim of this show is to provide education and build a community of like-minded investors who can collaborate, share insights, and help each other in each other's journeys. You can make excuses or you can make money, but you can't do both. So come and join us
Welcome back to the Andrew Wright Property Podcast with our masterclass in land subdivision with Carson Bolt Have you subscribed yet? Make sure you click the subscribe button. We're bringing on absolute legends on this podcast, and make sure you hit the subscribe button so that you get all the episodes.
Thanks for helping me out. Carson, how you going, man?
Good. Yourself?
Mate, absolutely awesome. So- That's right ... I don't reckon many people, uh, talk about this, but we're gonna talk today in part three of this master class, five reasons to walk away from a land subdivision site. Yeah. Now, the f- first one I wanna cover off is access to the sites, and it's not even just subdivision sites, it could be just a normal property that you wanna buy.
But-
Mm ...
some lots, I don't know how it happens, but they're actually what they call landlocked, where you just can't get access. And the first really- Yeah ... obvious one that comes to mind to me is, um, my mum and dad asked me, oh, 20 years ago, "Andrew, should we buy this beautiful waterfront apartment on Cooran Cove?"
And they sh- showed me the price. I think it was like $130,000 for this brand-new- Mm ... absolutely stunning apartment on the water at Cooran Cove. And, "Yeah, go and buy it, Mum and Dad. Go and buy it." And like five or six years later, they sold that thing at a massive loss, and the bottom line is you just can't get there with a car.
Mm. So that property is landlocked. You need a boat to get there. Mm. There's no driveway, and I've seen multiple sites, uh, more than you would actually, uh, believe that even, even on land, that there's actually just no road access.
Yeah. That's right, access issues or what might be allowed to have one dwelling, you might not be able to get multiple dwellings through there.
So especially state-controlled roads, like really busy roads-
Mm ...
uh, a lot of the time s- the state government, they do not want another 20 cars exiting on that busy road already, or they definitely don't want you to be reversing out. Mm. So little things where you might have been able to do 30, 40 years ago when it wasn't a busy road, and now it is, when you go do your development, you can't just assume that you get access off that road.
So sometimes you might need to acquire the blocks behind it, and then the access needs to come, you know, around the other side. So little things that you just, you know, if you're pretty bit wet behind the ears, you just be, "Oh yeah, we'll just come through where the driveway already is or just make it a little bit wider."
It's not always the case. So-
Yeah, look, it's just- Yeah ... there's just so many examples of this happening, which to the normal eye you just wouldn't think. I mean, I've got a site now in Longreach where I've gone to the Department of Main Roads and said, "Hey, this is 100 Ks an hour now. Can we slow this down so I can allow trucks to safely slow down in this lot?"
Mm. They just said no.
Yep.
Um, you're gonna have to widen the road. So you've mentioned it before in another podcast y- and have a deceleration lane and acceleration lane, and-
Mm-hmm ...
the funny thing about that is, that challenge with that access is A two-- Uh, a second issue is there is a property behind the site I bought, and the people who live in that property, they don't have a driveway.
They actually drive right through the middle of my block of land to get to their own house, and as soon as I develop that, they're, they're not gonna have a driveway to their own house.
Well, that's right, and that's why when you're buying a property, if someone's got a... Check the easements as well, because they might have easement access rights through, through your property.
So you've gotta check and, and then if you need to, you need to negotiate to move the easement or the access over before you do your development. So there's little things like that. We bought a site that someone subdivided off into, um, off their, they had, uh, old timeshare apartments and they did a rezoning, subdivided a piece of dirt off, and then when we lodged our application One of the things is we were allowed to get access up through the, uh, complex for a bushfire access, and they objected to our DA, the people that sold us the piece of dirt.
And we were, we're like, thankfully we'd looked at the easement access rights beforehand and just went, "It doesn't matter. You sold off this piece of dirt with, um, an easement in our favor to go through your site. You can't say no to this." And we show- and council were like, "You need to, you know, respond to this objection."
I was like, "Yeah, here's the easement rights." Like, they sold us the mongrels of the site- ... and then tried to object to our DA. So, um-
That is so interesting, Carson Yeah And y- and you know why it's so interesting? 'Cause that same site I bought in Longreach, where the people behind there drive through it, when I had it under contract, I rang them and said, "Hey, did y- I'm just getting to know the neighbors.
I've bought this site there." And they actually tried to bluff me and said, "Oh, you know, you can't development that. You can't develop that site. There's an easement through the middle which allows us to get to our land."
Mm.
And I said, "Well, hang on, mate, it's not showing up on the title search." Mm. And they actually tried to bluff me to say, "Don't you develop it.
There, there's an easement there," but there wasn't- Mm ... an easement. So-
Yeah ...
these are the things that you need to check out in your due diligence.
100%. Yeah. You need to do, do your homework. But like a lot of those things as well, you still wanna, you don't wanna landlock s- someone's access. You know, that you still wanna give them access somehow, you know?
A lot of times- I'm building a road on the side- Yeah ... and they might contribute to that. So when I, I've got the plans drawn up and I'm actually gonna build, there's be a council road on the side, which is a little bit, uh- Yeah ... a little bit north of the site, which they'll, they'll get a work around, but, uh-
Yeah.
Yeah, so- It's just important to go through it
Oh, 100%. So yeah, you're right, that access is a huge one, and it's, it's one, I know many a developer that's bought a site and just on access alone, and normally 'cause it's a, a busier road or sometimes just the topography, like the slope coming off the site, it comes in too steep.
Um, you've gotta- Yeah ... have a certain grade. Um, or if you get over, say, 16%, uh, a lot of the time council won't approve it if it's, if it's too steep coming ac- access into the site. Mm. So, um, sometimes under a CTS scheme you can get that grade up to 19% or, uh, 20% even, but, um, yeah, you can't even really hang your hat on 16%.
Yeah.
It's just such a, a, a... I mean, if you've got a site that's landlocked, I mean, I, I don't know if there's a specific number, but that massively, massively devalues the block of land. And I did a bit of due diligence. One of my, um, uh, bucket list strategies I wanted to do was to buy a site full of trees that were allowed to be cut down.
And I did some due diligence on a site, and the selling agent there said, "Oh yeah, you know, there's a driveway that goes all the way to this site, so the trucks are already coming in and harvesting some of these trees." And What I found out during my due diligence is, yes, there was a road there, but it was a private road owned by the neighbor, and it wasn't an easement.
Mm-hmm.
And at any point in time, if I bought that site, they could just say, "No, you're not allowed to have access through here." And when I have a look at the aerial map, oh yes, there's a road there, and-
Mm ...
yes, there was a private road, but it belonged to the neighbor.
Yeah. And, and, but like you said, that's the opportunity as well.
If you've got an, you know, it devalues the site when you don't have the access, but if you can solve that problem, once again, we-
Yes ...
a lot of our projects, every single one of them has got issues. And- Mm ... the bigger uplifts that we get is purely by solving the problems. If you b- secure that site under due diligence, and then you spend a bit of time talking to the neighbors and, and just buy a sliver of land to get access through, you could double the value of that piece of dirt- Great solution
just because you've, you know, applied a square meter- Solved the problem ... rate. You've only needed a, a 20-meter wide section of someone's dirt to get another access to the back of this block.
Mm.
And it might cost you you know, 50 grand, 100 grand and buy that piece of dirt off and you could, you know, you bought the site for $2 million, it could be worth 3, $4 million just by doing that one exercise.
It's thinking outside the box, where a lot of people just go, "Huh, it's not gonna work." I know people that have had a house and they were trying to do a s- a subdivision and there wasn't enough access down the side. Some of them just cut off the eaves to make it work. Yeah. And other times they've just bought, once again, another two meters of the neighbor's property, offered them really good money, a, a far higher square meter rate, um, than they would've got if they just sold it normally.
And all of a sudden it unlocked the site when everyone else looked at it and went, "Oh, there's not enough access down the side." Once again, thinking outside the box and just asking those couple of extra questions that a lot of people just don't bother. They just throw it in the bin. And
that, that's awesome advice, and it just- Mm
reminds me of a deal I'm negotiating on now. Right now, uh, it's already four lots of land, but the back one you've got to get access driving through the middle of it, and I've already, uh, rang the local council there to see if I can acquire a block of land right next door-
Mm ...
which would give it a completely separate road access, and it wouldn't...
It's, at the moment it's landlocked. You've actually, only way you can get through is through the other three lots. But if I can buy this other little, little block of land off the council-
Mm ...
um, I can get a separate road access there and it'll unlock it.
Oh, 100%. The, we, we... And that's, you know, the opportunity, and we just bought a site off a developer that did the same thing.
They bought a two pieces of dirt that bordered their site, um, that was left over from the, the railway line. So that was landlocked. It was worth nothing to the railway guys. He bought it for peanuts- Mm ... and then it made his site so much bigger and sold it to us for a lot more. So he's, yeah, I think he paid, like, 150 grand to, to buy, like, an acre of dirt and then, you know, he, we've probably paid- Massive uplift
10 times that for that- Yeah ... piece of dirt- ... because it's, it's, I can get a lot of lots out of it. But once again, it's just thinking outside the box- Mm ... and asking the questions and actually being proactive. You know, there's, um... And that's what I love about property development. I love the fact that we're problem-solving and yeah, and, and any- Two things that people agree to, for the most part, you can actually do in property development.
Nothing's really off the table, and that's the cool thing about negotiations. And even if you've got no money, if you can just get someone to agree to really good terms, and it's not necessarily that it's bad for them, it's just like something they never thought of doing, you can just sell that opportunity to another developer and that's where you can get those spotter's fees and bits and pieces.
Win-win. Yeah. So-
No, that's awesome. So, um, one thing I want the viewers, uh, to learn, you can see why you need a mentor, so give Carson a ring if you're interested in land subdivision. But also be cautious of real estate agents in their marketing pitch, because that actual timber lot that I was looking to buy, I'm not gonna say they were misleading, I think they just didn't know that the, that private road wasn't an easement and he's, and he s- he s- implied that it was.
Mm.
But I go back to 1992, which is, um, 26 and eight, 34 years ago I first became a real estate agent straight out of university. And the first block of land I sold was on Russell Island. Wow. And we had a marketing spiel. We had some pretty ladies out the front in Surfers Paradise that got tourists from Sydney and Melbourne to walk in, and we'd do a, a, a spiel about, uh, the seven-year property cycle on the Gold Coast and I flew them in an aeroplane to Russell Island because Russell Island is landlocked.
There is no road there. And believe it or not, uh, in this fixed spiel that I was trained to give to all the buyers, we showed them a newspaper article which showed a potential bridge that was planned, a bridge to be built over to Russell Island that was gonna stop this island from being landlocked. Now, it's 30...
How many years is that? 34 years later, there's still no bridge there. Still no
bridge, yep.
And- Yeah ... you know, I, I'm, I'm feeling a bit sorry for myself that I, as an employee, was told to show all these buyers this article of a potential bridge that might be planned to go over to Russell Island, 'cause it still hasn't happened.
So-
Mm ...
access to sites is a big thing, and you just need to be very, very, very careful with your due diligence.
100%. Yep.
Moving on to number two, um, Carson, this is probably, I'm sure you have a lot more experience than me with this, but with your, uh, rural to residential sites in particular, there are a lot of sites that need the right soil type- Mm
to enable septic tanks to work efficiently and for the drainage of stormwater and all the rest of it, so-
Mm-hmm ...
you know, I have read in various areas where some sites, a val- a valuer will actually value a block of land 80% less if the soil type doesn't allow you to put a septic tank on it so that you can actually build a dwelling on there.
So-
Mm ...
sometimes, uh, it could be just a rock under the soil as well, where you just can't actually put in septic tanks. So you've got a lot of experience with this. Can you talk us through Some reasons why you might walk away from a subdivision site if the soil's wrong
Yeah, contaminated soil is another one.
I was looking at an industrial site on the Gold Coast recently, and that used to be an old, um... It did some, uh, mining activities. Not, not major mining activities, but they had different things stored there and stuff got into the soil, so it's all contaminated, so you literally gotta tip it, replace it. So, you know, they can be major issues.
Obviously service stations is a, is one that everyone probably knows about. You've gotta, um, get that, get that sorted. Sometimes you can, um, by aerating the, the dirt, you can, you can solve the problems, but sometimes you just have to literally tip it and replace it. Uh, different soil types, yeah, like if you've got really highly reactive soils, like e- we pulled out of a, we had a site, um, an industrial site up in Loganholme under contract.
We'd done the subdivision layout. We'd actually pre-sold 60% of the lots, which sounds like the perfect deal, and when we did our geotech, the, came back as uncontrolled fill, so we had to rip up the dirt, re-compact it, uh, and also it was E class as well, so it was highly, um, uh, reactive soils. It was like clay.
And we spoke to the builder, uh, across the road and the engineer and worked out that even the car park had to have piers throughout the whole thing. So the construction costs go through the roof. Wow. And especially when you're dealing with, um, commercial buyers, they're far more educated than, um, your residential buyers.
Whereas the average mum, dad, they might buy a residential lot and probably 90% of them will not do a soil test before they buy it. They'll just buy it and assume that whatever comes in, they'll just put in an allowance for, uh, you know, a little bit extra. But we- your commercial buyers, they're probably a little bit more, um, switched on when it comes to, um, doing their due diligence.
So we knew that We couldn't just sell these and the next person would have to deal with it. We would have to solve the problem for them, and we pulled out of that deal purely because of the E-class soils. We tried to renegotiate it, and the vendors just went, "No," and they saw our subdivision plan, which they liked, and they lodged that and ended up doing the development themselves.
This is such a great lesson that Carson's talking about because you know, some people will have a look at a, a map of a local town planning scheme and it might say that, yes, you can subdivide this big chunk of land into, for example, a one-acre rural residential lots or whatever. And if you go and purchase a site that hasn't got an approval yet because it's in that zoning map that says you can do it, and then later after you buy it, you, you do a soil test and it says, "Well, you, you're not allowed...
A septic tank won't work here," and you can't actually build there-
Mm.
You've just lost a heap of dough. Yeah.
Yeah, 100%. So it can add a lot of cost. Rock's the other one. We- the, the site that we've just secured in Scenic Rim, there's rock everywhere, and that can... That will probably kill you more than anything because, you know, uh, even if you've got reactive soils, you can kind of replace it and do different things.
If you've got rock, it can get very expensive trying to- Yeah ... if you've gotta run a sewer line or a water line down, yeah, y- with rock, a lot of time you can build, import some dirt and build over the top of it. But if you've, if you've gotta start cutting, you know, lines through, that can get very expensive, so, uh, and sometimes you can't blast and you gotta, you know, because you've got other houses and things around.
So, uh, yeah, once again, having a really good geotech or good relationship with a civil contractor that you can take on site. Like I said, not everyone's got a Shannon in their team where they can kind of go out and do a lot of that due diligence, but like I said before, there's, there's al- there's an expert for every area, and if you're concerned about something, get them on site before you go unconditional.
We pretty much never buy a site, um, cash unconditional. We've done a couple of times where we've... It's just been a no-brainer, but for the most part, you, you really need to- Mm ... you know, get in there. And, and geotech is one of the ones that people miss all, all the time. So yeah, I've seen, heard lots of horror stories and, um, yeah, it's something you've gotta tick
off.
It's, it's interesting. I mean, I'm, I am looking at a site at the moment which is industrial land and it is actually on the contaminated land register.
Mm-hmm.
And, um, the town planner has told me his estimate is, uh, $200,000 for the initial soil test.
Mm.
And then even if it sort of goes, if there's any, only a small amount of problems there, the amount of time it would take to do what they call the remediation works to make that soil safe again-
Mm
um, for the amount of money that it costs to buy the site, I mean, it's a pretty big gamble. It's high risk, potential high return, and that's why I'm still looking at it because this is a big site-
Mm
The agent selling it tells me that he doesn't believe it should be on the contaminated land register because it was just some cement dust that was, um, it wasn't asbestos or anything, it was just some cement dust that was whacked in there and buried.
But at the end of the day, you could be sitting there 18 months down the track and a million dollars-
Mm-hmm ...
and you might not get it off the contaminated land register, so that's a pretty big punt to take.
It's, yeah, and, and like you said, high risk, high reward. Uh, if you've got the, the resources and you know it's gonna be worth significantly more, it might be a gamble where you say, "Hey vendor, you don't have the cash to resolve this-
Mm
and you're gonna find it really difficult to, to, to sell this thing as is." Mm-hmm. So you either take the low ball offer, "Well, I'll pay you your number, but I need 18 months or 12 months to resolve all these issues and get the sign-off, and I'll buy it subject to it getting off the register." Mm. And say, "Look, what do you wanna do?
Because it's been sitting on the market for 12 months," you know, or, or whatever the timeframe is, and that's the conversation that you have. And say, "Look, we've got the expertise. We're willing to spend the money, and look, we're gambling, you know, 20, 30, 40, 50 grand just to do these initial reports." Uh, 200
just for the soil test-
Yeah, that's
right
'cause it's 45 acres.
Yeah.
Big site.
That's massive. So-
Yeah ...
and then- the zeros to if it's contaminated across the whole site- Mm ... it's gonna be really painful. So it's, yeah, it's one of those things that's you've got to take a calculated risk, but, um, yeah, the- could be a massive upside if you get it right.
What's really scary for me, because I don't understand all this engineering thing, is the agent said, "Oh" I said, "Well, how do I know that it'll come off the contaminated land register?" And the agent said, "Oh, well, the, the guys there say the big, big risk is that because a, a fair bit of that, uh, l- land is also flood affected, if some of that contaminated land gets in the little creek- Mm-hmm
and it spreads in the water-
Mm ...
like, you're not just dealing with a little patch where they buried this stuff, it could be-
Yeah ...
hundreds of meters, uh, long. And that's sort of scaring me quite a bit actually because of my lack of knowledge around contaminated land.
So it should, yeah. Like I said, I wouldn't be taking the agent's advice on any of that, that's for sure.
No, well, he's trying to sell it, isn't he? Yeah. So yeah, you've got to be very, very careful. So I'm- Yeah ... I'm unlikely to proceed with that one. But that was on my bucket list too, of deals I wanna do. I wanna buy a contaminated land site, fix it up, and because I, I don't wanna use it for residential use, I'm hoping a council will let me just use it for truck parking or something where no one's living there and it's, you're gonna cover it with compacted gravel anyway or concrete, which might reduce the risk.
Well, I know you like your, um, your hardstand. Mm. And I was, it was a project that we passed on and I wish we'd done, and it had, um, undermining issues. So for, for everyone playing at home, undermining is you've had, had a mine underneath and now, you know, the, the dirt can kinda cave in, so you can't build houses on certain portions or you've gotta do all this remediation work, pump it full of like a concrete, and there's, there's ways to re- remediate it.
But we had one recently and it was like a, a $20 million bill to remediate this, this mine underneath this potential subdivision and we had to walk away. So, um, but- W- this one site was probably 10 lots that could be as an industrial subdivision site where it, you know, it just made a bit of progress. And there was this other big balanced lot and it had undermining.
I was like, "Oh, how am I gonna sell that?" The guys ended up doing the subdivision, kept this massive piece of dirt, and I saw it for sale the other day, and they've got a tenant. 'Cause f- finding hardstand in capital cities is- Very hard ... really difficult. And they got a 450 or $500,000 lease just on the hardstand.
Yeah. And I'm sitting there looking at it going-
There's no one living there. A- and- It's a great- ... sometimes if the council will let you do industrial use there and you've- Mm ... reduced a lot of the risk because you've covered it with compacted gravel-
Mm-hmm ...
you might be able to rent it out for truck parking.
And they've just put, got these temporary big shade, like, um, buildings in there, so it doesn't matter if it, you know, if there's a bit of, you know, movement and, uh, they've still got a fantastic investment. Yeah. And I'm looking at it going, "Hmm, I should've, should've looked at that a little bit harder." It's on my
bucket list, that one.
There you go. So, yep.
Um, Carson, you are, um, uh, an expert in reason number three why people might wanna walk away from a subdivision site, and that is because of a severe slope of the land.
Mm-hmm.
Yeah. So issues associated with that are the extra, uh, civil works around putting in roads. Uh, it might be, you know, slope and connecting sewers.
Um- What's, what's... Y- y- you've built a, almost a business around fixing problems like this to buy sites cheaply because no one else will touch them.
Mm.
Tell us your thoughts on this.
Retaining will kill a lot of deals. I know, you know, pretty experienced developers that have got caught on this as well, have just-
Mm
applied their normal subdivision rate number to their feasibility, and retaining can be very, very expensive. Uh, and sometimes you physically can't retain it, the blocks. We've got one at the moment. We just said to the engineer, "Let's try and bench this site." You physically can't, 'cause it, th- th- you keep chasing the slope down, and if you put in a road, if you've got a 25% grade on a bit of an angle and you put in a road that's flat, all of a sudden you've got a retaining wall here and a ra- retaining wall there.
How do you get into your lots? Mm. So then you gotta put a retaining wall at the back and cut it down. Sometimes you can only deliver sloping blocks, which then reduces your, your builder pool. So we're at the moment with a site, we've come to the conclusion we can't actually fix the problem. Um, so the next step is to then partner with sloping builders, because if I just try and sell you a block, Andrew, and you just go to your favorite Matchcon builder, they're not gonna build on it, and they'll just be like, "Hey, Andrew, don't buy that block.
Just buy the one around the corner." Yeah. Where, so it's my job as a developer to solve the problem for the incoming buyer. So now we're meeting with lots of split level builders. Some of them are too expensive, and then it's like, okay, someone else has got an affordable split... 'Cause they're used to it and they're happy building on slope.
But if you go to the wrong builder, it won't work. So we'll get a couple packages and try and solve the problem that way, whereas people just go, "Oh, it's too expensive to build on sloping blocks." But hey, look, come around to this estate. These houses look beautiful. Here's some builders we recommend you talk to.
Here's a couple of packages at a price point that works in the median, you know, pri- um, price for the, for the, for the town.
Yeah.
And as long as you can do that, then you can, um, solve the problem. But once again, people just put it in the too hard basket. But slope is just one of those ones that everyone looks at and goes, "Ooh, that's, that's too hard basket," but don't actually do the numbers.
I was saying to you offline, if money can solve the problem-
Mm-hmm ...
then it's probably worth looking at, like we were talking about before. If you got a opposite a cemetery or opposite a, a railway line or you're opposite a, you know, a tip, some of those things money can't... You can do- Yeah ... the most amazing subdivision through there, and you still can't sell the end product, whereas- Yeah
here, you know, we can throw some money at this thing and, and actually solve the problem for the incoming buyer, then, then I'll, I'll look at it. So that's kind of where we draw the line, or you wanna make sure you've got- Yeah, enough contingency to hold it for a bit longer, 'cause the sales rate's gonna be slow and you're gonna have to drop your compare- your, your comps.
So-
Yeah, it's very, very interesting analysis. I mean, I took before in the last podcast about my first time I paid a surveyor to do a subdivision plan and in Ipswich I bought a church, and I had a look at it and there was a massive bit of land behind it, and there was a four- already a four-meter driveway down the side.
I thought, "How easy is this? Pay the money for the subdivision plan," and couldn't connect the sewer. The neighbor wouldn't let me do it, so it was just a big waste of time. But I did have the option there on that sloping site to build a retaining wall. That particular council, because it wasn't a rural block of land, they wouldn't allow a septic tank, but I could have considered w- uh, a pump or a-
Mm-hmm
sewer pump, whatever that is, and that will- Yeah ... actually pump the shit uphill.
Yep.
And I just thought, well, for the c- cost of the retaining wall, the cost of the pump, and then you don't just buy a pump, you've actually gotta maintain it as well.
Mm-hmm.
I just walked away.
Yep. Yeah, it's a good point. Yeah, there's all those hidden costs and, and, and, and back to the, the retaining as well.
Some councils will let you do multi-tiered walls. You know, we got one at Tweed where we tried to apply the same methodology down there, and it's like, "We don't want multi-tiered walls. So you c- we'll only let you put one tier of a wall in, um, and we want you to build with the natural topography." And other councils are hap- happy for you to do as much retaining as you like.
So different councils have different rules, so just 'cause you were able to do something on one site, you can't just jump over into the next, you know, council and expect to do the same thing, which is once again why you wanna have the local knowledge and have, you know, an engineer and a, and a planner that's working in that council.
And 'cause every town planner go, "Oh, yeah, I do Ipswich as well, and I can do Moreton-" "... and all the rest," but they just don't have- Yeah ... the, the f- the, the number of the head planner or the engineer that you might need to, um, have that intimate knowledge, um, or those right contacts. So yeah. But yeah, retaining and slope i- is the biggest deal killer there for the most part.
Mm-hmm. People just underestimate how much it's actually gonna cost. But yeah, sewer, water, slope, you've gotta make sure you've got the connections downhill, or like you said, you gotta have pumps. But once again, a lot of people don't know about some of the solutions that you can do, and if you're willing to work through that, your, your buyer, your competition to buy that site is significantly reduced 'cause everyone just looks at the slope.
So once again, if money can solve the problem and the feaso works, uh, and you've done your homework on, on the sales risk and all the rest, then why not?
Yeah. So. Fantastic. Kasen, number four reasons why someone might need to walk away from a subdivision lot is environmental issues, not around the soil, but other things.
And- Mm ... I'm really excited that you mentioned before about a mining shaft because, um, I actually put a property in Gympie under contract maybe three years ago and, um- When you go on Google Maps, you do an aerial look at things, you don't actually see the slope.
Mm.
Um, I, I put this property under contract and I drove three hours up to Gympie to have a look at this thing, and as soon as I got on the site, the front of it was all fine.
There was, uh, five different retail shops there. And from the map behi- on the Google from the Gold Coast, I thought, "Look at all this land behind. I can subdivide out the back here and I can do something down the back here." And it was one of the steepest blocks of land I've ever seen when you got down the back.
And when I went down there, there was a big one-meter-wide hole, and it was a well. And-
Oh, wow ...
it just went down as far as you can see. So one, it was super sleet- steep. Two, there was a well there. And when I got talking to the tenants in that property, apart from all the termite issues that came up on the building report, they actually said that they suspected that there were underground mining shafts that were discontinued, 'cause Gympie is a mining town.
Mm.
So I went down to the local council there. They said, "The only way you'll find out is to go and check with the council." So I went there, and they said it was a two-hour wait to find out, so I just gave up on the site, pulled the pin under the DD, wasted 1,500 or two grand on a building report. But I drove back to the Gold Coast and pulled out of the contract.
So-
Mm ...
environmental Mining shafts as an example. It could be that it's completely flood affected, it could be swampland. Mm. You might be... It doesn't rule out the possibility of building. You might be allowed to build a house on stilts there, even if it's flood affected, but it's certainly a big issue that you need to consider and might force you to walk away from a subdivision project.
Mm. Yeah, it's a good point. People, you know, obviously koala habitat and trees that you can't clear is a, is, is a big one. A lot of people also don't realise that you can have, um, wildlife corridors. So sometimes you've got a cleared site and you have a wall of vegetation on the block next door and a wall of vegetation.
And I've had, I said, "This is the perfect subdivision." And I went to my ecologist and he's like, "Uh, no, it's, it's in a wildlife corridor, so the, the animals and the fauna actually travel through your site." And I was like, "There's not a tree on the site." And they're like, "You can't do anything." So, uh, s- so you really need to have a good ecologist and, and planner that can hold your hand through these things.
Other things you need to consider, uh, like some, some creeks, depending on the type of creek, is you got different setbacks. So you can't put effluent sometimes within 30 meters of a creek line. Um, a lot of the time you have certain setbacks 'cause they wanna protect the, um, riparian buffer zones of the, of the creek zone.
So that can range from 30 up to 100 meters in some instances. Like the subdivision we've just lodged in the Gold Coast, we've got a 60-meter buffer to the creek that we can't touch anything. So, um, even though the, the vegetation's not protected, uh, it is protected because of the buffer zone. It's not like it's high, you know, ecological value.
So there's little things like that that you need to consider. And then, and then where that line is from the vegetation you can't clear, everyone's like, "Oh, cool, I can just do a subdivision." Well, yes, but what's the bushfire implications? Mm. Now you've got something called a A BAL rating you've got to comply with, your bushfire attack level.
Anything over like a BAL, uh, 29 I think it is. So once you get up to like BAL 40, all of a sudden all of your cookie cutter builders don't want to build a BAL 40. There's a subdivision on the Gold Coast at the moment, half of their blocks are either BAL 40 or flame zone, and they're nice blocks, but you can't build on unless you're doing a concrete, you know, uh, underground, you know, uh, compound.
So they're the little things that you need to work at. Yes, you've got a subdivision, but now you've got a heavily bushfire affected block that, you know, significantly devalues. And if you've just done your comparable price analysis on, on a, on the same size block, but didn't factor in the bushfire implications, you can get caught as well.
So they're all the little things and, you know, it sounds scary and, and it is, but you, you need to... If you've got a good team, they'll, they'll pick those things up, you
know, halfway. Yeah. No, it's really good advice, Carson. I mean, I reckon 50% of the sites that I look on are even commercial sites where they look, "Wow, that looks really cheap."
When I go onto RP Data, I click on the flood map, and a lot of the times it's just all blue. And there's another one called fire overlay, and then it's all red, and I think, "Oh, that's why it's so cheap."
Yeah. Oh, the flooding's the, the, the quickest one to turn on and-
Yeah ...
you know, but- There's like, uh, different levels of flooding as well.
Sometimes it's like- Mm ... the Q100 flood level, and, and a lot of the time you can actually import fill and, and lift the site. Uh, where you've got a higher flow, you can't import because you don't want to push the flooding into your neighboring property. There's a, there's a thing, um, you've got to comply with in development, there's no worsening.
Yeah. So you can't make the problem worse downstream, 'cause everyone knows that old development where it don- never, the, the, your property never used to flood and now the water's diverted and now you flood. Like Murwillumbah has those issues over the border, where subdivision went in and everyone's complaining- Mm
that it's, it's way worse than what it was. And whether that's the case- Yeah ... the floods have just been worse since then, or it actually is because of the subdivision, but that's why you, you know, you gotta get your hydraulic, your engineer to, to model all that and make sure there's, there's no impacts. But, um, sometimes you can actually, there, there's another opportunity, like I said, in, in, in Logan for instance, where there's the light blue, I know I can still do a subdivision on the flood mapping.
But when I get into the dark blue, I'm just like- Yeah ... I don't even bother taking it any further. So, and you, you kinda learn that over time and once again, you need to work with your engineer pretty closely to know what you can and can't do. Yeah.
So. It is, it's fascinating stuff and, you know, I've, I'm even learning new words trying to become a property developer.
I've learnt this thing that there's, uh, impervious, uh, hardstand. Impervious is a word apparently, and it means that the, when it rains the water can't go through concrete- Mm ... and then it goes, the storm water actually goes out and it goes, uh, could go out to your neighbor's yard. So that's- Mm ... why, you know, you gotta have a look at, with your development site where there's gonna be grass, where the water can just sink down naturally.
Mm. But if you're gonna put concrete all over it for truck parking, for example, that water won't go straight down anymore- Mm ... and it's gonna go out somewhere else into your neighbor's yard or- Mm ... or the, uh, council drains.
Plus if you've got a lot of slope, you think you've had a, a, um, a one acre block and all of a sudden you put buildings all down one side and you've got concrete, all the water's gonna flow on top of that, you know, concrete.
You've gotta then put into a basin, treat the water, slow it down so it exit your site at the same pre-development levels as beforehand. Because- Yep ... last thing, um, the person downstream, once they've, they've got their house sitting there and all of a sudden you've channeled all the water f- funneling straight into their house, you're not gonna have a friendly, a friendly neighbor.
But council are all over that, you know, but, and they'll make sure that you comply with that. But if you haven't done your due dill and you've bought the site thinking that you can just do what you want, then, um, yeah, you're gonna get found out. But, uh, yeah. So there's, there's lots of different eco side of things that you've got to comply with.
Um, but once again- Um, I think there's massive opportunities in all of these things that we're talking about- Mm ... which are all deal killers.
Yeah.
If you get a good team, that's where a lot of the opportunities are. Like, uh, we bought a site in Tweed, the whole fo- site is covered in vegetation. Everyone, like, knows Tweed's very green.
Mm-hmm.
And even a, a friend of mine who's a town planner, he just saw the for sale, um, saw the listing come up, saw the vegetation in Tweed and just didn't even bother inquiring. Turns out every single one of those is camphor laurels, which is a weed tree that you can remove, um, right of way. So I just did that little bit extra due diligence, got the ecologist out on site and said, "Look, it's the right zoning, but it's got these vegetation.
I got no idea which trees I can and can't clear." Mm. He's like, "They're all weeds, guys. We can clear them." So, um, yeah, once again, it's just getting a good team and, um, the... And we've got one at the, at the moment where, uh- Or two, two sites, uh, the one in Beenleigh, there's a cockatoo feeder tree on our site
And he had put the cameras around, and the cockatoos come through, and we've got the same trees on the site, but the cockatoos don't feed on those ones. Mm. The ones they feed on, we've got to keep. The ones that they don't, we don't have to. Like, how the heck do you know that information? Wow. Yeah, so there's, there's things like that, once again, you need to do your due diligence if you're in ecologically sensitive sites, um, to make sure that, you know, you're not gonna get stuck.
So I've got two other trees on our 10-lot subdivision that we're designing. Got a big fig. Figs are protected, and we're, it's kind of right where I want the road to go. So we're like, "Stuff it. Let's turn it into a feature." We'll take a negative into positive. We've got the road, and we've got it splitting around the fig tree, and then it comes back on the other side, and now it's gonna be a, a feature and a bit of a highlight of the subdivision.
So, but if you don't know that- Hmm ... and you can just assume you can knock everything down because it's a, um, in a, in a zoning or, or a part of the site where you typically can, there's, there's certain varieties of trees you just cannot knock down. Hmm. So once again, having an arborist, we've taken our arborist out on site, we've taken our ecologist out on site, and we, now we know, okay, these are the three trees that need to, need to stay.
Let's design around them. You don't wanna... 'Cause if you just, if you just get your engineer and planner to do all that- Hmm ... they'll just design the most efficient thing, and then you'll just get caught redesigning it and spend all this money on, on redesign, so.
What's so great about talking about these five potential reasons why you should walk away from a subdivision site is that Carson looks for ways to solve all these problems.
And as a real estate agent, I know if I'm getting the best price for a seller, it's usually in a multiple offer situation where there's heaps of people that want the site, and people pay too much. Well-
Hmm ...
Carson's at the other level, where he's looking at sites that no one else wants because he's confident in his team's ability, in most cases, to try and solve solutions.
And he's not gonna have the same competition when he's making offers. And-
Hmm ...
that's where there's a, you know, a higher margin in the development if you're buying right without the competition.
Yeah, 100%. Like I said, I want the stuff that's got the issues. And, and, and once again, 99% of the time I can't solve them, but most people don't even stick around long enough to find out if you can.
Hmm. And if you've got, you're willing to put in a bit of that sweat equity to then, you know, find that site, if it does work, your margins will be significantly higher than just- Hmm ... a normal, you know, cookie cutter subdivision site that didn't have any of the, um, complications. You just, you just won't get the margins in them unless you get a massive uplift in, in pricing, so.
Fantastic. The fifth reason why you might wanna walk away from a subdivision site is the view, both Google View and from the Street View. You've actually gotta think, if you're gonna get a subdivision, um, completed, do people actually wanna live here? Do people wanna live here? Um, I've had problems selling normal, uh, lots.
Um, I can think back, uh, one site in Queen Street, which was immediately opposite a cemetery, and everyone that came in I don't wanna live here next to all those dead people across the road.
Mm.
Um, I, I a- also auctioned another big giant chunk of land on the Tallebudgera Creek, and it was immediately opposite a council sewage treatment plant, and everyone that came in said, "Oh, I don't want the smell from that sewage treatment plant when the wind blows in this direction."
So- Mm-hmm ... there are certain issues there that you can just have a look at a site and you need to make a determination as to, you know, whether that's gonna make the place a lot less valuable.
High voltage power lines is another big one. Yeah. We've, my f- very first subdivision we did, we had a high voltage power line running on the rear of our site, and people just hated the fact that they could see it from their, from their block where their house was going to be.
You know, those really big ones- Yeah ... not your normal power lines.
Yep.
So your buyer pool's just going to shrink if you've got those issues. So once again, you, you better be buying it cheap if you, if you've got something that money can't solve. You're not gonna move a high voltage power line for the most part, and you're no doubt not gonna pick up the cemetery and move it.
So there's- ... there's some of those things that you, you just can't do anything with. So yeah, you wanna do your homework, make sure even just, like, the, the neighbors or there's like... There was a really nice waterfront block in Karara that I was looking at, and next door there's a industrial use site. Like, you can't build a, a beautiful luxury home there.
You're just, you're just not gonna get the same value. One of our other subdivisions, um, there was a cucumber farmer right next door with these... And it was really overgrown and just sheds every- it looked terrible. So we just planted a screen and we said, "Look, I know you can see it now, but we've s- Yeah
we've invested $50,000. Give it three years, it'll be screened." So it's like at least people were like, "Oh, okay." Like, help solve the problem for them. Mm. Once again, can money solve the problem? Yes, we could screen that one out. It was just a visual amenity. It wasn't an odor or anything, so. And even though it wasn't sold then, we'd invested the money to say that, "Hey, you don't have to pay to solve this.
We've done it. You just gotta give it time to, to grow a little bit more." Yeah. So.
This is where the, uh, Google aerial, uh, shots can really help. I mean, I, I just sold, I've got a property under contract just a few kilometers behind here at Burleigh, and it's, um, behind where there's a quarry, and the g- council's just recently said they're gonna discontinue or not allow, uh, this certain area to be used as a quarry anymore, and that adds value.
And there are other sites there where I have a look at from a Google Maps point of view, and you can see other industrial use sites, maybe an abattoir or a truck parking depot, where you know if you buy a block of land there for a house and it's just on the fringe, you're gonna have a whole heap of semi-trailers driving past your house- Mm
uh, on a daily basis. So that's just not gonna generate the same amount of, um, revenue when you sell those sites. Like you mentioned, there'll b- just be a, a smaller buyer pool for those sort of sites.
Yeah, that's right. And yeah, if you've got time to sit on it and you bought it really well, it still might make sense, but you better allow, you know, double, triple the time, talk to your agents, how long is it gonna take to move this?
Because I've seen subdivisions still work on busy roads, but once again, your buyer pool is just significantly less. So you, um, as long as you've allowed extra holding costs And, you know, an appropriate number that, you know, 'cause you're not gonna sell it for the same as the, the block around the corner that doesn't have those issues.
So as long as you've reduced that price and added extra time in, then you should be okay.
Carson, um, I'm just so impressed every time I come up with all these questions. Uh, not only do you pro- provide a technical response to it, you actually back it up with real-life examples that you've been through yourself or with your clients, and it's just so valuable to educate the audience, uh, with your answers around this.
So just covering off the five reasons why you might wanna walk away from a subdivision site. One is access, two is soil, three is extreme slope, four are other environmental constraints such as flooding or underground mining shafts or issues like that, and the fifth one is just the street appeal, uh, or from a Google Map, what you can see around the site.
Carson, thank you very much. That's, uh, part three of our episode, uh, on a masterclass in land subdivision, and there's no one else better that could have, uh, answered all those questions. I really appreciate your time.
No trouble, mate. Appreciate it. I, um, could talk subdivisions all day long, so, um, happy to, happy to jump on.
Thanks, Carson.
Thanks, mate.
Thanks for listening to the Andrew Wright Property Podcast. This is all about building a community of like-minded investors who can share real-life stories, experiences, and collaborate with a view to helping each other. Join us. Get in touch through the link in the show notes. I look forward to you joining me on the next episode.