1. How to pick new duplex projects that
deliver equity, growth and cashflow

2. Introduction
• Positive Real Estate (PRE) has a long standing
relationship with REI
• PRE has now formed a strategic partnership with
REI combining its extensive property strategy and
acquisition experience with REI’s leading research
and analysis capabilities

3. The next 30-40 minutes
• What is a dual occupancy (duplex)?
• Town planning
• Finance overview
• Strata overview
• Duplex Strategy
• Pros and Cons
• Market timing – when to buy
• Best areas to buy in
• Duplex Properties Overview

4. What is a dual occupancy
(duplex)?
Purpose built two dwellings on one property to be
subdivided on completion of construction

5. What is a dual occupancy
(duplex)?
Attached or Detached

6. What is a dual occupancy
(duplex)?
Town Planning
• Zoning (Res B, R3
Medium Density)
• Development
Application (DA)
lodged with Council
• DA Code Assessable
• 3-4 month process
depending on Council

7. Duplex Strategy
• Price point $550,000 +
• Advanced strategy for a client who has already done a dual
living or house and land
• Strong yields and cashflow
• Flexibility of 2 properties in 1
• Manufactured equity

8. H&L Dual Living Duplex
Price $400,000 $460,000 $600,000
LVR 95% 90% 80%
Deposit $20,000 $46,000 $120,000
Rent pw $420 $600 $660
Rental Yield 5.5% 6.8% 5.7%
Potential Equity $60,000
Approval time 7-9 weeks 7-9 weeks 12 weeks
Area Capital City
Major Regional
Capital City
Major Regional
NSW
Major Regional
or
Regional
Duplex Strategy - Comparison

9. Duplex Strategy - Type of
Investor
H&L Dual Living Duplex
- Low deposit looking to get
into a deal
- Looking for med to long term
capital gain
- First land and construction
deal
- Low income with minimal
serviceability
- First home buyer to rent out
secondary dwelling to an
investor
- Negative geared property
portfolio
- High income looking for equity
not cashflow
- Turbo charge portfolio with 2
strata titled properties
- High income needing
deductions
- High borrowing capacity
- High deposit required up to
20%
- More experienced property
investor who has done a land
and construction deal
- Looking to recycle deposit and
move onto another deal on
completion

10. Duplex SWOT
Strengths
•High land content compared to units
•High cashflow
•Multiple income streams - less vacancy
risk
•Stamp duty on land only (1)
•High LVR lending in category 1 areas
•Median pricing more stable than units in
market downturn
•Create development equity during
construction
Opportunities
• Buy from developer in bulk – discount
(5)
• Land developers increase land prices in
subsequent stages (6)
• Purchase in an estate with high owner
occupier ratio
• Purchase infill sites close to city centre
(7)
• Having access to wholesale build terms
to maximise equity gain (5)
• Strata title allows individual sale of units
• Refinance equity out upon completion
Weakness
• Longer approval timeframe for DA
• Client needs to pay interest b/w land
settlement and tenant moving in
• Higher price point
• Body corporate fees once strata titled
• Limited duplex lots available in new
estates
• Finance from 80% LVR up to 90% LVR
Threats
• Urban sprawl estates – over supply
• Investor estates
• ‘Cowboy’ retail builders resulting in bad
client experience
• Council infrastructure charges reduce
profitability

11. Strata title process -
Duplex
• PRE duplex packages include cost of obtaining strata title
• Building Format Plan (BFP)
• Community Management Statement (CMS)
• Headworks Charges
• The BFP and CMS are lodged with council along with the
final occupancy certificate on completion of the duplex
• Council releases approved stamped plans and documents
• Builder lodges documents with titles office

12. Duplex Finance
• Duplex finance is specialised
• Finance broker needs to know what type of valuation to
order and which funder to use
• Valuation can be done in-one-line or strata titled
• Example in Toowoomba for 5 bed duplex (3 bed + 2 bed)
• In-one-line valuation $480,000
• Strata title valuation $600,000
• Most lenders will lend 80-90% on in-one-line valuation
only

13. Duplex Finance Example
1
Construct and refinance
• Borrow 80% LVR of package price $550,000 = $440,000
• Deposit $110,000
• Refinance on completion at 90% LVR assuming 10% uplift in
value = 90% x $605,000 = $544,500
• Release $544,500 less $440,000 = $104,500 of equity!

14. Duplex Finance Example
2
Construct and sell 1 of 2 then refinance
• Borrow 80% LVR of package price $550,000 = $440,000
• Deposit $110,000
• Sell 1 duplex on completion for $302,500 less 3% selling
costs leaves debt of $146,575
• Refinance on completion at 90% LVR assuming 10% uplift in
value = 90% x $302,500 = $272,250
• Release $272,250 less $146,575 = $125,675 of equity!

15. Duplex – Where and When to
Buy
When to Buy

16. Duplex – Where and When to
Buy
Where to Buy
• Regional versus capital city areas
• Affordability
• Strata title comparable sales

17. Duplex Examples
• All of these duplex examples have between a 10% - 25%
potential uplift in equity based on either an agent’s market
appraisals or registered mortgage valuation
• Duplexes can be completed in well under 12 months for
registered land

18. Duplex Example 1 –
Toowoomba QLD
Attached 2 x 3 bed, 2 bath
single garage
Land: $210,000
Build: $395,000
Total: $605,000
Market Rent: Appraised at $660pw
3 bed ($330pw) per side
Gross Yield: 5.7%
Market Value Appraised at $670,000
Total dwelling size 264m2 or approx
132m2 per side
Land registers July 2015

19. Duplex Example 2 –
Tamworth NSW
Attached 2 x 3 bed, 2 bath
single garage
Land 927m2
Land: From $126,500
Build: From $430,000
Total: From $556,500
Market Rent: Appraised at $660-
700pw
Gross Yield: 6.2%
Valuation of $610,000
Total dwelling size 271m2 or approx
135m2 per side
Land Registers July 2015

20. Duplex Example 3 –
Peregian Springs QLD
Attached 2 x 3 bed, 2 bath
double garage
Land: From $273,600
Build: From $504,300
Total: From $777,900
Market Rent: Appraised at $960pw
Gross Yield: 6.4%
Market Value Appraised at $850,000
Total dwelling size 341m2 or approx
170m2 per side
Registered Land

21. ‘Wholesale’ Builders
• 3-5 builders to cover key areas Australia wide
• Have proven themselves to be reliable, quality builders
• Standard pre-negotiated build contract terms
• Have proven in-house construction management system
• Building Contract standard for H&L, dual living and duplex
• 16 weeks, 18 weeks and 20 weeks
• Liquidated damages
• Fixed price
• Turnkey

22. Wholesale Advantage
Retail Wholesale
Build Period (House) 26 weeks 16 weeks
Build Period (Duplex) 32 weeks 20 weeks
Liquidated Damages $20 per day = appraised rent
Builder variations Often None
Turnkey Rarely Yes
Build Commencement 6-12 months 3-4 months
Contracts Mgt No Yes
Construction Mgt Sometimes Yes
Handovers.com Sometimes Yes

23. Next Step…
Submit your details now by using the link below to find
out:
• Detailed information on each of the duplex projects
• Next steps if you are considering securing one of these
opportunities
• How to make sure this strategy suits your personal situation
It's true there are big chunks of money to be made in real
estate at the moment... but if you're not in the market right now,
you will miss out on great opportunities like these.
www.positiverealestate.com.au/duplex