Michael saw an old client this week. He’s had his builder’s ticket for 4 years and is about to start his own building company.
He owns a property with his 2 brothers. They are not interested in funding a development, so he is going to finance the demolition of the old house and the construction of 2 units, which will then be sold off and the profits used to build the third unit.
He was advised to get something in writing to cover himself with his brothers.
He was suggesting obtaining a strata survey, transferring 2 lots to himself, and leaving the third in the 3 names.
Michael suggested leaving the title as is to avoid unnecessary transfer duty and that he should instead enter a standard building contract to build the units, with a standard builder’s margin built in and also charge the development interest on the money that he is providing for the development, since he is taking all the risk. There will still be a profit for the 3 brothers on sale of the first 2 units, which will be tipped into the third unit to increase the profit overall.