Case Study: Unlocking Potential in Drayton – A Strategic Development Success

Overview

What started as a neglected property purchased under a "Mortgagee in Possession" auction has been completely transformed into a vibrant, six-unit residential development in Drayton, a sought-after suburb of Toowoomba. By combining strategic negotiation, innovative planning, and a hands-on approach to problem-solving, we not only delivered a high-quality development but also achieved an impressive 28% profit on costs, exceeding all expectations.

Recognising the Opportunity

Listed for auction in Brisbane’s Courier Mail as part of a distressed developer's portfolio, the property came with challenges but also significant potential. Despite being outbid at auction, we saw an opportunity. Armed with a thorough site analysis, we made a calculated post-auction offer, demonstrating why the $300k reserve was unachievable due to the site’s condition.

Our persistence paid off. Through strategic negotiation, we secured the site for $250k under a delayed settlement, creating the perfect springboard for a high-yield development project.

Why Drayton? The Perfect Location

Nestled just 117 km west of Brisbane, Drayton is part of Toowoomba, Australia’s largest inland city. Known for its excellent infrastructure, major highway connectivity, and renowned cultural events like the Carnival of Flowers, Toowoomba attracts families, downsizers, and investors alike.

At the time of acquisition, Toowoomba was in the midst of a government-driven infrastructure boom, making it an ideal environment for well-planned residential projects. This presented the perfect opportunity to deliver a product tailored to the market’s needs.

The Transformation

Initially approved for four units, the site had partially completed construction plagued with defects, including corroded reinforcements and inadequate drainage systems. We saw an opportunity to reimagine the project.

Collaborating with a local town planner, we transformed the original vision into a more ambitious six-unit development featuring modern, three-bedroom townhouses. This shift not only maximised the site’s potential but also addressed a growing market demand for affordable, family-friendly homes.

Results That Speak for Themselves

Category	Projected 6 Units DA	Actual
Total Costs	$1,466,979.50	$1,459,193.43
Valuation	$1,860,000.00	$1,873,000.00
Profit/Manufactured Equity	$393,020.50	$413,806.57
Profit on cost	27%	28%
Project Duration	18 months	15 months
Annualised Profit	18%	23%

Overcoming Challenges

1. Resolving Construction Defects:

The abandoned site was riddled with issues, from corroded reinforcements to drainage blockages. Careful planning and prioritisation were critical in rectifying these problems without blowing the budget.

2. Navigating Labor Shortages:

Local trade shortages and high demand meant inflated prices and long delays. By bringing trusted tradespeople from Brisbane and arranging local accommodations—despite limited availability—we kept the project on track.

3. Addressing Community Concerns:

Neighbor complaints about stormwater runoff, unrelated to our site, threatened to delay approvals. We commissioned an engineer’s report to address these concerns, ensuring council compliance and maintaining goodwill with the local community.

Key Achievements

• Maximising Potential: Transformed what originally was a four-unit project into a high-performing six-unit development, offering modern, market-aligned homes.

• Effective Cost Control: Delivered the project under the projected $1.47M budget through efficient planning and strong trade negotiations.

• Exceeding Market Expectations: Achieved an average valuation of $312,166 per unit, surpassing projections and enhancing overall profitability.

• Impressive Returns: Delivered a 28% profit on costs and a 23% annualised profit—well above initial forecasts.

Conclusion

The Drayton development stands as a testament to the power of strategic foresight, innovative thinking, and decisive action in property development. From acquiring a distressed site to delivering a standout residential project, this case study showcases what’s possible when challenges are met with vision and determination.

Want a closer look at how we transformed this underutilised site into one of our most successful residential developments? Visit our Drayton, QLD Project Page for a full breakdown of the numbers, strategy, and step-by-step execution behind this 6-unit success story.

When tackling complex developments like Drayton, working with a financially stable builder is just as important as site potential or planning approvals. Learn how to spot red flags and protect your project from costly delays in our guide on how to choose a financially secure builder.

Are you ready to unlock the potential in your next property development project? With the right strategies and expertise, success is closer than you think. Let OwnerDeveloper help you turn your vision into a profitable reality - Contact us today to start your development journey.