I have decided to avoid getting into UNWANTED discussions with folks who any way wont reform. So let me discuss the mathematics of Chennai realestate in a new Thread.
An hour ago, I called a Builder in Saligramam asking for the price of his flat. He quoted 5600 psft. I asked him about UDS and FSI and road width. He was building a clean property on 2 grounds, 8 flats with stilt and road width was 30ft. He was using an FSI of 1.67 which is perfectly understandeable.
Then I asked him " what is the price of land here ?"
Builder: 1.5crores to 1.25crores.
I: So I can offer you land there in a much better place than you are building.
Builder: I cant buy outright now sir, but 50:50 is ok.
I: How is 50:50 fine? For 3200sqft that I have you can build minimum 5000sqft even though I know you will build 5400sqft at 1.67. So what is your cost of construction?
B: 1500psft.
(Now this price is terribly high but I was ready to let him go with the price?)
I: So how can it be 50:50? You need only 75L to build 5000sqft?
B: See if I give you 2 flats worth 2500sqft you can yet get at 5600psft.
I: That is just 1.4cr for 3200sqft.
B: I can maybe give you another 10L or so.
I told him that even if I turned a builder and sold one flat I would have built the entire 4 flats but he was telling WITHOUT ANY MATHEMATICAL BACKING that he will need 1.5 flats. Then he said well I cant sell 1250sqft flat to which I said you can make 6 flats with new rules.
This went on till I said "get lost" or rather a "bye" and left him.
Now let us see the mathematics.
If I can get 5600 psft for 1 flat then cost of 1250sqft of flat is 70L. Let us assume I throw one 5L more and I will have the property ready even if I use this builder's rate of 1500psft. That rate is ridiculous and includes profits. In today's "builder in trouble" market, you can find a good contractor to build you at 1200psft.
Now if one flat sold at 70L then 4 flats cost 240L, so the builder should give you 240-75(his construction cost even at 1500psft)=175L.
He is throwing in 2 flats at 140L and maybe another 10L. So you might think it prudent to lose the 25L and take it.
However what guarantee do you have that you will get your money? Secondly in joint venture, your money is not in your hand. So if I got 150L outright now, in 2 years that will be worth 180L at 10% interest rate.
In other words, builders in Chennai are super cons! And remember, his investment is ZILCH (Zero).
So if I turned a builder with my own land, I can get the best of construction at 1200psft. Also I used 5000sft, which in reality can move to 5400sft even at 1.67 FSI. Today you can get even more since the third floor can be built after 3 years and if you keep those rights for yourself, then you got that too.
Let me ignore even the 3rd floor. With 5400sqft and price of 5600psft, I will need 5400x1200=64.8L to complete the project. I will find JUST ONE BUYER and charge him 5600psft, which means 5600x1350sft(since total built up area is 5400sft for 4 flats). I will get this 75.6L. I can use this 75.6-64.8=10.8L as pocket money for any price changes or troubles or legal charges or whatever. Net I get 3 flats all for me. I can sell them at the prevalent price after 2 years or get them booked at current rates and et 75.6x3=227L or 2.27Cr.
Now does it make sense to get 2.27Cr or just 1.5Cr is the question. How many of you earn 75L for 2 years? I bet most of you dont! Again you don’t need to be a fulltime builder. Just employ a good contractor and MANAGE him!
BETTER BECOME A BUILDER IS YOU HAVE YOUR OWN LAND!
(PS. Hope this helps some folks who wanted to sell their land in Mylapore!)

Incidentally if I reduced the price of flat by even 600 rupees my net gain is 2.27cr-600x5400=1.95cr. So all I need to do is SEARCH for one serious WORTHWHILE (meaning has a safe job) buyer.
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  • Dear Friends,

    Both of you are MUDALALEES. Unfit to be Secratery to the other. But, if you become PA or PS to a Minister, may be to the Urban Development Ministry, I am sure, it will be beneficial to the Govt and the public.

    ks2071746
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  • Tit for Tat !!! :)

    Originally Posted by ks2071746
    Dear Friends,

    Both of you are MUDALALEES. Unfit to be Secratery to the other. But, if you become PA or PS to a Minister, may be to the Urban Development Ministry, I am sure, it will be beneficial to the Govt and the public.

    ks2071746



    ks,

    This is only tit for tat. As you would have noticed, I'm issue-focused because I don't have an axe to grind!!!

    Nats is personality focused (all that unnecssary name-calling and bad language) simply because he is stuck with lots of RE and does not know how to make suckers of the people on this forum to bail him out by falling for his high-price-because-you-get-200%-in-2-years tricks.

    Only against him - and only when he goes ballistic - do I use tit-for-tat tactic and it seems to work well since he only learns his lessons when he gets it back in the same language he uses. As to why he uses this kind of language, maybe its the upbringing! Or maybe he thinks he is superior in some way to all the others on this post (maybe thinking its his IIT degree) not understanding that there are many members who may be far more qualified and experienced (not to mention successful) than he, who may simply be visiting, reading and exiting (and not crapping around like him all the time!)

    In every other of my posts you see the difference :D

    As to being a secretary, I don't have any problems since I believe in dignity of labor - something that Nats so obviously does not going by the derogatory way he talks about Secretaries. Nats must remember that, at least secretaries earn a honest days wage according to their capacity. Unlike Nats who professes high qualification but is merely a speculator waiting to rob the unwary who passes by your way. In what way is that different from a highway robber? . Low capability + honest earning is far better in my books than high qualification + highway robbery!!!

    cheers
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  • Originally Posted by wiseman


    There are 2 separate arguments.

    1. Seller sells land. Builder invests in the whole thingy. Land, Building, Selling Expenses, all of it. In this case which builder will work in today's high-risk environment without adequate cushion as margin? Use you head you less-than-a-secretary.

    2. The other argument is your owner build everything and reap a profit. In my books, it is only throwing good money after bad!

    In today's declining economy, you are suggesting to other viewers,
    - First invest a humongous money into risky high-priced, land
    - Then pour in more money into risky building
    - then (when you have no money to market), wait for buyers to come and pay fancy stupid prices that only a moron like you will pay

    In the second argument - which only a complete idiot like you will follow - you carry a very high risk for a very long period in a declining market. And you think that somehow all those profits will come your way?

    As someone else said, Dream On. And I would really like to see you actually put in more money (who will lend money to you to build?) and hold new built-up property for current prices after 9-12 months when there is going to be a super-excess flood of property when builders who cannot hold on any further and buyers who go broke come to market in distress!

    I was arguing the case 1 where I sell outright and builder gets to markup whole investment in property because he is putting up the whole amount.

    You are arguing case 2 where you put in even more money into a declining market, hoping that somehow, 9 months later, miraculously people will pay even more than today. My argument is, if they pay less by 20% - 30% (which seems to be the reasonable level of drop in the next 1 year), your so-called profits will all vanish like the mist on a hot summer morning!!!

    Besides, where are the other costs like Marketing? And where is the cost of Capital? Your math is so woefully inadequate that you are not even fit to be my secrertary!!!

    Grow up!

    cheers

    Calling me an idiot wont make you wise as much as calling yourself wise. Since you are just not wise. Now you proved to be a secretary and a lousy one though, by simply trying to rephrase my interesting story in your dumb moronic way.
    Then when I state what I want, you reinterpret it with your feather brains. God save all who have to live with a numb skull like you.
    For other saner folks,
    What I told in my original writeup is simple.
    a. Dont sell your land to a builder who marks a margin on your land even though he will only pay you in installments.
    b. If you turn a builder, since you have land, all you need is build using your BUYERS' money.
    c. If you can build 4 flats technically in your land, normally one flats money may be sufficient to build the entire set of 4 flats.
    UNLIKE WHAT THE IDIOT MAN ON THIS BOARD SUGGESTS, ALL I TOLD YOU IS GET TO SELL ONE FLAT AND USE THAT MONEY TO BUILD NOT ONLY THAT FLAT BUT ALL THE REMAINING FLATS. IN OTHER WORDS YOUR INVESTMENT IS ALMOST ZERO.
    Finally I feel those of you who talk highly about Wiseman are bigger idiots than Wiseman. Just follow this single thread. See what that idiot's contribution is, other than trying to rewrite what I said and I bet he did it because some 2 guys praised my writeup and Wiseman feels pissed off. Honestly I dont need anyone on this board to praise me. I have better things to do. However if folks try to ask me and Wiseman on par for info. then you are idiots. Remember, Wiseman is a BIG TALKER with NO MATTER. I only talk matter and I even tried to preempt arguments with that idiot by creating a new thread and lo and behold that nut loose arrives and states whatever I did not state as if I wrote it. Certainly Wiseman is a jobless time passer with no real worth in life.
    I DONT THINK I WANT TO CONTINUE SERIOUSLY WRITING HERE, SINCE IT SERVES NO GREAT PURPOSE TO ME.
    So if you bunch of fools expect market to fall and so delay your purchases do that. If you have land and want to sell and go to hell, do that?
    I CARE TWO HOOTS FOR IDIOTS WHO COMPARE A MORON LIKE WISEMAN WITH ME? HE IS NOT FIT MY SHOE!
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  • Well, point is getting home :)

    Originally Posted by Natarajg007
    Wiseman there is something wonderful about you. I have seen low IQ folks. I have seen arrogant fellas. I have even seen arrogant idiots. However you are the height of arrogant idiots. Nobody can beat you in that. Your name shows what you WANT TO BE, but your views show why your name is a MISNOMER.
    When you talk about your English that shows how banal you are and when you try to rewrite my Mathematics it shows what a trite you are.
    In effect Wiseman, you have been talking on this board, until I came as if you were the lord and master, as there was none who had the courage to tell you where you belonged.
    Once I placed you in that small spot in the corner, you have tried from mimicking my name, to abusing me using dup ids to trying to act like a secretary and a parrot.
    Your fame unfortunately is totally tarnished and the more you shoot stupidly at me, the more you are shooting your own foot.
    Unfortunately I dont have the time to forgive idiots. Having to deal with the height of arrogant idiot in you, I am bored to the core. I dont think I might write frequently here in the future. I think it serves no purpose to me.
    So that leaves you a forum to boast like a madman, to talk nonsense and call it wise and create dup ids to propagandize nonsense.
    All said and done you post the image of the fools who think that if they get a Doctorate degree for silly reasons they have become great.
    I dont need any such shit degrees. I have the best IIT B.Tech, IISc. M.E. So you can keep the imaginary Wise cap and enjoy in your utopia.
    Farewell.



    Nats,

    The amount of verbal diarrhea from you is showing that my points are hitting home! :D

    Time will tell who is correct.

    cheers
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  • Not a forum for personal mud slinging

    Dear friends this forum is not a place for personal mud slinging so please be civil and take note of ideas, information and make a personal judgment. Each ones opinion is different which makes the forum interesting so please stop the mud slinging and stick to ideas and information.
    Thanx
    CP :)
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  • Nats and wiseman plz exchange ure email IDs and keep the verbal assaults outside the board. And Mr.Nats, even though you talk about your IIT degree doesn't reflect in ure language. Keep it healthy argument even if you don't approve other's ideas.


    ps...people from Harvard, Sloan, IIMs are the ones responsible for the current global slump.
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  • Dear friend,

    The RE sellers are always greedy lot. They have been enjoying huge returns and will not like to give in so easily.

    ks2071746
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  • Originally Posted by ks2071746
    Dear friend,

    The RE sellers are always greedy lot. They have been enjoying huge returns and will not like to give in so easily.

    ks2071746


    Dear friend

    Time will give suitable solution for all RE problems

    The world is fortunately global with night and days.

    Soon you can see day time

    thanks

    chataara
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  • They can not keep it for a long time.

    At one stage they have to sell at lower rates
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  • Originally Posted by surla
    Nats and wiseman plz exchange ure email IDs and keep the verbal assaults outside the board. And Mr.Nats, even though you talk about your IIT degree doesn't reflect in ure language. Keep it healthy argument even if you don't approve other's ideas.


    ps...people from Harvard, Sloan, IIMs are the ones responsible for the current global slump.

    Harvard Sloan and IIMs mean very little me.
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  • Originally Posted by wiseman
    Nats,

    The amount of verbal diarrhea from you is showing that my points are hitting home! :D

    Time will tell who is correct.

    cheers

    So you are living your life eating diarrhea? That sound natural given your behaviour on this board.
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  • With so many pseudo intellects on this board, talking about anything and everything they dont know, my word wont matter.
    Just thought that I will refer to the news item yday which said that Auto majors in India have had an year on year spectacular growth in February. If that is the case, I am really curious how our silly pseudo intellect bears think that fellas who Cars and Bikes wont houses.
    If India really is in a depression as they feel then where did the money come for Autos?
    In a country like India where people dont need to flash a car and where there is public transport (good or bad!) unlike an infrequent Greyhound in US, do people choose cars or houses? Obviously houses have ers. That a few of the disillusioned fellas here who have lost a job or have gone over board on salaries keep complaining, is no reason that RE will fall. Infact the auto figure is apt reason to believe that IT MIGHT MAKE MORE SENSE TO ENTER RE MARKET WITH VIGOUR NOW THAN BEFORE.
    So if you sold out your land for a song in 2003 and missed another 500% to 600%, if you sell it out now, you might make yourself feel the same pinch in the next few months. Ofcourse the 2003 sellers will have to back their lands in another 2 years at probably 2500% hiked values.
    Well the hallucinating bears dont have to believe me, but well if Cars can be sold, why will it not be prudent to RE now?
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  • Now I must hasten to add that many silly NRIs on this board tend to believe that if people CANT cars in US, cars wont be sold in India. These are those unsuccessful folks from India who fled as cheap labour abroad. Now they use the same logic to talk about RE. However as it has been shown, Auto sales are booming. So will RE be left behind?
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  • Well I am only too curious to find out what these bear dreamers will do when the market shoots up again in the coming months?
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  • I agree, but ...

    Originally Posted by surla
    Nats and wiseman plz exchange ure email IDs and keep the verbal assaults outside the board. And Mr.Nats, even though you talk about your IIT degree doesn't reflect in ure language. Keep it healthy argument even if you don't approve other's ideas.


    ps...people from Harvard, Sloan, IIMs are the ones responsible for the current global slump.



    Can and Surla,

    I agree with you. But when Nats comes out with stupid stuff that "Harvard, ... means little to me", I simply can't resist having a go!!! :D

    Nats: They mean little to you simply because you don't have the acumen to understand!!! :D

    cheers
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