I bought a house on a cross-lease site in Pt Chevalier for $90,000. Rather than build anything new, I kept this one simple: create a section, and sell both pieces as they were. The existing house sold for $95,000, and the new section sold for $25,000. Costs — legal fees, subdivision costs — ran to about $10,000.
The numbers
| Purchase (whole site) | −$90,000 |
| Costs (legal, subdivision) | −$10,000 |
| Sell existing house | +$95,000 |
| Sell new section | +$25,000 |
| Net result | +$20,000 |
Run the numbers and it's a real but modest result: roughly $20,000 net on $100,000 committed. Not a great profit for the effort involved. It paid the legal fees and put a little in the bank, and not much more than that.
But the deal did two things that mattered more than the number.
It cemented a buying relationship. The agent who sold me the site also sourced buyers for both the house and the section afterwards. That's not a coincidence — it's what happens when you complete a deal cleanly and everyone involved comes away satisfied. An agent who trusts you with one deal starts bringing you the next one before it's advertised. That relationship outlasted the profit on this particular site by years.
It proved the model. This was the deal that showed me what makes a subdivision project actually work: you need an existing property with the potential to create at least two sections, not one. The first section's sale needs to cover your costs — purchase, legal, subdivision, the lot. The second section is where your margin lives. Alberta Ave's numbers were thin because the split between "cost recovery" and "margin" was too even — the house sale barely covered the purchase price, and the section sale barely covered the rest. The lesson wasn't to stop doing this kind of deal. It was to be more disciplined about which sites qualify: ones where the numbers have real room in them, not ones where everything is tight from the start.