Start with the realistic end value of each completed dwelling in that street, based on comparable sales, not hope.

Add up every cost: land and stamp duty, demolition if it is a knockdown, design and permits, construction and site costs, subdivision, holding costs such as interest and rates, and selling costs.

The gap between total end value and total cost is your margin; experienced developers want a healthy buffer for risk, not a thin one.

Run these numbers before you buy, because the site price is the one input you can actually negotiate.

Lenders assess a two-dwelling construction loan differently to a single build, often against the end value and sometimes requiring a pre-sale of one dwelling.

Progress payments follow the build stages, as with any Victorian major domestic building contract.

Your borrowing capacity, the equity in your land, and whether you intend to sell or hold all shape what a lender will offer.

Talk to a mortgage broker experienced in small-scale development early, because the finance structure affects the feasibility.

Develop-to-sell: selling new dwellings usually brings GST into play, commonly calculated under the margin scheme, and the profit is generally taxable.

Develop-to-hold: keeping one or both as rentals changes depreciation, gearing and capital gains considerations.

An accountant's view before you commit can change whether and when you subdivide and sell.

None of this is advice; it is the checklist to take to your broker and accountant.