Large Scale Property Development
Discussion
Just putting some feelers out on a project I'm working on at the moment...
The aim is to take all of the hard work out of property development and present an Investor with a project fully in place and awaiting funding or management.
I have got a lot of ground work covered, just need to know my target market for clients.
As I realise a lot of you boys and girls would like to increase your fortunes, wanted to bounce the Idea around on here a bit to get feedback from you guys.
Let me know what you think.
Projects will range from barn, warehouse conversions to small housing estates and new build executive homes. Also can look at Commercial opportunities as well. retail parks etc.
The Idea is that my company do all of the running around, legal work, PP, Land acquisition, on several potential developments.
I have one In development at the moment, to make an apartment building in Gillingham which will take a few months to put in place, rough return would be about £450k on about £600k build cost... to be finalised. My fee would be around 15%
let me know what u think
David
The aim is to take all of the hard work out of property development and present an Investor with a project fully in place and awaiting funding or management.
I have got a lot of ground work covered, just need to know my target market for clients.
As I realise a lot of you boys and girls would like to increase your fortunes, wanted to bounce the Idea around on here a bit to get feedback from you guys.
Let me know what you think.
Projects will range from barn, warehouse conversions to small housing estates and new build executive homes. Also can look at Commercial opportunities as well. retail parks etc.
The Idea is that my company do all of the running around, legal work, PP, Land acquisition, on several potential developments.
I have one In development at the moment, to make an apartment building in Gillingham which will take a few months to put in place, rough return would be about £450k on about £600k build cost... to be finalised. My fee would be around 15%
let me know what u think
David
Sounds like you'd be competing with some pretty large organisations such as DTZ, Kier Group etc etc.
What will you be able to offer which the 'big boys' don't?
Not trying to put a downer on it, just questioning the marketplace. Besides, if you ever need any project management, space planning or interior design involvement on these developments I may be knocking on your inbox
What will you be able to offer which the 'big boys' don't?
Not trying to put a downer on it, just questioning the marketplace. Besides, if you ever need any project management, space planning or interior design involvement on these developments I may be knocking on your inbox
We Hope to be different by preparing a project and essentially selling the rights to develop it.
We will not offer project management. I just won't have the resources to finance that. I don't believe we will be in direct competition so that should be the niche.
and yes, could potentially put something together if your in that field.
We will not offer project management. I just won't have the resources to finance that. I don't believe we will be in direct competition so that should be the niche.
and yes, could potentially put something together if your in that field.
Am I being picky or is there some confusion between looking for "investors" and offering a chance to develop a project?
In our field we make a clear distinction between developers and investors. Developers will be active but investors will generally be looking to take the back seat and let someone else do the construction.
If the target is for genuine investors in the sense in which we use it then it would be useful to team up with a contractor who can take the project through to completion. "Developers" would probably be finding their own deals anyway.
Unfortunately I have seen some investors in this sort of situation be completely fleeced by their builder. Anyone going into such a project has to understand where and how their investment can be abused.
Fear of something like that happening could put off a lot of potential business and dealing with the issues of cost and delivery could be difference between your venture making it or disappearing with the also rans.
In our field we make a clear distinction between developers and investors. Developers will be active but investors will generally be looking to take the back seat and let someone else do the construction.
If the target is for genuine investors in the sense in which we use it then it would be useful to team up with a contractor who can take the project through to completion. "Developers" would probably be finding their own deals anyway.
Unfortunately I have seen some investors in this sort of situation be completely fleeced by their builder. Anyone going into such a project has to understand where and how their investment can be abused.
Fear of something like that happening could put off a lot of potential business and dealing with the issues of cost and delivery could be difference between your venture making it or disappearing with the also rans.
Billsnemesis said:
Am I being picky or is there some confusion between looking for "investors" and offering a chance to develop a project?
In our field we make a clear distinction between developers and investors. Developers will be active but investors will generally be looking to take the back seat and let someone else do the construction.
If the target is for genuine investors in the sense in which we use it then it would be useful to team up with a contractor who can take the project through to completion. "Developers" would probably be finding their own deals anyway.
Unfortunately I have seen some investors in this sort of situation be completely fleeced by their builder. Anyone going into such a project has to understand where and how their investment can be abused.
Fear of something like that happening could put off a lot of potential business and dealing with the issues of cost and delivery could be difference between your venture making it or disappearing with the also rans.
I think its a great idea, I want to manage a property project, have the funds, but don't have the contacts to get the land etc too start with. If for a fee, someone can provide me with that along with some back up. Its perfect.
Billsnemesis said:Good point, well made... We did try to put together a project for an 'Investor' (A city lawyer) made the mistake of presuming he would give up his golf etc to make extra money... nope! He wanted to take a back seat and see someone else manage the whole project for him. Immediately I saw things from his perspective, and thats where the Idea sprouted from.
Am I being picky or is there some confusion between looking for "investors" and offering a chance to develop a project?
In our field we make a clear distinction between developers and investors. Developers will be active but investors will generally be looking to take the back seat and let someone else do the construction.
If the target is for genuine investors in the sense in which we use it then it would be useful to team up with a contractor who can take the project through to completion. "Developers" would probably be finding their own deals anyway.
Unfortunately I have seen some investors in this sort of situation be completely fleeced by their builder. Anyone going into such a project has to understand where and how their investment can be abused.
Fear of something like that happening could put off a lot of potential business and dealing with the issues of cost and delivery could be difference between your venture making it or disappearing with the also rans.
Its still a very raw idea, and there is a lot of work to be put in.
I don't mean to cause offence, but judging by some of your other posts, you seem the sort of person who is very untrusting of people you pay to help you... conveyancers, estate agents etc. and while I will defend my corner, being an estate agent myself
I can agree with the fact that rogues remain in these Professions. Hey everyone, don't tar us all with the same brush, I'm not out to 'fleece' anyone!!
I agree that it will be a hurdle to gain trust... but thats also what I do 10 hours a day, every day
KingRichard said:
Just putting some feelers out on a project I'm working on at the moment...
The aim is to take all of the hard work out of property development and present an Investor with a project fully in place and awaiting funding or management.
I have got a lot of ground work covered, just need to know my target market for clients.
As I realise a lot of you boys and girls would like to increase your fortunes, wanted to bounce the Idea around on here a bit to get feedback from you guys.
Let me know what you think.
Projects will range from barn, warehouse conversions to small housing estates and new build executive homes. Also can look at Commercial opportunities as well. retail parks etc.
The Idea is that my company do all of the running around, legal work, PP, Land acquisition, on several potential developments.
I have one In development at the moment, to make an apartment building in Gillingham which will take a few months to put in place, rough return would be about £450k on about £600k build cost... to be finalised. My fee would be around 15%
let me know what u think
David
I have outline planning in at the moment for 3 detached on my back garden. Am I correct in thinking you would then put all the relevant parties together and save me doing all the hard work. And would your 15% come form the investors as oposed to someone like my self who has the property/land.
Phil
As Clapham has already suggested this really is as old as the hills and is what us nasty old developer types spend our time doing, making money for ourselves and our joint venture partners.
My own operation will often take the decision to trade a site rather than develop it either way the work we do is the same all the way until the land is bought. Either way it seems you want to be a developer making the dough without necessarily taking the risks associated with building a site out, fine but these are exactly the sort of deals all developers are after. What we are all after is getting in long before it gets into the hands of an agent or indeed the agent introduces it to us to do all the work on their clients behalf, a subject to planning deal, very nice!
Consider the up front costs of all the following all of which you are risk of bearing should the deal fall on its backside.
Legal acquisition, you’ll need either conditional subject to planning contract or option agreement.
• Architects fees
• Highway engineering fees
• Ground investigation to ascertain any contamination issues and ground conditions for pilling
• Tree surveys
• Laser site survey
• Deposit monies to go with the contract (refundable)
There can and will be many others but even on a modest deal of say four plots your going to be for £20g’s plus if your lucky not to mention contract deposit of 5% if your lucky.
Do also spend serious time on considering the real flip side in doing these sorts of deals, how long can you afford to sit on the land after legal completion without it breaking your arms financially? I complete one on the 7th of Jan I’ve held for over 2 years, yes it will double up on the original purchase but the interest needs some staying with. If you think you can simply back to back contracts I sincerely doubt in the current market you’ll be that lucky.
Please also believe me that there are more potential deals than I can shake a stick at on the table at the moment so the days of the unwitting house builder paying over the odds is now well behind us.
If you’re a residential agent do bear in mind it is damn hard to be both poacher and gamekeeper, be absolutely sure which one you are as once you cross the divide it is very hard to turn back.
This is what I do and yes you can make a lot of dough but please do believe me when I say it really isn’t that easy and I am damn pleased I’ve got a construction company to go with it otherwise you can go a long while without any loot coming in.
Good luck.
My own operation will often take the decision to trade a site rather than develop it either way the work we do is the same all the way until the land is bought. Either way it seems you want to be a developer making the dough without necessarily taking the risks associated with building a site out, fine but these are exactly the sort of deals all developers are after. What we are all after is getting in long before it gets into the hands of an agent or indeed the agent introduces it to us to do all the work on their clients behalf, a subject to planning deal, very nice!
Consider the up front costs of all the following all of which you are risk of bearing should the deal fall on its backside.
Legal acquisition, you’ll need either conditional subject to planning contract or option agreement.
• Architects fees
• Highway engineering fees
• Ground investigation to ascertain any contamination issues and ground conditions for pilling
• Tree surveys
• Laser site survey
• Deposit monies to go with the contract (refundable)
There can and will be many others but even on a modest deal of say four plots your going to be for £20g’s plus if your lucky not to mention contract deposit of 5% if your lucky.
Do also spend serious time on considering the real flip side in doing these sorts of deals, how long can you afford to sit on the land after legal completion without it breaking your arms financially? I complete one on the 7th of Jan I’ve held for over 2 years, yes it will double up on the original purchase but the interest needs some staying with. If you think you can simply back to back contracts I sincerely doubt in the current market you’ll be that lucky.
Please also believe me that there are more potential deals than I can shake a stick at on the table at the moment so the days of the unwitting house builder paying over the odds is now well behind us.
If you’re a residential agent do bear in mind it is damn hard to be both poacher and gamekeeper, be absolutely sure which one you are as once you cross the divide it is very hard to turn back.
This is what I do and yes you can make a lot of dough but please do believe me when I say it really isn’t that easy and I am damn pleased I’ve got a construction company to go with it otherwise you can go a long while without any loot coming in.
Good luck.
hi,
i'm just embarking on a similar project,
as with all businesses the key to it is local knowledge and knowing your market.
ofcourse i cant compete with the big house builder companies, they get the site, survey, architecture etc all done in house, but i do beleive there is a market for the small builder,
that small spot of empty land you've driven past for the last 3 years, or the petrol station that just closed down is the place to do it, but you need to be in the position of making an offer on the land before its even for sale
you'll only get 3 or 4 houses on it, so it doesnt register on the big boys radar and the small local builders dont have the time to do the land search, planning consent, cut the deal etc, but want to build houses.
a lot will depend on your local councils housing policy, some places are very stringent others not so. in my area houses are being put up very quickly in some of the most unlikely places, single houses, small blocks and big 300+ unit developments are all currently in progress.
i beleive the rough rule of thumb equation to use is; (please correct me if i am wrong)
total market value of houses / 3 = how much a builder is willing to pay for the land.
so you then fit your costs/profit into that figure
ofcourse youre also finding a buyer whilst the planning consent is pending, then ideally you can complete the purchase and sale of the land at the same time
so make friends with a solicitor and an architect and the local planning officer, make all the deals 'subject to...' so you can get out if it goes wrong.
its a time consuming endeavour, you may have a dozen sites in mind but only one will go ahead, but once you have built up a database of active local builders its just a case of sticking with the deal and keeping it moving forward.
my two pence worth... ;-)
simon
i'm just embarking on a similar project,
as with all businesses the key to it is local knowledge and knowing your market.
ofcourse i cant compete with the big house builder companies, they get the site, survey, architecture etc all done in house, but i do beleive there is a market for the small builder,
that small spot of empty land you've driven past for the last 3 years, or the petrol station that just closed down is the place to do it, but you need to be in the position of making an offer on the land before its even for sale
you'll only get 3 or 4 houses on it, so it doesnt register on the big boys radar and the small local builders dont have the time to do the land search, planning consent, cut the deal etc, but want to build houses.
a lot will depend on your local councils housing policy, some places are very stringent others not so. in my area houses are being put up very quickly in some of the most unlikely places, single houses, small blocks and big 300+ unit developments are all currently in progress.
i beleive the rough rule of thumb equation to use is; (please correct me if i am wrong)
total market value of houses / 3 = how much a builder is willing to pay for the land.
so you then fit your costs/profit into that figure
ofcourse youre also finding a buyer whilst the planning consent is pending, then ideally you can complete the purchase and sale of the land at the same time
so make friends with a solicitor and an architect and the local planning officer, make all the deals 'subject to...' so you can get out if it goes wrong.
its a time consuming endeavour, you may have a dozen sites in mind but only one will go ahead, but once you have built up a database of active local builders its just a case of sticking with the deal and keeping it moving forward.
my two pence worth... ;-)
simon
fuzzysi said:
hi,
i beleive the rough rule of thumb equation to use is; (please correct me if i am wrong)
total market value of houses / 3 = how much a builder is willing to pay for the land.
simon
Not any more I’m afraid.
This is a common mistake made by agents when appraising land values which originates from underestimating accurately what the build costs will be. Currently for a reasonably specified house one wouldn’t expect to get something built by a contractor for much less than £95 sq.ft. after you’ve allowed them to make a profit. That figure assumes there are no exceptional costs such as large scale decontamination the costs of which have rocketed in recent months. Beware, that cheeky looking petrol station is not quite the ‘Golden Fleece’ you might believe it to be. 30% absolute tops on land and that’s on a quick in and out deal.
fuzzysi said:
of course youre also finding a buyer whilst the planning consent is pending, then ideally you can complete the purchase and sale of the land at the same time
This sounds good but in practical terms is not that likely, you’ve got to be sufficiently funded to stick with the project after legal completion.
I can not stress strongly enough this type of venture could leave you staring at a whole load of costs and a return which was not worth the risk.
Please be careful!
Hi Guys, thanks for all your feedback, its really helpful.
Truth is this has been one of many business ideas I have looked into, my opinion is that without hitting a few walls, i'll never learn to jump them.
I'm sick of trundling off to work every morning, just to make someone else more wealthy. I should be putting my efforts into developing Ideas and learning how to network and build business.
Not that I don't hold my MD in the highest regard... he has done what I've been dreaming of all these years.
Building a business is never an easy thing to do... I've watched my family go bankrupt and pick themselves up again. recovering took the best part of 15 years. I know the level of commitment involved, and realise that its absolutely crucial to get the model right.
Thanks for all your help it has been invaluable and has brought to light many issues which I had not previously thought would be problems.
BTW anyone got a cracking idea and need partners?
Truth is this has been one of many business ideas I have looked into, my opinion is that without hitting a few walls, i'll never learn to jump them.
I'm sick of trundling off to work every morning, just to make someone else more wealthy. I should be putting my efforts into developing Ideas and learning how to network and build business.
Not that I don't hold my MD in the highest regard... he has done what I've been dreaming of all these years.
Building a business is never an easy thing to do... I've watched my family go bankrupt and pick themselves up again. recovering took the best part of 15 years. I know the level of commitment involved, and realise that its absolutely crucial to get the model right.
Thanks for all your help it has been invaluable and has brought to light many issues which I had not previously thought would be problems.
BTW anyone got a cracking idea and need partners?
Now Richard rarely do I feel this charitable but here’s one for you to think over.
It seems to me you’re keen to combine some of that agency experience into a property deal or two, nothing wrong with that, so did I once upon a time!
I would be very surprised if in your agency environment you are not inundated with private punters on the look out for single plots, if not your in the only part of the world where this doesn’t seem to be the case.
Find a site for three or four dwellings in an area which is not sensitive planning wise. Acquire the site and put all the roads and services in creating a site which can be sold off as individual plots to private punters willing to pay over the odds for a square of dirt. This one can really put a flat six on your drive if that’s your favourite sort of charger.
It never ceases to amaze me how much a punter will pay for a single plot and it is no underestimation that if on a plot by plot basis a developer is willing to pay £100k per plot a punter will give £140 - £150k.
Now just remember where this came from when you go to your nearest Porsche dealer to have your intelligence insulted by their sales staff in a year or so from now.
Oh yes, for those who know their property a level market is a damn site better to make money in than the inflation fuelled years we’ve just had, all you ever need to do is do your land deals properly and the rest will surely follow.
PS I see you’re in the Gillingham part of the world, is there still a Baker Construction on the way into the town? It has provided hours of entertainment over the years!
It seems to me you’re keen to combine some of that agency experience into a property deal or two, nothing wrong with that, so did I once upon a time!
I would be very surprised if in your agency environment you are not inundated with private punters on the look out for single plots, if not your in the only part of the world where this doesn’t seem to be the case.
Find a site for three or four dwellings in an area which is not sensitive planning wise. Acquire the site and put all the roads and services in creating a site which can be sold off as individual plots to private punters willing to pay over the odds for a square of dirt. This one can really put a flat six on your drive if that’s your favourite sort of charger.
It never ceases to amaze me how much a punter will pay for a single plot and it is no underestimation that if on a plot by plot basis a developer is willing to pay £100k per plot a punter will give £140 - £150k.
Now just remember where this came from when you go to your nearest Porsche dealer to have your intelligence insulted by their sales staff in a year or so from now.
Oh yes, for those who know their property a level market is a damn site better to make money in than the inflation fuelled years we’ve just had, all you ever need to do is do your land deals properly and the rest will surely follow.
PS I see you’re in the Gillingham part of the world, is there still a Baker Construction on the way into the town? It has provided hours of entertainment over the years!
KingRichard said:
I'm sick of trundling off to work every morning, just to make someone else more wealthy. I should be putting my efforts into developing Ideas and learning how to network and build business.
Not that I don't hold my MD in the highest regard... he has done what I've been dreaming of all these years.
sounds like you are taking a big jump into unknow territorory with high risk/reward and looking for a get rich quick options.
Why not stick to what you know, set up your own estate agency, become sucessful at that and then look to spend your profit after securing your bases on get rich quick.
superlightr said:Have to admit, I am
I'm sick of trundling off to work every morning, just to make someone else more wealthy. I should be putting my efforts into developing Ideas and learning how to network and build business.
Not that I don't hold my MD in the highest regard... he has done what I've been dreaming of all these years.
sounds like you are taking a big jump into unknow territorory with high risk/reward and looking for a get rich quick options.
Why not stick to what you know, set up your own estate agency, become sucessful at that and then look to spend your profit after securing your bases on get rich quick.
ing good at what I do... Don't want the get rich quick option, I would enjoy overcoming adversity and creating an asset that I had worked hard for and would create lots of dosh - eventually! The estate agency venture is one that I have naturally, and seriously looked into with a partner. The trouble with Estate agency is the amount of overheads that have to be paid out before you can even generate a pipeline, leave alone a turnover, then lastly there is profit. You see, Agency is always 'No Sale, No fee' and you don't get paid unless it all goes through.
The cash-flow forecast for Estate agency made depressing reading
mounting losses for up to two years before starting to break even and then another couple to make a profit.
Mind you I did design the Forecast with a lot of safety margin... allowing for shit market conditions etc. Maybe I should play safe and stick to what I'm good at. And re-direct my income into higher risk ventures when I actually have an income to speak of
thanks for that
most new businesses will have a 3 year break even time. 10k for an office 10k for advertising, 10k to move & live on. 30k each year min for a new business but when the income does come in, then your onto a winner.
Im in the same line as you - well not really,we just let. Spent a lot on buying a business but has been well worth it medium and long term. Hard in the first 4-5 years but paying dividends now.
good luck,.
Im in the same line as you - well not really,we just let. Spent a lot on buying a business but has been well worth it medium and long term. Hard in the first 4-5 years but paying dividends now.
good luck,.
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