"I want to become a Property Developer, but I'm not quite ready to get started." You guessed it, another quote from the list of things people say to me a lot.
Often the reason they're not ready is some form of mental roadblock. Fear of failure, procrastination, lack of confidence - the list goes on. That's why my Property Development Formula program includes a mindset coach, along with all the property development mentoring. All of us need a helping hand to get our head straight at times.
But for now I'm talking about the more practical reasons you might not feel ready, and what to do about each one.
Tax Returns
Ugh. The annual pain of getting your tax return ready. And if you're behind, it's even worse. But guess what? Without your returns being up to date, you are going to find it very difficult to get finance to start your property development journey. A lot of lenders want to know tax returns are up to date as part of the property development finance approval process.
And even if you're looking to do a joint venture with a money partner, leaving such an important task undone isn't exactly a huge recommendation of your services.
So stop procrastinating and get this area of your life sorted. Or if you don't want to do it yourself, then pay to get an accountant or bookkeeper to sort it out.
Finance
As a Property Developer, an important member of your "Dream Team" is a mortgage broker. Not just any random broker, but one who specialises in working with property developers. They need to understand non-standard applicants, and have access to many different types of lenders aside from the main banks.
Your broker can take a look at your current situation, and give you guidance on what sort of equity and serviceability you have. They can also help you identify any weaknesses they see in your current financial situation. That gives you the opportunity to sort those out before you need finance. For example, do your tax returns!! Oh, I said that already?
And what if the broker says there's a snowball's chance in a hot place that you'll get finance? Then you'd better make sure that getting educated about No Money Down Deals is a big priority for you. More on that later.
Structures
When you come across a cracking property development deal, it will make your life much easier if you already have your structure set up and ready to go. Now, I'm not saying you can't run around like a mad chook and get it done in a very short space of time when you identify a cracking deal, because you can. And if you're reluctant to have a structure sitting around for months while you find a deal, you can certainly do things that way.
What I would say, though, is that you have the conversations with your lawyer and accountant about the best structure to use NOW. That way, when the cracking deal arrives, you can immediately get your preferred structure happening. You don't have to waste time doing the research, because you will already know what you need, given your property development structure can have major tax and asset protection implications.
Education
Now, given I'm an educator, this is very definitely something I believe should be on your list! And spoiler alert - there might even be a little bit of shameless self-promotion ahead. But rest assured it's all in your best interests!
It was the wise Maya Angelou who said "Do the best you can until you know better. Then when you know better, do better." Personally, I believe you never stop learning as a Property Developer. No one person can ever know it all. So the sooner you jump on the bandwagon and educate yourself, the better off you'll be. Plus, as Maya suggests, as you learn, you will improve and do better - which equates to more profits!
So where to start? Well, there's a lot you can learn without paying a cent. If you've stumbled across this article by chance, then I'd highly recommend you head back to our main Property Pulse page and cherry-pick a few more articles that you feel may suit your needs.
Next up, follow the Property Developer Network Facebook group. There, as well as asking questions, you can watch my weekly Sunday Session broadcast. I do these most Sundays, and they're a mix of talks on specific subjects, interviews with guests, Open Mic Nights and more. Plenty of great information. And to save you having to trawl through the page looking for old episodes, you can find all the back sessions on our YouTube channel.
If you're willing to step it up a notch, then come to a Monthly Meetup. In person is always best, but they're also accessible virtually if you can't make it in person. If you join as an annual member, you also get access to the back catalogue which contains many years' worth of Meetup recordings. An absolute gold mine of information.
Seriously, you can learn a lot for very little if you access all those resources. And if you want to learn the process in detail from start to finish, plus have access to both a mentor and a coach to support you along the way, then my Property Development Formula is for you.
Okay, that's enough shameless self-promotion. Moving on...
Strategy - Deal Type & Size
When you put together all the practical pieces you've assembled so far, and then add in the things you've learnt about the process of property developing, you should be in a good position to determine what development strategy fits your circumstances. You'll also know your financial resources, whether on your own or together with a money partner, and so have some idea of what type of deal size fits those parameters. Choosing the right property development strategy is one of the biggest factors in long-term success.
If you're more adventurous, in reality your potential deal size is unlimited. Don’t let your lack of resources stop you from being resourceful. Having said that, I do recommend starting small and building your skills as you increase your deal size, rather than plunging straight into the deep end of the pool with a really big development deal.
Area Expert
Take time getting to know the area where you're planning to do deals. This is a vital piece of the puzzle. When you're truly an Area Expert, and a development deal comes across your desk, you will already have a good idea whether it's a deal you should spend time investigating. Becoming an area expert helps you identify profitable property development opportunities much faster.
It will also mean you've done some rough numbers and found out whether or not the area is even suitable in the first place. After all, just because a site is developable doesn't mean it's profitable. Too often I see budding Property Developers get frustrated because they can't find any deals that stack up in their area, and so think they're doing something wrong.
In fact, it's quite possible that although the strategy works in a lot of areas, it doesn't work in yours. If that's the case, change your strategy or change your area - don't give up.
Follow all the suggestions in this article, and before you know it, instead of saying "Ready, Set..." you'll be able to say "Ready, Set, Go!!"
Often the reason they're not ready is some form of mental roadblock. Fear of failure, procrastination, lack of confidence - the list goes on. That's why my Property Development Formula program includes a mindset coach, along with all the property development mentoring. All of us need a helping hand to get our head straight at times.
But for now I'm talking about the more practical reasons you might not feel ready, and what to do about each one.
Tax Returns
Ugh. The annual pain of getting your tax return ready. And if you're behind, it's even worse. But guess what? Without your returns being up to date, you are going to find it very difficult to get finance to start your property development journey. A lot of lenders want to know tax returns are up to date as part of the property development finance approval process.
And even if you're looking to do a joint venture with a money partner, leaving such an important task undone isn't exactly a huge recommendation of your services.
So stop procrastinating and get this area of your life sorted. Or if you don't want to do it yourself, then pay to get an accountant or bookkeeper to sort it out.
Finance
As a Property Developer, an important member of your "Dream Team" is a mortgage broker. Not just any random broker, but one who specialises in working with property developers. They need to understand non-standard applicants, and have access to many different types of lenders aside from the main banks.
Your broker can take a look at your current situation, and give you guidance on what sort of equity and serviceability you have. They can also help you identify any weaknesses they see in your current financial situation. That gives you the opportunity to sort those out before you need finance. For example, do your tax returns!! Oh, I said that already?
And what if the broker says there's a snowball's chance in a hot place that you'll get finance? Then you'd better make sure that getting educated about No Money Down Deals is a big priority for you. More on that later.
Structures
When you come across a cracking property development deal, it will make your life much easier if you already have your structure set up and ready to go. Now, I'm not saying you can't run around like a mad chook and get it done in a very short space of time when you identify a cracking deal, because you can. And if you're reluctant to have a structure sitting around for months while you find a deal, you can certainly do things that way.
What I would say, though, is that you have the conversations with your lawyer and accountant about the best structure to use NOW. That way, when the cracking deal arrives, you can immediately get your preferred structure happening. You don't have to waste time doing the research, because you will already know what you need, given your property development structure can have major tax and asset protection implications.
Education
Now, given I'm an educator, this is very definitely something I believe should be on your list! And spoiler alert - there might even be a little bit of shameless self-promotion ahead. But rest assured it's all in your best interests!
It was the wise Maya Angelou who said "Do the best you can until you know better. Then when you know better, do better." Personally, I believe you never stop learning as a Property Developer. No one person can ever know it all. So the sooner you jump on the bandwagon and educate yourself, the better off you'll be. Plus, as Maya suggests, as you learn, you will improve and do better - which equates to more profits!
So where to start? Well, there's a lot you can learn without paying a cent. If you've stumbled across this article by chance, then I'd highly recommend you head back to our main Property Pulse page and cherry-pick a few more articles that you feel may suit your needs.
Next up, follow the Property Developer Network Facebook group. There, as well as asking questions, you can watch my weekly Sunday Session broadcast. I do these most Sundays, and they're a mix of talks on specific subjects, interviews with guests, Open Mic Nights and more. Plenty of great information. And to save you having to trawl through the page looking for old episodes, you can find all the back sessions on our YouTube channel.
If you're willing to step it up a notch, then come to a Monthly Meetup. In person is always best, but they're also accessible virtually if you can't make it in person. If you join as an annual member, you also get access to the back catalogue which contains many years' worth of Meetup recordings. An absolute gold mine of information.
Seriously, you can learn a lot for very little if you access all those resources. And if you want to learn the process in detail from start to finish, plus have access to both a mentor and a coach to support you along the way, then my Property Development Formula is for you.
Okay, that's enough shameless self-promotion. Moving on...
Strategy - Deal Type & Size
When you put together all the practical pieces you've assembled so far, and then add in the things you've learnt about the process of property developing, you should be in a good position to determine what development strategy fits your circumstances. You'll also know your financial resources, whether on your own or together with a money partner, and so have some idea of what type of deal size fits those parameters. Choosing the right property development strategy is one of the biggest factors in long-term success.
If you're more adventurous, in reality your potential deal size is unlimited. Don’t let your lack of resources stop you from being resourceful. Having said that, I do recommend starting small and building your skills as you increase your deal size, rather than plunging straight into the deep end of the pool with a really big development deal.
Area Expert
Take time getting to know the area where you're planning to do deals. This is a vital piece of the puzzle. When you're truly an Area Expert, and a development deal comes across your desk, you will already have a good idea whether it's a deal you should spend time investigating. Becoming an area expert helps you identify profitable property development opportunities much faster.
It will also mean you've done some rough numbers and found out whether or not the area is even suitable in the first place. After all, just because a site is developable doesn't mean it's profitable. Too often I see budding Property Developers get frustrated because they can't find any deals that stack up in their area, and so think they're doing something wrong.
In fact, it's quite possible that although the strategy works in a lot of areas, it doesn't work in yours. If that's the case, change your strategy or change your area - don't give up.
Follow all the suggestions in this article, and before you know it, instead of saying "Ready, Set..." you'll be able to say "Ready, Set, Go!!"
