Next thing to include is comparables in the area, both in terms of the property you're purchasing (if you haven't already purchased the property you're developing) and for the end product. The numbers you've used in your feasibility for Sales Revenue need to be backed up by solid comparables, not just blue sky figures that you're hoping to achieve. Specifications
This ties in to the research you've already done around your target market. What level of finish are you planning for your project, if you're going to be building? Your demographic research will have told you whether your target market is more likely to be Investors or Homeowners. This is a really important distinction to make.
Investors are going to want a product that is appealing, but at the same time robust enough to take the inevitable knocks and bumps that happen in the rental market. They're mostly going to be driven by the numbers around vacancy rates and rate of return. Homeowners, on the other hand, are much more swayed by the "wow" factor, and are not so concerned about having something generic and low maintenance, as they will be taking care of the property themselves.
The level of detail in this section may depend on whether or not you've already begun the project. If there are subdivision plans drawn up, or floor plans, renders etc because you're already well into the project, then include those too.Issues and Challenges
Always include an outline of issues and challenges you know you need to overcome during the project. What type of constraints are Council likely to put on the development? For example, are there likely to be issues around overlooking neighbouring properties, which will require the back townhouse in a group to be single-storey. Wherever possible, once you've identified the issue, include details of how you've solved it, or plan to solve it. Don't just include a list of challenges with no solutions.Team
This section is always important, but if you're a new Developer, then it's vital. Any Investor is going to think twice before handing their money over to a complete rookie, so you need to show that although you as the Developer might be a rookie, you have plenty of experienced people on your team who will bring the necessary knowledge and experience to the table. This is known as borrowed credibility, and it makes a big difference.
Some people to include here, depending on the size and type of project, are:
- Town Planner
- Civil Engineer
And lucky last in your IM is the feasibility for the deal. Often the full feasibility can be a bit overwhelming, so it's worth trying to keep it simple. The best way to do this is to use categories rather than individual line items. So you might have a category in the feasibility called "Development Approval", which is the total of 15 individual line items. Make sure that you do have the breakdown of all those line items available, so you can provide the full spreadsheet if requested.
Now that you have all the content for your IM, there's only one thing left to do - put it all together in a professional manner. This is NOT something you chuck together at a moment's notice on the back of an envelope. Take the time to make sure it's well written, and presented in an attractive way. If you don't have the computer skills to do that, then pay someone else to take your information and prepare it for you.
Because, as I said right at the start, Investors are potentially looking at multiple deals every week, so if you want to attract those bees, make sure yours is one of the most appealing, well-crafted honeypots they're looking at.