If I had a top 10 list of questions I get asked most often, then "How do I get started in Property Development?" would definitely be in the TOP 3, and possibly TOP OF THE LIST.
Which is a good thing, as finding out what you don't know is better than just deciding it's too hard and not bothering to start.
So, do you want the good news or the good news?
Okay, let's start with the good news. Getting started in Property Development is easy if you have a process to follow. That’s why I developed my 'Rapid Elimination Method' for finding deals that are both developable and profitable.
And the good news? It takes WORK! "Hang on a minute", I can hear you saying, "Isn't that bad news??"
Not at all. If it didn't take work, a whole lot more people would be doing it, which means there would be less opportunities for you.
The secret is to make sure the work you do is the RIGHT work, so you get the results you're after. It's easy to get online and start trawling through property listings looking for deals. Most people love that part! But that is definitely not where you need to start.
"Okay, fine", I can hear you grumble, "no more randomly looking online, but now tell me what I should be doing!"
Choose Your Strategy
A big reason people don't get started in Property Development is because they fall into the trap of chasing bright, shiny objects all over the place, which I like to call bright shiny objectitis. This ties in to what I said before about no more trawling real estate listings. Focus is key.
Because although it's easy enough to find a renovation deal, or a subdivision deal, or a rooming house deal that works, you end up being jack of all trades and master of none. What you need to become is an absolute grandmaster at your chosen development strategy. That way you can constantly build on your knowledge base, going deeper and deeper, getting better results every time.
Start Small
One of the biggest reasons people don't get started in Property Development is because they look at a 5-storey apartment complex that's being built nearby, and the thought of trying to do that themselves frightens the bejeezus out of them.
Don't panic! The secret to getting started in property development is starting small. Maybe turn one property into 2. Learn the skills, build your team of experts, and grow into the bigger development deals down the track. How do you eat an elephant? One bite at a time. So make your first bite one you can manage.
Become an Area Expert
This ties in to choosing your development strategy. Just because a strategy can be done, doesn't mean it should be done in every area. You need to understand your chosen area really well, and confirm it's an area where your chosen strategy is going to work.
Too often I see people decide they want to buy a house on a corner block and split off the back yard, so they go ahead and buy the house down the road without making sure it's a profitable deal in their area. Remember, every strategy works, but not everywhere!
So the secret here is to narrow your focus down to one specific Council. The advantage of doing this is you can get to know that Council really, really well, and only have to remember one set of rules for your chosen strategy. There are 537 Councils throughout Australia, and the last thing you need is having to learn a whole new set of rules in a new Council for every deal you see.
Then, within that one council, you research all the suburbs until you have found 3 suburbs where your chosen development strategy is going to be profitable. That's when you start to become an area expert - 1 Strategy, 1 Council, 3 Suburbs.
My Rapid Elimination Method
Next up, your goal is to throw away as many properties with development potential as possible. "What?" I hear you cry. "Surely the idea is to find as many developable properties as possible?"
Yes, but developable isn't the same as profitable. And it makes sense that the faster you can throw away sites that aren’t profitable, the more sites you can look at. My “Rapid Elimination Method” uses tollgates to do this. This involves:
Reality is that most properties don't make it past the Quick & Dirty 10 minute tollgate, which is great. Because then I can stop wasting time on them and focus on the ones that are much more likely to be profitable.
Build a Hotlist and Farm It
Now you have a list of sites in your area that fit your strategy, and have passed the first Quick & Dirty tollgate as having potential to be both developable and profitable, you can pursue those sites with laser-like focus. There are lots of ways you can do this, so I’ll leave that for the future stories! Stay tuned....
Which is a good thing, as finding out what you don't know is better than just deciding it's too hard and not bothering to start.
So, do you want the good news or the good news?
Okay, let's start with the good news. Getting started in Property Development is easy if you have a process to follow. That’s why I developed my 'Rapid Elimination Method' for finding deals that are both developable and profitable.
And the good news? It takes WORK! "Hang on a minute", I can hear you saying, "Isn't that bad news??"
Not at all. If it didn't take work, a whole lot more people would be doing it, which means there would be less opportunities for you.
The secret is to make sure the work you do is the RIGHT work, so you get the results you're after. It's easy to get online and start trawling through property listings looking for deals. Most people love that part! But that is definitely not where you need to start.
"Okay, fine", I can hear you grumble, "no more randomly looking online, but now tell me what I should be doing!"
Choose Your Strategy
A big reason people don't get started in Property Development is because they fall into the trap of chasing bright, shiny objects all over the place, which I like to call bright shiny objectitis. This ties in to what I said before about no more trawling real estate listings. Focus is key.
Because although it's easy enough to find a renovation deal, or a subdivision deal, or a rooming house deal that works, you end up being jack of all trades and master of none. What you need to become is an absolute grandmaster at your chosen development strategy. That way you can constantly build on your knowledge base, going deeper and deeper, getting better results every time.
Start Small
One of the biggest reasons people don't get started in Property Development is because they look at a 5-storey apartment complex that's being built nearby, and the thought of trying to do that themselves frightens the bejeezus out of them.
Don't panic! The secret to getting started in property development is starting small. Maybe turn one property into 2. Learn the skills, build your team of experts, and grow into the bigger development deals down the track. How do you eat an elephant? One bite at a time. So make your first bite one you can manage.
Become an Area Expert
This ties in to choosing your development strategy. Just because a strategy can be done, doesn't mean it should be done in every area. You need to understand your chosen area really well, and confirm it's an area where your chosen strategy is going to work.
Too often I see people decide they want to buy a house on a corner block and split off the back yard, so they go ahead and buy the house down the road without making sure it's a profitable deal in their area. Remember, every strategy works, but not everywhere!
So the secret here is to narrow your focus down to one specific Council. The advantage of doing this is you can get to know that Council really, really well, and only have to remember one set of rules for your chosen strategy. There are 537 Councils throughout Australia, and the last thing you need is having to learn a whole new set of rules in a new Council for every deal you see.
Then, within that one council, you research all the suburbs until you have found 3 suburbs where your chosen development strategy is going to be profitable. That's when you start to become an area expert - 1 Strategy, 1 Council, 3 Suburbs.
My Rapid Elimination Method
Next up, your goal is to throw away as many properties with development potential as possible. "What?" I hear you cry. "Surely the idea is to find as many developable properties as possible?"
Yes, but developable isn't the same as profitable. And it makes sense that the faster you can throw away sites that aren’t profitable, the more sites you can look at. My “Rapid Elimination Method” uses tollgates to do this. This involves:
- Quick & Dirty - 10 Minutes Max
- Detailed Analysis - 2 Hours Max
- Due Diligence - Whatever it takes
Reality is that most properties don't make it past the Quick & Dirty 10 minute tollgate, which is great. Because then I can stop wasting time on them and focus on the ones that are much more likely to be profitable.
Build a Hotlist and Farm It
Now you have a list of sites in your area that fit your strategy, and have passed the first Quick & Dirty tollgate as having potential to be both developable and profitable, you can pursue those sites with laser-like focus. There are lots of ways you can do this, so I’ll leave that for the future stories! Stay tuned....
