I often get asked what I do for a living. My ‘elevator pitch’ or quick answer is…” I help people develop property by managing all the details from finding the right site through to finding the right tenants on completion. The result is creation of a large amount of equity through the development process.”
Their next question is always…why don’t you just develop property for yourself?
The answer to this is a bit longer, but to keep it short and sweet… I love sharing knowledge and find it very satisfying project managing developments. I do have a stake in all our developments anyway, as I share in the equity we create. This means I take personal ownership of the developments. Over the past 8 years the number of developments Property Bloom has managed stands at 53. This is on average of 6.6 developments per year. Also, the bottom line is that there is no way I could finance 53 developments on my own. By doing them for others, I get to do what I love and make a living from it. No brainer really.
So what are the benefits of using a professional project manager for your development?
Save money; a good project manager will have established discount structures in place with builders, architects, surveyors and other contractors. On a 3 villa project, the builder’s discount alone saves our clients over $12,000. On a 6 villa project we’re saving them well over $30,000. These savings help offset the project management fee.
Save time; To set up your own development team, find the right site, run feasibilities, design the project, manage the planning phase and then the build phase for even a small dual occupancy can be very time consuming. If you are trying to hold down a full time job at the same time, you will find it challenging. Using our refined system, we fast track all stages of the project for clients.
Minimize risk; if it’s your first development then just one error may mean the difference between a profitable development and a non-profitable one. Using an experienced PM takes some of the risks away. Developing will always have an element of risk, every development is different and we’ve learnt something new from each one we’ve finished.
Learn how to develop; simply by going through the process whilst working with a PM you will learn so much. If you engage a PM that is happy to teach you along the way, then you may be ready to manage your next project on your own.
Access to sites not on open market; our sources know what we’re looking for and will contact us about sites they may have available or have coming up. About 50% of our sites have not hit the open market.
Professionally managed & recorded; the paperwork alone can be mountainous and you want to ensure all documents are kept to maximize your tax return and so you can use them as a reference when doing your own project.
Local knowledge and experience; Property Bloom specializes in the Lower Hunter Region of NSW. So we know the markets very well and can quickly analyze a potential site location. Our contact base of agents, contractors, builders, professionals is broad and we have been able to weed out any suppliers we have not been happy with in the past. We continue to fine tune and improve our systems and processes.
Keep your day job; cashflow is important when developing so all of our clients have day jobs to fund their developments. It enables them to keep moving forward with building their property portfolios. We often have clients running two projects simultaneously to fast track their wealth creation.
If you’re thinking of developing but are a little worried, work with a project manager who has local knowledge and good experience in the area you want to develop in. You’ll essentially be buying yourself the time and experience it would have taken you to get up to the same level.
No comments:
Post a Comment