Author

"Residential Development Made Easy

For your development project to be successful every element must be planned carefully.

Buying land for development is just one intergal part of that planning process; however it tends to be focus of most start-up developers.

Before starting process of selecting and buying land for development, you need to decide who or what legal entity is going to buy land. For instance is it going to be in your personal name, in you and your partner's names or a company name.

Answering that question is important because you need decide who or what entity is going to borrow money to purchase of land, but also borrow money for total development.

Each individual’s personal circumstances are different. Add to that different States or Countries in which we live, and and you can see that they are many permutations to be determined before you can answer that question.

These decisions are fundamental to your work as a developer. After all we are developing to make money and setting up your structure correctly ensures that money you make is tax advantageous.

My best advise is to investigate and engage a good property accountant, a good property lawyer and a good property finance broker.

Notice I have bolded word property against these three professionals. Please understand that in any profession, there is need to specialize.

I mean you would not get best advice from a lawyer who mainly did family law, now would you. What's answer? Before appointing anybody ... interview them ... after all you are about to base your future on their advise.

Have your personal and or company financial details clearly set out and in particular have your 'wealth plan'defined so you can brief each of these professionals.

Don't do you thinking in front of them. It wastes time; is unprofessional and costs you money. The better quality of your preparation ... better brief you will leave with them.

Except for Finance Broker, they all charge by hour.

Please - please - please; if your best friend or Aunt Mary's next door neighbour is a lawyer, accountant, broker - don't engage them! Or if you want to go in that direction, interview them and ensure they have correct property background.

Residential Development Made Easy goes into more detail as to how you proceed with these professionals and determine which entity actually buys land; borrows money; develops it from greatest tax advantage to you and protects you legally

Let's Get Control of That Development Land

So your plan is progressing. We know who or what entity is going to buy land. The next point to consider is what 'tool' are we going use to gain control of land.

You'll see as you progress through development process, you need to build in as much flexibility 'for you' as you can.

We haven't got there yet, but eventually you'll need to made an application to local authority in order that you can build what you want i.e. 4/6 townhouses, apartments etc. What happens if authority says 'no.'

Do you still want to buy land? I don't think so!

So in this part of Residential Development Made Easy I talk about various strategies you can adopt to gain control of land correct way.

Time To Find That Development Land

One of things you'll discover in my eBook, is that you can do several development activities at same time.

One of 'Activities' I tell you to do "well before" any of above action steps is to do your market research ... yes, I tell you how to go about it!

Usually most basis reason reveolves around something you don't have.

Some of them may be:

1. I own land ... have capital & capacity to borrow ... but no experience.

2. I have capital & capacity to borrow ... partner has land ... both have no experience.

3. I am 'time poor' ... work full time and can't be personally involved ...

Let's suppose you want to find a land owner who will put their land into Joint Venture, (JV) and their land will be their major contribution to deal, plus some borrowings.

Let's consider implications of entering into a JV in first place.

After all, in a JV you have to take into account another persons attitude, decision making process, (or inability to make a decision), whether they have a logical and sensible mind ... list goes on.

So, getting into a JV must have a good payback for you. Whatever you lack is usually reason for entering into a JV.

I have noticed over years that JV's have a prime motivator, driver of deal (you), and other person is along for ride. For example: other party may have a wonderful property (site) and wants to develop it, but does not have knowledge. You "love" site and know that you could make it a very successful and profitable real estate development. You approched land owner.

Another example: maybe two individuals who have saved their capital, however individually it is inadaquate to undertake a project. Combining their capital and borrowing capacity will allow they to proceed.

I prefer a JV where both parties are equally motivated, have different skill bases, but each regards other as contributing equally. You know feelings that can occur, "I'm working harder that you ... all you do is phone and number crunching work ... I'm always out and about on site dealing with real work."

Don't forget why you got together in first place.

So there are many reasons for JV's. However, you must be clear as to why you are doing it, and it must be secured by a legally prepared JV Agreement.

A lot of 'practical people' hate legal documents ... a JV Agreement is a legal document and both parties must understand what it says. If one of you is a bit slack on this point, it is up to other to sit them down and go through it ... it's important!

Why?

Suppose JV deal hits a rough patch and your partner says, "I didn't know that ... why didn't you tell me ... I left all that legal garbage to you ... blah, blah." Got It, have arguments at beginning of deal ... not later.

A JV Agreement sets out what each party will contribute, both money and effort, and sets out each parties obligations. It also sets out what happens if parties 'fall-out' with each other as well as division of profits or losses.

There is a lot more at stake if you JV with your rother-in-Law, other relatives etc ... term 'on-going-nightmare' is a phrase that readily comes to mind.

And if one of those family JV's brake down, it dosen't matter how many pages are in JV Agreement, or what words say to prove that you are "RIGHT," ... as far as YOUR Brother-in-Law is concerned, you are a 'expletive deleted.'

Just thought I'd get that out of way!! OK?

One more thing ... doing a JV with a rich person, when you are many levels poorer then them, is also not smart.

Why?

Well, in simple terms, when 'push comes to shove' money rules ... The golden rule says, He who has GOLD, RULES.

Also, if rich guy tell you not to bother with a JV Agreement ... he appears to be saving you money ... tempting eh? ... what he's really doing is taking away your legal rights.

Yep, you'll have less rights than an employee. If that's deal ... better to be an employee!

In my my ebook I emphasise importance of getting Structure Work of business organised - you will build a much better development business from a secure foundation.

When you are doing your interviewing of associated professionals, try to see if they, personally, have any entrepreneutial tendancies.

They may have land, houses, houses for renovation etc but don't have 'TIME' or 'SKILLS' to do work themselves.