| by
Colm Dillon
From the desk of Colm Dillon
...
Author
"Residential
Development Made Easy
Hello Colm here
..
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 the
focus of most start-up developers.
Before starting the
process of selecting and buying land for development,
you need to decide who or what legal entity is going to
buy the 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 the money to purchase of the land,
but also borrow the money for the total development.
Each individual’s
personal circumstances are different. Add to that the
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 the 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 the word property
against these three
professionals. Please understand that in any profession,
there is the need to specialize.
I mean you would not get
the best advice from a lawyer who mainly did family law,
now would you. What's the 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 the quality of your
preparation ... the better the brief you will leave with
them.
Except for the Finance
Broker, they all charge by the 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 the 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
the land; borrows the money; develops it from the
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
the land. The next point to consider is what 'tool' are
we going use to gain control of the land.
You'll see as you
progress through the 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 the
local authority in order that you can build what you
want i.e. 4/6 townhouses, apartments etc. What happens
if the
authority says 'no.'
Do you still want to buy
the land? I don't think so!
So in this part of
Residential Development Made Easy
I talk about the various strategies you can adopt to
gain control of the land the correct way.
Time To Find That
Development Land
One of the things you'll
discover in my eBook, is that you can do several
development activities at the same time.
One of the 'Activities' I
tell you to do "well before" any of the above action
steps is to do your market research ... yes, I tell you
how to go about it!
Is it important? ...
Multi million dollar corporations spend 'millons' on
market research ... if it's good enough fore them to do
it, I think it's more than good enough
for you as well. It's professional ... it's necessary
... and it's in your financial interests.
You can do this kind of
research before you spend a 'dollar' of your own money
... you can do it in fun way ... but with a method
behind it ... all explained in Residential
Development Made Easy.
From that data base
you'll know what type and size of
accommodation product you want to develop. You'll
finally also determine what is the total 'make-up' of
your development.
OK, every authority has
different development rules. You should go to the
Authority's offices and find out 'the rules' for the
type of land you want to buy.
Architects know these
rules ... ask them to explain to you the quick 'easy'
way to determne a development site's capacity!
I give an easy example in
my eBook ... how to assess the number of residential
accommodation 'units' you can develop on a particular
land site ... from the front seat of your car. All this
impacts on your development costs.
Buy land for $100,000 and
put eight units - houses, whatever, on it the land cost
per unit is $12,500 per unit. If you local authority
says No and only allow you to put four
units on the land ... that looks like double yourcosts
to $25,000.
Development Land
Negotiation
Only you know if
you can 'Do It Yourself!'
Well, Can you negotiate
directly with the Seller of the land? It's the one I use
myself ... but is it for you?
It's you choice ... if
you go my way, my eBook gives you a 'word for word'
script. Even if you don't do it yourself, you need my
information to be able to manage the person who does it
for you.
Plus other options.
The Contract to
Buy The Land
In Residential
Development Made Easy I address this
subject in great detail.
You need to know the
detail of Contracts for the Sales & Purchase of
property.
In two sections of my
eBook I give a 'blow by blow' detailed explanation of
how to ensure your contract is prepared correctly for
what you want to achieve.
To emphasise how
important your understanding of the Contract is, let me
just say this to you.
After you have completed
all your market research, talked to your accountant,
lawyer, finance broker, many real estate agents, found
the property and successfully negotiated the purchase
... you then have to design your project and make
application to the Authority for permission to develop.
This is the point:
(read that last para
again)
After all that work, time
and money spent, the only thing that connects you
back to the land you want to develop is a 'bunch of
paper' called a Contract.
The words
on the Contract should ensure that, if you get your
approval to develop, that the Seller can't change
his/her mind and not sell you the land.
Got It?
By that time you've
invested a lot of time & money ... by getting an
approval to take a property from its current position,
say one house, to four townhouses, you have
increased its value Subsantially.
If your contract is not
correcly worded and the vendor can
'get out' of the contract, then the
value increase you have created passes
to him/her.
This is not a Happy
Experience ... read Residential Development
Made Easy and be aware of what to do.
Oh Yes, I almost forgot.
If you decide to negotiate the purchase of the property
yourself, I take you through a special session on
Contract Presentation to the Seller ...
By definition, there's a
'right way' and there's a 'wrong way.'
Life is full on these
decisions ...
'turn right and you're
successful,' or 'turn left and you're on your way to
trouble'... 'learn the right way and be successful,' or
'keep flying blind
and learn from the school of hard knocks.
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