Investor

Discussion in 'Development' started by Brian84, 25th Jun, 2020.

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  1. Brian84

    Brian84 Well-Known Member

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    Hi everyone,

    I’m in the process of getting my builders licence (still about a year and a half away from getting it) and I was wondering how I would go about finding people to invest/partial fund some of my projects once I get the licence.

    I have been a carpenter for 19 years and I have had my own framing business for 15 years. I have now started the 2 years experience as a construction supervisor that fair trading need me to do to be eligible for the licence.

    I have successfully completed Cert i-iii in carpentry and Cert iv in building and construction.

    Who would I be best off speaking to about writing up an agreement for a potential investor so it is fair for both myself and the investor.

    Has anyone had experience with this before?
    How did it work out? Good or bad experiences are welcome.

    Regards Brian
     
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  2. Trainee

    Trainee Well-Known Member

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    Youd need successful projects to show investors. Maybe do a small reno, document everything so that investors can see it?

    what do you expect the investor contribute? For how long? Penalties? What entity owns the property? Whats your stake in it? Etc.
     
  3. Lindsay_W

    Lindsay_W Well-Known Member

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    What type and on what scale are the projects you're going to be looking to do?
     
  4. Brian84

    Brian84 Well-Known Member

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    I’m thinking house and land packages.
     
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  5. Brian84

    Brian84 Well-Known Member

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    Thanks for your reply. That’s something I will have to think about more.
     
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  6. Lindsay_W

    Lindsay_W Well-Known Member

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    Curious to know why would you need investors for that?
    Wouldn't you just be the builder for those house and land packages? and the 'investor' is just the client that's buying the property and funding the build? So technically you just need buyers.
     
  7. Brian84

    Brian84 Well-Known Member

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    I was thinking of buying the land and building a house and then sell them. I was looking for an investor to fund some of the project so I don’t outlay as much money or take out a loan for the full price. I would then repay the investor their initial investment plus a profit.
     
  8. Trainee

    Trainee Well-Known Member

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    Can imagine this for infill areas. What sort of numbers would this involve?
     
  9. Brian84

    Brian84 Well-Known Member

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    I’m thinking around $600-750k
     
  10. Lindsay_W

    Lindsay_W Well-Known Member

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    Why not buy the land, subdivide into blocks, sell H&L packages for each block? This way you don't build anything until the client buys the H&L package and they fund the entire build, less outlay/risk for you - isn't that how it's normally done?
    I've never seen a builder develop and build all the houses prior to selling them, seems like a big risk to do it that way but I could be wrong...
     
  11. Brian84

    Brian84 Well-Known Member

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    My boss does it like this and he is a very successful man. I work for a well known builder.
     
  12. Lindsay_W

    Lindsay_W Well-Known Member

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    Ok, so does your boss also get someone to invest in his projects?
    Might be a good idea to find out exactly why and how he does it so you can replicate?
    If you have the cash to do it and don't NEED to sell it at the end/could afford to hold it for a period (because you're cashed up) then it's a bit different but I personally wouldn't want to outlay for the full build and THEN try to sell it to someone, the risk is you can't sell it for what you need to make a profit. Let the buyer fund the build and take your profit from actually building the house, could that work?
     
    Last edited: 28th Jun, 2020
  13. Brian84

    Brian84 Well-Known Member

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    He doesn’t have or need investors. He buys whole streets of land in new estates. He has completed houses sitting around waiting to be sold.

    I see what you mean but getting the client to fund the project. Makes sense.