Property Development Education/Strategy?

Discussion in 'Investment Strategy' started by 6frados8, 4th Dec, 2019.

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  1. 6frados8

    6frados8 New Member

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    14th Jan, 2017
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    Location:
    Melbourne (and vicinity), Victoria, Australia
    Hello hello! Was curious to understand how some of the more experienced property investors/developers out there "educate themselves" in property development, having had little to no prior experience?

    Personally, I'm in a situation where I could consider subdividing and further developing an investment property thanks to a redundancy (otherwise I'm currently renting). In my mind, I would like to I would to like to develop/get developed a number of high-level financial models for a few cases such as:

    1. Purchase PPOR
    2. Subdivide and live in new property
    3. Subdivide, put both properties on the rental market and remain rentvesting

    I am prepared to pay for this if need be. Would this be in scope of most financial services providers working in property? Is there a reputable advisor who could provide such a service (preferably out of Melbourne) that someone could recommend?

    Or, am I best putting in the time and energy myself and engaging with what would be a lot of stakeholders in developing this understanding?
     
  2. thatbum

    thatbum Well-Known Member

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    Perth, WA
    In short, I used this forum and read extensively, supplemented by going to home opens every weekend, and linking up with a few of the other forum members in Perth.

    I didn't bother with any modelling or crystal ball stuff - I just got out there and learned the market and about property generally until I could eyeball good deals at first sight, and do the necessary DD on them before pulling the trigger.
     
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  3. Willy

    Willy Well-Known Member

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    Location:
    NSW
    I wouldn't class myself as an experienced investor/ developer but subdividing PPOR has been my strategy over the last 10 years and I have done a few of them.

    Your last paragraph is the answer to your question.

    Willy
     
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  4. Piston_Broke

    Piston_Broke Well-Known Member

    Joined:
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    Location:
    Love Shack
    I doubt this very much.
    Unless you can buy someone like sash a nice lunch ans pick at his brain, it's pushing uphill.
    I would def not look to a "financial services provider" for such advice.
    Maybe some BAs might have experience in buy/build etc.
    Basically I would only talk to someone who has done it.
    Sift your family and friends for anyone in the building industry, or who has recently built a new house and ask them about the process.

    I think you're overthinking this. And there's not that many stakeholders involved from your side.

    All you need is patience, some research and fairly good and record keeping.
    Ask questions along the way. Tedious it is and expect it to take twice as long as you're told.
    eg though order may not be correct

    Planning
    Start from an overview and zoom in.
    1. Purchase PPOR
    2. Subdivide and live in new property
    3. Subdivide, put both properties on the rental market and remain rentvesting


    Zoom in a little bit
    1. Find and buy suitable property
    2. Get plans and surveying
    3. Submit plans to council
    4. Submit construction certificate
    5. Get utilities and fees sorted
    6. Hire builder
    Then zoom in again on each step.
    This is a simple overview, step one has a few steps involved as well.
    For eg
    1 Find property with xyz criteria
    2 Check council LEP
    3 Go to council and specifically ask
    etc etc etc

    All the best
     
  5. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

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    Location:
    Sydney
    I would say read and absorb as much as you can from these forums, especially case studies, and Trust No One. Even facebook groups have hidden agendas these days.

    Choose an area you're happy to make your PPOR, then start to get a good understanding of Council's LEP and DCP, ask lots of questions of their duty planner.
     
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  6. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Location:
    Perth
    I read this post weeks ago but forgot to reply.

    I think my first piece of advice is to not rush into anything. Most people have time on their side and barring procrastinating for years you should use time wisely to educate yourself so that you can make the best decisions. Markets may go up and down during that time but if you rush the decisions without good knowledge and due diligence you may end up losing money and going backwards.

    You can outsource some aspects of developing but even so it's good to be able to assess and know if your advisors are giving good advice. When I started out I learnt our state development/subdivision guidelines back to front and every person that I talked to along the way had to prove they also knew what they were talking about. I joined technical forums, I joined PC, I networked with other developers, I talked to my accountant etc etc

    If you want to do some reading on developing then I think the books by Ron Forlee are pretty good to start understanding where you kneed to skill up. Then you start hypothetically buying stuff and doing feasibility against everything you can find and you will discover that an awful lot of development projects do not stack up.

    BTW I would suggest that you do seek immediate guidance from an accountant if you intend to buy a PPOR and develop it as you may risk losing any CGT free aspects of a PPOR by doing that if your strategy is demolish the house and build 2. Sometimes it's best to keep PPOR and developing as 2 different things.
     
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  7. Sackie

    Sackie Well-known cafe bum of the East Premium Member

    Joined:
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    Posts:
    22,667
    Location:
    Vaucluse, Sydney.

    If you plan to get into property developing long term, I recommend you take it seriously from day one. This would be my order of education. Everyone is different.

    1. Ron Forlee books
    2. Bob Anderson development course
    3. Network with other developers in your area. Read all the development threads and make notes.

    You do all that over a period of a few months, and your knowledge will skyrocket and you'll gain some clarity on the process and key players involved. You'll know how to help yourself move forward.


    I am assuming you already have a very good grasp of PI fundimentals. If for example your at the stage of asking what is a depreciation report...... I'd recommend learning all the basic property investing fundimentals first.


    At the end of the day, property development is all about managing two things; people and processes. Once you can do that half decently, most of it runs by it's self because the consultants do 90% of the work.


    The biggest challenge for the developer is really getting the feaso right.
     
    Last edited: 29th Dec, 2019

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