How To BE A Property Developer part 1

How To BE A Property Developer part 1



you hello and welcome to property development Institute my name's Steve Chandler and I'm a third generation Australian property developer but in this video I'm going to explain to you the five fundamentals of property development you see property development is a process and all you need to do is understand the process to be a property developer so I'm going to explain the five fundamentals of property development you know in the past there are so many people that have said to me Steve I'd love to be a property developer but I don't know how and other people have said to me Steve you know I'd love to be a property developer but I haven't got the money uh and if that's you right now don't worry you know you're not alone there are so many people out there who are exactly the same and to be honest with you I was exactly the same – because when I started my career look I wasn't anything I was nothing yeah my dad was a property developer but I wasn't so I started from zero look I dropped out of school so I didn't finish school uh I did a carpentry trade so I'm a chippy yeah and then from there I started to get involved in other types of post trade courses and started a career in building but after a short period of time I worked out that just working for someone else wasn't really going to make me a lot of money at a young age I love BMWs and to this day I still love those cars and they're dynamite expensive but what I had was a desire to achieve something and slowly but surely I started to learn more and more about property development but still I was working for someone I didn't know how to get that big chunk of money that big profits the property developers made so I did something one day it just hit me I bought an apartment I renovated it and I sold it just over a year later and I made about 35 percent profit so 35 percent in just over a year now that's not bad and it was more than what my income was at the time so when you think of that I actually doubled my income in that particular year so what did I do I did it again and but this time with a house 50% then I did it with another house and then another house and another and another and over the years I've made millions of dollars out of buying renovating and selling property now you can too why can't you start small that's what I did you just start small as my building career developed over a period of time I then moved into property development and started working for some very large property development companies and guess what I started making millions of dollars for them on those large-scale projects and that was absolutely amazing the money that they can be that can be made out of those big big projects is absolutely enormous and something that you'd really like to do yourself so what did I do I went and started another project but this time I started something on a much bigger scale so whammo and I went yep this is great I was going to make a fortune and then of course the GFC happened the global financial crisis well that changed things a lot and what it made me realize is there were a lot of things that I had learned that I didn't put into place in that particular project and as a result I'm still to this day getting over the impact that had on me at the time so for anyone coming into the property development industry I swore if I could help them to not make the mistakes that I've made that I would well as a result three years ago I started lecturing at university I started delivering property development training all over Australia for my industries peak industry body and I wrote some books on property development for people beginning in the market so I've done all these things because I didn't want people to go through what I had gone through and more recently I've created a training program for people and this training program is called property development Pentagon and the Pentagon explains those five fundamentals of property development so let me just quickly put them up on the wall and tell you what they are the first fundamental is acquisition if you don't acquire a property you can't develop a site but there are so many ways of acquiring a property and again you might be sitting there saying Steve that's great acquisition is the first fundamental but I haven't got any money well what if I told you you could acquire a site without any money interested absolutely so acquisition you can acquire sides without any money the second fundamental is feasibility so feasibility is knowing the financial aspects of your project and feasibility there are a number of different types of feasibilities that you use at various stages throughout a property development project the third fundamental is authorities authorities without an approval from the authorities you do not have a development project so you may have a quieter property dam your feasibility to know how much money you're going to make but you're not going to make any of it unless you get your authority approval so understanding how to deal with authorities and the processes and procedures by which you can actually achieve an approval a critical to property development the fourth fundamental is revenue the money the money that comes in all of your development is subject to the profitability of your development is subject to the revenue that you receive so there are so many different aspects of the revenue stream that you can utilize to improve your bottom line we'll learn all about that but revenue is amazing number five delivery this is the creation of the built form the building work the construction activities that create the properties that you're going to sell so the five fundamentals all interrelate to each other acquisition you must have a development site feasibility it must be feasible or viable for you to be able to do it authorities without an approval you don't have a development revenue without someone buying your development or leasing your development you have no revenue and delivery without design and construction of the built form you don't have anything to sell to anybody so these are the five fundamentals of development which I have created a program called property development Pentagon now I'd like to take you through more information on acquisition it's a acquisition is the essential component of being profitable with your development and there are a number of different ways that you can actually acquire a site so let's have a look a few of those I'm going to write them on the board over here for you whenever you buy a property the standard way that you buy a property is what I'll call outright purchase so and our right purchase is simply when you go you offer a dollar value for a site it's accepted there's an exchange of contracts and a period of time later there's a settlement you hand over whatever the agreed value was and you now own that property so an outright transaction is fantastic you get you get the title to the property and you can then do anything permissible under the planning schemes that may apply as far as development is concerned on that property the next form of acquisition that you can use is what we call an an option agreement now there are two forms of option agreement there's a call option and a put and call option now a call option is when you agree to buy a property from someone at some point in the future for an agreed future value however you are not compelled to do so so you have the right to acquire the property for the agreed future value at some stage in the future but you don't have to if things don't work out for you or you're not in a position to be able to do that so you can acquire a property and work out what you can develop on it get an approval do everything except for start construction with a call option agreement so you don't actually have to own the site so you don't have to own it outright you will have to own it outright once you start construction a put and call option agreement is where you agree to buy a property at some stage in the future but this time you're compelled to buy it and the owner can put it to you that you have to settle if by the end of the option period you haven't settled that transaction so the fundamental differences are with a call option agreement you can acquire someone's property at a point in time in the future for an agreed value without having to pay for the property you can always walk away you don't have to settle if something happens you don't get your authority approval or something that nature you can walk away without having to settle on that profiting a put and call option agreement is similar to a call except you cannot walk at the end of the option period if you have not settled then the owner can force you through the put component of the option for you to actually settle the third way that you can acquire a property to develop is through a through a joint venture now a joint venture agreement allows you extreme flexibility if you are putting in the property development expertise other people your joint venture partners may be putting in the cash so this is a great way for you to undertake property development projects without any money if you've got a little bit of money and you have a few friends perhaps you can pull your resources into a joint venture whether they're financial or intellectual property your knowledge and skills in property development perhaps you could do a joint venture that's something that you should consider particularly when you have the skills and not necessarily have the large equity that some property developments require you to have the next way and the last one that I'll be talking about today ways for you to acquire a site is through what we call development agreements development agreements quite often are where a landowner has a property and they don't want to sell it but they want to be part of development without being the developer so for example you may have approached them to obtain an option to purchase that property and they've said no we don't want to sell the property to anybody we actually want to be part of a property development but we don't know anything about development we need a development partner who's going to develop our land this is where you would use a development agreement so the way that you might structure that and again with joint ventures and development agreements everything is negotiable absolutely everything is negotiable because we're talking about commercial transactions so a development agreement you may simply say that the landowner puts in the land now you do everything else now the landowner may will be someone who says that's great but I have no money in my pocket other than the value of my land you might say okay I have no cash on my own but there's nothing stopping you creating a joint venture with someone who has some cash to then enter the development agreement with a land owner so there's always a way for someone who doesn't have the cash to get into a property development now the structure of your development agreement will will require that the land owner gets paid the land value at settlement one all of the development is complete and the money comes in the door but not only that they'll get a share of the development profits so again this is a great way of doing a property development without having to have the cash without having to pay for the land and it's a way that many people make a lot of money in the current market all of this the five fundamentals of property development the acquisition the feasibility the authorities the revenue the delivery all of the different methodologies of acquiring the sites and so much more are all in the property development Pentagon program and I'll be really honest with you if a high school dropout can learn this and bring all this together it just makes it simple for you it's an easy simple program something that you can enjoy right from the comfort of your own home learning to be a property developer I truly hope that I've been able to add some value to you here today in a couple of days time I'll send you another email with a little bit more video information for you hopefully or help you understand more and more about those five fundamentals of the property development process Steve Chandler thank you for your time today

Comments

  1. Geoff Mtchell

    How many lives ruined since this video 3 years ago! What a disaster! Hope you didn’t go into the opal tower!!!!

  2. Daniel Sisto

    Steve, is this program applicable in the states? We operate a real estate investment business where we syndicate large aparmtent buildings to hold, renovate and sell residential property and broker private money loans. We are looking to move into more of ground up development and commercial redevelopment and have some interest in your course. Thank you

  3. Danielle Lesser

    Junaid Iqbal Mohammed Memon Is your training only available in Australia? or worldwide? Watch more here: https://www.youtube.com/watch?v=Yl7Te1jh-sY #junaidIqbalMohammedMemon

  4. Phú Gia Real

    Thanks for Sharing. This is what i need now. I Also invole in real estate business; if u have chance to visit Vietnam, please let me know. I will more than glad to take you around to see the market.

  5. Mic Schizo

    @Steven Chandler What about land ? I have some land that I will like to do some developing on. Not just a few acres either, I'm talking enough acres to build a small town. Any advice ?

  6. djexclusivee

    I love this video, thanks so much. Give me hope for a highschool drop out, with a physical disability, coming from a war torn country. I had the vision before but this give me some structure. God bless you!

  7. feedsunj

    Hi Steven

    Quick question – have you ever thought of developing property in Dubai ?

    I hear it's very hot (again)

  8. Ted Collin

    The best property developers video. Thanks for the great information. The way you deliver is absolutely perfect, clear especially for some listener with English as their second language.

  9. Nurse Betty Cares

    That was perfect pace. Thank you! I watched so many ridiculous videos before watching this. I'm glad I found this.

Leave a Reply

Your email address will not be published. Required fields are marked *