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Great information Wardy and very true…
Developing takes many years to get the neccesary skills to understand the total foundation to complete a successful project.
As Wardy also said be careful of all the generic books out there and take them for what they are, a broad overview. They do give you a base understanding which all helps but most of the skills are learnt on the job. I learnt the hard way after ending up in the Planning & Environment Court fighting for an approval which had 95% backing of the Community and still getting knocked back because of certain "non competitive" reasons by Local Govt (it's great to have mates in the right places type scenario). I ended up spending a lot of extra money on something that I thought was a shoe in. In the end I did mediate with Local Govt and come to an agreed approval after an extra18 months and couple hundred thousand $$$Although times are a bit quieter at the moment and Councils are happy to approve more projects without the typical red tape to keep the economy turning, I would still suggest after covering all bases with a Town Planner and getting his full support on the project, that you allow monies for fighting for your project in the Courts. As you can see from my experience you just never know. * One important point also, make sure there is sufficient community "need" for such a project, that can be easily proved and fought for. This will be the only way that you can win in the Courts should you come up against a Local Govt with the before mentioned type attitude
On the subject of the development process you can always employ suitably qualified professionals along the way to help coordinate the approval process. Architects and Engineers can do this but are usually at the higher end dollar wise but you can always negotiate a price in these quieter times. I coordinate my projects myself now but in the past did it with the help of a trusted Town Planner ( one who knows the local area well and all that is happening development wise in that area as well as who's who in the game will certainly be beneficial ). A Town Planner is usually quite a lot less than the previously mentioned professionals to hire and knows the whole process.
Once all that is done and you have your DA (development approval), BA (building approval showing complete construction materials and final layout) and then Operational Works Approval (for all earth works and services), you will still have 2 important phases to complete.
1. – Off the plan sales and marketing, then following up through to handover of keys. ( Can be done by a trusted R/Estate Agent/Agency after full Contracts and Disclosure statements have been drafted by a qualified Solicitor)
2. -Then the construction phase. ( Can be done by a suitably qualified Builder or through a good Project Manager with a proven track record who for a fee usually 5% of total build can direct the whole construction process )…………
Kaleidoscoppess an Accountant can certainly setup your preferred entity for you, Company/Trust etc . Depending on how in depth you want the structure to be you can set one up yourself. A good site to check is Shelco an online Company registration website. A basic Company can be setup from as little as $1500 last time I checked, it might be a little more now.
Finance.. I am in the process of obtaining finance for a smaller project due to the current economic conditions of about $9mil and I can tell you first hand the Banks are really tight with their lending criteria at the moment and changing daily. They are wanting the project to show a return of min 30% and as much as 80% pre-sales depending on location and experience. They will also want extra security or Director's guarantees. Private equity is around but hard to find and they are only interested in exceptional returns or joint venture as they see the current market as very risky. My advice at this stage is if it doesn't stack up with a major lender then be very wary and make sure your due diligence and feasibility is bulletproof and be aware to allow for many variables that are not all covered in the books you read. Also note that a few of the Developer/Authors out there at the moment have gone bust during these recent times not all by bad management mind you but because of the worst global recession since the "Great Depression" and may have ulterior motives to build back up their cashflows by selling information that got them into that trouble in the first place.
Just to finish off, sorry for rambling I don't usually post on forums either as finding the time to do so is hard. But after reading what Wardy posted I also agree there is alot more to know with the development game and many pitfalls to be aware of. I thought that if I share my experiences with you and help save you money, whether it be $1000 or $1mill it all adds up.
I hope after all of that I have helped educate and not frightened you totally as you can see by my signature the entreprenuerial drive and "Have a Go" attitude is what has got me to where I am today.
I will soon be embarking on my biggest project to date. A large fully approved Seniors Housing Development of more than $100mil which has taken me quite sometime to get to this stage but will be marketing in the not to distant future.
Best of luck to you all!!
N.U.R.V
