If you own a property suitable for development, I’ll partner with you

A Joint Venture is a great way to get started in property development. And, it’s a great way for experienced practitioners to pool resources and crack into bigger markets.

The type of Joint Venture property development that my business primarily focusses on is a bit different

An owner has a property that’s suitable for a highly profitable development, but doesn’t have the time, experience, contacts or skills to develop it. So he partners with my business, and we look after the entire development. The vendor maintains exclusive ownership of the property the entire way through, and can choose to retain one, some, all or none of the completed townhouses. The following is a real-life example…

A few months back, I was in serious negotiations to purchase a large block off-market in Eltham. After a mountain of due diligence and feasibility work with Council, Town Planners, Architects, Builders, Arborists, Analysts, Banks, and Agents, I determined that the market value was $4.05m.

At this price, I’d make $2.3M profit by building 10 detached dwellings with an average resale of $1.2m.

Unfortunately, I was dealing with a very Junior Agent. He agreed that my offer was strong, but he hadn’t done the hard yards in educating his vendor on price, terms, worrying market conditions, etc. My offer fell flat.

But, it was a ripper site, with massive potential upside, so I wrote the vendor a letter that comprehensively explained the ins and outs of property development (think Holding Costs, LVRs, Council Contributions, Contingencies, GST Calculations, etc), and how I arrived at the purchase price I did. Even though the price offered was slightly higher than recent nearby sales supported, he wouldn’t budge. No good.

Undeterred, I followed up with a Joint Venture proposal in which Tom (not the vendor’s actual name) would retain ownership of the property, and I would look after all aspects of developing it: from feasibility, design, permits, finance and legals through to construction and sales.

Instead of accepting $4.05m today, he would get $4.05m in 24 months time, PLUS a 50% share of the $2.3M profits.

The downside for Tom: he’d have to rent somewhere for a year during construction, and he’d be liable for some taxes on his $1.15m profit. But, apart from selling his property for significantly more than he otherwise would have, the other benefits would be substantial:

• he’d be able to design his own brand new house within the development (from floor plan and facade right down to wall colours, kitchen appliances and window furnishings)
• he’d continue living in the exact same location that he’d lived in for 35 years
• he’d cease worrying about the maintenance of a large block

The Joint Venture would be a big win-win for both of us.

If you own a property that may be suitable for property development, Contact Us to discuss Joint Venture options

The market has well and truly shifted over the last year, and many people who fancied themselves developers a year ago have found that it’s not that easy.

I’m always looking for profitable sites for myself and for my clients, and I’m amazed at how many properties with plans and permits in place have come up for sale in recent times; unfortunately, the vast majority are sub-standard, having been completed by owners with little-to-no understanding of build costs, profit margins, buyer demographics, and resale values.

Don’t make the mistake of trying to develop your property on your own – you could actually lose money.

Many people who own big blocks, and are considering selling, know that their property will ultimately sell to a property developer. If I were them, I’d hate the idea of handing over big profits to someone else! Join forces with an experienced and well respected company such as Property Analytics, and maximise the value of your biggest asset.

We’ll do all the hard yards, and will guarantee that you’ll receive the agreed market value of your property at the completion of the project, PLUS half of the development profits.

Depending on the development potential of your property, like Tom, you could be better off by $1m+ in just 2 years.