what are your #LessonsLearned #2017!
Before you can move on to your goals for 2018 it’s a good time of the year to reflect on what’s gone well, what you could have done better this year.
For the majority of 2017, I have focused on getting my Reading new build development to start. At a high level my top three challenges have been as follows:
a) Reducing the S106 contributions. (nationally under 10 units affordable housing contributions are NOT required).
b) Getting a good building contractor who also had the paperwork required by banks.
c) Redeeming the mortgage and securing development funding.
See a glimpse of my Reading development.
We have secured planning permission to build eight new apartments by knocking the bungalow.
My top 7 TIPS for consideration when you get into Property Development.
- Due diligence; Do your own research on funding options available in the market, vetting builders, comparing quotes from professionals, don’t be complacent. I was given an offer letter from Lender A, only to be told a few months later they have pulled out as the project costs went up.
- Don’t be in a rush to start the Development; it is a long-term game. It can take 1-3 years from start to finish; getting planning permission can take 6 months – 1 year, securing funding another 6-8 months and then the build.
- All costs are front-loaded, you will be paying out lump sums in planning & professional fees for drawings, surveys, counsel fees; all upfront. The rewards are realized when you sell/ rent the units. Property Development is NOT for the faint-hearted.
- The devil is in the detail. This could be in relation to reading the fine print on the loan terms from the bank, quotes from property professionals or detailed costing from the contractor. Please read the detail to know what you are getting yourself into.
- Don’t give up too easily. If we had not been in a rush to start the Reading development, our (unlawful) S106 contributions to the council could potentially be reduced to zero.
- Don’t be Penny wise, pound foolish. I wanted to save £3k initially by not appointing the architect firm to project manage the competitive tendering process from builders. Eventually, this costs me a lot of time & money down the line.
- Always ASK the question – don’t pretend to understand it all even if you risk sounding ‘dumb’. Embrace all the new learnings rather than focusing on the challenges & what you don’t know or understand.
Anyway, hope you find these useful. It would be good to stay connected as I will be starting a video blog of the development progress from January 2018. If you want to keep posted, please link up with me on LinkedIn, FB, Instagram or Twitter – details below.