Building a team
Well, firstly you need a PM. Are you going to project manage yourself or invest in bringing somebody onboard to head the project up? A good project manager is worth their weight in gold.
Having an experienced QS keep a close eye on material costs and project finances will give you the best shot at staying on budget and on time.
You’ll want to bring one onboard at the earliest possible stage as they will be able to advise on the feasibility of a site before the project gets underway and work out what you can build, how much it will cost and what you’ll need to get there.
Demonstrating that the project has been costed by an experienced quantity surveyor will go along way to giving property development finance lenders confidence that the project will complete on budget.
Make sure you’ve got a good lawyer in your pocket. Property development can present complexities that are difficult to navigate for even the most experienced developers. You’ll need legal support to help you navigate planning applications, construction regulations and any surprises that may pop up along the way
Development Finance Brokers
Building a relationship with a good, knowledgeable development finance broker is arguably one of the most important things you can do during your property development journey.
Being able to secure property development finance or not will be the difference to the project getting off the ground or falling at the first hurdle.
Getting the best possible rate and terms can make a huge difference to your bottom line, cash flow and ability to progress onto further projects quickly.
The development finance market has a reputation for being difficult to navigate and lacking in transparency, which can be off-putting for first time developers. For this reason, we’ve developed an intuitive comparison engine that lifts the lid on rates and costs of products across the market so you can get an idea of what a property development finance loan may cost you.
Once you’ve plugged in the details of your construction loan, one of our property finance experts will guide and support you through the remainder of the loan application process right up until release of funds.
How much cash do you have to put towards the development?
If you are using yours or other people’s cash to help fund the project then be prepared to demonstrate this by bank statements. The future sale of shares or property is naturally less appealing to a development finance lender than hard cash in bank.
Can you put together and show a breakdown of cost of works?
Consider producing a schedule of works that details all the expected costs, include within that a reasonable contingency and timescales for each element. The more detailed and realistic the schedule is the more sensibly the lender’s valuer will assess your application (and it will be a useful planning exercise for you anyway, this is in effect your business plan). Resist the temptation to be over-optimistic or lacking in detail, these are the biggest mistakes inexperienced developers make.
Can you supply a realistic exit strategy?
What is your exit strategy for the project, will you be selling some or all of the units? Or will you be refinancing the new property as a means of paying back the lender? The lender is going to assess not just how much the property will sell for but also how quickly each is likely to be completed in line with your timeline. Be sure to factor in estate agent costs, and a reasonable time for legal completion. Your prospective estate agents should be able to provide comparable evidence of what similar property has sold for, this evidence will help support your plan and your development loan application.