Property Development Team
23 Property Development Consultants Every Property Developer Must Have In Their Team
Your Property Development team is essentially your army of property development consultants & property development companies that help you bring your development project to fruition. Property developers come from varied backgrounds in terms of education and industry. However, they all have one thing in common, they work with the right property development team. There have been property developers with no education at all who have done well. And there have been property developers with all the relevant degrees who have failed. What separates the failed property developers from the successful ones is right property development team for the right project.
How To Become A Property Developer?
In order to become a successful property developer you must have the following:
- Property Developer's mindset. You must be hungry, in terms of your desire to achieve your goals.
- Irrespective of your educational qualification, you must be willing to learn everything about property development.
- You must have a Good Property Development Team
- Check out my Frequently Asked Questions about becoming a property developer.
- And a good property development team of professionals and consultants.
A Property Developer needs to understand all facets of the property development process. From conducting property development feasibility, determining the highest best possible use of the site to identify profitable opportunities. Understand the property market cycles, conduct market research & due diligence, to engaging the property development team and orchestrating & facilitating the entire development process from inception to delivery.
Before you enter into the realm of property development, I strongly recommend that you assemble a team of property experts and knowledgeable consultants.
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Why You Need A Good Property Development Team?
The simple answer is that property development is complicated and covers multiple disciplines. You can’t possibly have all the knowledge yourself. Even after you have become an experienced property developer, you will still rely on the skills and knowledge of qualified and experienced property development consultants. I only work with property development consultants that I trust & they are part of my success in property development.
Over a period of time you will find that there will be a handful of property development companies that you work or consult with most of the time. These handful of property development consultants who know how you work and you know them, will then become your property development team. In this article, I extensively discuss the property development team you need in order to become a property developer.
How to select the right team of property development consultants?
The property encompasses a wide range of structures and associated features, necessitating the hiring of specialised advisors in various fields. Before hiring a consultant, get a profile of the individual or firm to check that they have the necessary knowledge, expertise, and experience to work on the project you are planning.
For example, it is not a good idea to hire an architectural firm that has only designed residential buildings if you want them to design a multimillion-dollar shopping centre. In addition to lacking the necessary background skills, the smaller firm would lack the necessary workforce to develop.
Only hire consultant who...
- who are best qualified for the job
- work on or have worked on similar types of projects like the one you propose
- have the right staff to help you with any size project
- have previously worked with them and so you are familiar with their capabilities.
- have been in business for a satisfactory amount of time
- have been through a competitive tendering process
Who Should Be Part Of My Property Development Team?
Whenever I consider a project, I assemble a team of consultants who help me establish the viability of my project and the initial project costs. If I commit to the project and proceed further, I bring on other experts as well. There are things like cost estimates, project yield, legal matters and all manner of side processes that are involved.
However, who you decide to hire and make part of your property development team will depend on your project. A rule of thumb that I follow is that the smaller your project is, the lesser number of property development consultants you will require in your property development team. For example, if we were to do a subdivision, our property development team should consist of a town planner, civil contractor along with a surveyor. On the other hand, a unit or townhouse development project would require a town planner with an architect.
Below, I explain in more detail who you will need to be on your Property Development Team and why you need them.
Property Development Team - MindMap
Here is a list of your Property Development Team
In my opinion, the first person that you should look for is a mentor from whom you can leverage experience. Your property development mentor will have a broad spectrum of knowledge on what steps you must take for your project. I remember how my mentor transformed the way I took decisions initially. In fact, your property development mentor will change the way you look at sites.
Over the years, I have learned to look at a project, not in terms of whether or not I have the money but in terms of what is possible for this project. Apart from asking myself, do I have the money to do this project? I ask myself questions like,
- Can I put this development project together?
- Can I get favourable settlement terms?
- What is it that I can offer to the vendor to swing them my way?
- What is the maximum price I should be paying for land?
These are the questions that I asked myself whenever I am looking at a project for development. It’s sad, but most property development courses or investment courses do not and will not teach you how to think like a property developer.
Property Development Feasibility Expert
In property development, numbers are everything. It blows my mind when I see property guru's run around the construction site and their focus is on taps, tiles and appliances. As far as I am concerned, as a property developer my focus has always been on the bottom line. I track my property development feasibility study like a hawk using my Property Development Feasibility Suite. If you brush this off as not important or because you find yourself not very good at it, I can guarantee you sooner or later your project will have a blow out and will cost you more than you have ever anticipated.
The town planner / urban planner will ensure that the project is in accordance with your local authority’s residential codes and regulations. They will create a town planning report to support your application for approval to carry out the project.
The way I select the right people on my property development team is to understand the past projects they’ve been successfully involved in. I then narrow down the list to a team of experts who will suit my specific type of project.
What I’ve learned through experience is that property development is about managing both property development processes, and people. Their invaluable input is essential for successfully completing your property development project.
I have found that a good accountant is essential to ensure that I stay on top of the financial aspects of the project including record keeping and cash flow analysis. A good accountant with experience in property development is paramount to get the right advice on how to financially structure your deals.
An accountant can help the developer with all financial and tax issues that arise during the development process. An accountant's services may include:
- Assessment of the best ownership vehicle for you
- Assessment of tax structures
- Preparation of audited financial records and tax returns on an annual basis
- Preparation of monthly financial statements
- Represent a developer in the case of the tax audit.
A land surveyor is responsible for the preliminary assessment of land and reporting the necessary geographic information as well as to finalize the actual build on the plan of subdivision. Initially, the surveyor will prepare an identification survey as known in Queensland and also known as re-establishment survey in Victoria. They will also prepare a feature survey identifying significant trees, buildings as well as a contour (levels) survey. This allows the architect to commence working on the layout plan.
I always have a suitably experienced architect on hand as the building design is critical in helping you lay down the architectural plans. Your architect should ensure that the plans are in accordance with the building authority's regulations. Believe it or not, an architect can also help you manage the construction contract as well as monitor ongoing construction in order to ensure that it follows the approved plans.
Like the architect you use for your building design, a landscape architect will be another one of the professionals required in property development. They will be responsible for designing the outdoor areas & landscape of your project.
Similar to architects, there are building designers. They have similar responsibilities to architects but do not have an architectural degree; some may have a drafting or architectural design diploma or certificate. Some designers that specialise in a particular field are highly efficient and knowledgeable and are sometimes better equipped than architects due to their expertise and technical knowledge. Fees are similar to those charged by architects but maybe slightly less.
If your project is larger than 4-6 units, your lender will mandate a quantity surveyor to audit your construction cost estimates. The QS will also manage & report on costs to complete. In addition to that, a QS will also validate all progress claims, prepare a bill of quantities, and a depreciation schedule.
A quantity surveyor or building estimator plays a crucial role in development because his cost estimation will influence whether or not the project will proceed.
When choosing a quantity surveyor, be sure he has experience with the project you're working on. If the surveyor has no experience with the development in concern, he may underestimate or exaggerate expenditures or fail to account for an essential cost in the project.
Preliminary cost estimates, feasibility studies, including cash flows, development of bills of quantities, and cost control, including verification of payment certificates during construction, are all services provided by quantity surveyors.
Builder / Construction Contractor
One of the most important professionals required in property development is the building contractor. Personally, I take extreme care in selecting the right contractor to make sure construction goes according to the contract and approved plans. The last thing you want during your project is for your builder to go bust. Although because your bank is involved, there is some assurance that it will step in and help you appoint the second one. Nonetheless, this is a long, arduous and costly process to go through.
Also called certifiers in different states, are primarily responsible for approving and certifying building plans. They also ensure that the building is built according to the maintained regulations and building codes. I pick my building surveyors based on the type of building I intend to construct as their experience may vary.
A lot of developers use buyers’ agents to help them source development sites so they can concentrate on running my projects. Some of the best buyers’ agents also have the basic property development knowledge and can be very helpful in locating potential sites for your project. However, I find using buyer’s agents the laziest approach in the book. I have personally never used one and will never use one in the future. Only because, I feel that I can find, negotiate and structure a better deal without having an agent in the middle, irrespective of whether they represent me or the vendor.
Development Finance Broker
Without money, projects simply don’t happen. This is why I make finding a good finance broker one of the most important members of my property development team. Your normal home loan broker and a development finance broker will possess very different skill sets. Usually, they tend to specialise in either or type of finance. A development finance broker will not only know the top banks but also the 2nd tier and private lenders who can fund either the full development or parts of it.
An acoustic engineer is required to test and make sure that the new development does not produce excessive noise. They are there to ensure that noise levels are kept within an acceptable range.
My property development team would almost always include a civil engineer who will be responsible for the design of drainage, sewer system, earthwork, roadwork and water reticulation. These designs must accompany a planning application. They need to make sure that the design is in accordance with the building permit.
I use electrical engineers to design the electrical and telecommunication plans of the building. However, for smaller projects, architects or the building designer can also help with the electrical plans for the building.
When I want to build on a site, I want to make sure that I can safely put the buildings there. I engage a geotechnical engineer to report on the soil composition and anything which may be an issue for construction.
I engage a hydraulic engineer where I need advice & design for roof water drainage, sewer & water reticulation relating to the building. Their drawings are usually accompanied with engineers drawings at the building permit or building approval stage, but can also be required to support a planning application.
One of the key professionals required in property development is a mechanical engineer. I work closely with them in considering air conditioning systems, ventilation, elevators, and other aspects of the project that involve mechanical devices.
A structural engineer is required to design foundations and framework of the building. It is your job to make sure that there is communication between your structural engineer and architect. The structural engineer will supply design and sizing details such as tie downs, bracing and steel or timber sizes that must be incorporated in working (detailed) drawings. The structural engineer will periodically supervise the construction & ensure conformity to engineering requirements in the design.
A traffic engineer is responsible for assessing the impact of future traffic flows and make sure that appropriate design measures are built in to deal with traffic flows. When undertaking a project where potential traffic issues exist a traffic report will be a mandatory requirement of the development permit application. Traffic issues can arise from your development being on a busy road or where the number of vehicles entering or exiting from a site has significantly increased.
As developers, our approach should be to reduce risk at every opportunity. Good lawyers help us do so through good advice and preparing documents that protect our position when there is a lot a stake.
A property lawyer can assist you with the following:
- Draft all legal documents, such as property contracts, lease agreements, and partnership agreements.
- Review all zoning or rezoning issues, financial paperwork, environmental objections, and service or guarantee agreements.
- Act as the developer's legal representative in any legal problems with buyers, tenants, or contractors.
I would like to CAUTION novice property developers and investors to be careful of using templates obtained from property seminars and other courses. I know this because when I started off in this industry, I was lured by property seminars who promised to give their past agreements and contracts so we didn’t need to spend money on them.
Please DO NOT USE someone else's agreements and contracts, because they are not worth the paper they are written on.
The main reason being the fact that every project is different, every deal is different, the terms and conditions of each project are different and so are the stipulations pertaining to that specific development. DO NOT BE PENNY WISE AND POUND FOOLISH.
An attorney's fee is commonly calculated using a flat amount for a specific service, an hourly rate for the work completed, or a percentage of the transaction.
I always do whatever I can to maintain a good working relationship with an experienced lender or the funder of the project. They help provide the necessary funding for the project. Without their input, my project would otherwise remain an idea.
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An appraiser aka a commercial valuer is responsible for calculating the Project Related Site Value & the residual value of land for the development site and the completed project for development finance purposes. Unfortunately, your choice, in this case, is limited to the commercial values available on your lender's preferred panel. A project related site value is particularly important in Australia as it removes any GST implications from costs and GRV’s i.e. the gross realization value of your project.
In my recent 12 townhouse development, I, in fact, challenged one of the valuation firms on their commercial valuation and got them to revise their number. This is something that is seldom taught in property boot camps and or property seminars. However, if you wish to become a good property developer, you must understand or at least have your own property development feasibility study that accounts for this. Both my property development feasibility add-ons, Smart Feasibility Calculator as well as the Advance Property Development Feasibility include calculations for the residual value of land as well as the Project Related Site Value.
Real Estate Agent / Project Marketer
In my experience, a good real estate agent that helps you in selling your development quickly can save you a lot of anxiety and money. What you should be looking for in your real estate agent or project marketer is whether or not they are pro-active. Anyone can throw a line out and wait for the fish to bite. However, a good agent will have an extensive network as well as would know the market like the back of his/her hand.
A real estate agent can manage housing development marketing for smaller projects; however, larger development projects may necessitate a marketing firm.
A marketing firm can take care of the following:
- Reviewing existing market circumstances for the type of development planned, as well as the present market mix (age, gender, income group, and race) and developing a marketing strategy
- Preparing graphic design and presentation work
- Establishing a marketing budget for the duration of the project
- Assisting in a public relations programme
How to Manage your property development team?
A developer relies mainly on the development team's knowledge and professional recommendations. How you manage them will determine how well you extract the most crucial information and motivate them to do their best work on your project.
The following are some ideas for efficiently managing this vital team and it helps you to better prepare for your first property development project:
- By being firm and fair, you may demonstrate leadership skills and earn the respect of your consultants.
- Provide direction to your team members and establish clear project objectives.
- Consultants who do not do their tasks professionally and adequately should be treated with tact.
- Maintain a positive outlook for the project you're working on. Consultants will feel more at ease in this situation, especially working in a high-risk environment.
- Be accessible and commend consultants on their hard work.
- If the consultant fails to do so, confirm the contractors' appointments.
How to negotiate fees with your property development team?
Most professional consultants have a defined fee structure set forth by their association or institute. However, these fees are adjustable based on the degree of assistance. Fees are usually collected as a fixed amount or as a percentage of the total development cost.
It's reasonable that most developers want to cut costs to increase profit margins, but when negotiating a fee for your projects, you should be fair. While this is not always the case, if the negotiated rate is too low, you may not be able to get the best out of the consultant, who may prefer to work on higher-paying projects.
When dealing with consultants, make sure to get every discussion and agreement in writing, notably the confirmation of costs and appointment conditions.
Most consultants would charge for general disbursements in addition to fees, such as the cost of travel beyond a specific radius, prints, photocopies, postage, facsimiles, and any other costs not covered by the negotiated price. If you believe you have been unfairly charged, make sure you get rates for these expenditures and ask for a record or breakdown.
It's critical to ensure that the group functions as a team after choosing the consultants you're satisfied with. Because these specialists must collaborate, any personality clashes will jeopardise the project's success.
As a developer, you should be aware of potential issues and resolve them as quickly as feasible. As well as assembling the right team, you must have confidence in the consultants' capacity to serve you to the best of their abilities and that you may contact them at any time if an issue or concern develops.
How to Run Meetings With Your Property Development Team?
There are a staggering number of meetings with the consulting team, council officials, builders, and subcontractors during a construction project. If the aim of the meeting and the topics to be covered are not clearly established before the meeting, there will be a lot of wasted time.
This is why it is critical to present a detailed plan to your team before the meeting.
All attendees must have a shared understanding of the meeting's objectives and what has to be accomplished by the end. When meeting with consultants, ensure everyone knows the project's goal, including the scope, budgets, and, most crucially, the timelines and deadlines.
All meetings must close with a list of actions by specified people to avoid any misunderstanding.
Meeting rules should be announced initially, and the chairperson should inform attendees. The following are some basic guidelines:
Time of the meeting: It's critical to be firm with late entrants and non-attendees who don't give apologies for missing the meeting.
Leadership position: It must be stated in the meeting that you will be acting as the group's captain and that your directions should be purely for the project's benefit.
Responsibility: Attendees must take responsibility for their conduct if they do not carry out their assigned tasks.
The time limit for the meeting - no one should be allowed to continue a conversation that is unrelated to the meeting's topic.
Mobile phones: During meetings, all persons should turn off their mobile phones. Attendees should be excused from the meeting if they need to make a phone call.
The list of people and experts who make up a development team may appear longer. However, the number of consultants you hire will depend on how active you want to be in property development and, of course, the size of the project you're working on.
As a full-time developer, you should always look for new opportunities, and having a great development team is critical to your success. If your first project is small (for example, a duplex unit development), you may only need an architect and a structural engineer. At the same time, a regional shopping centre will almost certainly require all of the consultants' services.