Finance property development easily. Drowning in paperwork? How are you utilising your time?
Some of the best developers I have met over the past few years are the best because they know what functions within their projects consume the most amount of time. Of these functions, which ones add the least value and therefore could be outsourced to the greatest effect?
They understand that their skills are in the site acquisition, picking the builder and getting their projects sold quickly – not in the drudgery of administration, compiling research reports and supporting documents, not to mention negotiating with several banks to get the best offer to help maximise their profit.
Given time is such a prized commodity when developers are running a project it would make sense to leverage the talents of others that may have deeper relationships with key contacts in these fields, rather than trying to do it all themselves – but unfortunately this doesn’t always happen.
Developer case study 1
- Developer: Individual developer with a team of specialists and consultants to assist with administration, research and sourcing of finance.
- Project: 2 separate 46 unit complexes
- Timeframe: 18 months
- Advantages: More projects + quicker turnaround time = more profit.
Developer case study 2
- Developer: Individual ‘old fashioned’ developer that insisted on doing everything himself
- Project: Single unit complex of 21 apartments
- Timeframe: 36 months
- Disadvantages: Extra work for the developer + slower turnaround time = less profit + more stress.
Great developers understand their time is valuable and they run their projects like they are the Chairperson of an ASX 200 business with a team of specialists and consultants to support them, they have a deep understanding of their project and outsource activities that unnecessarily consume their time – as opposed to running the project like a family owned business, completing every single function and task themselves.
So what type of developer are you and are you spending on activities that you might not be adding value to?
Jayden Vecchio is the Director of Red & Co Finance, a speciality development finance firm based in Brisbane that can assist with development funding through the major banks, private and mezzanine funders. If you have any questions or feedback regarding this article he can be contacted on 1300 88 73 28.