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5 practical tips for Property Developers to survive and thrive (part 1)
Coronavirus is having a massive impact on our industry and will continue to do so for the rest of 2020. Last week, one of Brickflow’s Founders, Ian Humphreys, shared his views on how the pandemic is affecting lending, and his predictions for the future of the development finance market.
Whilst we collectively need to figure out how to navigate the challenging road ahead, the extra downtime imposed by remote working also poses opportunity for developers. It’s the perfect time to reflect, focus on business areas that you might normally neglect, and proactively prepare for better times ahead.
Deals will still happen, just more slowly, so lockdown needn’t put a nail in your development plans.
We’ve come up with five ways to use your time productively, enabling you to not only survive these turbulent times, but to get ahead of the game.
Here’s the first two.
Research sites (from your sofa)
With all this extra time, it’s an excellent opportunity to spend more of it looking for sites and researching them. There are many resources out there to find sites (nimbus maps is great) and agents are more likely to spend time discussing the finer details with you than in a ‘normal’, busier environment.
One of the positives to come out of the pandemic for our industry is that land prices are expected to (eventually) fall. This means sites that you previously thought were a no-go could become attainable, so keep a more open mind than usual.
Brickflow enables you to run a sense check on sites, before spending time analysing the granular detail of a particular deal. If you’re considering ten sites, you can probably discount six or seven in minutes, simply by running the numbers through our search engine. On marginal sites, you can even adjust the land purchase price until you get to a level that delivers the amount of profit you need.
Create a top-notch presentation
You only get one chance to make a first impression, and that applies as much on-paper or online as it does in-person. Lenders want to see your credentials, so it’s essential to instil confidence in you and your experience from the outset.
This is an area where many developers fall short. It’s a common mistake to provide a standard CV that you’d usually use to apply for a job. A CV generally focuses on roles, practical experience and maybe skills, but lacks the additional detail on previous projects that lenders look for.
At the other end of the scale, many developers send a link to a website, which may focus on more specific schemes but is likely to comprise more pretty pictures than substance. Combine the two and you’re getting closer, but to really nail a first-rate presentation, it needs to include much more.
What to include
Imagine you’re telling a story, and like any good story, you need a great opener. Your introduction should include:
- How long you have worked in property, and/or been a property developer
- An overview of all your relevant developments (see below)
- An explanation of how you started out
- How you have used your skills to become a successful property developer
- Details of your team and/or partners
- The types of schemes you have worked on
- Professional qualifications
The more detail you can share for your previous developments the better. Focus on the most relevant to your current scheme, and then list the rest with the most recent first. Include as many examples as you can.
Lenders ideally want to see that borrowers have completed three previous schemes. If you don’t have three schemes under your belt, do you know someone that does, and can they be a part of your team?
For each previous project, you should include:
- Development address
- Acquisition date
- Acquisition costs
- Development areas (sq. ft)
- Build costs
- Total costs
- Exit (sold or retained)
- Detailed description of the works
Don’t like paperwork?
Nor do we. A big bonus of applying for finance through Brickflow is that you complete one online form and upload all documents online, saving weeks on the traditional application process. A big barrier to shopping the lending market is the pain of providing information multiple times, so we store it securely, meaning you can switch lenders quickly and easily.
And for more practical ways for developers to equip your business, not only to survive these challenging times, but to come out the other side on top, read 5 practical tips for Property Developers to survive and thrive (part 2)
We’re working from home too, so if you’d like to chat to us more about this blog, Brickflow or development finance in general, please give us a call on 0203 488 1674.
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