What is property development? It seems like a simple question.
When people are looking for a property strategy that can bring transformational change in their lives – the “gamechanger”- they often ask this simple question. But what if knowing what property development is isn’t as important as knowing if it is for you?
Preparation for the property development process begins well before you have formulated a vision for your first site. Before you go out there, looking for the right deal, take a moment to look in, and consider if is this your true calling.
But before we get carried away, let’s look at the current landscape of property development. Starting with a simple answer to the question…
What is Property Development?
Wikipedia defines “Property Development or Real-Estate Development as is a business process, encompassing activities that range from the renovation and re-lease of existing buildings to the purchase of raw land and the sale of developed land or parcels to others. Real estate developers are the people and companies who coordinate all of these activities, converting ideas from paper to real property”.
What’s attractive about it is that it can lead to a high return on investment. The ROI in these projects is a large part of their appeal to people looking to change their life for the better. What’s more, the return also means that a developer can build their property portfolio irrespective of property cycles and a lot quicker.
Because while there are a litany of books, seminars, and courses out there, the truth is that the first step towards a successful career in property development begins with understanding not what it is, but if you have the right mindset for it. Because it the number one underlying factor that determines your success in this industry.
On The Market: Let’s Talk Property Development
Somewhere along the way, the arena of property development became saturated with teachers and gurus. Simply typing ‘property development courses’ into Google will bring with it tens of millions of results, with everyone trying to get you to buy into their idea of property development.
Ironically, the message of these teachers is very similar. They talk about market property development as the slick, savvy business in which you can get rich with minimal effort. In truth, many of these courses tend to focus on selling the idea.
It’s not so much about discussing the market of property development, but rather, marketing property development.
But here is the thing. Property development isn’t simple. It’s not easy, and it certainly is not a get rich quick scheme. Property development requires work. It requires forethought, and above all, it requires commitment.
So let’s break down the mindset required for property development a little, to see if it still appeals to you.
Are You Committed?
Are ready to change your life in a significant way? Are you willing to put the time, money, and effort towards your goals? Are you ready to take on, assess, and manage risk? Feel comfortable with a certain degree of uncertainty, and push forward no matter what? These are confronting questions. But they illustrate the beginnings of what you might experience, on the road towards high reward.
This is the mindset that can, in under 5 years, develop 7 projects worth a combined 35.9 million dollars. It requires incredible discipline. Something that is expanded in this FREE short course on property development, called “Creating your own APAM”.
Even dealing with figures this large can cause anxiety in people. It requires an awareness of how we assess risk, an understanding of uncertainty and how we navigate these waters intelligently. It even requires an awareness of the traps that even professional property developers can fall into. But what needs to be understood is that the commitment is not a small one. Property Development is a “big picture” change that requires wholehearted commitment.
When looking at yourself, consider if your mindset aligns with these ideas, or if they can be trained to do so. If you’re still not sure, consider what makes a successful property developer.
Knowledge Is Power
From the art of finding the right deals to doing your due diligence. Accumulating knowledge is key to placing yourself in a position of strength. This includes being aware of the property clock and cycles, understanding finance, as well as being able to effectively do financial feasibilities on projects.
But don’t worry. You don’t have to know these things yet, but you do have to spend the time to learn them.
Some important lessons for property development include:
- Finding the Right Deals
- Due Diligence
- Financial Feasibility
- Understanding Commercial Finance
- Site Identification and Acquisition
- Obtaining Permits & or Development Approval
- Promoting Marketing & Selling your Developments
- Managing Construction Contracts
- Preparing for Settlement
The more knowledge you can obtain before getting into a project, the better off you will be with your ability to assess risks and manage the development process. With knowledge, numbers, and data, backed by extensive research, you can create the foundations of your property development project, and subsequently your property portfolio.
Knowledge is useless if it is never applied, so is knowledge applied poorly. This leads to diminished profits and in certain instances dire consequences, especially in property development.
Property Development System is the primary tool used to create your very own Automatic Property Acquisition Machine (APAM). APAM installs a process of how to channel profits and equity from one project to another. It also allows for higher speed in property acquisition and continued movement towards more property projects.
The APAM system demonstrates a mechanism for financial freedom, scalability, and a quantifiable degree of certainty.
The key benefit of installing these processes and applying knowledge is that it keeps you moving forward. Changing your mindset to acquire and using the right knowledge puts you in the best position to achieve goals and get results.
But nothing is without risk.
From land acquisition to preparation for settlement, there is a lot to plan for. And while this knowledge certainly helps to reduce risk, it is important to be aware that risk is ever-present.
Some people find it challenging to even consider risk-taking. But the fact is there will be times when it is necessary to take a risk. Prudent property developers will make sure that they do their research and check the details so that the risks are calculated, assessed, and managed. Property Development System was born of this need. It is a system of logically reducing, mitigating, transferring, and containing the ever-present risks at every step of real estate development.
Not just risk though, uncertainty also plays a major role in property development.
The difference between risk and uncertainty is that risk is the distance between safety and hazard. Whereas uncertainty can be the unknown feeling felt between that space. Unfortunately, many people end up self-sabotaging themselves, unable to differentiate between risk and uncertainty.
A perfect example is planning permits and/or development approvals. Knowing the difference in permits, planning regulations, and which consultants to use differs from council to council, state to state, not to mention country to country. And while a lot of information can be accounted for, it is unreasonable to expect to know the outcome of a Development Application (DA) with 100 percent certainty. There are nuances to permits and planning.
This is a small example. But extrapolate outward and you will find that there are nuances in many areas of the property development process. And compounded on top of each other, elements of the project become uncertain.
But don’t panic. Uncertainty is natural. Big things require a lot of small steps and the occasional leap of faith. But a leap of faith should be made in the knowledge that you have done as much as you can to ensure success.
You need to grow comfortable in the space of uncertainty, but never become consumed by it. Always know the end goal, but understand you can’t know everything or be prepared for every setback. Great success is born in uncertainty.
And speaking about success…
Failure Is Not The Opposite Of Success
Do not talk yourself down. Failures both great and small happen. They are inevitable. Another issue of self-sabotage is the binary thinking of success and failure.
Getting ready for construction, and losing a bit of money in trying to find the right construction contractor, isn’t an ultimate failure. Nor are all the projects that never go forward. An important lesson in property development is that failure isn’t the opposite of success.
In fact, success is paved with stones of our many failures. Because learning to overcome these challenges leads to knowledge, and knowledge to power, and power to strength. It is important to both be comfortable in uncertainty and steadfast in the face of failure.
On The Question Of Mindset
Fundamentally, the most important element of any development project that you are considering doing is having the right mindset. And in summary:
- Be committed to the big picture.
- Seek, acquire, and use as much knowledge as possible.
- Know what the risks are. Assess them all, reduce as many as you can, and manage the ones you must take.
- Understand and grow comfortable with uncertainty.
- Do not be afraid of failure.
And there is one more element to property development we have not talked about. And that is fear of success.
Don’t Fear Success
You read that right, sometimes it’s not the fear of failure that keeps us from moving forward, it is the fear of success. Property development can lead to massive windfalls. Thinking you don’t deserve it can motivate that ultimate and erroneous notion of failure. If you fear success, you will quickly become overwhelmed with the idea that failure is inevitable. Embrace the notion that success is not just attainable, but that you are worthy of it.
Incorporating all these factors into your mindset means your potential knows no boundaries. Success has no limit. Failure is no longer a dead end but a challenge along the way. What is uncertain is no longer a threat and risks are manageable. Being empowered by knowledge and strengthened by knowing how to use it leads to being committed to a bigger picture than ever before. So now a new question must be asked….
Are you prepared for a future in property development?
Before you invest in a paid course, please take the time to go through the free short course in Property Development. It is not fluff and offers a lot of value and can help you to decide if property development is right for you.