Developer mentor to share profit

[bumblegoodie]

Hello again,

i have been reading alot of articles, forums and emails saying the benefit of joint ventures.

as well as the inspirational stories from experienced ppl here saying to take things seriously you have to be hands on.

so with the two in mind, any developer mentors here willing to take me as their student.

As iam still a newbie with the local sydney council rules, would it be rude to ask for a local mentor? i know OC1, Westminster are very experienced but are located in Perth.

this is also my short term goal for 2015 to complete at least one development and make a profit by the end of the year.

Below is my proposal:-

1. i will pay for costs including buying the land + construction costs
2. i will conduct all research with your guidance
3. i will share my profit (% to be agreed with ourselves)
4. no risk to my mentor and receive a profit
5. will require my mentor guidance and support at every stage of the project
6. prepare to start off with a duplex or subdivision development

All i need is the mentor's time to ensure the success of the end result.

I will also like to share this experience with everybody here.

 

[mflying]

Buying a profitable deal in Sydney would be a challenge!


No need to pay money.. If you need help, post genuine numbers and deal on forum and plenty SS members will give you their honest feedback and guidance.

 

[bumblegoodie]

Buying a profitable deal in Sydney would be a challenge!


No need to pay money.. If you need help, post genuine numbers and deal on forum and plenty SS members will give you their honest feedback and guidance.

thanks mflying.

the site for sale belongs to Hornsby council and is close to shops, rail, medical centre and school. all within walking distance.

This is the site details:

1. over 1000sqm
2. over 15 metres wide
3. R2 zoning
4. house at front situated slight on the side

there this may be ok to do a sub-division. a battle axe type or do a duplex.

could you point me to which feasibility calculator is the best to use?

 

[mflying]

A good architect can advise you possibility of future development.

15 meter frontage may/may not be good enough for duplex (check relevant dcp)

For battle Axe..you will neeed 3.5 to 4 meter access way.so check side set back of existing dwelling.

 

[bumblegoodie]

thank you guys.....

i thought it might be interesting to share the numbers as well have a local mentor to support me along the way which i can phone and have immediate chat.

 

[MoneyNverSleeps]

thank you guys.....

i thought it might be interesting to share the numbers as well have a local mentor to support me along the way which i can phone and have immediate chat.

I agree. I'm in the same situation as you and the learning curve is much steeper without an experienced mentor showing you the rope. This is one of the main reasons why I'm seriously considering paying for a good mentorship program. When you think about it, noone is going to do it for free and if you split profit and guaranteed whoever links up with you will want the bigger profit share (naturally) the profit share in one single deal will already be much higher than the cost for one of these programs.

 

[sanj]

I agree. I'm in the same situation as you and the learning curve is much steeper without an experienced mentor showing you the rope. This is one of the main reasons why I'm seriously considering paying for a good mentorship program. When you think about it, noone is going to do it for free and if you split profit and guaranteed whoever links up with you will want the bigger profit share (naturally) the profit share in one single deal will already be much higher than the cost for one of these programs.

If you're bringing in someone to do the work and you're doing the funding typically you'd give up anything from 20 to 50% of profit, definitely not the bigger profit share.

Even 50% is imo too high

 

[superAndrew]

Involve someone else experienced for your first development and give them a % of the profits.

They will have a personal stake in the project and will be more inclined to make it succeed.

As sanj said you could negotiate something between 20 - 50% assuming you only do the funding and they do the work. However given the fact that you want to be involved the % could be lower

 

[bumblegoodie]

I agree. I'm in the same situation as you and the learning curve is much steeper without an experienced mentor showing you the rope. This is one of the main reasons why I'm seriously considering paying for a good mentorship program. When you think about it, noone is going to do it for free and if you split profit and guaranteed whoever links up with you will want the bigger profit share (naturally) the profit share in one single deal will already be much higher than the cost for one of these programs.

thanks for the reply. yes is certainly harder to do it yourself and learn the ropes. since we have the same interest and live in sydney maybe we can chat over a coffee and share knowledge and then bring those info to this forum as well?

PM me if you are interested?

 

[bumblegoodie]

If you're bringing in someone to do the work and you're doing the funding typically you'd give up anything from 20 to 50% of profit, definitely not the bigger profit share.

Even 50% is imo too high

yes course of.... i think that percentage will need to be agreed by both parties but hey if both are making a profit and can be replicated why not!!!!!

i love team work!!!

 

[bumblegoodie]

Involve someone else experienced for your first development and give them a % of the profits.

They will have a personal stake in the project and will be more inclined to make it succeed.

As sanj said you could negotiate something between 20 - 50% assuming you only do the funding and they do the work. However given the fact that you want to be involved the % could be lower

thanks Andrew. agreed... dont mind the lower profit.. .. i think if i make a mistake the costs will reduce the profit margin anyways

 

[oc1]

yes course of.... i think that percentage will need to be agreed by both parties but hey if both are making a profit and can be replicated why not!!!!!

i love team work!!!

I'm not a fan of doing a JV with people with no development experience. GENERALLY, since the process isn't understood they don't understand the risks involved (not knowing what you don't know), only see the rosy side to it (all upside no downside), which all leads to a nervous JV partner when you encounter bumps along the way.

 

[bumblegoodie]

I'm not a fan of doing a JV with people with no development experience. GENERALLY, since the process isn't understood they don't understand the risks involved (not knowing what you don't know), only see the rosy side to it (all upside no downside), which all leads to a nervous JV partner when you encounter bumps along the way.

Hi Oc1, thanks for the reply.

Yes you are right and that is why i said in my initial post i will pay for the land and loan costs and take on all the risk.

However, the mentor will get an agreed % of profit without putting themselves at risk.

I just need someone dedicated to give me advice and guidance along the way.

As you can see in all my previous posts iam studying hard to get a good understanding but as you said there are things that one would not know until they experience it.

BG

 

[superAndrew]

I'm not a fan of doing a JV with people with no development experience. GENERALLY, since the process isn't understood they don't understand the risks involved (not knowing what you don't know), only see the rosy side to it (all upside no downside), which all leads to a nervous JV partner when you encounter bumps along the way.

Bumblegoodie seems to be pretty eager to learn about the ups and downs and is willing to fund the whole project.

 

[Mick C]

Hornsby council is the most difficult council to deal with...a lot of environmental planning requirements + most are resi low density + 50% ratio for land to usage space etc....

I have a site in Cheltenham (the Cresent/Lyne rd)- corner block faces the train station and it's 1,200 sq clear flat land with no heritage listing, current house is bang right in the middle so need to knock down.

Put in DA for 3 townhouse...and it's been sitting there for 10 month
Council town planner comes back that they prefer if i consider doing a 10x1 bedroom over 55's development as it's so close to station etc.....WTF

Previously having Dealt with council from bankstowns and Nowra etc...all nice and simple. Submit...some concerns...amended and approve and within 6 month.


If the site is in Hornsby...good luck

P.s Personal opinion.

thanks mflying.

the site for sale belongs to Hornsby council and is close to shops, rail, medical centre and school. all within walking distance.

This is the site details:

1. over 1000sqm
2. over 15 metres wide
3. R2 zoning
4. house at front situated slight on the side

there this may be ok to do a sub-division. a battle axe type or do a duplex.

could you point me to which feasibility calculator is the best to use?

 

[bumblegoodie]

Bumblegoodie seems to be pretty eager to learn about the ups and downs and is willing to fund the whole project.

.

Hi Andrew,

yes, iam keen to learn and get hands on but since iam putting alot of money at risk (in my own opinion) is better to get it right and get a smaller portion of the profit and share it then making a loss.

At present i have a site in Blacktown NSW that iam thinking of doing a duplex.

looking at the council website now and will put together numbers. Will make another post later as a diary in this forum.

currently looking at :

1. DCP
2. LEP
3. feasibility study


BG

 

[MoneyNverSleeps]

I'm not a fan of doing a JV with people with no development experience. GENERALLY, since the process isn't understood they don't understand the risks involved (not knowing what you don't know), only see the rosy side to it (all upside no downside), which all leads to a nervous JV partner when you encounter bumps along the way.

Case in point. Unless there's a personal relationship, most experienced developers wouldn't bother wasting their time with newbies not only because of what's mentioned above but also due to the time and efforts they have to spend holding the newbie's hand through every single step of the way.

What if a newbie has available sites and finance ready to go? I doubt an experienced investor would have trouble finding either. The thing they lack the most and cannot afford to spend frivolously is TIME which is what the newbie is asking for.

 

[MoneyNverSleeps]

thanks for the reply. yes is certainly harder to do it yourself and learn the ropes. since we have the same interest and live in sydney maybe we can chat over a coffee and share knowledge and then bring those info to this forum as well?

PM me if you are interested?

Sure thing mate, as I'm only just starting out on my persona PI journey I would love to meet as many people on the same path as possible. I'll PM you and we can catch up for a chat over coffee sometime.

 

[oc1]

However, the mentor will get an agreed % of profit without putting themselves at risk.

I don't want to dampen your enthusiasm as you should persist with this if it's something you really want to do. However, you need to view this with a developers hat on. There are risks and you are viewing risk only from a monetary POV. The developer risks time and potentially a lot of it. Some projects can take 15 months others 36 months. What if you lose your job and can't fund the project once the DA is issued? What if you experience an unexpected event placing the project on hold, meanwhile the developer has risked a lot of his/her time for no reward. These are risks to consider even before you take market risk into calculation. To increase your chances you would need a cracker of a site. And to protect yourself a developer that has the time to meet your expectations.

Case in point. Unless there's a personal relationship, most experienced developers wouldn't bother wasting their time with newbies not only because of what's mentioned above but also due to the time and efforts they have to spend holding the newbie's hand through every single step of the way.

What if a newbie has available sites and finance ready to go? I doubt an experienced investor would have trouble finding either. The thing they lack the most and cannot afford to spend frivolously is TIME which is what the newbie is asking for.

Well put. I would seek a friend or a friend of a friend first.

 

[bumblegoodie]

I don't want to dampen your enthusiasm as you should persist with this if it's something you really want to do. However, you need to view this with a developers hat on. There are risks and you are viewing risk only from a monetary POV. The developer risks time and potentially a lot of it. Some projects can take 15 months others 36 months. What if you lose your job and can't fund the project once the DA is issued? What if you experience an unexpected event placing the project on hold, meanwhile the developer has risked a lot of his/her time for no reward. These are risks to consider even before you take market risk into calculation. To increase your chances you would need a cracker of a site. And to protect yourself a developer that has the time to meet your expectations.



Well put. I would seek a friend or a friend of a friend first.

thanks OC1 couldnt agree more.

i guess i just go back to square one and learn then do the development myself with the help of somersoft members.

i certainly do not expect to be spoon feeded but guidance along the way.