Market for the sale of property options, Adelaide

[cpsmith]

Hi All,

I recently came across the idea of securing viable development sites using a purchase option and then selling the option on to a developer. I have met a developer in Adelaide and another in Sydney who use this method.

While I understand that options are certainly not the way to go in many cases, would anyone know of developers who would be interested to purchase options for potential development sites that I could speak with? Essentially I'm trying to determine whether there is a suitable market for the sale of property options in Adelaide before I start the business of securing them.

Thanks!

 

[MRO]

Sounds like you have been to a seminar recently?

Lots of people trying to do the same thing and the hardest part is getting the property owner to understand why they should sell you the option rather than selling the property directly.

Are you planning on adding any value yourself or is this a straight onsell?

 

[Xenia IM]

Options are just a tool - the relationships with developers IS the business!
Negotiation skills are the business!

Knowing how options work without a business background, without knowing people, without having contacts, is like buying a hammer and expecting to make the same amount of money skilled trades people do using that same hammer.

 

[Corey Batt]

Options are just a tool - the relationships with developers IS the business!
Negotiation skills are the business!

Knowing how options work without a business background, without knowing people, without having contacts, is like buying a hammer and expecting to make the same amount of money skilled trades people do using that same hammer.

There was a thread of yours from a couple years ago regarding options: http://somersoft.com/forums/showthread.php?p=755769

As to the OP's post, I've found it very rare for the option holders to have their contracts available for a reasonable price to justify the development - as always everyone gets too greedy.

 

[Xenia IM]

Exactly!

I have used options successfully, we are still landbanking with them, we are still in negotiation with developers.

yes developers are open to ideas of options - that is how they purchase land.

Can someone be taught? When the majority of people are running away from things that are not even after them, running on fear - not a chance.
I would not waste my time - not on here anyway.

 

[Xenia IM]

Hi All,


While I understand that options are certainly not the way to go in many cases, would anyone know of developers who would be interested to purchase options for potential development sites that I could speak with? Essentially I'm trying to determine whether there is a suitable market for the sale of property options in Adelaide before I start the business of securing them.

Thanks!

Just to answer your question cp - yes there is a market for it. However like all business plans it takes time to develop relationships and build the market. Options are just the tool.
If you secure good land - there is a chance that someone could purchase it.

I have lots of options on the Adelaide urban boundaries, some have been renewed for a further 5 years.
I have sold property on option in the past also.

In a nut shell - yes it can be done, is done and will continue to be done by people in Adelaide.

My advice to you - take the time to get to know PEOPLE. This business is all about people and creating VALUE through negotiations and know how, not about bricks and mortar and dirt.

 

[cpsmith]

Just to answer your question cp - yes there is a market for it. However like all business plans it takes time to develop relationships and build the market. Options are just the tool.
If you secure good land - there is a chance that someone could purchase it.

I have lots of options on the Adelaide urban boundaries, some have been renewed for a further 5 years.
I have sold property on option in the past also.

In a nut shell - yes it can be done, is done and will continue to be done by people in Adelaide.

My advice to you - take the time to get to know PEOPLE. This business is all about people and creating VALUE through negotiations and know how, not about bricks and mortar and dirt.

Great, thanks for that. Just hearing that other people have done it is very motivating. A few months back I spoke with a number of the larger development companies and one in particular stated flatly that no one uses options except for very large land purchases like the development of Mt Barker. So to hear something different is great.

Over the last five years I've founded, built and sold a business in what was a new industry for me when I started. Your points about getting to know the people resonate very loudly. I found that the hardest part in moving industries was not the lack of technical knowledge, but the lack of people you know! Time to do it again....

Do you have any suggestions for getting started in meeting potential options purchasers? My personal network is a little slim in that area and the developers I have come across seem pretty isolated from one another. Is there something or somewhere they have in common or is it simply a case of sniffing around anywhere I can? (eg real estate agents, UDIA, Somersoft forums!?) I am well prepared for it to take time.

Cheers