Reply: 1
From: Michael Yardney
Adam. Thanks for the questions. I'll try and answer them frankly to help others such as you get involved in the property developing game
>Just wondering how people become developers, did you have some sort of building trade, and graduate from that.
Many small developers have come from the building trade, but I guess a major requirement is having an entrepreneurial flair. I did not have a building background. I had a "real job", a profession before becoming a developer. I bought my first investment property in my early 20's (now 48) and for the next 15 years or so built up my investment property portfolio to be worth around $5,000,000. Then I supercharged my wealth creation because I realised that the property professionals did not go out and buy the newspaper and purchase their properties retail. They developed or built their properties at wholesale. So I started in a small way. I did some renovations first then built some houses for resale and then moved on to townhouses then industrial buildings. I employed builders and learned from my mistakes, but in the heady times of the 80's properties went up by 20 -25% per annum (interest rates where also very high (15-19%) and this huge inflation was very forgiving for my mistakes.
>What is a day in the life of a typical developer like.
I spend much of my days looking at properties and evaluating opportunities. This is partly in the filed and partly on the computer doing detailed feasibility studies/ I spend a lot of time invol;vbed on town planning issues to obtain permits. Part of my time is spent supervising the builders we employ and part of the day ensuring my team are doing their allocated duties. Recently I am spending more time with clients helping them become "armchair developers"- helping them build and buy their properties wholesale. I have a team that helps me, but I like the people contact. (It's more fun than choosing door knobs!)
>What stops you from going into larger scale commercial projects.
I have done many commercial and industrial projects as well as 2 broad acre subdivisions and one small city office building. Today I find there is more money to be made in residential projects. I am less daring in my older years. I've built up a substantial asset base and don't need to risk it, so I only undertake the projects that have the maximal opportunities for profit.
>Have you ever met a successful developer who came from professions other than the building industry.
Yes Many have because a successful developer needs to be an entrepreneur. Many come from legal and real estate backgrounds
Also do a lot of people fail at this
>game, and if so what are their
>common mistakes,
MOST developers fail (the big and the small ones) because they don't realise the complexities involved or they become overconfident. The biggest mistake is not understanding the property cycles and getting caught with stock that is too expensive when property prices fall.
> and finally is it alot of hard work and
stress, does it become easy money after some experience.
Of course it's a lot of work... there are no free lunches. You also need a deep understaning of many issues such as town planning, finance, negotiation, economic cycles and the building process. But doing the deals is fun. After a while it became a bit boring, very repetitive and that's why I started putting together groups of co-developers last year that is bringing outside people in and allowing them to but their properties wholesale like the professionals.
>Sorry about the amount of
>questions
Don't worry happy to help and it allows me to put in 2 free plugs
1. Anyone in Melbourne who wants to learn about the way I make money in the property market (there is something for everyone the newbie and the experienced) I will be holding a FREE event on July 17th Please email me on
[email protected] and we will send you details
2. Anyone wanting to learn more about property investing can subscribe to our free email newsletter - subscribe @metropole.com.au
Have a great weekend!
Michael Yardney
Metropole Properties
