Property Development Project Management

[Claire90]

Hello All,

I'm interested in getting into property development. I will most likely start small with a subdivision.

For at least the first one, I'm thinking of using a company to select the site and project manage the development i.e. select and acquire the site, do feasibility studies, liaise with council to gain approvals, select and oversee builders etc.

I know a lot of you will say that I could do this myself, however, I would like to have it project managed for the following reasons:

1. I live in Sydney and do not wish to invest in Sydney.
2. I know an intelligent and experienced investor who lost $20k on his first development. His advice was to pay for the education / mentoring upfront. I think this would be a great way to learn.
3. I'm time poor.

Here are two companies that appear to provide the services I require:

Property Bloom - operating in the Hunter / Newcastle area
Developer's Edge - Operating in Brisbane

Has anybody used either of these companies or know of any other similar company to manage a development?

What I like about these companies is that they take a percentage of your profit as payment, so they have an incentive to ensure you make a profit.

I've spoken to representatives from each company. Here's what I found out:

Property Bloom recommended a duplex in a residential estate in Newcastle.
They appear to have good systems and processes and have managed many of these projects, but their fees are high which will most likely impact the viability of the project.

I also spoke to Sailesh from Developer's Edge. He came across as very knowledgeable, but has been focusing on larger developments for the last few years.

I'm just wondering if anyone has used either of these companies and / or can recommend any others.

 

[westminster]

If you were interested in Perth I do that service for development projects here

Whilst I don't charge a percentage of the profit, it is in my best interest for you to make a healthy profit so that you can then do another development. I charge a percentage of the land and then a percentage of the construction contract.

 

[Claire90]

If you were interested in Perth I do that service for development projects here

Whilst I don't charge a percentage of the profit, it is in my best interest for you to make a healthy profit so that you can then do another development. I charge a percentage of the land and then a percentage of the construction contract.

Hi Westminster,

Thank you for your reply. I think I'd like to start a little closer to Sydney (ideally Brisbane). I will definitely keep you in mind for future projects though. Do you mind me asking, what are the percentages you charge, and what services you provide?

 

[westminster]

Hi Westminster,

Thank you for your reply. I think I'd like to start a little closer to Sydney (ideally Brisbane). I will definitely keep you in mind for future projects though. Do you mind me asking, what are the percentages you charge, and what services you provide?

3% on land and construction contract. This gives you some strategy work, site find, feasibility, design concept, DA, construction management through to handover to a PM for property management or REA for sale.

 

[Mitch1]

project mgt

I think your approach is a sound one and one I have recently used due to my lack of knowledge in the area
I got quotes from 3 project management companies (brisbane)
who used different approaches and had one to one meetings with them.

1. P.Mgr who had a builders licence but was a figures and reports man
2. P.Mgr ex builder who moved into the area of project managing
3. P.Mgt co. who use the cloud for everything - all aspects are updated regularly and changes are uploaded for each stage for everyone involved to see (these only go to B.A. and leave everything to the builder at this point)

each gave a set quote with clauses for additional costs that may arise (extra site visits (except for no.3 who did not seem to visit!)
I went with no. 2
my reasons for this were purely driven by his building knowledge.

he effectively almost paid for himself by spotting something in the plans that had it gone through without changes would have cost a packet in the build due to access restrictions erecting retention walls. it looked good from an architectural point of view but the changes were not huge to correct this but needed to be sorted before lodging or we were stuck.
the downside was that this same guy is also pretty flippant about putting anything on paper outside of the contract but I was covering most of this and using an accountant. his build cost est were all verbal so hard to pin down! I eventually got this on paper by sending him mine and having him correct them

to get my figures, I got a quote from a very large building company to take on the project which gave me a very good idea of what these would be. very expensive option that I did not go with as I wouldn't have learned anything from it.

no. 3's overall fee to see it through to final build/planned sealing etc was just shy of 60k
I did find that getting it through to D.A. was pretty 'straight forward' and if going again would get someone at this point to pick it up from B.A. if necessary BUT this was because the town planner and architect did most of what was needed.

to protect myself prior to lodgement I would pay a draftsman to check over the plans prior to lodgement to ensure the building aspect would be optimal.

 

[Mitch1]

by the way, they did not source the land for me. if you find land to subdivide you can also use dial before you dig to find out if there are any services running through the block that might make subdivision impossible.

A town planner can also advise on wether subdivisions are possible. A reputable buyers agent can be used for this if you wanted an alternative to project mgt. sourcing the block

however, most R.E. agents are savvy enough to use this info in their blurb if development is possible but they always add STCA to cover themselves and there is a very good reason for that
pm me if you would like the number of the project guy I used. he is quite a forceful character but I found this quite useful!

 

[Claire90]

3% on land and construction contract. This gives you some strategy work, site find, feasibility, design concept, DA, construction management through to handover to a PM for property management or REA for sale.

Westminster. I would certainly be keen to work with you if it wasn't for the distance (I'm in Syd). I'll certainly be in touch if I expand my investing to Perth!

I love your work!

 

[westminster]

Westminster. I would certainly be keen to work with you if it wasn't for the distance (I'm in Syd). I'll certainly be in touch if I expand my investing to Perth!

I love your work!

Thanks Claire. It's a job I love doing as I have so much passion for it.

 

[Claire90]

Hi Mitch,

Thanks for your posts!
What type of development was it? Would you use that PM again? I think the refusal to document things would be a deal breaker for me. Do you mind me asking what was the price difference between the three?

 

[Mindmaster]

Thanks Claire. It's a job I love doing as I have so much passion for it.

Hi WM, a couple of questions for you.

Your service sounds extensive. If a client signs up with you, what else do they have to do apart from pay costs and arrange a PM or sales agent at completion?

In the current Perth market, are you able to source development blocks for your clients that will provide returns of 15-20% or higher at completion? Assuming holding, not selling.

 

[westminster]

Hi WM, a couple of questions for you.

Your service sounds extensive. If a client signs up with you, what else do they have to do apart from pay costs and arrange a PM or sales agent at completion?

In the current Perth market, are you able to source development blocks for your clients that will provide returns of 15-20% or higher at completion? Assuming holding, not selling.

Hi Brendan, it's a very comprehensive service. I'll PM you what it includes but all you have to do is sign lots of forms and make decisions based on my recommendations. I'll do colours and everything for you in that price and help with PM at the end.

I have a couple of 25% duplexes for $650-700k at the moment, a mixed commercial and 2-3 apartments at around 25% for $700-750k or I will find something specific to your strategy.

 

[Mindmaster]

Hi Brendan, it's a very comprehensive service. I'll PM you what it includes but all you have to do is sign lots of forms and make decisions based on my recommendations. I'll do colours and everything for you in that price and help with PM at the end.

I have a couple of 25% duplexes for $650-700k at the moment, a mixed commercial and 2-3 apartments at around 25% for $700-750k or I will find something specific to your strategy.

Thank you for the PM. I've gone over your information and your services pretty much covers everything. Excellent for anyone interested in a project manager and as the OTP mentioend, too bad about the distance.

Not looking for any project management services now but good to know what is out there, options available and so forth.

 

[Tano]

Myf is a rockstar of the property investment world and she has a uncanny nack for finding fantastic development sites by thinking outside the square.

 

[D.T.]

Myf is a rockstar of the property investment world and she has a uncanny nack for finding fantastic development sites by thinking outside the square.

Are you a sock puppet?

 

[Tano]

No, not at all. I have learnt alot by reading her posts over the years and following her projects.

 

[Mitch1]

Hi Mitch,

Thanks for your posts!
What type of development was it? Would you use that PM again? I think the refusal to document things would be a deal breaker for me. Do you mind me asking what was the price difference between the three?

Hi claire,

Multi unit build (9 2x2 and 2x1)

His PM strategy is not to get actual costs until DA approval at which point it is very refined, every item is listed for costing, used in the build. From bricks to taps. All of this is on paper. This is then given to builders for tender process, one is selected and a contract is drawn up. Get BA and so on.
Prior to this, you cannot accurately cost so he was obviously non committal but happy to give verbal estimates.
The first guy was approx 100k (this quote dropped by about 35k when he realised I was sourcing other quotes)
No. 2 was just shy of 60k
No. 3 was approx 40k but seemed excessive for just getting to BA and then left to builder.
Yes, I would use no. 2 again, but from BA to supervise build as long as I had either him go over architect plans before lodging to make sure there would be no build complications, or a drafty or builder I knew to do same. He also had some good cost cutting ideas during the build process and that is due to his own building experience. No. 1 I did not feel had this and. No. 3 was, for me, too high tech and not hands on. Just a personal preference.

I would also have 1-2 builders I wanted quotes from at tender along with his recommendations as he has a lot of contacts in the trade which is great in one way but narrows your options in other ways.

 

[Sailesh Channan]

I am happy to look for an manage smaller projects however, it is difficult to find something with 20% plus margins due the high asking prices for these sites.

I have moved onto larger sites for my own projects however, I have a lot of experience since 2001 in inner city sites (60 plus projects) and then established Developers edge in 2004 where I recommended outer suburb properties with excellent results. Refer to my facebook page for the results.

 

[dboy_tomato]

Yeah I am looking for a similar PM in Sydney. Does anyone has any recommended PMs? For a Duplex site?

Sorry if hijacked the threat abit

Thanks