How Do I Get Development Finance
To Start Developing?
Real Estate Development Blog
First and foremost thank you sir so very much for all the informative information on "How To Become A Real Estate Developer." Indeed, you are truly a blessing.
Sir,I have one question I need to ask you.
How does one go about obtaining the funds one need in order to start as a developer.
The strong desire is there, the 25+ experience, abilities and skills are there but the funds or capital is an issue. What advice would you give in order to resolve?
Looking forward to hear from you very soon.
From the desk of Colm Dillon ...
Author of "Residential Development Made Easy"
I have written to several people on this very issue and I will enclose copies of the emails I sent to them ... read between the lines for the answer to your question.
A few other things to consider as well:
1. If you own a home or apartment, then the difference between what you owe the bank and what it is valued at is your equity ...
That equity can be borrowed against when you do a few other things,like ...
2. Add to that any savings you may have ... all of that can be used to get started.
3. Save money as quickly as you can.
4. Buy a house property - apartment - renovate it - using mostly your own labour and skill and sell at a profit or retain the renovated house and rent it out.
The rent pays off the mortgage so there is little drain on your cash reserves.
Revalue the house ... if it has increased in value use this increase in equity to borrow against.
Using your current personal income plus the income of the first house and the projected rental income of the house you intend buying. another property you want to buy and rent out ....
repeat the formula.
Stacks of people around the world have got very rich doing this - I know about one young woman who has only ever worked for McDonalds, and still does, and she is reported to be worth over $2 million.
Hope this helps ... here are some other emails I have sent to people.
Real Estate Development attracts a wide cross section of individuals. I get a lot of questions asking for advice about how to begin ... especially with limited money and knowledge.
Here is my reply from such a person and my comments to him may help you as you consider the issues. He currently an engineering student.
I have changed the names and a few other details to preserve privacy, but the questions and my answers may help you decideif you want to get into real estate development.
I'm very happy that my real estate development ebook helped you and that you liked my format presentation of the book.
I have been asked this question (funding) a few times in the past and I hope my suggestions help you.
The most inexpensive thing you can do now is 'acquire knowledge,' before you take on the responsibilities of added financial riskof actually doing your first development.
You have begun the knowledge gathering by studying my ebook, which is the only one on the web and now selling in 43 countries.
What I'm about to say, I say to everyone ... so you are not alone!
Knowledge is 'power'... and with 'knowledge power' you can achieve anything you want.
I define property development as "getting people to do, what you want them to do, to achieve your goal, within a set of Time Frame and a set Cost Budget."
Now that sound simple, but before you can start doing any of this stuff, you need to get all the information you need in orderto make decisions, give instructions, acquire market information, access finance, engage a consultant team, find a builder and many other things.
Your email does not give me much info on your current level of real estate development knowledge, so the extent of my advise may be slightly off the mark for you personally, buT here goes.
Let's consider an analogy from another profession - Trading the Stock Market.
All beginners are told to start off doing "Paper Trades" while they acquireknowledge.
That way you keep track of all your 'buy - sell' decisions and the result - 'profit or loss.'
"Paper Trading" stops you risking your limited store of cash, while allowingyou to learn the ropes. You can also analyse each decision without any emotional burden.
As you are still studying engineering, I suggest that you consider doing a variation of the 'Paper Trade' and apply it to real estate development.
In other words you take all the actions as though you were doing a full real estate development project and complete the whole deal.
In fact, why not try to locate a developer that is new or relatively new, to the business, and maybe about to undertake his/her first, second, whatever, project, and offer to be a 'Silent FREE Working Partner.'
What does Silent FREE Working Partner mean?
OK, LETS GO.
After you have assessed your 'Weekly Time' availability, put a written proposal together and offer it to the 'small developer.
It Might Include:
1.You have studied the process (my ebook) and can help in keeping the development process flowing in the correct sequence. Many people don't know there is a process - knowledge power.
2.You can do Feasibility Studies (my ebook) for him/her.
3.You can do Cash Flow calculations (ditto).
4.You can prepare Finance Submissions (ditto) ... most people don't have a clue.
5.You can gather market & marketing info in a logical fashion (ditto)
6.In fact, why not just go through my ebook and you can compile a list of contributions you can offer to the developer that will have them welcoming you with open arms.
7. Assure the developer of total confidentiatality.
8. Tell them where you are at - study - engineering - books - learning - own properties, but don't have the time for a self propelled project yourself for at least a few years.
9. You are someone to talk too, who is vitally interested in his/her success.
We all need someone to bounce ideas off ... two heads are better than one.
See what I mean about the Paper Trading analogy?
You are part of the real estate development process; on learning curve; not emotionally involved; not financially involved and the reward you get is experience commensurate with your input.
KEEP A DIARY!!
If you like the idea, why not try finding such a person? Ask a real estate agent who knows a few people who develop small projects and don't have the formal training you have from my ebook.
Many solicitors and accountants have this type of small developer client, who will be very pleased to have another person assist their client for FREE.
Indeed you may get many prospective developers from this source.
Hope I have helped you - don't hesitate to email again.
Residential Development Made Easy
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