I’ve lost count of the number of students I teach whose initial ambition was to become their own Project Manager. If you want to be a Property Developer, don’t do that. Instead, you want to be the CEO who hires a Project Manager to manage your projects for you, to be your eyes and ears on the project and to report back to you.
As a developer, you won’t be drawing up the architectural plans or laying any bricks personally. Instead, you’ll be hiring an architect and employing a main contractor who’ll take care of this. In fact, as a developer, you’ll probably have a couple of dozen different professionals working on your project. This is where the leverage comes in. Even though each of these people may have decades of experience in their respective careers, all you need to do is pay a relatively modest fee to hire them to work on your project. You are simply creating a team of professionals to work under your Project Manager, with you sitting at the top of the tree as the CEO. Now, look at you! Suddenly, you’re heading up a team of professionals with hundreds of years of experience between them and who have completed hundreds of development projects. And the best part is that you don’t have to shell out for their services personally; their fees will be paid for by the development finance.
If you find yourself having newbie nerves, think about Richard Branson. He recently launched his first cruise line, Virgin Voyages. But he didn’t start this venture, having spent thirty years in the cruise line industry, rising from cabin boy to captain. Instead, he’s simply an entrepreneur who saw a great opportunity and who used his existing CEO skills to pull together a team that already has all of the experience necessary to make it a success. Did he attend that first board meeting thinking, ‘I hope no one asks me what the front end of a boat is called or what it costs to build a cruise liner?’ Probably not. He has a team of people sitting around the table that can answer those questions for him. What he does have are the skills necessary to see an opportunity and build a team capable of taking advantage of it. And, of course, you wouldn’t bet against him succeeding.
Now, your role as a small-scale property developer is of the same mould. Nothing quite as grand as running a cruise line, but the principle is the same. You’ll be playing the role of Richard Branson in your (much smaller) property development business, and your extended team will be on hand to deal with the details and the technical stuff.
So what exactly will you, the developer, be doing? Well, at a high level, your job breaks down into several key roles:
- You’ll need to establish your business, strategy, and brand, and decide what type of development you’re going to tackle.
- You’ll have to recruit your team of professionals, including architects, solicitors, project managers, structural engineers, etc.
- You’ll need to be able to find a supply of good quality, profitable deals. These will need to be analysed to sort the wheat from the chaff and decide which ones are worth pursuing.
- You’ll be arranging the finance for your first project, working with both commercial lenders and private investors.
This is all well and good, but what skills do you need to be a property developer? Surely you can’t expect to earn the sort of money developers make without having any talent or knowledge whatsoever? Well, I’ve been training and working with developers for nearly 40 years, and here, in my opinion, are the essential skills that you need to do the job well.
1. Organisational skills
Your property development business won’t happen unless you are highly organised. You also need to be systemised and make sure you establish processes for each part of your business. They take effort and foresight to set up, but they pay big dividends and stop your business from degenerating into a shambles.
2. People skills
Development is fundamentally a people business. Not only will you be working with a team of professionals, but you’ll also be wooing estate agents, lenders, and private investors. This requires the ability to create and build rapport. And, of course, development projects always have a few bumps in the road, so you’ll need to be able to make sure you get to the end with all of your critical relationships intact, ready to go again.
3. Management Skills
Property development is a business, and you need to operate it as such. This means deploying management skills to run your business and being highly disciplined. You’ll also need to stay on top of cash flow, as even profitable deals could fall into the red on their journey unless you manage things effectively.
4. Decision-making skills
Any decision is often better than no decision, and in development, you’ll have a team of professionals to advise you. The problem can arise where the developer needs to make a difficult call, and they dither, hoping some silver bullet solution might suddenly arrive. This dallying has scuppered many a project, frustrating the contractor who can’t get on with things until a decision is made. So when the ball is in your court, make a decision quickly and move on. In development, time is usually money.
5. Hard work
Once you’re up and running, development can be a job you do in your spare time. But you’ll need to put in some hard graft to get started. You’ll also need to be persistent. Great deals don’t grow on trees, and there’s no guarantee you’ll find one quickly. The good news is that this frightens off most of the competition, so if you know what you’re doing and you stick with it, you’re likely to be successful.
Your property development education is the glue that holds all of the above together. Can you avoid making any expensive mistakes without getting training? It’s theoretically possible, but then it’s also possible to jump out of a plane without training. The other thing that education gives you is the ability to see opportunities that other developers can’t see. And you’ll want that edge so you can get the best possible deals.
It’s easy to get disheartened. Great deals can be difficult to find, and projects rarely go entirely as planned. The spoils go to the developer who keeps going. But your first project will inevitably be your most challenging, and the journey gets easier as you build your experience and reputation.
Organisational skills, people skills, management skills, decision-making skills, hard work, and determination are already part of the working day for many people. To be a highly successful property developer, add in a little learning. The core skills you require are not specific to the industry, so be a little more Branson.
ABOUT THE AUTHOR
Ritchie Clapson CEng MIStructE is a veteran property developer of almost 40 years and co-founder of propertyCEO, a nationwide property development and training company that helps people create a successful property development business in their spare time. It makes use of students’ existing life skills while teaching them the property, business, and mindset knowledge they need to undertake small scale developments successfully, with the emphasis on utilising existing permitted development rights to minimize risk and maximize returns.