As of June 22, our little company has just celebrated its first birthday and what better time to reflect on the last 12 months, our experiences and lessons learnt (there has been plenty!). Langton Developments had been in the works for over 9 months before we officially kicked off in June 21 by registering the company, and I fully believe the time taken to research, learn and get the right guidance before jumping in was the best first step we could have taken.
There has been a number of challenges, some great moments and some things we look back on now and laugh at - but overall, the number of lessons we have learnt in 12 months has been invaluable. A quick view on the high-level stats for the company (everyone loves stats) for our first year:
Snapshot:
2 land subdivision projects successfully acquired and commenced - due to complete in Oct/ Nov 22.
Over 900 letters mailed to property owners for pre-qualified sites in our target areas.
Made offers on 12 properties, both on and off-market.
Detailed desktop analysis and feasibilities completed for over 50 properties.
Completed the Property Developer Formula (PDF) course and commenced formal mentoring program (highly recommended).
Of the >900 letters individually printed, stamped, and mailed out to our target properties; I would say our response rate was around 2% (not great I know). We were also trying to acquire sites in the biggest property boom in SE QLD in basically forever, so that wasn't an easy starting point. With the ever-increasing property values, it made it very hard to assess current market-value / expected land sale value and owners’ expectations were being inflated with every month that passed. We spent a considerable amount of time (3 months) identifying where we wanted to be targeting and locking in our development strategy, to pinpoint the exact sites we wanted to acquire so we could move quickly when the time came. That was by the far the most boring part of the process but necessary to ensure you had a focus and to increase your chances of success.
We acquired our first site in December 21, a 1 into 3 in Capalaba (Redlands Council). This deal came to us through an agent we had kept in close contact with and made offers on other properties previously. So when the call came through that a property was about to come to market, we took the opportunity to be the first in to view it and put a contract on it that day. It was a site we had already short-listed in our pre-qualified sites list, so we knew what could be achieved. This site is not without its challenges mind you (we spent the first month clearing out existing house and getting it rentable), however we are working through each of those challenges and expect to achieve a great result by October/ November 22
Our second site acquired in May 22 was an on-market property in Wynnum (Brisbane City Council) in a great little pocket that I had been renting in. I knew the area well, what land was selling for and the potential for developing the 1470m2 block. This property had the original contract fall over from another developer who did not want to deal with the NALL protected mango tree at the rear of the lot (a monster of a tree). Our plans for subdivision took the tree into consideration and worked it into the design to make sure we could achieve a good result. There is also several up-side opportunities for this site given its size and positioning which we are looking into. We planned this purchase to lodge the DA the same day as settlement to expedite the project. We are expecting an approval from council in the next fortnight and highly likely this project will be completed prior to project 1.
What lessons have we learnt?
Many. I have picked the top 3 lessons from our first 12 months and what I would recommend to anyone else in the early stages of getting into development.
1. Take time to educate yourself, pick your strategy and plan what you want to achieve
We spent quite several months in early 2021 looking into all types of developments in all areas of Brisbane, putting offers in on properties, changing our strategy and approach and getting nowhere fast. We then recalibrated our approach in September 2021 and undertook a formal mentoring/ training program (PDF Formula), selected our strategy, and put the time in to research and analyse our selected areas (this was critical). Once we did this, we started to see all the mistakes we were making previously, and it allowed us to pinpoint exactly where we wanted to be and focus our efforts. You need to have a strategy and a plan, or you won't have anything to measure against.
2. Choose your team carefully
As a Developer, the team of consultants and property professionals you surround yourself with is your greatest asset. This is a people focused business and you need to be able to work with and trust those you have in your corner. We spent time building a strong and quality team around us (Town Planner, Engineer, Accountant, Solicitor and Surveyor) - your team will make or break your development and give you priceless guidance and advice - pick them well!
3. Build rapport with Agents, Owners, and Property Network
Building rapport applies to every single person you have dealings within the development space. Take the time to meet and establish a relationship with sales agents in your chosen area, your team (of course), other developers and property professionals in your local network and very importantly, the property owners you are trying to acquire from. Being recommended or referred on will be one of the most critical things that will help you as a developer, so make sure you focus on relationships first and foremost in all of your dealings.
What went well?
Securing and commencing two projects and submitting both for DA is an obvious highlight for us but I'd also mention the education and mentoring side - taking the time and investing in this has helped us to fully understand development and be able to identify issues early and solve them. Investing in self-education and learning is vital and I couldn't recommend it enough.
What didn’t go well?
We were in the early stages of discussing buying a property off-market (1 into 2 site), the owner was interested, and we decided it was a good idea to bring along a Contract ready to be executed (before having an offer agreed to). We were way too keen and excited and as you can expect - and it backfired massively (radio silence followed). Quite funny in hindsight but a missed opportunity (not a mistake we will make again). A key lesson - don't be afraid to make a mistake, but if you do just make sure you learn from it.
We hope you enjoyed this blog post, it's great to be a year in already and we have plenty planned for the next 12 months as we complete our current projects and plan in the next steps for our business. Onwards and upwards!
Chris and Jon.
Comments