Aligned Property Services

Development Consultancy – Building Your Development Team

Development Consultancy – Building Your Development Team

Development Consultancy – Building Your Development Team

Starting a property development is exciting.  Creating something from the ground up, or maybe giving an unloved building a new lease of life! There are opportunities to create significant value in property development, but it is also one of the highest risk areas of property in our opinion. 

It is therefore very important that you pick the right team, for that particular development, to give it the best possible chance of success.  If you are converting a listed building for example, your team sheet will have some of the same roles as a new build development, but use businesses and individuals with experience for those type of projects.

The below roles are not an exhaustive list, but we have attempted to give an overview of the key areas you will need to appoint teams or individuals on your developments, time and time again.  

Sales and Marketing

You may think it’s odd that we would start with sales & marketing, but one of the most important things in development is understanding your exits.  You need to know sales values, rental values, regardless of the type of project.  

Good commercial or residential agents are invaluable contacts, they can help you with live market data and insights, helping you shape the type of product you will develop.  It is important to understand the target market, so you can ensure the design works, and your development is not only fit for purpose but attractive to the end user, whether it is a student HMO, a trade counter or an executive home. 

Build relationships with the best agents in each area you operate in, they can help with acquisitions, appraisals and disposals, so hopefully you can provide them with opportunities too either via your projects or introductions to your networks.

Project Delivery Team

On some developments there may be a huge array of professionals supporting you, on others it may be a handful, depending on the size, complexity and value of your development.

In the majority of cases, it is normal for the development to start with an Architect, they will be able to develop a concept, design a scheme, advise on planning matters, and should it progress, co-ordinate other members of the design team such as engineers, create full construction drawings, and support it through to completion.

At this stage we need to consider viability, and we advocate getting professional costing advice from trained professionals rather than Dave at your local property meeting (sorry Dave!).  A Quantity surveyor will be able to review a design and the details of a development scheme, and build up an accurate cost plan, and cashflow forecast for the development.  

A competent QS will be able to advise you on costs to build something, a great QS will also be able to point out opportunities where the development may be able to designed differently to ensure the build is efficient in terms of time and costs, this can make or break a development so definitely worth getting this advice at the start of a project.  It’s worth noting that QS & PM services vary massively in their approach and commercial models so worth reviewing several options for your developments.

Funding

So now we have a viable development scheme and the core professional team in place, we need to raise the capital to cover the development costs, which is a crucial part of any successful property development.  

Whilst we are not going to go into detail here about how development finance works, it’s a complex area and due to the numbers involved we are again massive advocates of surrounding yourself with the best possible team.

For the less experienced, we would always suggest starting with a good commercial finance broker.  There are thousands of brokers in the market, from one man bands to large national firms, and it can be really difficult to find the right one for your development when they all say they can do a similar thing.  We work with several different brokers, and tend to use specialists for certain types of development projects.

A good broker will give you a range of finance options from credible and reliable lenders, with a detailed comparison of the proposals and the pros and cons of each.  It’s worth noting that most brokers charge fees, and also get some form of commission from the lenders, so make sure you understand that at the start, and when costs start to be incurred as this varies greatly.

Now you have selected a lender either via your broker or you have selected one yourself (if you have the knowledge, time and contacts), the next key is to understanding how they operate. Most will require a valuation of some sort at the start of the development process, some use a QS to “monitor” your project throughout, and they all have different fee structures, start up and ongoing costs that need factoring in correctly.

Another way to fund your developments is through private funding, using investor cash to either fund part or all the development costs, which has pros and cons, but very useful tool when starting out or scaling your property developments.  A subject we will go into in detail another day perhaps!

Professional Services

The main professional services you will need in property development are accountancy and tax services, and legal support.

Accountancy and Tax is something that needs to be considered right at the start of any property development.  The way you structure the development company, the way you acquire the property/land, the way you manage the construction, and the exit are all factors that could have massive implications on the financial success of the project.   

Legal support – from conveyancing when acquiring the land, supporting with development finance, investor loan agreements and concluding the exits, you need competent solicitors with experience, and capacity to support you throughout the process.  Again we work with a range of  different firms in this space to ensure we have the right coverage for our needs and those of our clients.

Construction

Once all the above are in place, just the small matter of delivery!  Construction is obviously an important aspect of every development, and the right selection process is vital.  

Whether you decide to go for a main contractor, or individual trades, we would highly recommend using a professional project manager to oversee the build if that is not you’re area of expertise.  Regulations are constantly changing, health and safety is an important aspect as well.

Getting the right delivery model for your specific development depends on so many factors, but our normal approach would be to appoint small main contractors on low value and simple projects directly, or split some of the larger mor complex jobs into packages for individual trades.

Once you have decided this, you need to select a construction partner.  Again if you are using a QS and PM service, they may do the majority of this for you.  

Remember that price is only one piece of the jigsaw, you need to agree the key terms such as payments, contract type, retention, and warranties. 

We would also recommend taking the opportunity to visit their other projects, seek references, check their capacity going forwards, team structure as a starting point. 

Summary

  • Starting a property development requires a wide range of skills and experience, and having the right team in place is essential
  • Undertake proper selection processes for all roles, don’t just go off recommendations, or just use the same person as last time as a default
  • Be prepared to pay up front for advice and guidance, it will save time, money and heartache in the long run!
  • As you get more experienced in property development you will take on more, larger and complex projects, having multiple teams and contacts for each area is great for resilience.

If you are looking at a development and would like help building the right team, Aligned Property offers consultancy services to support you to achieve that.  This can be undertaken project by project or on a longer term basis.  If you are interested in finding out more, please contact Tony or Paige at Aligned for a friendly chat.

Tony Houlihan
Founder & Director at Aligned Property Services | + posts

With a background in Procurement and a passion for property, Tony has been actively involved in the property sector since 2013. He took the leap in 2018 to focus on property development and has since developed over 25 homes, both new builds and conversions, across the North West.

Tonys’ goal is to make property easier for everyone, by connecting people with the right experts and knowledge to achieve their property goals, be that a bit of surplus income on the side or a full time career in their chosen area.

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