All Topics / Finance / Property Development Management and financiers
- I want to do subdivisions with multiple dwelling Property Dev Mng (PDM) for investors who wants a part of the action. After doing a PDM course I found what was missing is the upfront market research AFTER you have determined in which suburb to do development. The purpose of this market research is to determine what was built during the past 2 years, what sells well and what not, what ideas to “copy”, who were the previous role players (architects, civil engineers, town planner, builders, real estate agents) and to meet with them to get tips, do’s & don’ts, lessons learned and other information.
This research forms the basis of your new (and subsequent) development to ensure the most optimum time to market and maximization of your profits. It also provides the initial inputs for the feasibility study and the Development Finance Application (DFA).When discussing this with prospective investors all agreed that they don’t do it, that it is a great idea and probably of great value but are not prepared to pay for it. Therefore those I spoke to rather buy off the plan.
a. What services can I add to this ‘upfront’ research that will make it more attractive for investors/financiers? How can I sell such a research service?
b. Will you pay for such service? How much are you prepared to pay for it?
c. Where and how will I find investors that also want to be mezzanine financiers [In real estate finance, mezzanine loans are often used by developers to secure supplementary financing for development projects (typically in cases where the primary mortgage or construction loan equity requirements are larger than 10%). Most commercial banks requires 20%-40%]
d. How do I build an initial track record and reputation in order to develop a trust relationship with potential financiers / investors?
e. How much weight will a proposal and sample of a feasibility study carry when approaching mezzanine financiers for the 1st time?
f. Should I approach mezzanine financiers in the same way as commercial banks i.e only when the final DFA is available?Thanks in advance for your comments!
RegardsAny ideas or comments from anyone on this forum….
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