Most of our property development projects follow the same process which is broken down into fifteen steps. Depending on the region that we are developing in, some of the processes described below may be called different things or need to occur in a different order, but in the majority of cases this overview provides an accurate summary of the steps involved to bring a property development to completion.
Step 1: Site Evaluation (2-3 weeks)
We identify promising suburbs by examining their recent performance and looking for indicators of future price growth such as population increases, infrastructure upgrades, new employment hubs, and additional amenities. From this, we create a shortlist of suburbs that are suitable for property development.
When we locate a land lot of suitable size in a shortlisted suburb, we research the sales history of nearby properties to provide a pricing baseline. We then create a preliminary plan to determine how we can develop the land and how many new properties we can build.
By combining this preliminary plan with the pricing data, we can generate a feasibility report. The feasibility report considers the projected revenue from selling the completed properties and compares it to the expected expenses required to complete the project.
The findings of the feasibility report determine if we proceed with a Development.
Step 2: Purchase & Capital Raise (1-2 months)
When the decision is made to proceed with a Development, the property is purchased by a Special Purpose Vehicle company and a deposit is paid. To cover the remaining cost of the land so that we can successfully settle, we raise capital from investors. Investors’ monies are deposited into a Unit Trust created specifically for that Development and investors receive Units in the Trust proportional to the sum they invest.
Step 3: Development Design (2 months)
Once we decide to proceed with a Development, we seek out an architect and town planner to assist with the creation of a design for the Development. The key factor that influences our selection of an architect and town planner is their experience working with properties in the area.
We collaborate to produce a layout and design for the properties that will generate the highest sale price. We also preemptively check with the town planner that our proposed plans meet the requirements of the relevant Council to prevent later delays.
Step 4: Planning Permits & Approval (3-4 Months)
Now that we have a satisfactory plan we must obtain permits to begin construction. Australian planning schemes regulate the use and development of land by requiring permits before certain types of development can start. If the Development involves land subdivision, this is where the subdivision is approved.
We meet with the nominated town planner for the Development to determine if the proposed plan meets Council requirements and what additional information will need to be submitted. We then submit the application.
Each council has their own requirements, which is why we consult with the town planner, but a typical submission involves a site plan, elevation drawings, a written report, costing estimates, and a current Certificate of Title.
Part of the application process is Advertising. Any plan to develop land must be advertised in the area, so that any locals who may be affected by the development are aware of the development and have an opportunity to voice their concerns. If any appropriate complaints are raised, the building plan may be rejected until those objections are addressed. The period of advertising varies per state but is usually around two weeks.
Once any concerns from neighbours are addressed, we can make a final submission and obtain Development Approval.
Step 5: Building Approval (3 Months)
Once the planning permit is approved, we move to obtain building approval. Building approvals have different names in each state and territory, but the concept is the same. All residential building work involving a new home or a renovation to a home needs a building approval. A building approval must be obtained before any building work can start.
Getting building approval requires us to show the council how the properties will be built, the technical details of construction including all materials, and what Building Code of Australia (BCA) requirements will be met.
Step 6: Tender Process (1 Month)
Once building approval has been accomplished, we go to tender to find suitable builder. We approach a minimum of five builders and obtain quotes from them to build the development. Based on the quotes we receive back from the builders, we select one based on the price, quality, timeframe, and builder’s credentials.
Step 7: Off the Plan Sales (Ongoing)
To maximise the profitability of the Development, we endeavour to sell all properties as soon as possible. As such, our sales are handled in-house and through the engagement of our selected channel partners.
After receiving council approval we create a contract of sale so that we can legally begin selling the properties. We create ads for Facebook to generate leads who are interested in buying the Development’s properties. We utilize Facebook as our main platform to generate leads because it offers the best cost-per-lead ratio of any marketing platform. By using Facebook’s algorithms to target specific demographics and psychographics, we can advertise to people who are both interested in purchasing property and capable of meeting the finance requirements.
By clicking on the Facebook Ad, the prospective lead is redirected to our website where they fill out an enquiry form.
Each lead who enquires is automatically added to our Customer Relationship Management system and assigned to a specific consultant. This one consultant manages all interactions with the lead to build rapport. The consultant contacts the lead and arranges for a time to meet face-to-face. When they meet, the consultant uses supporting material to assist with the sale.
To reserve the property, the lead pays a reservation fee, officially becoming a client. At a later date, the consultant meets with the client again to arrange for the deposit to be paid and the contract of sale to be signed.
Step 8: Builder Appointment
Based on the quotes we received back from the builders in Step 6, we select one based on the price, quality, timeframe, and builder’s credentials.
Step 9: Construction Funding (1-2 Months)
Once a builder has been selected we obtain a construction loan from a lender to pay for a portion the construction process. The interest on a loan is cheaper than the returns we offer to investors. So by obtaining a construction loan we can keep costs down, increasing profit, thus allowing us to offer greater returns for a smaller number of investors.
Step 10: Construction (9-12 Months)
The construction process involves several stages. The first stage is to prepare the site. This involves the disconnection of services, demolition of any existing dwellings, and some preliminary plumbing. If the Development involves subdivision, each new lot needs to be prepared with electrical, water, gas, and waste infrastructure. This typically involves connecting to the preexisting infrastructure and establishing a body corporate to manage the shared utilities.
The house and land lots of this Development require the construction of required infrastructure: a connecting road, footpaths, stormwater drainage, sewerage, water reticulation, electrical supply, and NBN internet.
Next is construction of the townhouses for Stage 2. This involves the creation of a concrete slab as a foundation, followed by the erection of the framing and roof trusses. The next step is to build up the exterior or facade of the properties. Electrical wiring, plumbing, and other piping is built into the walls before insulation is installed and the interiors are constructed. Flooring is installed, as is the tiling in wet areas. Exterior doors, garage doors, and windows are fitted, making it possible for the building to be ‘locked up’ for the first time. Finally, tapware, baths, sinks, mirrors, and vanity items are installed.
Before handover occurs we inspect the properties with the building manager and identify any issues which need to be fixed. Once those issues are fixed, the keys are handed over to us.
Step 11: Established Sales (Ongoing)
This process is similar to the off the plan sales process, except we have additional supporting material for the Sales Consultants. This includes a lookbook, investor book, and a promo video. We may also arrange for on-site inspections/tours of the properties.
Step 12: Titles (2-4 Weeks)
We lodge the required documents to the relevant State governing body for title registration.
Step 13: Settlement (1 Week)
Once we receive the Titles back we officially settle the property and present the purchasers with their Titles and keys to their new property.
Step 14: Profit Deposited
All income from the sale of the developed properties is deposited into our solicitor’s Trust account.
Step 15: Profit Distributed
The monies in the solicitor’s Trust account are then distributed to the Unit Holders in accordance with the Trust Deed, bringing the project to a close.