Browse All Tribes or choose a Tribe below:
By signing up I agree to Property Tribes Terms and Conditions
Already a PT member? Log In
Sign Up With Facebook, Twitter, or Google
By signing up, I agree to Property Tribes Terms and Conditions
Already a PT member? Log In
Don't have an account? Sign Up
To reset your password just enter the email address you registered with and we'll send you a link to access a new password.
Hey guys, hope the spring sun is shining wherever you are! OK so I am relatively new to the property development scene but have come across some really interesting sites including rows of disused garages sitting on a large plot of land which has potential for development. Can the group provide some advice as to how I might approach a developer with a view to providing the developer with the opportunity in return for a site finding fee? what agreements would need to be in place with the developer to secure my position?
Your help and advice is much appreciated
Please take the following comments in a constructive way.
What is your fee based on? Will you provide a report, including planning requirements, estimated costs, sale prices and profits, etc.? Do you know if the land owners are willing to sell and for how much? BTW, you will probably need the former to achieve the latter. Even (some) real estate agents miss those points.
Some developers specialized in big developments while others do so with smaller projects, but most of them have their own preferences and searching systems (or trusted agents) and plan their next projects before they finish the current ones.
I would make sure I am adding value to the "opportunity". Otherwise it might drive the developer to think "why should I pay a fee when I still have to do all the hard paper work/research?".
Each opportunity is different. However a safer approach might be doing the necessary research, showing property owners the potential market value for their properties (based on your research/report) and securing your position with them before approaching developers.
I hope that helps.
PS. Comments based on experience. I used to work for property developers.
Hi David, really useful response. My aim is to provide a full assessment of the site,approach the owner(s) and build out the opportunity prior to approaching the developer. It’s more being clear on what agreement I would need to have with a developer to present them with the opportunity to ensure my position is secured and the value I have added is recognised.
In that case, it is the owner(s) you need to secure your position with. Ideally the owner(s) and you will have an agreement (in written) where you become their agent for those properties. Usually limited to a minimum selling price, time period, etc. You will need to make sure the owner(s) do not change their minds about asking prices or delay negotiations up to the point where your agreement expires. The best way to do that is an experienced solicitor's job, I used to be on the other side of the fence.
Cheers David your advice is a big help
What do you mean by 'build out the opportunity'?
Hi Snipes, an alternative to consider is a promotion agreement. This would allow you to secure exclusivity on the site, work up a planning permission and then sell the site on behalf of the landowner. You would need to pay for the design and planning fees but would take a percentage of the sale.
Perhaps this is too long term however?
Interesting, I’ve not heard of a promotion agreement before though it sounds similar to an option or subject to agreement. I am considering paying for training on land/site finding to increase my level of knowledge in the field. Paul Higgs (Millbank land academy) has a course which I am told is good though £1k for the day may be a tad price prohibitive!
Its similar to an option, however, there is no right to buy the site... the end exit is selling the site on behalf of the landowner. i.e. promote it.
Paul Higgs has great experience and track record working for proper developers, just like myself. If you are interested, I run an online academy which is very affordable comparatively. https://propertylikeapro.com/property-dev...nt-course/
All the best
Funnily enough I’ve read some of your property likes pro blog posts about the development process. Found them really insightful
you will need a good agreement with both the owner, and ideally, a developer lined up for purchase. Timescales are critical, you will have little control over the planning process - it can take longer. So your 'agreement' must take it into account. . Or you might run a risk of spending money on getting planning and your option runs out.
Courses: I actually went to one, found it a complete waste of my time and money.