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  • Refurbish/Develop

    I have found a site, I need to approach owner...

    ...So I have been "sprouting my wares" and found two sites in Berkshire near Reading, one is an old derelict cottage and the other a small industrial site neither in conservation areas and I think both have legs re planning...the cottage is privately owned and the industrial site is owned by a company dormant though I have tracked down the director:......

    Do my letters need to have a different tone for a private individual?

    What should I include or avoid in any approach?

    Anyone done this before who can give me some pointers?

    Thanks

    Bromwyn
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    Hi Bromwyn

    I've recently been in touch with a few owners and what I've found is that it's an extremely frustrating and slow process. Given that they're sitting on these properties means they either don't really want to sell or can't be bothered going through the sale or it's not the right time. With this in mind it's very different to buying from s motivated seller with an estate agent.

    I'd try to get a face to face meeting and have more than one strategy ready to present them. They might want to hold the property and participate in the upside so you can offer that. They might want a straight sale. Just have options.

    I don't think you need a different tone. You should come across as professional in both letters.

    Good luck!
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    East London based property developer, investor and speaker

    East-Eight.com

    Follow Me: Facebook Twitter Snapchat

    Thanks and interesting perhaps the approach should be to get a dialogue going, before talking about a purchase or other transaction

    Wonder if you or anyone has any thoughts about why owners seemingly hold derelict/unused buildings without wishing to generate income from them.. perhaps its a lazy individual or corporate who thinks the property will rise in value anyway (..and may be they are right....)

    I guess for those who have been successful with the "cold call" site finding strategy and have had success, what made the difference...yes the approach is important but was it as simple as luck/timing (the "numbers game") or something else??

    Best wishes Bromwyn
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    I think the answer is to be open and transparent about who you are and what you have in mind and be prepared to take time to nurture the relationship.

    People are suspicious of unsolicited contact and therefore its important to be very clear why you are contacting them, and to provide some credentials as to who you are etc.

    Once you get to speak with them, try and build some rapport with them. Then find out their relationship with the property. Maybe there is some "pain" there that you can help solve.

    So, take a long term approach as to building the relationship, take time to build some rapport and trust and you may get a positive outcome.
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    Approaching direct has been a very big part of the way I've always done things and you do need to bespoke everything slightly for each situation.

    Coincidently, here's something related which I think might be useful that I wrote on one of the FB Groups just last Friday (sorry it's a bit long-winded but there is some good stuff in there)....

    Site Finding and 'Creating' real off-market development opportunities

    After starting developing on a small scale over 30 years ago (refurbishing houses, gradually progressing to splitting houses into flats and then working on small new-build schemes) I eventually came to the realisation that the really clever money is made from finding sites, approaching (or being introduced) direct to situations and 'creating' the best off-market development opportunities. Understanding Land and Planning is the key.
    Following that discovery, I've spent the last 25+ years learning exactly how to do this (Site Finding, Creating Value, Planning & Development) in the most effective way possible, both for myself and for some of the biggest developers in the country (I used to be Head of Land for Barratt Developments).

    What follows is I hope some good advice, from my experience, about how to find the best off-market development opportunities (I only talk about Land, Planning & Development because that’s my expertise, but I think what I say applies to whatever you might be looking for - HMO’s, Flips etc).

    So here it is:-
    In order to find the best opportunities you need to look and think beyond the obvious. For example, many people are aware of the potential of pubs, petrol stations and office conversions ... That means, everyone is after these things and there's a lot of competition for them.

    As a result, rather than give you a list of specific types of things to look for,
    I thought it might be more useful to cover some of the principles behind finding and creating off-market opportunities so that you can start spotting more of these for yourself, with less competition.

    It's a big subject, but here are some key pointers.

    *Focus on real 'off-market' opportunities. There seems to be a lot of confusion about what off-market actually means so it might be worth a quick clarification. Off-market does NOT just mean that something isn't on with a directly instructed agent. Recently I've heard people suggest something is ‘off-market’ where an agent, sourcer or other individual might be talking to an owner (or their mate, or their mates mate, or their mates mates next door neighbour.... etc) and they subsequently punt it all over the place (effectively putting it ON the market). An off-market situation is where you are talking directly to a land (or property) owner with very little or, preferably, zero competition. The best way to create real 'off-market' opportunities is to spot them yourself and go direct or, to have very good relationships with people that will introduce you (and only you) directly to potential opportunities.

    *Remember that the majority of 'Land' opportunities are actually sites comprising existing buildings (so 'Brownfield' Land) that can be either demolished or converted/extended and redeveloped. The key criteria to look out for is that it is 'underdeveloped', that is, the density of the site (saleable square feet) can be increased or the value of each square foot
    can be significantly increased (i.e such as replacing industrial or commercial space with residential). Usually it's a combination of both. Often this will be situations where lower-value uses can be demolished (in the majority of locations residential will be the highest value use anyway) and there is potential for increased height and/or site coverage.

    *Get yourself educated around planning. The simplest and cheapest way to do this is to attend local planning meetings where you'll start getting a feel for what is being consented (or not) and why. Opportunities really are all around you everywhere, everyday. The more you understand planning the more angles and opportunities you will start seeing.

    *Get on your bike (or better still, walk). There are many potential sites that are off of main roads or behind existing buildings. When you are driving you'll miss a great deal of opportunities because you'll be looking forward most of the time (or you should be!) or going too fast. By cycling, walking or even on the bus (seriously, upstairs on the bus is great as you don't have to concentrate on the road and you get a whole different
    perspective on things) you will spot much more. On a similar note, I make a point of never going the same route twice if I can help it. The more different places you go to and the more different routes you take the more likely you are to spot an opportunity.

    *Keep your ears open. It's not just what you see that might indicate a
    potential opportunity. Every time you hear someone talking or a bit of news
    you should be thinking, 'how might this/that create a potential opportunity'? You should go through the same thought process when you are reading the local newspaper (highly recommended) or listening to the local news. To give some obvious examples, if a building has caught fire, there are rumours of a factory or business closing or moving or someone has just been made redundant, these are all signs that land or buildings could potentially become available for development. Change, good or bad, equals potential opportunity.

    *Put the word out. Years ago, when people used to ask me what I did and I
    told them I was a Land Buyer, the usual response I got was this - 'oh, do you drive around looking for land and buildings then?'. The answer, and the recommendation to you is this. No, I don't 'specifically' go out and about looking for sites, but every time I'm out, anytime, anywhere (taking a different route) I've always got my eyes (and ears) open. What does happen just as much is that I know a lot of people, they know what I do and that
    I'm good at it so, if they bring an opportunity to me, if it's at all workable then there's a very good chance I'll do the deal. It can be the same for you. So, as well as always looking myself, I've got a whole load of people (agents, sourcers and other professionals) looking for me, because they know that I know how to ‘create value’ (and of course, they get paid very generous fees when I do). You should learn how to do the same. Get in touch with all of your contacts, friends and acquaintances (it doesn't have to be just property people) and put the word out to everyone you know, telling them that you are in the market and exactly what you are looking for.

    *Finally, to contradict one of my opening comments slightly, although I wouldn't advise making the most obvious sites your main focus, you shouldn't totally ignore them either. The reason being is this - The market, and peoples circumstances, are constantly changing and there is therefore a big timing element as to what may or may not be a deal. You may approach what might look to be something that is too obvious at just the right time.

    For example, I'm currently developing a site for 8 big houses in West London (pictured above *Sorry? I don't think I can post the photos in PT*) that was one of the first things I spotted and approached in 1989. The site was stables (so underdeveloped in terms of both density and value) in the middle of a row of houses so it was a very obvious site. I got no response when I approached the owners at the time and no doubt tens, if not hundreds, of other developers and agents would have approached the owners over the years.
    A couple of years ago (whilst taking a different route...) I passed the site again and was surprised to see that it still hadn't been developed. I did a Land Registry search, wrote to the owners (there’s a very particular way that maximises positive responses) and on this occasion the timing was just right (the mum had recently passed away and the kids wanted to sell-up and cash-in).

    So remember, you need to think laterally, be persistent and never give up. Deals are everywhere and the more your look and learn the more you'll start seeing them.

    Whatever you do, even if you just take onboard some of the suggestions above, you will definitely find and create many more deals.
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    Hi higgsp,

    Great post very informative


    many thanks

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    Hi higgsp, great post and a bit of a cliff-hanger on the "very particular way [to write to the owners] that maximises positive responses". Probably a long shot, but any chance of a further insight into this specific aspect of approaching an owner with an offer? Ie, should you be crystal clear about wanting to purchase the land, or, more vaguely, discuss the owner's intentions for the land or something along the lines?

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