Becoming a developer without your own money may seem impossible, but with the right strategies, it’s achievable. In this part two conversation of Moss with Mike, they discuss the key aspects to consider.
To gain financing, invest your own money upfront for valuation. This shows lenders your confidence in the project’s growth potential. Conduct thorough research before spending on valuations or architectural drawings. Don’t underestimate the impact of essential features like direct water access on a site’s value.
Ensure feasibility throughout the acquisition phase. Allocate a budget for due diligence and make informed decisions. High-end developments with attractive features can increase value, but be cautious of overcapitalization.
Loan structures play a vital role. Private financing allows capitalization, reducing upfront costs. Standard lenders offer lower fees and leverage. Protect your assets with a sound legal strategy.Private finance has higher fees, but you can capitalize on costs. Standard lenders offer lower fees and leverage. Understand these options to make informed choices.
Becoming a developer requires an experienced team and careful decision-making. Don’t rush, and plan wisely.
Ready to delve into the full episode and unlock the secrets to becoming a developer without your own money? Listen now and pave the path to your developer dreams.
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Episode Highlights:
- 00:00 Welcome to Helpmebuy Property Podcast
- 01:38 Establishing the GRV in a Development
- 04:20 Have a Small Budget for Due Diligence
- 06:36 The Problem With Lowballing the Price
- 11:05 Pivoting the Business Model to Bring in Serviceability
- 13:11 Why Private Equity Might Be Better Suited to Capitalising
- 16:34 What is a Serviceability Business Model?
- 25:00 No Private Debt Funding and Cash Equity
- 25:49 The Importance of Staging Property for Sale
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