If you take a look at the Virgin website you’ll see an impressive (and varied) number of brands, including broadband, aviation, radio, and holidays. Richard Branson doesn’t lay fibre, demonstrate safety instructions, hit vocals, or book hotels. He’s an entrepreneur who sees opportunities and who used his existing CEO skills to pull together teams that already have all of the experience necessary to make each business a success.
To be a success in property development, you need to be a Branson. As a developer, you won’t be drawing up architectural plans or laying bricks personally. Instead, you’ll be hiring an architect and employing a main contractor who’ll take care of this. In fact, as a developer, you’ll probably have a couple of dozen different professionals working on your project. You are simply creating a team of professionals to work under your Project Manager, with you sitting at the top of the tree as the CEO.
So what exactly will you, the developer, be doing? Well, at a high level, your job breaks down into several key roles:
1. You’ll need to establish your business, strategy, and brand, and decide what type of development you’re going to tackle.
2. You’ll have to recruit your team of professionals, including architects, solicitors, project managers, structural engineers, etc.
3. You’ll need to be able to find a supply of good quality, profitable deals. These will need to be analysed to sort the wheat from the chaff and decide which ones are worth pursuing.
4. You’ll be arranging the finance for your first project, working with both commercial lenders and private investors.
This is all well and good, but what skills do you need to be a property developer? Surely you can’t expect to earn the sort of money developers make without having any talent or knowledge whatsoever? Well, I’ve been training and working with developers for nearly 40 years, and here, in my opinion, are the essential skills that you need to do the job well.
1. Organisational skills
Your property development business won’t happen unless you are highly organised. You also need to be systemised and make sure you establish processes for each part of your business. They take effort and foresight to set up, but they pay big dividends and stop your business from degenerating into a shambles.
2. People skills
Development is fundamentally a people business. Not only will you be working with a team of professionals, but you’ll also be wooing estate agents, lenders, and private investors. This requires the ability to create and build rapport. And, of course, development projects always have a few bumps in the road, so you’ll need to be able to make sure you get to the end with all of your critical relationships intact, ready to go again.
3. Management Skills
Property development is a business, and you need to operate it as such. This means deploying management skills to run your business and being highly disciplined. You’ll also need to stay on top of cash flow, as even profitable deals could fall into the red on their journey unless you manage things effectively.
4. Decision-making skills
Any decision is often better than no decision, and in development, you’ll have a team of professionals to advise you. The problem can arise where the developer needs to make a difficult call, and they dither, hoping some silver bullet solution might suddenly arrive. This dallying has scuppered many a project, frustrating the contractor who can’t get on with things until a decision is made. So when the ball is in your court, make a decision quickly and move on. In development, time is usually money.
5. Hard work
Once you’re up and running, development can be a job you do in your spare time. But you’ll need to put in some hard graft to get started. You’ll also need to be persistent. Great deals don’t grow on trees, and there’s no guarantee you’ll find one quickly. The good news is that this frightens off most of the competition, so if you know what you’re doing and you stick with it, you’re likely to be successful.
It’s easy to get disheartened. Great deals can be difficult to find, and projects rarely go entirely as planned. The spoils go to the developer who keeps going. But your first project will inevitably be your most challenging, and the journey gets easier as you build your experience and reputation.
Your property development education is the glue that holds all of the above together. Can you avoid making any expensive mistakes without getting training? It’s theoretically possible, but then it’s also possible to jump out of a plane without training. The other thing that education gives you is the ability to see opportunities that other developers can’t see. And you’ll want that edge so you can get the best possible deals.
One of property development’s key attractions is its accessibility since, apart from your property education, the core skills you require are not specific to the industry. Many people have these skills and already use them in their careers, day in, day out.
*Ritchie Clapson CEng MIStructE is Director of propertyCEO