Are you considering becoming a first time property developer? It’s a potentially lucrative sector, and there are no qualifications needed. You may be looking to purchase old properties, refurbish them, and sell them on for profit. Alternatively, you could be considering investing in large scale developments—or even wanting to work in the emerging and increasingly important build to rent sector. However, the sector isn’t without risk—and you should carefully consider your options before proceeding.
Enness works with many experienced property developers, but we’re also able to support those looking to explore the market by becoming a first time property developer. Such clients can range in their experience; you might be a total beginner. Alternatively, you may have a wealth of experience in a related industry, such as construction, but have never personally tried to develop properties before.
Unfortunately, even if you do have plenty of experience in a related industry, lenders will still view you as a first time developer and this may reflect in what you are offered in terms of lending. Lenders will always initially look to see a successful property development track record, and if you can’t show this, you may think that developer finance is unavailable to you. Fortunately, Enness has built close relationships with a large number of specialist lenders, and through this network, we will generally be able to support you in your ambitions.
So what will you need to prepare to begin this process? You’ll need to be able to show your plans for a well thought out and profitable development. You’ll need to create a solid business plan with targets and projections.
You’ll then need to identify what approach you want to take, and what your exit strategy will be—that is, how you’ll prove to your lender that you can service the debt. Generally when becoming a property developer, you’ll either be looking to buy and sell for profit, or buy to let, using the rental income to service the debt. You’ll then need to do general research, such as location.
From that point, we’ll be able to help you secure finance by using our extensive experience to present your case appropriately for the lender we have in mind.
We’re also able to offer you industry leading guidance on how to enter the development market, so if you have questions about any aspect of becoming a property developer, we’d be delighted to advise you on this. Please contact us for a further discussion.