It isn’t always easy to find a suitable property development site.
What many people confuse when looking for development sites is finding a piece/s of land that “look” good when in reality they are far from it.
The zoning and legal use of the land is obviously critical to development however even before you consider this aspect you must find out if there is demand for a particular type of property. There’s no point developing apartments if there are only freestanding homes and lot sof vacant land in the area; unless affordability is a problem.
Knowing that there is demand for a type of property product enables you to investigate whether developing that type of property would be viable in the locality where you discovered the demand.
I always do a hypothetical feasibility on land which may be suitable for the type of development that I have identified. If it stacks up then I know it is worth me spending time to commence the site acquisition process.
What is the site acquisition process you ask? That’s the process I use to approach property owners. It starts with sending very brief letters to property owners enquiring about their future plans for their property. I don’t say I’m interested in buying their property and I certainly don’t discuss price.
If someone calls me in response to my letter I must be prepared. Remember that the person calling you may have thought long and hard about calling you so when they call you have to answer the phone and give them enough answers to enable a face to face meeting.
If you don’t get a response to the letters you send then it’s time to hit the phones (many people’s phone numbers are available on the internet) or knock on doors. Because you send a letter you can say “I sent you a letter a couple of weeks ago…” which is your ice breaker.
Most people will acknowledge that they received your letter, some will deny it and some will hang up on you or close their door in your face. For those who keep dialogue open with you, you have about 30 seconds to get their interest so that you can have a face to face meeting. If you are door knocking you must be ready to sit down with someone immediately if they invite you in.
There is a whole new strategy that must take place for a face to face meeting and it differs for every different type of person. People in their 30’s are very different to people in their 60’s. Their goals and desires differ dramatically. You must know how to find out what is important to them and leverage that to facilitate a deal.
Whatever you do, make sure that you have draft acquisition documents ready. From the time someone says “yes” to when they change their mind is about 7 days; your window of opportunity is small and you must move fast.
