Buying land to develop, how to get into it? Property developmentWatch this thread
I have quite extensive knowledge of my area so I have been giving advice to this developer friend of mine on sites worth looking at. I have made enquiries about a parcel of land near me and am waiting on a reply.
Would the bank loan me the money to buy land and develop it? There is an architect in my family and I obviously have a developer friend etc etc. I also have quite extensive contacts in local government and the council.
I think maybe start at the smaller end, buying up smaller plots of land or derelict houses at auction and doing them up etc? I am willing to defer big purchases for myself, like the money I have saved for a mortage and the money I'm saving for a new car, if any scheme would return profit. What about joint ventures with this developer?
I can't answer your questions about finance but I can say this about your property developer friend.
Be careful about blurring the lines between an assumed friendship or acquaintance. Your property developer friend has her own business, and first and foremost she will be viewing anyone with an interest that takes away her profit as a threat? Why if she is successful would she want to go into a joint venture with you or anyone? What is in it for her? It is unlikely to be for her benefit, or she might even exploit your inexperience. Many partnerships fail because of a breach of trust between partners. It brings out the worst in people. Be very very careful even with someone you think you know very well, even family. When the chips are down you can see a whole new side to someone you thought you knew - but didn't.
If you can be successful on your own keep going. You have control over decisions and your efforts are rewarded to you alone and not shared. You can still tap into advice and get the backing of more experienced small business start ups (usually from council enterprise projects) Do think twice before wanting to share your efforts. It can feel a very lonely place to have to make all the decisions but stick with it. Older, wiser and all that. Partnerships can all go wrong very quickly and they are messy to sort out at court.
If you have good contacts with people in land, government and council, they will prob give you far better advice than internet randoms, people often get specific qualifications and education to do this, they don't generally just decide.
A bank will probably not significantly lend to someone with no exp/collateral and they would also likely want to know about education, They won't take family or friends into account unless they are formally partners or similar.
Lastly, you're talking about restoring a derelict house as being the SMALL end? To be blunt, have you ever built or restored a house before? It's a massive MULTI DISCLIPLINE project, masonry, joinery, surveying, plastering, insulation, electrics, gas, plumbing, legal work, health & safety... unless you are professionally time served in at least half of these things, you will likely lose most if not all profit to the contractors you hire. (also if you aren't skilled at managing and keeping contractors in line they will prob start taking advantage, especially if they see you don't really know what you are doing
(oh yeah, when you try and take out insurance for your project, they'll likely want to know who has what qualifications and experience to run the project, one of the first things my commercial liability insurance asks me is 'Are you qualified to do the job you are doing?'.. I don't know what happens If you say 'No' but it prob isn't good)
All going well I'm taking on a run down property to develop this year, and it basically has some moderate damp issues, some damp and wood wormy roof timbers and a few missing slates while obv needing redecorated, this is pretty much the max I am willing to take on, and that's with me having a tame plasterer and joiner to help me.