New apartment standards outlined for Victoria and NSW
The Victorian and NSW governments have announced new standards for apartment buildings, as both look to create greener...
While Ed Fernon does put credit on the values he learned as an athlete—including commitment and a goal-setting psyche—for his success in property development, he still cites creativity and open-mindedness as some of his "number one things" to remember to grow in the business of creating wealth through property.
According to Ed, he always makes sure to think outside the box as a property developer. However, he is also willing to admit that there are professionals out there who have more creative ways to structure a design.
Moreover, property development is all about building good properties for your prospective clients and it's always vital to get the different perspectives from all parties involved to create a "win-win scenario."
"Being open-minded in property is one of the number one things. I mean, I'm trying to be creative in what I think outside the square. Trying to expand the pie where possible. Create win-win scenarios... My first thing [I consider] before I even look at the property... is what's important for this person?" the former Olympian further explained.
"I've got to create a win-win situation because if they're not benefiting from the deal then you might as well walk away. And often, terms are more important than price."
Ed shares more information about how a good collaboration is the key to success in property development:
How important is it to understand what you create and its ability to sell on the market? How do you get that information?
Ed Fernon: Local real estate agents are a great source [of information]... Anytime we're looking at a different area, we try and sit down with all the local real estate agents. Get their input. Find out what sells well. There are particular areas where one and two bedroom apartments are just selling like hot cakes. And then there are other areas where they're [not] doing terribly well because people want houses and they want a different product. So, really knowing your product, as well as knowing your market is pretty bottle in that sense.
Is property development just building and development?
Ed Fernon: If you actually break down the development cycle and what's required from go to woe, there are so many different processes... There's a huge number of stages even before that in terms of finding the sites, negotiating the deals, plans, permits, approvals, and a lot of people just go through that and don't even worry about the risk associated with the development. And then there's the selling side of things and the complete project management.
How do you manage all these responsibilities?
Ed Fernon: You can't do everything... so if you're going to do the whole thing, [you should find] really, really good solid people who you trust in those different roles to provide those other services that you're not doing. Or just saying... maybe I'm really good at negotiating deals or putting plans together. I'll just focus on that rather than trying to do all of it yourself.
I think people often try and go do it all themselves and then they fall into a heap because they don't have the knowledge or the experience.
Can you describe your thought process before getting into property development?
Ed Fernon: You certainly need to know your endpoint. What's your strategy here? What's your exit strategy? What are your strengths and weaknesses? Having an understanding of where you're up to as well. There's no point going into a deal if you don't have a clear understanding of what you're bringing to that deal. And everyone's unique... You [only get] to talk in generalisations [if] you know someone's specific situation.
What would be your final advice to prospective property developers?
Ed Fernon: Finding your niche is really important, [as well as knowing] where you have those weaknesses, being able to partner with people who can bring their strengths to the table.
There's plenty of ways to reduce your cash flow, so also [consider] the time frames. There could be another GFC [global financial crisis] at any moment and you're two years into a three-year build and it can happen. So [it's about] trying to limit your cash flow and understanding your cash flow. Having a contingency [is important, as well as having] a real clear idea of your strategy and being able to be flexible as well, to know your end game.
Tune in to Ed Fernon's bonus episode on The Smart Property Investment Show to know more about the necessary “grunt work” that will benefit prospective property developers by enabling them a better understanding of their market—influencing not only their decisions during the construction phase but the ultimate outcome of their development endeavors.