As an experienced property developer who is well on his way to constructing his third project, Eric Brown knows that in order to truly succeed in the venture, one must need to know the value of a good team—being surrounded by invaluable professionals who operates in your best interest.
Aside from having successfully built two development projects in the past years, Eric also does commercial building for a living, but in spite of his extensive knowledge and experience, he always sees to it that he never gets too involved in any of his projects.
The property developer said: “I've done a bit of personal work over the years, and I think, one thing I've learned [is in order] to be successful, you have to be able to delegate with trust.”
“I have a builder that I trust, and when I give him the job, I'm going to try and not micromanage him because I think I don't appreciate being micromanaged myself,” he added.
One of the most important people in his team right now is his architect, who had already helped him finish his development application by laying out a building plan that adheres to the guidelines as stated in the Local Environmental Plan while also benefiting Eric as an investor.
More than making sure that the property ends up being aesthetically-pleasing, architects also help property developers avoid going over their specified budget. For Eric, one of the very first thing that he needed to get right are properties’ several design specifications, which could take up a huge part of his funds.
According to him: “The thing that I'll have to get right ... at the start with the architect is making sure that I'm comfortable with what they're specifying and the fixtures and the fittings.”
“They will design things and design specifications to suit your budget. You may not want a six and a half thousand-dollar piece of marble in your kitchen [and] there are options that you can go to get a different piece of marble that might be $1,500.
“There are lots of options you can play with at the specification stage that can keep your costs under control,” he added.
Good architects are creative and thoughtful while also being practical.
Smart Property Investment’s Phil Tarrant said: “[They should be able] to get the best result for the minimum amount of money spent.”
In one of his previous development projects, Eric wanted to make the bathrooms nice but he lacked enough money for marble stone tiling. His architect then brought him to a ceramic tile shop where there are faux marbles that look exactly like the ones he initially wanted to get.
“The job is phenomenal, it's beautiful, and most people that walk in there don't realise that it's faux marble,” he exclaimed.
While there are definitely good architects out there, some would still take advantage of people who have the money to invest.
Eric advises property developers to look for architects who have fixed service fees in order to avoid spending too much.
He explained: “Usually, architects … work on a cost-plus basis, so the more expensive the build cost is, the more money they get from their fees. If you can find an architect that has a fixed fee, happy days.”
Some architects are also often affiliated with different stores and suppliers, letting them earn a little kickback for every sale. Make sure that their suggestions are made in your best interest and not their own.
The property developer said: “[Some architects would say], ‘This is going to look amazing’ then they just sell you on the aesthetics of the thing.”
“I think architects, good architects, also have skills [of] knowing what works practically, because that's the beauty of it when a practical solution is aesthetically beautiful,” he added.
At the end of the day, it’s all about finding professionals you can trust to steer you on the path towards success. You have to remember that property development is riskier than other investment strategies, and instead of doing it all by yourself, you will always be better off working with people who have your best interest in their minds.
Good professionals will not only help you make good decisions but will also make you realise the opportunities you could be missing.
Eric’s architect insisted on taking them to a “shopping trip” when he was building his last project, and while some would hate the hassle of it, the property developer and his wife ended up loving the process.
He advised budding property investors: “I'd say real life—touch and feel. My architect, with our last project, took myself and my wife shopping three Saturdays in a row … [He] took us through Danks Street, through Alexandria, and so many different shops ... I loved it.”
“There were places I'd been that I didn't even know. I was thinking in my commercial head, ‘Oh shivers, I can use that for this project. I can use that product for this job.’
“It was amazing and it was lots of fun. There was no pressure to buy. I wouldn't have enjoyed it if he had have said, 'Right, now you've got to spend the money and buy it.' It was just looking,” he shared further.
“You've got to make sure that you're A-team … your development team is 100 per cent trusted and operating in your best interests,” Phil concluded.
Tune in to Eric Brown’s episode on The Smart Property Investment Show to know more about how his most recent purchase of a warehouse is performing two months on.