Debt lenders and lenders process thousands of property deals and development proposals every month. However, they only finance a select handful. So how do you make sure that your property development deal stands out from the rest? These are the eight simple steps that every builder and developer must follow while putting together their proposal to ensure successful and secure property development finance for their upcoming project.
1. Presentation
A lender should be able to understand the deal within seconds. The better the deal is presented, the easier it is for the lender to read and understand.
2. Headlines and sub-points
Divide the proposal into headlines and subpoints so the lender can simply glance through the proposal to understand it; profit margins, development details, site and location – headline everything.
3. Numerical appraisals
Always check and double-check the numbers in the proposal. One small mistake and it could be a deal-breaker.
4. Share all the information
How did you calculate your total costs? How did you reach the GDV? Don’t expect the lender to believe that you understand the market, instead show them how well you know the market!
5. Paint a picture
Investing in something one can picture is easier than investing in hypothetical numbers! So share a picture of the upcoming development or the blueprint.
6. Experience and reputation
Let the lender know about your previous projects and developments as that shows your experience in the industry.
7. Share details
Share the details of everything – purchase cost, development costs, professional fees, profit on cost, gross development value, etc.
8. Consider the downside
Always have space for a contingency budget. Consider downsides such as increasing building costs or decreasing sales and calculating profit margins accordingly.
