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AMA

I’m a Property Developer AMA

81 replies

Cheesenibbler · 12/12/2022 20:43

Fire away

OP posts:
VisitingThem · 12/12/2022 22:17

Cinnamonandcoal · 12/12/2022 22:11

I have another question - are you female? I work in this industry including with many many developers and I actually cannot think of a single woman who leads an SME. There are women in the finance, sales, legal sides but essentially 100% male in terms of leadership apart apart from a few in massive corporates. So I'm really interested.

Slight derail but check out the Women in Property networking group. Its nationwide and I've met lots of interesting SME leaders through them.

Cinnamonandcoal · 12/12/2022 22:17

Thanks, I used to be involved but not for a while. Will give it another look.

Lmgify · 12/12/2022 22:17

Planner here, so I have a rough idea what you do. How did you first get into it? Did you start with renovation/ smaller projects and then build up to it? What’s your background?

Cheesenibbler · 12/12/2022 22:18

RoseBucket · 12/12/2022 22:10

I’m me of the reasons councils miss their quota is because developers have raised the value of land, the councils can no longer afford it.

Council do not own much land, you mention supermarkets, Sainsbury’s and Tesco sit in huge pockets of land which they bought and have not developed, even John Lewis is converting their unused space into apartments for rent, why, because of the profit they’ll make from the tenants.

You have way too much faith in councils. The problem is archaic planning law. Pre-1945 (World War II) there were no issues with building housing. Since the 1940s when planning law was brought in the housing quota has fallen further and further behind.

I assure you that is the reason, and if all SME developers downed tools and stopped trading, like RoseBucket here would have, the situation would be far far worse, and worsening.

OP posts:
Freetodowhatiwant · 12/12/2022 22:19

I was going to ask if you’re female too.

Also do you enjoy it?

And how much do you pay yourself as a salary? Are you comfortably off? I realise that’s all relative.

Do you think it’s something other people can get into? I have a couple of BTLs which I use to supplement my paltry income. I am a good landlady and without them I couldn’t survive as I just don’t earn enough as a freelance single parent with very little spare time on my hands. I would quite like to expand as you have but not sure now is the time to do this. Or whether I have the skills/guts/money!

Cheesenibbler · 12/12/2022 22:20

jibbe · 12/12/2022 22:09

Are you worried by the BRR as a business model? Isn’t it like a house of cards, many property developers have been massively hit by rising interest rates? Are investors running scared in investing in the UK due to the economic shit show?

It is if you don’t have margins of safety and sufficient profit levels in place. We have always worked on the assumption they interest rates will be at 4.5%, so the current environment is fine for us.

OP posts:
nomoneyno · 12/12/2022 22:21

Landlords are a scourge on society.

Cheesenibbler · 12/12/2022 22:25

Cinnamonandcoal · 12/12/2022 22:01

Your investors who want 10%... is that equity funding with all the risk that implies? It's very cheap if so. Do they charge you interest or take their money back first? Is that before or after tax? I would expect 15% IRR post tax, or more.

Do you refinance the properties once let with cheaper longer term debt?

How are things at the moment given finance costs and construction costs?

If you're remediating brownfield sites do you have access to grant funding?

If you hold all your properties for the long term, in my view that's more moral, often, than selling them. It's in your interest to build well and maintain well, not build crap which causes all kinds of issues for the next owner.

So I risk my own money first. Investors come on board to help fund construction once the planning is granted.

you get large tax breaks to re edit contaminated land. It equates to about 25% off the cost of remediation.

most investors get 10% before tax, but you can lend through SIPPs so some get it tax free.

things are hard, but because I get the planning uplift to start with it gives me a cushion if costs go up. I am not that fussed about refinancing costs atm.

OP posts:
validnumber · 12/12/2022 22:27

How do you find the land in the first place?

Cheesenibbler · 12/12/2022 22:30

Freetodowhatiwant · 12/12/2022 22:19

I was going to ask if you’re female too.

Also do you enjoy it?

And how much do you pay yourself as a salary? Are you comfortably off? I realise that’s all relative.

Do you think it’s something other people can get into? I have a couple of BTLs which I use to supplement my paltry income. I am a good landlady and without them I couldn’t survive as I just don’t earn enough as a freelance single parent with very little spare time on my hands. I would quite like to expand as you have but not sure now is the time to do this. Or whether I have the skills/guts/money!

So I am a man, but my wife and I run the business 50:50. She’s the real boss.

I think to do things on a massive level requires a sacrifice that many people can’t give. I probably lost 5 years of my life to this through stress and anxiety that I won’t get back. I wanted to kill myself on more than one occasion, and I have had less than 10p across all my bank accounts more times than I count.

I would suggest you sit down and workout your own goal. What you want your life to be like financially, time wise, what you want to work on. Then start making steps and a plan towards that. It might not be in property at all, you might want to start another business. Follow your passions and drive at your goals.

OP posts:
mommydragonn · 12/12/2022 22:31

Is there a way to find out whether my selfish abusive neighbours have applied to housing association for permission to sell their property at the end of the 5 year restrictive covenant period 😊

Cheesenibbler · 12/12/2022 22:32

validnumber · 12/12/2022 22:27

How do you find the land in the first place?

It’s actually quite funny. My 4 best sites were all on RightMove.

planning law is soo complex, that people often miss things, so an amazing deal can be hidden in plane site.

OP posts:
Cheesenibbler · 12/12/2022 22:34

mommydragonn · 12/12/2022 22:31

Is there a way to find out whether my selfish abusive neighbours have applied to housing association for permission to sell their property at the end of the 5 year restrictive covenant period 😊

Erm I doubt there is a way. You will see it advertised soon enough if they have.

OP posts:
Cheesenibbler · 12/12/2022 22:36

nomoneyno · 12/12/2022 22:21

Landlords are a scourge on society.

Are they? No place at all for a private rental market offering good quality accommodation at a fair price?

My tenants seem really happy, and they stay a long time. I don’t increase the rent, and I maintain the properties well. I think that’s a good thing, or no?

OP posts:
RoseBucket · 12/12/2022 22:36

@Cheesenibbler down tools. Just own it, you buy land, dilapidated buildings build flats, houses and rent for profit. That’s it, you make profit for yourself and your investors.

You’re trying to paint yourself as some sort of hero, that is my issue.

I’ve worked in planning, project management and development for over a decade, you can’t dress it up to me.

Planning laws were required to rebuild the Country post war as a way to actually try and build faster, while blocks shot up to house those displaced during the war.

My father was actually part of the biggest housing projects in London in the 60s and 60s, and the new ‘garden cities’ built to house the explosion in population. I lived in the now torn down Aylesbury estate Elephant and Castle.

Many of the original tower blocks and brutalist architecture backfired, the designs created while estates which enabled the growth in crime. Many of these have and are being torn down now due to concrete cancer, asbestos and other issues which came to light much later.

Planning became impossible with red tape halting growth post 80s it has actually relaxed whilst trying to protect green belts.

Glenfall disaster, was partly a consequence of those relaxed rules.

Cinnamonandcoal · 12/12/2022 22:37

I would say Grenfell was about relaxed and outsourced building control rather than planning. Plus other things of course.

RoseBucket · 12/12/2022 22:39

Cinnamonandcoal · 12/12/2022 22:37

I would say Grenfell was about relaxed and outsourced building control rather than planning. Plus other things of course.

Yes that is also true.

pompei8309 · 12/12/2022 22:43

Cheesenibbler · 12/12/2022 20:55

@wannarunfromitall - no so I look for horrible, contaminated, industrial (brownfield) land, or dilapidated houses. The aim is that they offer no current or future employment prospects, or in the case of houses, can’t be lived in. We create high-quality accommodation and let it out to tenants.

The idea is that we increase the housing stock, whilst minimising any negative consequences.

We have investors who invest in the business for set returns generally 10%. The banks generally want 12%.

How hard is to get planning for building on brownfield land?

Cheesenibbler · 12/12/2022 22:44

RoseBucket · 12/12/2022 22:36

@Cheesenibbler down tools. Just own it, you buy land, dilapidated buildings build flats, houses and rent for profit. That’s it, you make profit for yourself and your investors.

You’re trying to paint yourself as some sort of hero, that is my issue.

I’ve worked in planning, project management and development for over a decade, you can’t dress it up to me.

Planning laws were required to rebuild the Country post war as a way to actually try and build faster, while blocks shot up to house those displaced during the war.

My father was actually part of the biggest housing projects in London in the 60s and 60s, and the new ‘garden cities’ built to house the explosion in population. I lived in the now torn down Aylesbury estate Elephant and Castle.

Many of the original tower blocks and brutalist architecture backfired, the designs created while estates which enabled the growth in crime. Many of these have and are being torn down now due to concrete cancer, asbestos and other issues which came to light much later.

Planning became impossible with red tape halting growth post 80s it has actually relaxed whilst trying to protect green belts.

Glenfall disaster, was partly a consequence of those relaxed rules.

I am not sure I haven’t already conceded that I do want to make a profit. I fundamentally wouldn’t make the sacrifices I do make, if it wasn’t profitable.

Why is it so hard to believe that I can actually simultaneously make profit and still care about my tenants. It’s good practise.

I can look myself in the mirror and feel good that I have treated my tenants well. I have loads of tenants who haven’t had rent increases in 5 years. I still turn a profit - I could make more, and choose not to. I have tenants who have been hard up, I have wiped months of rent arrears and bought them food. I give away 10% of my income to charity.

That doesn’t fit with your daily Mail narrative though does it. I am just heartless fat cat without a car for anyone else. You decided that from the second you saw the title of the thread.

OP posts:
pompei8309 · 12/12/2022 22:44

nomoneyno · 12/12/2022 22:21

Landlords are a scourge on society.

You’re joking I hope

Wanderingoff · 12/12/2022 22:46

I’m interested to know how you came to do this work OP? Im
guessinf you’re a woman that is less common in this area? What sort of age bracket do you fall into?

also - I agree that the government couldn’t care about house building at all - do you have any insight into why they changed the tax structure for buy to let’s - theoretically these go against the idea of keeping housing wealth with the established wealthy group. It’s always perplexed me. I had a theory it was because george Osborne
waa trying to squeeze out small players so there was more room for big build to rent players but I may be completely off there.

Penguinsaregreat · 12/12/2022 22:51

Interesting that councils don’t want new homes built. I assumed they would so that they would receive more council tax.
I can understand 100% councils not wanting certain types of residents within their district. Why would they want people who don’t work yet demand to be housed, or demand social care.
Must be so much better to have a good proportion of residents not claiming anything.

RoseBucket · 12/12/2022 22:51

Cheesenibbler · 12/12/2022 22:44

I am not sure I haven’t already conceded that I do want to make a profit. I fundamentally wouldn’t make the sacrifices I do make, if it wasn’t profitable.

Why is it so hard to believe that I can actually simultaneously make profit and still care about my tenants. It’s good practise.

I can look myself in the mirror and feel good that I have treated my tenants well. I have loads of tenants who haven’t had rent increases in 5 years. I still turn a profit - I could make more, and choose not to. I have tenants who have been hard up, I have wiped months of rent arrears and bought them food. I give away 10% of my income to charity.

That doesn’t fit with your daily Mail narrative though does it. I am just heartless fat cat without a car for anyone else. You decided that from the second you saw the title of the thread.

Oh lord, you’ve just lost your argument with your Daily Mail narrative. Original when one runs out of a response.

Nothing wrong with profit and providing homes, however you are part of the problem by holding onto land for investment you reduce the availability for those who wish to buy affordable homes, those buyers who only want one home for their families however unable to, due to developers buying land to build rental portfolios, when your argument is lack of affordable homes do you not see the irony.

RoseBucket · 12/12/2022 22:52

Penguinsaregreat · 12/12/2022 22:51

Interesting that councils don’t want new homes built. I assumed they would so that they would receive more council tax.
I can understand 100% councils not wanting certain types of residents within their district. Why would they want people who don’t work yet demand to be housed, or demand social care.
Must be so much better to have a good proportion of residents not claiming anything.

Most people in council homes actually work!

coronafiona · 12/12/2022 23:03

How would someone invest in a business like this? Without having to do the work I mean