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Developers profit margin

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24

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    #32
    OttoPilot
    Registered Users Posts: 540 ✭✭✭OttoPilot


    What kind of personal guarantee do you stand to lose if this doesn't go well?


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    #33
    Kaiser74
    Registered Users Posts: 44 ✭Kaiser74


    Bigus wrote: »
    Hope is not a business plan .

    And 12 % is not sustainable, unless property was bought at 2012 levels.
    I thought all you needed was hope to borrow money...
    Can you back up this claim that it's not sustainable?


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    #34
    Kaiser74
    Registered Users Posts: 44 ✭Kaiser74


    OttoPilot wrote: »
    What kind of personal guarantee do you stand to lose if this doesn't go well?

    No personal gaurantee required.


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    #35
    Kaiser74
    Registered Users Posts: 44 ✭Kaiser74


    J.pilkington wrote: »
    Okay so
    - you don't own the land
    - you haven't a fairy how to set sales prices
    - you are going to sub all the construction work out
    - you haven't a fairy how to request quotes / price jobs
    - you have no business plan
    - you are asking silly questions on an internet website which is mainly frequented by people trying to pass their time i.e.unlikely to be able / be willing to give helpful advice
    - you have no planning permission
    - have not decided whether to build apartments / houses

    And you want to start the building work in a few weeks.

    Which African country was the financier a prince? Are you off to a western union tomorrow to wire an admin fee to him before he release the €20m to you?

    Mid terms ha?

    Not going through your points as you obviously haven't read prior posts.
    Advice sought not all taken on board.


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    #36
    J.pilkington
    Users Awaiting Email Confirmation Posts: 1,331 ✭✭✭J.pilkington


    Kaiser74 wrote: »
    Not going through your points as you obviously haven't read prior posts.
    Advice sought not all taken on board.

    All my points above are taken directly from your posts in this thread!

    Are you having trouble tracking your story!


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    #37
    Bigus
    Registered Users Posts: 4,940 ✭✭✭Bigus


    Kaiser74 wrote: »
    I thought all you needed was hope to borrow money...
    Can you back up this claim that it's not sustainable?

    Yes .

    12 % per annum compound will wipe out any potential profit, unless you bought at distressed prices . Get your account to run a few numbers at 12 %. I charge too much per minute to do so .


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    #38
    Kaiser74
    Registered Users Posts: 44 ✭Kaiser74


    Kaiser74 wrote: »
    Not going through your points as you obviously haven't read prior posts.
    Advice sought not all taken on board.

    Looking feedback pilko that's all too late now for nonsense .


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    #39
    Kaiser74
    Registered Users Posts: 44 ✭Kaiser74


    Bigus wrote: »
    Yes .

    12 % per annum compound will wipe out any potential profit, unless you bought at distressed prices . Get your account to run a few numbers at 12 %. I charge too much per minute to do so .

    Account back with spreadsheets next few days. I think a 20% profit on investment is possible and sustainable if projects roll over.


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    #40
    OttoPilot
    Registered Users Posts: 540 ✭✭✭OttoPilot


    Kaiser74 wrote: »
    No personal gaurantee required.

    Why would a bank lend you money to buy land and pay for the development if you have no collateral to offer them? They would be taking more risk than you for an even slimmer margin.


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    #41
    J.pilkington
    Users Awaiting Email Confirmation Posts: 1,331 ✭✭✭J.pilkington


    Kaiser74 wrote: »
    Looking feedback pilko that's all too late now for nonsense .

    How is too late, you haven't even bought the land / sought planning / found a builder / decided what you are going to build / spoken to an architect etc etc.

    But yet you are going building in a few weeks


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    #42
    J.pilkington
    Users Awaiting Email Confirmation Posts: 1,331 ✭✭✭J.pilkington


    Kaiser74 wrote: »
    Account back with spreadsheets next few days. I think a 20% profit on investment is possible and sustainable if projects roll over.

    Have you given free reign for the "account" to come up with a business plan when you have provided zero inputs (costs, what you are building, sales prices, timelines etc etc)

    "Account" will need this data

    Anyways I'm reaching the end of my journey so I'm out, enjoy the rest of your midterm break.


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    #43
    Kaiser74
    Registered Users Posts: 44 ✭Kaiser74


    Kaiser74 wrote: »
    Account back with spreadsheets next few days. I think a 20% profit on investment is possible and sustainable if projects roll over.

    2.4 per annum is 200k pm - 600 for 6mths. If I do six projects pm I need to make 100k profit per project to break even. I think you can make more than 100k per project


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    #44
    Anongeneric
    Registered Users Posts: 151 ✭✭Anongeneric


    This

    tabby aspreme wrote: »
    As much as you can get away with, with questions like this the Boooom is definitely Baaak


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    #45
    Kaiser74
    Registered Users Posts: 44 ✭Kaiser74


    J.pilkington wrote: »
    Have you given free reign for the "account" to come up with a business plan when you have provided zero inputs (costs, what you are building, sales prices, timelines etc etc)

    "Account" will need this data

    Anyways I'm reaching the end of my journey so I'm out, enjoy the rest of your midterm break.

    Yes waiting for formulas so we can adjust depending on profit %, site costs, build,sales etc


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    #46
    Kaiser74
    Registered Users Posts: 44 ✭Kaiser74


    Kaiser74 wrote: »
    Yes waiting for formulas so we can adjust depending on profit %, site costs, build,sales etc

    Ok pilko be good.


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    #47
    OttoPilot
    Registered Users Posts: 540 ✭✭✭OttoPilot


    Kaiser74 wrote: »
    Yes waiting for formulas so we can adjust depending on profit %, site costs, build,sales etc

    Don't forget to mention boards as your source!


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    #48
    Kaiser74
    Registered Users Posts: 44 ✭Kaiser74


    OttoPilot wrote: »
    Why would a bank lend you money to buy land and pay for the development if you have no collateral to offer them? They would be taking more risk than you for an even slimmer margin.

    Not a bank hence high interest. 70 30 loan to value


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    #49
    Anongeneric
    Registered Users Posts: 151 ✭✭Anongeneric


    Any interest in buying a bridge OP?


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    #50
    Kaiser74
    Registered Users Posts: 44 ✭Kaiser74


    OttoPilot wrote: »
    Don't forget to mention boards as your source!

    Yea otto will mention your advice in particular.


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    #51
    K.Flyer
    Registered Users Posts: 8,565 ✭✭✭K.Flyer


    Very limited market for that type of price. The property would need to be an exceptional standard in a prime location to draw that type of financial interest.
    Your building start time frame is way too ambitious. Building work is picking up again which is now creating a shortage of quality tradesmen who are busy again. Those who are not busy are not busy for a reason.
    What market research have you done, other than asking questions here.
    As you have no experience in this field you may find your projected profits less than expected and you will need a decent PM to oversee everything to ensure quality workmanship is maintained throughout the entirety of the project.
    There are easier ways to make decent returns with that sort of capital than throwing it all into the one very ambitious project.


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    #52
    Kaiser74
    Registered Users Posts: 44 ✭Kaiser74


    K.Flyer wrote: »
    Very limited market for that type of price. The property would need to be an exceptional standard in a prime location to draw that type of financial interest.
    Your building start time frame is way too ambitious. Building work is picking up again which is now creating a shortage of quality tradesmen who are busy again. Those who are not busy are not busy for a reason.
    What market research have you done, other than asking questions here.
    As you have no experience in this field you may find your projected profits less than expected and you will need a decent PM to oversee everything to ensure quality workmanship is maintained throughout the entirety of the project.
    There are easier ways to make decent returns with that sort of capital than throwing it all into the one very ambitious project.

    Hi flyer, thanks.
    Obviously no drawdown until ready. Builders lined up. When we're ready we will start to purchase. Pm and admin not a problem. Acct qs estate agents, legal meetings ongoing.
    What do mean by easier ways to decent returns with the capital mentioned? Thanks


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    #53
    Kaiser74
    Registered Users Posts: 44 ✭Kaiser74


    Kaiser74 wrote: »
    Hi flyer, thanks.
    Obviously no drawdown until ready. Builders lined up. When we're ready we will start to purchase. Pm and admin not a problem. Acct qs estate agents, legal meetings ongoing.
    What do mean by easier ways to decent returns with the capital mentioned? Thanks
    Just to clarify its not 1 project but a number of projects over the loan term


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    #54
    K.Flyer
    Registered Users Posts: 8,565 ✭✭✭K.Flyer


    Kaiser74 wrote: »
    Just to clarify its not 1 project but a number of projects over the loan term

    I presumed from your other posts a development of several houses on the same site done in phases.


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    #55
    Kaiser74
    Registered Users Posts: 44 ✭Kaiser74


    K.Flyer wrote: »
    I presumed from your other posts a development of several houses on the same site done in phases.

    No 1 house per site in top location.
    The easier returns on capital??


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    #56
    Victor
    Registered Users Posts: 78,332 ✭✭✭✭Victor


    Kaiser74 wrote: »
    I too have a background in construction with a family construction company.
    There is a long history of construction businesses going bust when they tried to engage in development,

    As drug dealers say, never use your own product.


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    #57
    drunkmonkey
    Registered Users Posts: 28,126 ✭✭✭✭drunkmonkey


    Is it not a lot easier buy some property in the right areas, sit on it a few months then flip it. Seems like a speculators market not a developers at the moment.
    If I was entering at this late stage buying property I'd like my profit in my pocket by 2020 as the wheels will probably start to wobble on the train at that stage.


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    #58
    Kaiser74
    Registered Users Posts: 44 ✭Kaiser74


    drunkmonkey wrote: »
    Is it not a lot easier buy some property in the right areas, sit on it a few months then flip it. Seems like a speculators market not a developers at the moment.
    If I was entering at this late stage buying property I'd like my profit in my pocket by 2020 as the wheels will probably start to wobble on the train at that stage.
    Thanks monkey.
    The idea is to have paid everything back by 2020. Not sure if you would make enough money sitting on a house for a few months then flipping.


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    #59
    J.pilkington
    Users Awaiting Email Confirmation Posts: 1,331 ✭✭✭J.pilkington


    Jesus I've underestimated the advice of boards

    @midnight
    Kaiser74 wrote: »
    where is the greatest profit in construction, site and build 5 bed or period house and convert to 5-6 apparents?

    @ 2am
    Kaiser74 wrote: »
    No 1 house per site in top location

    I suppose your "account" did the drawings overnight and got planning permission too. We need more people like you!

    Now for the Nigerian prince to wire you that €20m! You'll have to pay him €50k in admin fees before he releases


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    #60
    antoinolachtnai
    Registered Users Posts: 9,776 ✭✭✭antoinolachtnai


    You aren't really adding any value to the property. You are just building something on it, and hoping that the value of the property plus the land is enough to cover your costs and some profit at the end.

    I can see why it is attractive for the financier. I can see what is in it for the builder (who you will have to pay up-front.) I am not sure I can see what is good for you.

    Since you have a construction background, could you get some of these building contracts? I think you would be better off.


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    #61
    pilly
    Banned (with Prison Access) Posts: 9,005 ✭✭✭pilly


    J.pilkington wrote: »
    How is too late, you haven't even bought the land / sought planning / found a builder / decided what you are going to build / spoken to an architect etc etc.

    But yet you are going building in a few weeks

    He meant it was past his bedtime.

    Why are people feeding this crap.


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