So now you have a potential property development site. Now, what? Billion Dollar Property Developer Bob Andersen says that you should ask these questions.

Hi, everybody! Bob Andersen here.

I don’t know about you, but I had a pretty good 2016. But I tell you what: I’m really looking towards 2017.

It’s going to be a great year.

As a part of my property development education series, what I would like to do today is to actually take you through some questions that you could ask when you’re talking to a real estate agent or a property owner. This is in relation to a potential development site.

Just so you don’t get stumped, I’ll run you through some of the smart questions you need to ask to get you the right answers. Getting the right answers is important because the outcome will tell you whether or not to move forward with the deal.

There are 2 types of sites that could come up:

Raw Site. It’s a site that doesn’t have a development approval at all. Most of the sites that we buy don’t have development approvals.

Development-Approved Site. Also referred to as DA, this pertains to a site with a development permit in place.

Let’s take a look at both of these.

QUESTIONS TO ASK ON RAW SITE

Let’s say you come across an ad on RealEstate.com or one of the portals and you ring up. In most cases, you’ll encounter a potential property development site. And quite often, there’s a bit of information missing. Price, for example. Sometimes, agencies leave it out purposefully.

So what you want to do is to get a bit of a feel — a little bit of a push on the agent in terms of price. Ask them these:

• How long has it been on the market?
• Have you had any offers?
• What sort of offers?

Try to get a feel based on a prior offer or based on what the owner might be looking for. Put a little bit of heat on the agent. They don’t mind.

QUESTIONS TO ASK ON A DEVELOPMENT – APPROVED SITE

Since you’re talking about a potential property development site, you have to get the zoning and the size right. This may or may not be mentioned in the ad, so asking about zoning, lot size, and the reason why the owners are selling is important. In terms of lot size, make sure it meets the minimum size.

What’s the point? If it’s an approved site, why are they selling? If they’ve gone through all the trouble to get an approval, why are they selling?

Think about it.

Could it be that they didn’t quite get the approval they wanted?

Were some conditions on that approval that were a little bit hard to fulfill?

Could it be that they did their numbers but it didn’t quite work out so they’re trying to off-load the site?

THE CHALLENGE ON A DEVELOPMENT-APPROVED SITE

Just because the property development site has approval doesn’t mean it’s an absolute cracker. Because ultimately, it would come down to the numbers.

Now, one challenge for a DA site would be when it has a house standing on it. And quite often, houses on potential development sites are leased. If they’re leased, you might not be able to start building right away. That’s because in most cases, tenants are locked in for a long-term lease.

So in this case, you need to know about tenancy terms first.

TALKING TO THE OWNER

I prefer talking directly to the owner, but most of the time, you can’t do that. But if you’re talking to the owner, get a bit of a feel of why they don’t intend to proceed with the development. Now, I’m going to let you in on something:

This conversation could be an opportunity to talk to them about a joint venture.

It could also be an opportunity to offer some financing for the deal.

Be creative.

These things you won’t be able to generally do when you’re dealing with an agent. At least not initially. But if you’re dealing with an owner, it’s a subject that could come up.

So there are a few hints there. Some questions you need to ask to get on top of it and find out what’s going on.

I look forward to seeing you on the next video.

All the best!

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