7.5 Ways to choose property development courses for FAST results
Separating the wheat from the chaff
Property Development Courses are one of the most sought after courses for using real estate to build financial wealth. Why? Because Real Estate Development is the Ferrari of all property investment strategies, and the principles and processes behind Property Development are the same worldwide.
No matter whether you are looking for property development courses in Melbourne, Sydney, Brisbane, Australia, United States, New Zealand or the UK, you will find that most property development courses on the surface look and feel more or less the same.
Why are you looking for Property Development Courses?
So what made you search for Property Development Courses today?
- Are you looking for a job in a real estate development company?
- Or would you like to learn how to become a property developer so you can use property development as a strategy to build financial wealth?
There is a difference between the requirements for both these types of property developments & hence the property development courses that can impart the required skills.
Suppose you are looking for a job in a real estate development company, investment funds or a corporate environment; you will need to have a degree in construction.
Even if you are looking for property development courses at TAFE or university level or even a masters in property development, you will find construction modules at the core of these courses.
The corporate world works a little differently from the real estate investment industry. The size of their projects is different, and since there are almost always share & stakeholders involved, real estate development companies will always require experienced professionals.
And because this is a job with no stake in the project, you will never experience the swings & palpitations that come from investing your own money in the project.
You will never be as careful as you would be when it was your own money on the line. It's the same as growing your share portfolio, investing in riskier stocks in a simulated environment and boasting about it.
Property Development Courses - Video Walkthrough
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Property Development Courses For Real Estate Investors & Developers
For property investors, Property Development IS NOT EQUAL TO Construction. Construction is the last thing that happens in a property development project. And you can transfer most of the construction risk to a builder or construction company.
Property development courses for investors are slightly different simply because they focus on small- medium-sized boutique development projects to generate equity in a short amount of time, where the investor or a group of investors are the ones funding the project.
In this day and age, the barriers to entry in the real estate development industry are low, and almost everyone has an equal opportunity to get started in property development.
Do I need a license to become a property developer?
You do not need a degree in construction, and neither do you require a real estate license to become a property developer.
So if you are looking to take the leap from a property investor to a property developer, here are…
7.5 Ways to choose the best property development courses
1. Who is the property development coach & how did they get started?
If you find a property development coach who is self-made, who did the hard yards & struggled when they were getting started - respect them because it is not easy. Their experience is invaluable.
Secondly, you need to find someone who made it in the post GFC world. Many property gurus who teach property development made their wealth in a world when banks used to lend money to anyone who had a pulse.
At the time, all you needed to get a loan for development was a pulse. The collateral was the property you were developing & no pre-sales were mandatory. The criteria to lend money were so low that it was hard for anyone to reject their loan application.
We keep hearing about baby boomers having more wealth than Generation X, Y Or millennials. Part of the reason is that these days property development finance is hard to come by, and even when it does, it comes with many restrictions and conditions.
So if you are going to do a course in property development, make sure it is from someone who made it happen even when the odds were against them.
2. Who is promoting these courses?
You want to find out about the marketing company behind the property development courses you are interested in because these property developer courses are often layered to squeeze every penny from novice property investors.
These courses are tiered, so even if you spend $4000-$7000 on the best property development course, you will never be able to get everything you need to complete your first development project.
Either ongoing support will be missing, or property development feasibility software will not be part of your course fees.
Or worse, you will be given a property development feasibility template that is no better than a glorified totalling calculator.
3. What's the end game?
Do you wish to undertake property developer courses to build wealth or become a property developer?
You have to know about these fundamental problems. The real problem is the fact that you've been lied to for years. And these lies are keeping you from achieving the financial freedom that you desire and deserve.
One of these lies is that you have to know the magic formula, the top-secret strategy. I bet you've heard that or maybe even believed this at one point in your life yet:
This is not even close to the truth…
If you are one of those who fell victim to this lie, then you must decide now to believe the truth instead… because:
If you do not, you will never be able to get started in property development, and you will go around chasing one outrageous claim after another, looking for the magic portion and the secret sauce.
And, eventually, no matter how strong you are, you give up on property development as your strategy to build real wealth.
All the misinformation out there, that cheesy seminars love to exploit is enough to confuse and scare anyone.
It confused me when I was getting started…
The seminars I attended had many inspirational stories thrown in, yet they were all extremely vague on how to actually make it happen. And there was certainly no step-by-step system to plug into. And that was what I really needed!
So for a while, I wondered if it was my fault…
Was I missing something? I mean, the speakers made it look so easy…
Why couldn't I figure it out?…I was left feeling frustrated, deflated and demoralized…
I soon discovered it's wasn't just me... There were lots of other people in an identical situation…
Some of them eventually gave up…
Yet most just kept stuck in the same vicious circle…
Continually attending seminars, doing one property development course after another, and never gaining any traction at all…
The truth is you should never jump into any strategy, even the no money down deals, unless you know how to go all the way from start to finish.
And the problem with these thinly disguised sales pitches is that you never really know your numbers, let alone know the complete property development process.
4. Is your property development coach proficient in property development feasibility study?
A robust Property Development Feasibility Study forms the backbone of any property development project and is the most crucial component of your project.
Moreover, property development feasibility requires a complete understanding of all moving parts, including:
- Market Research
- Due Diligence
- Property Development Finance
- Types of development finance
- Timing of development funding
- Sources of capital
- Order of funding
- Site Analysis
- Type of Development Entities/Structures
- Project Accounting
- Project Timing
- Feasibility assumptions etc.
- Tax Implications
- Govt. Regulations
- Decision Metrics
Most real estate investors find it difficult to accurately do a financial feasibility analysis because it is complicated, and it takes time to understand what is involved and how each issue, hurdle or challenge translates into actual project costs that you must allow for in your project.
In my experience, most property development coaches won't even know how to use a development feasibility calculator.
I remember speaking to one coach, who said he is always scared that someone will find a mistake in his property development spreadsheet. This brings me to my next key consideration...
5. Does the course include a property development feasibility software or an ostensible spreadsheet?
I am not talking about property development feasibility templates because there are numerous issues and limitations to them. In fact, property development feasibility and feasibility software should be a stand-alone real estate course on financial feasibility.
I am referring to a development feasibility software or even a spreadsheet, but with hardcoded calculations that are dynamic and can adapt to various use cases.
All real estate development courses are incomplete if they do not include feasibility software with the following features:
Ability to do a quick feasibility analysis
More often than not you will find yourself looking at hundreds of deals and projects, with and without permits.
These projects could be commercial, residential or mixed-use. They could be multi-family like townhouses, apartments or single-family homes etc.
These potential development projects will come with incomplete information, i.e. when they become available for your consideration, you will not know every detail about the project.
However, you will have a short window to respond if it is a good deal because it will be grabbed by other developers & taken off the market instantly.
I can tell you from experience that a good deal or a profitable project does not stay on the market for long. And if you aren't skilled enough to respond or vet the project correctly, you will constantly miss out on profitable deals.
Iterative Calculations
Iterative calculations often occur in real estate development finance calculations (read more). But in a nutshell, you need to be aware of them because they are notorious for breaking development feasibility templates on excel or spreadsheets. And you will find that 99% of them built by "self-proclaimed" excel gurus don't even know what they are and or how to work them.
Funding Table
A funding table lets you easily distinguish between soft costs and hard costs and their sources. You can read more about a funding table here.
In property development finance calculations, a funding table is a must in a feasibility study. It is required because your lender will not always fund all soft costs incurred for the project.
So moving ahead in your project, assuming you will borrow 60%-70% of total costs, is being naive or just plain stupid.
An incorrect assumption directly impacts your calculations of development equity contributions, affecting your IRR and NPV values.
Cash flow projections
For smaller projects that start and finish with 12-24 months, you can get away without projecting your cash flow over your project's timeline. However, for larger projects, correctly projecting cash flow in an S-Curve distribution is essential.
This is because your cash flow determines your monthly outflows. Its correct projection is required to ascertain the interest costs based on when the developer must fund the project from their pocket.
So if you do not wish to run out of money in the middle of a project, you must project cashflows correctly and determine exactly how much your project will cost you and when will you be required to inject equity in the project.
Learn More
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6. Do your property development courses teach you about development funding?
Property Development finance is a crucial module that must be part of the curriculum in any property development course. Most real estate development courses merely touch on the basics. They do not include different ways to incorporate various types of development loan calculations that can be used in a single project.
Here's a real-life development finance scenario For you to ponder over...
Two property owners are coming together to develop their mixed-use sites collectively. As per the JV (joint venture) agreement, party A will contribute their land when getting the construction loan.
Party B will settle on their site who has investors funding part of the developer's equity.
A construction loan will not be enough to fund the project, so a mezzanine loan will kick in before the construction loan starts but after all developers equity has been exhausted.
At project close, some residential commercial units will be sold to pay down the debt, and some will be retained as an investment for cash flow.
A permanent loan will kick in when operating income is stabilized to pay off the construction loan. The project will be held for 10 years before all properties are sold based on capital growth or cap rates.
If your property development course cannot teach you how to calculate interest costs for this project, you should think twice before investing in it.
Or maybe you should pitch this to your current property development coach to see if their glorified excel feasibility template can solve this?
7. Are the property development courses telling you What To Do or showing you exactly How To Do It?
There is a difference between throwing a manual at you and saying, "Hey, everything you need to know to learn how to drive a car is in this manual" and sitting beside you to show you How to drive a car step by step.
I have been to seminars where they only tell you all the things you need to do rather than diving deep into navigating an actual project.
It's easier said than done. It's easier to talk about and give unrealistic projections of your equity will grow exponentially and how you will be a multi-millionaire real estate developer in the next few years.
But if you ask these successful property developers to show you HOW, they will dodge your questions like we dodge the coronavirus at all costs.
7.5 Bonus Question: Is your property development course a course or a Property Development System?
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Conclusion: the best property development courses
Property Development Courses and coaches come a dime a dozen. It's easy for these courses to fill your eyes with dreams than to impart real skills or to show you exactly how to find, stack and execute a development project. Any property given enough time will go up in value, and the developer will almost always look good when the market is rising.
No matter where you are from, Melbourne, Sydney, Brisbane, Perth, London, South Africa, Canada, United States or New Zealand, buy a big enough site in an already established suburb and hold it for 5-7 years you will still make money. No real estate or property development courses required.
However, if you wish to learn property development the right way, make sure that the property developer courses you are researching include the following:
- A self-made property development coach
- Preferably who is not promoted or controlled by a marketing or promotion company?
- Make sure that these property development courses are not get-rich-quick magic formulas or wealth systems.
- Does your property development coach know how to do a detailed feasibility study? If they cannot do one, what are they going to teach you in the course?
- Do the real-estate development courses include feasibility software? Your property development education is incomplete without development feasibility software.
- Real Estate development requires in-depth knowledge of development finance and creative ways of funding the development. If your real estate development course cannot teach you everything about development finance, it's not a good course.
- And finally, your property development courses must show you exactly how to do development, rather than tell you what to do in a property development project.