When purchasing land there are some fundamental task that must be completed. With the idea to develop, finding the appropriate land parcel to accommodate your development is critical. Be it a residential or commercial development everything starts with the idea. Once you determine what your goals and objectives are (covered in previous post). Identify the development team. A solid team should include at minimum, an attorney, accountant, and an architect. Often times the team can include a builder or general contractor. Getting the builder involved early can save on frustration later. Generally involving the entire team early is a good idea and helps to minimize delays, control cost and establish a milestone dates for the entire development.
The development schedule should lay out in a realistic manner and point to critical dates that must be met. The early stages of the schedule should unleash resources to yield needed factors that will determine an approach for the development. A market study, concept plans, financial proforma and contract proposal should be prepared as quickly as possible but not recklessly. Adequate time must been spent on these items to assure all scenarios and variables that could possibly affect the development are uncovered. Once prepared these items should be used to identify and secure a financial comment for the development. There is no time limit on how long this portion of the process will take, however; depending on the development team, their resources etc. a letter of financial commitment can be obtained realatively quickly.
Once there is a financial commitment to the development, move to survey and receive local zoning or subdivision approval as required for the development. As a part of the zoning or subdivision approval process and as was developed during the financial determination process the conceptual drawings are now ready for refinement by the design professional. The design component of the team should be responsible for coordinating and managing the the full architectural design, site engineering and final construction documents for the development.
Once the final construction documents are completed, which may take several refinement meetings and design adjustments to meet the development budget, final local approval can be obtained. Once final approval is obtained, the development can now be marketed to generate sales. The sales team will probrably be new to the development team at this point and should brought up to speed on the developments' goals and objectives, its benefits to the customer, its features and basically why the customer should buy into this development as oppsed to another. The sales team should be unleashed with a clear and concise objective and a solid product.
The product is whatever the development represents, new homes commerical strip stores etc. In the ideal world the sales team will be able to secure pre-sales. Pre-sales will help with permanent financing. Now theland can be purchased and commit to the development. At this point the design team has identified and bid to sub-contractos.
Additional equity maybe required at this point to move the development and stay on schedule. The site contractor is the first wave of an army of construction professionals that will be employed on the project development. This will generate the bank draws. Having vetted, prequalified, selected and awarded contracts in the back ground as an overlap of other activities in the schedule can yield an early start date to construction and could possibliy give the development a jump start. END
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