First off, what skills do you have?
Are you a builder? If so, you’ll be able to evaluate development costs.
If you aren’t a builder, you need to find someone to fill that knowledge gap. That could be teaming up with someone you know, a builder or an estimator. Secondly, you could network to find someone who can fill this role.
Do you have any capital? If you do well, you can start to fund planning applications.
But, even if you have capital, it might be better to partner up with someone with deeper pockets, like a local developer who is more comfortable with the risk/reward dynamics of developing.
If you have £50k, will you want to invest it all on the planning costs of a single deal? Not really. Certainly not whilst you’re still inexperienced.
I’d suggest that when getting started, you want to partner with people.
For your first deal, work with someone to learn the ropes. It’s not easy when you’re just starting to know what makes a good deal, the potential pitfalls, and how to evaluate it. You can figure it all out, but it’s not easy.
The learning process will be much quicker if you work alongside someone with experience. You don’t want to spend all your time learning by trial and error. You want to know off the back of someone else’s experience.
Some developers are just okay, some good, and others great. The great developers will spot angles to deals; they’ll sniff out the great deals, whilst those that are just ok will spend too much time on the marginal deals. Learn who the great developers are in your area and contact them. Offer to work for free, just deal sourcing, with a cut of any deals you bring forward.
This first stage of your journey will dictate how you do it. Will you shy away from getting started, too scared to reach out to developers for the fear that they might reject you, or do you get resourceful and find a developer to work with? Search one out until you find one you click with and can form a mutually beneficial partnership.
What does that look like in practice?
You do the legwork whilst they advise you, steer you, guide you, coach you, evaluate the deal, and soak up all the knowledge. They fund the deal, whilst you get a small cut on the deal. More importantly, you learn the ropes in a low-risk way.
You don’t need to get rich on your first few deals. Learn the ropes on someone else’s back until you can strike out independently.
