We have finally concluded the deal; we have a signed option agreement.
We have a site that will hopefully result in 10,700 sq ft of development across six new-build properties. Step one: Obtain Class Q permission on the Barns, which allows for permitted development to change them from agricultural units to residential. Step 2: We adopt a new build scheme based on the parameters of the Class Q approval.
To hit the ground running, we took some risks and completed step one, the Class Q application, which has now been submitted.
To conclude this phase of the strategy we have shared over the past 18 weeks, it’s clear that with focused effort, off-market deals can be found. We sent around 110 letters and received 15 responses, resulting in 3 good leads, which ultimately led to one deal.
It’s a pure numbers game.
Yet it wasn’t so long ago I heard the story from a would-be developer who had sent 1000 letters and not found a deal. How?
The 1,000 letters would have included follow-up letters, so let’s say they identified 300 sites. I don’t see how they couldn’t have got a bite from someone.
They were likely pursuing complicated deals, such as those involving multiple owners, such as back garden development. That can be hard.
My main thought now is, did I go too small? Should I be looking at the farmer’s field next?
You make money by creating value, so what better way than taking a farmer’s field at £15k per acre and turning it into £1m per acre. That’s serious value creation.
I think finding deals is great for would-be developers to get started. Going out and knocking on doors, meeting people, and trying to do a deal will lead to massive personnel growth. It puts you out of your comfort zone, stretches you, and forces you to grow. And making £100k isn’t to be sniffed at.
Plus, it’s an easy way to partner up with others. Just work for a developer, find deals in their area, you put the legwork in, you gain credibility in negotiations by saying who you work with, meaning you can get over the challenges when you don’t have the answers at hand.
After you’ve found a few deals for others, got some experience, earned some fees, you can either then do your deals, or go for bigger deals.