So I speak with Australia’s number 1 commercial finance broker Dan Holden about how you can leverage your money and time. It’s been more than a year since we spoke with Dan and a lot has happened across the lending landscape in that time, and with Dan’s business, so we have a lot to catch up on.
During this discussion we talk about what’s happening with construction finance lending, where sources of funding are coming from and ways that you can make your capital work harder for you.
Lessons for real estate developers
1. Have you identified your business model
Do you know what type of developing business model you have? Do you build townhouses, apartments, house and land packages? What’s your profit margin per unit? How many units do you need to produce each year to generate the revenue and profit you want? Are you looking to switch categories? These are all questions that would be good to have answers to because once you understand what you do, you can set about on making it happen.
2. Are harnessing the power of your capital
Making your money work harder can sound like a cliche but in such a capital intensive business as property developing, it pays to look at ways to recycle your money quicker and generate more returns. This may mean looking beyond traditional bank finance, looking beyond project to project and also beyond the cheapest funding out there. This might be a significant shift in thinking as you move from cheapest money to a model that may create a higher velocity of cashflow.