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Property development has some inherent risks, like any business venture, and understanding what they are and how they can be mitigated is crucial to ensuring the success of any project.
Ron Forlee is a real legend in Australian property development circles. Ron will be a name known to many listeners of the show having written a number of books on developing property in Australia including Australian Residential Property Development, An intelligent guide to Australian Property Development and Australian Residential Property Development for Investors. No doubt you have some of those books in your collection. So I was very excited to be able to speak with Ron for my 100th episode.
Ron is a trained architect who applied his training to tackle property development projects first in South Africa and then in Australia. Following his decades of experience he then transferred his lessons and knowledge into books.
I am sure you will enjoy getting to know the man behind the name as we discuss his favorite projects, what he learned from his very first development and the many lessons he has picked up along the way.
Property Development Training
If you are interested in learning the fundamentals of property development, in your own time and at your own pace, then be sure to head over to www.propertydevelopertraining.com and take a look. I take you step by step through the development process so you know exactly what is needed to find a site, run a feasibility and complete a small scale property development, be that a duplex or 3 or 4 unit site. The training includes a bonus program called Taking It To The Next Level for people who may want to go into developing full-time.
So head over to propertydevelopertraining.com and take a look… I would love to see you on the inside…
Property Developer Quiz
Keen to find out how ready you might be to become a developer? Then take the Property Developer Quiz (https://www.propertydevelopertraining.com/quiz) and get a sense of where you are at…
Become a Million Dollar Property Developer
Grab my book Become a Million Dollar Property Developer about my journey into property development. This book is ideal for anyone who intends to get into small-scale property development and wants an insider’s guide to successfully obtaining wealth, fulfilment, and glory.
In this book, Justin will share how he succeeded in delivering a 20-townhouse project on his first property development project and what he learned along the way.
Many people have a dream of becoming a property developer. They aspire to build properties, grow portfolios, and amass great wealth. However, many people often struggle with making the leap into property development.
This book has the answers for how you can make the leap into property development. Grab your copy now.
Social Connection
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Property Developer Podcast LinkedIn – https://www.linkedin.com/company/property-developer-podcastLinks
Links
AYR International – www.ayr.international
Episode Summary
In this episode of the Property Developer Podcast, host Justin Gehde speaks with Ron Forlee, a property developer and founder of AYR International. The episode focuses on understanding risk and opportunity in property development, and how to effectively manage both aspects to maximize profitability.
The conversation begins with Ron sharing his background in property development and how he got started in the industry. He explains that his approach to development has always been centered around mitigating risk and finding opportunities, which has allowed him to successfully navigate the ups and downs of the market over the years.
Risk in property development
Justin and Ron then discuss the concept of risk in property development, and how it can be managed to minimize potential losses. Ron emphasizes the importance of doing thorough due diligence before making any investment decisions, including researching market trends, analyzing financials, and conducting feasibility studies.
Capitalise on opportunities
The conversation then shifts to the topic of opportunity, and how developers can identify and capitalize on potential opportunities in the market. Ron stresses the importance of being flexible and adaptable, and not being afraid to pivot when the market changes. He also emphasizes the importance of being proactive and always looking for ways to add value to a project, such as through innovative design or strategic partnerships.
Development risk with different asset classes
The conversation then delves into the specific risks and opportunities associated with different types of property development, including residential, commercial, and mixed-use projects. Ron explains that residential development tends to be more stable and predictable, with less risk but also less potential for high returns. On the other hand, commercial development can offer higher returns but comes with higher risk due to factors such as market fluctuations and tenant turnover. Mixed-use development, which combines both residential and commercial components, can offer a balance between stability and potential for high returns, but requires a more complex management approach.
Benefit of a strong team
Justin and Ron also discuss the importance of building a strong team to help manage risk and identify opportunities in property development. Ron stresses the importance of hiring experienced professionals, such as architects, engineers, and contractors, who can provide valuable insights and help mitigate potential risks. He also emphasizes the importance of building strong relationships with lenders, investors, and other stakeholders, who can provide support and help identify potential opportunities.
Managing financial risk
The conversation then turns to the topic of financing, and how developers can effectively manage financial risk. Ron explains that developers should always have a solid understanding of their financial position, including their cash flow and debt obligations, and should have a plan in place for managing any potential financial setbacks. He also stresses the importance of building strong relationships with lenders and investors, and being transparent and proactive in communicating any potential financial risks.
Finally, the conversation ends with Ron sharing some of his top tips for effectively managing risk and identifying opportunities in property development. He emphasizes the importance of staying informed and up-to-date on market trends and regulations, building strong relationships with professionals and stakeholders, and always being willing to pivot and adapt when necessary.
