In every business, trust is important. So how do you find trusted property builders? Billion Dollar Property Developer Bob Andersen shares his expert tips.
Hi everybody! Welcome back again, Bob Andersen here with some more exciting gives and takes on property development.
If you’re looking at requiring a builder, let’s just say you’re going to do a small townhouse project as my word is, or we’re going back to our standard three-townhouse project, it’s very important to get the right property builders. You’ve probably heard some horror stories about builders if you’ve watched any of those current affairs programs after the news during the week. It’s pretty good sprinkling of builders and always naughty builders, bad builders and you could get the wrong idea watching that and think that all builders are bad. It’s not only the bad ones that get the publicity. Sometimes here are also good builders and it’s very important to get the right builder. So, what is the right builder?
The right property builders are experienced in building a type of product that you want. For instance, if you’re doing a two-story townhouses, then you want a builder that regularly does that. Not just somebody who does townhouses but somebody who regularly build townhouses and obviously, quality and price. That’s important too. Another one is good value. A builder that can build at a good price, build a good quality product and is experienced in that type of construction.
Well, that might be theoretically what you need but, how do you find those sorts of builders? Where can you go to get on some of these good property builders? It’s very important. As well as that, because you need a good builder to help you with your pricing as well. So, how do we do that? Well, there are a couple of different ways. Quite possibly and most likely, you would be dealing with let’s say an architect or perhaps a building designer getting your approvals.
Architects often make good builders. So, in regards to architects, they just don’t do designs – obviously, they can do the design for your building approvals. They can do the detail designs for your building permit or construction certificate but they have other skills as well. Architects as well can run tenders so they can help tender for a builder to select the right builder and they can also do what we call contract administration where during the construction phase, they go out on site and check the property builders working and handle the contract. So, architects that do that, architects that call for tenders, and also architects who go to site inspections, will be meeting builders.
So, they will be first of all seeing which builders are winning tenders, they’ll also be seeing what are the prices that are winning the tenders and of course, when they get at the site to inspect, they’ll be seeing which property builders are doing quality work and whether they’re on time and on budget. It’s important that the builders are on time and of course, on budget. So, architects and building designers and sorts of people that do can be a very good source of recommendation for builders.
Builders On Surrounding Properties.
Now, in your particular area that you’re concentrating on, whenever a development is starting let’s say a construction site for some townhouses, apartments or whatever it is, after the approvals have gone through, you’re going to see a fence. It’s one of the things to happen. A builder will put up a perimeter fence. So, somewhere on that fence on the front of that property, you’re going to see the builder’s details. Now, any builder who is building townhouses in your patch or in your area, you need to contact and you need to know about them. So, you see the fence go up, you’ll see the sign go up and you need to contact those property builders.
First thing you’ll say is of course, “I just saw your sign go up, I can see you’re doing a townhouse project, by the way are you a builder/developer or are you just builder and develop for yourself or do you build for other developers?” That’s a very important first question because some builders only build for themselves. But property builders who build on contract, you need to talk to them. As a matter of making a time and getting there and having a bit of a chat with the builder, say, “I’m always looking for a good builder. Can we catch up?” That’s an opportunity of course to have a look at the builder, have a look at the building on site and have a look at the plans. You can even talk about the pricing. So, that’s great as well.
Another way you can get good property builders is through the building broker. I’m not sure if you know that. I’m sure you’re familiar with finance brokers. Finance brokers, what do they do? Well, they find finance that suits your circumstances. Building brokers are no different. Building brokers find a builder to fit your project. Not all builders are the same.
Some builders build small projects, some builders build larger projects, some builders might say “look, I don’t build more than five townhouses.” Other builders might say, “I don’t want to build less than ten.” – Larger builders. There are builders who build townhouses, builders who build apartments. Some builders build one or the other or both. There are builders that geographically build in certain areas. Some builders might build on the south side of the city but not on the north side. So, geographic, size, types of buildings as well. They all vary.
As a result, a good building broker will have on his book a range of good property builders. Proven builders, builders that the brokers worked with before, builders that have done good due diligence on. Now, building brokers, they charge a fee of course. They don’t do it for nothing. The charge is generally about 2% of the building contract price but that becomes part of the building contract itself.
So, as the builder gets paid, let’s say each month or whatever, a part of that will be the building brokerage fee. It’s only a small fee. There’s no reason why you can’t source your own property builders and at the same time have a building broker sourcing builders as well. Whoever comes up with the best builder, wins.
So, these are a few good tips on finding good property builders. All the best and great builders are out there. You just have to get out there and have a bit of a good look. Catch you soon!