How to assess the competence of a property developer

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Choice of Property Developer

Did you catch our blog last week? ‘Sell or Joint Venture, which is better for a landowner?’

If you did not, check it out here

Ok so let’s say you have decided to go into a joint Venture and have found a developer, how do you assess the competence of an interested developer?

There are two major fronts that determine the success or otherwise of a joint venture partnership, these are :

Availability of Funding

Funds are required from inception all the way to completion of the proposed development. Professional fees, processing of building approval, planning permits and other related activities require funding, even before actual construction works begin.

This is where a proof of funding comes in handy. Proof of funds could be a document issued by a bank or financial institution that certifies that a developer has sufficient funding /financial ability to oversee a transaction. It could be presentation of the company’s account statement or it could basically be showing a track record of previous projects which the developer has successfully funded and completed.

Any of these should give some comfort to the land owner but note that it is still possible that things could go wrong in the area of financing.

Technical Expertise/Know How

Another important factor is the developer’s expertise. Consideration should be given to the compliance or otherwise of the property developer to building/construction standards, the pedigree of contractors the developer engages in the different aspects of the project, is also a great indicator of a developer competence. Visiting the developer’s previous projects will often times help to determine their technical capacity.

Apart from the two factors already identified, the developers marketing strategy is another factor that points to their competence. This is particularly important when the intension is to sell the completed buildings. While the landowner doesn’t have to sell the properties through the developer, it is an advantage when the developer has the competence to promote and sell the project. The better the promotion the faster the property sells and this could also boost the property value

This is a quick summary which can help with your assessment, but the ultimate assessment is to have a competent real estate professional to guide you.

JV Pulse helps property owners find developers for their projects, but did you know that we have a combined experience of over 30 year managing real estate projects, spanning from as small as single family homes to multi storey building running into billions of Naira.

This means not only do we get you connected, we also have the competence to professionally asses the developer on your behalf. That’s called killing two birds with one stone.