The three-way squeeze
Doing your own development demands three things at once.
Time. Not huge hours, as chapter 3 showed, but the right hours at unpredictable moments, for two years, while your job and family carry on.
Money. The equity gate from chapter 6, typically six figures of cash or equity before a bank will engage, plus a buffer you hope never to use.
Experience. The unknown unknowns. First-timers do not fail because they are careless. They fail because nobody told them which questions existed.
Most people can summon two of the three. It is the third that gets them.
The classic first-timer mistakes
Ask anyone who has spent decades in this industry and the same failure patterns come up every time: buying a site before deciding the strategy, paying the vendor’s price instead of the residual, feasibilities missing whole cost categories, no contingency and borrowing to the absolute limit, the wrong ownership structure discovered at tax time, finance assumed rather than confirmed, and going it entirely alone to save on advice. Every one of these is survivable on paper and expensive in person.
The risks, named honestly
| Risk | What it looks like | How professionals manage it |
|---|---|---|
| Market | End values fall during the project | Buy at residual, keep the full margin as buffer, presales lock prices early |
| Approval | Council delays, conditions or refusal | Subject-to-DA contracts, approved sites, quality lodgement |
| Construction | Builder failure, variations, latent conditions | Builder due diligence, fixed-price contracts, contingency, QS-certified claims |
| Finance and rates | Costs of money rise, terms tighten | Conservative gearing, buffers, terms locked early |
| Inexperience | Unknown unknowns, in every category at once | Experienced teams, mentors, and honestly, scars |
Keeping an eye on the wider market helps with the first and fourth of those, which is what our property market news and commentary is for.
One of the investors in our Sapphire Place project at Palm Beach invested time in a professional development course before ever committing money. Her conclusion is the most useful sentence in this guide:
“I have a sound understanding of the figures a development can and should achieve, and I know most first-time developers do not maximise their returns. I am also time poor. This is a strategy I could not pull off on my own right now.”An investor in our Sapphire Place project at Palm Beach, five townhouses. She chose co-development instead, and chapter 10 shows how that ended.
That is not defeat. That is an investor who understands the game well enough to choose her position on the field. Which brings us, at last, to the position we built.