This month I wrapped up a 14 townhouse project that I have been working on for nearly five years. It has been a long, challenging and eventful project. There have been many many lessons and I will share some with you.

We have finished with all the settlements in the complex. I have one remaining unit left unsold which is currently on the market and I'm looking to get that sold in the next month or so. I had always planned on keeping this unit till the end of the project because it is bigger and unattached to the rest of the dwellings on the site, and will appeal to a different range of buyers than the other ones. Anyway, I will talk more about the lessons from this project in a moment.

You can check out the video below of the finished product.

On my other project, I am expecting the Building Permit to be issued any day now and then have the builder on site within the next few weeks. Can't wait to get that project underway. Hopefully we have minimal delays on getting that delivered.

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Lessons Learned from my 14 townhouse property development project

So, on this podcast I thought I would share some of the key lessons I took out of my just finished project. For those who have been listening to the podcast for a while would know that I have been battling away on this project for a number of years, probably close to five years, which included a failed trip to the planning tribunal to try and get a planning refusal overturned. So it has been a long road.

Anyway, the project is basically done now and looks fantastic. Check some of the video posts I have made on the show's Insta and Facebook pages to see how it looks. I am very proud of the finished product and the buyers who have moved in are also delighted with their new homes.

So what are the lessons I have learnt from this project? Let's go through some of them. These are in no particular order just reflections I have looking back over the past few years...

1. The illusion of perfection can drive frustration

One of the challenges I continue to face is the expectation that things will go smoothly, even though I know and understand there will be challenges along the way. This can be a source of frustration when things go awry or problems pop up that annoy you. For example, I had to spend $6,000 getting a new electricity connection for one of the townhouses because the council wouldn’t allow the cables from the central meter to run across the front garden of one of the townhouses at the front of the site. This was frustrating and annoying, and shouldn’t have really happened if the services engineer had designed something that council would be happy with, but they didn’t and I had to sort it out. It was frustrating and shouldn’t have happened but it did.

So the lesson for me was a reminder that bumps and unexpected turns are par for the course when doing a development and you just have to roll with them.

2. Growth happens when you are challenged

So following on from the previous point about perfection, is also the benefit of challenges in terms of how they help you grow and adapt. The funny thing about challenges is that they force you to evolve and learn. Easy projects don’t really teach you much, you don't gain as much experience, so I think it is wise to embrace the pain when it happens so that you can evolve and expand as a developer. It is when things don’t go to plan that you can understand where things go wrong and what you can do in the future to try and make it sure it doesn’t happen again...

The lesson on this point is that without the pain can you really enjoy the pleasure.

3. Nobody cares more about the project than you

You can be sure that nobody wakes up in the morning more enthused to deliver your project than you. And that means you need to stay on top of the people who are working with you to make it happen to ensure things are getting done on time. You also need to provide a dose of inspiration to keep them interested and focused on the job. I do this through regular check ins and asking how things are going. It is also beneficial to remind people that you are grateful for the work they are doing on the project. So remember you are the conductor of the orchestra and you need to keep everyone in time and focused.

4. Confirmation bias can derail a property development project

A huge lesson I learnt through this project is to be very wary of confirmation bias. Confirmation bias is where you believe your own view of the world. This stems from my loss at VCAT where I held a view that we should get a permit, and this view was supported by my team, and I accepted their reassurance because it mirrored my own. But we were wrong. The lesson is to try and remain open minded and explore the worst case scenarios so you can try to mitigate them, and be alert to believing that your own worldview is the likely outcome of a situation.

5. Maintain a strong financial picture throughout the project

There are a lot of expenses involved with a property development project, and invoices fly in and money goes out all the time. Variations come up in building and numbers forecasted in feasibilities change regularly. The market moves, you might sell for more or less than you expected, and it is important to keep a good eye on how you are tracking so you know where you stand financially, as this has a big impact on your sales campaign and understanding what kind of sales results you need to get to achieve a certain financial outcome. It also forces you to maintain some financial accountability for how costs are tracking against forecasts. The lesson is to ensure you are regularly aware of how the project is tracking financially. That might mean a monthly report from your project accountant, or a consistent effort on tracking expenses and cashflow through your spreadsheet or however you plan on managing your project financials.

6. Property markets can change quickly

Property cycles can change quickly. In the cycle of this project we went from a market reaching a peak, to a softening period, and then a massive growth phase again. There is no way you could have predicted that type of change in a five year period. It just goes to show how quickly the market can change, for the better and for the worse… The lesson is that it is very hard to predict where property markets will head so be aware they can change quickly.

7. Liquidity and contingency are the lifeblood of a property development project

I think having sufficient cash to get you through a project is really important. It allows you to keep the project moving ahead, pay your team and other suppliers in a reasonable and fair timeframe, and reduces the overall stress level through the project. Having enough cash allows you to avoid delays while you scramble to raise capital, and to take care of some of those unexpected costs that pop up along the way. Having enough working capital makes a big difference to how you manage a project. It facilitates less volatility in your decision making, and allows you to keep things moving. For example, we had some water issues on site that required $11,000 of additional drainage works, while I was not happy about having to pay for it, and looked for alternatives and ways of not doing it, ultimately there was money in the contingency for that exact type of situation, the works got done and paid for. So the lesson here is a timely reminder to have enough cash ahead of each stage of a project so you can keep things moving along.

8. It is helpful to have investors/stakeholders who understand the risks

During a project when everything runs smoothly and exactly to plan you may not face many issues from people who have invested in your project, but when things don’t go exactly to plan that’s when it pays to have ensured your investors are educated about the risks of a project and what can happen along the way. The added stress of dealing with anxious investors would certainly add another level of complexity to a project. So the lesson here is to carefully vet who you accept money from and make sure you take the time to explain the potential risks involved with the project, and try to partner with people who have experience in investing.

9. There's a great sense of satisfaction from having happy customers