Many say that property development is a team sport. There are a huge number of team members who add value to the project. Some are obvious, like architects, real estate agents, and structural engineers, others are less seen or work behind the scenes, such as 3D graphic designers, colour consultants, or landscape architects. One things is for certain, that it’s next to impossible to complete a whole project on your own. You must leverage the skills, resources, knowledge of others.
One article I came across recently by a US-based tech entrepreneur Naval Ravikant describes this concept of a team, and that in order to be successful (and reap the benefits) long-term, you play multiple iterated games. And it’s this idea of repeating the process, with the same players, whether it’s capital or relationships, you start to get the effects of compounding.
For example, capital returns of 8% per year may not sound much, but re-iterated over 9 years, giving you a return of 100% or the equivalent of double your money. That’s right, double. Similarly you can think about relationships in the same way, the first time you do business together, there’s uncertainty, not knowing how each person operates, and their distinct quirks. Over time, the dealings become easier, almost frictionless, and then the ability to tackle bigger problems (and deals) becomes a reality.
Check out the post on tech start-ups, and I think can be easily applied to property development and investment.