Knocking down a shed for 4 houses: land sourcing with Ryan Carruthers
Alex Harrington-Griffin talks to renowned transparency and good business fan Ryan Carruthers about better informed land owners, family land deals and knocking down your garden shed.
How do you feel agents can add more value to a land purchase?
Give details of other similar sites, maybe a different eye of the area - it has planning for X, but in this area, we've seen X perform better - or simple things in the design of the house. We've found these houses with XYZ sell faster or for more.
They can give newer developers or smaller developers an actual ‘crack at it’ instead of alienating them from the process. I welcome more competition. The first rule of business is to follow up, and agents never do that. A lot of people have talked to me about agents I know and work with saying they rang them last week and they have just not called back despite calling over and over again. So follow up is important.
What do you believe can be done between buyers and sellers to improve the land buying process?
Not had that much of a bad experience on this one, solicitors could be quicker though.
A timeline of everything that is going to happen at a certain point. For example, date offer is going to be accepted for details of when solicitors are to contact each other, the kinds of things they are going to be talking about; just all the information. Really dumb it down so that a five-year-old could understand it. I think that would help vendors massively. Information and clarity are key, educating them on legal vocabulary as well. Simplify the process. Explain to the vendor the thoughts and feelings they are going to have over the timeline; for example apprehension. Think about this to rope in with the timeline - feelings at the various stages of the process.
I don’t use the red book valuation before I put an offer down. My offers are usually cash offers so not required so much.
What would you say are the main barriers to sourcing viable land?
Finding suitable sites, vendors unrealistic values on sites, competition from land bankers
Dealing with vendors is definitely one especially ones who don’t fully understand the whole process of everything that is going to happen. And maybe they have dealt with other developers as well. That seems to be quite an issue. And then other developers who have told them other things.
Unrealistic expectations as well of the land seem to be a barrier. Reason: Probably people around them have told them - you could build 50 houses on your site etc. I did one recently where I was talking to the vendor. He showed me this plot of land. He said to me that his friends told him that because the shed was in his back garden and was already there, he could knock it down and get four houses. He insisted, despite me telling him that it was not easy, that his friends told him he could do it. His friends had been through the planning document and advised him. I think it is important that sellers are educated and informed by professionals and not dependent on second-hand information that misinforms them.
Also, another barrier for me is other competition. In Lincoln, we got some absolute sharks. Typically land banking (buying stuff and holding on to it) - never developing it ever - just to keep everybody else out of the game - keep out the competition; making the traditional offering high, showing intention to buy and then dropping the price at the end - that’s a major barrier. This is by both experienced and inexperienced developers.
What has been your most challenging land buying experience?
Multiple parties involved, so brothers, sisters all having a stake in the deal and wanting totally different things from it and different valuations - with family feuds as well.
I was dealing with one vendor initially and found out while going through the typical questions that there were quite a few of them. I requested a meeting with everybody, and that was just an absolute nightmare because every single person had a different idea for the land. Not many people got on with each other. That made things an ‘absolute pain.’
Another issue was buying from an institution - had to go through a board. That was also challenging. You put your proposal forward, and everybody has to agree to it. This can be time-consuming, and not everyone always agrees. Know who your vendor is before you put anything forward.
How many deals do you look at per month?
I probably look around 20 - 25 deals that could go somewhere per month. I probably look at 40 that are an initial discussion. Of the 20-25 I hope to take up between 5-10 good deals per year.