The 2 types of developers.
By Peter Micalos
These days everyone is a property developer.
The attractive returns, promises of financial freedom and the flamboyant lifestyle are all louring factors for people wanting to enter the industry.
There are basically two types:
- Commercial Property Developers
- Private Wealth Managers
Both types are good and have their advantages and disadvantages.
COMMERCIAL PROPERTY DEVELOPERS
- Tend to be more aggressive
- Are looking for "year on year" returns
- Have a degree of corporate infrastructure
- Actively manage risk
- Typically adopt a "Trading Stock" sell down retail model
- Product is safe and reliable
- Have a sophisticated capital stack
PRIVATE WEALTH MANAGERS
- Play a longer term game
- Generally have a stronger balance sheet
- Are more passive
- Outsources more
- Hold and retain stock more
- Use less leverage
- Smaller team
- Less overheads
So what is a better model ?
A blend of both is very powerful.