The phone call that landed us a hidden development deal

Landing a Profitable Development Deal with a Single Call

If you’ve ever wondered how to become a property developer in Australia, let us share one truth. Sometimes the best opportunities don’t come from spreadsheets or endless scrolling, they come from one simple phone call to a Real Estate Agent.

This case study is a perfect example of property development for beginners: spotting a potential development deal, doing the due diligence, navigating council rules, and pivoting when the unexpected (like COVID) throws a spanner in the works.

We wanted a site over 700–800m² that we could split into two blocks and have someone to help us to get into those sites. Simple enough, right? Except, we did not have connections or rapport with the agents in our target area. We enquired online but the agent’s emails kept showing brand new, undersized listings that didn’t suit us. We then called the agent and explained exactly what we wanted and what we were looking for in the property. That five-minute chat unlocked an off-market site over 800m². Without that call, we never would have seen it. Seems too easy right? It took us a few phone calls, and multiple points of contact, but it taught us to pick up the phone and put your name out there.

So, we had secured the site but next came other hurdles. There were street trees that might block driveways or be considered “regulated", and an old encumbrance on title from a previous developer. To add to that, COVID restrictions had started, and everything looked highly uncertain (our income, availability of materials, and cost of works). What should have been a 12-month project ended up being nearly 3 years thanks to COVID and construction delays. Costs increased, but the Adelaide property market uplift helped offset that, and the due diligence Gambit guided us with, meant that potential disasters were averted. In the end, the development was profitable and by building, we were able to capture extra value from the site.

Here's what Gambit helped us to do, step by step:

• Feasibility Check: Think of it like a “financial health check” for the property. In this case, the numbers showed the block could be split into two smaller lots (a “1 into 2” subdivision). On paper, this meant the project could return about 14% profit overall, but looking at the actual cash invested, it worked out to around a 45% return on cash. In simple terms, for every $100 of cash we put into the deal, we expected to get $145 back.

• Checking the trees: Street trees can derail a project. We ordered an arborist report early, which confirmed one tree could be removed without issue. A small step, but it saved us from a costly mistake.

• Reviewing legal documents: The property had an old encumbrance that included fencing and façade requirements. Our lawyer confirmed it wasn’t enforceable. This step is vital as Adelaide zoning regulations for development and title encumbrances can limit what you can actually build.

• Confirming services and approvals: We checked sewer, water, and power access, and made sure overhead power lines wouldn’t affect the design. This ties into knowing how to get planning approval as every council has requirements on frontage, services, and access.

• Pivoting during COVID: We ended up selling one block quickly, helping us to fund the build. We were able to use the already approved plans to we build a home.

If you're new to property development, remember: the property development process steps are about problem-solving. Stay curious, keep asking questions, and don’t underestimate the power of creating connections.

Key takeaways that we learned from this project:

• Stay in touch with agents: sometimes one phone call is all it takes.

• Always run a feasibility study: this showed us that the site was worth pursuing before we were fully committed.

• Don’t ignore encumbrances or zoning rules: they can make or break a development project.

• Have multiple exit strategies: market conditions change, so stay flexible.

• Do your due diligence: we learnt that property development is about being prepared and knowing when to pivot.