Transcription
In the last 6 years, my team and I have done over $45 million of development and planning here in Australia. My name is Jack, and in this video, I'm going to walk you through what I think is the best strategy to get into commercial property development in 2026. Whether you're just starting out or you've already done a deal or two. Stick around cuz I'm going to break this down into four lessons. Lessons I learned the hard way. The kind of stuff I wish someone had sat me down and told me in 2020. So, let's get into it.
Lesson one, the deal is made when you choose the land. I want to tell you a story. There was a site that we were looking at in a regional town. Great zoning, great location, great price. Everything on paper looked good, and we started getting pretty serious about it. But something felt off. The area had a few properties nearby that had been sitting vacant for a while. So before we went any further, I made a couple of calls to some local agents just to see what was leasing in the area. Turns out the tenant pool was tiny. There was maybe three or four tenants in the area that could ever need industrial space of that size. And two of them already own their own premises. And the third had just signed a long lease somewhere else. So, there was effectively no one to lease to. The site was fine, the zoning was fine, the price was fine, but we would have built something with no one to lease to. No solicitor is going to pick that up. No title search is going to pick that up. You're only going to find it out by actually understanding the market that you're building in. And that's why this is so important. Most people think development is mainly about building when really it's mainly about buying the right site. Because once you're committed to the wrong site, everything that follows either becomes harder or becomes impossible. And I see it constantly. People fall in love with a block of land before they've even understood it. They like the price. They like how it looks from the street. They've already mentally built it inside their head. And they haven't asked a single fundamental question.
So, here's exactly what I look for before I even consider moving forward. Zoning. Can I actually build what I want here? And I don't mean a quick squint at a zoning map. I mean, what's the code? What's permitted? Are they approved outright or do they need consent? Because there's a big difference between something being technically possible and being realistically approvable. I'm on the phone to a town planner early. I'm checking height limits, overlays, floor space ratios, and setbacks. The question I'm trying to answer is simple. Can I execute the vision that I want for the site without fighting with council for the next 12 or 18 months? If zoning doesn't support it, nothing else matters.
Next is demand. What does the market actually need? Not what I think's going to look good, not what I'd personally use, but what a tenants actually looking for right now. And this is where beginners get burnt. They build on preference, not on data. "I reckon this would work" is not a development strategy. So, I'm asking agents, what's leasing? What's sitting vacant? What sizes are tenants requesting? What types of tenants are moving to the area? If there's no demand, well, then you have a liability.
Usability and access. If trucks can't move, if customers can't get in or out, the site doesn't work. It doesn't matter how good everything else is. For industrial, is there enough turning radius? Is the driveway wide enough? Is the access off a proper road? For retail or medical, is there enough parking? Is the traffic flow actually in your favor? Your tenants are running businesses. If your site makes their operations harder, they won't lease it or they'll leave, and that hits your income, which hits your value.
Next is visibility. Most tenants pay for exposure. You can have a great building in a bad position and it'll underperform. Is it on a main road, maybe a corner block? Does it have high traffic count? Can people see it from the street? For a lot of tenants, visibility equals revenue, and revenue is what funds their rent and exit strategy.
Before I buy, I already know how I'm getting out. Am I selling or am I holding? This is where a lot of people get caught out. They get into a deal without knowing their path out. So, I'm thinking if I'm selling, who's the buyer and what yield are they going to expect? If I'm holding, is the rental income strong enough to justify the capital that's sitting there? And if things go sideways, can I change the use? Maybe stage it or pivot. Good developers plan the end outcome first and then reverse engineer everything from there. Nail those five things: zoning, demand, access, visibility, and exit, and you've already eliminated the majority of the bad deals before they start. This alone will save you years of pain and a lot of money.
Lesson two, control the site before you own it. Let me tell you a story about a subdivision project I was pursuing. I'd found a site that on the surface it looked like a great opportunity. The location was good, the numbers seemed to stack, and I was excited about it. Instead of committing to buy it outright, I secured it through an option agreement. I paid a small option fee, locked in a purchase price, and bought myself some time to do some due diligence. And thank God that I did because as I dug deeper into the services, I realized that the site wasn't properly serviced for sewage. To make it work, I would have had to install a $300,000 sewer pump station, which would have blown the numbers right out. So, the deal was dead. Because I had the option, I simply let it go. I lost the option fee, which hurt a little bit, but compare that to what would have happened if I bought the site outright and then figured all that stuff out later would have been catastrophic. The option fee was the price of a lesson that I didn't have to figure out the hard way. And that's the whole point of this lesson. Most beginners think that you need hundreds of thousands or millions saved up to buy the land outright and then figure it out. But you don't need to do that. You just need to control the deal. Because in development, control beats ownership early on in the process.
Here's how it works. You agree on a purchase price with the owner upfront. Let's say a million dollars. You lock that price in today. You pay an option fee and that secures you 6, 12, sometimes even 18 months of exclusivity. During that window, the owner can't sell to anyone else. The price is fixed and you control what happens next. But the part that makes it powerful, you're not obligated to buy. So now you've got a window to run your feasibility, talk to your consultants, validate demand, and lodge your development application, all without committing millions upfront. And if the deal stacks up, you execute your option and get into it. And if it doesn't, you walk away. You might lose your option fee. But compare that to buying the wrong site outright. It's a cheap lesson. And here's where it gets even more interesting. If during that period you've got your DA approved, you probably just increased the value of the site without owning it. And at that point, you don't even necessarily have to be the one who builds it. You could bring in a capital partner, structure a JV, or assign the deal to someone else entirely. What you've done is taken a raw opportunity and you've structured it into a de-risked deal. And that is what investors pay for. So you don't need to own the land to make money from it. You just need to control the outcome.
Lesson three, the real money is made before you build. Let me give you a real example of this. We found an old vacant shed in an industrial area, completely vacant. No one wanted it, but we had a tenant in mind who'd be the perfect fit if we could get the right approvals in place. So, we put an option on it and lodged a DA for a change of use, which would shift it from an old shed into a logistics center. And at the same time, we went and signed an agreement for lease with the incoming tenant. Once the DA was approved and the tenant was in, the bank revalued the property. The value of the property jumped multiple six figures before we even touched the site. And because we didn't exercise our option until after the DA was approved and after the tenant was locked in, we didn't have to outlay any equity upfront. And the uplift basically funded itself. You don't have to wait until the end of a development for value to be created. A lot of the time it can be done early on through one thing, development approval. Take a raw piece of land and turn it into an approved project. Done properly, the value increases and sometimes significantly. And that's why early on in the process, I'm spending money on architects, engineers, and planners to get a DA across the line. Because when you can take something uncertain and turn it into something tangible, that's what banks and investors care about. Not ideas, not potential, approved, structured projects. And all this ties back to feasibility. It all comes down to three numbers. What it'll be worth at the end, what it costs to get there, and what's left over. If the margin isn't strong enough, you walk away. This is a game of discipline. The numbers will tell you the truth, and it's your job to listen.
Lesson four, you don't need to build it alone. Once you've got a good site, a clear plan, and an approved development, now we find the right people. Because most commercial developments aren't funded by just one person. They're structured. You might bring the approved project. Someone else might bring the equity required. And together, you take that to the bank. That's how developments can often happen at scale. And while construction's running, you're not just sitting back. You're talking to agents, you're finding tenants, and you're getting the project leased up before construction finishes because once it's built and leased, the income heavily influences the valuation. And that's when the asset becomes genuinely powerful. And at that point, you've got options. You could sell and realize a profit. You could hold and collect the income. Or you could do a mix of both. Either way, you've created something from nothing. So, if I had to sum this up, this is a game about finding the right site, learning how to structure a deal properly, creating value before construction even starts, and learning how to leverage other people's capital. One good commercial deal, when it's done right, can genuinely change your life.