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Tuesday, 25 August 2015

Launching a new residential project in India


Investment in the land is always considered as the low risk and high return option. 
Building a residential project could make you rich in quick time. The most important thing that you need to start the residential project is the initial capital money.

How to fund your residential project?
Well - First thing that you will need is NA (Non-agricultural land) Plot. The amount of funds required for the residential project depends upon the size of the project, area of the plot and location of the plot.
Let us imagine that you want to buy the plot in the outskirts of Pune, Baramati, Jejuri, Saswad, Loni Kalbhor, Dehu, Kiwale, Gahunje or Talegaon. You can easily get a 3000 sq. ft plot for around 25 to 50 lacs in the outskirts of Pune.  

Below is the list of possible options to raise the funds to buy the plot.
  1. Your savings
  2. Bank loans against the plot
  3. Personal loan
  4. You may try to arrange funds from your friends or family in case you are short of money.
  5. Another option is - You may get in contract with other party as a part of Joint Venture. In this scenario, ensure that other party or person is trustworthy and you have close ties with them. If the cost of plot is 1 Crore, you will have to shell out just 50 lacs! If there are 3 partners, you will have to shell out just 33 lacs and with 4 partners you will have to shell out just 25 lacs! Just imagine how easily you could become the owner of such a big residential project. Beware - Profits will also be shared :(  
Buying the plot
Wonderful! Now that you have managed the fund to buy the land, it's the time to nail down the plot! You could appoint the real estate broker to help you find out plots in your budget. Brokers usually charge around 2% amount of the deal as their fees. If you have enough time, you can yourself go and hunt the property. This is a time consuming process so you need to have patience! 

Key things to consider while buying the plot are mentioned below.
  1. Location
  2. Title of the land
  3. Area of the plot  
  4. 7/12 extract
If you are happy with all above parameters, go ahead and register it on your name with local department of registration and stamp. You will have to pay stamp duty and other taxes while registering the sale of deed.

General overview - Residential project launch

Okay! You have done great job so far! Now It's the time to launch your residential project.  
Follow below steps.
  1. Make the architectural plan of your project with the help of architects.There are a lot of freelance architect who can make the plan for you at very low costs .
  2. Get your plan sanctioned from local council body.
  3. Get the construction commencement certificate from local council body.
  4. Advertise your plan to launch the project through different channels like newspapers, websites, social network and mouth marketing.
  5. Potential customers contact you and invest in your project. Use the money paid by customer to clear the project costs.  
What kind of skills and people you will have to connect with?

Below is the list of professionals/ skilled people you will have to connect with.
  1. Advertisers
  2. Architects
  3. Civil Engineers
  4. RCC engineers
  5. Labour
  6. Brick Layer
  7. Carpenter
  8. Painter
  9. Electricians
What are the different material suppliers you will need to connect with?

Below is the list of material suppliers you will have to connect with.
  1. Steel traders
  2. Brick suppliers
  3. Cement Suppliers
  4. Sand suppliers
  5. Tiles and fittings suppliers
  6. Hardware suppliers 
What are the legal aspects of the residential project?

You will have to follow all rules and regulations laid out by local council. key things to note are -
  1. Getting water connection
  2. Getting electricity connection
  3. Getting Sewage connection
  4. Building completion certificate
  5. Building occupancy certificate
What after project is completed?

You will have to carry out below things post-completion of the project.
  1. Hand over the flats to customers.
  2. Register the society under government act.
  3. File various taxes to comply with government laws.
What are the major challenges in completing the residential project in India?

In India, we all know that any government related work does not move without paying bribes. Even though situation is improving under Modi Government and due to the agitations by Anna Hazare and Kejriwal, we can't deny the fact that ground reality has not changed at all.
We have to pay EXTRA money to get approvals for various documents. That's the reality and the most challenging part of any residential project. If you could manage to establish links with bosses in the local municipal corporation by hooks or crooks, no one can stop you from realizing your dream of being a real estate developer and amassing the wealth like others!

If you are looking for joint ventures, kindly contact me on reply2sagar@gmail.com Please note that minimum budget from your side must be 10 lacs or more :)

What do you think on this topic? Please express your opinion or ask any question through comment below. You can write to me at reply2sagar@gmail.com

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