How This Architectural Engineer Built £30M in Property Without Leaving His Practice | EP672

0:00Now the property industry, when you start getting into it, there's a lot of shady characters, there's a lot of smoke and mirror. Hello, architect nation and welcome back. This is the right place for you if you run a small architectural practice. On today's episode you'll discover the one clean business model that might outperform your architecture firm and why it's making this architect rethink everything. How he built a development empire controlling 30 million pounds in property without using a penny of his own architecture firm's profits. The reason your architectural client might be turning into your competitors and what you can do to turn that threat into a strategic advantage. In today's episode I sit down with Ben Richards, an unwarr'd winning business owner, architecture engineer and property developer who's built a vertically integrated ecosystem of businesses. His 12-person architecture practice runs largely without him, allowing Ben to focus on 65 new homes across five sites totaling 25 million pounds.

1:02With a passion for both design and business, he's mastered the art of adding value from concept to completion. Ben, welcome back to the business of architecture. How have you been? Hello, very well, thank you. Yeah, I think it's been two and a half, three years maybe? Two and a half years. You were last time on the show and the last episode became one of the highest viewed videos that we've had on the business of architecture list. Good. I think the topic you were illustrating last time about architect developer, I really struck a chord of a lot of people. This is a topic is always super popular, super interesting. Again, I'd make the point that I think the majority or the most popular, I don't want to call it a fantasy or aspiration, I should say. The most popular aspiration is that we have here on the show, is architects becoming architect developers. I mean the control, right? Yeah, I think it's a desire.

2:09I think we're talking about this today, the actual realities of being a property developer and what it involves might not be exactly what people are imagining, but certainly the aspiration that's wrapped up in it or the image of what it can provide is this kind of freedom of design and not having a client and being able to do what you want to do and ensure that your architectural ideas are being well-executed. Yeah, it's definitely given me a few new gray heads since the last time we spoke and receiving hairline is making its way further back on my head for the yeah, we can get on to that and the stresses involved and risks and I completely agree it is definitely an aspiration of a lot of architects that I speak to, but yeah, I always give a word of warning and some large caveats, but yeah, we can get stuck into that. Awesome. So you are the

3:09managing director of aura architecture and interiors. You've also been running a successful property development investment firm, XB property and a surveying business, XB service surveys, which we went into last time that we were talking. So perhaps you could give us a little bit of a recap on the medley of architectural development businesses that you have in the portfolio, and then you can catch us up to speed about what's actually happened in the last two, two and a half years. I mean, for those that are visually watching, they're sort of behind me, you can see the various businesses on the on the ball behind me, but the architecture practice is is the longest running one. Now I've been running for eight years this month actually since I left the Berkeley group and started the journey into entrepreneurship and running an architecture practice. We're now a team that is about 12 strong and most of those sort of PAY a couple of freelance architects and freelance and sort of business assistants that help us along the way, but yeah,

4:12we're running around about a million pound turnover, that type of level work in London and the South East. About 70% of our business I would say is private-resy type projects, and then the remaining 30% is working with property developers and property investors like myself on their own projects. So we've done some really cool projects over the last eight years. I'd say since we met two and a half years ago, we've really pushed the interior side of stuff. So when we spoke to enough years ago, it probably would have just been our architecture, but we've now added that our architecture and interiors. We sort of always did it, but it sort of now evolved where we offer standalone interior design services and we really push it a lot more with our architecture clients to also take that that interior design package and again give us full control on both the exterior look, the internal space planning and the interior finishes, which is awesome. So yeah, that's where Or is at. When we met two and a half years ago, XP surveys would have been a fledgling

5:12business, probably would have been only 18 months in in play. We probably only had one survey working for us. We've got now five people in that business full-time and we built a really good network of external surveyors. So I wanted to do with XP surveys in sort of a shorter space of time, the same thing that I did with Or in like let's say it's taken me eight years to get to a million pound revenue. I want XP surveys to get to that million pound revenue within five years. So we've got a bit bit of work to do over the next 18 months, but I'm really, really happy with where it's been and gone to over the last six months since starting 2025, we have smashed it. It's been amazing to have seen sort of laying the foundations, taking a while to get there. We brought on a business development manager at the tail end of 2024. He's really helped us build relationships with our existing client base, bringing new client base, improve our internal processes, be a little bit

6:13more kind of robust in our systems internally. And we've really seen things kick on 30% net margins. It makes me sort of question why I do some other businesses when it's a business model that works. It's the sort of thing where it's black and white. You go to site, you laser scan, so just rolling back actually, it's a measured building surveying and topographical surveying business. So we use laser scanners, we scan buildings, we provide as built drawings for architects, we'll build environment professionals, contractors, interior designers, and then they go off and do whatever they want to do with with the proposals. So for me, it's from a business model perspective very clear, you go to site, you scan it, you post process it, you draw it, it goes out the door, you never hear from a client again, that's the goal. It's clean, there's a cleanness to it. Yeah, there's no sort of delays in planning or clients have gone on holiday or clients have had a baby, so they don't get back to you for four months. So it's very, we want it done yesterday,

7:13we want the survey output tomorrow, and that's it, you're done and dusted. So I feel like it's more productised, from a business model perspective, I just know having seen it now work and operate really efficiently and effectively, I love it. So yeah, that's where we are with XB surveys, and then XB property, which is where I spend most of my time nowadays, we are actively building out around about 30 million pounds worth of property across London and the South East, mainly in the home counties, but one scheme in Muswell, Hill North London, and that in between those five sites, we are delivering about 65 units across those five sites, so we've got some new build, very small amount of new build, most of it is repurposing existing buildings, changing offices into residential, adding my various enhancements and optimisations, maybe getting a couple of new builds in the car park, that type of thing, and that's typically our bag at the moment, we haven't done a huge amount of new build housing schemes, but it is something we're actively looking to do, but our skill set really is repurposing existing buildings,

8:18bringing them back to life, using change of use, permit development type applications, and squeezing as much value out of sites as possible, so yeah, that's three of the main businesses, and then you've got a Paro Social, which is the one at the bottom here, that is a social housing portfolio that we've been building over the last four and a half years, we've got 85 units within that portfolio across 11 assets, and that has been buying assets, generally getting them back to break and refurbish them at the top bottom, putting them on a 10 or 25 year lease with a social housing operator, and then effectively it's a full repairing internal ensuring lease, and the idea is that it hands over to the operator, and we don't have much to do it, there's nuances behind that, and it's not being that easy, but that was the crux of it, we're actively looking to try and sell that portfolio, so it's been a busy two and a half years since we last spoke, put it that way. Wow, £30 million worth of construction across the UK, that's extraordinary.

9:25It's been great, it's had its challenges, and out of the five sites that we're working on at the moment, they're not all performing as well as they should do, but ultimately that's generally why you spread your risk across numerous sites, and don't put all your eggs in one basket, because we've got five that are going in tandem, if one doesn't perform as well, it's not going to break the bank, because if you were just doing that one. In terms of the property development, what's the relationship between oral architecture and XB property? How do the two interact with each other? I'm assuming that oral does all of the architectural services for the property company. You're making money as a development fee, making money on the architectural services, making money, having equity in the assets themselves as well. Yes, so oral is a standalone business, it gets design fees for XB properties projects, that fee is,

10:25it varies, we want our own development appraisal from a development perspective, with what we would expect to pay for certain elements of planning, of detailed design, of maybe contract administration, and ultimately oral try to kind of bring the project in within the anticipated budget that XB sets. There's a little bit of, not leniency, but I can control that to a certain degree. It's pretty much market rate of what we would expect to pay elsewhere. We have a business to run within Aura, and we need to get paid at the level that we would expect to be paid elsewhere. To put it in perspective, I think over the last two years, it's been around about an average of 25% of our revenue within Aura has come via XB's projects. We're not too heavily waiting, I haven't built Aura to service XP. We are servicing XP as part of Aura, and it's been quite a busy period with these five sites being delivered over the last couple of years, so that's tapered

11:27off to about 12% in 2025 in terms of the revenue, but historically it's always been around about 20 to 25%. Do you ever have any competition with your developer clients, that's those developer clients that you're doing with Aura, and then you're kind of going or bidding for the same site that one of the developer clients is going for with XP? Yeah, it hasn't really happened like that. No, I've heard, and I've spoken to a few people from a development perspective that have been reluctant to use me as an architectural practice because of that, and I've never really fully understood it, but I've spoken to a couple of people that have mentioned it. Most people see it as a massive benefit. When they're coming to an architectural practice that understands development so intensely like we do because we do it day in day out, there's so much value that we can add and bring to the table from a value engineering perspective, from a contacts perspective, from a consultant introduction perspective. One of our developer clients, sort of four or five

12:29years ago, we managed to raise them a quarter of a million pounds for their own development through my XP contacts, but it came via Aura, so there's loads across over. One of the sites with delivering at the moment started as an Aura project, so I went to site to look at it from an architectural perspective, got chatting to the owner. The owner said, I'm looking to move to Malaysia with my wife. We're looking to sell this, but we want to explore the planning first. I was like, well, I'll buy it from you. It's got good legs. I see the potential in it. He didn't want to spend the money on the planning in the end, so ultimately we agreed a strike price, and we're now literally about a month away from finishing on that site, which is nine units in Muswell Hill. So there's loads of good osmosis through all of the businesses. One of the most interesting ones is actually with XP surveys, because there has been occasions where we've bid on sites, we've lost it, and then like two weeks later, the buying entity has contacted XP surveys to a measured survey to survey the site that we missed out on. So we know who won the bid. We've got

13:33that inside knowledge, and we can see it through. So it does have the benefit of that type of synergy with through the businesses and through the extending network, and the property industry is actually pretty small. So there's a lot of crossover and a lot of people that we know through all of the different businesses that I actually spoke to somebody earlier who requested a quote from 28 flats in Marlow for interior design, and I didn't actually realise, but he's been commenting on, he's been watching my aura house tours on YouTube, he's been tuning into our property experts podcast, and he comments actually quite regularly on the podcast and actually put two and two together, but that trust and relationship has been built from both a property development and investment perspective, but also it's it bringing in that lead to aura for potential design work through that business. So yeah, Osmosis throughout the whole kind of ecosystem that we built. I love it, and I love it, just what you were saying now, that actually when one of your development

14:36clients, you were able to bring them investment from people that you knew in your XP network, and you're kind of solving a handful of different problems there, not just the architectural problem for the client, and that's the sort of thing I can imagine, you know, as an architecture firm, you know, you'll be able to bring that additional A, the knowledge base that you've got, but also just being able to help with the finance to facilitate a project with trusted investors to your developer clients. Well, that's awesome. Yeah, it's sort of, I feel like it does have a bit of a double edged sword because some people might see it as competitive, but at the same time, you know, the conversation I have with a guy about Marlo earlier on the phone, this this wasn't a conversation about interiors and and the architecture and things like that. He was asking me about the scheme that we're selling in Marlo, you know, he was asking me for recommendations for sales agents, and I could give him that information because I've literally going through it as we speak, and I said I'd make an introduction to the sales agent that sold half of our scheme. So yeah, I feel like there's huge benefits of coming to aura from an architectural perspective,

15:39but getting so much more than just the architecture because I'm just so embedded in the property development and investment world. So two questions for you, and you can answer them, how are you, how you feel fit? One is how, how are you running all of these different businesses at the same time? Like how have you structured it? What's the hierarchy that you're using? How have you been able to be effective of your delegation, put leadership in place to run things? How do you know when to prioritize what at what time? You've got three serious businesses here all doing their thing. And just one is a nightmare. Tell me about it. It is difficult and yeah, stretch very thin. What's the second question? Then the second question is the money for the property. Where does that ultimately come from? Has it been a case of, you know, you've started this with, you got your architecture company first, it was the professional services,

16:42we like professional services, they cash flow fast, you're taking money out of that and then investing it into the property and then kind of supplementing it with external investment. Or has it, you know, did you go, did you, were you straight in with the investment properties from day one? What was the mix? Two really good questions. So question one from a sort of delegation from a team building perspective. There's about 30 people within the sort of ecosystem of businesses behind me. So including one of my business partners is business as well. But that's how really it's the team, you know, within or within three years I brought in a Graham, so Graham's my design and operations director. He's the one that manages the day-to-day of the office and that was crucial for me to do, to relinquish myself in order to do the development stuff. So my one goal with Aura was to build it to a size that could work without me ASAP to allow myself

17:44to do the developments. And that started from scratch really, that was figuring out the marketing strategy, we get a lot of organic inquiries come through that is based off of the back of certain engine optimization that I've done eight years ago from the basis of building our YouTube channel, the house tools that I do, the Instagram following and all that type of stuff that I've built that's almost like evergreen and organic. And that's how I always wanted to build it so that I didn't have to push loads of money into PPC or rely on myself going out and networking and bringing in the work as a sole kind of owner of the business. So I was a real focus early on managed to do that, within like the three, four year timeframe, bringing Graham. And in reality, I probably do about probably four hours a week in Aura. So it is pretty self-sustaining that being said, I'm jumping in a lot more at the moment because we probably can probably come onto this, but I'm finding

18:46times are really tough. We are really struggling, this will be the first loss-making year that we've had in eight years. And there's probably various reasons for that, but it's been really tough, so I've had to kind of get back involved a little bit more, a little bit more salesy, you know, network and throw myself out there a bit more than I used to do. But yeah, it's about the team, like within every business, bringing in the right people in order to free up your time to think about how the business operates, not how the day-to-day operates. You know, people say thinking about building, thinking about being on top of your business, not in your business. And that really has been a massive focus over the last eight years for almost every business except XB Property, where XB Property don't have to spend a lot of my time because I'm the one kind of coordinating the sites and project managing and working with my PMs to kind of deliver those schemes. So yeah, for me, it's all about team bringing in the right people, setting up a good structure

19:46around the business, having the support team and administration behind you as well, every business, one of the first people that we bring in is a PA or a business assistant. And that's been a fundamental for all of my businesses. Like, I won't, you know, XB surveys was actually our first employee was a surveyor because one of our lettings, well, one of Jack's, my business partner, one of his lettings in his HMOs. He knocked on the doors, had a new tenant and an Oscar answered the door and Jack was like, you know, I'm the landlord, nice to meet you just coming to say hello, you know, what do you do? And he said, oh, I'm a measured building surveyor. I've just been made redundant and Jack was like, oh, that's funny because we've just started a measured building company. Do you want a job? And that's where it started with XB Survey. So he was our first employee, but our second employee within XB Survey was a business admin assistant who could run the day today, invoicing, quoting, taking inquiries, processing all of that at the front end. And I think that's really important. I think the thing that I always see

20:49from technicians, from architects, from party wall surveys, from structural engineers are by nature of what they've done and where they've come from, they are exactly that, their technicians, they operate the building, they operate the property, they operate the business. And what what a lot of people in that mindset really struggle to do is take themselves out of the day have the business understanding the entrepreneur sort of entrepreneurship kind of hunger, I guess. And they stay in the business doing the same things over and over and can't get that scale and grow the business because they're so involved day to day. And more often than not, it's that person that's the bottleneck to the growth of the company. I think because I had this overriding, I need to release myself so I can do this development stuff. I forced myself into the position where I had to delegate, I had to bring in the teams, I had to build systems processes, I had to think like a business person, not like, you know, an architect would in a in a typical

21:50architectural practice. So I think I think I was sort of that helped me that pushed me towards doing everything I needed to do to release myself from from the day to day. And so with each business you were, you kind of had this hiring ladder in mind of first of all, you know, get that get your office admin in so that all of that, you know, easy to delegate stuff as out of the way. And then you're, were you hiring kind of more senior people at first, particularly in the architecture practice because we, you know, we see this as a hiring, perhaps a hiring mistake that a lot of practices fall into where they hire, you know, part ones or part two's because that's all they can afford. And then now they've got even less time because now they're training people to do stuff. Yeah, no, I made that mistake. First employee of the business assistant for, for Aurora, then my second employee was a part two architect in rural fairness, given my situation at the time. So I started or eight years ago in May. And I think I might have talked about this last time, but started in May and in October, I traveled the world for six months. So I went with my girlfriend at the time now wife and

22:52traveled the world had some amazing times. But I kept the business going whilst I was over there because I had the business assistant and I had the part two architect doing the day-to-day drawing work. Had I been in the UK, you know, I might have maybe gone for someone a bit more experienced that I could, you know, know I could work with and leave alone to a certain degree and not have to train up. But I felt like I needed a doer. I needed someone to do the doing whilst I was overseas. I could coordinate and manage and video calls and emails back and forth that sort of stuff. So my first year really wasn't your typical startup year because I've traveled far for it. But when I got back, I was ready to go. I was ready to build. I did bring in some more senior part three architects after that because what I've learnt, like you've just said really in terms of mistakes people make, we've made this mistake in XB surveys where we've tried to hire cheap and it's cost us a fortune. We no longer actually take on part two architects in aura because it's

23:53just too expensive from our time and management perspective. The cost difference isn't actually as dramatic as people think as your cost and your baseline overhead. Let's say your baseline overhead is 30 pounds an hour and the cost of a part one is maybe 15 pounds an hour but the cost of a part two is maybe 30 pounds an hour. When you bolt on the overheads of the business anyway, that's the bit that outweighs things. So you may as well get somebody that's more experience for only a small increase in actual cost per hour to the business and bring in some skilled people that don't need management, no have no great management skills themselves to kind of time manage their own projects and deliver efficiently and on time. It is something that we've definitely learned, I think, bringing in unless you're a massive company and you have the management and the time to train up people. It's not good for people to hear because it sort of puts

24:57those younger graduates off joining smaller practices or it forces them down the road of joining bigger companies because the smaller ones don't want to take them on which is not ideal because when I started I always wanted to go into a small company so I could learn so much more and have more of a say on what went on and see everything from a business perspective. But yeah, I completely get having been through it, buying in experience is key. It's an interesting one there. The kind of tension between, you know, as a profession, what I like about architecture is that we are a profession and we always, there's a kind of one and desire to nurture talent, but it's really something that as a business person, you've got to earn your right to be able to do that effectively. And I know that creates a sort of difficult situation. Again, I can empathise what you were saying. I was very much the same when I graduated from university in the midst of the big session

26:00because I just wanted to work in a small practice so I could see everything going on, but it was even harder to get a job then in a small practice and only big practices were the ones that could really cater for it. So it's not to say that small practices shouldn't hire in experience, but you do have to get your business working and earn the right to be able to, you know, to bring it in, to bring it in so you can put the time in with the training that's needed. I mean, what I would say and I sort of caveat that to a certain degree is that I've got some superstars in the business and I've had superstars that have been gone that have been more a part one type, you know, architectural technician or a part one architect, for example, that are either still with me or, you know, I want them to come back. That have been amazing, but I would say they are more of a needlin haystack than anything else and you might have to go through quite a few to find that one that is a superstar and do you really have the time to do that as a business, not really, you know, hiring and firing is expensive, you know, both in financial

27:04reasoning and time and emotion and effort. So we have just, you know, almost put a blanket, you know, we don't, we don't hire part ones and a part two would still have to be very, very, you know, convincing that they are the right people to bring on board. Great. So that's very clear kind of description of how you've been able to leverage your time so effectively by, you know, being very thoughtful in the hiring and setting up hierarchy in the architecture firm and in the, in the surveying firm. Yep. We would, the other part of the question, not necessarily related, but, you know, where's the money coming from? Where's the money coming from? Yeah, this is always money, the interesting part for so many architects, you know, and one of it, I think one of the biggest hurdles is that architects who've got this desire to be the architect developer, probably always thinking about it in terms of like, well, I've got to use all of my own money to do this. And then the whole idea of raising finance just suddenly just

28:06feels like, oh, that's going to be more clients. It's just the same thing that we were doing before now. Yeah. I mean, so, so put it this way. Zero pounds from aura has gone to any of my property developments to, to, to do those developments. It's a separate business, you know, that, that, that is an aside, it is, I think you touched on it earlier, really, really well in terms of, for me, that is the cash flowing business that keeps keeps my my lights on, pays my mortgage, pays my lifestyle. That's the kind of quicker cash that I think most people need. And I've seen a lot of developers come and go in this industry where they've quit their day job. They might be a commercial agent, land agent, you know, engineer or whatever, you know, and they get to about the two year point. They haven't found themselves a deal yet. They, you know, haven't haven't actually started any proper development. They become very dejected by it all and they go back to work, you know, three days a week or or just, you know, haven't got the cash flow to sustain their lifestyle. If they haven't got the deals coming in. So I would implore everyone to think about

29:12some form of cash flowing business alongside the development because development is extremely lumpy when it comes to cash. You might buy a site and not see any profit for three years. I literally nothing. And that's just that's just the way it is. You know, we do get development fees along the way. We might take an acquisition fee, you know, that type of stuff. So, but that really just keeps the lights on. Doesn't really, doesn't really spend the needle. So I absolutely think having a service based business is amazing. With our developments, the way that we generally find the cash is external partners, external investment. We raise that in two ways. The first being either just a loan agreement where it's it's simply a, we'll give you a million pounds. We want 10% return and it's, you know, it's all drawn up in an agreement and that's the scenario. We use that money to go and purchase the property and, you know, there's typically security. So for those that aren't familiar with the terms effectively, if somebody's given million, million, million pounds and I'm buying

30:12something for two million pounds, that person might have a charge over the asset. So their money is secured against the asset, just like a banquet and a mortgage. So bank comes in, they give you X amount. They secure it on the asset so that if they have to step in and sell the asset at some point, you know, they know that they're going to get their money back up to a 60% leverage or something like that. And yeah, that's effectively how that sort of loan agreement would work. The other scenario is on an equity basis. So that money is more shared risk shared reward. So somebody brings me invested million pounds in one of our developments. We may give them a 50% profit share of the profit at the end of the deal. But ultimately, if the project doesn't make any money, it's their risk as well. So they might not make any profit. They could lose some of their equity. But generally when you're figuring out which route you want to go down, the equity is more

31:18risky, but higher reward. And then the loan agreement is supposed to be, I guess, a more fixed return on the investment. Nothing is ever fixed. And I always have to caveat this with money as at risk when you're investing in property. Nothing's guaranteed, even though they might say it's fixed return. You can't really use that term. But the crux of it is it's his investment, his loan agreement in place for ex return per annum. And yeah, that's that those are the two options. And historically, of the projects we've done over the last seven years, it's been about a 50-50 split between equity investment and loan investment. So you're pretty much 100% using other people's money, whether it's like loaning institutional finance, private finance. And then how do you negotiate then what your kind of final keep is after you kind of pay people back? And is it

32:19always like your flipping properties or you're buying them and building them, developing them, selling them or you holding them on long term? Yeah, that's another good good sort of point, because some of them we build to sell, some of them we build to hold. We would generally, we've own actually done one project where we bought something cash with someone as in no senior debt. Most of the time we will bring in the external investment. So that's the equity portion. And we will couple that with senior debt from a bank. So we will leverage up the investment as much as we can, because that means we can give that investment a bigger return typically. So the way we typically structure, I mean it's all up for negotiation. It's going to depend on who the investor is. It's going to depend on what the project is. Our as simplistic way of putting it as possible would be we are the time, the expertise, the delivery, we'll bring the deal, we will do everything to deliver the asset. We are that 50% and the money is the other 50%.

33:25So we see it as that. If somebody is bringing all the money, we're bringing all the skill set, the delivery team, the the opportunity, we get the other 50% and it's generally as simple as that. If we were asked to put in more money, it might be that we're delivering it, we're bringing the skills, we're bringing the opportunity, we're bringing some money. So that split will actually be weighted more heavily in our favor. So it might be we get 60% of the profit and they get 40% because we're bringing X amount of the original investment needed as well. But we don't typically or haven't typically had to do that. Most of the most of the projects that we've worked on, we have raised 100% of the funding to do it from external sources. Now I'm not saying that we've done every project where we've put no money in because we have but those soft costs at the start of a project, i.e. solicitors, some architectural feasibility, fees planning consultants, legal costs to get to a certain stage searches and surveys. All that stuff we often will have done up front out of our own

34:28pocket, but as soon as that investor comes in, those soft costs are paid back and then it is a very clear kind of the only investment in the vehicle is their investment. That's that's that's really fascinating actually, kind of keeping it kind of keeping it very clean like that in a way and it's a way that you can scale and you're not getting you're not you're not tying up all of your capital inside of one project. So there will there will come a time. I think because we've been in really a fairly aggressive growth over the last seven years, I don't want to keep doing it this way. There will be a turning point and that probably that probably is in the next two or three years where we out of the five projects we might have active actively going, one of those projects will be our own cash, not external investment and then maybe the year after it will be two of those five. Then for it, you know, there will become a time where we'll start to de-leverage and use our own money to kind of do the projects, but in the early phase

35:32that's been the growth. As XP property, are you making development fees as well? So you're always getting something out of it. Let's say, worst case scenario, you can make profit on the project, but you would have made something in development fees. Yes, so we will often, if we found the opportunity through our network and we brought it to the table, there's often an acquisition fee that will take up front. There will be development management fee which might be three percent of the contract value, something not something around that. That's generally because if I was just me and I was bringing in a QS, a PM or a contract administrator to do that work, we would be paying out of that special purpose vehicle that's doing that deal to that person, but just because we've got it in house as XP property to do that delivery doesn't mean say we shouldn't get paid for that amount. Most lenders, most senior lenders are perfectly filing with a 3% development management fee. They expect it. Sometimes it has been difficult with third party investors where maybe they don't

36:35really understand the process to kind of persuade them that actually that should be a thing because the way that they're seeing it is that well, you shouldn't get any money until the end. Well, we have to keep the lights on. We have to deliver this scheme to get to that profit and the profit at the end is profit. We still have costs to pay throughout that process, so we will typically take a DMV. It really doesn't, we're not making much on that. It's really just covering our team's cost. We've got 400 grand worth of overheads in our development business every year, to cater for those acquisition fees and those PM fees. Almost cover that and that's all it's really good for. What kind of investors are you looking for? What makes a good investor for you? Yeah, it's a very good question. We've almost outgrown the people that have helped us get to this level, which is great in a way, but also kind of bad because we are actually now in a different period of growth and size of project where we're now having to tap into new networks.

37:41Historically, let's say our average investment would have been 250 grand and that would have been from networks that we've built, raising our profiles, friends and family, extended friends and family or acquaintances. That's more retail money as we sort of describe it. They can't go any deeper than that. They're investing in that 250 grand because that's effectively all they've got and they want to put it into a development. They want to understand the process. They want to buy some investments and put it to good work. Where we are now, we're actively trying to raise two and a half million pounds for a 14-unit scheme in Islington. That is a different kettle of fish to my uncle, Joe, who is just got a couple hundred grand in the bank that wants to invest it somewhere. You're then talking to high net worth individuals, family offices, funds, that type of level where they have different requirements. They have different appetite for risk. We are now in that kind of pool where the delivery of what we're delivering

38:47at the moment was, let's say, 800 to 1.2 million pound type investment. We're now stepping up to two to 3 million pound type investment and some of our existing investors can stretch to that level, but only if you're doing one project or two projects at a time that is not like they could do the five projects all by themselves. We are having to now tap into a wider pool of investors that are different demographic, different type of people. We found it quite hard over the last year to widen our horizons and tap into networks that we've not really had to before. It's a slightly different world. It's fascinating, actually, because you're kind of describing something here. There's going to go into the architects who want to become property developers. If you're trying to do it out of profits out of your own architecture firm, either a long wait or your firm has got to

39:53be run like a machine and it's really doing well. Obviously, this skill set that you're describing is a raising finance, raising investment skill set, which is a different skill. It's a different skill together. You're also clearly very financially literate. We had to talk to the pain points and take on risks. Take on other people's risks and have them feel comfortable with you and what you're doing. There's a lot of salesmanship involved in here. They have to know I can trust you. It's a very property industry when you start getting into it. There's a lot of shady characters. There's a lot of smoke and mirror. There's a lot of I do. I'm very good at marketing. I have a course that you can buy that will tell you how to be a developer and make a million pounds in a year. It's bullshit, to be honest. It's a very, very hard and difficult industry to be in. And it's got harder and harder. I'd say it's never been more difficult to actually be a developer nowadays. You do have to raise your profile. You have to try and stand out. I'm relatively young.

41:00My business partner is a bit younger than me. We're in this for the next 20, 30 years. We don't want to, we don't want to knock down any bridges. We don't want to sort of, we want to be known for people that deliver what we say we're going to basically. We are known in the industry for the open and transparent kind of people that we are. We have our own podcast. We run it every Friday. We're live every Friday. We talk about the ins and outs of all of our businesses, how to be a better property developer, a better property investor, how to be a better business owner. Cards on the table. This is what's happening type vibes. You don't really see a lot of that. You see a lot of, I've done this. I've done this. I've made this much million. This much million. But they don't tell you about the ones where it didn't go well and they broke even and they couldn't pay back their investor and all this sort of stuff. You've got to be very careful. We try to be as open and transparent as we can and I think that's being the reason that we've, so today we've raised

42:02about 17 million pounds in equity through various investors. We've raised about 60 million in senior debt. To be able to do that, I think we have been very strategic in how we've presented ourselves to the industry. We've built a lot of good relationships. No people know us through various networking circles. I'd like to think that most people say, these guys know what they're doing. If they don't, they'll openly admit that and find somebody that can. Nobody knows everything and construction is extremely risky. There's a lot of that goes wrong. More often than not, it's also working with the right investors for you. We've turned away money where we don't think it's the right fit because things go wrong in property development and you need to have a relationship where you can table those things and I'm going to open an art's conversation not just shift blame or get angry and it's not going to get you anywhere. Some things happen.

43:09Unforeseen, it's just part of the game. Working with investors that understand that is what we're looking for. Like I say, we want to be in this for 10, 20, 30 years. We don't want somebody to just invest in one deal. We want them to be on the 10th deal with us, 20th deal with us and help us grow to that and both feed each other. It's definitely a different skill set in raising finance. You mentioned the sales aspect of it. You do have to sell yourself and action speak louder than words, I think, in that respect. You mentioned that it's becoming more and more difficult to become a property developer. Why is that? Is it something specific to the UK and changing legislation and regulations that have just been making it more and more difficult? We hear all these stories of the entrepreneurial exodus in the UK. I think that's part of the

44:09government haven't helped. Well, previous governments, this government, everything is becoming more and more difficult from a red tape perspective. The planning process is very broken, as far as I'm concerned, everything takes longer than expected. We submitted a scheme for who houses in one of our developments. I uploaded 25 documents. Five years ago, I probably would have done six, seven. Now it's ecology reports, noise reports, energy statements, fire strategies. Before you've even know whether you've got a chance of getting planning, you've spent 30 grand. And that, I think, is putting people off. It's a very, very difficult game. It's very expensive. I'd say from a landlord perspective, everyone hates landlords. Most people don't like developers. Second to estate agents. We're probably on that list of hated professions. But it's, yeah, government red tape. We've got labor shortages. Material costs have escalated

45:12significantly after all. COVID times, they've plateaued a bit now. But with all of that increasing cost for us as developer, the real thing that isn't happening is landowner and property owner expectations lowering. They still have the figure in their head. They still think their property is worth X. Even when you show them the figures like this, they're going to cause me to build this out. I've got to make X amount of margin. This is what your land is worth. They don't want to hear that. What normally happens is when we're direct to a vendor like that, and we've tabled our what we can buy for it, pay for it. They almost have to be proven wrong, basically. They have to ignore us, go to the market for six months, realize that the only authors that are coming in are lower than ours. But they've wasted six months because they not believe that that is the true value of their asset, but they need to be their expectations need to be managed and shown that it's not worth that much by going through that process. They won't just take our word. It's at every stage of

46:15the cycle, there are difficulties. There are more barriers. The sales process at the moment is way more long-winded than it used to be. Solicitor seemed to be inundated with work. Something that is a cash buyer that should take eight weeks to sell is taking four months. People with a mortgage might take five months. Everything is just taking more more time. All of that time, we are holding interest costs. When we finish a site, we've got two sites at the moment. I think we're at 35 grand a month in interest. Every week that goes by, I say to the team, how much money have we lost today? Oh, this much. It's just chewing away our profit margins. It's tough for me. Regulation is at a different level, delays through the whole process, causing issues, finance and interest costs. To be honest, from a development perspective, finance and interest costs aren't, they haven't actually fluctuated. The mortgage market has fluctuated mathematically and increased massively. From a development finance perspective, you're still somewhere between 10 and 12 percent a year. That's been the case

47:19for the last five, six years. It's all stacked against us. Sometimes I wonder why I bother. Well, that's very interesting as well. You have an intimate understanding of the challenges of what it's like to be a developer in 2025 and in the UK. Then you're also, as an architect, you're still working with developers. We would assume that everybody's facing the same sorts of challenges. What, as an architecture firm owner, do you see as challenges working with developers when they're dealing with all these sorts of challenges? An obvious one would be getting paid on time from developers. This is the classic thing for architects. They're now mitigating the developer's risk. They didn't sign up for it necessarily. Developer is struggling with all the things that they're being hit with. They're getting hesitant investors. They're going to pay you with it's not there. Architecture firm suddenly goes two, three months of our game paid. You can see this from both sides now.

48:23XP property is my worst client. Everyone, Graeme and I look at our invoicing and our outstanding invoices and I'm like, it'll be next week. It'll be next week. It'll be next week. So I completely get that for external or external other architecture practices where often the service providers are at the bottom of the food chain when it comes to developer invoicing. It is really tough and there will be a lot of speculative work. I imagine that some architects are doing. I don't generally like to do that because I know what it's like. Some of these things don't come off. What I don't like about that speculative approach is that if one architect does it, then almost everyone has to do it. People aren't getting paid what they should be for what is what I think the most value add process through the whole life cycle. My value in XP property

49:28is Jack bringing a site and me saying this is what we can do from it. This is how we can squeeze value. This is how we can take it through the planning process and add roof lights, terraces, gardens. This is all going to add value. We can take it through permitted development by doing X, Y and Z. That three hours worth of work is the biggest value add to the developer. Yet a lot of the time, we're not paid for it as an architecture practice because developers expect us to do it for free. When people start doing it for free, it just has that vicious cycle of, well, this guy said they would do it for free. It's just like consultations. As Aurora, historically, we charge for consultations, 250 pounds plus VAT, not a huge amount. The amount of value that that person gets off the back of it is massive. Yet we get a lot of pushback saying, well, this architect isn't charging for a consultation. Why are you? For us, it's a bit of a quality client control thing where they're not willing to pay 250 quid plus VAT for consultation. It might not be the type of

50:30client for us. The same rule applies. When one practice starts giving us stuff for free and lowering costs, and this is where I think I do feel like Aurora struggled over the last year because I feel like the whole industry is a bit of a race to the bottom at the moment in terms of fees. With coming off the back of COVID, more people working from home, less overheads, having that hybrid style and having less overheads as a practice, those that do have the big overheads are getting pushed out. I feel like with less work out there, which I think there is, people are more hungry to win the work. All they see is lowering the price to win that work. It becomes a race to the bottom. I do feel like we are in a really tricky spot for the industry. What do you think would be a way forward for architecture practices in general and the industry as in general to be able to reassert a leadership position and value and start being able to get paid

51:38what we're worst in terms of? I actually don't know the answer. There are companies out there now that certainly from a private residential perspective. I've seen some of their quotes. I don't know how people are doing it for that. It's as simple as that. I always use to think if you prove your value enough, if you build your brand identity, your website, your social media, your perception from the outside of doing amazing projects and proving that value that you had, that you should get the clients to pay the levels that you expect. I just don't think it's that case anymore. I think that everyone shows really the value that they create. Most people do create really nice looking schemes. They're still cutting the price to win the work. Ultimately, a client,

52:38if they're getting a price, we're at 10 grand, somebody else is at 6 grand. Even if they like the work that we do, they're going to go for the 6 grand. People don't have the money that they used to. With interest rates where they are at the moment, I don't think as many people are refinancing their homes to release equity to do home improvement works as much as they they used to. I just think it's a really difficult place to be in and part of the reason why strategically, I'm wanting to reduce that 70 percent baseline of work for private residential clients down to 50 percent private resident, 50 percent investor developer, maybe even some social housing type stock where we know the money is there in that industry. We know they need to build loads of homes. Can we tap into some HAs and build relationships there to give more of a steady baseline of work? Because the private resident side of things, I think, is really tough. That's interesting. It's actually like a sector pivot and being thoughtful about where you're going after work.

53:42I've always wanted to be in the resie space. My business is called Aura Homes. It's always been about homes. That's my passion. I don't want to go into education or health care industrial stuff. It is about homes for me, so I don't want to pivot too much. I do think the sort of housing association side of stuff is a potential way of getting a good baseline. With XP property, do you ever use other architects other than Aura? In the early days, I did for some projects. Nowadays, it is just Aura that does it. To be fair, there was a joint venture we were doing. If someone came in and under bid Aura, you wouldn't go for them and you'd still go for Aura. This is where wearing the two hats is difficult. I still want to make as much money as I can with the development business. There's also been times where I wish somebody else did the XP project because it's cost my

54:47architecture practice money. It's been unprofitable for Aura to deliver the scheme. I do find myself expecting more than I would another client. There might be a sneaky thing that I ask for for you to do this lease plan for me or tweet this drawing. Graeme will say, can I charge for that? I say no. It definitely does have a bit of a double-edged sword. Yeah. Posing cons. Yeah. It's fascinating. It's fascinating. It's really interesting to hear the genuine tensions between the two, the pros and cons of doing it. You've laid out there. I've still got shareholders and business partners to appease within XP. I still have to almost justify using Aura. I think that's the perfect place for us to stop there.

55:50Again, I really appreciate you just coming in your candidness, transparency, sharing a bucket load of information and knowledge and experience there, which I think is really gold. You've really shown us a different side to the challenges, the reality of being a developer. It is hard. Thank you very much. What's next for the rest of this year and 2026? Continue to deliver the units that we've got on. We finished a few schemes. We're coming out of the sales process of them. Sales are relatively slow, so it'll be good to get some of those over the line. We're next week starting phase two on one of our office conversions to 11 flats. We've finished nine flats. We're now moving into the second phase of 11 flats. Our Maxwell Hill scheme is going to be finished in two months. We've just finished a Dr. surgery conversion into five flats, so that'll go on the rental market in our portfolio.

56:51There's still lots to do over the next 12 months to get these 65 units finished and off our books. We're raising more money for the Islington scheme. We have a couple of other projects which I know Jack's busy negotiating and trying to bring into our pipeline. Yeah, XP surveys. I'm super excited to continue the growth of that. We're going to see nationwide expansion over the next couple of years or I'd like to stabilize and get back to where we were in terms of profitability and levels of work and keep plugging along. Love it. Brilliant. Thank you very much Ben and hopefully we'll top again in the not too distant future. Thanks for having me. I want to stop being the bottleneck in your firm, then stop hiring seat fillers and start building a team of self-managing pros. The Rockstar hiring guide shows you exactly how you'll learn how to find, evaluate, and

57:54onboard people who actually drive results. So you can focus on being the visionary instead of the workhorse. It's yours free at businessfarchitecture.com forward slash Rockstar. Thank you to our recent listeners who left reviews for the podcast on iTunes. Your reviews help others find this podcast so rising tide raises all boats. Thank you to chillist mum and Scrazy. To be acknowledged on this show, open up the podcast app on your phone, search for businessfarchitecture and after clicking on the show, scroll all the way to the bottom to leave a review. Today's episode of the Business of Architecture Show is sponsored by Smart Practice TM, the world's leading step-by-step solution for small architectural practitioners that want to structure their existing practice so the complexity of business doesn't get in the way of the architecture. Because you see, it likely isn't your architecture skills that holds you back. It's the business aspects of running a practice,

58:55managing projects and people dealing with clients, contractors, and money. So if you're ready to quit being a glorified administrator and get back to architecture again, go to SmartPracticeMethod.com to discover the proven, simple, and easy to implement Smart Practice Method that is revolutionising firm management for owners and teams. Ryan Willard here and I'd like to thank you, of course, for joining us today and remind you that the views expressed on this show by our guests do not necessarily represent those of the host, and we make no representation from his guarantee pledge warranty contract bond or commitment, except to help you conquer the world. CarpeDM