Gday,

Well I just got off the phone to one of my partners who I am doing a development with in Sydney, it’s a beautiful and tidy little deal that has worked really well so I thought I would tell you little about it.

Some of you may know about Blaxland as I have explained the deal at bootcamp. It is a deal I am currently involved in located in West Sydney. It is a simple deal which will leave me with a house debt free.

The site was originally a DA approved site for 8 villas. There was one house on the site already. The land purchase price was $500,000 plus costs of $50,000. The retail value of each villa is $350,000.

Eclipse Finance covered the construction costs of $1,050,000. We financed the land from the presales with our JV partners.

This is a simple deal, on a DA approved site and as I have avoided going for the top end of the market and my end sales prices are realistic in the current market this is a development project with a tidy profit.

If you do enough research on a development, do a feasibility using realistic costs and end sales and it still comes out with a Margin on Development Cost of 20% then you should not encounter problems when it comes to selling the end properties.

I know some people are wary about getting into the property market at this time but there are great opportunities and bargains to grab hold of. So long as you do not try to project and hike up future sale prices and you base your development on today’s prices then you are in an excellent position to make great wealth from the current market.

Carly

Hi Guys,

Not sure if you got to read my article in Think Big magazine last week so thought i’d post it here for you guys!

How to Get Finance in a Financial Crisis
In the last issue I spoke about the current property market and how the current economic climate is providing a phenomenal opportunity for educated investors.

So lets say you read that article and decided that you would like to jump on board and start snapping up some of the fantastic property deals that are sitting out there waiting for someone like you to make them your own.

Well the next question is how do you get the money to buy the property in the first place. Banks aren’t lending as readily as they were and they are generally asking for bigger deposits - these days you will generally need anywhere from 10-30% deposit when purchasing a property. At an average property price of $500,000 that means you are going to need anywhere from $50,000-$150,000!

Well lets get real for a second, there are not a lot of people out there that have a lazy $150k sitting in the bank ready to throw into their next property purchase. And if you start saving now then you could be ready by about 2019!

So how do you get around this? Get creative! Well that’s what I like to call it, Creative Finance. For most property deals I do I will use the banks money for most of the purchase but I will use Creative Finance for the rest.

Creative Finance usually means using other peoples money, also known as OPM. There are plenty of different ideas and ways to be able to do this, but probably one of the best in today’s market is Vendor Finance.

A “vendor” is the person that owns the property, the person that is selling you the property. So vendor finance means that the person who is selling you the property lends you the money so that you can buy their property from them. Well that’s just ridiculous, I hear you thinking. But hear me out because I’m going to show you how you CAN do this.

You need to look at the deal from the vendor’s viewpoint. In this property market most vendors are not getting the price that they want because the demand has dropped in the market. For this example lets say we are wanting to buy a $500,000 property and the bank has approved us 80% finance. So the bank will give us $400,000k and we need to come up with $100k ourselves for the deposit.

1. Approach the vendor and let them know that you have a bit of a different proposal for them, that this will end up with them getting more for their property than what they are asking. Immediately you have their attention.
2. You let them know that you would like to buy the property but don’t have the deposit just yet. Explain that you can give them 80% of the purchase price now.
3. Tell the vendor you would like to pay them more than $500,000, perhaps $520,000. That’s $20,000 more than they are asking. And they probably weren’t even going to get the $500,000 in this market.
4. Explain that to be able to do this you would need them to leave in $100,000 equity for now, and you will pay them back in 2 or 3 years, agree on an exact time frame.
5. Agree that also in 2-3 years (whatever the agreed upon time was) you will pay them back the extra $20,000 you offered.

This means that the vendor gets $400,000 now, and you get your property now. In 2-3 years the vendor gets another $120,000 and you get 2-3 years to either save it up or if you’re lucky the property would have experience some capital growth and you could pull the money out of the property itself – this is more possible if you are renovating or developing the property as that will inevitably increase the value.

Vendor finance is a win-win situation for both parties, and many vendors are willing to do this if it means that they get the price that they want and in some cases even more. It wont work for a vendor that is desperate to sell and needs all the money now – but not many vendors are in that position.

To see more examples of creative finance, get my free DVD Property Development Secrets of the Wealthy by visiting www.cdevelop.com.au.

Don’t let no deposit be your excuse for not getting into property, I didn’t use any of my own money for my first few property purchases and today sometimes I still don’t use any of my own money!

Carly

G’Day,

Well we have had a few requests from you to see some of my current developments and the details on how I made them happen. While the ins and outs of most of my deals is usually reserved for live property bootcamps only, I thought I would give you a peep into the world of some of our latest deals. With the current market, I especially wanted to show you some current deals and how they are done in this economic climate. So you will see some blogs coming soon with this…

We will also be adding a new section to our newsletter where in each issue we will be featuring a particular property deal that you may find interesting, so if you aren’t subscribed to our newsletter jump onto the website and do so at www.cdevelop.com.au.

Hopefully you will find this useful and interesting and if any of you have deals you would like me to talk about on this blog please email support@ccorp.com with your deals or any ideas or suggestions you may have. You could also add them to the forum….perhaps add a new thread on the forum called Deals in Progress and let everyone see where you are at. Others can then offer you support or advice or even help some way and this will really increase your contacts with each other. The forum is a useful tool but it is there for all you guys to network with each other and up to you all to make use of it and start building contacts.

So jump on the forum…maybe twice a week and make yourself known!

Cheer guys,
The CCORP Team!

G’Day,

I reckon you should always ensure that you surround yourselves with positive and encouraging people who with help you and will be supportive of you on your journey to success. Avoid dreamstealers or people who disapprove of your great ideas and are not happy for you to be successful in what you do.

I want to share with you an inspirational story that I came across recently;

A high school senior Monty was asked to write a paper about what he wanted to become when he grew up.

He wrote a seven-page paper describing his goal that someday he would own a horse ranch. He wrote about his dream in great detail and he even drew a diagram of a 200-acre ranch, showing the location of all the buildings, the stables and the track. Then he drew a detailed floor plan for a 4,000 sq foot house that would sit on his 200-acre dream ranch.

He put a great deal of heart and soul into the paper and the next day he handed in his paper to his teacher. Two days later, Monty got his paper back. On the front page there was a large red F with a note that read ‘See me after class.’ Monty was shocked and went to see the teacher after class and asked ‘Why did I get an F?’
The teacher responded, ‘This is an unrealistic dream for a young boy like you. You have no money. You come from a poor family. You have no resources. Owning a horse ranch requires a lot of money. You have to buy the land. You have to pay for the original breeding stock and large stud fees. There is no way you could ever do it. Please go back and rewrite your paper with more a realistic goal. I will re-consider your grade’.

Monty went home and thought about it long and hard. He asked his father what he should do. His father said, ‘Look son, you have to make up your mind on this. I think it is a very important decision for you.’
After sitting with it for a week, Monty turned in the same paper and made no changes at all. He told his teacher, ‘You can keep the F and I will keep my dream’.

Monty still has that school paper now framed over his fireplace in his 4000 sq ft house in the middle of the 200-acre house ranch. A few years back, the same school teacher brought some kids to his ranch for a retreat. When the teacher was leaving, he said, ‘Monty, when I was your teacher, I was something of a dream-stealer. During those years I stole a lot of kids’ dreams. Fortunately you had enough guts not to give up yours.’

Don’t ever let anyone steal your dream. In your journey in finding your dream and achieving your goals, you will meet many people that will tell you it is not possible to achieve what you have set for yourself. Smile at them graciously and continue on. Find the right people to surround yourself with. You will soon become the next Monty.

Remember - One of the biggest mistakes you could make at the moment is not something you do but something you don’t.

The CCORP Team!

G’Day,

When doing due diligence on sites it is really important that you pay attention to detail as an error in your due diligence can translate through the whole development process and impact potential profit. Due diligence is a critical element in site selection and you will need to research areas such as the surrounding heritage & environment, infrastructure, flooding issues, land use and land access for constraints.

Infrastructure constraints;
Sewer – availability, location of existing services, need for consent from adjoining landowners, sewerage capacity in relation to size of development, impact of slope of site on gravity of feed system…will all have an impact on your development.

Water – water pressure, availability, capacity of water supply, fire hydrants necessary and cost of installation for larger developments. Is the development in buffer zone for water storage catchments?

Power and communication – location of nearest infrastructure will need to be checked as not all overhead power is always available for connection. Power easement constraints may affect future development. There will be council controls over building near transmission cables. If the power and/or Telstra is across the road there may be a cost of tunneling underground.

Environmental constraints – There may be vegetation protection in place. You will need to check the local government for restrictions on clearing.

Access constraints – you will need to check the area you are thinking of developing for road widening, tunnels, approvals on adjoining land, or if the development requires access through adjoining land. Larger developments will require traffic reports.

Local knowledge is invaluable when researching your site and it is important that you are fully aware of any constraints that may be in place as these will have a huge impact on your development. When doing your due diligence you do need to be really thorough as this stage of research can make a deal and avoid any disruptions and cost blow outs along the way as delays can have a huge impact on the profitability of developments.

Cheers
The CCORP Team!