Let’s jump straight to it - Here is deal 10 of the 12 DEALS of Christmas. Today, Simon Benson talks about an 18 apartment development he is currently working on. This is a great example of joint ventures and being creative. Simon has been a student of CCORP’s Pro-Develop course since 2008.

Deal 10.

Client: Simon Benson
Location: Wynnum, QLD
Description: 18 apartments
Expected Profit: 24%

Finding the site: “It began in February this year when my business partner got talking to a local in Wynnum who ran a yiros shop, it turned out the dad owned the whole corner site. A discussion began on developing the site which had the minimum requirements of 1210 m2 in a 5 story zone. Scott quickly contacted me and I went to work on the feasibility of the site.” Simon then researched the Wynnum area, went through the council development plans for the area to work out what he could actually get on the site. Once he found out what he could put on the site he was able to do a feasibility for this development.

Quick Feasibility: After looking at council guidelines and regulations for that area, Simon concluded that he could fit 18 apartments on the corner block. He also spoke with the town planner and an architect who confirmed that he could fit this many on the site. 15 of them would have ultimate water views. Simon then got an estimate of what he could build the 18 apartments for. As he was just doing a quick feasibility at this stage, he used an online construction calculator from BMTQS for build costs. ”I then got onto RPData and did a radius search on the property to see what similar apartments were selling for in that area. The numbers were good.” Simon’s initial feasibility was 30% - not a bad result for doing a quick calculation.

The Vendors: Once the feasibility looked good, Simon and his business partner booked a meeting with the vendors. At this point the property was not up for sale so it was just a casual meeting to break the ice and find out what the vendor needed and wanted and what their goal was for the property. The meeting went for over 2 hours and went very well. The vendors were not interested in selling the property and their main aims were to keep all their retail and pay down their debts. They were interested in a Joint Venture where they provide the land and they get 4 apartments at the end of the development.

Research: Once the vendors were interested in a Joint Venture, it was time to do a more accurate feasibility based on this with all of the costs involved. Simon met various consultants and builders and did some more research on RP data to make sure that the site was still feasible. “Taking away the sale of the retail (vendors) and using their mortgage as the land value the Margin on Development Cost (MDC) came in at 24%.”

Challenges: “This took with patience 7 months when we finally had a signed Heads of Agreement.” Simon says that the hardest thing was gaining the vendors trust and negotiating a good deal for all involved. “The process has been challenging but I have gained confidence in my ability to do any development big or small.”

Simon says that “you need to remember the more people you talk to the more chance you have of finding a great deal. It could be your local shop owner or you next door neighbour.” This site wasn’t for sale, the owners didn’t want to sell but all parties involved came to an agreement to create a win win situation. This site wouldn’t have been found if Simon and his business partner weren’t making themselves known, letting others know what they are working on and interested in.

You may notice a recurring theme through a lot of these 12 Deals of Christmas…win-win development. Look at what you can give as well as what you can get, with Christmas so close it’s the perfect time to remember the importance of giving.

Cheers,
Carly.

Last time I showed you how to go about finding a development site so hopefully you have taken some time to look for some possibilities. But how do you know if they are anything more than possibilities? Well as I said, Property Development is a matter of applying seven simple steps. So now you know how to go about Step 1 – Finding a Development Site, it is time to learn how to do Step 2 - Site Analysis.

Quick Calculation
Once you have found a site you need to be able to do a quick calculation so that you can assess whether or not it is worth spending more time on. You will need to know your basic costs in order to do a rough calculation such as land purchase cost, building costs, retail value once built, consultant costs. These costs are relatively easy to approximate and at this stage you are only jotting down estimates to see if is something worth pursuing. For example if saw a development site with approval for 6 Townhouse you would do a quick calculation to see if it may be profitable:

Site: 6 Townhouses

Income = $3,000,000

Land Cost = $900,000
Building Costs = $1,200,000
Consultant costs = $50,000
Stamp Duty = $16,000
Selling fees = $90,000

Profit = $744,000

Check out the local council
Once you have done a rough costing and you know that there is profit potential in the development then it is time to take other matters into consideration such as council guidelines and zoning. The local council is a great source of information. If the site is already DA approved then a lot of the work has been done already. The architect and engineer who did the approved plans may be able to provide valuable information.

Another area that you will need to research is any environmental factors that may have an impact on the success of the development such as access to water, sewerage, telecommunications and power. These can be costly if not already provided. This is the stage where you will have to take a look at the actual site by visiting it so that you get to see anything that may not be visible on aerial maps or drawings such as power lines that may run through the site. You will need to look for such things as are there any heritage issues in the area, is the site liable to flooding, are there any easements on the land, is it going to be easy to drill into the ground or is it made of rock.

Demographics of an area are really important
Demographics of the area will also have a huge impact on the development. You will need to know who will buy in the area, what type of housing is needed, is there a shortage of certain types of dwellings, is the area predominantly single people or couples, families or elderly people? These answers will all have an impact on what you build, how many bedrooms you will need, what size houses are most likely to sell, and therefore have a huge impact on your profits as you need to be selling something that the area requires.

What is happening in the area?
Whilst it is important to check the current market it is also important to check out anything that may affect it in the future such as planned infrastructure. This will give you a better idea of what to build. By finding out the demographics and the future planned infrastructure you are then able to build properties that you will have no problem selling and as this is where your profit lies. Doing a site analysis is one of the most important steps in property development. You want to make sure that you project suits local requirements and therefore targeted at the right market. Continued market research will allow you to see what areas are experiencing a growth and which area is experiencing a decline so that you are not developing in an area that it is going to be difficult to sell. By checking out the local real estate market, you will be able to see how long it is taking properties to sell in the area you are looking to develop in. This will give you a good indication on how quickly you will be able to sell and again, how quickly you will make your profits. But I will focus more on selling at step 7 – selling.

What are my choices?
The main two types of sites are DA approved or Raw. A raw site has no planning approved and based on local council zoning guides, is up to you to research and decide what you can put on the site. A DA approved site has a lot of the work done already and with plans approved, there is a lot less that you need to do as architect and engineer plans will have already been drawn up. If you wish to make a slight variation to the DA then this is possible and may be accomplished by applying to the local council.

This is the stage where you fully analyse and get acquainted with the site. You will also need to look for anything that may be owing on the site such as rates or taxes. Council will have a big impact on what you can build so you will need to familiarize yourself with the terminology. Jump on their website and browse around the different planning maps and zoning guidelines for the area. You will be able to find out from council, information such as the minimum size per site, any street frontage requirements, any specific building materials that must be used, and the development plan for the area. Once you have determined through a quick calculation that the development is worth looking into further and you have done your market research on the area and researched the site, then the next step is to run a detailed feasibility with actual cost of everything involved to see what your profits will be. Negotiating is a key and a major influence on the profitability of any development but I will be telling you more about Step 3 – Financial Feasibility, in the next issue. Log onto www.cdevelop.com.au to download free reports and find out more about the courses we offer on Property development. Call 02 9371 4799 or email info@ccorp.com.au for more information.

I often get asked if Property development is risk so here it is.

Firstly that’s a very broad question - anything is risky if you don’t understand it. So if you know nothing about development, have no education and go buy a property and expect to find out on the way – yeah its risky. Not to say you wont make a profit, but it’s a lot riskier.
The more you know and the better you apply it, the less risky it gets. Research is the best way to minimize the risk and patience also. Don’t be in a rush to run in and get a deal because you think you will lose it, impatience causes you to overlook things you should have seen.
If you have a good base knowledge on development, following what you know, apply the seven stages, research carefully and do a very good feaso – the risk is greatly reduced and you can end up making a great profit.

Cheers
Carly

G’Day,

Sometimes people ask me the same questions quite a bit, especially people who are wanting to know a bit more about deciding to get involved in property development so I thought I would share two of the most common questions I get asked with you.

People often ask me what made me get into Property Development.

I was looking for a game and looking to make money. I had little education, no money, no credentials and NO IDEA WHAT TO DO! When I was about 16 I accidentally found a book on property investment and was instantly interested. I decided to get involved. I really knew nothing about the subject – I remember being so confused by the word equity for the longest time, I literally knew NOTHING on the subject. As I learnt more and met more people in the industry I discovered that property developers were the top of the food chain and they were calling the shots and making the big bucks – that sounded pretty good to me!
There were so many factors that attracted me to property development, the idea of building something from nothing, creating a vision from start to scratch, the freedom to do other things I love, not having a boss but being my own boss, the profits and also the fact that I didn’t have to go back to school. I love learning, but I learn well while on the job as opposed to at a desk.

A lot of people ask me whether or not I think Property Development is for everybody.

Yes and no. I think that anyone and everyone CAN do it, I don’t think everyone and anyone SHOULD do it.
It really isn’t an untouchable industry, it’s quite accessible and quite possible for anyone to learn about it and get started and make a great life through property development.
However not everyone is passionate about property and I think that anything you are going to do, do it passionately. Yes it can make you a lot of money, but a rich life has little to do with money and a lot to do with passion.
I love driving around on the weekend and staring at properties, almost every morning I walk around my suburb and look at all the houses. I imagine how they were developed or what they could be, who owns them and what they look like inside. I can sit and look at property magazines for hours – even when I’m not in the market to buy, well I’m always in the market to buy J
But if the idea of looking at property, doing deals, getting creative and building something from scratch – if this does not appeal to you, then do something else with your time and energy that will give you a better emotional return.
However I do think that everyone should OWN property, its such a solid and trusty asset to have and its something that you can always fall back on. So if active property does not appeal to you, then get someone else to do it on your behalf. This would be armchair development or passive investing and we help clients do this to. This would suit someone who doesn’t have the time or the inclination to do it themselves although they do like the sound of the returns. The returns wont be as high but they can still be pretty healthy.

If you are trying to decide if property development is for you then if you have a passion for property, a desire to add to your income and the determination to succeed then it is definitely worth it and the rewards are huge.

Cheers
Carly

Some people tend to think that property development is all about building, its actually more about deal-making. Good developers have creative minds, think like entrepreneurs, and are always looking for that great next deal.

If you don’t already, learn to love looking for properties and working out how it could possibly work. Deals don’t always fall into your lap…a good property deal is like a puzzle, you need to look at each piece and play around with it to make the whole thing fit together to give you the perfect and profitable picture.
But like any deal-making, you need to know what you are dealing in before you can put a deal together. If you don’t understand the product you will get stumped and not be able to piece the puzzle together. But once you understand the product you will be in control and know how to make it work.
Every single product that we use goes through a product cycle, and property is just a product. Don’t over-think it or let the price tags overwhelm you, it a product like anything else with a specific product cycle.

Somebody things about creating a product, they get a team of professionals to create it, they package it up and give it to a wholesaler, they pass it onto a retailer and a retailer sells it to the guy on the street – someone walks in and sees an item in a shop, pulls out their wallet and pays for it. At every single stage, someone is making money – except for the final stage, the retail stage – when somebody is paying the money for every single other person on the cycle to make the money.
So on the property cycle you have two choices, you can either make the money or pay the money…which one do you prefer?
I’m going to assume you want to make the money, which means that you cant be the last person on the product cycle, walking into a real estate agents office and buy the property “off the shelf” so to speak. If you do this, the only way you can make money on that property is to now wait years, wait for time to make the money for you.
Let’s get active, take action and get earlier on the product cycle so that the second we buy we are already on our way to creating the profit, not waiting for the profit.
Before I show you how this works in property terms, I’ll break it down using a product just about anyone would have been involved in at some time – coca cola.
You go to a restaurant for a coke, it costs you $4.50. You think to yourself, “I can get this cheaper”. You know that around the corner you can get the same coke for $3.00. By having a little bit of knowledge you can cut of 1/3rd of the price.

If you have more knowledge of coca cola you would know that the supermarket sells the same product for $2 – the more knowledge you have, the more control you have over what you pay for the product. The less you know, the more you will be controlled in terms of what you pay.
If you understood the wholesale side of coke you could go direct to coca cola and buy it from them for $1 a bottle – exactly the same coke at less than a quarter of price, because you know the language to talk when you are dealing wholesale.
Do you think coke still make money selling at $1 a bottle? Of course they do! Because they can make the product for half that, just 50 cents.

That’s property development and that’s where you start to rock and roll. Imagine being able to create a product that the market will buy for 9 times the value of what it cost you to create it, now you become the supplier.
To create and supply the product you need to have the recipe and the ingredients. If you have no money to buy the ingredients, but you know the recipe – there is still an option.
Get the product for free, by becoming the dealmaker. More than 80% of my properties and developments have been acquired this way, by putting a deal together using other people’s money (OPM) and you could do exactly the same.
You put a deal together that allows you to access the property today, you then take actions to increase the value of the property. Once you have increased the value of the property you then sell it or re-finance to draw down on the equity. With this extra equity created you then pay back the owner or whoever else you borrowed the money from, and you keep the remaining profit.
This strategy allows you to buy, renovate and develop without needing a deposit and without needing any cash-flow for mortgage repayments. In fact you use absolutely NONE of your own money, and if you’re like me when I first started developing – you might have no money, and so this is great way to get started.
And so you see that the more knowledge you have, the earlier you can get on the product cycle of property and the more money you could possibly make. To get earlier on the product cycle you need to understand the product of property development.

Cheers
Carly

Property Development is an incredible vehicle for creating wealth, but one that is misunderstood and as a result often overlooked by many Aussies.

Passive versus Active
There are many different ways to invest in property – old, new, houses, units, positive geared, negative geared, buy and hold, buy and sell, buy and renovate…its endless. And truth is that a lot of people get caught up in this, you can get so caught up in all the different strategies and trying to learn and understand it all and five years later…you realized you still haven’t bought anything! Sound familiar?

Well, lets get rid of all the confusion. Lets take it back to basics and look at strategy. I reckon there are two basics strategies when it comes to property – passive and active.

Passive is when you buy a property and you hold it, maybe you live in it or maybe you rent it out. The intention is that time will improve the value of the property, and so it called passive because technically you don’t do anything to make money from it. You sit back and you wait. This is a great way to invest, and I actually do invest passively. First property I ever invested in was a passive investment. But I realized it was going to take literally decades – about 30 years – before it would ever be a millionaire.

I thought there must be a much faster way to do it, and there is. Active property. This is when you take action and do something to increase the value of the property, such as property development.
You don’t sit and wait for time to make the money, your actions create the money.
I wouldn’t say that one is better than the other, I actually like both strategies and they both create fantastic results. It comes down to when you want to see the results. If you are willing to wait 25 -30 years before you see the big results, then passive is absolutely going to work for you.
If you would like to see some results in your life this year, and in the next couple of years then I would suggest Active property and that’s exactly what we are talking about in this book.
You want to be in the drivers seat, able to take action to create the profits that could change your life and give you choices and freedom to do the things you love.
Once you start playing the property development game you can cover both strategies – passive and active. Get active in creating money and property through development, and then hold some of the properties and watch them keep doubling in value every ten years or so – it’s a magic strategy that will give you cashflow and strong assets to fall back on.

For a free DVD that will show you some strategies that you can use, call 02 9371 4799 or email info@ccorp.com.au to secure your free DVD valued at $147.

Cheers
Carly

Property development can be broken down into seven basic stages. If you can grasp each stage and understand the basics then you can avail yourself of this fantastic wealth creation strategy that is property development.

This issue we are going to start right at the beginning with stage one and look at how do we actually find a site that is worth developing.

Stage 1: Finding a Site

It can sometimes be difficult to know where to start when first trying to get into Property Development and where to start looking for sites that may be profitable. There are many bargains to be taken advantage of in today’s economic climate, you just need to know where to look and start looking.

Where can you find sites? I have really learnt that great development sites can come from just about anywhere, so the bigger your network the better. To start building a network and finding sites you can look on the Internet, in your local paper as well as your State newspaper and also your local real estate agents. These will generally show you all the properties that are on the market. However there is another way to look for properties that are actually “off market”. You see a lot of development sites are actually sold before they ever officially become “on the market”. To find these sites you need to get yourself hooked up with a development agent, similar to a real estate agent but they generally only deal in properties where you can add value by developing in some way. If you look under the business section of the paper, under commercial and investment properties then you will find sites that are suitable for developing but you will also find the contacts of development agents, call these agents and ask to be on their contact list. They will then email you periodically with their potential development sites that are not available to the open market!

Another great way to find potential deals, is by driving through an area and looking for abandoned development sites. These present great bargains as usually construction will have come to a halt due to lack of funding and the vendor will be looking for a quick sale. The vendor or developer may need to sell at below current market value and there’s a high chance that there will be an option to get creative when doing a deal as the vendor will be prepared to take extra measures due to their situation. You can often negotiate something that is win-win for you both and might even mean you don’t have to invest any of your own money! (But more of that in Stage 4, when I’ll tell you about no money down deals). There are also many opportunities to create business partnerships in these situations. When getting involved in properties that have already started construction, be careful to do your research in regards to what has been done, what hasn’t been done and why construction halted. This will save you time and money in the long run.

When looking for a site, research is very important. You really need to know the area that you are looking at developing in extremely well as you will need to pick an area that allows for the type of development you wish to do. Go onto the local council website and you will be able to find a lot of information by browsing through it and familiarizing yourself with the content. If there is something you don’t understand you can call the council and talk to someone, usually the town planner, as they are generally very happy to help and advise. What the council wants to see in the area is a key factor and it is advisable to build up a good rapport with the local council.

While you are browsing through the council website, if you come across words that you do not understand look them up or ask the council what they mean specifically. This is quite important because if you do not understand the content you will start to feel lost and you will not be able to make sense of what you are reading/looking at. Familiarise yourself with the council and city maps such as the Zoning Maps and the Land Environmental Plans (LEPs). Understanding the terminology, not just with the council, but also in other areas of property development in general, is also a key factor to being able to succeed.

Research not only involves knowing your area well, it also involves educating yourself on the property market. Factors such as supply and demand of housing, what suburbs have a rising trend and which have had a drop in prices in recent years, whether you should be making offers above or below the current market price etc, will all affect your end result. Local real estate agents, various property websites and RP Data can all give you a lot of information on these trends.

Networking is also a great way to find sites! You can start networking and building your contacts such as builders, site managers, project managers, architects, town planners and other investors involved in the property development game.

You should network with anybody and everybody, friends, family, local shop owners, local real estate agents, neighbours, mortgage brokers, council, long term residents, plumbers, financial planners – let them all know what you are interested in. You want to get other people on the lookout for you too, doing the legwork and research for you where possible. Alert local real estate agents and development agents of what your criteria is such as the area you want, size of development, profit margin you are looking for, style of dwellings you wish to construct, your price range etc. You may also find that you may be able to help them too.

With the right tools and knowledge at your fingertips you will start to find yourself coming across more and more sites that may have potential for a lot of profit.

If you would like to do a practical exercise, jump onto your local council website and go to the development section, click onto the zoning map for your local area and check it out. This will show you the development potential of every property in your area. A great way to research and confirm potential development site and something I have been using since I first got started in property development.

Next issue we will move onto Stage 2: Site Analysis which is all about doing the right research on a property once you find it. In the meantime, happy property hunting!

G’Day,

As you may have read in our newsletters, we have been holding youth seminars around Australia to help educate teens on things such as: Setting Goals, How to get into Property and Investing, Understanding the basics of Money, Keeping Positive and much more.

Some of the kids wrote to us after they attended to tell us what he thought of the program so I thought I’d share one of the letters with you from a really shy 13 year old:

“The week before the program was going to happen my mother told me that I am going to this 2 day workshop. I got dragged along with my older brother on Saturday and there were so many people there. Some were younger than me (at the time I was 12) and there were people older than me.

We entered and we met Brent Williams and The Assist Team. We were given a folder and worksheets throughout the program. Everyone was put into teams. After we learnt heaps and we did activities that involved group work and working together.

I learned how references hold a belief like a table and how new beliefs take over old beliefs. This opened my eyes a little bit but the second the day was better. We arrived again and the day was more exciting and action packd like the Specific, Measureable, Attainable, Realistic, Time(SMART) goals, board breaks with our hand which was inspirational (but I had to do it with my foot) and after we did a visualisation which many people were blown away about and we felt inspired and elated.

The impact the program has had on me is that it has opened my eyes and to see things differently in a new perspective.”

S. Patel, Age 13

I thought I’d share this as some of you have very kindly donated money to Cfoundation at some point or another and have helped contribute to changing and empowering lives of our youth today and so much more. Visit http://www.cfoundation.org.au/index.php?option=com_content&view=article&id=51&Itemid=58 to see more similar stories of others whose lives have been changed.

Cheers,
Carly

As many of you know, I work to be able to give back. Charity is my reason for getting up in the morning and doing what I do.

Starting C Foundation came about because I was tired of not being in control of who I could help and how I could do it. I decided that I would make enough money to be able to fund my own not-for-profit organisation.

Since starting my foundation, I have been able to help hundreds of thousands of people. I’ve worked at natural disasters, educated people on the truth about street and prescription drugs, helped build schools in impoverished communities and started up a youth seminar to teach kids things such as how to get motivated in life, how to make a career out of the things they love to do, how to make more friends with ease and more!

I’ve had people tell me that they wish that they could help others but they don’t have any money. Well, the good news is you don’t need money to help others. Charity is defined as – “generous actions or donations to aid the poor, ill, or helpless” (dictionary.com).

If you have no money but you do have time, how about volunteering your time to a charity? Without assistance from volunteers, most charities wouldn’t be able to do what they do. The Red Cross is the world’s largest voluntary organisation. Did you know that much of their work is carried out by volunteers?

I love what I do and I love helping others. If you ever want to donate your time or money, find a charity that hits home for you and do what you can to support them.

To find out more about my charity work, donate money or volunteer for CFoundation, please visit my website at www.cfoundation.org.au

Cheers,
Carly

Hi,

I can across quite a few interesting ‘facts’ recently. Really don’t know how many of them are true but I thought I’d share them with you – as I said they are quite interesting.

11% of people are left handed
August has the highest percentage of births
unless food is mixed with saliva you can’t taste it
the average person falls asleep in 7 minutes
a bear has 42 teeth
an ostrich’s eye is bigger than it’s brain
no two corn flakes look the same
lemons contain more sugar than strawberries
The tongue of a blue whale is as long as an elephant
Our eyes are always the same size from birth
lightning strikes the earth 100 times every second
Madonna worked at Dunkin’ Donuts
Julia Roberts worked in an ice cream parlor
Queen Latifah worked at Burger King
There’s hope for all of us
In 1750 there were about 800 million people in the world. In 1850 there were a billion more, and by 1950, another billion. Then it took just 50 years to double to 6 billion
In 1870, there were more Irish living in London than in Dublin
Almost 1,2 billion people are underfed – the same number of people that are overweight to the point of obesity.
The first product to have a bar code was Wrigley’s gum.
The lowest annual rainfall occurs at Lake Eyre in South Australia, with an annual mean precipitation of about 100mm.
The highest annual rainfall occurs at Tully in Queensland, with an annual mean precipitation of 4400mm.
The first owner of the Marlboro Company died of lung cancer.
The world’s tallest man ever recorded in the history of mankind - Robert Wadlow, was born in Alton, Illinois, in 1918, and was 6 feet tall by the time he was even eight years old.
Mosquito repellents don’t repel. They hide you. The spray blocks the mosquito’s sensors so they don’t know you’re there.
No piece of paper can be folded in half more than 7 times.
The three most valuable brand names on earth: Marlboro, Coca-Cola, and Budweiser, in that order.
Donkeys kill more people annually than plane crashes.

Well there you have it – some useless information that you can share with people when stuck for conversation at least:)

Cheers
Carly