What is your strategy?

I agree MTR, although still I'm still in the infancy stages of my real estate career, building your team is the first and most important step. Tweaking until you love everyone of them ;)

I did a project in NSW and built a gun team (with the exception of the draftsman who was ***** and I would replace if I ever worked in NSW again). Now I'm faced with building my team in Vic and it is struggle street. Time blowouts because people won't get back to me, promises fall over, people suck etc, etc. Most people seem to have a different idea of time to me :rolleyes:
 
Yes and no, it's hard to explain.

I don't say any of the above to bignote myself btw, I normally keep this close to my chest but I thought I'd share this since you asked. I absolutely love property but it isn't the only thing I do so if returns aren't good there I focus on other areas. It's also why I have absolutely no interest in buy and holds, people talk about 5% returns etc, I view them as much higher risk because it's a waste of capital when there are opportunities out there earning say 30 to 50% if the business only trades on multiplier of say 2to 3 times earnings

Thanks for sharing, appreciate this.

This is very interesting and obviously your business model is working well for you, I agree more than one way to skin a cat.

Buy and holds would fade into significant when you can make much higher returns with less risk. BTW, I agree the buy and hold at 5% just does not cut it and takes a very long time for this model to work unless you jumped into rising markets with every buy and sold down prior to the market falling.

What's that saying ..... "you don't know what you don't know", and when you do know you do better, something like:)

Its great to hear these stories, isn't time for that interview;)

MTR:)
 
I agree MTR, although still I'm still in the infancy stages of my real estate career, building your team is the first and most important step. Tweaking until you love everyone of them ;)

I did a project in NSW and built a gun team (with the exception of the draftsman who was ***** and I would replace if I ever worked in NSW again). Now I'm faced with building my team in Vic and it is struggle street. Time blowouts because people won't get back to me, promises fall over, people suck etc, etc. Most people seem to have a different idea of time to me :rolleyes:

OK, can you clarify are you sub-contracting every trade??? or are you using a builder to manage the project with a fixed price contract??
 
I use a builder to oversee some parts - depending on how much I want to save. Because these first few projects are going to be down to the wire, I will be doing as much as I can myself. I could get someone else to manage the whole thing (at least to lock up so would still have to source my own sparky, plumber etc) but that would cost an extra 30K plus. I would prefer to pay myself 30K per project :p

To further clarify - I move houses to vacant blocks so not a straight forward build situation. Also I have to see which is more important - time or money. It is always a trade off. Hoping that once the foundations are built then the trade off won't be as severe.
 
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I use a builder to oversee some parts - depending on how much I want to save. Because these first few projects are going to be down to the wire, I will be doing as much as I can myself. I could get someone else to manage the whole thing (at least to lock up so would still have to source my own sparky, plumber etc) but that would cost an extra 30K plus. I would prefer to pay myself 30K per project :p

To further clarify - I move houses to vacant blocks so not a straight forward build situation. Also I have to see which is more important - time or money. It is always a trade off. Hoping that once the foundations are built then the trade off won't be as severe.

Prop
Sounds like hard work.


I suppose it comes down to what the estimated profits were and whether there was enough fat in the project to start off with?

I am also building 4 townhouses in Melb and I am in Perth. I have a project manager who will be managing the project and will fly over as required.
I have just sourced the finance very painful, but got it at resi rates.

MTR:)
 
" I am also building 4 townhouses in Melb and I am in Perth. I have a project manager who will be managing the project and will fly over as required."

Do you mind telling me how much the PM charged you?


Cheers
 
Accountant - He is anal, but bloody good and in Perth. Sort of guy that wears his trousers around his neck, if that makes sense, oops did I say that.:eek:

Tenants - not my issue, PM issue, employ the right person here or suffer the consequence.

Seriously though, by far I will say FINANCE FINANCE FINANCE the most nerve racking of all and sourcing the deal, however I actually enjoy this aspect.

Cheers
MTR

Hi MTR,

Do you use a mortgage broker to source for your finance? Would you be able to share the contact please. Plus your accountant and PM.

Will need to eventually approach these folks. Fingers crossed I get to that stage soon :)
 
Yes and no, it's hard to explain.

Basically I only get involved in particular kinds of businesses and business models. If I'm involved in starting them then low entry point and low staffing model is extremely important. Never say never but I'd almost never get into something that is very easily replicated and relies on the owner being there unless margins were huge (unlikely to be if easily replicated). Examples of this would be retail shops, things like say mechanics shops etc because the market is saturated and there are too many people willing to work in them for a pittance so I'd never be able to compete.

Basically I've got 2 businesses where I'm involved day to day and investments in another few where I've got some input but not daily. Of those only 1 involved buying into an existing business at a highish figure which has Hugh staffing cost but there is significant upside there.

In terms of hours, I love the flexibility. Eg yesterday alone I worked on 3 of them and yes I worked til 830pm but I enjoyed every minute of it.

Today I just woke up, will prob start work around 11. It also allows me to take a fair bit of time off? Eg I've been on I think 5 trips this year and there's no way I could do that if working for someone else.

It comes down to the approach, currently were negotiating to buy into a couple of others too, if the numbers work we will, if they don't we won't. Also, if a business doesn't work then yes I won't be happy but it isn't the end of the world as I don't have a loan against any of them, no big overheads etc.

There are lots of ways to skin a cat, people just need to open their eyes to the possibilities and once you do the options are endless. I dropped out of uni and only have a year 12 education but I get offered stakes in companies or offered jobs all the time. The key is to make yourself more useful to others than they are to you.

I don't say any of the above to bignote myself btw, I normally keep this close to my chest but I thought I'd share this since you asked. I absolutely love property but it isn't the only thing I do so if returns aren't good there I focus on other areas. It's also why I have absolutely no interest in buy and holds, people talk about 5% returns etc, I view them as much higher risk because it's a waste of capital when there are opportunities out there earning say 30 to 50% if the business only trades on multiplier of say 2to 3 times earnings

Sounds interesting sanj! i think id like to get involved in running a business at some point in my life but yeh it would have to be low start up cost and something unique.

i think its time you had a chat to the Y-man for this interview we all are keen to read :p:)
 
I don't say any of the above to bignote myself btw, I normally keep this close to my chest but I thought I'd share this since you asked. I absolutely love property but it isn't the only thing I do so if returns aren't good there I focus on other areas. It's also why I have absolutely no interest in buy and holds, people talk about 5% returns etc, I view them as much higher risk because it's a waste of capital when there are opportunities out there earning say 30 to 50% if the business only trades on multiplier of say 2to 3 times earnings

Hi SanJ,

With my current subdivision project, I was looking to sell 1 and rent 1. However the rental return would only be about 6%. There are no associated holding cost, based on what you said, would it be better to sell and invest somewhere else?

Dex.
 
Having been on SS for a short while I have learnt so much thanks to the experience of everyone. Like everyone has been saying, it all about finding something that works for you.

I've only just started on my journey (1 month in), and yet to settle! So what resonates with me is a combination of subdivision and the CGA theory (explained by Rixter). Assuming I acquire at least 1 block a year, I'll sell 1 block and rent 1 block. I hope to accumulate throughout "the 10 year cycle", I don't know in these times if property prices will keep doubling but at least I'll set myself up for it. I aim to take it slow during the accumulation phase and to take up no loan or a very minimal amount in order to acquire a property.

If all goes well.. ez game, ez life. (Bring on the hard work!)
 
Hi SanJ,

With my current subdivision project, I was looking to sell 1 and rent 1. However the rental return would only be about 6%. There are no associated holding cost, based on what you said, would it be better to sell and invest somewhere else?

Dex.

It's a bit different in this case because if you sell after manufacturing equity in this way you are likely to pay a fairly hefty amount in tax so that has to be taken into account when doing your calcs. In that case even if you have something else out there atm that might return you 10% once you take into account the tax aspect it could take you years to make up the difference.

Hope that make sense, just got out of a long meeting so brain is a bit fried...

Also can't seem to delete that emoji
 
It's a bit different in this case because if you sell after manufacturing equity in this way you are likely to pay a fairly hefty amount in tax so that has to be taken into account when doing your calcs. In that case even if you have something else out there atm that might return you 10% once you take into account the tax aspect it could take you years to make up the difference.

Hope that make sense, just got out of a long meeting so brain is a bit fried...

Also can't seem to delete that emoji

That made sense. thank you so much. Meeting at night, what a hard worker.
 
As many here have said - generate cash from a business and grow wealth through property (and shares). You can generate cash through property (or share) alone too but it will take a considerably longer amount of time.
 
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