Category Archives: Real Estate Development

My November 2014 Goals & Projects Report

my november 2014 goals & project reportThis month I thought I’d write a detailed report about the progress that I’m making towards some of the goals and projects that I currently have on the go. This is my November Goals/Project Report, which goes over some of the major projects and the progress that I’ve made on them so far.

It’s my hope that you can take away something from this report that will help inspire you to achieve your own goals.

Watch My November Project Report:

My Project Breakdown

I’m now going to go into some of the projects I’m working on in detail and share exactly where I’m at with them. If you enjoy this sort of post be sure to comment below.  I’m even thinking of making this a monthly report including other personal goals too, for 2015.

South Hedland Property Development

DA (Development Approval) approval is now in place.

The existing property has been tenanted at a rate less than initially planned. This has been due to the downturn in the market in WA’s north-west. We are still achieving figures that will meet our projected profits, but on the lower side. Once the new buildings have been completed, we expect there to be an invigorated interest in the area and would like to secure a long term corporate tenant into the new properties.

When the building plans were submitted for approval there was a rejection from Council in regards to how close the bathroom was located to the front of the house. The architect is making some adjustments to the plans to comply with the changes required and then we will go back to the builders to re-quote on the amended designs. The change shouldn’t actually affect the final price very much.

Click here to view this property.

Flynn Street, Churchlands

The kids are moving out!!! This property was purchased for the intention of using it as accommodation for our two children while they were studying in the city. We selected this particular apartment for the following reasons:

  • 6 mins drive from the city centre
  • 7 mins drive to the beach
  • Walking distance to small and major shopping centres
  • Bus stop right outside the door to the city, shops or universities
  • Close to the train station

You can read more about our Flynn St  property in this post.

Our son and daughter in law have decided they’d like to move back to Albany to be closer to the family. I love this idea for two reasons:

  1. We get to have our little grandson living very nearby
  2. The property will now be rented out at full market rent  (our bank account loves this one too!)

There will be a couple of weeks where the property will be empty. Whilst this would not normally be a good idea, we’ve have planned it this way for good reasons.

  1. We are going to stay in the apartment (thus saving accommodation elsewhere) for about 10 days and will save on accommodation costs elsewhere during the peak holiday season. We’ve got a busy social calendar planned in the city for that time.
  2. During our stay we will also be doing some cosmetic renovations to modernize and improve some areas. This will also justify us being able to increase the rent by $145/week.

Having tenants that are not family members will put an end to one of the biggest mistakes we’ve made over the time of having our property portfolio.

In the meantime I have been working on the following things specifically:

  • Securing a new tenant and completing the associated lease agreements and paperwork
  • Ensuring the property is updated to comply with smoke alarm and RCD regulations.
  • Selecting new carpet for all the bedrooms
  • Liaising with the carpet layers in the city to lay the carpet when we are there (Murray has done this actually J )
  • Obtaining quotes from tradies to replace the shower screens in both the bathrooms. The shower screens that are currently in the bathrooms are old and clunky. It’s an ideal time to update these areas.

Sub-Division Joint Venture in Brisbane

This joint venture deal is progressing nicely. It’s a quick ‘in and out’ type of deal. Buy the land, demolish the existing dwelling, sub-divide the land and re-sell both lots.

We obtained a delayed settlement on the original land lot which means the sub-division approval has gone through before we have even paid for the land.

The two new parcels of land are currently being advertised for pre-sale. The intention is to have the new blocks sold and settled on within only a few weeks of actually having settled and paid for the original lot. By doing this our money is outlayed for only a very short period of time before we receive the profits back. If projected sale prices are achieved, our return on investment will be 15%.

Investigating Other Joint Venture Deals

I’ve been in discussion with other investors who are seeking joint venture partners and if we go ahead with any of these I’ll give you details as they come about over the next few months.

I’ve discovered a great resource to create comprehensive legal documents for loan agreements, power of attorneys, partnership agreements and much more. I’ve used Law Depot to create an affordable Loan Agreement I’m considering with a potential joint venture partner and found it to suit my needs nicely for a reasonable price.

Finding Hidden Money

You’d be surprised at how much money you have lying around in your cupboards!! The last week or so I’ve been gathering up all sorts of bits and pieces and have filled our garage ready for a Garage Sale this past weekend.

It’s easy to spend so much energy on the accumulation of ‘stuff’. And yet really…. What for?? I just feel right now I want to get rid of lots of unnecessary ‘stuff’.

Because after all, the meaning of my life is held within the relationships we have and our experiences rather than the accumulation of material items.

I hope to make a few hundred dollars in exchange for my pre-loved goods. This might seem like an insignificant amount of money; and many people couldn’t be bothered doing something like this.

I don’t need to find money for a deposit or anything like that just now, but if I was this would be a great way to boost my bank balance. This is more about letting go of things that no longer serve our family. And, there are lots of other ways to put some extra cash to good use. Especially with Christmas just around the corner……

Remember: you’re trash is another man’s treasure. Note: The Garage Sale produced a great result of almost $400. Sweet smiley

 Final Lessons Learned In November

Some of the biggest lessons learned during November are:

  • I have everything I need to reach my goals within me.       Reach out to people who can help more often. It is wasted energy to try to solve problems yourself when there are others you know who can help.
  • Planning is everything. I’ve made the mistake in the past of thinking that just because I work on our business and property portfolio from home, that it does not have to be run to some kind of schedule. Because I like a ‘freedom’ lifestyle, for a long time I’ve resisted any kind of schedule. I now accept that a planned schedule (that still includes flexibility) will actually mean I get more achieved and I’ll have even more time to do other things I love to do. This will be a big goal for me moving into 2015.
  • Raise your standards!  This is the only way that you change your life.  Stop doing a “good” or “excellent” job.  Instead, do an OUTSTANDING job.  All the rewards goes to those who are truly committed and outstanding.  I’ve let some good daily habits slip and I am incorporating a new morning ritual that I want to follow more often.  I work out daily and want to eat more healthy foods as a default standard that I follow. You must make the habits you want a MUST and not deviate from them.
  • Energy is everything.  When you’re in a high energy state, everything is possible.  You’ll deal with things totally differently than if you are in a low energy state.  For a relationship to be successful, it requires energy.  For any goal to be achieved, it requires energy.  Energy is life.  In low energy states, that’s when you’ll create negativity and suffer from the negative emotions.  It starts with your body and emotions first thing in the morning.
  • Make your vision for your life clear and compelling.  Focus on that vision at least every week, so you know exactly where you are going.  Your vision and purpose for your life is what will continuously drive you and motivate you towards it.

These are some of the biggest lessons that I stand out for me during November.

Overall, I enjoyed putting this November Project Report together and I look forward to doing another one in the future. I’ve found that this public sharing gives you an important ‘behind the scenes’ look at what can be involved to build and maintain a profitable property portfolio so you can ultimately create the life you want to live. Thanks for reading!

Please leave a comment below or let me know any questions you have.  I’d love to hear what you think!

And pop on over to join our conversations each day over on Facebook.

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Here’s to your success!

Fay McLean

9 Things Successful Property Investors Won’t Do If They Want to Create a Life of Freedom and Adventure

Freedom and Adventure: Murray and Fay McLean Grand Canyon

 

 

 

 

 

 

 

 

Travelling the United States for 5 weeks – Murray and I helicoptering through the Grand Canyon

How did I do this?

What inspired me to become a property investor living a life of freedom and adventure?

Years ago at this time of day, I’d be looking out the kitchen window at the farm paddocks that were suffering from lack of rain and the dusty driveway. I was a farmer’s wife and I worked part time to being in some extra cash so the family could have a few treats.

Now, at this time in amazing Albany on the south-west of Western Australia, I’m sharing my thoughts about continually creating a life of freedom and adventure. I’d never have dreamed this would be my life….in a million years. (And, I’m not done with creating it yet!)

Back at the start of the old farming days I was:

  • Ignorant of the property market’s earning potential
  • Ignorant of the rules of smart investing
  • Ignorant of all things finance and legal
  • Ignorant of personal development

Yet here I am. How?

I became comfortable with being uncomfortable. Forget about all the traditional advice, of having a vision, or desiring a fuller life, or any of that good stuff.

I became comfortable with being nervous, or anxious, or worried….or with being frustrated, or jealous….or with being excited, or elated, or….with hand shaking and my stomach churning each time I found myself in an uncomfortable situation.

Yes, no matter how much you try to avoid these emotions, you need to face, embrace and release them, to create a life of freedom and adventure through smart property investing.

The trick is that managing your emotions is as much about what you won’t do as it is about what you will do.

So, I’ve spent a lot of time looking at the kinds of things that smart property investors are careful to avoid while building a solid property portfolio and living their ideal lifestyle. They consciously avoid these behaviours because they are tempting and easy to fall into if not careful.

They Won’t Let Anyone Limit Their Joy

be happy

Smart property investors don’t allow others to determine their level of happiness. When you seek pleasure and satisfaction by comparing yourself to others, you’re no longer the master of your own happiness. When smart property investors feel good about something that they’ve done, they won’t let anyone’s opinions or accomplishments take that away from them.

You don’t have to compare yourself to others, and you can always receive other people’s opinions as nothing more than a constructive comment. That way, no matter what other people are thinking or doing, your self-worth comes from within.

Regardless of what people think of you at any particular moment, one thing is certain—you’re never as good or bad as they say you are.

They Won’t Forget

Smart property investors are unwilling to be bogged down unnecessarily by others’ mistakes. They will let them go quickly. This doesn’t mean they will forget though. They will remember any wrong doings and protect themselves from being affected in the same way in the future. Learning from mistakes rather than dwelling on them.

They Won’t Die in the Fight

fighting spiritThere are many situations where you would be wise to walk away and conserve your energy for more important matters. But – that doesn’t mean you lie down and give in all the time.

Almost anything you want to happen can happen. Changes in contracts, creative finance strategies, win-win outcomes for all parties involved in a deal can all be a reality if you keep on fighting to see one day after another.

Choose your battles wisely and stand your ground when the time is right

They Won’t Live in the Past

Failure can wear down your self confidence and make it hard to believe you can achieve a better result next time. Most of what people consider as failures are a result of taking risks or trying to achieve something that might not be easy. You can’t live in the past. You can’t allow these valuable experiences to stop you from believing in your ability to succeed.

[quote]Failure should be our teacher, not our undertaker. Failure is delay, not defeat. It is a temporary detour, not a dead end. Failure is something we can avoid only by saying nothing, doing nothing, and being nothing.”[/quote] – Denis Waitley

They Won’t Dwell on Problems

If you are investing in property – there are going to be problems! To create a life of freedom and adventure you need to be in a good emotional state. When you fixate on the problems that you’re facing, you create and prolong negative emotions and stress, which hinders performance.

When you’re faced with a problem, rather than dwell on it and drain your energy – focus more on how you can find an effective solution. Make strong decisions and then move on.

They Don’t Think They Will Get Rick Quick

There are many successful property investing strategies and each of them have the ability to put profits into your bank account to help you create financial freedom and live your ideal lifestyle. The amount of profit potential from each strategy is different, and usually in line with the risk factor. All of the will take either time, money or energy.

On some property buys you can make great profit, on others less. But sure as night follows day, very few deals will give you a ‘get rich quick’ result. Smart property investors know their numbers, do their due diligence and know there is no such thing as get rich quick.   Sorry if that just burst your bubble 

They Won’t Hang Around Negative People

An earlier post on this topic was so well received, you should read it if you haven’t already

Plenty of people will tell you all about bad new, their problems and wallow in self pity. You must resist joining their pity party! Travis Bradberry, Ph.D. says “People often feel pressure to listen to complainers because they don’t want to be seen as callous or rude, but there’s a fine line between lending a sympathetic ear and getting sucked into their negative emotional spiral.

You can avoid getting drawn in only by setting boundaries and limiting time with these people when necessary. Consider it this way: if there was a person smoking, would you sit there all afternoon inhaling the second-hand smoke? You’d distance yourself, and you should do the same with complainers.

A great way to set limits is to ask complainers how they intend to fix a problem. The complainer will then either quiet down or change the conversation in a more positive direction.”

They Won’t Misjudge Cash Flow

Looking at the numbers that make up a deal initially is good. Buyers fees, agents fees, settlement fees, bank fees along with rates and taxes to name just a few. Knowing these costs upfront and knowing affordability is a must.  misjudge cash flow

The other part of this equation is to take into account a regular amount for maintenance on your property (regardless of its age), and a good allowance for time when there may be no tenant. If you happen to have a property that goes untenanted for a period of 30-45 days or more, your asset can quickly turn into a liability.

These are two types outgoings that smart property investors take into account on every property so they will never get caught short on cash flow unexpectedly.

They Don’t Play Lone Ranger

Smart property investors understand quickly that they don’t know everything! This means they will call on other smart professionals to ride alongside them with guidance. They will build a team of professionals who know their game as it relates to smart property investing. Solicitors, accountants, real estate agents and tradesman to name just a few.

[quote]It is much more rewarding to get to the top of the mountain and share your experience with others than to show up by yourself, exhausted.”[/quote]
-Shandel Slaten

Heck, just look at someone like Dymphna Boholt. She has an incredible history of property investing, and even though she’s got loads of professional expertise herself, the lady has some serious team players around her.

She’s a champ.

The other part of a successful investors’ support crew will be networking with like minded individuals who are supportive of their goals; other investors to bounce ideas off and get feedback from. They will have people who keep them on the ball and give them a kick in the butt when they need it.

The Secret Sauce

Being a smart property investor has lots to do with the properties and the numbers for sure. But the secret sauce that brings it all together is what’s going on in your mind. I’m constantly working on several of these pointers I’ve mentioned all the time. After all, you don’t just ‘get done’ with this sort of stuff.

I hope this post reminded you of a few areas that could need working on for you too

Your Turn

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To all of my professional property investors, what tips would you add to this list?

Are you struggling to become a smart property investor?

What do you need to change so you can create a life of freedom and adventure?

Here’s to your success!

Yay!! Our new property development project settled today!

Today is a very exciting one!  It marks the start of yet another new journey for us as investors. Up until now, most of our property portfolio has been accumulated using a buy and hold strategy along with cosmetic renovations to maintain and improve property values and equity on revaluation.  But this…. is our first major property development project.

Property Development Project: 20 Lawson Street South HedlandI wanted to post today to make the milestone of our settlement date.  But it’s only fair to give you some of the facts that have lead to this point.

Objectives For This Property Development

This site has been purchased with the intent of building a second house at the rear of the property.  Demolishing the original house and replacing it with a new one.  Applying for a DA approval to sub-divide the land.  And at least one of the titles, if not two, will also have a granny flat constructed.  This will give us at least three (possibly four) avenues of income from this one existing piece of land.

This is a project we are doing with a joint venture partner.  You can read all about how we set up the joint venture agreement here in case it’s a strategy that would suit your investing goals.

Negotiating The Deal

You can see the listing price of this property was $825,000.  With some smart negotiation skills,  the property was finally secured for more than $175,000 LESS than the listed price.   In addition to the originally signed offer, a further $11,000 was taken off the purchase price after we sent in a building inspector prior to settlement.

Quite a bit of maintenance will be required before we can put a tenant into the property.

There were a few last minute glitches with the settlement process today (which can sometimes happen unexpectedly).  But in the end the bank now has the money it requires for the purchase and we start the next phase icon_smile

Getting the Original Building Rented

The builder will go in tomorrow to start the maintenance and repairs.

The managing agent will also go in to take photos and details so the property can be listed as available for rent.  We obviously want to get a tenant into the property quickly, and will most likely put them on a six month lease.  This time frame will see us over the the time required to get building permits, approvals, architect plans finalized.  If more time is required, we can always put the tenant onto a periodic lease after the six months.

Project Insurance

Quotes for insurance required on the project have been received.  Although it will be necessary for any builders or contractors on site to have their own risk insurance cover, we take out Public Liability Insurance for not less than ten million dollars.   There was several thousand dollars difference between companies for the insurance we require.  So it’s a good reminder to be sure to get at least three quotes for what you need wherever insurance is required (or anything for that matter!).

Well, I just wanted this post to be a ‘quickie’ to bring you up to speed on our latest project.

Feel free to share this post if you know this could help others.

Up to the minute updates on this project and others, get sent to our community mailing list, so if you’re not part of that yet, I’d love you to join us today!

Here’s to your success!

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P.S.  Since everyone has a different comfort zone when it comes to choosing an investment strategy, I would love to hear YOUR thoughts on doing a development like this.

What is your preferred property investment strategy and why?

 

Watching House Rules Episodes: The BEST Way To Spend Your Time….

house rules episodes teamI really don’t watch much television at all, but every now and then I get sucked into watching one of these reality Australian renovation shows. (Damn it!) At the moment I’ve been watching the House Rules episodes. I justify my actions by claiming it’s research for my businesses (my blog here and our property investing). And that’s why I just had to write this post.

In fact, that’s exactly what I want to encourage you to do – use the show as research.

It’s no secret that these Australian renovation shows are scripted and edited to maximize a captive viewing audience. While there are a lot of tears and tantrums to wade through during the House Rules episodes, if you look deeper, you can find some golden nuggets that will keep you on track with renovations for your own home or investment property.

The House Rules Episodes – Lessons You Can Learn

These are the things I see as the major points to learn from this show:

Budget: I’d like to say there is something to be learned about how to budget your renovation. But unfortunately as we are never told what the teams have to use as a budget, I’ll have to pass on that.

Styling: The teams usually do a total demolition on each House Rules episode. Not every renovation you do will need that. What is nice, is seeing the completed rooms and the ideas teams have for styling. (Not all of them are great though!).

If you listen to the judges comments you can pick up small tips and tricks that work well in different areas.

Functionality: Look for things that make an area functional (or not). Small things can make a huge difference, such as oven or patio doors being able to open properly; the level of lights or shower heads.

I know it sounds like it’s too simple, so here’s a real life example. Last week I went to visit a girlfriend who had just moved into the dream home she and her husband had just finished building. My heart sank as she explained her disappointment in one particular area…. it was not until she went to put her new furniture into the lounge area, she realized it was not even big enough to fit a set of sofas, let alone the TV cabinet or coffee table. So now, it’s a small sitting area for two – not at all what they had planned.

Colours: Take notice of how different colours create different moods. People get told this all the time but seeing it in action always has more impact. Not all the colour choices on the House Rules episodes have been great.

I did love the colour Antique White that was used on this weeks’ episode, and have used a very similar colour myself called Hogs Bristle Quarter Strength in a cosmetic renovation. These are great colours for creating a crisp, clean and bright atmosphere.

Theme: It’s interesting to see how a theme, or in the case of this renovation show, the ‘5 House Rules’ can affect the whole outcome of the renovation. The ‘themes’ for the home renovations have varied from ‘farmhouse’ to ‘junky chic’, to ‘Bahamas’.

The completed rooms in each house have not always flowed as well as they could because of the nature of the competition. You however, have the chance to choose the theme or style for your property. Run it through the entire home to increase the impact of your whole renovation.

Renovate For The Owner: Every renovation on the House Rules show has been purposefully done with the owners in mind. This is a really important thing to remember.

It’s so easy to renovate for what YOU want. But if you are renovating for profit (and you should be), lots of thought needs to go into WHO will be living in or renting the finished property.

Are you renovating in an area where families are living? Is it likely to be young professional couples who tenant your property? The demographics of the suburb you buy in will have a huge impact on how and what you do during a renovation.

Be sure to do your homework first!!

House Rules – Final Thoughts

Sitting back at night with my cup of tea and feet up has been a fun way to reinforce some of these fundamental rules of renovating. It’s been great to see how much value has been added to each teams’ home and I’m sure you would agree, that despite faults, bad colour or design choices here and there – all teams have ended up with a home that is more functional and nicer to live in than what they started out with.

Although I’ve only done minor cosmetic renovations, I know several people that have had great success with renovating for profit. And I know some people prefer having a structured process that takes them from property selection through to working with their tradies etc.

I’d actually love to do a larger renovation at some stage in the future if it fits into investing strategies. I’m currently working on our buy and hold strategy and starting a property development joint venture, but at some point I may include a structural renovation. The way we’ve been investing up to this point as been super easy, so I’m interested to see if a renovation can be just as easy – or more complicated.

Here’s to your success!

Fay McLean

 

 

P.S. I would love to hear your thoughts on the House Rules episodes, and on your renovation project in general. Do you find them complicated? Do they work for you?