The Developer’s Playbook: From Property Acquisition to Stress-Free Success with Nathan Battishall of Duplex Building Design

[00:00:04] Well, welcome to another episode of the Residential Developer Podcast. I'm the host, my name's Nathan Battishall and today I'm going to do one of my, every couple of months I like to do a Q&A. So I get a lot of different questions come through, through the website and through socials and through our email blasts. And I try and collate some of those questions just to really pull out some pieces that I think can give value to yourselves as budding investors and developers and people wanting to do business.

[00:00:34] residential based projects. So I've got a few questions here, I'm going to just fire through them over this episode. So let's go.

[00:00:43] So the first question is a really good one. How can I identify undervalued properties with strong development potential? Look, that's a big one because I think one of the key ways to do well, I believe, in small residential development based projects is to find unidentified sites.

[00:01:03] Often you'll find that there's sites that people have overlooked or people have not carried out the research on that could otherwise be developed. So a couple of key ones I find in a lot of parts of New South Wales at the moment, certain areas it's getting really tricky to make numbers work for smaller projects such as duplexes or triplexes or three townhouses, those type of developments.

[00:01:27] So it's really key first and foremost to obviously not overpay for the land. And often we're seeing that the moment that an agent or someone or even the vendor realises that their site has development potential, they try and sell that site with the development uplift.

[00:01:47] And the moment you're buying a site with the development uplift chewed out of it, it makes it really difficult.

[00:01:53] So a couple of key things I'm looking for is if I'm looking to do a smaller project like a duplex, try and look for properties that have a really run down old house on it.

[00:02:03] Obviously, it's good to find infill land that's got a house gone.

[00:02:08] At the moment, I've seen this has been an interesting one.

[00:02:11] I've seen a lot of properties at the moment where a house has been knocked down or maybe a house has been burnt down.

[00:02:21] But I think the problem is when a house has been knocked down, it generally means that someone has probably already got a DA on it or already got a CDC.

[00:02:29] So they've already got a developer investor mindset for one reason or another.

[00:02:35] We're seeing quite a bit of this where there's a lot of DA or CDC approved sites for sale.

[00:02:40] Reason being often is because they've overpaid for the site or they've overcooked the design.

[00:02:46] They haven't factored in the budget.

[00:02:47] They haven't run their feasibility numbers accurately.

[00:02:50] So they're trying to sell a site.

[00:02:51] Not only are they trying to sell a site, they're trying to recoup all their planning costs.

[00:02:55] And some are even trying to obviously get some uplift created by that approval.

[00:03:00] And the challenge with that is then where do you make any profit?

[00:03:03] Sometimes it can work for a builder developer, maybe a builder who needs to just buy another site that's already approved to get their boys and their team moving on just to create another job and take the builder's margin, maybe a little bit of development margin.

[00:03:20] But a couple of key things to look for is look for sites that have a really rundown house, especially for those smaller developments.

[00:03:29] I see some people buy these sites with a really nice big house on it.

[00:03:33] And the problem is you're paying overs or you might be paying market value for that property because it's a really nice house or a really nice property that will fetch a really good price on the market.

[00:03:44] But when you're knocking it down, the numbers often don't stack up unless it's in a really top notch, high spec area where you can get a really great resale where the numbers work.

[00:03:56] Try and look for those blocks with a really rundown house that's not even worth renovating because essentially often you can buy it just for land value, for knockdown value.

[00:04:05] That's where the numbers can work really well.

[00:04:08] Another thing is to look for sites where people may have overlooked certain planning elements.

[00:04:15] Sometimes, for example, I've seen backward sloping blocks that people have just assumed automatically you need to run an easement so they've overlooked that site.

[00:04:26] But through having good team, through looking at the stormwater elements, sometimes you can engineer a site to make the stormwater work and most importantly comply with that council's development control plan for stormwater drainage.

[00:04:44] But often people that don't have a good team around them or are inexperienced can overlook a site due to certain constraints.

[00:04:51] Sometimes there can be elements around trees or around just being creative or looking at a site through a different lens or a different way of looking at things so you can engineer a site to make it work where other people may not have spotted the potential.

[00:05:06] Oftentimes, another way that a site can be undervalued is where people have only looked at that site through the lens of knocking that house down.

[00:05:15] For example, I've seen sometimes sites where you might be able to knock the house down and do four townhouses, for example.

[00:05:25] But sometimes you look at the numbers, you run your numbers, sometimes the numbers stack up better where you can do a little reno on that front house, for example, and do a duplex or two townhouses at the back.

[00:05:37] Often the numbers can stack up a lot better and sometimes more doesn't necessarily stack up from a feasibility point of view.

[00:05:45] Even for two, sometimes it's best to keep a house and do another house at the back.

[00:05:49] There are a lot of undervalued properties out there and I think a lot of people overlook them because they're only, they get set in one way of developing or one way of doing projects.

[00:05:59] For example, obviously duplex is the most common one because it's a great starting point.

[00:06:04] But I see sometimes people get too emotionally invested not to see that, hey, there is a house on that site that has potential to keep.

[00:06:15] So straight away you're not having to do a knockdown only to rebuild that house again.

[00:06:20] So that can be a great way of just seeing value in a site.

[00:06:26] And obviously location is a big thing as well.

[00:06:29] Have a look at what's emerging.

[00:06:31] Have a look at what's coming up.

[00:06:32] Have a look at what infrastructure is being utilised or implemented around the property as well.

[00:06:39] There's an old saying and I heard this when I did some education.

[00:06:42] You need to look at whether the local, state and federal government is spending money because where they're spending money, we should spend money.

[00:06:50] So have a look around.

[00:06:52] See what's the local council doing in that area.

[00:06:55] What sort of infrastructure is going in around that area.

[00:06:59] What's the local government, what's the state government and the federal government doing nearby that might actually, you might be able to get ahead of the curb or ahead of the game and actually get that property when it's on the low end, knowing that there's some things emerging.

[00:07:14] And obviously that takes research.

[00:07:15] It takes time.

[00:07:17] But it's important to do that research.

[00:07:19] It's important to educate yourself and really study that area.

[00:07:23] That's why it's important.

[00:07:24] Some developers I find that they don't focus on a couple of suburbs.

[00:07:28] They're focusing on a whole state, for example, or eight, nine, ten towns or suburbs.

[00:07:35] And the tricky part about that is that you don't get to know all the intricacies.

[00:07:41] You don't get to really get a strong understanding of the economy in that area, of the future growth.

[00:07:47] You don't get to understand what streets are good, what streets are bad, what streets are hitting good numbers and the resale.

[00:07:53] And, you know, the more you can hone in on a couple of areas, a couple of suburbs or a town, you'll get to know all the ins and outs of it.

[00:08:01] Because you can go, you can do a development on one street and you can go right over to the next street, literally 20, 30 metres over the fence.

[00:08:09] And the resale can be completely different.

[00:08:12] The buying pool can be completely different.

[00:08:14] And you can overcook your numbers if you run your numbers based on one street over.

[00:08:19] And that's why it's important to just hone in and understand your market, understand that suburb, understand that area, understand even the streets and the history of what property is doing.

[00:08:31] And even be able to forecast and preempt and, you know, get a really good picture of where things look.

[00:08:38] Next question is a really good one as well.

[00:08:40] And it's what are the best strategies for getting development approval quickly?

[00:08:47] Look, the reality is in some councils, it's just inevitable that development approval won't come quickly.

[00:08:55] Now, the first and foremost strategy of getting an approval quickly is to get a complying development, a CDC, being the fact that often you can get approvals within two to three weeks through a private certifier by doing a CDC.

[00:09:10] But it's not always possible to get the best use of a site with a CDC.

[00:09:16] So often you need to go down the development approval pathway.

[00:09:19] Now, look, there are still some key things to look at when it comes to getting a DA approval quicker.

[00:09:28] Now, I think the big thing first and foremost is in the acquisition side of things.

[00:09:33] Don't buy yourself a headache.

[00:09:35] If you do buy a headache, make sure that you get good terms, ideally a delayed settlement or a call option or a put and call option.

[00:09:43] Make sure you're able to get some terms that will enable that you're not having to pay those holding costs while you're executing that approval.

[00:09:53] And that's why it's important to really understand what you're up against.

[00:09:56] If you are looking to get a site where you have to navigate some challenges or you know you're going to have to potentially create, have some variations in the actual approval process, make sure that you've got contingency.

[00:10:10] But first and foremost, if you are looking to do deals and developments that minimise stress, that minimise delays, find sites that just stack up and work.

[00:10:20] Key things, just look for sites that drain appropriately from a stormwater point of view.

[00:10:25] Look for sites that aren't littered with native trees that could cause huge headaches where you may have to keep trees that could impact the yield due to the tree protection zones.

[00:10:37] Just looking at finding sites that aren't littered with flood constraints, bushfire constraints, overlays that can impact the design.

[00:10:48] So ideally you want to find sites that have really good solar access too, whether that be a duplex or a dual occupancy or townhouses or villas, any of those residential-based projects.

[00:10:59] Look for sites that where you can clearly see that you're going to get good solar access because often that's a big killer is privacy, loss of views, sort of view impact for neighbours, overshadowing for neighbours and solar access for the development.

[00:11:15] There are a couple of big key things that can really cause delays in a project because the moment that you – because you have to – if you're going down the DA pathway,

[00:11:26] your neighbours have the opportunity to write submissions or objections to why they believe that this development should not either go ahead or why they believe that a redesign needs to take place.

[00:11:38] So you want to minimise the amount of variations if possible.

[00:11:41] If you want a fast DA or if you want a more efficient DA, the best thing to do is submit an application that is 100% compliant.

[00:11:50] And if it's not 100% compliant, make sure that you've got contingencies in place.

[00:11:55] If you are looking to go some variations, make sure that you've already preempted what objections may come and have some solutions on how you can actually navigate those objections when they do come.

[00:12:08] And one of the key things in doing that is having really good suitable quality team around you.

[00:12:12] So having a really key switched on design team, having a really good planner involved in the piece as well, submitting a really good application to accompany the architectures and the documentation is vital.

[00:12:27] Often I see people really want to skimp out when it comes to that town planning piece where they don't want to spend that money creating a really good statement of environmental effects

[00:12:38] and variation statement where someone who's really well thought out the design, thought out the implications, thought out in a sense, preempted what neighbours may say, preempted what the planners at council and the various consultants in council may come back with

[00:12:58] and actually come up with and actually come up with and actually come up with and actually come up with a design that can actually answer those questions or trigger really good, well thought out, articulated responses to any potential objections that may arise.

[00:13:12] So a lot of it does come down to acquisition, just making sure that you are acquiring a site that is not going to throw up headaches.

[00:13:20] Solar Axis is a massive one.

[00:13:22] If you've got a site where you know you've only got one option to have a driveway in the north, for example, and all your townhouses are going to face south, well you've got to really think long and hard.

[00:13:32] I've seen really good sites just not stack up purely due to the fact that the site is not orientated well for that particular use of development.

[00:13:42] And solar Axis is a massive one.

[00:13:44] It's really hard to argue if you've got terrible solar access into your living areas, into your private open spaces, if you're causing significant overshadowing to your neighbours' private open spaces and living areas.

[00:13:57] Well, you open yourself up to large objections.

[00:14:02] And I've seen this where people have run their feasibility numbers based on making it work in scenarios where you could get a large number of objections and rightly so, where you literally the only way to make it work is to drop the yield to meet that criteria.

[00:14:22] And that's where it's so vital to look at those things and have great team around you early in the piece so that they can actually be the devil's advocate really early on before you even acquire that site to state some of the concerns around this property as to why you could potentially run into headaches.

[00:14:41] And I see that all the time where people have acquired a site that, yes, it looks good initially on paper, but once you start to dig down into the planning elements of it, you know you're going to potentially run into headaches.

[00:14:52] And some people love to take that huge element of risk.

[00:14:57] But with that risk comes a lot of potential for challenges in that process, in that DA process that can either result in a very long process, drawn out process, and even can result often in a DA rejection that can be very hard to fight in environment court if there's a large number of

[00:15:22] elements where it doesn't have elements where it doesn't comply with either the development control plan that councils set out or worse still have some LEP non-compliances.

[00:15:34] So yeah, look, the key in getting a faster approval is to try and make it as compliant as you can and also provide as much documentation as you can.

[00:15:45] If you know you're going to need traffic planning, make sure it's submitted with the application.

[00:15:51] If you know that there's trees on the site, native trees, well, make sure you submit a arborist report because every time you don't submit the appropriate documentation, it just continues to push that DA further down the road and you're not able to get all those moving pieces kicking along.

[00:16:08] So it's important just to really submit the right documentation, even for the designer, to make sure that they're submitting the right documentation that that particular council needs.

[00:16:18] Some councils want shadow diagrams on their notification plans.

[00:16:22] It's important to know what that council wants, for example, on their notification plans.

[00:16:26] Every council is slightly different and that's a slightly different nuance in terms of the documentation that they require or they need on that application.

[00:16:35] And you don't – one of the best ways to delay a project is by those RFIs continually coming back.

[00:16:41] Sometimes you can't help but get RFIs and the reality is sometimes RFIs come as a result of, unfortunately, some local governments can sometimes create RFIs just to continue to move that project, keep that project on hold to deal with workload.

[00:17:01] And it can get frustrating, but the more that you can submit something that's fully compliant, has all the documentation that's required, it really helps smooth that process.

[00:17:12] Another great question is how can I reduce my development risk in an uncertain market?

[00:17:17] You could possibly say that we are – we have been in a little bit of an uncertain market at the moment.

[00:17:25] And there's always ways to pivot or to look at what the current market trend is and look at it through that lens.

[00:17:35] So at the moment, at the moment, we're finding that it's really hard for young couples to get finance.

[00:17:42] One thing I'm finding in the development space, the people that have money at the moment and that are spending money are the baby boomers.

[00:17:49] There's, you know, my parents' generation who either are about to retire or have retired.

[00:17:55] They're cashed up.

[00:17:56] They own their properties unencumbered.

[00:17:58] But a lot of them have owned properties with big backyards.

[00:18:01] They're looking to downsize.

[00:18:02] They're looking to, you know, some of them want to possibly – they own a really nice property unencumbered.

[00:18:10] The idea is to maybe go and buy a smaller property, whether it be a townhouse, a terrace, a duplex, a dual lock, downsize, buy it with no mortgage, no debt, have a whole bunch of cash that they can either go and invest and do something else with or they can go on some holidays.

[00:18:29] These – that's – I'm seeing a big buying pool of those type of people in this current market that we're in.

[00:18:35] They're not worried about – they're not worried about the interest rates because they don't owe any money on their property.

[00:18:41] So they're not stressed about inflation.

[00:18:43] They're not worried about any of that.

[00:18:45] So you've got to look at what that buying pool needs and what that buying pool wants.

[00:18:50] I've seen a real resurgence of single-story dwellings coming back into the market.

[00:18:55] Sometimes doing a single-story duplex, for example, or single-story villas versus double-story has made a real emergence, especially in the uncertainty of this market where there's a buying pool of these people that are cashed up.

[00:19:09] They'll pay good money for a property that hits all the numbers, that stacks up in terms of their livability, in terms of the lifestyle that they want to live.

[00:19:18] Is it close to cafes?

[00:19:19] Is it close to shops?

[00:19:20] Is the block relatively flat?

[00:19:22] Is it low maintenance?

[00:19:24] Does it hit all the numbers that they desire?

[00:19:29] Does it have that type of housing stock that that particular market is needing?

[00:19:36] Does it have – some of them might want a little bit of a workshop at the back of the garage.

[00:19:40] They want a couple of bedrooms for their grandkids and the kids when they come to visit.

[00:19:44] So the moment that you can create a product that hits that current market's buying pool, you open yourself up to doing really well in a market where other people may not necessarily be doing so great, where they've targeted a demographic that just may not be able to buy,

[00:20:03] or a buying pool that's very limited, or a buying pool that has a low borrowing capacity.

[00:20:09] So it's just key to look at those things.

[00:20:11] We're seeing a real emergence of townhouses, duplexes, that sort of thing where you've got the guest bedroom or even the master bedroom sometimes downstairs,

[00:20:22] and then you've got a couple more bedrooms upstairs.

[00:20:25] Again, that still attracts a buying pool of a downsizer, whether it be a retiree or someone who's getting close to retiring,

[00:20:33] you know, that baby boomer type generation, no debt, no mortgage, but want to downsize, don't want to keep mowing that massive one-acre block,

[00:20:43] or, you know, they've got a house that's worth a couple of mil.

[00:20:46] They can go and buy another property now for a mil and have, you know, a whole bunch of cash to go and reinvest or to enjoy some lifestyle as they approach retirement.

[00:20:58] So, you know, in uncertain markets, there's always pools of people that you can market to.

[00:21:05] And in this particular market now, from what I've seen, targeting that baby boomer, downsizer generation,

[00:21:15] you can do really, really well in at the moment.

[00:21:18] Another question that I got was, what are some of the most effective ways to manage multiple consultants and contractors when doing a development?

[00:21:26] Look, this is an interesting one because I think there's so many moving pieces when it comes to projects and developments,

[00:21:33] whether you're a mum and dad, an investor or a developer.

[00:21:38] There's so many moving pieces in all of it.

[00:21:40] And there's a couple of approaches that you can take.

[00:21:43] Some people like to be very hands-on during a project.

[00:21:46] So they like to develop their own team of consultants, everything from planners, surveyors, designers, interior agents, all that sort of thing.

[00:21:57] So the key thing in all of it is to really build that team and not only build that team, but build that camaraderie and build that trust.

[00:22:06] The moment that you – the reality is if you have to micromanage your team, the reality is it either means that you're a control freak

[00:22:14] and people probably won't want to work with you.

[00:22:16] Or the second factor is the reason why you might need to micromanage people is because you've got – you've gone for the cheapest of everything,

[00:22:23] the cheapest consultants, which often means they're not good quality.

[00:22:28] And then that means that you've got to constantly be on their case, moving them along.

[00:22:33] Whereas when you get the right people and there's that synergy, there's that camaraderie, you'll find that things move a lot quicker.

[00:22:40] So the key in a lot of it is find great people.

[00:22:43] Now, look, you don't want to be overspending.

[00:22:46] You don't want to be paying overs because if you spend too much, it obviously chews into your bottom end.

[00:22:51] But you don't want to haggle people too.

[00:22:52] If you've got good people who have your best interests at heart, you'll find that they're – when they understand your strategy

[00:22:59] of why you're doing what you're doing, they'll get on the same page as you,

[00:23:03] understanding that, hey, you're doing this to generate wealth, which will in turn for a lot of people

[00:23:08] who want to do this as an ongoing scenario where you don't just want to do one project.

[00:23:13] Some people do.

[00:23:15] But a lot of people want to do this as an ongoing scenario to generate some wealth.

[00:23:20] For various different reasons.

[00:23:23] And when you get the right people on board who understand that philosophy and understand that mentality,

[00:23:29] you'll find that it can make life a lot easier.

[00:23:33] So one of the best ways to manage consultants – and when I talk about it, I'll talk about it pre-build

[00:23:39] and then the build phase.

[00:23:41] Because you've got your pre-build.

[00:23:43] That's where you're dealing with all the moving pieces of consultants, designers, town planners.

[00:23:50] You're dealing with real estates to get appraisals.

[00:23:53] You're dealing with obviously agents to get on board and help you with your feasibility.

[00:23:59] You're dealing with obviously mortgage brokers.

[00:24:01] You're dealing with finance.

[00:24:02] You're dealing with all those moving pieces pre-the-build consultants, whether it be engineers,

[00:24:08] stormwater structural.

[00:24:10] You could be dealing with certifiers.

[00:24:12] You could be dealing with council.

[00:24:13] All those moving pieces.

[00:24:16] And then you've obviously got the build phase where you're – if you're a builder developer,

[00:24:21] obviously you're building your own team of trades.

[00:24:24] You've got your carpenters.

[00:24:27] You've got all of that moving piece.

[00:24:29] And for most other people that aren't registered builders, you're generally using a builder.

[00:24:36] So you want to find a builder that has a real proven track record and history of running good job sites,

[00:24:45] managing projects on time, on budget, and obviously not full of defects,

[00:24:52] and creating the product that the market wants and that the market needs.

[00:24:55] And that's a key piece.

[00:24:58] But I think in a lot of it, I find for most people, they don't want to be bogged down with stress.

[00:25:03] So the big key thing is to make sure that you're – as I said before, you're finding consultants,

[00:25:10] builders, team that are leaders in their field.

[00:25:14] And when you get the right people and people that are good, you won't need to micromanage them.

[00:25:19] You'll be able to just basically be on board with them and let them do their thing and do it really well.

[00:25:23] It'll make your life easier.

[00:25:25] It'll make the project run smoother.

[00:25:27] And you'll have that confidence of knowing that the project's in good hands.

[00:25:32] Next question was, how do I accurately calculate the costs and profitability of a small residential

[00:25:39] development?

[00:25:40] This is a big one because I'm amazed sometimes when I see people kickstart a project or even buy a site

[00:25:49] where they haven't even run a feasibility.

[00:25:53] We're in an age now where there's so many tools out there.

[00:25:57] There's so many groups and training organisations that you can even equip yourself in doing projects

[00:26:04] and developments.

[00:26:05] And a lot of them will even give you feasibility tools.

[00:26:08] So the first thing to do is to get yourself a good feasibility template.

[00:26:13] There's Excel spreadsheets out there.

[00:26:15] You can get them, you can even find them online.

[00:26:17] If you're savvy with Excel and various things, you can even build your own.

[00:26:21] But the key is to get a really good spreadsheet or feasibility sheet.

[00:26:25] There's even programs out there that will run feasibilities for you now.

[00:26:29] I know a lot, even a lot of the site finding programs now like your Stash and your Archistar

[00:26:36] and a lot of these ones now even have feasibility templates built in.

[00:26:40] But if you're old school, you can do it on paper or just get an Excel spreadsheet or even get your accountant

[00:26:47] to help you build a spreadsheet.

[00:26:49] And on that spreadsheet, you really want to do your research, putting in all your numbers

[00:26:54] because I find what chews into the profitability often I find on a project, a couple of big ones is GST.

[00:27:00] A lot of people don't factor in GST.

[00:27:02] If you're looking to do the project to sell, well, you need to factor in your GST element.

[00:27:08] And a lot of people don't factor in the GST and that can really chew into your margin.

[00:27:12] You might have wanted to hit 20% or 18%.

[00:27:16] All of a sudden, you factor in your GST.

[00:27:19] That can really chew into your margin.

[00:27:21] So it's important to put all of those numbers in.

[00:27:24] And even in worst case, find an accountant who actually gets property and understands property

[00:27:30] and make sure that they're on the same page as you in terms of why you're doing projects,

[00:27:38] why you're wanting to do developments.

[00:27:39] And more importantly, try and find an accountant who's actually done some of their own projects.

[00:27:45] That's one of the best keys.

[00:27:47] And there are a lot of savvy accountants out there now that do projects and do developments.

[00:27:51] And there's nothing better than working with someone who has done their own projects

[00:27:56] because they're going to have experience that they can bring to the table when it comes

[00:28:00] to a profitability, understanding the numbers.

[00:28:03] They'll even pick up some things that you might have missed in that feasibility and just

[00:28:08] really help educate you in that space.

[00:28:10] So just key things, making sure those numbers are inputted.

[00:28:14] A lot of people forget to factor in things like demolition.

[00:28:18] They forget to factor in tree removal.

[00:28:21] You know, there might be four or five trees.

[00:28:22] Well, that can add up in costs.

[00:28:24] A lot of people forget to factor in your contribution fees.

[00:28:28] They don't take the five minutes to get on the phone to council and actually get an update

[00:28:32] rather than a lot of people Google it and they'll find a forum where someone mentioned

[00:28:36] these for the contribution fees at Bayside Council.

[00:28:40] These are contributions at Coffs Harbour Council.

[00:28:42] And they've just put those numbers in without taking that time to call that council

[00:28:47] and to make sure you get the appropriate right contribution fee.

[00:28:52] Even in a lot of areas in and around Sydney and some of the outlying areas, there's additional

[00:28:56] contributions now.

[00:28:57] There's that state contribution that's come in for duplexes, townhouses, that sort of thing.

[00:29:02] Like that can add up.

[00:29:03] Those costs can add up.

[00:29:05] Factoring in all of your consultants, your contingencies, your agents fees, marketing.

[00:29:10] You know, there's so many little moving pieces.

[00:29:12] And by getting that fees are really accurate and really making sure you've got all those

[00:29:17] numbers in.

[00:29:18] Then obviously getting appraisals for the product, making sure that you factor in, you know,

[00:29:25] not over-inflating the resales.

[00:29:28] Factoring in your interest rate, even going off a worst case interest rate if you might

[00:29:33] have a little bit of trouble getting bank funding, for example.

[00:29:36] Factoring in a higher interest rate.

[00:29:38] And then anything better than that's obviously extra fat in the deal.

[00:29:42] But that's a key thing is just making sure you run those numbers.

[00:29:45] So first and foremost, get a template, get a good accountant, and then do your research.

[00:29:50] Do your research.

[00:29:51] Even have some people around you or some mentors or some people that can even have a look over

[00:29:56] your shoulder and just see if they can, they might pick up some things that you may not

[00:29:59] have otherwise factored in.

[00:30:02] Another great question is, how do I ensure a smooth construction process and avoid costly

[00:30:08] delays?

[00:30:09] Obviously, some things happen that are out of your control.

[00:30:13] A lot of people that built during the COVID period, that was just a historical event that

[00:30:19] was completely out of your control.

[00:30:21] But generally, a lot of things can be within your control and cost escalation and delays

[00:30:30] can obviously really chew into the margin of a project.

[00:30:34] And I think first and foremost, the best way to get around this is to be realistic in your

[00:30:39] initial feasibility.

[00:30:40] Just because a builder tells you it'll take six months, do your research.

[00:30:45] Do your research in and around that suburb, in and around that area of how long on average

[00:30:51] a build's taking.

[00:30:53] Do your research on the particular builder that you decide to build with.

[00:30:57] You know, talk to them, ask for a couple of references.

[00:31:01] There's nothing wrong with getting some references from a builder.

[00:31:04] If that builder's told you six months, it'll take six months or it'll take nine months or

[00:31:08] 12 months to build that particular project.

[00:31:11] But then you talk to their last two clients and both projects have taken 18 months plus

[00:31:16] and there was variations and different things involved.

[00:31:21] By doing your research, by doing your due diligence, you're able to really get to the bottom of why

[00:31:28] that is and look at that.

[00:31:32] There could have been legitimate reasons, but by doing your research, you can really get a

[00:31:36] picture of the history of that builder.

[00:31:38] Are they reliable?

[00:31:39] You know, do they have a history of finishing projects on time?

[00:31:43] And that way, if that particular builder is taking 12 months and you've gone to some seminar

[00:31:50] where they've told you you can build a duplex in six months, maybe a long time ago you could

[00:31:55] have, but don't base your numbers on the best case scenario.

[00:31:59] Do your research.

[00:32:00] And if you do have red flags about that consultant, well, you know it's an important question to

[00:32:07] ask and you've got some big decisions to make.

[00:32:10] And generally what you want to do is find consultants anyway, especially builders that

[00:32:15] you can build that long-term relationship with.

[00:32:18] And there's things that you can factor in to minimise cost escalations during a project as

[00:32:24] well.

[00:32:25] One of the big key things in avoiding variations is to be clear in your documentation, clear

[00:32:31] in what it is you're wanting to build before you even sign that contract.

[00:32:35] And often I find some people skimp out on spending the money to get things like geotech.

[00:32:42] And if there's a bit of rock, you know, discovering where it is, what it is and address it early

[00:32:47] in the piece, is their peering going to be needed on this particular project?

[00:32:51] And even with your documentation, spending a little bit more money on consultants, especially

[00:32:57] designers to get the accurate detailed documentation, even things like tile heights, niches, you know,

[00:33:05] things like is there some particular joinery?

[00:33:07] Is there particular finishes that if the documentation is not clear, a builder could make assumptions

[00:33:14] during the quoting process?

[00:33:16] And as a result, then there could be variations because you haven't factored in how many down

[00:33:20] lights you want.

[00:33:21] You haven't factored in, you know, all that detail.

[00:33:24] Yes, it might spend, you might spend a few grand more in getting that documentation process,

[00:33:29] but it can save you, you know, multiple, sometimes tens and thousands of dollars in the build

[00:33:36] phase because you're not getting hit with very unnecessary variations that could have been

[00:33:40] alleviated by actually being clear to your builder on what you require earlier in the piece

[00:33:48] so they can do a more detailed and accurate tender prior to the signing of the contract.

[00:33:54] So there's just some things like that that can actually, you know, avoid unnecessary costs

[00:34:00] that can actually chew into your margin.

[00:34:03] And other things just with delays is just making sure that you're paying,

[00:34:07] obviously releasing payments on time, making sure that you're diligent in getting back to contractors,

[00:34:13] getting back to the builder on different elements to do with selections and finishes.

[00:34:19] And yeah, but a lot of it does come down to good thorough due diligence prior to selecting your team

[00:34:24] and just really getting them on board with your vision of where things are headed

[00:34:29] and factoring in some delays in your feasibility for things like rain delays

[00:34:34] and various other things that could happen.

[00:34:36] That way, because it's been factored in before you've even bought the site,

[00:34:41] you know, you've got that contingency there so no one's left stressed.

[00:34:47] Last couple of questions and I'll put these at the end because I think they're really vital

[00:34:50] and get overlooked sometimes.

[00:34:52] This is a great question.

[00:34:53] How can you manage the stress during the ups and downs of property development?

[00:34:59] I think that's a cracking question because reality is anything that involves risk can bring stress.

[00:35:07] Property development's not always roses.

[00:35:10] It's not always stress-free.

[00:35:13] The reality is stress can come.

[00:35:15] And look, there are ways to minimise a lot of stress in development.

[00:35:19] And one of the biggest ways to minimise stress is knowing your numbers, running your numbers,

[00:35:24] buying a site that's not full of headaches.

[00:35:26] So a lot of it comes down to the initial acquisition.

[00:35:30] And I've said this already a few times on this podcast, but I think sometimes people force the numbers to work.

[00:35:36] They force a site to work.

[00:35:37] They get too emotionally invested in a site of what it could be one day rather than what it is likely going to be now

[00:35:46] or at the end of this project and development.

[00:35:48] And that's where a lot of stress comes is where people have made unwise or they've made rushed decisions

[00:35:54] or they've made decisions based on the best case scenario, which rarely ever happens.

[00:36:00] And as a result, it brings a whole bunch of financial stress and strain.

[00:36:04] It can affect your mental health.

[00:36:06] It can affect your relationships.

[00:36:08] It can affect everything and anything around you as a result of actually not really just sitting down

[00:36:15] and making wise decisions early in the piece.

[00:36:18] And look, even when you've made great decisions and you've got a site that works,

[00:36:22] stress can still come.

[00:36:24] Just because a project is going to hit it out of the park in terms of its profitability

[00:36:29] doesn't necessarily mean you're going to have the best time of it.

[00:36:33] Sometimes stress comes through micromanaging.

[00:36:35] I've found some of the most stressed people are people who micromanage so heavily,

[00:36:40] they hold everything so tight that they run themselves into the ground with stress

[00:36:46] rather than just get amazing people around them, whether that be consultants, contractors, builders,

[00:36:52] all the different moving pieces, brokers, all that sort of thing.

[00:36:55] You get amazing people around you who are the best of the best at what they do.

[00:36:59] You'll find that it alleviates the stress from your day, from your life, from your week to week

[00:37:05] because you've got people you can entrust this project to.

[00:37:09] It doesn't mean that you are blind to it.

[00:37:11] It doesn't mean that you don't obviously look at things and do your own research,

[00:37:15] but you're not having to think about it 24-7 and constantly be chasing up and following up

[00:37:22] every single moving piece.

[00:37:24] And you just end up a nervous wreck.

[00:37:27] And look, there's some other things you can do in your day-to-day to avoid stress,

[00:37:31] even if you've found the right site.

[00:37:34] It's profitable.

[00:37:36] You're letting the team do their thing.

[00:37:38] You know, just looking after your health, eating well, sleeping well, you know, exercising,

[00:37:44] doing all the things that actually can help you physically and mentally and emotionally,

[00:37:49] spiritually, socially, emotionally.

[00:37:51] Be able to just cope with the day-to-day grind of doing projects,

[00:37:55] especially once you get to the point where you're not just doing one,

[00:37:58] but you're managing multiple projects.

[00:38:00] And a lot of people want to get to this place where they could have two, three,

[00:38:03] four projects on the go.

[00:38:04] And, you know, that's where you can get really good at actually managing stress

[00:38:08] so that this thing doesn't run you into the ground.

[00:38:11] You know, the whole reason a lot of people are doing developments and projects

[00:38:14] is to generate wealth but to create some lifestyle as well with the people you love.

[00:38:19] And it's, you know, it's a sad story when you see people run themselves into the ground

[00:38:25] where they have a heart attack or they have, you know, a mental breakdown

[00:38:30] or they, you know, blow up a relationship or a marriage or something over,

[00:38:37] you know, things that could have been managed well when it comes to stress.

[00:38:42] And the last question, what importance does leadership skills play

[00:38:46] in doing developments and projects?

[00:38:49] Another cracking question.

[00:38:50] And I want to talk about two different elements here,

[00:38:54] leadership versus management.

[00:38:56] And I think, look, what I've seen that makes an amazing developer and investor

[00:39:03] is someone who develops and strengthens their leadership skills.

[00:39:08] I've said this a few times and I'll continually harp on about this,

[00:39:14] is the most stressed out people I see are micromanagers.

[00:39:20] Micromanagers rarely make good developers.

[00:39:22] And even if they do make good developers, they rarely ever keep a team,

[00:39:28] whether it be builders, consultants, because no good builder, no good consultant,

[00:39:36] no one who's great at their craft wants to be so heavily micromanaged

[00:39:40] because it just takes the enjoyment away from the project.

[00:39:43] And the reality is most people that heavily micromanage end up running themselves

[00:39:50] into the ground.

[00:39:51] So it's important to develop your leadership skills.

[00:39:54] And look, some people are born natural good leaders.

[00:39:56] Other people have – it's a craft that you have to work hard at.

[00:40:00] And the reality is everyone can get better as a leader.

[00:40:04] Even if you're not a strong natural leader, you can – it's a craft that you can work on.

[00:40:09] It's a craft that you can continually invest in and develop yourself in.

[00:40:13] And some of the great ways to do that is to expose yourself to good leaders.

[00:40:18] Have a look at leaders that are out there that are great at what they do.

[00:40:22] Read books.

[00:40:23] There's so many books.

[00:40:24] We've never had more resource around us when it comes to books, podcasts, YouTube videos,

[00:40:30] education, training.

[00:40:31] There's even courses on leadership that you can do to develop and grow yourself as a great leader

[00:40:37] because the reality is good leaders – good leaders realise – and I love Andy Stanley,

[00:40:42] a leader and an author, has an amazing statement.

[00:40:45] He said, you know, I'm not the smartest person in this organisation.

[00:40:49] I just got here first.

[00:40:51] And, you know, a good leader understands that they don't need to be the best at every single

[00:40:56] element of that business.

[00:40:57] When it comes to being a developer, some of the best developers, you know, often don't know

[00:41:02] a whole lot about certain elements of the business, but what they understand is to be good at what

[00:41:08] they do, they have to put themselves around great people who are smart, switched on in

[00:41:13] their field.

[00:41:14] And a good leader understands when you get the right people around you, you build that trust,

[00:41:19] you empower them.

[00:41:20] See, leadership's a big part of leadership is about empowerment.

[00:41:23] It's not about control.

[00:41:25] See, a lot of people get leadership mixed up.

[00:41:28] They see leadership as management.

[00:41:30] But there's a big difference between leadership and management.

[00:41:33] See, leaders understand to get good people around you who are the best of the best of what

[00:41:38] they do, and you empower them to run with it.

[00:41:42] But see, a good leader also understands and knows how to articulate vision.

[00:41:46] And when it comes to a development, it's important to have a vision for what you want that project

[00:41:51] to be, to have a vision of what you want this development to be.

[00:41:55] What sort of profit do you want this project to hit?

[00:41:57] What sort of market do you want to aim this project for?

[00:42:00] What sort of feeling do you want the buyers to have when they walk into that product?

[00:42:05] And when you can articulate that vision to your team, whether it be a designer, whether

[00:42:11] it be a consultant, whether it be your builder, whether it be your real estate agent, when you

[00:42:16] can articulate that vision and you've got the right people around you, you can create something

[00:42:21] incredibly special because people will get on board with that vision.

[00:42:25] The right people will align to that vision.

[00:42:27] And as a leader, you're almost like a conductor of a band or a conductor of an orchestra where

[00:42:34] literally you're conducting that amazing team to create that masterpiece and create that

[00:42:42] story and just watch it start to pull off into motion.

[00:42:45] And you'll find that as you develop as a leader, that's where you can start to scale to doing

[00:42:50] multiple projects concurrently because you've got the people around you.

[00:42:56] You're not having to micromanage.

[00:42:58] You're able to articulate the vision.

[00:43:00] You're able to communicate that vision as well.

[00:43:02] It's all well and good to have a vision, but you've got to communicate that vision so your

[00:43:06] team can catch it.

[00:43:07] And a good leader builds camaraderie, builds loyalty, builds trust.

[00:43:12] A good leader empowers.

[00:43:14] A good leader learns to trust people and trust their judgment.

[00:43:18] And a good leader also understands their blind spots.

[00:43:21] So they've got people in their corner who can call them out when they've overlooked a particular

[00:43:26] matter.

[00:43:27] A good leader will be someone who can empower the team to be able to see those things and

[00:43:35] move forward in a direction and then scale.

[00:43:37] A good leader is always someone who is able to then scale where you can run multiple projects

[00:43:43] concurrently.

[00:43:44] And that's an area that often gets overlooked, those last two questions, looking after your

[00:43:49] mental state, dealing with stress, and also growing yourself as a leader because leaders

[00:43:55] attract great people.

[00:43:57] Leaders attract people that want to move forward with you.

[00:44:01] And then when you've got that mindset, you can create something special and you're enjoying

[00:44:07] it with the team as well then.

[00:44:09] When you hit a victory, it's not this thing where you're on your own celebrating it.

[00:44:14] You've got a great team around you.

[00:44:16] And part of being a great leader, and especially when it comes to the property space, is as

[00:44:20] you do well, you can be a part of the story of helping the team around you and the people

[00:44:25] that you're dealing with day to day.

[00:44:26] You can watch their lives lift as well.

[00:44:29] You can watch their lives succeed.

[00:44:30] You can watch their companies and their organizations as well move forward as you move forward as

[00:44:37] well.

[00:44:37] So leadership's so key in being a successful developer.

[00:44:41] Well, look, there's a whole lot more questions, but just for time's sake, I'm going to pull it

[00:44:47] up from there.

[00:44:48] And look, if you enjoyed this episode, I want to encourage you to make sure you like and

[00:44:53] subscribe and share this with any family, friends, or developers, or investors, or people

[00:44:58] interested in this space that you think may get something out of this session.

[00:45:02] And thanks again for listening, and we'll see you next week.