1 00:00:09,280 --> 00:00:12,600 Speaker 1: Hello and welcome to today's episode of The Money Puzzle. 2 00:00:12,880 --> 00:00:16,320 Speaker 1: I'm your host James Gerard, standing in for James Kirby 3 00:00:16,360 --> 00:00:19,319 Speaker 1: this week. Today we've got a special episode plan which 4 00:00:19,360 --> 00:00:22,760 Speaker 1: is going to be all about property development, but not 5 00:00:22,800 --> 00:00:26,320 Speaker 1: your fifty story high rise skyscraper. We're talking about property 6 00:00:26,320 --> 00:00:29,400 Speaker 1: development for the average mum and dad investor. So if 7 00:00:29,400 --> 00:00:32,000 Speaker 1: you've ever considered diving into the world of property development, 8 00:00:32,280 --> 00:00:35,800 Speaker 1: this episode is for you. We'll be breaking down the basics, 9 00:00:35,800 --> 00:00:38,280 Speaker 1: sharing tips and tricks, and discussing the ins and outs 10 00:00:38,320 --> 00:00:41,240 Speaker 1: of property development. So grab a notepad and get ready 11 00:00:41,240 --> 00:00:44,120 Speaker 1: to learn how you can start your property development journey. 12 00:00:44,400 --> 00:00:46,519 Speaker 1: And to help us with this special episode, we have 13 00:00:46,680 --> 00:00:51,200 Speaker 1: an equally special guest, di Chi Samahara, property developer at 14 00:00:51,520 --> 00:00:54,960 Speaker 1: National Buyers Agency firm Property Buyer. Welcome, Dichi. 15 00:00:55,040 --> 00:00:56,120 Speaker 2: Hello, James, how are you. 16 00:00:56,760 --> 00:00:59,880 Speaker 1: I'm doing well? Thanks for coming on today. So let's 17 00:01:00,080 --> 00:01:03,240 Speaker 1: jump straight into it. Okay, So opening the lid on 18 00:01:03,240 --> 00:01:05,920 Speaker 1: the word of property development. It's estimated that only two 19 00:01:05,959 --> 00:01:09,800 Speaker 1: to three percent of all property investors engage in development activities. 20 00:01:10,120 --> 00:01:11,520 Speaker 1: Why do you think that's the case. There's a lot 21 00:01:11,520 --> 00:01:13,520 Speaker 1: of people that buy investment properties, but not many people 22 00:01:13,560 --> 00:01:14,640 Speaker 1: that actually develop them. 23 00:01:15,760 --> 00:01:16,520 Speaker 2: Two reasons. 24 00:01:16,600 --> 00:01:21,920 Speaker 3: One is that investment and development they're completely different approach. 25 00:01:22,000 --> 00:01:26,280 Speaker 3: So property investments is more passive and you're targeting mid 26 00:01:26,319 --> 00:01:30,600 Speaker 3: to long term returns, whereas property developments is more coactive 27 00:01:31,080 --> 00:01:37,560 Speaker 3: and short to medium term form of investments. Now, availability 28 00:01:37,600 --> 00:01:42,800 Speaker 3: is another reason why there's only one or two properties 29 00:01:43,080 --> 00:01:45,680 Speaker 3: out of every hundred sites that go off with sales. 30 00:01:45,800 --> 00:01:49,560 Speaker 3: So just from the stuff, there is not many sites available, 31 00:01:49,600 --> 00:01:52,520 Speaker 3: so that puts a limit on to how many people 32 00:01:52,560 --> 00:01:55,760 Speaker 3: can actually make money as a developer. 33 00:01:55,800 --> 00:01:56,920 Speaker 2: That makes sense. 34 00:01:57,080 --> 00:01:59,400 Speaker 1: Yeah, And when you say a site, what do you 35 00:01:59,400 --> 00:02:01,080 Speaker 1: mean is that like a raw block of land is 36 00:02:01,080 --> 00:02:04,040 Speaker 1: at a house with a land that's conducive for development? 37 00:02:04,680 --> 00:02:07,680 Speaker 3: Yeah? Yeah, So look how if you have a thousand 38 00:02:07,800 --> 00:02:11,240 Speaker 3: square meter a lot with a small house at the 39 00:02:11,320 --> 00:02:13,680 Speaker 3: front with a little space on the site, that's a 40 00:02:13,680 --> 00:02:17,399 Speaker 3: potential subdivision site. If you see just another house down 41 00:02:17,400 --> 00:02:19,720 Speaker 3: the road up for sale on real estate dot com 42 00:02:19,960 --> 00:02:24,400 Speaker 3: that's really run down, but potential for renovation, that's a site. 43 00:02:24,400 --> 00:02:28,400 Speaker 3: So yeah, we call these properties sites in general. 44 00:02:28,720 --> 00:02:32,000 Speaker 1: Got it? And we see in the media almost every 45 00:02:32,080 --> 00:02:35,200 Speaker 1: day about another construction company going under, and in fact, 46 00:02:35,200 --> 00:02:38,760 Speaker 1: two thousand have gone bust. Over the past three years. 47 00:02:39,040 --> 00:02:41,400 Speaker 1: So I'm just wondering his property development is still a 48 00:02:41,440 --> 00:02:44,680 Speaker 1: profitable business and what's changed in recent years to cause 49 00:02:44,720 --> 00:02:46,880 Speaker 1: all of these liquidations and bankruptcies. 50 00:02:47,840 --> 00:02:50,960 Speaker 3: Look short aus is Yes, it's a very still profitable 51 00:02:51,200 --> 00:02:53,680 Speaker 3: for certain products in certain areas. You're just going to 52 00:02:53,720 --> 00:02:56,920 Speaker 3: be more careful what to pitch now compared to ten 53 00:02:57,000 --> 00:03:00,480 Speaker 3: twenty years ago, because the building cost is hi. 54 00:03:00,639 --> 00:03:01,639 Speaker 2: So whether you're. 55 00:03:01,480 --> 00:03:04,720 Speaker 3: Building a house, duplex, unit, townhouses, they only work in 56 00:03:04,720 --> 00:03:07,640 Speaker 3: the areas with mid to high medium prices. So if 57 00:03:07,680 --> 00:03:09,919 Speaker 3: it's going to cost you, let's say five hundred thousand 58 00:03:09,960 --> 00:03:13,959 Speaker 3: dollars to build in one suburb where the resale is 59 00:03:14,000 --> 00:03:15,960 Speaker 3: a million, but the outer suburb you can sell it 60 00:03:16,000 --> 00:03:18,920 Speaker 3: for two mil, naturally you will go two million dollars suburbs. 61 00:03:18,960 --> 00:03:22,240 Speaker 3: So I'd go as far as Castle Hill to the 62 00:03:22,240 --> 00:03:24,920 Speaker 3: west and Epping to the south. And if you're in 63 00:03:24,960 --> 00:03:28,040 Speaker 3: that's that's if you're all targeting north apart of Ridge. 64 00:03:28,440 --> 00:03:29,280 Speaker 2: But if you're in. 65 00:03:29,240 --> 00:03:32,000 Speaker 3: The south apart of Ridge, I'd say you go as 66 00:03:32,040 --> 00:03:35,320 Speaker 3: far as Stratfield to the west and Birdwood to the south. 67 00:03:35,360 --> 00:03:39,040 Speaker 3: And generally speaking, you want to be targeting only suburbs 68 00:03:39,080 --> 00:03:42,040 Speaker 3: with medium price above two mil and outside of these areas, 69 00:03:42,080 --> 00:03:46,320 Speaker 3: resale values just don't stand. So I guess that's how 70 00:03:46,400 --> 00:03:51,600 Speaker 3: you pick which areas to start your projects and to 71 00:03:51,680 --> 00:03:52,760 Speaker 3: make sure that you make money. 72 00:03:53,120 --> 00:03:56,760 Speaker 1: Got it, and say, folks, which is a term which 73 00:03:56,800 --> 00:04:00,640 Speaker 1: James Kirby would say, dayti's talking about Sydney. I mean 74 00:04:00,840 --> 00:04:02,560 Speaker 1: we do have listeners from all over the country, and 75 00:04:02,600 --> 00:04:05,440 Speaker 1: in fact I know all over the world in places 76 00:04:05,480 --> 00:04:08,240 Speaker 1: such as Dubai in Singapore, so we'll try and cover 77 00:04:08,320 --> 00:04:10,520 Speaker 1: other markets as well. But at this stage it was 78 00:04:10,760 --> 00:04:13,200 Speaker 1: Sydney that you were speaking about it, and that's where 79 00:04:13,520 --> 00:04:16,800 Speaker 1: you're based. So why did you get into a property development. 80 00:04:18,600 --> 00:04:24,560 Speaker 3: I've always wanted to become a developer, just simply because 81 00:04:24,600 --> 00:04:28,200 Speaker 3: of the lifestyle choices that you will have. So my 82 00:04:28,480 --> 00:04:31,800 Speaker 3: job is not nine to five, it's really twenty four 83 00:04:31,839 --> 00:04:35,040 Speaker 3: to seven, but I get to choose when and where 84 00:04:35,279 --> 00:04:38,600 Speaker 3: and how I want to work. Especially on post COVID 85 00:04:39,680 --> 00:04:43,800 Speaker 3: remote work has been very popular. But even before that, 86 00:04:43,960 --> 00:04:47,720 Speaker 3: I was able to live my lifestyle. So that's how 87 00:04:47,760 --> 00:04:50,160 Speaker 3: I got into it. Well, that's the reason why I 88 00:04:50,240 --> 00:04:50,640 Speaker 3: got into it. 89 00:04:51,480 --> 00:04:55,400 Speaker 1: Got it. So I'm imagining in Red Ferrari pulling up 90 00:04:55,440 --> 00:04:58,720 Speaker 1: to construction site, you pull out with your your chinos 91 00:04:58,839 --> 00:05:01,920 Speaker 1: and boots wearing hard hat. Point in telling people what 92 00:05:01,960 --> 00:05:03,320 Speaker 1: to do? Is that sort of the lifestyle of a 93 00:05:03,400 --> 00:05:04,160 Speaker 1: property developer? 94 00:05:04,480 --> 00:05:08,480 Speaker 3: Almost true, except not Ferrari or Lamborghinia. I'll drive a 95 00:05:08,560 --> 00:05:11,000 Speaker 3: white Highlux. You know, I'll get to I've got to 96 00:05:11,000 --> 00:05:12,160 Speaker 3: look at part as a developer. 97 00:05:12,240 --> 00:05:15,960 Speaker 1: So I a driver, good, good, very very practical. And 98 00:05:16,160 --> 00:05:20,280 Speaker 1: what about education? Is there anything in particular that you 99 00:05:20,720 --> 00:05:23,640 Speaker 1: have done that helped prepare you to jump into property development, 100 00:05:23,680 --> 00:05:26,640 Speaker 1: or anything with your career that helped move into property development. 101 00:05:27,520 --> 00:05:32,039 Speaker 3: I think a lot of developers have one particular profession 102 00:05:32,279 --> 00:05:36,040 Speaker 3: of their own. Otherwise, you know, you can't really get 103 00:05:36,040 --> 00:05:40,200 Speaker 3: ahead of everyone else. My case, I started as a 104 00:05:40,520 --> 00:05:42,560 Speaker 3: started as a real estate agent, so I was working 105 00:05:42,640 --> 00:05:44,200 Speaker 3: for Ray White First National. 106 00:05:45,240 --> 00:05:46,239 Speaker 2: Did it for a few years. 107 00:05:47,480 --> 00:05:49,719 Speaker 3: Made you know, some seed money, but it was mainly 108 00:05:49,839 --> 00:05:53,880 Speaker 3: getting that that practice and also experience in the real 109 00:05:54,000 --> 00:05:59,880 Speaker 3: estate environment. But some other people, they could be a 110 00:06:00,080 --> 00:06:02,600 Speaker 3: builder or train any kind of trade to have that 111 00:06:02,760 --> 00:06:05,400 Speaker 3: sort of knowledge ahead of everyone else. You could be 112 00:06:05,480 --> 00:06:08,200 Speaker 3: a banker or an accountant who will know the numbers, 113 00:06:08,279 --> 00:06:11,960 Speaker 3: really will. So I think as long as you have 114 00:06:12,360 --> 00:06:16,120 Speaker 3: that one particular profession. It doesn't have to be this 115 00:06:16,360 --> 00:06:19,640 Speaker 3: particular profession. If that makes sense. 116 00:06:20,320 --> 00:06:23,600 Speaker 1: Yeah, got it, that absolutely makes sense. Understanding where your 117 00:06:23,640 --> 00:06:27,159 Speaker 1: personal straps are and then applying that to the property development. 118 00:06:27,279 --> 00:06:31,719 Speaker 1: So next time, I'm curious about what type of average investors. 119 00:06:31,760 --> 00:06:34,720 Speaker 1: So we're talking about mum and dad investors, what sort 120 00:06:34,760 --> 00:06:38,000 Speaker 1: of characteristics or traits do you think they need to 121 00:06:38,040 --> 00:06:39,800 Speaker 1: get started in property development. Do they need to have 122 00:06:39,920 --> 00:06:43,720 Speaker 1: a high level of to tolerate risk. Do they need 123 00:06:43,839 --> 00:06:46,640 Speaker 1: to have certain experience? Do they need to have a 124 00:06:46,680 --> 00:06:48,720 Speaker 1: certain amount of backing but behind them? So you know, 125 00:06:48,760 --> 00:06:51,080 Speaker 1: who's sort of suited for property development? 126 00:06:51,839 --> 00:06:55,080 Speaker 3: I think someone who is proactive and once more control 127 00:06:55,279 --> 00:06:58,600 Speaker 3: over the course of their investments and often in the 128 00:06:58,640 --> 00:07:02,320 Speaker 3: shorten to around time. So if you invest in a properties, 129 00:07:03,800 --> 00:07:06,000 Speaker 3: you know, two bedroom unit for example, there's not much 130 00:07:06,120 --> 00:07:09,680 Speaker 3: you can do to you know, control this due course. 131 00:07:09,680 --> 00:07:13,240 Speaker 3: Whereas property developments it's all about you know, making sure 132 00:07:13,280 --> 00:07:15,760 Speaker 3: you control it really well so that it doesn't go wrong. 133 00:07:16,440 --> 00:07:20,360 Speaker 3: So I think the approach, if you enjoy that proactive approach, 134 00:07:20,560 --> 00:07:23,840 Speaker 3: I think you're suited to be a developer. And also 135 00:07:24,560 --> 00:07:26,840 Speaker 3: that you need to have really thick skin on the 136 00:07:26,920 --> 00:07:30,840 Speaker 3: face and also just tenacity to go for you know, 137 00:07:30,920 --> 00:07:32,840 Speaker 3: one after another, so. 138 00:07:33,080 --> 00:07:33,600 Speaker 2: Go get up. 139 00:07:33,760 --> 00:07:36,960 Speaker 1: Yeah. Interesting, that's interesting about the comments about the thick skin. 140 00:07:37,240 --> 00:07:42,760 Speaker 1: So what happens in the world of property development that 141 00:07:43,040 --> 00:07:45,080 Speaker 1: requires you to have a thick skin? Is it dealing 142 00:07:45,120 --> 00:07:47,680 Speaker 1: with people that you're buying the properties from. Is it 143 00:07:47,760 --> 00:07:51,200 Speaker 1: dealing with the builders that you engage in? Curious about 144 00:07:51,280 --> 00:07:52,920 Speaker 1: some of the stress points. 145 00:07:55,000 --> 00:07:57,320 Speaker 2: Look, you deal with a lot of people. 146 00:07:57,520 --> 00:08:02,120 Speaker 3: They I'll personally love of going direct to vendors instead 147 00:08:02,120 --> 00:08:05,600 Speaker 3: of have gone through asians because I get quality sites 148 00:08:05,640 --> 00:08:09,280 Speaker 3: that way, or at least I'll believe that when I 149 00:08:09,360 --> 00:08:12,040 Speaker 3: go door knocking, and people usually don't like people hocking 150 00:08:12,080 --> 00:08:14,520 Speaker 3: on your door, So you're gonna you're gonna have thick 151 00:08:14,600 --> 00:08:16,400 Speaker 3: enough skin on your face to have the door slammed 152 00:08:16,440 --> 00:08:20,080 Speaker 3: in your face every now and then. But also is 153 00:08:20,160 --> 00:08:23,280 Speaker 3: just just talking to builders, you know that they could 154 00:08:23,280 --> 00:08:26,840 Speaker 3: be really rough and they're good people, but they come 155 00:08:26,880 --> 00:08:29,720 Speaker 3: across very aggressive sometimes, but so you've just got to 156 00:08:29,760 --> 00:08:30,120 Speaker 3: deal with it. 157 00:08:31,680 --> 00:08:32,880 Speaker 2: Not all of them, by the way, but. 158 00:08:33,880 --> 00:08:37,840 Speaker 3: Yeah, generally stress tolerance level that's very important. 159 00:08:37,880 --> 00:08:39,520 Speaker 2: So yeah, that's yeah, the think goes better. 160 00:08:39,559 --> 00:08:43,959 Speaker 1: I think I understood and for someone who's wanted to 161 00:08:43,960 --> 00:08:46,240 Speaker 1: get started out in property development. Is there anything that 162 00:08:46,400 --> 00:08:49,599 Speaker 1: you had come across that would help any websites with 163 00:08:49,760 --> 00:08:53,839 Speaker 1: useful information? And the YouTube courses are their template spreadsheets 164 00:08:53,880 --> 00:08:56,720 Speaker 1: out there is anything to sort of kick start somebody 165 00:08:56,720 --> 00:08:57,839 Speaker 1: who wants to learn more about this? 166 00:08:58,679 --> 00:09:01,920 Speaker 3: Yeah, yeah, look, I mean there's not any particular course 167 00:09:02,000 --> 00:09:04,800 Speaker 3: that you want to enroll yourself in, so it's not necessary. 168 00:09:05,280 --> 00:09:08,680 Speaker 3: All the how to develop property one oh one type 169 00:09:09,360 --> 00:09:12,559 Speaker 3: of videos are all over YouTube, So just watch something 170 00:09:12,640 --> 00:09:15,439 Speaker 3: that's well edited and it makes sense to you what 171 00:09:15,559 --> 00:09:22,680 Speaker 3: you enjoy. But I think practicing running feesos is better 172 00:09:22,800 --> 00:09:25,680 Speaker 3: than any other training that you can get off these videos, 173 00:09:25,679 --> 00:09:28,079 Speaker 3: to be honest with you, So start with a simple 174 00:09:28,160 --> 00:09:32,600 Speaker 3: renovation job. Compare the buying price to the resale value 175 00:09:32,600 --> 00:09:34,240 Speaker 3: and see if there's in you're not enough margin in 176 00:09:34,320 --> 00:09:38,480 Speaker 3: it after considering not just build costs but GSD levees interest. 177 00:09:38,600 --> 00:09:41,079 Speaker 3: You can find these on domain real estate dot com 178 00:09:41,120 --> 00:09:44,920 Speaker 3: dot au and yeah, once you get used to it, 179 00:09:45,080 --> 00:09:47,520 Speaker 3: then you know you can do one for new build 180 00:09:47,600 --> 00:09:51,400 Speaker 3: and then duplexed, then maybe two to three subdivision and 181 00:09:51,520 --> 00:09:54,839 Speaker 3: even if you have no idea about anything, now trust me, 182 00:09:54,920 --> 00:09:57,920 Speaker 3: once you have run a hundred feesos and read through 183 00:09:57,960 --> 00:10:00,960 Speaker 3: a few led p s DCPs. You will start feeling 184 00:10:01,000 --> 00:10:02,959 Speaker 3: more comfortable in what you're doing and move on to 185 00:10:03,080 --> 00:10:05,000 Speaker 3: considering the first real life project. 186 00:10:06,040 --> 00:10:09,360 Speaker 1: Perfect. Yeah, so step by step, start with renovating a 187 00:10:09,400 --> 00:10:12,120 Speaker 1: bathroom and then work your way up to doing a 188 00:10:12,360 --> 00:10:14,960 Speaker 1: ten subdivision lot development somewhere. 189 00:10:15,679 --> 00:10:16,160 Speaker 2: Yeah, that's it. 190 00:10:16,400 --> 00:10:19,720 Speaker 3: Just just if it's just practice practicing fees it it's free. 191 00:10:19,720 --> 00:10:21,600 Speaker 3: You don't losing your money, So that's the best way 192 00:10:21,640 --> 00:10:21,960 Speaker 3: to learn. 193 00:10:23,080 --> 00:10:25,680 Speaker 1: Yeah, it's a good point. Looking in your own backyard 194 00:10:26,440 --> 00:10:29,760 Speaker 1: pun intended. So looking in your own property portfolio and 195 00:10:29,920 --> 00:10:33,000 Speaker 1: seeing if there's any scope to improve the value of 196 00:10:33,160 --> 00:10:36,360 Speaker 1: existing properties you have. So I suspect that you could 197 00:10:36,360 --> 00:10:38,520 Speaker 1: have a look at things like can I build a 198 00:10:38,559 --> 00:10:41,040 Speaker 1: grany flat in the back of an investment property? Do 199 00:10:41,160 --> 00:10:45,080 Speaker 1: I have enough land to subdivide? Is it worthwhile doing 200 00:10:45,280 --> 00:10:48,480 Speaker 1: a knockdown and rebuild or a knockdown and building townhouses 201 00:10:48,960 --> 00:10:50,640 Speaker 1: on the site, or is it just worth maybe doing 202 00:10:50,760 --> 00:10:54,120 Speaker 1: a renovation, and as you said, Dichi, looking at the 203 00:10:54,200 --> 00:10:57,600 Speaker 1: cost of the renovation and then afterwards, what's that uplifting 204 00:10:57,800 --> 00:11:01,400 Speaker 1: value of the property. And if you find that that 205 00:11:01,559 --> 00:11:03,720 Speaker 1: worked well on your own portfolio, then maybe you can 206 00:11:03,720 --> 00:11:07,680 Speaker 1: get started and looking for other sites to purchase, not so. 207 00:11:07,800 --> 00:11:11,640 Speaker 3: Much your own portfolios. You do your practice rounds on 208 00:11:12,280 --> 00:11:15,839 Speaker 3: looking for sites for sale on real estate dot com 209 00:11:16,160 --> 00:11:20,000 Speaker 3: or domain dot com dot au because usually your portfolio 210 00:11:20,720 --> 00:11:25,559 Speaker 3: is not necessarily suited for property developments. You got to 211 00:11:26,320 --> 00:11:29,079 Speaker 3: for the development project to work, you've got to get 212 00:11:29,120 --> 00:11:30,880 Speaker 3: it right from the start, at the buy in. 213 00:11:31,280 --> 00:11:32,720 Speaker 2: So if you already have. 214 00:11:32,760 --> 00:11:35,839 Speaker 3: An investment property portfolio, chances out it wasn't bought for 215 00:11:35,920 --> 00:11:40,040 Speaker 3: development purposes, so you don't often find something profitable within 216 00:11:40,120 --> 00:11:41,920 Speaker 3: your own portfolio. It's just going to start from the 217 00:11:43,000 --> 00:11:43,480 Speaker 3: number one. 218 00:11:43,559 --> 00:11:45,560 Speaker 2: Step one. It was just to find and buy the. 219 00:11:45,600 --> 00:11:48,439 Speaker 1: Side, got it. So your suggestion is to be purposeful 220 00:11:48,600 --> 00:11:50,760 Speaker 1: with it. Don't look at what you have and try 221 00:11:50,840 --> 00:11:53,520 Speaker 1: and make a triangle fit into a square hole and 222 00:11:54,480 --> 00:11:58,040 Speaker 1: develop your existing asset to start from scratch. Correct. 223 00:11:58,200 --> 00:11:58,560 Speaker 2: Correct. 224 00:11:59,080 --> 00:12:02,800 Speaker 3: The expression that I use always is that no matter 225 00:12:02,880 --> 00:12:06,400 Speaker 3: how well you cook a rock, you can't make it taste. 226 00:12:06,160 --> 00:12:06,679 Speaker 2: Like a steak. 227 00:12:07,679 --> 00:12:10,360 Speaker 3: So you've just got to Yeah, the property the site 228 00:12:10,559 --> 00:12:12,200 Speaker 3: has to be right from the start. 229 00:12:12,480 --> 00:12:15,360 Speaker 1: Yeah, that makes sense, all right. Well, talking about property 230 00:12:15,480 --> 00:12:17,560 Speaker 1: developments and the different types, can you run us through 231 00:12:17,640 --> 00:12:19,880 Speaker 1: what the different types of property developments are that maybe 232 00:12:19,920 --> 00:12:23,200 Speaker 1: an average mum or dad could consider. So I'm thinking 233 00:12:23,240 --> 00:12:26,400 Speaker 1: about things like buying a vacant block of land. Is 234 00:12:26,440 --> 00:12:28,640 Speaker 1: that maybe better to do? Should you buy something in 235 00:12:28,679 --> 00:12:31,280 Speaker 1: an established area with an old house on it? Should 236 00:12:31,320 --> 00:12:34,959 Speaker 1: you be looking at subdivisions, knockdowns? And there's a lot 237 00:12:35,040 --> 00:12:38,280 Speaker 1: of different options or spectrum of options when you say 238 00:12:38,320 --> 00:12:41,679 Speaker 1: the word property development. But for the average sort mum 239 00:12:41,760 --> 00:12:43,800 Speaker 1: and dad investor, can you run me through some of 240 00:12:43,840 --> 00:12:45,719 Speaker 1: the more common types of developments that they might be 241 00:12:45,760 --> 00:12:46,640 Speaker 1: able to get involved in. 242 00:12:47,840 --> 00:12:53,120 Speaker 3: Look everything you mentioned, renovation, new build, duplex, subdivisions, they're 243 00:12:53,160 --> 00:12:56,800 Speaker 3: generally a good place to start because they're less factors 244 00:12:56,840 --> 00:13:00,079 Speaker 3: that could go wrong. This is important because if the 245 00:13:00,160 --> 00:13:03,079 Speaker 3: project does go wrong for some reason, why you have 246 00:13:03,280 --> 00:13:06,720 Speaker 3: less to lose. It's actually very hard to lose money 247 00:13:06,800 --> 00:13:09,559 Speaker 3: as long as you're only developing one or two keys, 248 00:13:10,000 --> 00:13:13,240 Speaker 3: because these if you're only building one or two keys, 249 00:13:13,640 --> 00:13:17,920 Speaker 3: the potential debt can be managed on the personal level, 250 00:13:17,960 --> 00:13:20,319 Speaker 3: whereas if you had like five ten kids going at 251 00:13:20,320 --> 00:13:22,560 Speaker 3: the same time, then quite often that's enough. 252 00:13:22,520 --> 00:13:25,760 Speaker 2: To bankrupt you. So that would be where I'll start. 253 00:13:25,880 --> 00:13:27,479 Speaker 3: If I was just starting out today. 254 00:13:28,280 --> 00:13:32,840 Speaker 1: Okay, and then we're choosing a builder, which is central 255 00:13:32,920 --> 00:13:36,400 Speaker 1: to development. If you're knocking down and you're building stuff 256 00:13:36,840 --> 00:13:40,120 Speaker 1: over the years, how have you found a knack at 257 00:13:40,280 --> 00:13:43,719 Speaker 1: picking developers? So, builders, what are you looking for with 258 00:13:43,920 --> 00:13:47,640 Speaker 1: the builder themselves or through their company to have the 259 00:13:47,720 --> 00:13:50,160 Speaker 1: best chance that they're going to complete the build in 260 00:13:50,280 --> 00:13:52,400 Speaker 1: the time frame, in the budget, in the specs that 261 00:13:52,480 --> 00:13:52,800 Speaker 1: you want. 262 00:13:54,040 --> 00:13:59,679 Speaker 3: Look, I would be looking at not the cheapest. First 263 00:13:59,720 --> 00:14:02,600 Speaker 3: of all, I'll run a tender always at least three. 264 00:14:02,920 --> 00:14:05,840 Speaker 3: But someone don't necessarily go for the cheapest builder. 265 00:14:06,360 --> 00:14:09,120 Speaker 2: I would go for someone that. 266 00:14:10,720 --> 00:14:15,719 Speaker 3: Can justify what they're charging for and how much. And 267 00:14:16,320 --> 00:14:17,800 Speaker 3: because at the end of the day, you know, if 268 00:14:17,840 --> 00:14:20,880 Speaker 3: you find a builder that is way cheaper than everyone else's, 269 00:14:20,920 --> 00:14:24,240 Speaker 3: chances are they are trying to collect as much cash 270 00:14:24,280 --> 00:14:28,160 Speaker 3: as possible before they fall, for example. So mate, you 271 00:14:28,240 --> 00:14:31,760 Speaker 3: look at if you want to be very very diligent 272 00:14:31,800 --> 00:14:33,960 Speaker 3: about it, you want to be just tracking how many 273 00:14:34,080 --> 00:14:37,600 Speaker 3: jobs they have. You can even try trying to find 274 00:14:37,640 --> 00:14:42,320 Speaker 3: out how much asset they have to assess the risk 275 00:14:42,440 --> 00:14:46,040 Speaker 3: of them going bankrupt, which is probably not a silly 276 00:14:46,120 --> 00:14:49,960 Speaker 3: thing to do in this market right now, that's. 277 00:14:49,800 --> 00:14:52,840 Speaker 1: A good point. All right, Well, moving along to different 278 00:14:52,960 --> 00:14:56,600 Speaker 1: budgets for property development. Some people listening might have five 279 00:14:56,680 --> 00:14:59,920 Speaker 1: hundred thousand to invest into a property and the development. 280 00:15:00,160 --> 00:15:03,520 Speaker 1: Others might have five million dollars. So could we maybe 281 00:15:03,560 --> 00:15:05,600 Speaker 1: break it down to a few different price points they 282 00:15:05,640 --> 00:15:08,320 Speaker 1: say less than a million dollars, then maybe one to 283 00:15:08,440 --> 00:15:12,200 Speaker 1: three million, and then three million to maybe six million dollars. 284 00:15:12,240 --> 00:15:14,200 Speaker 1: And if we could open up to around the country 285 00:15:14,240 --> 00:15:17,400 Speaker 1: as well rather than just focus on Sydney, what type 286 00:15:17,440 --> 00:15:19,880 Speaker 1: of property development would you suggest for each of those 287 00:15:19,920 --> 00:15:22,600 Speaker 1: three sort of budgets. And again there's not advice to anyone, 288 00:15:22,640 --> 00:15:25,880 Speaker 1: it's more just sort of ideas of, you know, where 289 00:15:26,440 --> 00:15:30,200 Speaker 1: might be attractive with regards to the different types of 290 00:15:30,240 --> 00:15:33,280 Speaker 1: property development that you could potentially do. So to recap 291 00:15:33,400 --> 00:15:36,120 Speaker 1: listen a million, second category one to three million, and 292 00:15:36,200 --> 00:15:37,760 Speaker 1: third category three to six million. 293 00:15:38,360 --> 00:15:42,240 Speaker 3: Sure sure, Look, you're borrowing capacity and cash in hand 294 00:15:42,320 --> 00:15:44,440 Speaker 3: at two different things. So I'm going to talk very 295 00:15:44,560 --> 00:15:47,240 Speaker 3: generically to you because that million dollars could mean anything. 296 00:15:47,320 --> 00:15:50,000 Speaker 3: So say if you had two hundred thousand dollars cash 297 00:15:50,120 --> 00:15:52,440 Speaker 3: save up and then you can borrow let's say sixty 298 00:15:52,480 --> 00:15:54,800 Speaker 3: percent of VR, that's three hundred K you can buy 299 00:15:54,920 --> 00:15:57,440 Speaker 3: up to half a million dollars in property, but if 300 00:15:57,480 --> 00:15:59,920 Speaker 3: you can borrow up to eighty percent in metro area, 301 00:16:00,440 --> 00:16:02,680 Speaker 3: you can buy up to a million dollars in property. 302 00:16:02,800 --> 00:16:07,600 Speaker 3: But I spoke about having the minimum threshfold a threshold 303 00:16:07,640 --> 00:16:10,520 Speaker 3: for meeting prices earlier on. If we spent the whole 304 00:16:10,600 --> 00:16:12,520 Speaker 3: two hundred k that you've saved up, you have no 305 00:16:12,680 --> 00:16:14,920 Speaker 3: money left to even run. A DA should be your 306 00:16:14,960 --> 00:16:18,520 Speaker 3: first step. So when you have less than say half 307 00:16:18,560 --> 00:16:20,960 Speaker 3: a million dollars in cash, you can't really fund purchase 308 00:16:21,080 --> 00:16:23,480 Speaker 3: of the property and pay for the DA on your own. 309 00:16:23,600 --> 00:16:28,080 Speaker 3: So until you surp surpass that benchmark, you should really 310 00:16:28,120 --> 00:16:30,320 Speaker 3: team up with someone. Otherwise you just can't get that 311 00:16:30,560 --> 00:16:32,720 Speaker 3: traction you need. But once you hit that set of 312 00:16:32,760 --> 00:16:39,320 Speaker 3: half a million dollars mark, then I would be looking 313 00:16:39,560 --> 00:16:42,680 Speaker 3: at some suit of simple way to probably look at 314 00:16:43,040 --> 00:16:47,560 Speaker 3: is if you're targeting its minimum two million dollars meeting 315 00:16:48,320 --> 00:16:51,160 Speaker 3: miting price suburb and then if you have let's say 316 00:16:51,640 --> 00:16:54,120 Speaker 3: less than million dollars, let's say your first cattery half 317 00:16:54,120 --> 00:16:57,120 Speaker 3: a million dollars to million dollars, that will be enough 318 00:16:57,280 --> 00:17:01,200 Speaker 3: to buy yourself let's say million, two million, one and 319 00:17:01,240 --> 00:17:06,160 Speaker 3: a half million dollars property for subdivisions, So you could 320 00:17:06,240 --> 00:17:11,320 Speaker 3: be targeting where would that be Earlwood would be would 321 00:17:11,359 --> 00:17:14,880 Speaker 3: have that around sort of just or under two million 322 00:17:14,920 --> 00:17:18,040 Speaker 3: dollars mark, so you will probably pick up a potential 323 00:17:18,760 --> 00:17:21,680 Speaker 3: maybe a knockdown rebuild site in earl would to build 324 00:17:21,920 --> 00:17:24,399 Speaker 3: one extra key on maybe two. But if you have 325 00:17:24,760 --> 00:17:29,480 Speaker 3: one to three million dollars, then you can start running four. 326 00:17:29,359 --> 00:17:32,520 Speaker 2: Different key four let's say four more than four keys. 327 00:17:32,680 --> 00:17:36,520 Speaker 3: So you could be running a project that could that 328 00:17:36,640 --> 00:17:40,960 Speaker 3: you build four townhouses in a medium sort of average area, 329 00:17:41,480 --> 00:17:43,119 Speaker 3: or you can choose to run eight in. 330 00:17:43,119 --> 00:17:46,240 Speaker 2: A cheaper area, or you can choose to run two 331 00:17:46,640 --> 00:17:50,840 Speaker 2: let's say very expensive duplexes in more. 332 00:17:50,760 --> 00:17:53,080 Speaker 3: Like eastern suburbs or lower north Shore. 333 00:17:55,000 --> 00:17:55,240 Speaker 2: Three. 334 00:17:55,520 --> 00:17:58,280 Speaker 3: When you have three to six million dollars, then you 335 00:17:58,960 --> 00:18:01,920 Speaker 3: and if this was hash not your borrowing capacity, once 336 00:18:02,000 --> 00:18:04,880 Speaker 3: you have three million dollars six million dollars, you start 337 00:18:04,960 --> 00:18:05,359 Speaker 3: moving on. 338 00:18:05,480 --> 00:18:11,200 Speaker 2: To sort of do you really want to be putting 339 00:18:11,280 --> 00:18:11,879 Speaker 2: that three to. 340 00:18:11,960 --> 00:18:14,400 Speaker 3: Six million dollars to run your own project? You could 341 00:18:14,520 --> 00:18:18,400 Speaker 3: be better off maybe teaming up with a bigger developer 342 00:18:18,600 --> 00:18:22,200 Speaker 3: and you go in as a potential equity partner to 343 00:18:22,640 --> 00:18:27,840 Speaker 3: have them delivery let's say twenty thirty forty townhouses units, 344 00:18:28,400 --> 00:18:35,160 Speaker 3: and then you can leverage off their professional experience and capabilities. 345 00:18:36,000 --> 00:18:37,680 Speaker 2: So that does that make sense? 346 00:18:37,800 --> 00:18:40,840 Speaker 3: You up to about three mil, you you will be 347 00:18:41,640 --> 00:18:45,120 Speaker 3: you're you know, if you're a novous developer, then run 348 00:18:45,160 --> 00:18:48,080 Speaker 3: your own project. But after three mel, you'll you know, 349 00:18:48,200 --> 00:18:50,679 Speaker 3: you want to be working with bigger guys. That's how 350 00:18:50,760 --> 00:18:51,639 Speaker 3: I feel. 351 00:18:52,280 --> 00:18:55,199 Speaker 1: Yeah, that makes sense. And for everyone who's not in Sydney. 352 00:18:55,280 --> 00:18:57,639 Speaker 1: Earlwood is a suburb that's sort of about ten to 353 00:18:57,680 --> 00:19:01,919 Speaker 1: fifteen kilometers outside of Sydney b D. Did I hear 354 00:19:01,920 --> 00:19:04,840 Speaker 1: you say something about keys. I think you said eight keys? 355 00:19:05,760 --> 00:19:07,440 Speaker 1: What do you mean by by that? With regards? 356 00:19:07,760 --> 00:19:11,520 Speaker 3: Yeah, look, Iran, people say it differently. I say keys, 357 00:19:12,640 --> 00:19:15,720 Speaker 3: but if some people say sites per site or dwellings. 358 00:19:15,800 --> 00:19:19,560 Speaker 3: But it's a number of literally a key to open 359 00:19:19,640 --> 00:19:22,200 Speaker 3: the door. So if you say I'm doing eight keys, 360 00:19:22,320 --> 00:19:25,440 Speaker 3: that means I'm dwelling building eight dwellings, or some people 361 00:19:25,600 --> 00:19:27,480 Speaker 3: you know might just say, oh, I'm doing eight dwellings. 362 00:19:27,880 --> 00:19:31,879 Speaker 3: If I say four keys, I'm building full houses or units. 363 00:19:32,359 --> 00:19:34,960 Speaker 1: Got it? That makes sense? There we go everyone, We're 364 00:19:35,040 --> 00:19:38,240 Speaker 1: starting to learn the property development lingo keys. I haven't 365 00:19:38,280 --> 00:19:38,920 Speaker 1: heard of that much. 366 00:19:39,640 --> 00:19:44,200 Speaker 3: The keys are usually used to describe hotels and motels, 367 00:19:44,240 --> 00:19:46,440 Speaker 3: but I started using this because a lot of people 368 00:19:46,560 --> 00:19:49,040 Speaker 3: understand keys more than when I say sites. 369 00:19:49,560 --> 00:19:51,640 Speaker 1: Yeah no, no, that makes sense. All right, Well, before 370 00:19:51,680 --> 00:19:53,800 Speaker 1: we get into the nuts and bolts of the property 371 00:19:53,840 --> 00:19:58,000 Speaker 1: development process, le let's take a pause for a break. Hello, 372 00:19:58,119 --> 00:20:00,400 Speaker 1: and welcome back to the money part. As the Lame 373 00:20:00,480 --> 00:20:03,359 Speaker 1: James Gerard, writer contributed to the Wealth section of the 374 00:20:03,400 --> 00:20:08,160 Speaker 1: Australian newspaper and also Financial Advisor with Financial Advisor dot 375 00:20:08,280 --> 00:20:11,080 Speaker 1: com dot Au. And this week on the show, I 376 00:20:11,200 --> 00:20:16,520 Speaker 1: have die Gi Samahara, Director Property Developer and from Buyers 377 00:20:16,520 --> 00:20:20,400 Speaker 1: agency firm Property Buyer. So now let's have a chat 378 00:20:20,440 --> 00:20:22,600 Speaker 1: about the development process. But before we do that, I 379 00:20:22,680 --> 00:20:24,920 Speaker 1: just want to remind everybody that what we're discussing is 380 00:20:25,000 --> 00:20:28,040 Speaker 1: general advice. It's not personal advice. So please don't go 381 00:20:28,160 --> 00:20:31,040 Speaker 1: out there and start buying properties and getting shovels in 382 00:20:31,359 --> 00:20:35,440 Speaker 1: developing stuff. Go seek advice from a qualified professional before 383 00:20:35,480 --> 00:20:38,880 Speaker 1: you do anything. All right, Diji, let let's jump into 384 00:20:38,920 --> 00:20:41,840 Speaker 1: the development process. So can you run me through what 385 00:20:41,960 --> 00:20:46,320 Speaker 1: a typical development process would be from the beginning stage 386 00:20:46,400 --> 00:20:49,080 Speaker 1: to the finishing stage and then some of the common 387 00:20:49,200 --> 00:20:51,800 Speaker 1: challenges that you would face in that. And let's maybe 388 00:20:51,880 --> 00:20:55,040 Speaker 1: work off the example of let's say a Sydney or 389 00:20:55,119 --> 00:20:58,639 Speaker 1: Melbourne thousand square meter property with an old house on it. 390 00:20:58,880 --> 00:21:01,680 Speaker 1: The local Environment plan from the council is conducive to 391 00:21:01,800 --> 00:21:04,840 Speaker 1: be able to knock down the old house and subdivide 392 00:21:04,880 --> 00:21:09,280 Speaker 1: it and build two townhouses on separate titles there. So 393 00:21:09,400 --> 00:21:12,560 Speaker 1: can you run me through from we've founded the property, 394 00:21:12,600 --> 00:21:14,800 Speaker 1: we've agreed on the price, how do we get from 395 00:21:14,880 --> 00:21:19,320 Speaker 1: that point through to the keys having these two townhouses 396 00:21:19,359 --> 00:21:20,720 Speaker 1: and selling those off for a profit. 397 00:21:21,119 --> 00:21:26,040 Speaker 2: Look, if I was to really broadly. 398 00:21:28,160 --> 00:21:31,040 Speaker 3: Just ordered to process that will be acquisition which you 399 00:21:31,200 --> 00:21:35,359 Speaker 3: just mentioned, you get the offer and acceptance exchange sets 400 00:21:35,400 --> 00:21:40,400 Speaker 3: on it. Now you've got the DA process, So that's 401 00:21:40,440 --> 00:21:43,680 Speaker 3: your development application. You want that approved body council so 402 00:21:43,960 --> 00:21:48,000 Speaker 3: that you can build those two houses. Now you then 403 00:21:48,160 --> 00:21:54,280 Speaker 3: move on to c C process construction certificate. So DA 404 00:21:54,640 --> 00:21:58,600 Speaker 3: is an approval to build, the plan to build the 405 00:21:58,720 --> 00:22:03,160 Speaker 3: construction stifficult, it is an approval to actually start building. 406 00:22:03,800 --> 00:22:05,560 Speaker 2: What's on the planet, And what. 407 00:22:05,640 --> 00:22:09,240 Speaker 1: About the private certifier? You would you typically try and 408 00:22:09,280 --> 00:22:13,240 Speaker 1: go through a private certifier process or development application through council. 409 00:22:14,400 --> 00:22:14,600 Speaker 2: Yeah. 410 00:22:14,680 --> 00:22:17,200 Speaker 3: Yeah, Look, you know, if you if you're what you're 411 00:22:18,480 --> 00:22:22,440 Speaker 3: trying to get approved is all compliant to the council rules, 412 00:22:22,560 --> 00:22:25,280 Speaker 3: you should definitely go through private certifier. Saves a lot 413 00:22:25,280 --> 00:22:28,040 Speaker 3: of time and money. But then if you want to 414 00:22:28,800 --> 00:22:35,280 Speaker 3: do anything that is beyond the permissible rules or parameters 415 00:22:35,320 --> 00:22:37,360 Speaker 3: that the Council give, which you want to be doing 416 00:22:37,440 --> 00:22:41,240 Speaker 3: to turbo charge your value, you have to go through DA. 417 00:22:41,640 --> 00:22:44,000 Speaker 3: But yeah, if you're just looking to sub bridge your 418 00:22:44,000 --> 00:22:47,280 Speaker 3: backyard or renovate, yes, private certifier perfect. 419 00:22:47,280 --> 00:22:49,920 Speaker 1: All right, So we're up to construction certificate which allows 420 00:22:49,960 --> 00:22:52,360 Speaker 1: you to construct and then what happens from there. 421 00:22:52,440 --> 00:22:56,600 Speaker 3: So once you have that construction certificate and pay your 422 00:22:56,800 --> 00:23:01,080 Speaker 3: section fees levees, you get to the first. 423 00:23:01,000 --> 00:23:04,440 Speaker 2: Draw down we call it is when you start. This 424 00:23:04,640 --> 00:23:08,120 Speaker 2: is when everything starts. You can't go back. 425 00:23:08,200 --> 00:23:13,000 Speaker 3: You've borrowed your first dollar from your construction financy and 426 00:23:13,400 --> 00:23:14,479 Speaker 3: the construction starts. 427 00:23:15,040 --> 00:23:17,200 Speaker 1: Now, okay, and sort of how long would that be 428 00:23:17,320 --> 00:23:20,160 Speaker 1: from the day you've settled the property until you start 429 00:23:20,200 --> 00:23:22,240 Speaker 1: to draw down on that loan to construct? Like, how 430 00:23:22,280 --> 00:23:26,600 Speaker 1: long roughly is that approval process for a typical townhouse 431 00:23:26,800 --> 00:23:28,920 Speaker 1: side in say Sydney or Melbourne. 432 00:23:29,880 --> 00:23:34,360 Speaker 3: Look, the last subdivision that I've done two lots out 433 00:23:34,400 --> 00:23:38,520 Speaker 3: in Kringai area that took me four months so and 434 00:23:38,760 --> 00:23:41,960 Speaker 3: another suburban b graft that took me four months. So 435 00:23:42,480 --> 00:23:46,240 Speaker 3: two lots subdivisions. It doesn't take as much as long 436 00:23:46,320 --> 00:23:48,360 Speaker 3: as you know it's compliant. So you're looking at four 437 00:23:48,400 --> 00:23:52,880 Speaker 3: to six months for the DA. Now you've got three 438 00:23:52,960 --> 00:23:56,600 Speaker 3: months CC. Then after it depends when you settle. You 439 00:23:56,640 --> 00:23:59,520 Speaker 3: can settle any time. You can choose to settle on 440 00:23:59,680 --> 00:24:04,440 Speaker 3: DA approval or on CEC approval, but regardless, you want 441 00:24:04,480 --> 00:24:08,080 Speaker 3: to be spending as little as possible from the time 442 00:24:08,160 --> 00:24:12,280 Speaker 3: of settlement. So you start building because every day your interests. 443 00:24:13,880 --> 00:24:18,960 Speaker 2: Are at it daily. So look, I would be targeting 444 00:24:19,640 --> 00:24:21,040 Speaker 2: no more than a month. 445 00:24:21,119 --> 00:24:22,800 Speaker 3: If I had, you know, if I have to settle 446 00:24:22,840 --> 00:24:27,280 Speaker 3: on property, then start subdivision work. So yeah, and then 447 00:24:27,880 --> 00:24:31,960 Speaker 3: once the building is complete, then obviously you've got your marketing. 448 00:24:32,080 --> 00:24:37,440 Speaker 3: You can choose to market your property before construction is finished, 449 00:24:37,480 --> 00:24:43,240 Speaker 3: so off the plan. This really helps you obtain well, 450 00:24:43,240 --> 00:24:46,080 Speaker 3: at least you can set your price. You can you 451 00:24:46,200 --> 00:24:49,359 Speaker 3: can sleep at night knowing that it's all sold. But 452 00:24:49,560 --> 00:24:53,719 Speaker 3: some people choose to build finish complete building first then 453 00:24:53,840 --> 00:24:57,720 Speaker 3: cell because it has that wow factor when it's presented 454 00:24:57,800 --> 00:24:59,840 Speaker 3: to the market and you can often get higher price. 455 00:25:01,760 --> 00:25:04,840 Speaker 3: If your finance allows you to build first, then you 456 00:25:04,920 --> 00:25:09,440 Speaker 3: should in my opinion. But if you're just really really. 457 00:25:11,160 --> 00:25:13,840 Speaker 2: Leveraging a very high amount, you might. 458 00:25:13,720 --> 00:25:16,280 Speaker 3: As well just get it done and going to sell 459 00:25:16,320 --> 00:25:20,080 Speaker 3: before it start complete and just just cashing then once 460 00:25:20,160 --> 00:25:23,560 Speaker 3: it sorely have your settlement. And that's that's your normal, 461 00:25:24,440 --> 00:25:28,040 Speaker 3: typical process of doing something like this. 462 00:25:29,400 --> 00:25:31,240 Speaker 1: I understood it sounds like a piece of cake, but 463 00:25:32,000 --> 00:25:34,879 Speaker 1: sometimes it isn't. So what can go wrong or what 464 00:25:35,080 --> 00:25:38,320 Speaker 1: have you found can go wrong typically in that process 465 00:25:38,440 --> 00:25:42,199 Speaker 1: that you've just described, To. 466 00:25:42,240 --> 00:25:48,760 Speaker 3: Be honest with you, what could go wrong or unforeseen problems? 467 00:25:49,200 --> 00:25:52,080 Speaker 3: You know they're unforeseen because I can't think of it now, right, 468 00:25:52,600 --> 00:25:55,720 Speaker 3: So you always assume that there's going to be a problem. 469 00:25:55,960 --> 00:25:56,080 Speaker 2: Right. 470 00:25:56,160 --> 00:26:00,920 Speaker 3: I haven't seen a single development that didn't have one 471 00:26:01,520 --> 00:26:07,080 Speaker 3: a problem. Right, So you want to look, we spoke 472 00:26:07,119 --> 00:26:11,160 Speaker 3: about the acquisition process, you said, start off this conversation. 473 00:26:11,320 --> 00:26:13,479 Speaker 3: Let's say we agreed on a price, YadA yadaya da. 474 00:26:13,560 --> 00:26:17,399 Speaker 3: But personally I feel that the process starts majority of 475 00:26:17,480 --> 00:26:22,720 Speaker 3: the development process is in the purchasing stage, because there's 476 00:26:22,720 --> 00:26:25,119 Speaker 3: a saying in the industry that in property development, the 477 00:26:25,160 --> 00:26:27,360 Speaker 3: profit is earned on the purchase, not the sell. 478 00:26:27,800 --> 00:26:28,679 Speaker 2: So if you don't pick the. 479 00:26:28,720 --> 00:26:31,760 Speaker 3: Right project from the staff the right price, it's already 480 00:26:32,200 --> 00:26:32,720 Speaker 3: game over. 481 00:26:33,000 --> 00:26:34,560 Speaker 2: And you want to be. 482 00:26:36,320 --> 00:26:44,840 Speaker 3: Making sure the building escalation contingency project contingency. You want 483 00:26:44,920 --> 00:26:48,240 Speaker 3: to put in about ten to fifteen percent of the 484 00:26:48,400 --> 00:26:53,400 Speaker 3: total project costs towards your contingency. Otherwise you just don't 485 00:26:53,480 --> 00:26:56,919 Speaker 3: have enough to deal with those problems that it's guaranteed 486 00:26:56,960 --> 00:26:59,280 Speaker 3: to arise. But as long as you have that contingency, 487 00:26:59,320 --> 00:27:01,880 Speaker 3: you're always safe. That's how will medium my risk? 488 00:27:03,040 --> 00:27:06,720 Speaker 1: Got it? And do you micromanage each project? So for example, 489 00:27:07,119 --> 00:27:10,119 Speaker 1: if the I'm not sure what they call the concrete, 490 00:27:10,160 --> 00:27:12,520 Speaker 1: a person who lays a slab, if they say the 491 00:27:12,600 --> 00:27:15,359 Speaker 1: slabs meant to be X number of inches deep, but 492 00:27:15,440 --> 00:27:17,639 Speaker 1: they do it y number of inches deep, which is 493 00:27:17,800 --> 00:27:20,159 Speaker 1: not deep enough and it needs to be rectified, and 494 00:27:20,200 --> 00:27:23,119 Speaker 1: then that causes delays and stuff like that. Do you 495 00:27:23,359 --> 00:27:25,760 Speaker 1: try and inject yourself into each of the development to 496 00:27:25,800 --> 00:27:28,920 Speaker 1: sort of be there to oversee and make sure people 497 00:27:28,960 --> 00:27:30,520 Speaker 1: are doing the right thing, or do you have to 498 00:27:30,960 --> 00:27:34,320 Speaker 1: employ someone what they called a site manager. 499 00:27:34,440 --> 00:27:36,120 Speaker 2: Site manager, project managers. 500 00:27:36,640 --> 00:27:39,960 Speaker 3: Yeah. Look, when I was starting, Yeah, I was trying 501 00:27:40,000 --> 00:27:43,200 Speaker 3: to save every dollar. I had more time on hand, 502 00:27:43,280 --> 00:27:46,760 Speaker 3: so I was trying to do everything myself. From getting 503 00:27:46,880 --> 00:27:51,520 Speaker 3: DA for renovation, you build subdivision work. But you get 504 00:27:51,560 --> 00:27:54,240 Speaker 3: to the point where that's probably where you don't want 505 00:27:54,280 --> 00:27:55,399 Speaker 3: to be spending your money on. 506 00:27:55,640 --> 00:27:58,720 Speaker 2: And also the biggest. 507 00:27:58,400 --> 00:28:01,680 Speaker 3: Thing that I've learned was if you pay someone and 508 00:28:01,920 --> 00:28:04,000 Speaker 3: get the professional to do it for you, when there's 509 00:28:04,000 --> 00:28:07,160 Speaker 3: a problem you actually have, you can legitimately blame upon 510 00:28:07,240 --> 00:28:09,960 Speaker 3: a finger sound that person and blame blame it on him. 511 00:28:10,400 --> 00:28:14,440 Speaker 3: It's his insurance, it's his responsibility, it's not it's not you. 512 00:28:14,720 --> 00:28:18,040 Speaker 3: That that is very important. And if you can get 513 00:28:18,200 --> 00:28:22,280 Speaker 3: that responsibility and potential liabilities risks off your back for 514 00:28:23,160 --> 00:28:25,560 Speaker 3: the cost of thirty forty fifty growing, you might as 515 00:28:25,600 --> 00:28:29,920 Speaker 3: well pay. So that's that's that's you look at. You 516 00:28:30,080 --> 00:28:32,960 Speaker 3: weigh up how much enjoyment you want to get out 517 00:28:33,000 --> 00:28:36,040 Speaker 3: of managing it yourself too? Okay, really, how much risk 518 00:28:36,080 --> 00:28:37,000 Speaker 3: should I be mitigating? 519 00:28:38,200 --> 00:28:41,120 Speaker 1: Yeah? Good, good point. All right, Well, before we get 520 00:28:41,280 --> 00:28:44,200 Speaker 1: into the million dollar question of how much money can 521 00:28:44,240 --> 00:28:46,120 Speaker 1: be made, from this, we're going to take a pause 522 00:28:46,200 --> 00:28:50,920 Speaker 1: here and stop for another short break. Hello and welcome 523 00:28:50,960 --> 00:28:54,080 Speaker 1: back to the money Pazzal. I'm James Gerard, contributor in 524 00:28:54,160 --> 00:28:57,600 Speaker 1: the WORL section of The Australian and also financial advisor 525 00:28:57,800 --> 00:29:00,880 Speaker 1: at Financial Advisor dot com dot au. And today I 526 00:29:00,960 --> 00:29:05,360 Speaker 1: have Daichi Samahara, property developer and director at Buyers Agency 527 00:29:05,480 --> 00:29:09,280 Speaker 1: firm Property Buyer Okay, So as discussing before the break, 528 00:29:09,360 --> 00:29:12,280 Speaker 1: let's chat about the numbers. Let's get down to the 529 00:29:12,360 --> 00:29:16,400 Speaker 1: nitty gritty. I've heard that an average property development a 530 00:29:16,480 --> 00:29:20,440 Speaker 1: good rule of thumb return is thirty percent gain. Is 531 00:29:20,480 --> 00:29:23,120 Speaker 1: that sort of the industry rule of return? In terms 532 00:29:23,160 --> 00:29:25,360 Speaker 1: of how much it costs you to buy the property, 533 00:29:25,640 --> 00:29:28,560 Speaker 1: all of the associated costs like stamp duty, all of 534 00:29:28,600 --> 00:29:32,320 Speaker 1: the construction costs, interest on the loan, agenc fees to sell, 535 00:29:32,640 --> 00:29:35,080 Speaker 1: you should end up with about a thirty percent return. 536 00:29:36,080 --> 00:29:39,440 Speaker 3: Yeah, look, thirty percent sounds great, but first you need 537 00:29:39,520 --> 00:29:43,040 Speaker 3: to understand the difference between your profit margin and return 538 00:29:43,120 --> 00:29:46,800 Speaker 3: on investment. So profit margin is that's probably what you're 539 00:29:47,080 --> 00:29:49,080 Speaker 3: talking about, is the ratio of the net profit over 540 00:29:49,160 --> 00:29:52,200 Speaker 3: to total stop the project. But this includes your cash 541 00:29:52,320 --> 00:29:55,640 Speaker 3: and the loan you get so whereas ROI, on the 542 00:29:55,680 --> 00:29:57,920 Speaker 3: other hand, is the ratio of net profit over actual 543 00:29:58,040 --> 00:30:00,440 Speaker 3: cash use them. So for example, if you make two 544 00:30:00,520 --> 00:30:03,160 Speaker 3: hundred k profit by spending a mill to buy a 545 00:30:03,240 --> 00:30:07,080 Speaker 3: site and build including alone, your profit margin is twenty percent. However, 546 00:30:07,240 --> 00:30:09,840 Speaker 3: feel only spent two hundred K of your own cash 547 00:30:09,880 --> 00:30:12,080 Speaker 3: and borrowed the other eight hundred k, your rois one 548 00:30:12,120 --> 00:30:12,720 Speaker 3: hundred percent. 549 00:30:13,200 --> 00:30:13,320 Speaker 2: Right. 550 00:30:13,800 --> 00:30:17,640 Speaker 3: So to answer your question, James, that that thirty percent 551 00:30:18,560 --> 00:30:20,440 Speaker 3: is good if it was a profit margin, but if 552 00:30:20,720 --> 00:30:23,240 Speaker 3: as an ROI, it's probably not. Because if you put 553 00:30:23,280 --> 00:30:25,440 Speaker 3: your cash in the bank term to positive get five 554 00:30:25,480 --> 00:30:27,720 Speaker 3: percent per aandum. If you put it in debt funds 555 00:30:27,760 --> 00:30:31,280 Speaker 3: you'll get five to ten. Invested in equity funds you 556 00:30:31,280 --> 00:30:33,760 Speaker 3: should earn about sixteen to eighteen percent. But if you're 557 00:30:33,800 --> 00:30:37,040 Speaker 3: not just risking your cash but taking on debt project 558 00:30:37,120 --> 00:30:40,080 Speaker 3: risk everything, you want to be clearing at least sixty 559 00:30:40,160 --> 00:30:42,600 Speaker 3: percent per anum on your cash. So that's sixty percent 560 00:30:42,680 --> 00:30:43,200 Speaker 3: in ROI. 561 00:30:43,800 --> 00:30:46,720 Speaker 1: Just to be clear on that, it sounds like to 562 00:30:46,960 --> 00:30:50,240 Speaker 1: maximize the profit on a property development, you should minimize 563 00:30:50,440 --> 00:30:53,120 Speaker 1: your own cash that you put in and borrow more 564 00:30:53,200 --> 00:30:55,280 Speaker 1: from the bank so that the return that you get. 565 00:30:55,320 --> 00:30:58,680 Speaker 1: The gross profit, as you put it, is enhanced due 566 00:30:58,680 --> 00:31:01,080 Speaker 1: to the level of leverage or geary that you've had 567 00:31:01,240 --> 00:31:03,760 Speaker 1: over that investment slash development. Is that correct? 568 00:31:04,400 --> 00:31:07,520 Speaker 3: Slightly different topic, but it is correct in a sense. Yeah. Look, 569 00:31:07,600 --> 00:31:10,360 Speaker 3: if you can borrow more, yeah, you know you should 570 00:31:10,400 --> 00:31:13,640 Speaker 3: borrow more. But if you don't have to borrow more, 571 00:31:13,640 --> 00:31:16,760 Speaker 3: if you have enough cash, you you know you don't 572 00:31:16,760 --> 00:31:19,080 Speaker 3: want to borrow more. There's there's pros and cons, but 573 00:31:19,240 --> 00:31:22,520 Speaker 3: I was more talking about the perception of that thirty 574 00:31:22,560 --> 00:31:26,040 Speaker 3: percent that you've mentioned so as a profit. So let 575 00:31:26,080 --> 00:31:30,120 Speaker 3: me finish explaining. So profit margin, right, this assesses the 576 00:31:30,200 --> 00:31:33,680 Speaker 3: feasibility of the project itself, and the target profit margin 577 00:31:34,840 --> 00:31:38,160 Speaker 3: ranges anywhere from fifteen to thirty five percent, and this 578 00:31:38,360 --> 00:31:41,240 Speaker 3: depends on the length of time requires to complete the project. 579 00:31:41,840 --> 00:31:43,080 Speaker 2: So if you're only. 580 00:31:42,960 --> 00:31:46,480 Speaker 3: Building a house which takes twelve months to complete, then 581 00:31:46,680 --> 00:31:50,200 Speaker 3: you're okay, were ten to fifteen percent profit margin. But 582 00:31:50,280 --> 00:31:53,400 Speaker 3: if you're building multiple keys and it takes twenty four months, 583 00:31:53,480 --> 00:31:56,000 Speaker 3: you want to be aiming for twenty five percent. If 584 00:31:56,040 --> 00:31:58,440 Speaker 3: your land sub that takes three years, you want to 585 00:31:58,440 --> 00:32:02,840 Speaker 3: be targeting thirty five percent. On more so, probably the 586 00:32:02,960 --> 00:32:09,080 Speaker 3: best way to measure your profit margin if it's above 587 00:32:09,120 --> 00:32:12,240 Speaker 3: the board, is you want to clean. Let's say twelve 588 00:32:12,280 --> 00:32:14,920 Speaker 3: and a half percent per annum would be a good 589 00:32:14,960 --> 00:32:16,800 Speaker 3: benchmarked to clear for your profit margin. 590 00:32:16,880 --> 00:32:18,640 Speaker 2: So if it takes two years twenty five. 591 00:32:18,480 --> 00:32:23,280 Speaker 1: Percent perfect that that's great. And then adding in the 592 00:32:23,960 --> 00:32:29,440 Speaker 1: capital structure of cash versus debt, what would be the 593 00:32:29,680 --> 00:32:34,120 Speaker 1: typical mix. So from say, let's just pick some random numbers, 594 00:32:34,400 --> 00:32:39,160 Speaker 1: a million dollars property purchase for the site, how much 595 00:32:39,200 --> 00:32:42,160 Speaker 1: of that would be typical from a developer to put 596 00:32:42,200 --> 00:32:43,880 Speaker 1: in his cash. How much would they borrow of that? 597 00:32:44,080 --> 00:32:46,000 Speaker 1: And then when you come to the development, let's say 598 00:32:46,000 --> 00:32:48,360 Speaker 1: it's you're going to build two townhouses on the site 599 00:32:48,360 --> 00:32:50,320 Speaker 1: and they're going to be five hundred thousand dollars each. 600 00:32:50,720 --> 00:32:54,000 Speaker 1: So for that second million dollars for the development cost, 601 00:32:54,480 --> 00:32:57,600 Speaker 1: who pays for that? Is that from the developer pays part, 602 00:32:57,800 --> 00:33:00,600 Speaker 1: the bank lends all of that. What's the typical cash 603 00:33:00,680 --> 00:33:02,320 Speaker 1: freest and s debt ratio with that example? 604 00:33:02,960 --> 00:33:06,959 Speaker 3: Okay, very broadly speaking, you're filling the metro area. Banks 605 00:33:07,000 --> 00:33:09,440 Speaker 3: are generally happy to lend you up to let's say 606 00:33:09,480 --> 00:33:13,240 Speaker 3: seventy five percent of the value. So if that million 607 00:33:13,280 --> 00:33:17,040 Speaker 3: dollars was in Sydney Metro, that you'll put in two 608 00:33:17,160 --> 00:33:19,960 Speaker 3: fifty of your own cash and you're borrow seven fifty. 609 00:33:20,160 --> 00:33:22,840 Speaker 3: Whereas feel in the rural area, let's say you're around 610 00:33:22,840 --> 00:33:25,360 Speaker 3: on the Lake Marquori, they'll banks will only give you 611 00:33:25,440 --> 00:33:27,840 Speaker 3: sixty percent, so you will have to come up with 612 00:33:28,200 --> 00:33:30,760 Speaker 3: four hundred thousand dollars of your own cash and two 613 00:33:30,840 --> 00:33:35,400 Speaker 3: fifty and yeah, that's number sort of you know, stays 614 00:33:35,680 --> 00:33:41,960 Speaker 3: the same from mortgage to construction finance, so that will 615 00:33:42,040 --> 00:33:46,800 Speaker 3: be your rough deposit or cash. I should say that 616 00:33:46,920 --> 00:33:49,600 Speaker 3: you should can set up setting. 617 00:33:49,360 --> 00:33:51,800 Speaker 1: Up okay, and then on the construction side of things, 618 00:33:51,880 --> 00:33:54,000 Speaker 1: correcting me if I'm wrong, but using the same metrics 619 00:33:54,040 --> 00:33:57,800 Speaker 1: Sydney Metro, say seventy or eighty percent loan. Because the 620 00:33:57,840 --> 00:34:00,240 Speaker 1: property today is only worth a million dollars as is, 621 00:34:00,480 --> 00:34:02,720 Speaker 1: the banks are taking a view that after the two 622 00:34:02,840 --> 00:34:05,440 Speaker 1: townhouses are on, the site is going to be worth 623 00:34:06,040 --> 00:34:08,080 Speaker 1: two and a half million dollars, So they'll lend the 624 00:34:08,120 --> 00:34:11,360 Speaker 1: construction loan based on the completed value of two and 625 00:34:11,440 --> 00:34:13,160 Speaker 1: a half and lend seventy or eighty percent of that 626 00:34:13,239 --> 00:34:15,839 Speaker 1: for the construction finance, but at a higher interest rate 627 00:34:15,960 --> 00:34:17,880 Speaker 1: compared to the first loan to acquire the property. 628 00:34:18,000 --> 00:34:21,680 Speaker 3: Is that correct? Combination of both? So if the resale 629 00:34:21,840 --> 00:34:25,160 Speaker 3: value gross revenue we call it is you said two 630 00:34:25,200 --> 00:34:29,320 Speaker 3: and a half MILLI yes, So if it's two and 631 00:34:29,400 --> 00:34:32,000 Speaker 3: a half meal then and let's say if it's in 632 00:34:32,080 --> 00:34:36,320 Speaker 3: Sydney metro area, the banks will probably lend up to 633 00:34:36,600 --> 00:34:40,160 Speaker 3: eighty percent. So they'll go, yep, we can lend up 634 00:34:40,239 --> 00:34:44,040 Speaker 3: to two million dollars. But then they also look at 635 00:34:44,160 --> 00:34:47,960 Speaker 3: how much cash you have put in competed at two 636 00:34:48,000 --> 00:34:50,960 Speaker 3: million dollars loan, So they go, well, look, you know 637 00:34:51,200 --> 00:34:53,759 Speaker 3: eighty percent of gross revenue two mil. But of that 638 00:34:54,000 --> 00:34:57,200 Speaker 3: have you how much have you put in? Have you 639 00:34:57,280 --> 00:34:59,400 Speaker 3: put in two hundred thousand dollars? 640 00:34:59,520 --> 00:35:00,399 Speaker 2: No, that's enough. 641 00:35:00,680 --> 00:35:03,520 Speaker 3: I want to see let's say thirty percent ut least, 642 00:35:03,560 --> 00:35:05,560 Speaker 3: So they'll probably ask you to put in let's say 643 00:35:05,800 --> 00:35:10,000 Speaker 3: six hundred thousand dollars cash. So to figure out how 644 00:35:10,120 --> 00:35:11,640 Speaker 3: much you need to come up with, you have to 645 00:35:13,239 --> 00:35:17,799 Speaker 3: calculate from both angles, and typically you know you can 646 00:35:17,880 --> 00:35:20,719 Speaker 3: only borrow the lesser figure out of the two. 647 00:35:22,600 --> 00:35:25,160 Speaker 1: That makes sense, Yeah, no, that absolutely, that makes sense. 648 00:35:25,680 --> 00:35:29,800 Speaker 1: All right. Well, last question overall is what are some 649 00:35:29,880 --> 00:35:31,600 Speaker 1: of the tips and tricks that you've learned, is there 650 00:35:31,600 --> 00:35:35,040 Speaker 1: anything that through your experience you would you go, geez, 651 00:35:35,080 --> 00:35:37,799 Speaker 1: I wish I knew that my first developments that you've 652 00:35:37,840 --> 00:35:40,520 Speaker 1: only learned over experience, over time, and anything else that 653 00:35:40,600 --> 00:35:43,160 Speaker 1: you have to say to anybody who's interested in doing 654 00:35:43,200 --> 00:35:44,000 Speaker 1: a property development. 655 00:35:44,880 --> 00:35:49,200 Speaker 3: Look, there is no particular suburb or product your guarantee 656 00:35:49,239 --> 00:35:51,360 Speaker 3: to make money on. But if you must rup the 657 00:35:51,400 --> 00:35:54,160 Speaker 3: diligence and method to do the volume, your guarantee to 658 00:35:54,200 --> 00:35:57,960 Speaker 3: find one or two potential opportunities for every hundred sites 659 00:35:58,000 --> 00:36:00,840 Speaker 3: to you assess. So with a you do this for 660 00:36:01,000 --> 00:36:03,759 Speaker 3: your your yourself will pay someone to do it for you. 661 00:36:04,000 --> 00:36:06,080 Speaker 3: Know that this is the only way for most people 662 00:36:06,160 --> 00:36:06,799 Speaker 3: to break through. 663 00:36:06,960 --> 00:36:08,600 Speaker 2: Otherwise you just. 664 00:36:08,719 --> 00:36:12,840 Speaker 3: Waste too much time dwelling on property or sites that 665 00:36:13,000 --> 00:36:15,320 Speaker 3: don't even stack up. But because that's all you have, 666 00:36:15,520 --> 00:36:18,200 Speaker 3: you go, oh, look at if I reduce the build 667 00:36:18,280 --> 00:36:21,279 Speaker 3: costs by ten gram per square, would to work? See like, 668 00:36:21,400 --> 00:36:23,080 Speaker 3: that's that's the common trap that a lot of people 669 00:36:23,600 --> 00:36:27,200 Speaker 3: newbie's falling to. So just just that that will be 670 00:36:27,880 --> 00:36:33,080 Speaker 3: my number one comment. But also getting started isn't hard. 671 00:36:33,160 --> 00:36:35,600 Speaker 3: It's not different to committing yourself to going to the gym. 672 00:36:35,920 --> 00:36:38,480 Speaker 3: So I'd actually go as far as saying, succeeding on 673 00:36:38,560 --> 00:36:41,319 Speaker 3: your first project is not that hard because most people 674 00:36:41,360 --> 00:36:43,799 Speaker 3: are sensible enough to only take on projects that can 675 00:36:43,880 --> 00:36:46,359 Speaker 3: go that can't go wrong, even if the profit margin 676 00:36:46,480 --> 00:36:49,560 Speaker 3: is very small. But it's usually the second or the 677 00:36:49,640 --> 00:36:52,680 Speaker 3: third project that slows you down or worse, knock you 678 00:36:52,760 --> 00:36:54,279 Speaker 3: out of the race completely if you don't have the 679 00:36:54,360 --> 00:36:57,360 Speaker 3: right guidance from someone with experience. So I've seen too 680 00:36:57,400 --> 00:36:59,960 Speaker 3: many people ruin there what could have been a brilliant 681 00:37:00,080 --> 00:37:03,480 Speaker 3: property development career by getting comfortable way too early and 682 00:37:03,640 --> 00:37:06,560 Speaker 3: making silly but fatal mistakes. So where the it's your 683 00:37:06,640 --> 00:37:10,400 Speaker 3: business partner or consultants or business coach, work with the 684 00:37:10,520 --> 00:37:13,560 Speaker 3: mental We can guide you through the first project with you, 685 00:37:14,160 --> 00:37:15,399 Speaker 3: not just the first one. 686 00:37:15,680 --> 00:37:19,240 Speaker 1: Very good tips and advice, and thank you Diji overall 687 00:37:19,320 --> 00:37:22,360 Speaker 1: for everything you've said today. It's been great to open 688 00:37:22,640 --> 00:37:25,479 Speaker 1: the lid and look inside of the property development world 689 00:37:25,520 --> 00:37:29,000 Speaker 1: and hear it from somebody who's actually doing property developments 690 00:37:29,040 --> 00:37:33,320 Speaker 1: and been successful at it. So Diiji Samahara, property developer, 691 00:37:33,560 --> 00:37:37,200 Speaker 1: Director at Buyers Agency firm Property Buyer, It's been fantastic 692 00:37:37,280 --> 00:37:39,520 Speaker 1: having you on insights have been great and I hope 693 00:37:39,560 --> 00:37:41,600 Speaker 1: our listeners have learned a lot about the basics of 694 00:37:41,680 --> 00:37:44,320 Speaker 1: property development. Thank you again for coming on. 695 00:37:44,560 --> 00:37:45,320 Speaker 2: It was my pleasure. 696 00:37:45,400 --> 00:37:47,960 Speaker 1: Thank you, James, no worries, and to our listeners, thank 697 00:37:48,000 --> 00:37:50,960 Speaker 1: you for tuning in to today's episode of The Money Puzzle. 698 00:37:51,080 --> 00:37:54,080 Speaker 1: Send us your questions and mister James Kirby will be 699 00:37:54,120 --> 00:37:56,840 Speaker 1: back next week to answer them. But you'll have me 700 00:37:57,040 --> 00:37:59,960 Speaker 1: again for the next episode. We'll be having an account 701 00:38:00,000 --> 00:38:03,480 Speaker 1: ten end of financial year tax session with an accountant 702 00:38:03,640 --> 00:38:06,839 Speaker 1: to get the inside scoop on tax planning and also 703 00:38:07,120 --> 00:38:09,880 Speaker 1: have a chat about accounting and tax advice that you 704 00:38:09,960 --> 00:38:12,560 Speaker 1: might hear at over the barbecue or at a pub 705 00:38:12,719 --> 00:38:15,360 Speaker 1: or from the back of a taxi and whether or 706 00:38:15,400 --> 00:38:17,480 Speaker 1: not those things are accurate. We'll run through some common 707 00:38:17,560 --> 00:38:21,400 Speaker 1: situations and get whether they're true or false. You can 708 00:38:21,480 --> 00:38:24,440 Speaker 1: tweet us your thoughts just use the hashtag the Money 709 00:38:24,480 --> 00:38:27,319 Speaker 1: Puzzle or one word, or email us on the Money 710 00:38:27,360 --> 00:38:30,600 Speaker 1: Puzzle at the Australian dot com dot au. Until next time, 711 00:38:30,719 --> 00:38:32,319 Speaker 1: I'm James Gerard. Talk to you soon.