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Welcome to Creating Generational Wealth Through Property Investment with Gordon Green. Join Gordon Green, a highly successful property investment strategist, as he shares his wealth of knowledge and proven strategies that have empowered thousands of everyday Aussies to build a secure financial future through property investment. In each episode, Gordon delves into the secrets of property investment success, offering practical advice and expert insights. If you're keen to explore property investment, Gordon also works one-on-one with clients to craft bespoke property deals tailored to their unique needs. Tune in and start your journey to financial freedom today.
Hello and welcome to creating generational wealth through property investment. I'm Adam Bell, your guide through the intriguing world of property investment. Now, today, yet again, our property investment guru, Gordon Green is here and he's going to share a couple of success stories from, Clients that he's had over the years.
Welcome to creating generational wealth through property investment with Gordon Green. Gordon is a highly successful property investment strategist. And in each episode, he shares his knowledge and strategies that have helped thousands of everyday Aussies build a secure financial future through property investment.
Remember Gordon works one on one with all of his clients. So if a property investment is something you're keen to explore, then Gordon would love to put a bespoke.
Welcome Gordon, I'm really looking forward to this. How are you Adam? I'm good mate, I'm good. Alright, so look, let's talk a couple of, you've done hundreds of deals over the years, so it must be hard to pick a couple for us to sort of break down and have a look at, but look, tell me, start me off, who are we talking about, when did it happen, and what sort of deal was it?
It's really a matter of whether you think it's the. most profitable deal or whether it's the deal that had the most impact on somebody.
Okay, all right. The
most profitable deal was one that was done last year. And I can't replicate it because the land isn't there anymore. Sure. But
opportunities
come and go.
But yeah, sometimes this one was a bit rare. Okay. It's a guy that had bought a duplex site and got his DA and everything done, and then his job changed and it looked like losing the lot. So we bail him out of the land and paid a bit of a premium for it, right? But after we'd finished the development, the client had to invest about 400,000 and a $1.4 million deal.
And after we'd finished the development, the 600, 000 in his pocket plus his 400, 000.
Wow. All right. Well, let's wind this back. Let's step this through. Okay. So you've had a client come along and, once he's got, how much did you say he needed? I raised 400, 000 against security on his own home.
On his own home. Okay. So needed to borrow 400, 000 based on security of existing assets. Okay. Found a block. Where was the block? Coffs Harbour. Coffs Harbour. Okay.
The deal had gone down about 12 months before and the delay in the DA had caused some hiccups and problems and the guy who had originally bought the block had lost his job or changed his job and could no longer settle on the land.
Right. So the developer just wanted to clear it. We paid a bit of a premium for the land, we probably paid a hundred more than it was worth. Okay. But there was plenty of money in the deal so there was no reason to screw the guy. It meant the original guy walked out with his funds intact without making a loss.
Okay. And my client still made well over 600, 000 net. Right. In less than 12 months.
Okay, so what, you did a, you put a, so let's talk what through, you know, your role in all of this. Well when the
DA was already there, it was actually fortunate because it was, instead of being a normal duplex, which is co joined properties.
Yep. It was two individual four bedroom homes. Right. And we modified the design a bit and put a high set carport on the side of one of them. So that we could attract that downsider with a caravan. Normally with a duplex I sell one and keep one. Yep. But these were a bit upmarket. Sure. So we sold both.
Right. And, it was a matter of once we saw the designs, Tidy them up, make sure they get there, and contract with a builder that I knew did some quality. Yep. And make them a bit better than average.
Okay, so you do all of this for your client, don't you? You not only found the land, you then, once you'd gotten that part through, and you said you had a bit of luck there with how that all came about, and then you then decide what sort of homes to put on and did these design tweaks?
Yes.
And it's, I understand what the market needs and I'm always looking at who's the end buyer. Yep. It's not about what I think's right. It's about what the current buyer in that marketplace wants. Right. And that's simple. Just talk to local real estate agents and ask what they get asked for mostly. It's about doing proper research and making sure you've got it together.
Sure.
So you originally were thinking you were going to do a duplex here?
We weren't thinking at all on that one. It was just the block come up and we looked at how we could utilise that to our advantage. Right. That's all. And then it was a matter of, okay, so if we tweak this a bit, we can get away with two separate homes.
Adjoined buildings. Yep. And they're still registered as a duplex and still had two titles as a duplex. Yep. So they do share insurance Sure, and they share rates So the two people who have bought them have to have a meeting once a year and decide on What insurance company they want to go with that's about the involvement, right?
Okay Yeah, it's I look after the whole process. I've sourced the land. I've sourced the builder I generally take a look at the build while it's happening I make sure that the inspections are done so that we can get titles at the end of the time. Yep. At the end of the time we get titles and then we liaise with local real estate agencies to either rent them or sell them.
Yep. So it's a full package. Yeah.
Right. Yeah. So let's just talk through those numbers again. So it was the land 400. How much was the land was
actually
600, 000 land was 600, 000. Yeah. Okay. And the build costs about 860. Okay.
About 1. 46, all up
1. 46 is what it cost to get it done. And then you sell both of them less than, 12 months after the original purchase of the land and the total, sell almost 2 million, a bit over 2 2 million.
Yeah.
Wow. Just over more than 90. So 600,
000 in 12 months, less than
12
months. Right. And he had, did he have, he had no out of pocket. All the finance was done. on the 400,
000 was inclusive of all these interest charges, legals, costs, the whole lot.
Wow.
His actual deposit on the deal was about 280, 000. Yep.
But then you've got to run up to your legals and your interest and your holding costs and the title issues at the end, just a few little things you've got to
allow for. Yep. Now how much, this is incredible Gordon, that you can get a deal like this together, and you said it is rare that, but, talk to me, how much You do everything, obviously, as you've explained, but how much involvement did your client have?
Do they just sit back and let you do it all and you just keep updating them, or do they want to be involved?
My best clients sign the paperwork and go away until we're finished. Because really I'm not set up to give a whole lot of reports and everything else, but I do keep in touch, I'll let them know.
Yep. How things going and what's happening. Yep. Generally slab down you gotta ask for some more money and then frame you gotta ask for some more money. So you need to talk to them. Yep. But, I have a couple of clients that are younger that I'm actually teaching how to do what I do. Right. Cause I'm probably not gonna be around all that much longer for them.
But yeah, it's I do either but I prefer the client that just wants to make the money
and Just let me do my stuff and I'll make you a good return. Obviously you've got your fee involved as well. But everyone's happy. Everybody makes money.
I've never had a client yet complain about the money I'm making him.
Yep. And what I'm charging him Perfect because it's always a percentage of what I make sure.
Okay, so you've got to do you know just in terms of your charging structure as well. So it's a win for everyone
doesn't make money I don't make money. It's so simple.
Yeah, so which is you know, How can you go wrong?
So
well Personally, there's a few hiccups with getting development approvals. Yep, but All you've got to do is adjust the numbers to make it work. Sure. And normally when I do something I'm pretty conservative with what my costs are and where they are. Yep. And I always make sure there's a surplus so that we're not suddenly scrambling at the last minute for an extra 30 or 40 grand it's like.
Sure. That's, that's a nightmare.
So that's your biggest deal by the numbers and, in terms of making a profit in a short amount of time off of a deal. Talk to me, you mentioned there was another one that you've got in mind where, it made the greatest impact to their lives.
A guy that was in a job he hated. And in 1985 I met him and we managed to write together enough asset for him to buy a eight by two bedroom in the heart of to won. Right. In Brisbane. Yep. And he has done nothing except pay them off in the first 12 years. Right. He paid $240,000 for the whole eight, and today that building would bring more rent.
Then he paid for the thing. Wow. And that enabled him to retire after he paid them off. He just quit his job and he now travels and has a good life, does what he wants to do. Right. Still single, still in enjoying life mentally. And he's probably not even 50 yet. Wow. So he's had a good time and I call that a really good deal.
Cause
do you ever do these deals Gordon and think, well, why didn't I do that for myself?
Oh, I've not done badly. When I was younger I was a trader, I bought and sold and bought and sold and bought and sold. Yep. And I didn't keep stock that I should have kept.
That you can look back now and go, ooh, had I kept that?
There's some deals that I've left millions on the table because I sold out instead of keeping. Yep. Like in 2002, 2004 I was buying six packs and eight packs and renovating them and refurbing them. Yep. And I could have afforded to keep one out of each block. Yeah, just the one. I could have given me around 46 units now.
Wow. That you earned outright. Yep. That if you put a figure on where they were, they'd be worth 700 each. Yep. What's 46 times 700? That's a bit more than I'm worth now. Too big
for my maths, mate. But,
yeah, it's just interesting. You live and learn. Absolutely. And it's, Yeah, I think I've made more mistakes than most, so I've learnt more than most.
Well you've mentioned
that and I think, it always comes back to what we've talked about in a couple of the earlier episodes. You've been there, you've done that, there's not much you haven't seen in the world of property investing. You've made mistakes, and look, on that, I believe we've got another episode coming up that we're going to do, in the next few weeks, on.
The biggest mistakes that people made and that's probably going to be based off of personal experience. I imagine but you've got to learn from those and you've done that so that you it won't happen for any of your clients going forward
Well,
you can't help stupidity, but
If the client follows the instruction and makes it work yeah, I take out as much risk as I can and i'll never say nothing can go wrong Because it's real estate and you never know what the rules are.
And we live on a
planet called Earth, mate. Yeah, and the
government changed the rules and regulations. Yeah, exactly. The banks changed and things like that. Yep. But when I put a project together, I make sure there's enough flexibility in it to account for any unforeseen things that happen. Sure. My question is always, in worst case scenario, if this goes to custom, how bad's it gonna be?
Yep. And can we deal with that? Yep. And if the answer's yeah, we can live with that, well, it's a deal.
Yep. And if the answer isn't Can you talk about that with each of your clients when you Before I even start. I'll look at
their risk profile, get them to understand what's investment and what's speculation and what's, what I call, harebrained schemes.
Yep. Which is really the out there stuff. And very few of them come off, but when they do come off, they're the ones that really make you the money.
Well, it's risk versus reward, isn't it, with all that? You're right,
but you shouldn't be playing with a lot of money in those areas. No. And that's, I see people do it, and I just shudder and go, hang on, don't you understand the basics?
And the answer is, most people don't.
Maybe this is too hard a question for you to answer, but, we'll have listeners out there who, looking at where they're at and considering an investment property and potentially wanting to come and talk to you is there an average type deal?
What are you looking to make? on average for your client in your average deal. Is that too hard on
average, but I have a minimum cutoff point of 22%. 22%. If the deal won't make 22%, it's not a deal to me. Right. Now I'm not talking about yield. I'm talking about return on their invested capital.
Yep. So if they've got 100, 000 of it, they've got to make 22, 000 profit. If they've got 400, 000 of it, they've got to make 88, 000 profit.
As a minimum. As a minimum. Yep. That's So that's your cut off. If the
deal doesn't stack to that level, I look at it and go, it's not a very good deal. Yep. And that's allowing for contingencies and all sorts of little things that could go wrong.
Sure.
And half it's with the funding. Some of the stuff I use development funding. And if that doesn't make a profit The funders just won't lend you the money, it's pretty, pretty cut and dried. Sure. To get the deal through it's got to stack up to a certain degree. Absolutely.
Even if you're using banks funding, the banks like to see it making 20 to 25 percent. Yep. Because you are doing a development, you're not just buying a house. We're buying a block of land, putting a house on it and hoping it makes some money. Yep. You're actually sitting down and planning your profit before you start.
Yep.
And that's what I love about you, Gordon, and what you do, is you've got a strategy. You've got, you know where you head with this. It's not your standard, let's just find a good block or a good property and buy it and just sit on it for 30 years and and make slow moving capital growth. You've got a plan, of how long to sit, when to buy, what to sell, when we're talking duplexes, sell one, keep one, and you put it all together to make that return happen quickly.
If you buy a property and you pay it off over 20 or 30 years, You're going to make a profit. I think, I may be a little impatient, but for the average person, the average client I see is probably 45 years of age, which is getting on as late as they want to be, and they've got 15 years to get it all together in.
Now if you buy a property and wait for it to go up enough, you're probably going to wait 10 years before you get enough equity. So the reality is, how many are you going to have at the end of your life? Two? Maybe three?
Which, as you said, will make profit, but there's better ways to do it, aren't there?
Well,
to me you haven't really made a profit, you've just stayed in the marketplace. Yep. Because it's not what the property's worth, it's what it's worth in comparison to other properties around it. True. So if you sold it and had to buy back in, have you made a profit or are you out of pocket? Yeah. And most times, if you sold it and following that process, you're out of pocket.
Yeah. Whereas I look for what I can do with either renovation or refurbishment or redevelopment so that we can make an immediate profit. And with the duplex process, I'm trying to think how long I've been doing them, but I've cut off. client that I did one for in 1992.
was his first one, and he's still doing duplex developments. But he's doing them in North Queensland. But he gave up his job, that's his full time job. That's his full time job. Just buying land, building a duplex, selling it. Yep. And the first one he started with was the second hand one that was pretty run down and pretty average.
Made him enough money to be able to go and do Keep going. good ones. Yep. Yeah, so.
Fantastic. Yeah. Well, look, thanks Gordon for sharing, you know, what have been a couple of really inspiring stories, today. Look, it's clear that with the right expertise and strategies, property investment can indeed pave the way to generational wealth, which is what you're actually all about.
So look, for those interested in learning more about Gordon's methods or to explore, you know, potential investment opportunities, visit his website or get in touch directly. Okay, his number's there. He's happy to talk to you. Give him a call, give him a text, send him an email. The details are in the description.
And look, join us, join us next time as we, we're going to uncover, as I mentioned earlier, the five biggest property investment mistakes that people made. Cause guess what? Gordon's made all of them. And, coming back here, creating generational wealth through property investment. Gordon, thanks so much for being here.
Thanks, Adam.