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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.
Welcome back to another episode of creating generational wealth through property investment with me, Adam Bell. Now today, Gordon Green's going to dive into what I've dubbed the duplex deal strategy. We're going to explore how building a duplex and selling one unit can give you a quick return of your money rather than just a return on investment.
On your money, which is what this is actually all about.
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 property deal together just for you. So
Gordon, welcome to the podcast. Hi Adam. Fantastic. Now this is something you've been doing a fair bit of recently, I believe. So talk me through what I'm calling the duplex deal.
Well, the first one we ever did, I think was about 1997. So we've been doing them for a while, but in the current marketplace, there's a place for them where we can get the money back on the deal very quickly.
Okay. Which enables my client to do another one and another one and another one. Okay. So instead of buying a house and paying her off over a period and waiting for some capital growth, and it's eight, 10, 15 years before he gets enough equity to go and buy another house. Okay. We can do that within 12 months.
Wow. Where he's got the return of his money, where he's got his money back out of the deal within 12 months and can go and do it again and again and again. Okay. It means you can build a decent sized portfolio in five to six years. instead of taking a lifetime.
Wow. Okay. So this is exciting. This is cause the, you know, I think there'll be a lot of people listening and myself included, that you've always just, the basic knowledge you've got around property investing is buy it, sit on it, wait for the capital growth, and that will happen over a long, period of time but you hear of these gurus talking about, own seven properties in a year, this, but this is a clear cut strategy on how to do it.
Talk me through it. So you find your block of land.
You find a block of land and at the present time, I'm operating anywhere from Coffs Harbour to
Begara.
I can do other areas, but the money's not there. I get. Independent valuations from the local real estate agents on what the finished product is worth.
So I know at the end of the day, that's the outcome. Yep. And I look at who's going to be the buyer for it. Like in Coffs Harbour. The retail on the blocks are about 9. 85. That's not an investment product. So we've bought housing that will appeal to a retail buyer. They're four bedroom. One of them's got a high lift carport on the side that'll take a caravan.
Just little things that we adapt and change in the design to suit the market we're going into. Sure. If it's a strictly rental area, we'll probably set it up with furnished so that we can get, share accommodation in there, which increases the return for the buyer. Sure. Which makes it more saleable.
It's really about where the land is, who's going to be the end buyer of that land, what sort of money my client has to put into the deal to make it work, and what sort of money needs to be put into the deal to make it work. If the client hasn't got enough money, well then we've got to find another option.
Sure.
And that's basically it. purely about how it's financed and how it's funded. Yep. So that the deal still works. Okay.
So you find the block of land and then you start to put the numbers together. So you work out what, what it's going to be worth at the, once on, on completion. And, obviously you're then left with two dwellings.
So the plan then is what you sell one
to On average, we're selling one.
Right. So talk me through an example. Let's just put some numbers down. Talk me through. Okay.
Let's look at the cheapest one I've done, which was in Gympie. The land was about 233, 000 plus costs and bits and pieces. Build was about 580, 000.
So end up cost by the time we got DAs and DAs and development approvals and titles at the end. And that was about 850, 000. Okay. In total. Yep. And they will retire for about 550, 000 each. So 1. 1 million. Wow. So there's about a bit over 200, 000 profit in the deal. Sure. The deal was funded totally in equity on the person's own home.
So a hundred percent borrowed money. They will sell one off, around 5. 50, maybe 5. 80, because the market up there is still going up. Okay. And we're not finished the project yet, so whatever it ends up at. Okay. And I've got opinions from two local real estate agents that say minimum 5. 50. Okay. So
they sell that one off, they're still left with The remainder.
Which is a couple of hundred
thousand, you've gone into the deal at 850, if you get 550, you've got 300 owing. 300 owing, yep. It's not necessary just to leave 300 owing on the property, you can pay the finance down, because you've borrowed the whole 850, and you can pay the finance down to where there's 80 percent of the one that you've sold.
So that would bring it in at about 475, 450, and you've got all your money back out of the deal, plus enough profit to pay your tax. And you can go and do another deal straight away.
Straight away, and do it all again.
Yeah, do it over again, and again.
So I'm gathering then, is the challenge with this at the moment, finding the blocks?
That's the trick. Right. And the blocks need to not only, look right, they've got to be at the right money where, because the bill cost is the same, whether I build it in Coffs Harbour or Bundaberg or Brisbane, the bill cost is within 100 a square metre. Yep. So overall it might be 20, 000 a difference depending where you're building, but it's immaterial.
Not a lot. But the blocks down at Coffs Harbour, it's 600, 000 for the block, whereas the block in Gimpie was 230, 000. Yep. So the Coffs Harbour project was 1. 4 million, but they're on the market for 9. 85
each. So it's all relative. Yeah, it's
just what can the client afford, and where have I got to go to be able to find that.
And I try and source blocks that are vacant, because you don't have all the demolition costs and everything else then. Yep. Depends what's there. Sure. There's a lot of areas that are older areas that have got larger size blocks in, and if you can get away with a rezone on it, where, before you start, you know you can do it.
You don't buy it hoping you can do it. There's some areas like the Gold Coast here where I look at it and go, Whoa, hang on, it's priced its way out of the market. Because I can't make a profit out of it.
Yep. You know what it's going to cost to do everything you, you do with this strategy and you do the numbers and you work out, is it viable?
Is it not? What is going to be the return? And then I gather you also then, obviously, cross reference that back to Your client wants to achieve and what their goals are. Yeah,
if they've already got a massive tax problem and don't want to make the profit, don't sell the thing for a while.
But then you've got to be able to fund it. And if he's going to keep it, maybe we'll set up this furnished co living accommodation where we get much higher rents. Three, four bedroom, you'll get 900, 1200 a week rent instead of 550. Yep. Big difference.
But this is the great thing about working with you, Gordon, is that you know all of this.
You've been around for so long. You know all the ins and outs when it comes to, whether it be this duplex deal or any type of, property investment. And in a previous episode, we haven't gone through seven ways. You know all the ins and outs about all of them. And when you work one on one.
with a client, you can get the exact right deal for them with all the right bits and pieces around it.
And I really look at the client and I make suggestions around what they should do, but at the end of the day, it's their decision about what they do. It's not my life, it's their life and they've got to be comfortable with what they do.
Some people take to it like a duck to water and other people are such a nervous wreck they shouldn't be doing it. Sure, sure. My old bank manager used to say it's really important that you can sleep nights. Yep.
And look, that would be something you'd work out with a potential client, off the bat, wouldn't it?
That, you do what you do and, that'll either be for them or not for them.
Yeah, and sometimes you look at it and go, well Really they're better off taking an extra couple of years to put it together than they are to go in boots and all and dip their toe in the water and see how it feels and get a bit used to it.
Because some of the deals I'm talking of reasonable levels of debt. And some people aren't used to that. To me it's just phone numbers, it doesn't matter. So long as the risk is minimal.
But you explain all of this in detail and then that's where they get to be able to make that, that informed choice.
Where they have enough information to make a decision. And I talk about the balance in the portfolio, both in cash flow and asset growth. Yep. But also I talk about the balance in the portfolios to what's income producing and what's not, where the negative gearing is. Yep. About 20 years ago I trademarked a thing called Building the Money Manor.
And that's still pertinent today, how you put a portfolio together so that it works for a client. And,
And looking at the big picture, cause you do one thing and it can affect something else, can't it? And you've got to understand. how everything fits together. Like this, like you just mentioned this, if you're already carrying tax debt, then this may not be the thing for you right now.
But, or
even if it is, you might want to sell
it. Yeah. So knowing what moves to make, and I think that's, again, just, something amazing that you're able to do, for any clients. I've said this before, but. You're not just someone who's a property investment, person who can get a deal.
You're a consultant. You help and look at the big picture, , and, can help coming, looking at it from so many angles.
And this is probably going to frighten most people, but the bottom line is I charge a fee. I would expect you to charge a fee Gordon. I'm working for the client.
I'm not working for the builder or the developer. Yep. So I'm really clear about who's paying me. And that way they get my opinion, not what the builder wants me to tell them so that he makes a Sale absolutely. There, there's a lot of difference. It's really about understanding what the client wants.
And then working with that operation. And even though I like doing duplexes at the present time, Hey, if that's not going to work for you, I'm happy to sit down and work out another strategy. It's about what works for you. Like I had somebody come to me recently, fresh out of divorce, and I had about 275, 000 with nothing else, no other equity, nothing, right?
They've got to start off a little differently to get going, and there's no way, no, not get them into a duplex deal, because their income just isn't sufficient to make it happen. Sure. So we've had to look at playing with other areas to build their return on their investment so they can make it happen.
Yep. And they're not young, they're already 52, so they've Got a bit of a challenge here, but it's not impossible. That's just a matter of working out what can be done. Now let's be clear here too. Gordon was happy to meet with anybody and talk about your circumstances. And so your first consultation doesn't cost you anything.
It's only once you decide you want to work with Gordon, that there is options available and you've worked out what they are and what he's going to go after for you that then would, that anything is payable at all. And you work on win Gordon, don't you? It's. If
the client's not making money, it's not much use to me.
It's because I can't get him back to do another one. Absolutely,
and that's what you work on too, isn't it? We talked about this, where you get one that allows you to get another, that allows you to get another quickly, and build. You know, we're talking generational wealth here and, you know, it's got to work for the first one for you, you to come back to Gordon and do the next.
There's, there's interest in you making sure this works, which is another reason why, the services you offer are absolutely fantastic.
And it's not all about what I know, just I probably know so much because I've made enough mistakes to learn lessons. And I have a saying that some people have 20 years experience.
And other people have one year's experience 20 times over. And one thing that I'm proud of is I can adjust what I do very quickly. It's if what I'm doing isn't working, what have I got to change to make it work? And I'm not exactly creative, but I understand how to take something out of one industry and put it into another industry and make it work.
Sure. And it's the same with building. It's okay, what have we got to change here to make this work? Sure.
What advice would you have for someone? Who is hearing this now and is thinking, geez, this duplex deal sounds like something I'd be really keen on, on exploring. What would you say to them?
I'd really want to know about them and where they were. So that means either get on the phone, have a talk to me, get a zoom call or come in and see me, whatever it takes to sit down and have that first conversation. And from there I can look at it and say, yep, I'm interested in helping you, or I don't think I can change what you're doing.
I don't have a magic wand, I can't do the impossible. I can do a lot better than most though.
And I think, with what you've said too, having you on board is going to give somebody, a much better chance of finding these blocks because you've got the contacts, you know where these places are, they're not easy to find.
to find are they at the minute and just having you in their corner to be able to source these, these great places should you decide that's, that the duplex deal is the right, right thing for them.
I had a young girl, 32, come to me recently and she wanted me to teach her how I do what I do.
And I said, look, I'm happy to do the deal with you and hold your hand and walk you through the process. But whether I teach you how to do it or whether I do it with you, it's going to be the same cost. Sure. And I said so, and she didn't come back to me and I rung her up and said, So what are you going to do?
She said, Oh, we're going to have a go at doing it ourself. We've got a group of investors together and we're going to use their money. And all the red flags went off and it was like, Whoa, hang on. Yeah. She hasn't got a clue what she's doing and she's using somebody else's money. Oh. So yeah, it was like, whoops, she's gone to a course somewhere and learned how to do this stuff.
Yeah. And she has no idea. And I said to her, so where are you going to source the properties? Oh, there's realestate. com and domain and that. And I looked at it and went, the minute it gets onto realestate. com, I've probably seen it a month before that. And my ego likes to think I'm the only one that saw it.
Yep. But the reality is I know the guy that's got it has probably got a database of four or five hundred. Guys like me Yep. That he sent it out to. Yep. And the only reason it's gone to realtor state.com is 'cause it won't make money. We've knocked it back and said it doesn't work. Yep. So then they put it up for the general public to try and sell it.
Yep. And that's the industry and people don't seem to understand it.
You blow me away with your knowledge, Gordon. You really do. And, I'm loving doing this series with you because it's, I'm learning so much just by, as I'm sure my listeners are, and learning so much about what I don't know, because you don't know what you don't know.
And, you've been around 50 to 60 years and you do know, and as you've said, you've made the mistakes. But look, I love the sound of this duplex deal. And if it's something that you're interested in out there. Please get in touch with, with Gordon. He'd love to have a chat with you.
Look at your circumstances, work out whether this or something else is right for where you're at, at right now. And, he's here ready to give you your guidance. Where you're going. So look, stay tuned for our next episode where we'll continue to share insights on building your generational wealth through property investment.
But, until then, Gordon, thanks so much for joining us and, my. I can't understand why there wouldn't be a whole heap of people right now about to text you to say look, let's let's get together, let's do a duplex deal with Gordon Green. Some people didn't help and some people you can't help. I love it.
Thanks Gordon.