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🎧 Real deals, real strategies, real results. Learn how to find, fund, and operate profitable property plays from someone who’s actually done it.
Hosted by Andrew Wright, principal of Professionals Southport and a commercial investor who rebuilt after losing a ~$15M portfolio during the GFC, this podcast gives you a straight-talking look at what it really takes to build wealth through property.
Each episode delivers practical frameworks, real deal breakdowns, and honest conversations with high-performing investors and operators across residential and commercial.
But it’s bigger than the episodes. The goal is to build a community of like-minded investors who share stories, swap insights, help each other grow and maybe even do deals together.
🔗 Join the community & learn more - leave your email at: www.andrewwrightproperty.com.au
📍 Connect with Andrew: hello@andrewwrightproperty.com.au
Hello, and welcome back to the Andrew Wright Property Podcast. My name's Adam Bell, and in today's episode, we're gonna talk about something probably everyone's thought about once or twice in their lifetime, and that's becoming a property developer. We all know the money that can be made, that we've seen property developers make.
So today, rather than talking about textbook theory, Andrew's gonna walk you through three real development projects currently going through their approval process, how he got into them, what he's doing with them, and giving you a leg up into how to think about becoming a property developer yourself.
We're gonna discuss what developers actually do, how to minimize the risk, mistakes he's already made so that you don't have to, why he deliberately buys unusual sites, and why he believes holding developments long term is one of the fastest ways to build wealth. Andrew, welcome to the podcast.
How you going, Adam?
I'm well, thanks, mate. Very well. All right, so let's get started. Mm. I mean, everyone has, at one point or another, thought, well, well, property development is probably- Mm ... the thing that comes to mind- Mm ... being a property developer-
Yeah ...
uh, when someone thinks about making lots of money. And we think about those ones who buy a plot of land, put up, um, you know, a, a big set of units or a high-rise.
But there, there's far more to it than that, and there's a lot of ways to get started doing it very differently to, um, what your common person would think, buy a block of land, build a high-rise. I haven't got the money to do that.
Yeah, you're right, Adam, and that's one of the reasons why I was a little bit shy coming up with this topic today, because we needed to come up with a podcast because we're, it's, uh, Sunday, and, uh, we need to release one every Tuesday.
And I feel a little bit unqualified in comparison to the guests we've had on this program, literally full-time developers that are doing hundreds of millions of dollars of projects. But the reality is, the majority of property developers do not do it full time, and it's almost impossible to straight off the bat become a full-time property developer because it takes two or three years before you get any returns.
And for that reason, most people Take about probably five years before they decide whether they wanna be full-time as a developer or not, so we all start off part-time.
Yep, absolutely. So when you hear people use the term property developer- Mm ...
what
do they usually picture?
Well, I can't talk for everyone else what they usually picture, but I suspect that almost everyone thinks of a full-time property developer going round in a Rolls-Royce- Oh
building large scale developments, but that's just not the case. So for me, property development is any form of work that you can do to force value on a property or improve it, and it could be as simple as a renovate and flip or the BRRRR strategy that I've referred to on a couple of podcasts where you just do a renovation, re-rent it out, increase the value of it, borrow against it, and then go and buy another investment.
So small scale development can actually start just with renovations.
Absolutely. So a property developer is anything, yeah, from a, from a flipper right through to that, that-
Right through to the high-rises,
yeah ... yeah. What, uh, so let's talk about, you know, what does a property developer actually do? Let's talk about a full-time one for- Mm
for starters. You know, the ones we picture. What are they doing day to day?
Well, the same thing that a part-time guy does for 10 hours a week, they're doing 40 or, or, or 50 hours a week, but probably it depends on, on what niche they've picked. So that's the beauty about property, there are so many different niches.
So someone who focuses on land subdivisions, when they get their approvals and, uh, they've got the site and they're adding value to it, their day-to-day task is gonna be very different to perhaps John Facer that we had on this podcast, where he's building 40-story high-rises. So what they actually do on a daily basis is very different.
What I wanna focus on in today's podcast, I, I, I don't have a, a building, uh, team of workers employed by me, so there are two types of developers, ones that employ all the builders to actually do all the ground-up construction, and the second one is small-time guys like me. I just outsource everything. So I'm probably not the most qualified person to talk about project management, and perhaps we'll get some more experienced people in to run through exactly the answers to that question, what's actually involved with, uh, project management when you're doing a full ground-up construction, because I've always outsourced it all- Mm
because I don't employ any builders, and I don't have any, uh, building qualifications, and I d- have no intention of going down that track.
Now I, look, I know you like to talk yourself down a lot- Mm ... um, which I find funny, because, uh, I mean, one of my questions here you've already answered is, uh, can you become a full-time developer immediately?
Mm. Um, however, I wanna make the point to our listeners that you've made and now have a portfolio and have done incredibly well through You're not your normal property devel- what, what, what's considered, um, you know, mainstream property development. You've done incredible, and you've done it all part-time.
So I think you are qualified to talk about, just not in the sense that you- Mm ... believe is, is the mainstream way, way of doing it. Can I restructure that question, say, do you ever want to become a full-time property developer and doing the, what you did say, having a team and, and, and doing that rather than finding your niche projects, doing your research, um, you know, and, and following the, the system and the strategy that you've talked about in just about every one of your, your podcasts that you've done so far?
Well, up to now I've been a bit of a hybrid investor. I'm mainly an investor. I run a full-time real estate agency with doing sales and property management, so my property development has been limited to very, very part-time allocation of my resources. What I will say is that if done correctly, property development can be a lot more rewarding than working in a business where you're getting paid on an hourly rate to make a commission.
Um, and I can also say that I find a lot more satisfaction from the results of property development. Actually Going back and looking at what you've actually built out of nothing to create something for the community that you can see, touch, and feel and, um, there's a lot more satisfaction in that. So the answer is, I hope I do become full-time one day because I find it a lot more satisfying.
Yep. You got a lot of passion and I, you know, I love- Yeah ... and we, you know, as we develop this series even further, we're gonna look back- Mm ... at s- at projects that you've, you've spoken about what you've started, but in what you're saying now, you get that satisfaction from having, uh, seeing a deal-
Yeah
constructing it in your mind, constructing the strategy, and then over time, seeing that pay dividends and, and actually come to fruition with what you've, uh, what you've planned.
Yeah, 100%. And, and e- especially for me because most developers have a business model where they build stuff and sell it. They pay the tax, and then next year they're out there looking for the next deal.
Um, my strategy is a little bit different. It's not for everyone. I'm not saying it's the right way to go, but I generally develop stuff- And hold it ... keep it for myself because I don't wanna get paid. If I'm gonna put in a heap of work to do something, I don't want to get paid once, I want to get paid every year- Yeah
going forward. And by doing that and keeping it and reborrowing against the equity I've got there, you can build more assets in a portfolio and that, they just keep compounding, going up and up. And every really successful developer I know even, um, when I ask them, "Oh, do you wish you had have kept more of that stuff yourself?"
They all say yes.
Yep. Yep. Do you measure your, um, growth per year in your portfolio value? Do you look at it each year? Do you go at, at, you know, we've just passed 30 June. Do you at 30 June- Mm ... go, "Right, last year my portfolio was worth XYZ million- Mm ... and it's now XYZ million plus, plus, uh, plus ABC?"
Uh, probably, uh, monthly I would say, but not on a, I don't go and get valuations- No
on our site, but- The reason I do that is not an ego thing to track it, it's actually to look at my future borrowing capacity. Yeah. So when I have a little spreadsheet and I've got all these different properties here, I look at the value, I put another amount in the liability for the loan, and then I have another section, what's the LVR?
Because I need to keep track of that so that I can have a look at what asset I can refi- finance next.
Sure.
Pay for a bank valuation, get a lease doc loan, and redraw some more money to have cash in the kitty to go out and do the next thing. So I'm sort of forced to review it monthly, because last year I bought seven properties.
I've bought a couple already this year, and when you're doing that, you... It's too hard to save the cash deposit, so you have to look at your portfolio, keep revaluing it. Where can I draw the equity to go and generate some cash to come up for a deposit for the next deal?
Sure.
It's not an ego thing. It's-
No, I under- I
have to do
it
I understand that. Yeah. Now, can I challenge you to put this, put this out on, on record? Mm. Being that it is 30 June- Mm ... or very close to right now, each year that we hit this point, can I ask you what your gross property, uh, portfolio is worth and essentially what the net is?
Yeah, you can. Sure.
Okay. What is it right now?
'Cause I've gotta ask you again in 12 months.
Uh, the gross portfolio is about 27 million. Mm-hmm. And my debt is, uh, probably about 11, so probably, what's that? 16 million net.
Okay. Mm. Put that on notice. Put that on notice, because we may even do it six-monthly, because I do wanna show our, our viewers and our listeners how that compounds.
Sure.
Um, and realize to a lot... I mean, you ask Andrew, you're gonna, he's gonna tell you that those numbers are small compared to a lot of people he, he knocks- Yeah ... around with. But I can tell you to a lot of our listeners, those, those numbers are gonna be- Mm ... absolutely massive. But the point being is that they're all relative.
Um, they're all relative to where you are, and you started a long, long time ago, but it's the compounding nature of what you do, uh, that gets it to that level.
Well, I, I, I'd argue I haven't started that long ago, because I lost everything in the GFC, and then I got separated from my wife- It's true ... and I really started about eight years ago, Adam.
Yep. So there you go. Mm. Mm. Um, you use the principles you learn here, but, um, but, uh, we will... I'll ask you every Christmas, I'll ask you every- ... every New Year- Okay ... and we'll, we'll, uh... Because I do. It, it, it does compound, and- Mm ... and that's with you buying and putting more in and putting more in- Mm ... but it, it's understanding that net, that net value.
'Cause as you've said, you, you want 100 million worth of debt. Absolutely. You've said it a few times.
Yeah, yeah.
Because we know that what that means in, uh, in net, uh, in net terms. All right, so, um, what's a realistic pathway to becoming a, uh, a property developer who wants to start at the start and end up full time?
Well, for me it was, um, I, I did a half a million dollar renovation on my house, um, uh, with some extensions, learning the skill set around adding value to the property, um, liaising with contractors. I did the same with my own office. I did a half a million dollar fit-out. I had an empty shell and I learnt the process dealing with architects and doing fit-outs there.
And I think that's sounds like very basic thing that almost everyone listening has probably done themself. But in a nutshell, I think that's a pretty good starting point because you should start small and work your way up.
Mm. Get that experience, get that confidence.
Yeah.
As we know, it's, it's taking that first step, isn't it?
Mm. And, um, and getting, actually doing it. And I wanna come back to something you said a little, a few, few weeks, uh, back and that is, um, make an offer every, every month.
Oh, yeah, you gotta get started. But before you do that, you probably should, um, we've talked about buying commercial properties, the same for development.
You probably wanna define your niche or your strategy.
Yep.
Are you gonna subdivide land? Are you gonna build a duplex, build some townhouses? What are you actually going to do? And you need to define that and what your borrowing capacity is to get started. So, um, that's step one.
Sure. So I think, um, you've sort of mentioned before too that i- p- probably a, a good idea is to start in one council area.
Why is that the case?
Well, this is advice that most, uh, mentors would provide property developers. There's, there's over 500 councils in Australia, and I'm finding out myself that every council has different rules for development, and even things like infrastructure charges can, uh, vary- Vary ... massively. Yep.
So I think by knowing one council very well, it, i- if you know your numbers very, very well, you can assess a deal that's on the market and know your numbers pretty well and have the confidence to go and pull the trigger and buy something pretty quickly. And now that applies especially more so for builders that are developers that might have 20 or 40 people on their staff, and they need to keep buying deals-
Mm
to keep them busy. Keep them. Keep- So someone who's got 40 s- Remember Paul Union came in here a little while ago? I do. And he's, he's got, like, 40 people on his payroll or whatever it is. Now, he needs to keep buying other sites on the Gold Coast to keep those-
People employed ...
people employed. Mm. I don't need to do that.
So the advantage to him is he can keep his costs down because he employs those people and there's no extra builder's margin in all of the costs. The advantage to me as a small guy is I don't have to go and buy another site tomorrow because I've got 40 builders that need some work. No. I can pick my mark.
I can go out of town because I don't have 40 people that need to work here.
Well, here. Mm.
And I can look at different councils, different areas, and I'm not forced to pull the trigger, and that's why I only buy deals that are deals of a lifetime.
Yeah. And I wanna get into a couple of your, your case studies, which we have talked a little bit about before, but, um, pull them apart a bit more.
But before I do, a couple more questions for you. Why do you buy sites that most developers avoid?
Everyone has a different risk profile. So my risk profile is, uh, extremely high, and I, I have no interest in targeting something with a 15% return. Um, I see some trainers on YouTube teaching people how to do a one into two lot land subdivision where you might make 50 or $100,000.
To me, that is of no interest to me simply because, um, I can earn that same money focusing my time and energy in my business selling four more houses, and it will take me two months- Mm ... and I don't have to invest any money whatsoever.
Mm.
So why would I go and invest hundreds of thousands of dollars buying sites, 12 months of my life and all this effort, and maybe make 50 or $100,000?
To me, it's not the best use of my time. Now, I'm not saying it wouldn't be for someone else.
Sure.
And that's where everyone's risk profile, your asset base, your ability to earn income in your current employment makes a big difference. So it may be fine for someone else getting started if you're in a job and you actually don't have the capacity to make a lot more money, uh, by working harder at, at your job.
It may make sense to go out and do a small little land subdivision to make 50 or 100 grand, particularly if that's your education process- Mm ... where you're learning how to step up the deal size next time-
Sure ...
and do bigger deals.
What's the minimum return you would consider before going into a project?
Uh, this is gonna be different for everyone, and most lenders are looking for, and Paul Younan and other developers we've had on this podcast have, have said that most lenders will be expecting a 20% return. I certainly wouldn't do anything unless I'm getting 25 to 35% return per annum. So that means if a deal takes two years, I, I want 50 to 70% return minimum, otherwise I won't look at it
On your money.
Yep, yep, and as we've talked about in so many podcasts- Mm-hmm ... there's so many different ways of, of actually making, making that happen.
Absolutely.
So all right, so how have council pre-lodgement meetings helped you with due diligence?
Look, they, it's, it's just so important. I mean, every time I buy a site and I go to a town planner, I say, "Here's a site and it's owned X, Y, Z," and they say, "Well, what do you wanna do w- with it?"
And a lot of the times I'll ask their advice, "Well, what do you think I should do with it?" And you'd be actually surprised at-
The
ideas ... how many town planners will come up with ideas, but they don't actually know what they would do because they're not developers. So most of the time the devel- the, um, town planners will say, "Well, Andrew, what are you gonna do?"
Like, and when you get started, it's easy to have a belief that, oh, I'll just buy this site and the town planner will tell me what's the best use of the site- Yep ... but they don't. Otherwise, they'd probably be developers themselves. Build- doing it themselves So you need to come up, you need to have the vision, you need to work out what's the best use of the site, and going to a pre-lodgement meeting, on several occasions for me in my short development career, has given me much better advice and strategy than any town planner could have done because...
I'll just run through a few examples. Yeah I mean, one, a negative one, um, I did a, had a building designers, uh, put together plans for an 11-bedroom boarding house in Ipswich. The town planner said the, um, infrastructure charges for this one facility would be 15 or 16 grand or whatever it was, and then we went and had a pre-lodgement meeting and the young lady there said, "Oh, well, we're not gonna charge you one lot of infrastructure charges.
Under our council, we're gonna charge you 11 lots because there's 11 different beds and baths, they're unrelated tenants, so we're gonna sting you for 11 different lots of infrastructure charges." Wow Now, the benefit I got out of that, well, the town planner was wrong with his advice- So- ... so I went straight to the horse's mouth.
I canned that project immediately, and then I built a shed and put a gym in there, and I paid the council $0 in infrastructure charges because I wasn't changing the use of the site. That's the first example. Second example, uh, 24 Helidon Street in, uh, sorry, 24 Railway Street in Helidon, which we're about to get approval for 15 units now.
Had a pre-lodgement meeting with them, and we had to build shops at the front because it was zoned commercial. And I asked a question to the gentleman at the council, "Oh, would you allow, allow me to build a couple of townhouses out the back?" And myself and the town planner were absolutely delighted with his response, that, "Andrew, we don't care how much residential- You put behind it
you build behind or above those shops- As long
as you tick this box at the front ...
as long as it's only two levels in height so it, it meets the, um, you know, m- fits in with the surrounding buildings, uh, in the area." And from that advice from the council, he basically told me what the best strategy was. And I went back, and then all of a sudden, um, we put in plans for a whole heap of units behind these shops which increased the density ma- massively and, uh, and, and the uplift, uh, for the property accordingly The third example, just a pre-lodgement meeting last week I had, we had six people on a Zoom call.
The Longreach Council had two staff, my town planner, myself, a, um, traffic engineer, and my building designer, and we were talking about the fact that this site was, uh, 1.8 meters away... 1.8 kilometers away from where the council water mains finish. And at the end of that pre-lodgement meeting, um, I told them that I was actually going to build a service station here, but because it was gonna cost me a million dollars to extend that water mains, which was required for the firefighting requirements of a- Of a service station
service station where there's petrol-
Yep ...
and fire risk, um, I decided to subdivide it into seven large truck depots and industrial outdoor storage blocks of land. So it's just a seven-lot subdivision. And during that, um, pre-lodgement meeting with the council on the Zoom call, they confirmed, "Well, the, that's no problem, Andrew.
We will not require you to extend the water mains if that's going to be the use that you're proposing."
Yep.
And by the way, they have a large site across the road which will require those utilities at some stage in the futu- future, so the council's probably gonna go to all that expense to extend the water mains and the sewer there later.
And they actually suggested, "Well, maybe at that time, Andrew, you could subdivide this into smaller lots, 'cause you're not gonna have to put septic tanks on each one and water tanks, et cetera. You can just plug into the mains," which will allow me to double the density again when the council actually does this.
So, so they're giving me the development strategies, 'cause that's what they want. Yep. And when I lodge it, they're not gonna fight over it, because that's what they actually see as a good use of the
site. Sure. And did they give you any, um, any idea on what their use was going to be for their land across the road?
No,
they haven't. It's all... No, they haven't.
Okay, because I guess depending on what that is- Mm ... and the fact that they're already flagging that it's going to need- Mm ... the water mains in, if that becomes a It depends what it becomes on- Yeah ... what then you can then turn your, your land use into across the road with water mains, whether that is a servo to, or whether it
you know- Yeah, great question, and you, th- that's a very good question.
I don't know the answer. I should ask them-
Yeah ...
whether they'll disclose it or not, I don't know.
Mm. I mean, I, I, I can't picture where you are and how far out of town or anything, but if it's- Mm ... residential, mate, you, you, you put a shop up- No,
it's industrial
It's, oh, it's still industrial. It is industrial across the road that that's- Right, it's still industrial.
They've zoned it the same way as my site. Right. Industrial investigation zone is the actual zoning.
Right. Okay.
But they haven't defined what they're gonna do with their industrial-
Right ...
investigation zone land.
But again, knowing what it would be could potentially at that time change your- Change, change
highest and best use.
Absolutely.
Have I learned anything on this
podcast? Yeah, I mean, you're, you're- ... talking the lingo.
Okey doke. All right, let's look at a couple of case studies- Mm ... um, of what you've done, 'cause we're talking about getting into property development. Talk, talk me through Longreach.
Well, that one there, we've just talked about the pre-lodgement meeting, so that one there, um- I did an awesome deal to help my kids get in the property market.
Um, I went one third each with my son and daughter- Yep ... and, um, I didn't have enough money to buy this site, and I got, um, their money together, they put in 40 grand each, and I put in 40 grand, and we went and, uh, bought this site up in Longreach. Um, vendor finance, the, um, people selling it were a young couple.
They needed $80,000 very, very quickly 'cause they were moving out of town, and they needed that 80 grand as a deposit to buy a house to live in- Yep ... in this new city. So I offered them 80 grand at settlement, and I said, "You lend me the rest of the money vendor finance for two years at, uh, 5% interest," and they agreed to it.
And that is such a good deal for me. It's basically like exactly the same result as saying, "Okay, I'll, I'll buy this property now and we'll have a two-year settlement-
Yep ...
but I'll agree to release the 80 grand deposit up front." It's basically exactly the same as that, but giving us permission for early access to go in and get the up- uplift with the development approval.
Sure. And what is the plan? What, uh-
Uh, well, it's, uh, it's, this, uh, lot, uh, seven lot industrial subdivision. So it's a land subdivision into seven large lots. They're about 5,000 to 7,000 square meters each- Yep ... and there'll be seven of them with a little road through the middle- Through the middle ... to allow access to the seven different lots.
So either truck parking or industrial outdoor storage, and a- again, I'm going to stage that development so that I can add, uh, sheds on each of the seven lots at a later stage if the tenant wants to have a shed on there.
Sure. And of course it was that one phone call to the, uh, to the council that changed everything.
Yeah, so my, my... When I originally rang a town planner and said, "What should I do with this site?" They said, "Oh, well Longreach desperately needs another service station out there." So that was my initial intention when I bought the site, but that one phone call to the council said, "Well, have you got a million dollars to, uh, extend the water mains?"
I said, "No." And, and that, you know, that saved me wasting money getting a designer to go and plan a service station.
Sure. Let's have a quick look at Lawlers Road, your other case study here.
Yep.
Just remind us, what was that, um, development? What was the
plan? Uh, our Lawlers Road is in, also in Hellerton, um, uh, 15 minutes, um, from Toowoomba, uh, just at the bottom of the range there.
So that site was 15,800 square meters of industrial land.
Mm-hmm.
Um, I'm working through the final processes now of responding to information requests from the Lockyer Valley Council, mainly around problems with potential storm water management.
Mm-hmm.
Now, um, that 15,800 square meters can't all be developed because the water flows over there, uh, when there's big rains, and- '
Cause we know it's a flood-prone- Yeah, and-
prone
sort of, uh, area of Australia, isn't it? Yeah.
Mm.
So I thought we had the plans finalized when we did a podcast here a month or two ago, and I thought, oh, well, we're down to 7,600 square meters of hard stand now. It looks like that's, as of, uh, Friday, just gone, when I opened my emails, it looks like that's coming down to 5,000 and something now.
So this is through flood mapping?
Yeah, and I can't explain why the engineers wouldn't have p- picked this up when we first did the plans. I, I don't know. Um, but what I can say is that I made a, had a, made a mistake when I bought this site as well because as a real estate agent, I have access to software called RP Data, and they have a flood mapping overlay thing where you can click flooding, and it'll show you if it floods.
It just shows you where. Now, when I bought that site, that's the first thing I did, well, click on the thing, there's no blue on it. So I thought there was no-
Flood ...
flood. I thought I could buy this 15,800 square me- And use the whole, whole lot ... use the whole lot. But what happened was, um, when the town planner makes investigations, they cross-reference my checks with the council flood maps.
So each... I'm not sure if all councils have, I suspect they do, but that particular council had their own flap, flood mapping, uh- That's
different to
RP Data ... which is different to RP Data, and it said, well, half of this site does flood, and that just ruined my plans straight away. But, um, we're now down to, I th- uh, 5,000 and something.
Of, of a total of what? 15, did you say?
15,800. So the latest thing that we, I just got through on Friday from the engineers is a new, um- bio-retention basin where the water fills up in this particular area before it's slowly released, uh, out to the council gutters on the road. Some, uh, big, uh, culvert box things that they're gonna stick under the concrete overpass to let the water go through so it doesn't build up- Build up
and, and sort of flood. Um, and a bit more earthworks. So because the site is reasonably flat, most of it, um, I have to do a bit more earthwork so that the water actually runs in a particular direction into these bio-retention basins. So the usable area of that site is gonna be, uh, a lot less than I anticipated.
It's still not finalized. We're still, um, about to lodge the final, um, paperwork to respond to the information request. But the key with all of these sites is I've made mistakes with all of them. Um, the church one in Ipswich, uh, I bought it to subdivide, and I worked out after I bought it that I couldn't connect the, um, the, uh, the, the sewer because it was too low, and shit doesn't go uphill.
Yeah. And I sold that one at a profit as well, uh, because I bought right. So you don't have to be perfect. You can make a lot of mistakes. As long as you buy well and have alternative uses for the site where you can rent it out and get some sort of cash flow to, to survive so that you're not making a massive mistake, property is very forgiving, and you can make mistakes and not lose your investment.
And even that church site, I mean, I flipped it within 18 months for a 200 grand profit. I did nothing to it because I bought it right.
Yep.
I knew my numbers. Beautiful. And it's okay to make mistakes.
So you've lost two-thirds of the use of this, um-
Yeah ...
uh, Lawlers Road. Is that just now unusable for, for anything?
Yeah. Yeah, they're not even... The, the, the, the, the feedback I have is from the council. We've got to promise them that there'll never be any cars or trucks going on that low land.
And so there's nothing left
but- No. So I mean, if I've got f- five and a half thousand square meters of it, I mean, I bought that site for $420,000.
Um- I thought it was, uh, you know, X amount per square meter. Now I've got to go back and say, well- A
third of it. It's-
Actually it's- ... basically a third of it.
Yeah ... it's about $80 a
square meter. Now, if I can only use 5,500 and I paid 420, I'm still, I, I'm, uh, it's not $20 a square meter. I'm bought it at about $80 a square meter.
But it's okay because it, I b- still bought it so cheap. Right. Remember, Yatala is $1,500 a square meter. That's
right.
And my return on this one, even at a reduced area of 5,500 square meters, I'll still make a 50% return over two years- Yep ... building that out, which is 25% a year.
Which is your minimum.
Which is my plan minimum, yeah.
Yeah. So it's still gonna be, it's still gonna work out okay. All
right. Looking back at the mistakes you've made, and you've just said, you know, property is forgiving. You can, can make these mistakes and- Yeah ... still do well.
Yeah.
But hindsight's a wonderful thing. Mm. You've just explained the mistakes. Some of them.
In hindsight, was there anything you could have done where these mistakes wouldn't happen? Or do you just have to accept at times, like where you've looked at the RP data flood zones and it's not there, but the council says they are, that, that this, this is just gonna happen sometimes?
I think the answer is if you've built a team of consultants and you buy a property with a due diligence clause, you can always spend money, um, paying consultants to provide, for example, the flooding advice.
Uh, they c- I could have got advice from the engineers that hang on the council- During
a due diligence.
Yeah, the due diligence period. Would, would you have still bought it? Yeah, I think I would have. And this is the same thing as the, uh, the 24 Railway Street, Hellerton. I made a mistake there not doing due diligence with my lawyer.
He said, "Oh, Andrew, do you want me to do any more searches?" I said, "No." And I found out later that the state government wants to reclaim one quarter of that land to expand the Warrego Highway. So I made another mistake on that site, too. But I bought it so cheap that I'm still gonna do very, very well out of it.
In fact, that site there, um, 15 units, um, I bought that s- I didn't even have enough money to buy that either. I, I got my ex-wife to put in half. We put in 60 grand each, and we bought it for $120,000 for 2,000 square meters of commercial land on the main street in the middle of the city in that town. Um- I'm gonna sell a quarter of that land back to the state government 'cause they're gonna force me to because they wanna expand the Warrego Highway, and I'll get 50 grand back from that.
So the land's cost me $70,000. I'm gonna build 15 units on it, so the land content of each unit is $5,000 is my cost of land for each unit. Now, if there's no margin in that, there's-
You're doing something wrong ...
I'm doing something wrong. So- That's it ... you know, it's gonna work out all right- Okay ... even though I made a mistake.
Now, all of your developments, pretty much all of yours, are staged. Yes. Why is staging developments so important, and how does it benefit you?
I think there's three main reasons. Uh, the first one, uh, is the infrastructure charges. So with these industrial outdoor storage units and, um, and truck parking depots, if I'm gonna put a fence around and some hardstand and have trucks park there, that's my stage one.
Stage two is building a big shed on there if those tenants actually need a shed. Now, the benefit of putting it in stages is when I build the truck parking depot, I only have to pay the infrastructure charges for the hardstand. Now, if I didn't stage it, they would whack me for the infrastructure charges for the shed as well.
But by staging it, I don't actually have to pay the infrastructure charges on building these sheds unless I decide to build the sheds. The second thing, which is very, very important, is when I go to borrow money to actually build these things, uh, if I've only got to raise money for stage one, it's a lot more feasible for me to borrow money because the banks, in most cases, won't lend me all the money to build the whole thing.
To, to, to get
to- So I can do it in little stages. Borrow a little bit of money here, build stage one. When that's finished, then I have the borrowing capacity once I've leased it all out- Yeah ... to go to stage two. Okay? And sta- and the third reason, which is really underrated, is when you get a development approval with the council, in most cases with most councils, they will put a time limit on the approval, and it might be four years, for example.
Now, there's so many sites in this country that have development approvals that never get built, and developers quite often will go at the end of the four years and pay a fee of 1,000 bucks and say, "Well council, can you extend this for another four years, because I haven't quite got round to building this?"
In most cases they'll agree to that. But in some cases, when there's a change in council or some other change in the local town plan comes up, they could just turn round and say, "No, we're not gonna let you extend this because we don't want it to be used for that anymore," and you, you've just wasted all your money.
Mm.
But by staging it, the majority of times in the majority of councils, you have a time limit to complete stage one, and stage two and stage three can be done any time in the next hundred years.
Yep.
So you don't have that time limit, and you're not gonna lose out. Or,
or even, even having, having to go ahead with stage two or three if, if circumstances change.
That's
right.
Yep.
Exactly, and yeah-
Rather than jump in and do the whole lot at once.
Yeah, so I could go and stay, do stage one at that, um, uh, 24 Railway Street, Hellerton, which is three shops which I'm not com- confident in leasing out- Yeah ... and four little one-bedroom units. I'm confident I can rent those four little one-bedroom units within two weeks.
Yep.
It's gonna be a lot harder to find people to operate a business in those three little shops. Now, if I never rent them out, I may never get to stage two- Yeah ... because there's, I've got to get stage one profitable first before I can fund the cash flows for stage two- Stage two ... which is another 12 two-bedroom units.
But there is another good point to all of this, and that is the fact that you think beyond stage one- Mm ... that you actually do have a staged plan, um, that there is A, B, C, and D. Um-
And, and, and you're right, and, and, you know the old philosophy, a journey of a thousand miles begins with a single step, and building 15 units for me is a bit scary- Yeah
but building seven, you know, I, I can handle that a lot easier. So a journey of a thousand miles begins with a single step.
Perfect. Now, you mentioned early on in this, uh, this podcast- Mm ... your whole strategy around everything you do with, uh, your property investments is develop and hold, or, you know- Or
buy and hold
buy and hold. Yes. Let's just, let's just say and hold.
Yes.
Um, not to sell. Now, most developers, as you've said, buy and sell. Why don't you?
Well, uh, I don't mean this to come out in a disrespectful way. There's a lot of developers that are a lot smarter than me and have made a lot more money developing stuff, selling it, and moving on to bigger and higher development, um, bigger scale developments.
But my feeling is, uh, if you're doing that, development is just a job. Every time you sell, you're paying tax, and next year you're unemployed, you've got to go out and find another site. My feeling is if you can build to rent it out instead of selling, you're increasing your asset base and compounding the number of assets you hold, which every 10 years should double in value- Mm
if the last 50 years has been a good example in this country. So why not keep each investment, and then at the end of 10 projects you've got 10 sites there that will hopefully all double in value in the next 10 years- Over 10 years ... and you haven't paid tax once-
No ...
on crystallizing an asset- Yeah ... 'cause you haven't sold anything.
So to me-
So to answer that question that I've just asked- Mm ... I'm gonna answer it in one word for you. You've just explained it. That's tax.
Tax and compounding. Yeah. Having a bigger asset base-
Yep ...
to compound. Mm. Because if you sell everything and then you're starting every year at scratch thinking, "What am I gonna do this year to make money?"
You're literally j- Yeah ... it's just a job.
Mm.
Whereas if you can get more and more assets compounding, one, you've avoided the tax, but two, you've got a, a lot bigger asset base. I mean, even there we talked about that $27 million in property. Now I'm only just getting started, but if, if that just goes up 10% a year, that's 2.7 million before I get out of bed.
Now, most developers might be happy to make 2.7 million in one year doing develop- I, I, I get that before I get out of bed-
Yeah ...
because I've got those assets compounding 'Cause it's compounding.
Absolutely- Yeah ... and not paying tax. Yeah. All right, what's on the horizon, Andrew? What's next? What's coming up?
Well, um, I, um, have recently, uh, had discussions with another town planner about, uh, a couple of the blocks I own in Ipswich. Mm-hmm. Uh, one of them, 3-5 West Street, Ipswich, had prior development approval for 170 units, a 15-story building, and-
This is a car park at the moment-
This is a car park ... if I, if I remember correctly Yeah, it's just rented out- Yeah
to the Ipswich City Council as a car park. And the, one of the other blocks in that- whole group that I bought there, uh, number 13 Ellenborough Street, had approval for a five-story, uh, commercial building. And I'm just, uh, thinking that I might get the ball rolling in, um, getting new approvals, 'cause those approvals lapsed, and I'm thinking that it might be time to add some value to those sites, uh, just in case the council stop paying me rent on the car park.
'Cause they've been there 21 years, but they've never signed another lease since they started. It's just one year at a time. Right. They could just stop paying me rent tomorrow, and if they decide to do that, I don't wanna then spend two years trying to get- Get the approval ... a development approval for that car park.
I wanna have something-
In place,
ready to go ... I'm thinking it might be worthwhile spending money now as a risk management thing so that I've already got approval.
Mm.
Well, that- And if the council stops paying rent, it's there ready to go.
That gives you two options then, doesn't it? And, and y- yours is hold and, and develop and hold or, or, um, buy and hold.
So you've got that one r- there where you could actually then start and let's call it staged if you haven't- Yes ... to save fif- a hundred and- 170
units. In that
case there- You could start with, well, start with 10 st- and move on. Yeah. Or you've just increased the value of that site. You could actually- And if I had to, I could just sell it
you could just flip it.
I could just sell it.
Yeah, but you're stuck if they leave tomorrow and you can't find another tenant, for two years trying to get the, the approval. That's
exactly right,
and- You- you've either got to get a tenant or you've got to get...
100% right. Yeah. And, and all of this sort of exit strategy thinking, um, is important.
Even though I'm buy and hold, that other site in, um, 24 Railway Street, Hellerton, with 15 units-
Yeah ...
I'm on purpose structuring that so that I can strata title them on 15 separate titles. So if I can't afford to hold them all and I need to flick a couple to get some cash in the bank and reduce my debt, I can just sell one, two, or five of those 15 units if I'm forced to.
So I'm s- instead of just putting it, um, designing it all with one water meter, for example, where I can't subdivide them into 15 lots, I'm gonna have 15 water meters, okay? And I may decide to put it on one title initially so that I only get one rates notice, and it'll probably be a lot lower than getting 15 rates notices.
But I've structured it so that there will be 15 meters. I just haven't connected them all, and if I need to down the track, uh, I can strata title them into 15 different lots and I can just go and sell three or five, uh, if I need to raise some money, and that'll probably increase the valuation of them too if they're actually 15 separate properties.
For sure. Have you got another target in your sights in Emerald?
I, I'm looking all over the place. Um, I've seen sites in Emerald, but, um, there's nothing in my buy box now. I've got a couple, I've got a couple in Townsville that I've got my eye on at the moment, but not in Emerald.
Okay.
And in fact s- can I just talk about
something- Let's just cut, let's just cut that out then.
I had something on here that said Emerald
Oh, no, I've got another site in Emerald with a development approval already. Oh. Oh, sorry, go back and say, ask that again. Yeah. Sorry.
Okay. Um, you've got something on the go in Emerald as well?
Uh, yeah, I bought a, um, truck parking depot there again, which is leased, uh, to a transport company, a mom-and-dad truck parking company.
They have their semi-trailers there, et cetera. Now they're on a, uh, a two-year lease there, and same situation. They, if they decide to move out, I've got, uh, plans there already approved, uh, to build a 900 square meter shed on that site. So I didn't get that approval. Actually, I inherited it when I purchased it.
Mm-hmm. And just before I settled, I made it a condition of the due diligence clause that I will continue with this purchase if the seller goes to the council in the next month before it expires and actually extends that development approval for another four years. So he paid the $1,000 fee, gave me another four years to build the shed if I need to.
And if my tenants there decide to move out, same thing. I've got all the ... And he paid all the infrastructure charges up front too, by the way, so I can just go and build that shed if I need to. Now, I'm not planning to do it-
Yep ...
but it's in the future- It's- ... if that property becomes vacant-
Risk management
I'll do it.
Risk management.
Yep.
Andrew, I wanna finish off with, uh, with one question. If you had $500,000 today and wanted to become a property developer, exactly what would your first 12 months look like from now?
If you were starting out and you've got 500 grand
Look, my, my-- right now at this point in time, my passion is truck parking depots, simply because I'm of the, the, the most important philosophy of real estate to me is that land seems to value every 10 years, double in value every 10 years. So industrial land is large chunks of land, and truck parking has no buildings depreciating on it.
There's no leaking roofs. There's no air conditioners going broke. There's no tenants. Yesterday I had a tenant, "Andrew, I've locked myself out. Can I come and collect your spare set of keys?" You don't get that sort of stuff with an empty chunk of industrial land. So for me, my passion definitely is, uh, industrial land, and I'd be going down that track.
But that changes over time, so I don't actually like your question because seven, six years ago, I finished building my first boarding house. Yep. Eight bedrooms, eight bathrooms, and it was such a great cash flow. I said, "Well, forget about all these other strategies. Why don't I just go out-" It, it- "... and build a whole heap of boarding houses?"
It- But the problem is on the Gold Coast, they only let you build up to four rooms without development approval.
Yeah.
And it doesn't make sense with a four-bedroom boarding house, and I haven't found any other great sites, uh, in Southport where I can build eight to 10-bedroom boarding houses. So I haven't been able to do that strategy.
But I thought that was my-- that's what I would do going forward- Y-you- ... is, "Oh, I'm just gonna go and build a whole heap of boarding houses."
You might not like that question-
Mm ...
but I do 'cause I'm gonna give you an alternative answer. I'm gonna look straight down the camera when I do. If you've got 500,000 and wanted to become a property developer right now, what I'd do over the next 12 months, I'd be actually going to your computer right now and writing in, uh, hello@andrewwrightproperty.com.au, and writing Andrew an email and telling him you've got 500 grand and you wanna become a property developer.
You do not know what is gonna happen out of that conversation, and that's what this is actually all about, this entire, uh, property podcast. He's not here to sell you a course. He's not here to do anything other than create a community of like-minded property investors who wanna do well, who wanna learn off each other, and who wanna make money and collaborate.
And, um, you know, he's open to JVs, he's open to... But he's open to just giving advice as well. If you've got 500,000 and wanna become a property developer, send Andrew an email. That's the answer. You've,
you've turned that into a great question. But, but the other reason I didn't like the question is who cares what I would do with it?
Every person listening will have a different strategy. Now, if they're a builder, they might wanna build their own duplex. They might wanna build five townhouses. They might just wanna do a land subdivision. So don't worry about what I would do. Find your little niche. I can point you in the right direction w- no matter what that is, with the right mentor for you, because I know a lot of smart people, a lot smarter than me, that have done each of these strategies.
And if I can't help you, I'll introduce you to someone who can.
I can, I can hear your phone pinging I can... The emails, the emails are coming in. The, the listeners have listened now. So look, Andrew, another, another great episode. There's so many great takeaways, but, uh, look, I am serious. This is what this podcast has been created for.
If you're in the property development game, if you wanna be in the property development game, if you wanna be a guest on the podcast, if you wanna do anything, give Andrew a, an email. He's, he's there. He wants to... He answers every email and, um, wants to chat to, to like-minded individuals. If you've enjoyed this podcast, please share it with anyone else interested in, uh, in property.
It's, uh, you that helps us get this, uh, this podcast growing and out to people who, um, who get value from it. So, uh, hit that subscribe button. Don't miss any. Jump back, there's 30-odd episodes there with, um, some incredible, uh, strategies and, um, education stories. Um, real wins, real losses. That's what this, uh, this podcast is all about.
So Andrew, thanks once again for joining me. I know you've got a, a, a cracking lineup of guests coming up in the next, uh, in the next five or 10 episodes, so look forward to that. But I also look forward to being in the, the hot seat with you again, uh, very soon.
Thanks, Adam. Can I just, um, do a little bit of rebuttal?
I said I was very shy to do this podcast because I don't feel overly qualified. I am only a part-time developer. But the other flip side to that is, hopefully people listening can relate, because there's so much about property development that I don't know. But the, the thi- the key is you don't need to know because the town planner has been doing it for 20 years.
The engineers have been doing it all their life. You don't need to know it all.
You just need to know the people who do kn- know
You need to know who you can bring into your team to sort it out and, but you do need to buy the site well. That's what you need to really focus on and, and have a good idea of where you can add value.
Absolutely. Andrew, thanks once again.
Thanks, Adam