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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
This will be a $10 million property within two or three years.
Wow.
Hmm. I, I, I honestly did not know this was possible. Today's strategy is a new one that I've never done before myself. Nine properties I've purchased in the last 18 months, and none of them had a bank loan. The opportunity is a lease purchase agreement.
What is a lease purchase agreement?
Okay. A lease purchase agreement is effectively-
You're gonna increase the value of this thing while you're doing it.
Big time.
I
hope the listeners take this seriously because this is just, even for myself, this has just opened my eyes wide up to a whole world of opportunity.
Now, there's more to this deal, Adam. Just wait.
There's more?
There's more.
All right. Let's do it. Okay, so-
Hi, I'm Andrew Wright, principal of Professional Southport, and this is the Andrew Wright Property Podcast. I've built a multimillion-dollar property portfolio, delivering a seven-figure annual rental income, and led my real estate team through thousands of sale and lease transactions. In each episode, I share real deals and strategies that will help you find, fund, and operate profitable property deals.
The aim of this show is to provide education and build a community of like-minded investors who can collaborate, share insights, and help each other in each other's journeys. You can make excuses or you can make money, but you can't do both. So come and join us
Welcome. Welcome, everyone. Welcome back to another episode of the Andrew Wright Property Podcast. Mm. And if you listened to our last episode, you'll know why I'm excited. I'm probably almost excited as the guy sitting opposite me today to talk about what may end up being potentially-
Mm ...
the two best deals he's ever done.
And if you've listened to this series, you know he's done some bloody good deals. I can't wait to hear this. Andrew, welcome to the, the podcast studio.
Thanks, Adam. I'm very happy to be here, man.
All right. Now, look, today's episode is about potentially two of your, your best ever deals, but, um, it's about one of the most un- misunderstood strategies in property investing, and that's lease purchase agreements.
Mm. Now, most people believe you need a huge deposit and, uh, and bank finance before you can buy a property, but you're living proof that that's not actually the, the case. Uh, but so today's strategy can allow you to control a property with very little to no money up front, create value before settlement, and potentially build equity before you even own it Andrew, where do we start with this?
Do you wanna talk about the deals? Do you wanna talk about lease purchase agreements?
Yeah.
Where do you wanna start?
Well, let's, uh, start by saying, um, uh, we've done a podcast before, um, about nine properties I've purchased in the last 18 months, and none of them had a bank loan. They were vendor finance.
They were deals done with private money loans because the banks wouldn't lend me money. They were done with joint ventures where I didn't have any money to put down a deposit, and I've had other people come in and put the deposit down in a 50/50 joint venture. And today's strategy is a new one that I've never done before myself, and I'm really excited to pursue it.
Um, I've listened to a lot of podcasts in America about this type of strategy, but I don't know anyone else who's done it. I'm sure it has been done before, so I'm certainly not experienced in it. It's new to me, but I'm very excited about its potential use going forward. So the opportunity is a lease purchase agreement.
W- well, before we even go there, what is a lease purchase agreement?
Okay. A lease purchase agreement is effectively two separate contracts. Uh, one is an agreement to lease a property where you enter into an agreement. It may-- Typically, it's a, a three to five-year term where you might find a seller who owns a vacant commercial property, um, has no income from it, and you simply just agree to lease it for a period of three to five years.
Now, the, the big upside with that part of the strategy is if you can negotiate for it to be what's called a master lease, and a clause in that lease allows you to sublease There is a rental arbitrage opportunity where you can rent it out. The owners had no money coming in from it. You offer a rent which is X amount, and if you can sublease it-
For more
you can profit massively. Now, think about it in general terms, maybe the viewers can understand. Uh, this, we've talked about this before. As a rental property agent, I used to get offended by clients filling in an application to lease one of our houses, where they say, "Well, Andrew, I'm gonna pay you 900 bucks a week, but I want the owner's permission for me to go and do Airbnb."
Mm. "
Now I'm gonna make two grand a week."
Airbnb arbitrage has become a big thing.
And it's the same thing with rooming accommodation. If you get a five-bedroom house or something like that in Brisbane, um, you can legally rent out the rooms, and there are people out there renting a house at $900 a week and renting it out for 2,000.
That's what you call rental arbitrage. Now, the same thing exists in commercial property, and a purchase to lease contract gives you that opportunity if you have the skill set around leasing.
I'm already know where this is going, having done so many, 'cause you're- ... you're gonna increase the value of this thing while you're doing it.
Big time.
Oh, I've learnt some things, uh, during this series. So, um, I wouldn't have known that when we started this series, but I, I now know how your mind works. So, so,
so that's part one. That is the lease contract. Yep. And the separate agreement which you need to enter into is a purchase contract, which is totally separate, and usually in a lease purchase agreement that has a delayed settlement.
So, uh, it may well be, uh, one, two, three, or five years down the dra- the track where you agree on a price, uh, and you settle down the track, uh, when, when, whenever... Everything's negotiable. The, the complication with that is you can also have a, a lease to purchase option.
Yeah.
Which is-
What's, what's the difference there?
Yeah ...
well, the, th- that's the preference for buyers because in three or four years' time you have the option to buy that property, but you're not forced to. The disadvantage for the seller is the seller may want some certainty, and they may not grant you an option if they want the cer- certainty of the sale.
Um, and, and they may not give you an option.
When there's an option in place rather than an agreement- Mm ... um, and I do understand the difference there now, is, is it still at a set price that is, um, agreed at that point in time? Or when it's an option, it could be, it could actually be market price at the time?
No, you usually would set the, the option, uh, would usually say, "This is the term of the option." It will say, "This is the exercise date where you must agree to proceed with the purchase, and this is the fixed price that we agree-" Wow ... "upon now, three or four years earlier than the transaction," and that's all documented- Okay
in the option agreement.
Why would a seller- agree to one of these agreements or options wh- while locking themselves into a price two, three, five years down the track when You know, on the whole, generally speaking, I've, generalizing everything, every deal has a different, um, scenario, but the price is, you know, it will be worth more at that particular time
Yeah.
So it's really interesting from the seller's point of view. Uh, you need to work out, do they need money straightaway, first of all? Now, if a seller needs equity from their property straightaway, they are not going to grant you an option-
No ...
because they need the money now. But if that person, and there's very, very, like, one-third of properties owned in this country are owned outright.
There are a lot of wealthy older people who don't owe any money on their properties. They don't need to sell now, and most of them want too much for them. So there's an opportunity where a seller can say, "Okay, well, if I'm gonna get some rent from this empty property, uh, why not agree to a lease purchase option where I'm putting in an inflated price on the property down the track?"
I see.
It's higher than current market value, and by the way, we're gonna get a heap of cashflow now from an empty property that we're not getting before. So
there's the answer to the question. Mm. You're offering them more than, you're generally offering them more than what it's worth today.
If it's an option, usually yes, and then there may be other examples where a seller might do it.
Now, just for example, last week in a podcast with Duncan, I mentioned that at one, uh, point in time, I wanted to refinance out of a loan. I had a $50,000 break lease, a breakout interest rate penalty from the bank, 'cause I'd fixed it for five years. It was a $2 million loan. Interest rates went down, and I thought, "Oh my God, I'm paying so much interest."
I went to my bank and said, "Can I refinance?" They hit me with a $50,000 penalty if I was going to do it. Now, I didn't wanna do that. Now, you may well find that a lot of commercial loans are also on fixed rates, and depending on the circumstances, the seller might, may not wanna sign a contract to sell now if they've got a big penalty to pay it out.
Or they might just have a massive income in that entity, or i- if it's in their own name, they may have a massive income that year, and they might not wanna crystallize a big capital gain in a year in which they have a lot of other assessable income, so they might wanna defer the sale agreement. So an auction, uh, sorry, an option allows them to defer that capital gain and, and get out of any fixed loan agreements where they might have a big penalty.
Sure.
Mm-hmm.
Before we get into these couple of deals that you're looking at, um, I just want to ask, why are so many investors unfamiliar with this, this strategy? Why isn't it used more?
I, I don't know, Adam, but even,
uh- You said you don't know anyone who's done this ...
I, I, I don't, no. And, and I've, I certainly haven't done it.
It, it seems to be a little bit more common in America, where they're a bit more creative over there. But from a buyer's point of view- I'm h- I hope the listeners take this seriously because this is just, even for myself, this has just opened my eyes wide up to a whole world of opportunity to benefit from cashflow and capital growth of a property you don't even own.
Like, w- the deal we're gonna go through now, it's, it's unbelievable, and I think I'm gonna pull it off.
All right, let's do it. Tell me, what is it?
Okay, so I'm not gonna give away the location because we haven't done a deal- The deal's not done yet ... we haven't done it. Okay. So I can't-
So we're sec- we're secret school here
we're,
we're secretly talking about the strategy. I can tell you that it's, like, three acres of land in the middle of a city.
You're gonna tell me after the podcast, aren't you?
Yeah, I'll tell you afterwards. So it's three acres of land in a, in a city. Um, there's a massive shed- Regional? Yes, it's regional.
Okay. There's a massive shed on it, 3,120 square meter shed Just so you get, that's more than three-quarters of an acre on a she- the shed is three-quarters of an acre. Wow. This is a massive ... It's like a little Bunnings.
And it's, it's empty?
It's empty. There's no tenant in there. The owner's, uh, in his 80s. He has multiple children.
He's a rich gentleman, and in s- as part of his estate plan, he has said to his children, "Oh, you can have this property. You can have this property." And this particular property, the other child didn't want. There's too many problems with it, and it's empty with no cash flow, and that's why he wants to get rid of it.
Now, part of the challenge is that no one can get finance on this thing because it's an empty 3,120 square meter shed, and it does have an asbestos roof. So it is a challenging site. And there is $1.5 million worth of stock thrown into this massive shed just taking up ... It's like a, the guy's just collected stuff for 80 years and wanked it in this shed.
What? It's just junk?
No, it's previous stock. Uh, it was previously a hardware business-
Oh, okay. Right ...
just like a Bunnings.
Right. Oh, it was? Right. Okay.
So I've, I've made an offer to purchase this, uh, site. Uh, the offer I've made is, uh, $2,450,000. Right. With a miniature in com- comparison to what it should be, a $25,000 deposit.
Uh, I've ... It's a lease purchase contract I've offered because I don't have any money to buy it, and I can't afford to buy it.
So all you gotta come up with is 25K?
Yes. $25,000 deposit if they agree to it- Yeah, yeah, yeah ... and they haven't yet. We'll secure it with a, a long settlement, which still has to be negotiated, but I've submitted a longer settlement.
How long are you going
for? I've gone for 18 months. The agent told me this guy will settle in six or 12 months. I've tried for 18, so that might be reduced. I've also put in place an offer to lease the property for three years at $750 a week. Now, I spoke to the agent about what I should offer. He's told me that the market rate for that property if it's empty without all of those goods would be about $150 a square meter.
Let's just call it 3,000 square meters. $450,000 a year is market rent. Now, I can't afford to do that because there's, I'm not running a business from there. I've offered $750 a week, which is 39 grand a year plus GST.
Yep.
Now, one of the things which needs to be on a short reel here, Adam, is the whole reason I came up with this idea, and I'm, I'm going all over the place here, but when I walk around this place, I said, "This is a massive, massive property, but it's an empty shed.
No bank's gonna lend me money. I, I, I can't finance it." And I thought to myself, "Well, I've gotta find a way to do a deal here. This is such a great site." So I asked the agent, "Have you had any other offers?" To buy this property. And he said, "Oh, no, but I did have a..." He told me the name. "I did have a big national tenant come here a couple of weeks ago, and they really wanna lease the property, but their business model is not to buy."
So I went, "You've got someone interested in leasing it? Market rate is $150 a square me- 450 grand a year is market rent." Straight away my brain says, "There's my opportunity." The owner didn't wanna lease it to them because he wants it sold. And he-
E- even when that opportunity comes?
Yeah. Yeah, well, they didn't, they hadn't put forward a price.
And, and I thought straightaway, "Well, what if I can buy this site now with a due diligence clause," which I've put in my offer, and during that time I'll, I've, I'll rent that property to that big national tenant. Now, at a se- 7% cap rate, $450,000 plus outgoings is 450 grand a year net. Values that property at 6.4 million.
Now, I've made an offer of 2,450,000. That's, that's a $4 million uplift in one day with a lease, a piece of paper, if I can pull it off. Now, I may have to increase the offer. The agent's telling me I probably need to go to 2.6, but I don't care.
If, if you get the tenant, you, you've, you've, you're comfortable doing that.
Yeah. And if I don't get the tenant, I'll, I'll still continue anyway because there's so many opportunities with this deal, uh, that it's gonna be a winner. So I'm offering to pay 39 grand a year rent. Now, they may come back and say, "We want 100." Um, I'll still do that as well because- That owner is prepared to throw in that $1.5 million of hardware stock- Oh
'cause he couldn't be bothered getting rid of it. He's gonna throw in the stock? He's gonna throw in the stock. And it's, it's, it's s- saleable stock? Yeah, some of it is old. So this, um, gentleman, um, apparently what he used to do, he was in the hardware store, and when, when Bunnings would have a whole heap of stock that they'd discontinued or whatever, it might've been 100 grand worth of stock, apparently he'd just go and say, "I'll give you 20 grand for it."
So he'd go and pick up 100 grand's worth of stock for 20 grand, and he'd store it in his big shed thinking he had a great deal, and then he basically-
But never went and sold it ...
Well, he sold some of it. Yeah. Um, but i- i- it's basically a bit of hoarding, and this stuff over a long period of decades has just built up in this shed.
So what sort of- Now, some of it's old ...
what sort of stuff is it?
It's hardware. So there is, um, there is, um- What,
screws?
There's screws Nuts, bolts ... there's building materials- Okay ... there's, uh, old furniture, there's, uh, there's electrical stuff. There's just, uh, i- there's-
So what are you gonna do? You gonna have a garage sale?
Well, my initial plan was to employ a couple of people on a full-time wage for the first 12 months and just sell it all, but I just don't like the idea of employing staff with all the hassles it has- Oh, yeah ... and the amount of cash that would go in their pockets. This is in a... This is a plane flight away from me.
I can't police it- No ... even with security cameras, and I reckon there'd be half of that money would go in the pockets of the employees in cash sales if I let them do that. So I've used the help of ChatGPT. I have no retail experience at all selling stuff, and it's recommended that I do a stocktake of the material and break it down into perhaps five or six categories, building material, uh, gardening equipment, this, electrical, uh, this and that, painting stuff, and then they've broken down and given me a list of hardware stores that specialize in each of those different targets in the m- cities around there- Just approach them all
and it's saying ring them all and say, "Well, I'm gonna have a two-day sale. Come in and give me your best offer to buy all of this stuff." 'Cause if I just went and said, "Okay, come and buy this $1.5 million of stock," it's gonna be sold at a massive discount. But if I can break it into-
You're gonna maximize
it
stock that's really important- Mm ... to a particular business in the area, they'll
probably- And they're getting a m- a great deal.
Mm. ChatGPT says I'll probably get an extra 200 grand by doing it that way, and but my feeling is if, if the stock's worth 1.5 million, and that's not verified, if I sold it for half price, there's 750 grand of cash there in 12 months that I can use as a deposit to buy the place.
Wow.
This is separate to-
It's just the deal itself.
Yeah, and then remember we, we haven't talked about the rental arbitrage. If I even agreed to lease this place for 100 grand a year, and I get this national tenant- For 450 ... to lease for 450-
There's another 350 a year ...
I get 350 a year in my back pocket
You're, you're gonna fund, you're gonna fund the purchase over th- that period.
But that actually brings me to a, a question. Some- something hasn't added up. Maybe I've missed something here. Mm. Mm. But you said that you're looking for an 18-month settlement- Mm ... um, and that, that, that you think the owner will probably try to pull you back on that. Mm-hmm. Um, but you said you're gonna l- lease it for three years.
Hang on. Am I missing a year and a half here somewhere?
I haven't quite worked that out yet either, but what I told the agent was, I, I have a pet hate about buying vacant commercial property, having to fund an extra 10% of the purchase price, which is 250 grand for GST, and then the, the local state governments charge you an extra stamp duty on the GST.
Now, 5% of quarter of a million GST is an extra 12 grand or something- Tax on tax, mm ... just a tax on tax. That's my pet hate. So I've told the agent, one of my requirements if I go ahead with this thing is we've got to make it a going concern, which means we must have a lease in place first before I sign a contract to purchase, so we can tick a box in the contract which says it's a going concern, no GST payable.
Now, I don't know why he's come up with three years l- but it may well be just so that we can show that there's an existing arm's-length three-year lease in place.
And it, and it's, and it's still got, uh, 18 months to run.
Yeah. And just to be double sure that it's all above board, I've used two different companies with my offer.
I'm g- ... This company here is gonna lease it for three years, and my other company over here that I've just set up- And buy it ... is gonna purchase it in 18 months, just to keep it arm's length. Now, I'm still waiting on lawyers to confirm this is all the right way to go, and this is the first time I've bought a property in New South Wales, and everything's completely different now.
In New South Wales, the lawyers prepare the contract, not the real estate agent, and they're gonna send it to my lawyer, and he's going to go through and tell me whether it's all okay. Now, one of the other requirements I've put in there is just in case I can't get finance for this thing in 18 months, I've asked f- to include- I don't know that you're gonna need it.
I probably will get... I mean, I might, but just-
If all this comes off- I'm gonna
be fine ... you're not
gonna need it.
But just in case, because I'm just- No ... out there buying so much stuff, I'm gonna insert a clause if I can to say that I have the right just prior to settlement to assign this contract to another company that I control in case I've got to ring one of me rich mates and say, "Hey, I can't fund this thing.
Look how much, I've added millions of dollars here. Can you put in some cash to settle?" So just in case- So that
you can change the buying entity ...
I can change the buying entity- So
you're still on the hook to buy- Y- ... but you can change the buying
entity ... change the entity. And I've asked him to have a look at structuring it in a way that I w- I can't be attacked by the state government for double stamp duty.
Now, I, I don't know whether this can be done, but that's what I've told the lawyer, that's what my lawyer's instructions are, is to find a way where I can assign this to another company without running the risk of having double stamp duty, and to also make sure it's a going concern so I don't have to pay the GST and the stamp duty on the GST.
Now, there's more to this deal, Adam. Just wait. There's more. There's more? There's one acre of spare land at the back of this site It's zoned mixed use, and I'm also, during that 18 months or 12 months before settlement, I'm going to get in the development approval to improve that site with further dwellings to provide a further uplift, so that when I revalue this thing in 12 or 18 months, there's gonna be a massive uplift, not just with the- What-
long-term lease with the national tenant, but with development approval for further dwellings at the back.
What are you gonna put on the back? I don't know.
What are, what
are, what are your ideas?
I don't know, but I've already had a-
Cold storage? Truck parking?
It, it's possible, but probably not, probably not.
I've had a 45-minute Zoom call with the boss of the town planning in the council that looks after that area, and I've gone through all the things that are permitted and not permitted, and I'm narrowing it down to, one, just some simple sheds, and there's no site coverage restrictions in that council. You can basically, within reason, build as much on a 4,000 square meters of extra land, I could build a 3,000 square meter shed, no problem.
Alternatively, I could do a boarding house, I could do retail, or he said I could do multiple dwellings.
Oh, I keep forgetting this is, 'cause y- you haven't told us where this is. I keep- No, no ... I keep picturing this at a, a b- big chunk of land in the middle of nowhere like in-
No, this is in the middle of town.
Yeah,
no, I, I keep forgetting because it's- It is right next to a McDonald's. It's next to a KFC. It's next to a Bunnings. It's right next to a Woolworths. This is a prime location, and I have the opportunity here to build whatever I want, and I'm going to probably tomorrow start ringing around the local agents there to say, "Hey, if I were to build multiple dwellings residential on this site here, would they sell quickly?
How much would they sell for?" And then I'm gonna compare that to building a boarding house and keeping it myself, uh, versus a shed or a retail shop. And the other thing about that council, different to the Gold Coast, is on the Gold Coast with a mixed-use project in a retail area, you've got to have shops at the bottom, remember, and build on top or behind.
With this particular council, you don't need to build retail. You can d- the, there are certain permitted uses there which don't require me to do retail, so I could just go and do a building, a boarding house.
Right.
I could just do multiple resi, uh, or I could do a shed, and I'm yet to determine that, but there's a lot more phone calls over the next month to work out what's the best and highest use of that site.
But one thing's for sure, that council says that they're very disappointed in their own KPIs if it takes longer than six months to approve a development application. So I'm convinced within that 12 to 18-month period, I can get this DA uplift- Oof ... before I settle on the site.
Wow. I, Andrew, my my mind is
blown.
This is, this is why I can't sleep. I'm, I'm getting a DA approval on a, an acre of spare land- I'm potentially getting rental arbitrage paying 40 to 100 grand a year rent and subleasing it for two, three, $450,000 a year and I'm Pre-leasing a property to a national tenant and, and, and maybe getting a, a couple of million dollars in uplift just with a lease
And we, you haven't mentioned selling this, sell- And I got no
money to buy it
and you're selling the stock
And I'm getting free m- ma- if I get half price for the stock, I'll pick up 750 grand to use for my cash deposit
I, okay, let's talk risk, okay? Mm. Um, this tenant isn't really a goer. Mm. So suddenly there is no-
Yeah ...
no tenant. Yep. There is no going concern. Yep. You've gotta find another one potentially.
What, what happens in that scenario?
Yeah, so that's why my offer is structured along the lines of the, uh, the lease amount being a low amount. So at the moment I've offered 39 grand a year, which if nothing happened, I can fund that. It's, uh, $750 a week. It would hurt me, of course. Yep. I'm not, like, super rich or anything, but- Yep
I could do it and I could get through at $750 a week knowing that each week there's $1.5 million of stock. I can go onto Facebook Marketplace if I need to, and I should be able to generate enough cash flow to cover it. Cover, cover
that. Okay, so that covers that risk- Mm ... and you'd, you'd obviously be going hard at trying to find another, uh-
I'd be, I'd be advertising straightaway- Yeah
on Real Commercial and commercialrealestate.com for a tenant.
Sure.
And hopefully within one year, given such a great location- Yep ... I'd be able to lease that property. And I'm confident, I don't know the market very well, but the local agent has told me he can lease it. He, he, he's confident he can lease it quickly.
I'm happy to pay him a commission to add value and, uh, I've got 12 months to find a tenant.
All right. I'm gonna throw a few rocks at you- Yep ... and just so that we can play out the, the, the worst scenario here. I wanna know where the numbers become unviable for you. So, A, let's, let's roll with that. A, okay, there is no national tenant.
Mm. When push comes to shove, nope, sorry, that, that isn't actually there. Mm. You've explained what you do with that. The, now the, uh, the vendor comes back to you and says, "Andrew, 39 grand a year. Are you kidding me?" Mm. "No. I, I want, I want, um, you know, it's, it's worth 450." Mm. "Um, I want, I want 250." Um, when does the numbers become where you're just, you know, at what point does it become a walk-away scenario for you?
Where... I- is, is that the key number, or is there anything else that, um-
Great question. That's why I'm sleeping every night rolling over and waking up every two hours. I don't know the questio- the answer, and that's why I'm pu- I am putting in, in my offer, uh, I think it was, uh, f- 14-day due diligence clause so I can think through these issues.
But rest assured, that national tenant is coming back to inspect that property in the second week of August, which is 10 days away. I want this contract signed before then because they're bringing their CEO and they'll probably make an offer to purchase the thing. So I want this under contract in the next 10 days.
And I told the agent, "Do not cancel that inspection. Don't tell them that it's sold. I want them to become my tenant." And now they've said previously that their preference- The CEO's coming to have a look ... the CEO plus two other managements, people, the management managers there plus the CEO, their preference was to rent.
Now they're bringing the CEO back because they thought they'd be forced to buy it. But if I buy it, I would be delighted for them to rent it. Now if that is their preference, I'd be very happy to pay this agent a leasing commission, get them on a long three, five, 10-year lease for me and that, that one action alone which can, may happen during the due diligence clause could add millions of dollars-
Okay, but-
in
value ...
but my skin's tingling here because this is where things get interesting and, and exciting. So if I've got this right, you've got to take the, the punt to buy before they, before they inspect on the basis that if they inspect they could very well see the, the opportunity with buying. However, you've got the risk that they decide not to actually, uh, lease as well and all this is gonna happen in a, in a 14-day period.
Yeah,
but, but that's before my due diligence clause expires. But even- Ah, okay ... see, my-
So you've got the safety net
I've got the safety net of the due diligence clause. But even if they don't lease, I'm still gonna proceed at them because if I can't generate 100 grand a year from sale of that stock I'm doing something wrong.
And it may well be that if I can't- Get inventories together and target specific hardware stores in multiple cities, uh, within half an hour's drive of that area that I just call an auction company, and we just go and do a massive auction and get rid of it all- Yep ... all the remaining stock. So that's my... Y- if you go down that track, it's a fire sale-
Yep
and you're not gonna get the, as many cents- No ... on the dollar as you would liquidating it like that. But that's my last risk management strategy. So I'm gonna break it down into five or six lots of different, um, stock inventories to target specific gardening companies or electrical- Yep ... companies or builders or painters.
And whatever's left at the end, I'm actually gonna ring one of these big auctioneering companies and say, "Hey, get rid of all this stuff." Okay. So I've got an empty shed, and then my tenant's ready to go.
All right. Have you had any feedback yet from your agent on your offer, on your initial offerings to-
Yes, he's confirmed that he submitted it to the seller.
The seller is considering it, but due to the magnitude of the decision, he's sitting down with his family to discuss their response to my offer. Right. Now, that tells me that he didn't say no.
Yeah.
He's probably gonna counter. I may have to up the leasing amount. The rent. I may have to up the purchase price, but with the s- multiple facets there- There's, there's margin there for you
there's so many margins there. There's margin there for you. I'm, that's why I'm confident I'll do a deal. And just remember, like, like-
How long has it been on the market for, do you mind me asking?
It's not advertised.
Oh.
Remember, this, this whole deal came because I made the effort to p- buy a plane ticket, hire a car for two days- Well-
and go around looking for six other properties that were on the market, and that agent said- Hang on ... "By the way, there is another property that a guy who wants to sell. It's not advertised." I only found out about this 'cause I put in the work. This
is off market.
Yes.
Now, we, we do need to explain exactly this, and, and I want you to tell the story 'cause you did tell it in the, in our last episode.
Mm. However, we haven't explained how you came across this. Mm. Um, okay. You've jumped on a plane To somewhere unknown, which has got to stay unknown at this particular time- Correct ... ready to look at six different, um, uh, deals, properties, um, in the- Yeah, the main motivation
was cold storage
facilities ... yep, in the area.
Yeah, yeah.
You've, uh, come across this agent, said, "Well, if you're looking at, at these, come and have a look at this other one I've got," and then you've stumbled across this. Um, so you've, you haven't got any competition in, in terms of offers being put to the vendor either?
No, just this one other national tenant that that agent had contacted.
But it, this all came about because the agent thought I was flying there just down to see him, but I said, "Look, mate, I've, I've s- looking at other properties in the next city." And all of a sudden as an agent, well, you know, he wants to be the one- Yeah ... that gets to sell. "Oh, well, I've got one in that city that I can sell you."
"Okay, well, let's have a look at it." Now, it just so happens that this one that's I didn't fly down there to see may end up being the best deal of all, because I put in the work.
This is just-
Mm ...
crazy. I love it. I love it. Now, you told me how excited you, you were, but this is just, it, it, it is mind-blowing.
This
will be a $10 million property within two or three years
Wow. Mm. Wow. Yeah.
And
y- and, uh, as I can now see, one of probably the best, the most profitable deal, deal you've ever done in terms of uplift in such a short space of time. There's a lot to- Mm ... to fall into place, but there's no reason it, it can't happen.
There's no reason why it can't happen, but, you know, in a way, Adam, you know, one thing that I don't really like is listening to podcasts on YouTube with commercial buyer's agent out there saying, "Oh, would you buy this if we could turn it into X, Ys in a few years?" I don't actually like the structure of this podcast where I'm saying, "This is what I'm gonna do."
I don't like gunners. I like actually going, "This is what I've done." But I am so excited about this one that I, I'm agreeing to talk about it because I'm just so excited. Now, none of this has happened yet. It's all theoretical, but I do think it's gonna happen.
Yep. And look, one thing is you've put yourself out there with this podcast, and we're gonna come back and talk about- I might fail too
if it does- Yeah ... if it doesn't, or something in between. There will be updates on this regularly and- Yep ... you know, it's only going to... We, we put out a, an episode every week, Andrew. This is due to all happen in the next, um, what is it? 30 days, 30 to, to 60
days. 14. The, the-
From now.
This national tenant's going back there in 10 or 12 days.
Oh, I under- I need this under contract before they go back, 'cause they might go and make an offer to purchase it, which is far higher than what I
offer. Well, we'll be doing an update on this in, in, uh- Yeah ... in three weeks' time. Yeah. Um, we have to just to know what's, uh, you know, what's, uh, what's happened.
So, uh, whether we tuck that onto the, uh, the start of another episode or we do a full one, because this is one we are gonna follow, um, very, very closely. Can
I just talk about one downside of that property?
Sure.
I mentioned before one of the reasons why there's a challenge with that site also is there's an asbestos roof.
You did.
Now, when you've got a 3,000 square meter shed with an asbestos roof, the agent told me, he's already, he actually emailed me the quote, 450 grand just to remove the roof. That's not even to replace it. Now, it's probably another 300 grand to put on a new colorbond roof. So at some stage I'll probably have to spend 750 grand putting a new roof on that, but I'm hoping there's no evidence that it's damaged.
It might last another 20 years, but, you know, this is another reason why some properties are problem properties, and if you can become a problem solver- You can potentially, you know, make a lot of money, and the more problems you can help people with, help sellers with, the more money you can make in real estate.
I'm a problem solver. I'm becoming, because I've got no money to buy, I'm becoming, like, I, I read this word, I heard this word in an American podcast, I'm becoming an acquisitions engineer- ... working out how to buy things when I got no money.
All right, so you're an acquisitions engineer.
I'm an acquisitions engineer.
That's my claim to fame, because I got no money- You're a
bloody- ... and I'm still out buying ... smart property investor, that's what you are. But you can call yourself whatever you like. We'll put that in the show notes. If you wanna, if, if you wanna get in touch with our new acquisitions engineer, um, uh, please do.
Look, guys, if you're out there listening to this, this is, um, potentially the, the deal of the century. We'd love to hear your comments, your feedback. Um, do, um, sign up to, uh, Andrew's, uh, weekly newsletter on the, the website andrewwrightproperty.com.au. Um, mate, is there anything else to, to, to talk about with this one?
Um, I mean- There's one
more thing.
Yep.
Just wait, there's more, Adam.
Oh, crikey.
Now, again, I'm learning. I, I, I honestly did not know this was possible, but I sat down with the agent and said, "Look, if you wanna, you know, help this guy get a deal done, he's in his 80s, he wants some certainty for his estate. Is there any other strategies that might assist him to help me get a deal done here?"
And he said, "Well, listen." I said, "Have you actually done one of these before? Because I've never heard of it being done in Australia." He said, "Yes." I said, "Tell me about the deal." And one of the things that came up in that deal is that in that particular transaction that he had been involved with before, the rent paid during the time of that lease, which was three years, came off the purchase price at settlement.
And that's what I have included in my offer.
Oh, wow.
I didn't know that was legal, and I still haven't had my lawyer confirm all this, but he said he's done it before But
you now know, Andrew, with his counteroffer, you've just put in a, a perfect thing that he can counter where he actually takes that off- Yeah
and, and includes
that- And feels like he's having a win ...
yeah, includes that in his as value that he's getting back, um, that wasn't even necessarily meant to be there in the first place.
Unbelievable.
Oh,
my. I didn't, I didn't know this was legal, and I don't even know how it, uh-
Okay, well, we'll, we'll, we'll up the rent to this.
We'll, I'll take the purchase price of this, and you're not getting the rent off. Yeah.
I- And I've got my accountant on the job to confirm how that's treated for tax. If I'm pa- claiming all those rental payments each month as a tax deduction, how does that all work when it comes off the purchase price?
And then I haven't even thought through those, and even the accountant said, "Oh, Andrew, this is complicated. We need to think through these issues." But let, let me tell you, Adam, um, just wait. There's more.
Oh, G- Yep. Uh-
Okay, so I went on the Google Maps. This particular property has two separate street access, and there is one small block of land at the rear access to this site which, if I could purchase it, would add massive value to this site because it would allow easier access for that one acre at the back.
Remember Peter Pulich a little while ago said he'd end up buying a church and end up buying another block of land so he could get more access into the site to build his 216 retirement homes? Well, this particular block of land is owned by the council. So while I was on a 45-minute Zoom call last week, I said, "Oh, look, by the way, would you be interested in selling me this extra block of land here which would really improve this existing site?"
And the head of the town planning, they had a look. He said, "Well, if it was up to me, uh, I- I'd be recommending that we sell this site. There's no particular strategic value to the council in holding this site. In fact, I didn't even know we owned it until you asked me just to have a look at it. Now, I don't know why we own it."
So he's given me an email address.
So this is a little forgotten pocket of land?
Yeah, yeah, and, uh, I'm going to ... I haven't done it yet. This was only on a Zoom call yesterday. I'm gonna ... And he's given me the email address, say, "Andrew, um, send us an email s- tell us that you wanna buy this site, and within 30 days we'll have a response for you."
Now, if I can buy that site, it creates a massive value add as far as access to this rear, uh, one acre of land that I'm looking for development approval. So, you know, you ask me why I'm excited. Y- what, you ask me why I can't sleep. There's just so many things to this deal I've never done before And, but it's just so exciting It
wasn't on your hit list of seven things
You know, then the bl- that block of land's not for sale either.
But when I look, look at the maps, I'm, I'm getting creative. Oh, wouldn't this block be a lot better if I own that little bit there? And the council said, "Yeah, well, we, I don't think we need this."
Sounds like they didn't even know they really had
it He- well, the, the town planning guy didn't know that they, a council actually owned it
Wow
So we'll see what happens.
I mean, once again, like I, I know I'm getting excited and look, none of this may come to fruition, Adam, but-
We'll wait and see Yeah Stay tuned, everybody. It's only gonna be a, a, a few episodes away that we will give you the update, um, on what actually takes place in the next- Mm ... two to three weeks. We'll know where this sits.
We'll know whether the deal's been done- Mm ... how it's been structured, what it looks like, what the vendor, um, pulls back on, um, whether the, the, the... We'll, we'll wait until the, the, the big national company's had its inspection so that we can give you the full picture. Stay tuned. It's coming, coming back in an episode very shortly.
But in the meantime, please do like, subscribe, join Andrew's, uh, mailing list. Again, we're not here to sell you anything. We're here to build a community. If you wanna get, um, in touch with Andrew about anything property related, want, uh, uh, advice on a deal, wanna do a deal with him, um, please get in touch.
And, um, can I just add, like I, I don't want this, my viewers who subscribe to this podcast to sit here and say, "Oh, look at Andrew talking about himself." I want to create opportunities for you guys. So what I want you to think about is you can do this too. You can have a crack at it. There's nothing to lose.
Go out and find motivated sellers, properties with problems, and find a seller who doesn't have the money to quickly add value to their site. I mean, I've gotta do all this within a year to uplift the value. Some owners don't have the money to apply to council and get uplifts. Some of them don't have the time to do it, and some of them, this guy's got plenty of money, but he's 80-something years.
He just doesn't have the inclination. So if you find a motivated seller that doesn't have either the money, the time, or the inclination to add value to a site in a short period of time, you can help him by offering to give him cashflow, lease his property with a delayed settlement or an option to buy, and it's a win-win You can do this yourself
You can, but if you think you can't and you've found what you think could be a property where there is opportunity but you don't know what it is, I know a certain bloke who will probably work it out with you, for you, in conjunction with you.
Get in touch. It, it, it's his superpower. Um, he won't, he won't talk himself up, but, uh, I, I certainly will. Andrew, potentially the best episode we've ever done, um, as well as the best deal that you're about to do. Fingers crossed. Stay tuned and, uh, you will find out exactly where this goes. Andrew, thanks very much.
Thanks, Adam. Appreciate it.
Thanks for listening to the Andrew Right Property Podcast. This is all about building a community of like-minded investors who can share real-life stories, experiences, and collaborate with a view to helping each other. Join us. Get in touch through the link in the show notes. I look forward to you joining me on the next episode.