My first project after my disastrous 30th year was to build a great home on a small acreage. Despite the questioning crowd – “why do you need a house that big for only you”, I pushed determinedly ahead.

I was on such a tight budget that I imposed upon some amazing friends who let me live in a van (theirs) on acreage (theirs), with my two dogs and two cats (which their son helped take care of) whilst I built the house …

I had a strategy for that house – I built it to sell for a profit. I held onto that dream, I lived it, breathed it, believed it and wouldn’t let anyone or anything take it from me.

First I had to organize finance. It took a lot of guts, a lot of effort, and a lot of sweet smiles at the Bank Manager! When my marriage broke up I ended up with all the bills whilst my ex went bankrupt. The Bank wasn’t too keen on financing a single divorcee with a bankrupt ex.

Then, I had to find a builder who was willing to work with a “girl” – after all, what would I know about design and building. Most builders thought “girls” didn’t know anything about building or design. But this one did! I designed the house, drew the plans to scale, and found a builder who understood what I wanted and, more importantly, one I could work with.

Months were spent watching my dream come to fruition. And, when it was finally completed, I moved in.

The first morning waking up in that house is forever etched into my memory. The main bedroom was at the back of the house, with huge glass sliding doors looking out onto sky and trees. The area was quiet, calm, peaceful. I had done it. I was here. I was living in my dream.

So why did I feel so empty, so miserable, so hollow? What was wrong with me? Here I was – I had persevered through the trauma, I was living in a beautiful house, I had achieved the dream, I had arrived!

I should be happy, joyful, over the moon, excited. But I was none of those …

It took about six months of living with the hollow feeling before I identified what was wrong.

I had focused my whole life on building that house. I’m not sure how long I worked on that dream, but it was well over a year. It had consumed me, it had been the only thing I thought about. I was single minded, nothing and no one distracted me.

The problem was that I had no other dreams once I built the house. I hadn’t thought past that point.

So, when I finally achieved the dream of finishing the house, I was left with nothing to look forward to. That was the empty feeling. No dreams, no plans, nothing.

Now, I make sure that when I achieve something big, there is always something else to work towards, to look forward to, to be excited about. It may be a property project, a trip, some sort of activity. It doesn’t really matter what it is, as long as I have more than one.

How about you? Are you living with the hollow feeling inside yourself? Not sure why? Ask yourself if you have something to look forward to …

Don’t waste any more time. Life is way too short. Find something to dream about, to look forward to, to be passionate about.

And make sure you ALWAYS have something to look forward to.

Bless ya!

Welcome to the final part of this series of blogposts. If you missed the first three posts just scroll down and catch up on my earlier information.

Selling the property is the final stage and it’s the point where you and any other partners in the project get paid so of course you want to get this bit right!

Engage a real estate agent early on in the renovation. If you don’t have one picked out already, invite 3 or 4 onsite so they know what you are doing. At this point you are really interviewing them to sell your property when the renovation is complete.

Timing is everything so make sure you know what is selling in the area and how much other properties are going for. You want to know as much, if not more than the agent, remember it’s your project; you’re in charge so it’s your responsibility!

I like to have a sign up close to the end of the renovation saying something like “selling soon” to generate a bit of interest in the area. In my experience, it’s always good to build a bit of hype prior to opening it for inspection.

Once all the trades are complete and the last bit of painting is done, I like to bring in a home stager. Most buyers have limited vision so you really need to present a home, not just a house.

Bring the home stager and furniture in a couple of days before opening the property so there is enough time to get some professional photos done and uploaded onto the agent’s website, realestate.com.au and any local print media.

It’s time to hand the keys over to the agent and let them do their job; keep a watchful eye and ensure you receive quality feedback to act on.

When the offers start rolling in, listen to the market, don’t get greedy and ensure the agent is representing you truthfully and accurately.

Welcome to the third part of this series of blogposts. If you missed the first and second post you can read them by clicking on these links: Finding A Reno or   Crunching The Numbers

Renovations can be pretty time intensive which is why it is very important you have good trades that turn up on time and take pride in their work.

To build up a good team of tradies takes time but you will soon find the ones you like to deal with. It can be a tight knit industry so always ask for a referral. An electrician always knows a good plumber and a Chippy always knows a good plasterer. A good plasterer knows a good painter and a good painter knows a good tiler and so on. A tradesman that recommends another tradesman is putting his own reputation on the line so you are bound to get a good referral.

If you are not happy with your tradie, don’t use them again; if you are happy with your tradie, pay them well and pay them on time. I carry a cheque book around with me so I can write a cheque there and then when the work is complete. You will soon be prioritised to the top of their list when you earn the reputation of paying on the day.

Having a project manager or builder on site managing the trades is ideal but if you are starting out this might have to be your job.

Ensure your renovation is realistically scheduled. Tradespeople really don’t like working on top of each other, it’s messy and can be dangerous.

Create a good working environment; ensure there is a flushable toilet onsite with a place to wash their hands and sit comfortably at smoko.

Keep the place tidy. If possible have a site fridge, microwave and kettle so all contractors can make themselves comfortable onsite.

Be clear in your instructions when explaining what you want. Listen to their advice but keep the end goal in mind.

A great idea might be to have a whiteboard onsite or a list of jobs required by each trade. If everyone knows who is doing what and when, they have a better chance of getting the work done efficiently.

Be extremely diligent on time and cost. Renovations are notorious for taking longer than expected and costing more that you thought. That’s the nature of a renovation so always have a contingency for this to happen

Like a lot of things its trial and error so take note of what works and what doesn’t.

Welcome to the second part of this series of blog posts. If you missed the first post you can read it here.

In any property transaction it’s all about the numbers and with a renovation it’s even more crucial to stick with the figures and not get emotional about your own personal tastes.

I literally look at hundreds of deals every year so for me it’s very important to be able to sift through the average deals quickly and systematically.

To keep it simple I break every deal down into percentages based around the initial purchase price. For example if I found a potential renovation project and knew I could purchase it for $300k then my numbers would look like this:

• 5% of purchase price for all closing costs including stamp duty, legals and inspections ($15k)
• 10% of purchase price for the renovation costs ($30k)
• 4% of purchase price for holding costs ($12k)
• 10% of purchase price for profit ($30k)
• 4% of purchase price for selling costs ($12k)

Total costs are 33% of the purchase price

Therefore if you can’t sell the property for 33% more than you paid for it then it may not be worth spending any more time on the deal.

Bear in mind these numbers are purely speculative and should only be used in the initial analysis. You can manipulate them a little for example, by increasing profit % and lowering holding costs %. If the property deal adds up at this point then a detailed feasibility study should be undertaken

The more numbers you crunch the better equipped you will be to pounce on a deal when it presents itself.

The renovation strategy is one that is dear to my heart as it was the first strategy i used in property investing. It is still a popular strategy today so I thought I would give you all some inside information on renovation over the next series of 4 blog posts.

Renovations are a common strategy so you need to be on the agent’s hot list to acquire a good one. This strategy is best used in a rising market to capitalise not only on the physical value you are adding but on the growth of the market happening around you.

This is one strategy you really want to buy well on the way in.

With any strategy it’s all about the numbers which i will be covering in the following post. For now, let’s focus on sorting the wheat from the chaff.

Making money with a renovation is all about adding more perceived value than actual cost. This means steer clear of anything that requires structural work. By the same token replacing wiring, upgrading plumbing, putting in insulation are all items that will not add any value to the end sale price – they are just things that are expected to be in a good state already.

The best things to focus on in a renovation apart from the obvious things like kitchens and bathrooms are items that you can see, touch and feel. For example, painting, lighting, floor coverings etc

So when looking for a property that has profit through renovation, search for something that can be improved with minimal cost.

I have seen some properties that really only require a good clean, some paint and the lawns mowed to create a profit out of nothing.

To find out some quality resources to assist you in finding deals have a read of this previous post.

In the end it all comes down to the numbers so start looking and stay tuned for my next post.

Last year I had the privilege of having “morning tea” with World Vision Australia’s Tim Costello.

Warren and I sponsor a bunch of children in Africa and Thailand through World Vision.  We’ve even been to Senegal, in West Africa, to see four of “our kids”.

One of the main reasons I invest in property is so that I can help people.  Supporting an organization like World Vision helps to make a difference to someone else’s life.  And, having seen first hand my sponsored children, I know that what I do does make a difference.

The morning tea with Tim was one of life’s unexpected highlights – one of those moments that comes along, and, for a brief moment in time, takes you to another place, another level, another challenge.

I listened to Tim as he tried to explain to us what it was like to go to the places he goes to.  I understand the difficulty of putting into words what it is that you experience and see when you see places so different to ours.  I also understand the amazing emotion and thankfulness you experience when you see just how much of a difference such a small amount of money and sacrifice on our behalf can make.

We think that we are facing tough times.  But the reality is that tough times in Australia means food in our mouths, shelter over our heads, welfare, clothing and loads of assistance and support from the community.

Here’s some of the sobering statistics that Tim shared with us.  Please note that these are approximate – I was listening so intently I didn’t write anything down!

At the end of 2008, the payments to just Wall Street Executives alone was in the vicinity of $29 billion.  And in 2008, the total that the Western World gave to Africa in aid totaled around $27 billion.

Most people are well acquainted with the acronym GFC – Global Financial Crisis.  However, there is a much worse crisis staring the world down.  This is the “other” GFC – Global Food Crisis.  World food supplies are alarmingly low.  This has been bought about by a number of factors, including global warming, the increase of “food” allocated to bio fuels (30% in the USA), increased transport costs, the devaluing of the dollar.  In addition, as some Third World countries start to increase their living standards, they move from eating grain, such as rice, to eating meat.  It takes something like 7 times more to feed, and therefore supply, meat.

I had no idea we had a Global Food Crisis.  Did you?

My morning tea with Tim Costello came about because we could afford to put fuel in the car we own, drive to somewhere, and, because I am educated in schools most people take for granted, communicate with the people around me, sit in a building with nice surrounds, and enjoy sumptuous food with plenty to spare.

Our sponsored children, on the other hand, are lucky to have even seen a car, let alone understand the cost of fuel, are limited to their feet as transportation, rarely go anywhere except their very small village, are praying for an education and working hard when and if they do get to go to school, live outside, but occasionally in mud huts with dirt floors, don’t have toilets, bathrooms, kitchens or lounge rooms, and are lucky if they get a meal a day.

So, the next time you think you are hard done by, take a moment to take stock off all the things we take for granted.  We are so blessed!

Anything can happen – and it probably will! I’ve been reflecting on a project I did a few years ago, and it’s amazing how things happen especially when you look back in hindsight.

At the end of 2007 I put a contract on a property here in Brisbane. A beautiful, well-maintained “Queenslander” style home graced the block. The land was already subdivided into two lots, but on one title.

I negotiated a long term contract with settlement to take place in around four months. Then, I set about using the settlement time to put my plan in place.

The “plan” was to move the “Queenslander” off the block, either by selling it, or by moving it to another block. Then, we would separate the two lots into two individual titles. Our options were to sell one or both of the blocks as vacant land, or build a house on one or both of the blocks, which could be rented or sold.

I am often referred to as the “Contingency Queen”, and you can see it applies to this deal given the amount of different options i had!

First of all though, I needed to find a buyer, or another block, for the “Queenslander” style home. So, I put the word out, and, sure enough, a family came along who were interested in purchasing the house.

This family had their own unique strategy, which they had already used several times previously. They would purchase vacant land, and then move an old house onto it. They would lift it up, renovate, live in it for a couple of years, sell and repeat the process. They would renovate at their leisure, and, in most cases, the homes were livable. They were making a good profit as they were increasing the value of the project, and in addition, they were gaining equity.

The family had just sold their current project. They had a suitable block, and were keen to do business.

We settled on a sale price of $40,000 and everything was put in place for the removal – all their responsibility. At the end of the process, I would be a tad richer, the block would be vacant and clean, they would have a new home, and we would all be happy!

Naturally, for the removal to occur, I had to own the property, so settlement had to take place first.

One of this family’s goals is to own their home outright. They’ve chosen a strategy, and it’s working well for them. Over the years they’ve built up equity, lived in some great homes and locations, and are well on the way to home ownership.

The reason they’ve been able to achieve all of this is because they have a goal, and they are focused on that goal. They’ve found a strategy to help them achieve it, and, most importantly, they are implementing the strategy.

As property investors, we are often focused on an external “strategy”, or a complex strategy, or an advanced strategy. However, there are lots of different opportunities around us, and what this savvy young couple are doing highlights another way of looking at property. It’s simple, effective, and it’s right under their nose!

Sometimes what we want is right with us too! And often, we don’t even realize it.

What is it that you want? What is your goal? Is it possible that the strategy to achieve your goal is simple and, even better, in plain sight?

Once you work this out, don’t be distracted by complexities – keep it simple, stay focused, and just do it!

I would love to hear from anyone about their goals or strategies. We all invest for different reasons and its always fascinating to share why different people do what they do.

See you next week!