Episode 5: Unveiling the Mastermind: "Bob Anderson's Journey in Property Development"

https://buyfairproperty.com.au/contact/

Welcome to Episode 5 of The Property Now Podcast, where we dive deep into the world of property development with a true industry stalwart, Bob Anderson. As the founder and owner of Property Mastermind, Bob brings a wealth of knowledge and experience to the table. In this episode, he shares captivating stories from his life and reveals what motivated him to embark on a career in property development.

Join us as Bob takes us on a journey through his remarkable experiences, highlighting the challenges, successes, and lessons he has learned along the way. From his early beginnings to becoming a renowned figure in the Australian property development landscape, Bob's insights are sure to inspire and educate listeners.

Time Stamps:

1:55 Introducing Bob Anderson

7:12 Learning about money

12:12 Understanding Wholesale Buying versus Retail

19:24 Understanding Development Feasibility

26:51 Looking for Long Term Growth

33:08 Last Pieces of Advice from Bob

Discover the driving force behind Bob's passion for property development and gain invaluable insights into this exciting industry. Whether you're a seasoned investor or just starting your property journey, this episode is a must-listen.

Tune in to Episode 5 of The Property Now Podcast and be prepared to be captivated by Bob Anderson's incredible journey in property development.

Chapters

• 1:55 Introducing Bob Anderson
• 7:12 Learning about money
• 12:12 Understanding Wholesale Buying versus Retail
• 19:24 Understanding Development Feasibility
• 26:51 Looking for Long Term Growth
• 33:08 Last Pieces of Advice from Bob

Transcript

Speaker 1 (00:01):

Welcome to the Property Now Podcast, where we talk all things property, investment, and new homes with your host Matt eol. Speaker 2 (00:09):

Yes, there's bad debt. Yes, there's good debt. The good debt is not bad. It will never send you broke. Ever rich people rely on debt to expand because without debt it's pretty hard to expand. It's almost impossible. Speaker 1 (00:20):

If you want to learn more about what's happening in the market and how to benefit from property investment, then go no further. We dig deep as to why our sector is a key to building financial security and safety for your family. Never before has it been more important to understand the playing field than now. Speaker 2 (00:39):

And I would say this, this is probably going to raise some eyebrows with some people, but your family home is not an asset. It's a liability. It's taking money out of your pocket from a cashflow position. Speaker 1 (00:49):

So let's get on with the show. Happy listening and we'll see you on the other side. Speaker 2 (00:53):

Hello, good morning and welcome to the Property in our podcast. It is a pleasure to be with you. I'm your host, Matt aal, and today we have a very special guest. I've just had Hillary press the button on us without giving us any warning. So we've been thrown straight in the deep end, but that's okay. So my guest today is Awar of the property development industry, someone who's been doing or crafting his trade for a very long time, since the 1980s, I believe, which is when I was born. And his name is Bob Anderson, the founder of Property Mastermind and Positive Property Strategies. How are you, Bob? Speaker 3 (01:30):

I'm feeling rather old. A stalwart. Oh, interesting. Yeah, Speaker 2 (01:34):

A stormwater's a compliment. Speaker 3 (01:35):

It is. It is. We called much worse than a stormwater. I'm happy with stormwater. Speaker 2 (01:40):

Well, mate, you have been in the game a long time and I would imagine talking property development's probably pretty easy for you these days. After all of your experience, why don't you give us a quick introduction to your history. For those who don't know you, I'm sure a lot of people will know you, but tell us a little bit about yourself. Speaker 3 (01:57):

Well, yeah, I'll keep it fairly quick, but you are correct. When you say been involved in property or property development for that matter, since the early eighties, so pretty much four full decades. So I've seen plenty, learned a lot, made my fair share of mistakes, hopefully not repeated them too often. That's really what it's about. I'm always going to make mistakes. But yeah, got involved in small projects back in the day I came straight out of real estate. Well, taking it one step back and I won. Use up the whole programme telling you my history. Alright Speaker 2 (02:25):

Mate, it's about you. Speaker 3 (02:26):

I had a rather nasty car accident actually coming back home from my mate's, 21st, totally sober, but 4:00 AM in the morning. I simply fell asleep. I had three cash businesses. I was working around the clock because I thought, well, the only way I can make money is I was exchanging time for money. So the more money I wanted to make, the more hours I had to work. And got to a point where on my way home I fell asleep and hit a bridge and that put me out for two years. So all that hard work I was doing chasing the almighty dollar ended when I hit the bridge because they were three one man businesses and relied on one man and being stuck up with your legs in the air in hospital or back home recuperating, that didn't help at all. So as I got myself, well, it took some time, was on crutches for a year.
(03:10)
I reappraised my whole life because I was quite a young man living life in the fast lane, doing well. So I thought, and then bang, all finished at 4:00 AM for me. And so once I got over feeling sorry for myself, and that probably took six months, the old, oh, why did it happen to me sort of thing. I eventually got over that because I could see no one else was going to get me out of it. I got my health sorted out, started to get my mind sorted out. I'd never really thought much about it, a young man that I was. And I started to read books. Not that there was many books around in those days. We're talking 40 years ago, but there were some of the old great books were there. And so started reading those, started to get my head sorted out, which was good.
(03:53)
And then looked at, well, what am I going to do when I'm back on both my legs? And I decided on property because, well, I didn't know much about the share market. My dad was a spray painter, panel beater, and I did have an opportunity of becoming a spray painter, panel beater, but I didn't thank goodness. So property it was. And then I thought, well, how do you make money out of property? And I thought, well, obviously owning property, that's a good start, but who makes money out of property? And I looked around and I thought, well, they've got real estate agents selling this stuff. We've got builders billing it, we've got investors owning it. How do I get in there with no prior experience? And I did come to the conclusion that property developers appeared to make a lot of money. That was what I was short of.
(04:40)
I think I had about $5 in my bank account by the time I got back and had to borrow a bit, but property development. And I thought, how do you get into that? And I had to look around. You couldn't do any courses back then. And I thought, well, I'll just have to hoof it, but in the meat, there are few around now, I thought I'll have to hoof this. And I thought, well, at least I've got to get in the property market, at least get my foot in the market somehow. And I was living in Brisbane, so I went to the Gold Coast where I thought, that's where you go to make your fortune in property. Realised later it's probably where a lot of people go to lose it. But anyway, things have improved on the Gold Coast. But back in those days it was a very hot and cold market. Hey, it was up, it was down. It was all over the shop. Speaker 2 (05:17):

Almost like the Las Vegas of Australia, isn't it? It's the glitz of Hammer and yeah, Speaker 3 (05:23):

Yeah, particularly in those days. The market has solidified a bit since then, of course, but it can still have its ups and downs. But I got into agency and I managed to, I went door knocking real estate agents and I started with one agent that I liked and they were selling land estates. That's really what they're doing. At the back of the Gold Coast there, they had four different estates that they were selling for developers and never having sold anything in my life other than the old car. That was interesting. I found out I could sell and I enjoyed that, but I was only on my way to somewhere. I really just wanted to build up some knowledge or some contacts or whatever I could do. I didn't even have a plan, but I knew I wanted to be a property developer and it got my foot in the market, at least as an agent. Speaker 2 (06:05):

Sometimes just putting your first foot forward as opposed to having a plan is all you need, isn't it? It's like having a plan is good, but just getting in there and entering the arena as Roosevelt put it is the way to go. No, that's really interesting, mate. Yeah, I didn't realise that you had that car accident and that's what sort of sparked your need to change directions. We actually talk a lot about the risk of not leveraging your income and not having investments to support you should something happen to you if you can't work or because it does happen. We don't expect it to happen as young people, but if you can't support yourself when you can't work, then we've got issues. So Speaker 3 (06:45):

Yeah, that's the great thing about these days of course, is the knowledge that's out there available from people like yourself. I wish I'd known you 40 years ago, but you didn't exist, so not much chance of that happening. Speaker 2 (06:56):

I just existed, but I didn't have too much knowledge then Speaker 3 (07:01):

A bit of that advice would've been pretty helpful for me. I thought it was 10 foot tall and bulletproof and found out otherwise. Yeah, Speaker 2 (07:07):

It's something I'm quite passionate about and I actually was helping a charity who developed school aged people, high school students, and one of the topics that they wanted to support with was money and how to make it and how to approach it in different ways to what they teach us traditionally. And so hearing you talk about these kind of things is why we want you on here as well to share with more people. So Speaker 3 (07:29):

That's a little bit of a passion of mine, although you seem to have done more about it. Something we've always had in the background is we're not taught how to manage money at school. It's almost like they want us to go the other direction and get into as much debt as we can. I can understand there's vested interest that might want us to go that way, but certainly a lot of the education isn't steered that way. So when my eldest son was about 13 or 14, I bought him a book. It was called Making Money Made Simple. I think it was Noel Whitaker who was a financial planner and didn't mind a bit of property that got my son. It's a pretty simple book. I think it's probably still out there in its 50th edition or whatever. But it's explained things like good debt, bad debt and the importance of investment, all the basic stuff. But I mean that was a revelation to him and it's a revelation to a lot of people and people aren't taught to manage money and we are relying on people in educators and people like yourself sometimes to show them the path, show them the way. Speaker 2 (08:28):

Yeah, there seems to be a lot of reliance on worked income and superannuation and these things. And hopefully the awareness can start rising with all of the different social platforms and ways to learn. Now as you mentioned, there's different courses that you can do and you have some pretty incredible courses as well, mate, on your chosen topic. So I might just a couple of points here. So you launch Positive Property Strategies in 2001, but the main front business that people would be Property Mastermind. Does that sound pretty correct? Speaker 3 (08:58):

Yeah, that's a fair comment. As I said, I did do my first developments near enough to 40 years ago, and I did have a spell in there where I worked for a couple of the biggest development companies in Australia because I got to a point where I wanted to learn more about development, but I also wanted to experience larger developments, certainly larger than I could afford to do. And that's when I moved into the corporate world, got a couple of lucky breaks, worked for some of the big companies in there until I got sick of boardrooms and the like, and then went back on my own again. So yeah, positive property strategies, it goes back to about 2001. I set it up initially as a project marketing company, really not project marketing, project management company. So I was managing other people's projects at the same time.
(09:41)
I was doing some of my own, because when you're doing property developments, most of your money is at the end of the development. And so you might have a period of one or 18 months or two years before you really see the fruits of your effort. Although you can in certain circumstances pay yourself a project management fee on the way through. I thought, well, you rock up to coal's every, or Woollies every second Saturday to pay for your food. They want cash, they don't really want to know how many assets you got or that you've got a big chunk of money coming in 18 months. So I did project management where I'd manage other people's projects and then I'd be doing my own, which was a nice combination. I could get regular income off the project management side of things and out of my own projects while I was a nice occasion at the end of a project where you get a big lump sum.
(10:29)
Took me a while to wake up though. When I started development, I used to just develop and sell and get some money and then develop and sell and get some money. If only I could go back then I'd tell you I should have been keeping some of the stuff I developed. I didn't even fully understand the importance of holding property long-term because there's virtually nobody, this is even before the nineties when we had lots of people and spookers and good people and naughty people out there telling us to buy property. But back in those days there was really nothing there. And I think I was probably developing three bedroom townhouses for $50,000 or whatever it was back there. I mean imagine if I'd kept them, they're now worth probably 600,000. But I didn't know. You dunno what you don't know and you just base what you do and what you do know. Speaker 2 (11:16):

Yeah, look, I mean I take my hat off to you for acknowledging that for starters, but also for doing something about it and creating education platforms for people to learn about that. I mean we talk often about the importance of holding property and really you don't need to sell it that often these days. If you can acquire the right type of properties, then you can lend against those. There's all sorts of different ways that you can sort liquidate or release money so that you can live the way you want to live. But it's really a long-term plan. And I've actually heard, I've listened to your podcast, which is hosted by Hillary Saxon, the Property Master Mine podcast. I heard you talking about retail versus wholesale. I thought that that was a really interesting topic. People only just buying retail products, which is what we sell predominantly. We sell retail products to people and educate them on how to maximise 'em. But we do do developments for people too. Tell us about that importance of wholesale versus retail. Sorry, and I guess that's property development to a T. Speaker 3 (12:16):

Yeah, it is. I'd even rename it. A lot of people do say property development wholesale and that's true, but I go back and even say cost price. So if you're looking at property, look, we know what a great long-term tax effective asset builder it is. And that's undeniable. That's not to say shares aren't good too, but look, I was bought up with property, so of course I'm going to push it. But buying retail fine, nothing wrong with that at all. But if you can get property a little bit cheaper, sometimes people might band together and buy it wholesale. That's normally when you buy some volume, it might be a good opportunity. Some people come together, there's a small land subdivision, there's builders building house and land packages. And if you can all get in there or have someone help you get in there at least and get some good discounts like for volume.
(13:06)
And that happens in all sorts of things, doesn't it? Discount for volume and that's wholesale. And gee, if you can get in there, that's good because now you're getting below retail. But if you're willing to do it and look, it's not without its risk. I'm not going to look at it through rose coloured glasses. You've got to do property development and do it well, but then you can naturally get it at cost price. And so you can go retail wholesale cost. Well, you don't get better than cost normally. So what it means is you might be able to acquire, say a property that might be worth $600,000 on the retail market, but if you can create that as a developer, you're probably going to get it for about 500,000, which is a good headstart. And that a hundred thousand is really a profit. Of course on that particular property, I might be talking about one townhouse out of three or four, I'm just sort of isolating one.
(13:51)
And the good thing is when you come and you finish that development and now you want to get some finance, so you can hold it as a long-term investment, you can actually use your profit as your deposit. That a hundred thousand dollars profit you made and you're not selling it, you're still keeping it in your own name or whatever entity you're developing. That can be your deposit at the other end, which means that you can rinse and repeat this thing and accumulate property fairly quickly. And of course you've got all those different properties that you can develop as well, different types of properties. So yeah, I mean, as I said, I didn't do that for quite a while as well. I suppose I was pretty stupid compared the average person these days would know way more about property investment than I probably knew three or four years into the game because of the availability of knowledge.
(14:37)
But yeah, holding property as a developer is a good thing. So we've got two opportunities when we develop something, we can sell it. And that's great because you make a cash profit, you've got to have cash. Like I said, rock up at Kohl's on Saturday, you better have some cash. But the ones we keep, we can keep at cost price. And so my motto is, well, maybe when you're starting out in property development, you might just want to sell for a while, build up some capital, but you should be thinking about owning some as well. Speaker 2 (15:06):

Well, with telling comes that tax component too, doesn't it? The government's just waiting there on the edge of the seat for you to hand over your hard work to them. Speaker 3 (15:15):

It's a bit difficult. Yeah, they do. They do. Well, the beautiful thing is tax. I love tax. I love paying tax. The more tax I pay the better. Speaker 2 (15:25):

Yeah, well it means you're making more. It doesn't it. So it means you're doing okay. No, that's good mate. And I mean there's obviously a multitude of different ways that you can actually develop properties these days. And I'm referring more to the strategy behind how you do that. It might be a strategic alliance or a joint venture or an option sale or what would some of the ways that you prefer be to acquire development? So maybe it's for someone who doesn't have the experience or doesn't have as much capital as what you might normally need to get into a property development or to get started. Speaker 3 (15:59):

Yeah. Well, I think if somebody's thinking about property development, they need to go in eyes wide open in the respect that if you're going to make a pretty good chunk of money by creating something, then there's obviously more risks involved than if you were to buy a finished product. But I mean the advantage is you get at a cost price, not retail, but you've got to work for it and you've got to be smart and you've got to do it well. And so a lot of that is get yourself educated. It's not something that you can learn as you go on the internet. It's just more complex than that. So you need to get yourself educated first of all. And look, you might not have enough capital initially. You have to think about, well, what type of project am I going to do? Am I going to do a two lot subdivision, cut a block of land in half?
(16:47)
Well, yeah, that's good. What are you going to do? Then you're going to sell them or you're going to build on them. You might build a house on one and sell the other lot. You might build on two. So have a think about what you can do, what you can afford to do. You might have to have a talk to a good clever broker, find out how much money you can afford in your current situation. Is that enough money to do a project? If it's not, that's okay. You're going to have to get somebody else to come in with you. We'll just call that person an investor. And there's great opportunities for investors to make money out of property development without ever doing it, but then they need a property developer to hook up with. There's great opportunities for young, old budding or not necessarily young property developers to do developments if they don't have enough money by hooking up with an investor.
(17:33)
So it's a great win-win done properly. And so, I mean I've done lots of those sorts of things over the years of joint ventures and even capital raising some more sophisticated sorts of things. I think I worked out once I've done $300 million worth of projects without using my own money and perfectly legitimate. Well, the other half of people that I did those things with were pretty happy too. They didn't have to do the property development. They just made money on their money. There are some great opportunities out there, not only as a developer, as an investor in developments, but you've got to do your due diligence, like I said, going eyes wide open, no rose coloured glasses and think everything's just going to bounce through this thing and everything's going to be wonderful. Speaker 2 (18:17):

Yeah, and I'll talk to you about feasibility in a second, but I think what you just touched on then about using other people's money is one of my favourite ways to approach things or educate people on, and we talk about debt and people think debt is bad. It's often that people think bad debt is good and good debt is bad with family homes and whatnot. I have all sorts of different ways of looking at things. But for those who don't know how or don't have enough money and don't have the education, you can use other people's money as long as you have a proposition that's valuable enough to them because there's plenty of money going around, there's no shortage of that resource. It's very available. It's just available to a smaller portion of people who know how to use it. Speaker 3 (19:01):

Sure is. No, you're absolutely right. There's a lot of capital out there in the market looking for a good home. Speaker 2 (19:08):

So identifying opportunities, Bob, I mean in the development world it's called feasibility, doing your due diligence, however you want to paint it. What are you looking for predominantly when you, okay, something's popped up on your desk, this looks like a great opportunity. Let's not go into guns hot. How are we assessing a development as a high level approach? Speaker 3 (19:30):

Yeah, well, we'll assume that we're starting off relatively small if we're going to be a developer. I don't try and retire out of your first project that you're perfectly correct due diligence. And part of that is doing the feasibility of what we often refer to as a fiso or crunching the numbers, call it what you like. Property development really should be quite unemotional. There shouldn't be any emotional at all in property development. It's just based around numbers and which is one of the things I like about it because I am fairly analytical, it doesn't mean I'm unemotional. It could be emotional at the right time in the right circumstance, but with property development, it's just about the numbers. And so even something like a two lot subdivision, which is about a smaller project as you could do as a developer, is it zoned correctly? Because zoning is really important.
(20:15)
That's the delegation if you like, that the council's put on it. Is it a site that's big enough to be cut in half if the minimum lot size in an area is 400 metres, well that suggests you need at least 800 before you can cut in half. So is it big enough is its zoning? Okay. And even things like when you create that new lot, it has to have its own services, its own sewer and its own water, its own stormwater. And sometimes they can create a problem, even it's something as simple as a two lot subdivision. Can you get the connections for those services? One of the great things about property development is there's always an expert. Every little step of the way that you're doing in a property development, there is an expert that you can consult to, well get advice from now, sure, they'll probably charge you for a little bit of advice, but it's money well spent. So if you're thinking things around stormwater and sewage and water, well that expert's a civil engineer. If you're thinking of things around zoning, what can I do? What can't I do? It's more likely a town planner.
(21:18)
And then when you go up a step from that, now you start building something. Well, there's more complexity. Probably one of the smallest building things you'll do. You might decide to build houses on those two lots you just created, or you might do something like a duplex and once again, a little bit more complex Now with a duplex, let's say, well, you always have to make sure you can get your service connections to each side of your duplex. But now we're building, so we've got to do our feasibility, our numbers, well, what's the cost to build this duplex? What we're trying to do is to see what the profit margin is and whether it's worth the effort and the risk to do it and not just whether it's worth it to us, the financier of the project, they want to know it's worth them risking their money because they're putting in the majority of the money and they might be putting in 70 or 80% of all the money that's required to do the project. So they're pretty keen to make sure it makes a profit. They're not real keen on financing something that breaks even. So it has to work for them and it has to work for you. That's the point of the feasibility to make sure there's sufficient profit to finance it and for your effort and risk as well. Speaker 2 (22:25):

And what would you consider as sufficient profit these days? I mean, when I started working for developers, it was around that 30% market. I don't believe that's the case anymore. Please correct me if I'm wrong, but what sort of profits are people really aiming for these days? Speaker 3 (22:42):

Yeah, one way of measuring profitability, if you like, is a bit like a return on investment sort of thing and how that works if you work out your profit and obviously you work out what your costs are. So a simple formula is this what you sell your completed product for less. What it costs you to create would be your profit. It's pretty straightforward. So if you like sale price, less cost, sequels, profit. Now if you divide your profit into your costs, which is a bit like working at an ROI, it's how developers do it. You come up with a percentage. So quick round figures, if it costs you a million dollars, that was your cost to do this project and you made $200,000 profit, then that would be called 20%, 200,000 as percentage of a million, 20%. That's sometimes called return on cost, margin on cost, developers, margins, all the same thing.
(23:38)
And so you just mentioned 30% back in the day when you were looking at it. And that would depend a bit on the type of project as well, because projects the larger, more complex take longer, and there's different aspects. If you're doing a very simple, straightforward project, let's say like a duplex, a lot of people might start with a duplex. 15% is quite acceptable to finances because it's not a big project. They don't see it as high risk. You might if you haven't done one, but they don't. It's a pretty small project to them. You can be in and out of it relatively quickly. You only have to sell two. And typically you will get a finance you to finance that on a 15% margin. If you go up a little bit bigger, maybe might step up to four townhouses perhaps something like that. Or they'll be looking for a bit more of a margin because it's a bit more complex. There's four going to take longer to build, take longer to do. And they might be looking at somewhere up around 20% for something like that. If you ever move into things like apartments or they're more likely to look at 25% because once again, they're bigger and more complex and take longer and it's pretty much around that. So yeah, it's relative that profit margin, it's good for you. I mean you should want that sort of a profit margin anyway. Certainly the finances do. So if you're both happy, it's a good thing. Speaker 2 (24:56):

I guess it's important to also understand the income potential from holding the property. The profit margin might not be where you want it, but if you can hold the property for a period until you think the market's going to rebound, then that's potentially an approach that people can consider as well. Speaker 3 (25:11):

Yeah, and when you get to smaller, sorry, I cut you off. Keep going. Speaker 2 (25:14):

No, I was just going to say thank you for your formula. I'm sure it's good for people to understand a simple way to work out profits so that they can start assessing development opportunities. So it was very cool. Speaker 3 (25:25):

And with things like let's say house and land packages where a block of land and a house, often you don't really have to prove that margin to the financial, which can be handy because it's more like what we call retail finance. So it's a matter of looking at, well, what's the land contract cost? What the building contract cost? What's it worth at the end? Oh, that's okay. Margin might be less of an interest at that time. You might be looking at more the long term thing, not so much the short term. Short term is, well, what's the difference between what's it worth and what it costs me long term would be, is this a good area for capital growth? Is this a good area for rentals? And start to look at, well, what would be my position in five years or 10 years if I hold this property?
(26:09)
And really, in a way that's a much more important question than a very short term one of, do I make 50 or a hundred thousand? Well, yeah, that's good. The more you make the better, of course. But yeah, it's that long-term because, well, for lots of reasons, not the least of which is should you ever sell it in the future, your tax position is pretty good because you can claim the 50% relief you've got. All those reasons, I assure you that you teach as well out there is why property is a great long-term investment. And even something as simple as a house and land package, you've got to look at it. Long-term property is longer term. We're not trading commodities here where the price of coffee tomorrow is of interest compared to the price of coffee. Today we're not doing that sort of stuff. It's longer term. We're building really solid long-term wealth. That's what we're doing. Speaker 2 (26:56):

Yeah, it's such a great way to sustain security for yourself. I mean, yeah, I'm exactly the same, Bob. We do talk about that a lot. The benefits of compound growth and these kind of things, the longer that you hold property, the better you're probably going to do. To be fair. And that's why we always say that the best time to get in is yesterday. And it doesn't have to be the perfect to start, but the best investment on earth is Speaker 3 (27:21):

Earth. Oh, that's a good one. I'll write that down. I'll say it came from you, but I will use that. Speaker 2 (27:24):

It's not mine. That's alright, Speaker 3 (27:27):

That's alright. I'll steal it off you. Wasn't it Einstein who said that the eighth wonder of the world has compound interest. I dunno if that's really true. Some people have attributed it to him and doesn't really matter whether it was Einstein or somebody else. It's an amazing theme. Compound compounding interest, compounding growth. Speaker 2 (27:45):

And for those who dunno how it works, it's basically growth on growth. So if you buy something at 500,000 and it grows by 10%, it'll be 550,000. But then if it continues to grow at 10%, 550,000 is 55,000 in growth and so on and so on. So I think it's important at the moment with the value of money really declining, we're seeing very high inflation environments and the importance of having assets is probably more important than ever to be fair. And it's becoming more challenging for people to get in. So having education on using investors or being able to approach acquiring property in different ways is so important. Speaker 3 (28:27):

Yeah, it's when you combine it with the power of leverage, it's incredible. Speaker 2 (28:32):

Leverage is probably my favourite word in property investment. And you said before that obviously shares can be very good as well, but the difference in that leverage component, being able to use other people's money to get into property is such a powerful thing that I really want people that listen to our podcast to keep considering and keep learning about because it will get you a long way. And if you do have an accident like you did Bob, and you can't work, you've got that leverage there working for you. Thank God you came out of that. All right. It sounds like there was some good silver linings of that experience for you, Bob. Speaker 3 (29:06):

Yeah, it is. At the time I thought, well, it probably was the worst thing that ever happened to me at that time because I hadn't suffered much. I was only a young man in the early twenties, but looking back, it was probably one of the best things that ever happened to me because I thought, well, what if that hadn't happened? What if I hadn't been laid up in bed and forced to think about my life and where I was going and where I wanted to be? I would've just kept out there living the life of a young man with pockets full of money and thinking that just exchange time for money. You want more money, work harder. That was my philosophy and that was really my dad's philosophy too, because I mean obviously I loved my dad. He couldn't teach me anything about investment or money or anything because he didn't know.
(29:48)
He did teach me a couple of things, which I found probably even more valuable. And that was a strong work ethic and the importance of integrity, I think. I mean if that's the only two things he taught me, that's more than enough. I eventually worked out the whole money and investment thing myself. Anyway, thank goodness I did. And probably the car accident was a catalyst. If anything, it would've brought it forward anyway, so it wasn't such a bad thing at the time. Although the police officers that attended the accident, I did actually talk to them sometime later, some months later, and they thought I was dead. They went back to the car to get out a fatality report, but I filled them. Thank goodness. Speaker 2 (30:27):

The rest is Speaker 3 (30:28):

History. My children are pretty happy I didn't die too. Speaker 2 (30:30):

Yes, absolutely. Well, they've got a life now, don't they? So that's pretty cool. Oh, were they born? Did you already have kids when you had your accident? Did you? Speaker 3 (30:39):

No, no, no, I didn't. No, I didn't. I said to them, lucky I survived. Or you would've looked quite differently. But anyway, that's funny, isn't it? That opens all sorts of things in your mind, the sliding doors and all sorts of things when you know how close you have come to leaving the planet, but you don't, and it gives you a different perspective on life. Sometimes I have to relate back to that. Sometimes you just, I dunno, you get in a rut, you just sort of forget things. You forget things, how important certain things are. They're usually the things you can't buy. Sometimes you need to remember. And I didn't nearly die a second time once from drowning. And when I survived that, which I did, obviously I had a whole new concept on life for a while, but it sort of fades into the distance.
(31:20)
The things I thought were really important suddenly didn't seem to be all that important at all when I survived. And the things that I probably didn't put enough emphasis or thought into were suddenly the real things that I did, and I wish I could live my life or think the way I thought the day after I nearly drowned, I would live life differently. And I'm sure plenty of people are in that same position. They understand what I'm saying. So sometimes I actually reflect back on that and it could be at a time when I'm going through something tough, I thought, well, I've survived plenty of tough things, so I will survive this and I'm actually alive and I look around me and there's not rockets falling out of the sky, and if I want food, I just go to Woolworths and buy some, like you sort of forget some of this stuff. Speaker 2 (32:02):

Yeah, I actually had a near experie get a bit Speaker 3 (32:05):

Philosophical, sorry. Speaker 2 (32:06):

No, that's all right. I had a near death experience about nine months ago. It was a near car accident. It took my best Louis Hamilton move to avoid the accident. But it shook me up quite a lot for a while actually, and definitely made me look at things differently. And I wish that we could paint it like this. I've talked with a lot of people who want to do something but let fear overtake their ability to act. And I mean, I've been doing this since 2007 myself, so I do still run into people and see people that didn't act when they wanted to. And it's always the same thing. I wish I had it back to myself. I wish I had have gone into these opportunities and they just didn't. So I think I'm sharing this because I want people who listen to this to back themselves, don't go and make rash decisions, make educated decisions, but we usually regret the things that we don't do.
(32:58)
Not the things that we do do. So I think it's important, mate. I don't want to keep it too long. It's been a really good chat. I could chat to you forever. But yeah, I guess probably in finish mate, you do develop all across Australia. You've been involved in over a billion dollars worth of developments is my understanding, which is a ridiculous amount of transactions. Are there any certain areas or states in particular that you're liking more at the moment? Whether that's because of regulations or easier to get through or just profit opportunities? What are you seeing? Speaker 3 (33:32):

Well, most places, I apologise in advance to any of your viewers or listeners that live in the Northern Territory, but I have avoided it for varying reasons. But there again, I mean I know people that have invested in Darwin at the right time and done well too. So not really, but I haven't developed there. It might be a bit different. Perth, Hillary's doing some project in Perth and NDIS project. Perth markets, as you know, has recovered a lot. It took an upper cut in 2014. It's taken it until now to recover. Although the mining industry, when it starts to go well over there, it drags a lot of contractors and people out and makes it a bit harder to build. So it has gone through some quite large construction price increases, probably more even more than the East coast state, but there's still some opportunities there.
(34:11)
Predominantly, I mean within our property development education sphere, about probably a good 80% of people come from the three East coast states, and that's partly because of population. But look, Sydney and Melbourne have had the correction they had to have and we had some ridiculous growth all round, and Sydney and Melbourne have gone through their correction. It's only a correction and that's pretty well bottomed out now. So things are looking better there. I'm doing a little bit in Queensland, but I do, and Hillary does too. We develop remotely. She's doing stuff in Victoria, Western Australia, Queensland. I do a bit in Queensland, new South Wales. I seem to have a bit coming in New South Wales. So no, look, there's always opportunities. I mean, Australia nationally is undersupplied for dwellings. In fact, we have been for about since the end of the second World War.
(34:55)
It has its ebbs and flows, but there's always opportunities. I mean, I've developed for 40 years through everything through the 87 stock market crash back in the Keating area with interest rates and inflation at 11 point something. And so I've always managed to make money and there's always money to be made. Sometimes it's easier and sometimes it's harder, but the fundamentals always remain the same. So I'm pretty comfortable with the market at the moment for sure. I mean, certainly inflation, but it's actually starting to peg back inflation. But I've bought and developed when inflation was 11.5%, five or 6% doesn't scare me at all. And it's heading in the right direction. A lot of overseas migrations yet to crank up. Again, we don't have a lot of people coming in with money that need places to live. And so property investment, tremendous time, you should be locking in and interest rates, well look, they're only getting back to the 30 year average.
(35:50)
They were never going to stay where they were, just get used to it. But at great time, in my opinion, and we're looking for sites, our students, all the people we teach are looking for sites. Great time to invest. This is not a big rev up as you know. I mean I've been just in our discussion here, I just say that the way it is, but I think it's some really good times ahead. I'd recommend anybody to be locking in, whether it's a development, whether it's a good investment to be getting in there. Like you said, I meet people all the time who did our property development course 4, 5, 6, 8 years ago and haven't maybe done anything. They say, oh God, I regret it. I'd be so much wealthier now. Same with investors. It's time to do it 20 years ago, second best time now. Speaker 2 (36:30):

Yeah, it's something like, Speaker 3 (36:31):

What do you think? Are you seeing it that way? I'm interviewing you now, what do you Speaker 2 (36:36):

That's fine. I get interviewed all the time by different clients. No, look, I agree with you. I think there's always a need for assets naturally, and I think the best time to be greedy is when others are fearful and be fearful when others greedy. So the down markets always markets that create opportunities. People are a little bit more cautious, and that generally leads to better opportunities by way of people discounting and offering more incentives. Look, I mean 650,000 international migrants in the next two years is what they're saying. And a consistent influx of 200,000 people per year for the next 10 odd years as an average. So yeah, you're right. It's a huge shortage and a massive need for property. I actually love NDIS and the co-living approach. We're doing a webinar on that this Thursday actually. So these new strategies of being able to generate more income, I think is a great way to consider investing in property as well. And yeah, so look, I guess, was that a good answer? I don't know, Bob, how did I go? Speaker 3 (37:37):

Yeah, no, I think we're both in alignment of how we're seeing the market and the future. And even as a developer, you were talking about good cashflow investments to hold and the thing we develop those as well. I mean, we're happy to develop just some standard residential, but we'll do specialised stuff as well so that we can keep that for good income. I love retirement villages, but obviously it's not everybody's thing and there's a few dollars involved in that, but it might be something for people to aspire to. I Speaker 2 (38:03):

Used to work in that space. Speaker 3 (38:04):

They're an incredible, well, best development I've ever found. But yeah, but there's great opportunities out there, either investment development, you want to do renos, I mean, as long as you're doing property and getting in there. Speaker 2 (38:16):

No, that's great mate. Well, look, I've really enjoyed our chat. I guess the last thing I'd love to hear from you for the listeners is how do we put people in contact with you? How do people find your services? What's your website address or can they find you an Instagram? How do we go about that, mate? I mean, I know where you're Speaker 3 (38:34):

On all of those, but no, true. Look, if anybody's thinking about property development, perhaps getting into it, got some thoughts about it, I think probably start at the website, probably a good place, property mastermind.com au. Just go there, have a bit of a read phone number, have a chat's a good place to start here. We've had a good conversation. Like you say, you and I could talk all day about property. It's in our blood, it's in our DNA. Speaker 2 (39:00):

Yeah, no, I always try and keep these episodes short, but I tend to, it starts and then I look down and it's at 30 or 40 minutes. I'm like, oh god, where did that go? But no, look, mate, it's been a pleasure. I really grateful for you sharing some of your time and your knowledge with us. I found it extremely valuable myself. I'm sure the listeners will as well. I look forward to working with you in the future, and I can definitely see opportunities for us introducing opportunities and hopefully vice versa as well. So thank you very much. Speaker 3 (39:29):

Yeah, love to. It's been a great conversation as always. Love to have a good chat. Hope you enjoyed it. Everybody out there as well. I'll catch Speaker 2 (39:36):

You later. Appreciate it. Speaker 1 (39:37):

Thanks for listening to The Property Now podcast with Matt elo. We hope you learned something valuable and enjoyed the show. Should you wish to reach out to us, you can do so by calling 1 302 8 9 3 2 4. Or you welcome to email matt@hellobayfairproperty.com au and he'll be more than happy to help. However he can. Have a great day.