the pitfalls of property development how not to lose your shirt in property advanced property...

The Pitfalls Of Property Development

How Not To Lose Your Shirt In Property

Advanced Property StrategiesNhan Nguyen

www.advancedpropertystrategies.com

Welcome

DISCLAIMERThe information and strategies contained in this presentation/publication are

provided by the author and/or publishing company as generalizations which they have formulated. They are not offering the information and strategies as financial, accounting, legal, investment, and/ or tax advice, and are not offering the advice as advice to be relied upon. Readers, viewers and purchasers must obtain specific financial, accounting, legal, investment, and/or tax advice from their professional advisor. Any testimonials included may not represent typical results. The results obtained by following the strategies will vary, according to the skill and experience of the user, and therefore are not guaranteed. Specific experiences and past performances do not guarantee future results.

This presentation/publication and its presenters do not offer any financial advice. Nor do they recommend that the information contained in this presentation/publication be construed in any such way. The producers and presenters/publishers insist that any financial action taken by, (or on behalf of) the purchaser or viewer of this material, is at the INDIVIDUALS OWN RISK and PROFESSIONAL, FINANCIAL AND LEGAL ADVICE should always be sought, when relating to matters of this nature.

My Parents Had Nothing

I Grew Up In Housing Commission…

My First House Gave Me…

$21,000,000.00

Property Development :

The Truth Exposed

Property Millionaire Tip:

You Don’t Go Broke By Not Doing The Deal

Mistakes That Can Send You Broke

Do You Want To Know What They Are?

Case Study #1:

Raw Site in Mining TownBought in 2006

Approved for 20 dwellings 2008Projected profit $3M

Market changedI’ve got a great idea!

Let’s Apply for 40+ dwellings!2010 application approvedNeighbour Takes To Court

2011 lender repossesses propertyProjected profit $3MCurrent Loss $500k +

Big Risk #1

Council Approvals Are Out Of Your Control

Risky Actions

Buying A Raw Site Without

Development Approval

Approval Takes Too LongHolding Costs Can Kill You

Market ChangesCan’t Get Funding Or

FinanceProject Goes Stale

Good News!

There are solutions!

Ideas:Buy

Properties Already

Subdivided

Already on 2 lots (or more)

Can quickly and easily release titles in less than 24 hours

Splitter Block Figures• $565,000 purchase 2011• Subdivision Costs $280• Time to Subdivide: 1 day• $365,000 sold one block in 5

months• After Holding Costs, Agents

Commission $70,000 Net Profit!

Other Ideas:

Buy Subject To Approval With Long Settlement

If Approval Doesn’t Come Through - You’re Safe

Other Ideas:

Use Property Options

Take Control Of the Property Without Ever Owning It

Case Study #2: KaizenProperty Marketers Turned Developers

$38,000,000 in Capital RaisingSpent >$80,000,000

Ultimate No $ Down Deals!!!

Case Study #2: KaizenProperty Marketers Turned Developers

Took on Big Projects 30+ LotsSome applications took 3 years+

Went into administration Investors got 70c / $

Risk #2

Lack Of Deal Experience

Going Too Big Too Soon

Greed Takes OverVacant Land Has No

IncomeApproval Out of Your

Control

Property Millionaire Tip:

Think Big Start Small

Other Ideas:

Start With A Duplex or

Single Build or

Cosmetic Renovation

Other Ideas:

If Buying & Selling Aim To Get Out Within 12 months

Shorter Time Frame Better

Other Ideas:

Have Multiple Exit Strategies,Especially With Land

Vacant Land Often Has No Income