My name is Justin and I am a builder. While I enjoy what I do, I decided I don’t want to be 70 and still swinging a hammer – there had to be a better way to use my skills to make money from property.
I discovered Mark Rolton and attended his Property Options to find new and creative ways to make money from property. And I was not disappointed. What I discovered was a smorgasbord of strategies and ideas that I could start implementing right away. It was like having a new set of eyes – I saw potential everywhere.
While driving in the mountains with my girlfriend one weekend I discovered an old house that was overgrown with plants and very neglected, but was amongst the thriving shops on the main street. What caught my eye was its location. I had learnt from Mark the strategy of gentrification – revitalising an old site to bring it in line with its higher and better use according to the town plan. The house was old and run down, but the rest of the street were commercial properties – cafes, restaurants and craft shops. I decided the best use for this site was to align it with its surroundings by turning it into commercial premises too. The best thing about commercial property is it produces fantastic yields, long leases and great ongoing incoming.
I kept the structure of the house but gutted it and had a facade put up, car parking, landscaping and divided it into three shops. It now looks smart and fits in with the bustling shops on either side. The best part is the triple rental return I can now command – a commercial property is far more lucrative than the original residential home. Since my improvements the property has valued considerably, I have not had an appraisal but looking at the comparables of the area I would estimate between 1.3 to 1.5 million. I’m stoked with my capital growth and my rental returns each week.
Step 1: Getting Started
I started by going to an expert to learn and that was Mark Rolton. I attended his 3 Day live Property Options Bootcamp. The sheer amount of information and the variety of strategies he shared was astounding. I left the weekend with new eyes and a determination to find a deal for myself.
Step 2: Find the Deal
We had learnt from Mark to ask the council what their vision is for the town and deliver what they want. After my trip to the mountains I jumped onto the council’s development website I knew the areas that had been zoned for commercial. I approached the owner and they very happy to sell the property as it had become something of an eyesore and would cost too much to repair.
Step 3: Choosing the Right Strategy- Townhouses
I put in an application to council for the site to be used as commercial premises and it was approved quite easily. Being able to develop then build the project meant that I could maximise the profit on the deal. I began by gutting the old house and building walls to divide it into three separate shops and gave the whole place a new lease of life by building a new modern facade. I tidied up outside as well, by making new car parking and landscaping.
Step 4: Know the Numbers
The return on my investment, a whopping 10%, meant it was too good a deal to sell. I decided to keep it because of its steady cash flow and its potential for capital growth, I estimate it has already increased by about $400,000. I learnt at Property Options the importance of knowing the numbers and your profit margin. Here is a simple breakdown of the deal.
- Purchase price: $600,000
- Construction costs: $300,000
- Estimated New Value: $1,300,000
- Shop 1: $32,640
- Shop 2: $27,840
- Shop 3: $27,840
- Total Rental Return per Year: $88,320 or 10.1%
I really took on board the lessons Mark stressed about retaining assets. We are trying to hold onto as much as we can to build our portfolio and create compounding capital growth in the long term.
What’s the point of working hard on a great development and then selling it off? You’ll make money in the short term but will miss out on more in the long run. Building a profitable portfolio is very important to me and I now have the diverse skills to be able to accomplish that goal. Property Options was definitely the key to my new success.