I attended Property Options with Mark Rolton and immediately decided it was a great idea to become a Joint Venture Partner with Massland – and thank goodness I did!
The deal we have put together is a fantastic deal – but I certainly did need Mark and Nathan’s superior negotiation skills with council and their network of consultants, to get the deal over the line.
I found the very large site in the northern suburbs of Brisbane right next to a future railway station, which was fabulous infrastructure. The area had recently been rezoned for townhouses and many developments had already been built in the area. I signed a Heads of Agreement with the owner and at that point Massland looked over my feasibility and agreed it was worth pursuing and Optioned the site.
We headed to the pre-lodgement meeting at council and were informed that the property had a koala protection overlay. The koalas on the site had to be protected which limited the number of trees that could be cut down and therefore the number of townhouses which could be built. This meant my feasibility was now not profitable because there were less townhouses. More on that later!
Massland has a comprehensive Due Diligence process that involves a variety of searches to ensure the site is viable. One of the searches turned up that the State Government Railway was planning to resume this property for the future railway station and parking. Massland had many meetings with Queensland Rail and managed to convince them to only resume a small part of the land and then to approve access to our site from the main road. A double bonus!
Armed with the information about the Railway resumption and the Koala overlay, Massland took up the negotiations and through their experience and skill managed the renegotiate with owner for a reduced price – which meant my deal had life again! They carefully explained to the owner that both these constraints meant the site was not as valuable as first thought, because a smaller area was available for development and negotiated a price that was still profitable for the owner. The site is able to fit 32 townhouses on it. Thank goodness for Mark and Nathan!
Doing a Joint Venture with Massland was the only way this deal came off. Using their experience with councils and government departments, was certainly the reason for the success of this deal.
In the end I found the site and did the initial meeting with the owners. From this point on Massland completed the Due Diligence, negotiated with the owner and sourced the Ultimate Buyer to sell it onto.
Step 1: Getting Started
I attended the Property Options 3 Day weekend with Mark Rolton and learnt the content. I signed up to RPData and carefully studied the local council town plan and started looking for large townhouse sites close to infrastructure.
Step 2: Find the Deal
I found quite a few properties that fit my criteria and sent them all letters. A couple responded and I set up meetings with them to discuss Options. I decided on the best site and signed a Heads of Agreement with the owner. The site was large 8094m2! Which meant it could potentially fit a lot of townhouses on it.
Step 3: Choosing the Right Strategy – Short Options
I contacted Massland and sent through my Feasibility on the site and they agreed it was possible. Massland did the pre-lodgement meeting with Council and met with Qld Railway to renegotiate how much of the site could be used for townhouses. Massland found an Ultimate Buyer who was very eager to purchase in this high growth area. As a result, we agreed to do a short option and on sell this site to the Ultimate Buyer.
Step 4: Know the Numbers
At the three day workshop Mark taught us how to do a feasibility, to know if our deal is profitable or not. My original feasibility was profitable using the whole site. When the size of the usable site was smaller, I redid my feasibility to ensure there was still profit for Massland and myself. It was very important that my numbers and profit was solid.
- Option Price: $721,000
- On Sell to Developer: $951,000
- Profit to Joint Venture Partners: $230,000
I am thrilled with the result of my first deal with Massland. The support they provided me ensured Property Options was successful for me. I am looking for my next deal, as I know my profit margin will increase to 35% for all my deals after this one. More money to be made with Massland! The future looks bright.