I had been looking around my local area for quite some time and was keen to purchase something before I had even heard of Massland and Options – unfortunately I was trying the traditional method of purchasing.
I sent some letters directly to the properties I was interested in purchasing and also used a direct approach “door knocking”. I sent out over 70 letters and received several phone calls but nothing came of it. My intention was to purchase a site in the central area and to acquire it the conventional way, 10% deposit with 30/60/90 day settlement.
I then came across Property Options and Mark Rolton at the Success Summit in Sydney. Mark’s language spoke to me and I connected with everything he was presenting on. I then undertook the PO course at the Gold Coast and discovered how to Option properties instead of purchasing them. After attending the course I had a clearer approach of how I was going to execute the few leads that I did have. I implemented Mark’s approach of needs analysis, when I did the face to face negotiations – really delving deep to find out the needs of the seller. This was fantastic! Out of two negotiation meetings I had – I got 2 deals on the table in the same area!
It really became evident how important it is to understand your seller and what they need. By going out of your way to assist them, it becomes part of the sale of the property.
Step 1: Getting Started
I attended the Property Options 3 Day weekend with Mark Rolton and learnt the comprehensive content and most importantly how to understand the needs of the seller and to negotiation a deal based on that criteria.
Step 2: Find the Deal
I looked in the area, as I’m familiar with it. I had a good idea of what could be developed in this locality and the massive upside potential. That’s why it’s critical at the start to begin in an area you already know.
I refocussed on the area I had chosen and with a fresh approach of Optioning the properties not getting into massive personal debt – I went forth with my meetings. I negotiated a property successfully with a seller for 24 months at $480,000.
Step 3: Choosing the Right Strategy
As I have Optioned the property for 24 months and am not making interest repayments, I have time to decide how best to complete the deal. I will do a Long Option on it – go through council and submit a Development Approval. Once I have the Development Approval I will then decide to either on sell it to a developer for a substantial profit or whether to develop it myself. If I can raise the capital I would enjoy becoming a developer and seeing the project through to completion. The great thing about Optioning property is – I have the time to decide.
Step 4: Know the Numbers
I knew Optioning the property at $480,000 was a good deal as I had already undertaken a detailed feasibility. I knew my comparable raw land sales, costs to develop, retail prices for completed apartments and also the demand for this type of accommodation in this particular area. I can either decide to on sell it to a developer for $625,000 and take my profit of $145,000. Or I could develop it myself and make even more profit. I will make that decision when the time comes.
- Option Price: $480,000 with 24 month option period
- On Sell to Developer: $625,000
- Profit to Joint Venture Partners: $145,000
I am very happy with the result of my first deal using Property Options. I look forward to continuing the use Options instead of purchasing property and to making huge profits from it. I also look forward to developing my own projects in the future. I’ve enjoyed being able to share Mark’s experience and blend that with my own. I know that from now on, I will make more money from this industry than I ever have before.