BANKABLE: How to make big money from small developments

By Nhan Nguyen and Matt Jones

Discover The REAL secrets to Property Development

Yes, it’s possible to potentially make a healthy income from small developments – if you know how. In fact it is easier than you think, once you learn the 6 steps to succes

• Language: English
• Publisher: Advanced Property Strategies
• Release date: Mar 22, 2018
• ISBN: 9781925471205

Book preview

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Disclaimer

All the information, techniques, skills and concepts contained within this publication are of the nature of general comment only and are not in any way recommended as individual advice. The intent is to offer a variety of information to provide a wider range of choices now and in the future, recognising that we all have widely diverse circumstances and viewpoints.

Should any reader choose to make use of the information contained herein, this is their decision and the author and publishers do not assume any responsibilities whatsoever under any condition or circumstances. It is recommended that the reader obtain their own independent advice.

First Edition 2017

Copyright © 2017 by Nhan Nguyen

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission from the author.

National Library of Australia

Cataloguing-in-Publication entry:

Creator: Nguyen, Nhan, author.

Title: Bankable : how to make big money from small developments in 6

simple steps / Nhan Nguyen.

ISBN:

9781925471199 (paperback)

9781925471205 (ebook)

Subjects: Real estate development--Australia.

Real estate investment--Australia.

Wealth--Australia.

Finance, Personal--Australia.

Published with support by Author Express

www.authorexpress.com

[e-mail]

| Bankable |

- Certain to bring profit and success.

TABLE OF CONTENTS

Introduction

About This Book: Think Big and Start Small

STEP ONE: PURPOSE

Your Reason Why

Goals

Summary

Action Steps

STEP TWO: PURCHASE

Buying Strategies

Speculative (spec) homes

The Upside of Building Spec Homes

The Downside of Building Spec Homes

Townhouse Development

Advantages of Townhouse Development

The Downside of Developing Townhouses

Strategies for Spec Home Developments

Designating an Area

Finding the Site for Your Spec Home

Finding the Site for Your Townhouses

Money Rules

Your money rules

My Money Rules

Buying at a Discount

Negotiation

Summary

Action Steps

STEP THREE: PAY

How to Finance: Avoiding the Pitfalls

No-Money-Down Strategies

Getting Finance Partners

Joint Ventures

Summary

Action Steps

STEP FOUR: PRODUCTION

Development Approval Process

Spec Homes

Speeding up the Process

Which comes first, the builder or the block?

How to Identify a Good Builder

Identifying the Right Product

Combining Strategies for More Profit

Townhouses

Lodging the Development Application

Development Approval

Operational Works Permit

Submitting a Building Application

Build Contract

Acquiring Construction Finance

Construction Phase

Tasks to Complete During the Construction Phase

Building Certification

Summary

Action Steps

STEP FIVE: PROFIT

Selling

Selling Your Spec Home

Selling to an investor

Selling to a Homeowner

Selling Your Townhouse Development

Renting Property

Standing out from the crowd

Spec Homes

Refinancing

Summary

Action Steps

STEP SIX: PLAY

Summary

Action Steps

Conclusion

About Nhan Nguyen

INTRODUCTION

Why do they call me the No Money Down Man ? My claim to fame is that by the age of twenty-four, I’d bought a couple of million dollars’ worth of property using none of my own money, so I have a fair bit of experience in this area. I love pushing myself to another level. Some people think I’m crazy, but I’m always looking at creating new material. Cutting-edge concepts and processes that are relevant in the current marketplace. Others tend to rehash the same process over and over again, but I want to give people a feel for what’s actually going on and create a blueprint for what to do in volatile times.

First, I’d like to tell you a bit more about where I come from.

I was born in a housing commission estate in Darra. My parents had been wealthy in Vietnam but lost it all in 1975. To escape the war, they jumped on a boat with little more than the clothes on their backs. I’m living proof that to be successful in this game, you don’t need to be born with a silver spoon in your mouth.

We moved to Carol Park, where I spent much of my childhood. These days Carol Park is quite industrial, and there’s a lot of development. When I was a little kid, my auntie wouldn’t allow me to play with my cousin who lived next door, and I believe this incident first planted the seed of me wanting to become a property developer. At the tender age of three years old, I knew I needed control of what I owned, what I did, and how I created my future.

Under the encouragement of my parents, who wanted me to become a doctor, I received instead a science degree at the University of Queensland. Admittedly, I did fail one of my subjects, BC306, because I was out there looking at property when I should have been studying.

When I was twenty-one, I bought my first investment property in Goodna, which is a suburb about twenty minutes out of Ipswich. I figured out a strategy to receive the First Homeowner’s grant and get a positive cash flow deal as well.

This experience helped me to understand something important about property, and that is you need to take responsibility for what you can control. I began to observe how I reacted when circumstances didn’t go right for me. After purchasing my first two properties, I started doing a renovation on the second, but both of them were sitting vacant at the same time. I became stressed. I was earning twenty-five grand a year, and each month I was short five hundred dollars. For some people that’s less than a car payment, but for me it was a massive amount of money.

Because I was stressed and desperate, I put a tenant in the property not being renovated. They had six kids and were on Centrelink. On paper, they seemed like a good choice. They were earning one thousand dollars a week, which was double the five hundred I was earning. I moved into one of the rooms to reduce their rent (and mine), and I was able to get a positive cash flow.

Then I started to get into trouble. The tenants trashed my property. What they would do was open up the window and throw the rubbish outside. Heaps of stuff. It was just disgusting. So, I sold the property too fast, because I was desperate. I only made two thousand dollars profit out of the whole transaction, but I was lucky to make any money at all. This taught me that if you’re desperate and emotional, you will make irrational decisions. Just because you can buy a property, doesn’t mean you know how to become a rental manager. It was an important lesson.

You need to know that wherever you are, whether you have assets and income or nothing, it doesn’t matter. For me, I used ‘having nothing’ as an excuse to step up. Some people might use it as a justification to do the opposite. You might say, I don’t have this. I’m losing money. I’m negatively geared. I have negative equity. But none of that matters. Use all of your difficulties to lift the bar and go to the next level. I’m living proof you can make it happen.

ABOUT THIS BOOK

Think Big and Start Small

I believe thinking big and starting small is the key to property development. There’s a fine line between passion and skill. You need to build skills while remaining unemotional with zero ego. If there’s an imbalance, it can lead to your downfall. I’ve seen it happen to many property developers.

Starting small allows you to acquire the fundamentals. These include:

learning how to obtain council approvals efficiently

understanding the many financing components

ascertaining the correct construction materials

perfecting the art of dealing with real estate agents and selling property

becoming aware of market timing

dealing with builders

working with valuers

working with private financiers, banks and other financial institutions

These essential elements can also be applied to other more complicated development projects heading into the future. Thinking big satisfies your ultimate goals and dreams, and starting small ensures you take a realistic approach that’s relative to your experience and skill-set.

STEP ONE: PURPOSE

Start with the end in mind.

Your Reason Why

It’s good to start with the end in mind, and that means getting crystal clear on the results you want to create from your property development strategy. Your driving force to bring about a successful outcome has to be bigger than money. Although money will be the end result, it shouldn’t be your WHY, because that should be based on something more specific and emotional. The question should be: what do you want to change in your life?

For instance, you might want to:

replace your income

travel on holidays more

spend more time with your family

fund community projects for underdeveloped countries

buy the ultimate car, boat, plane or rocket ship

The possibilities are only limited to your imagination. The point is to be absolutely transparent with your intentions, because that in turn will determine the strategy you implement.

This clear thought pattern will be your driving force: property investing in general is a rollercoaster ride. You’re going to experience some ups and downs and moments of procrastination and emotional bridges you’ll need to get over. I know, because I’ve been there. To burst through the minefield, you’ll need an internal motivator and a bigger picture firmly in place, before climbing aboard this ride of a lifetime.

Goals

Property Development can be defined as: