Hi Jaffasoft

We tend to agree with this article. 

We're finding in our architectural practice that more and more of our clients are requesting larger bedrooms that resemble hotel suites.  The main reason our clients are requesting these types of bedrooms is for peace and quiet especially from adult children that refuse to move out of home. 

The majority of our clients believe, that apart from the bathroom, the main bedroom is the only place in the house that seems to be off limits to growing children.
 
Adrian and Amber Zenere
http://www.archizen.com.au
http://www.RealEstateDevelopmentClub.com

Hi ckl

Unless one is extremely gifted and/or talented, most people these days usually have three investments choices, property, shares or the internet.
 
We recommend to start off by finding a strategy that is a good fit for you and that you're passionate about (or could become passionate about) and then become an expert in that area.  You want to be doing something that excites you, that makes you want to jump out of bed early in the morning and that makes you want to stay up all night.   If you're passionate about what you're doing you won't mind putting in the time and effort that it will require. 

We became involved in property because we just loved it,  We do have a self-managed super fund where we dabble in shares but overall, it would only make up about 20% of our entire investment portfolio because we personally are just not as passionate about shares as we are about property.  If shares excited us more then they would probably make up 80% of our entire investment portfolio.  We've found if you love what you do the money will follow.

A lot will be determined by your own personal risk comfort levels – risk v reward.  Any investment strategy isn’t without risks but we find that it’s important to “Be Risk Aware NOT Risk Adverse.”  Start small – we figured that once we’d learnt more we could then take more calculated, knowledgeable risks and look for larger opportunities.

Once we found a strategy that we were passionate about and had a clear vision we started with the end in mind, set ourselves realistic goals and then worked out an achievable step-by-step plan but more importantly your success lies in your mindset. Getting your mindset right will be the underlying fundamental key element to your success. We had to change our money beliefs and reprogram ourselves so we could attract an abundance of wealth.  We had to adopt a lot of the mental, financial and business habits of successful investors. 

Jim Rohn, the renowned Amercian business philosopher wrote, "The most important part of becoming a millionaire is the person that you have to become to accumulate a million dollars in the first place." Likewise, many financial advisors will say "The first million is extremely difficult to acquire, but the second is almost inevitable."  

This is a great insight – in our experience you will need to develop a different mindset and different habits from the average person in order to become successful.  By becoming this kind of person you also become the kind of person who can then earn the second and third million. If you happen to lose all your money, you would be able to make it all back again because you have become the kind of person who can make a million.  Essentially, by adopting the habits of the wealthy and the mindset of successful investors, you can become one.

If you do the same old thing then you'll get the same old results, if you want massive results then you'll need to make massive changes.  If you just read this, then not much is going to happen for you.  If you want to improve your situation you must Take Action because ahead of any other requirement is your personal motivation.  Only then can true success follow!

Remember – your success lies in your mindset.  It all starts with the quality of your thoughts!  If you have positive thoughts, you'll have positive results and if you have negative thoughts you'll have negative results.  You must first believe you have the ability to be successful before it can ever happen.

At the end of the day it's about enjoying the journey and the type of person that you become during that journey that ultimately matters.

Wishing you much success!

Adrian and Amber Zenere
http://www.RealEstateDevelopmentClub.com

We have just done the opposite and added an internal wall to a large penthouse to change it from a 2br to a 3br. Cost was under $4,000 (added $40,000 to the property value) with no electrical and plumbing works, yet our local planning authority still insisted on inspecting the work. Each council and body corporate is different so you should check with yours first. It is a simple phone call and this way you should get the right information upfront as it could be costly if you go ahead without approval from either. There is no one size fits all when it comes to building works no matter how small. Make an appointment with the Senior Town Planner if you need to. Adrian and Amber Zenere http://www.RealEstateDevelopmentClub.com

Hi Redwing

Thank you for your kind words and best wishes for our website.  As you're probably aware we discuss in detail how we conduct our feasibilities and the software we use on our website but to give you a quick overview.

We personally haven't found any "free" property development software that is worth using.  We're prepared to pay for good software because the purpose of a real estate development feasibility study is to establish whether a project is a viable proposition or not. 

It is critical that the feasibility is performed correctly.  We use property development feasibility software that allows us to work backwards to evaluate what the land is worth to us with development approval – this is called the Residual Land Value. 
 
Once we’ve found a potential development site we start off by doing some simple BOE (‘Back Of Envelope’) calculations, using our Real Estate Development BOE calculator, to check whether the site is within our ballpark of profitability and suitable for further investigations.

As soon as we’ve finished our concept drawings we fine-tune our ‘number crunching’ by undertaking a proper financial feasibility study.  Using 'Worst Case' scenarios (being conservative in the values that we input) we include anticipated time scales, all costs including consultants and construction costs as well as likely end sale values and our minimum profit margin plus a contingency allowance (which varies depending on circumstances especially site conditions).

For our real estate development financial feasibilities we use 'FEASTUDY' as it is, in our opinion, the most user-friendly property development software for real estate and investment proposals that we've used and the most appropriate for our use in smaller-scale residential development. In considering the time it saves us in preparing a Real Estate Development Feasibility Report, in our opinion, Feastudy 6.0 Professional is a comparably inexpensive tool compared to the important job it performs.

The feasibility study is also invaluable when putting together a JV or Loan Application Proposal as mortgage lenders or other investors can instantly see whether our real estate development project will be successful and the level of risk involved.

Adrian and Amber Zenere
http://www.RealEstateDevelopmentClub.com

Matt007 wrote:

Good advice Amber and Adrian.. only my personal opinion but I think a basic foundation knowledge of developing is also a very good place to start from. My experience with options is lol well documented but that said I'm now in partnership with some knowledgeable people for my main project and it's showing me so very much more than what I originally learnt from the 'expert'.. I'll use options again for sure, but need to do some more learning and one or two smaller projects I think before heading back to a project similar to the monster I've created up north!

We always recommend starting out with smaller projects first. If we decide an Option is the best way to proceed to enable us to control a site we would send the Vendor our ‘Letter of Intent To Purchase Under Option’ before we went to the expense of having our solicitor prepare a formal Option Agreement.

This outlines the basic terms upon which we would be prepared to purchase the property. The terms are not complex and we mention in this that we expect additional terms to be incorporated into the Formal Option Agreement.

Infact we just received a ‘Letter of Intent To Purchase Under Option’ today from another developer for one of our development sites. Not going ahead with it though as the offer and terms is not even close to what the development site is worth to us.

Options are one of the most powerful tools available to developers. They give developers the right to control a site during a set period of time, without the obligation of taking ownership, and usually with only a comparably small monetary risk.

Amongst other advantages they can buy time for the developer – to complete their preliminary feasibility and planning to determine the projects financial viability and to even obtain the Development Approval Permit. According to Robert Balanda in “Options Made Simple” they can even be used as an effective tax minimisation strategy.

Simply, an option gives a buyer the right (but not the obligation) to purchase the property for the payment of a fee. The amount of the option fee is negotiated between the two parties and is typically a percentage of the agreed property purchase price.

An option contract also allows the luxury of tying up a property without having to settle on it, which is when your name is revealed in the public record as the buyer of the property.

Walt Disney, for instance, assembled the Florida Walt Disney World site using options as he didn’t want to reveal to the many different property owners that he was the intended purchaser, as they could of held out for a much higher price.

A downside with options is, that the money that is given as the option fee, is usually forfeited if the developer decides not to go ahead and does not purchase the optioned property. On the other hand the significant advantage of options is that the usually small option fee is all that is at risk.

The precise terms and conditions of the Option Agreement will depend on the relative bargaining strength of buyer and seller. While not all sellers will agree to an option contract many will, especially if the terms of the option are not unreasonable.

The option fee can vary from nominal to several thousand of dollars – it will usually be determined by the seller and be dependent on their aggressiveness in selling the property. If they have hopes of a fast sale a substantial fee will usually be requested to compensate them if they should lose a sale to another buyer.

The option agreement is usually attached to the contract of sale. Once the option is exercised a contract of sale becomes into effect. The contract of sale will detail the price and all of the necessary terms and conditions.

Options are only one of the strategies that we use to control a development site.

Adrian and Amber Zenere
http://www.RealEstateDevelopmentClub.com

Don’t forget to add a contingency amount should things not go as planned.

Adrian and Amber Zenere
http://www.RealEstateDevelopmentClub.com

We like floorboards even though they may take a little extra cleaning and care. They are like a little black dress that are timeless and never look out of place. They can be used in all types of homes from federation to contemporary and you really can’t go wrong. If it is your PPOR then a few well positioned rugs should add that cosy warm feeling.

Tiles are better in wet areas but if you want to use them in other areas then I would consider underfloor heating as they are freezing in the winter. It is relatively inexpensive to install the only problem is the heating costs are high and not very environmentally friendly.

We don’t have children with allergies so we prefer carpet in the bedrooms. If you’re using different floor treatments just make sure you allow for the different levels so they end up flush.

Adrian and Amber Zenere
http://www.RealEstateDevelopmentClub.com

When we're considering a renovation or development project we always start with the end in mind and ask ourselves this question:  Who is my buyer and what would they want?

Would they want a 3 bedroom home with 2 bathrooms and an ensuite, separate laundry with little access to a beautiful backyard or would they want a 3 bedroom home with 1 bathroom, 1 ensuite, combined kitchen/laundry (that was intergrated well) and easy access to an outdoor living area and beautiful backyard. 

If you're still unsure ask 2 or 3 real estate agents in your area for their opinion.  From our experience most are happy to help especially if they think there could be a possible sale in it for them.

Then with any project you need to 'crunch the numbers' beforehand so you're confident that it will be profitable.  Apart from the renovation costs take into account the costs to get into the deal (stamp duty and other purchase costs) and any costs to get out of the deal (CGT, agents selling commissions, etc.) 

Remember to consider how long each option will take as time is money.  If it appears you're onto a winner then go with the most profitable option and where there is likely to be more demand.  After all a property is only worth what someone is willing to pay for it so the more demand the more likely you will achieve a better outcome.

Hope this helps!

Adrian and Amber Zenere
http://www.RealEstateDevelopmentClub.com
  

We’re happy to pay for good quality information that helps to take us closer towards our goals. We haven’t done Mark’s seminar but the CD you are referring to is ‘Options Made Simple’ by Rob Balanda.

We found it helped us in the beginning to understand how Options work. It explains how to use property options to buy and speculate in real estate. It includes really good checklists plus it has a sample Call Option Agreement and Put and Call Agreement.

We personally think that Options are just another strategy that can be used to control or tie up a property. For example some developers may enter into an Option agreement with a Land Owner where, for a relatively small non-refundable fee, a property developer has the right, but not an obligation, to purchase the property by a pre-determined date, by which time it is hoped that a Development Permit has been approved.

Options allow property developers to “lay by” a property and buy it at a later time if they wish to do so.

Adrian and Amber Zenere
http://www.RealEstateDevelopmentClub.com

We always find that its important to look at the big picture and start with the end in mind.  We would set realistic goals and then prepare an action plan taking into account the 80/20 rule.  You need to ask yourself  "Will managing my properties get me closer to my ultimate goal any quicker or would I be better off to outsource this part and concentrate on building my portfolio?"

When we decided to build a property portfolio we started with the end in mind and decided to run our property portfolio as a real business. This meant we needed to have a clear vision, set ourselves realistic goals, prepare a proper plan and be able to make better use of our time.

You need to think of your goals as drawing a map: if you know where you are and know where you want to go, even if you do get lost, you will find your ultimate destination, namely your destiny.

You need to set goals that are big enough to drive you, to excite you and move you forward to where you do want to be, and you need to set goals regardless of previous 'failures'.

Once you've set your goals then you will need a plan of action.  When it comes to building a property portfolio a typical plan shouldn't take you long to put together. Some parts may be a breeze however others may be a little difficult. If you're just starting out, the effort you make developing a concrete plan will more than pay for itself in the long term as your property portfolio grows.

Whatever you decide plan accordingly. “A goal without a plan is just a wish”. 

Adrian and Amber
http://www.RealEstateDevelopmentClub.com