One of Australia’s Wealthiest Property Developers, Having Turned Over More Than $1 Billion Worth of Property Development Deals
– The biggest mistakes made by first-time property developers and how to avoid them
– The Mindset of a successful property developer as compared to a hobbyist property investor
West Interviews Bob Andersen
Speakers:
West: West Loh
Bob: Bob Anderson
West: Welcome, folks, to today’s interview. And today, I’m very privileged to have with us Mr. Bob Andersen. Now Bob has been involved in property development for a very long time, over thirty years. And he’s in a conglomerate of people who control over $1 billion worth of property. And that’s a super, super impressive stat.
What’s more impressive is Bob not only has a personal portfolio but he’s also doing it day to day and he’s also teaching people how to do it. So we’re very lucky to have Bob with us today. And I want to welcome you to today’s interview, Bob.
Bob: Thanks, West. Great to be here.
West: Absolutely. Now tell us, Bob, when you speak to people and they ask you what it is that you do—because I know you’ve got such a range of skill set—what is it essentially that people need to know about you?
Bob: Well West, primarily, I’m in the property investment, property development area. But ultimately, what I do is I use property development more as a vehicle for getting property investment at cost price whether it’s for myself or for investor clients. Property development is really a vehicle to accumulate the asset class of property, primarily residential property. So yup, I’m a developer but there’s a reason for being a developer.
So what do I do? I’m a developer and I’m an investor and my clients are all investors.
West: So a lot of people who are kind of thinking of getting into development but maybe they’ve only done a couple of residential or maybe they haven’t done any property and they’re looking at getting into something on a small level, is that something that you help people primarily and teach people how to do as well?
Bob: Yeah. I heard Mal saying, “Never pay retail.” So myself, that’s part of the reason I got involved in property development, really. It was a vehicle for getting property investments at a—well, not wholesale price—but absolute cost price.
So people, sometimes they haven’t done a development at all and they’re investors with one or two investments of their own and they see that potentially property development could be a great way of accumulating property investments fast and at cost. So with those people, I have a whole property development education program for those people who want to make the next step up from property investor to just more property developer.
West: Wow. And I think there’s a perception in the public that you’ve got to be some sort of sophisticated, right up there and have done hundreds of deals before you can into development. I mean that’s kind of—when I was going through—at least, that was the perception. I mean if you look at a lot of the property work out there and books and tapes and seminars, they always show you a progression where development is like the ultimate goal. But you’re saying that people can—with some knowledge—get into property development and make it work for them.
Bob: Yeah, they can. I think one of the first things that people need to do is to know why they want to get involved in property development.
West: So find their reason.
Bob: Yeah…and a good reason. I was talking to somebody last week. He actually wanted to become involved in property development. So I put the question, “Why do you want to do this?” And they say, “Oh, I see property developers and they’ve got big fancy houses, they drive red Ferraris. They often have young women hanging off their arms.” And I say, “Well, that’s not a really good… It makes me sound very unsuccessful.” You know, I’ve been married for thirty years. I don’t drive a red Ferrari. And I haven’t got the biggest house in the suburbs.
But I think you have to go in there for the right reasons. And initially, as I said it’s a vehicle. It’s a way of accumulating wealth. It’s a way of accumulating property. So for those people, get the reason right first. And that’s important…having the right reasons.
Then the next question is ‘well, how do I get involved?’ And really, just like everything, you have to be educated. You have to gain knowledge and increase your knowledge for leveraging off people with far greater knowledge.
West: Absolutely. And you’ve got to learn from people who are in the industry and doing it and are the real deal. I mean, there’s kind of a lot of pretenders out there and obviously, I’m not going to name names or anything but there are people out there who don’t walk the talk and there are people out there who don’t actually do what they claim to do or say they do. And you have a record that just speaks for itself with all the developments that you’ve done: resorts, hotels, government buildings and all those kind of things that do that.
So how can people, I guess, identify who to learn from and what kind of signs can they look for when looking for a means or looking for someone to actually leverage from?
Bob: I think they’ve got to do a little bit of their own due diligence, really. In my case, I’m a real developer. I have a development company, Positive Property Strategies, where we’re involved in projects all the time. Even currently, you know, retirement villages, combination projects, townhouses, units—we’re always doing projects. And so I’m a real property developer, therefore, I have the ability to pass that knowledge on.
We’re like talking about people who may be trying to pass knowledge on that are not property developers but they’re outs… look, you’ve got to do your own due diligence on the subject.
West: So you’re a developer first and you’re teaching people afterwards. You’re not teaching people first as your core business and then kind of trying to do property development on the side. And I think there’s a big distinction, a big difference there.
Bob: Yeah, exactly. And I’ve developed this course. It took me quite a long time to develop it. It’s basically the culmination of nearly thirty years of experience that I’ve put into in my course. And I think that shows for anybody who really sees it.
West: Absolutely.
Bob: Credibility’s everything, really.
West: Definitely. And I definitely like to chat a little bit about it later because, you know, before our interview today, Bob was actually giving me a little sneak peek at the course. And it’s really exciting to see what he’s put into it. It seems like kind of a labor of love that he’s actually put almost everything into his brain that people can follow in a blueprint.
But before we get to that, Bob, why don’t you tell us maybe a couple of strategies that you recommend in today’s volatile environment with regard to property development? How can someone get into property if they don’t have, you know, a million dollars in the bank? And how do you specifically help people would be a really good addition to how people get in.
Bob: Yeah. Well look, knowledge is power. So first thing people need to do is actually to educate themselves—make an investment in their future. And that requires spending some money. That’s fine because the greatest asset is you have is yourself. So you need to invest in yourself. And there are sources of knowledge out there.
When I started, when I originally sort of moved from, if you like, from a short period in real estate into property development, there’s nothing out there. There were no books, there were no courses, there were no mentors. I did it the hard way. I made a few mistakes along the way. So increase that level of knowledge.
And then ultimately, you know, you have to make the first step. Some people keep accumulating knowledge, accumulating knowledge but they never make their step. Eventually, you have to make that move. I always say you don’t have to have an IQ of 150, you don’t have to be a multi-millionaire, you don’t have to drive red Ferraris to get into property development.
So start small. You might be looking at something like a duplex, two townhouses to get or maybe a triplex of three. You can get into that fairly readily. If you have no cash at all and you’re building up this experience, you can look at more creative ways of getting into things—joint ventures. I’ve done a lot of joint ventures and there are so many different ways of structuring joint ventures. You might look at joint ventures as a way of bringing in somebody with some money…
West: And you provide your time.
Bob: …and you provide your time and the knowledge that you’re building.
There are all sorts of things out there. There are things like using fancy stuff like call options and building equity into deals and that sort of thing. There are creative ways of getting in that requires knowledge of that. And also, look, at the end of the day you’re going to do some work.
So there are creative ways of getting in. But finance wise too, on the smaller projects, some of the banks are coming back in and starting to lend retail finance going for twos and three townhouses at higher LVR’s. So there are some too good opportunities to get in on the ground floor.
West: Absolutely. So even if you don’t have any money, you can still get your hands dirty and get some experience. And once you find some really good information that you can act on and find, I guess, a strategy that suits your personality, I guess—in a way, Bob—I mean, you were saying before that there are so many different things you can do but some people like to do something that’s more attuned to their personality and their risk profile I guess.
Bob: That’s right. Some people are more entrepreneurial. Basically, I’m a property developer or a property investor. Also, do you make entrepreneurs… there are things to suit people’s personality. Some people are more creative than others. But, you know, there’s a deal around the corner for everybody to fit everybody.
West: Absolutely. And I think, even that mindset in itself, people are saying that there aren’t deals out there. And someone like Bob who is day in and day out… there’s always a deal.
Bob: Yeah. And look, if you miss out on a deal of the year, the next one’s only a week away.
West: Absolutely. Absolutely. Wow. That’s powerful.
So what are some of the strategies that you give, Bob, to people who may have a little bit of cash lying around and maybe come to see you for, you know, “How can you help me, Bob?” What kind of things do you say to those people and maybe if you can give us a case study of how you’ve helped someone or given someone some advice or a strategy that has saved them some money or made them a lot of money?
Bob: One of the first things to do before you say, “I’m looking for a site,”—the first thing you do is not look for a site—the first thing you do is have a look at your structure. You need to get your structure right. And that will depend on what you’re going to do. Are you going to look for a site to flick. Are you going to develop something and sell it? Are you going to develop something and hold, the structure will vary.
Have a look at the finance and how you’re going to fund this thing: Are you going to use your own cash? Are you going to use somebody else’s? How it’s going to be funded.
But beyond that, before you start looking for a site, is to decide on the answers to those questions, then we have look at what sort of deal fits the person.
West: So kind of do it like a mini business plan.
Bob: Yeah, a mini business plan. Yeah, exactly.
Some people come to me that they’re already into development. They say, “Look, where do go from here?” Some people will say, “Look, I want to get into it. Where do I start?” Just start with the knowledge. Once you’ve got the basic knowledge, then you can build upon that with a mentoring program or whatever’s the next step. Now at the moment people arrive with a deal and a title. They already started. It’s amazing, you know. You see something has started. It’s scary sometimes but actually some people are actually in their first project and are quite lost. And I pick up people at various stages.
But as far as helping people in the deals, um, I mean you’ve met Ben Smith recently. Ben runs my portfolio turbocharger program. Ben started off basically as a mentoring student and I know he’d be right for the deal with a land subdivision, potential joint venture for a 20 lot subdivision. And I was like helping him with that in terms of how to structure the deal, how to structure the joint venture, how to make the win win with both parties. That was a great outcome. It was a great outcome for the land owner. It was a great outcome for Ben. And that was a 20 lot subdivision which actually, the way it’s financially structured, meant no money into the deal for the actual developer—it’s a 20 lot subdivision. Great outcome.
West: Wow. It’s crazy.
Bob: I often use that one as an example because it’s a very good deal of having… you can actually get into a deal and create at least…
West: So Ben obviously didn’t know that by his own back. But he got into the game and he came and saw you because he knew you were actually, you know, you know what you’re doing and you were able to systematically look at all the different aspects of the deal and put something together that was a win.
Bob: That’s right. That was a ‘no money down’ deal.
West: Wow. Powerful stuff.
So if someone is sort of getting—you mentioned before people kind of just dive in and they don’t really know what they’re doing. And I was also reading in your book, which we’ll talk about later, but what are some of the most common mistakes, Bob, that people make when they try and get in their first property development deal and they just, you know, they don’t know what they’re doing and they can potentially lose a lot of money? What are some of the pitfalls that people can stay away from based on your experience from the most common list of things?
Bob: One thing that scares me is that often with people starting out is they don’t know that they don’t know. It’s a dangerous thing. It’s a good thing to know that you don’t know but when you don’t know that you don’t know, that is very dangerous. And sometimes I go in some of the large property forums and you go and you see people coming up with a question, “I just bought a development site. What do I do next?” They’re asking other people out there who have never done a development for advice. That’s pretty scary stuff.
So where can they go wrong? Well, due diligence is a big thing when you’re looking for a site. Some people just launch out, they believe a real estate agent. Nothing wrong with real estate agents but caveat emptor: do your own due diligence.
I always say, first thing, get a little team together-be it an architect, be it a town planner and do your due diligence on the site. It might be a site without a development approval. What’s the zoning? What’s the likelihood of success on the development? What’s the yield? What can we get on it—two townhouses, four townhouses? Some people just launch out, buy a property without knowing and it’s quite scary.
So yeah, initially, the right sort of due diligence.
Know the structure before you enter into a contract. Some people just launch into a contract signing their own personal name with intent of developing and holding and then they find out, Well, I don’t really want it in my own name after all. And it’s an expensive business to try and take it out and sign personal name back into a trust or a company—whatever the structure is. So get these things in place early.
West: Absolutely. So I guess it all comes back to educating yourself and making sure that you have at least a base level of education. Personally, I actually respect people who dive in and do stuff but I think when there are things at stake, such as people’s lives and people’s families, you’ve got to actually have that base foundation. And I think a great step, as we’re talking about before, is going to Bob’s site and getting his eBook. I just spent the last few days reading it a few times and it’s an amazing, amazing resource. If nothing else, it’s free. It just teaches you everything…all the basics of property development.
And so Bob, for people who want to know a little bit more about your book, how did the structure come? And I’m guessing, over the years, you’ve thought, ‘How can I Put together something that just teaches people the backbone of what I do.’
Bob: Well, I wanted to get the basics out there because I was bumping into people all over the place, I was seeing…
West: You’re always getting the same questions probably.
Bob: They’re all the same questions and you know, as I said, you go into some of the property forums and you see what they were really doing. So I thought, ‘Look, at least let’s get some basic information out there about the development process, the sorts of development you can do, what are the risks or basically the advantages of doing property development. It’s about a 41 page ebook and it’s free. So that helps as well.
West: And it’s pretty damn good.
Bob: It just gives people a bit of a feel for property development: what it’s really about, what some of the advantages are, what the risks are, how you can get into deals. Obviously, here you can get a lot of wealth from it as well. So it’s a good first base, if you like, to go to.
West: Absolutely. And one of the things I noticed about it is people can start doing this in their spare time. I mean they don’t have to quit their job tomorrow and start going full—you know—full time property. They can actually learn and kind of do it on their weekends.
Bob: Look, I don’t want to make property development sound like it’s really easy. But it can be. With the right help, it’s relatively easy.
Look, very often people have done a course or start to mentor or have what I call a day job. And most of them are quite happy or quite comfortable to do, say, three townhouse projects—let’s say that’s an entry level: 2 or 3 townhouse project—in their spare time while they‘re currently in a full time job. A lot of that comes from two areas. It comes from getting the right help when you’re doing it. And then getting the right team of people around you.
And look, the thing is, once you start doing it, once you’ve done your first project, like you might do a 3 townhouse project—let’s say it’s a moderate but a successful one—you might pull, let’s say, $70,000 profit per townhouse. At the end of 12 or 18 months, it’s $210,000 worth of profit. But it could be a cash property if you sell them. It could be even better if you decide to keep some, because then you can hold it as a long term investment. And because you don’t pay tax unless you sell it, you’ve got this accumulating asset that you can still harvest the equity of. So all of a sudden, you know, the property development part time thing is making 3x or 4x as much as the day job. So the temptation is whether to do it full time.
West: For sure.
Bob: Some do it sometimes. Some people are happy to do a little project every couple of years. Use that to build their property portfolio with a long term goal, whether that long term goal is…it’s usually retiring early, change their lifestyle. Some people might develop three every 12, 18 months, 2 years. Sell one, keep two. Sell two, keep one. Use the extra cash.
West: I guess that’s all part of their strategy. Like the overall strategy that you were talking about before—putting down on paper what it is you want out of it. I mean if you want to travel the world for the rest of your life and drive Ferraris, you’re going to have to probably work a little bit harder than someone who just wants to be able to live and have their expenses paid by their investments.
So on that note, I was reading one of the principles you were teaching Bob, (in the book) where you teach people how a property developer saves way more money than a retail investor for exactly the same deal.
Bob: Yah.
West: Give us a really quick summary of how that process works. I thought that was really fascinating.
Bob: Okay. Let’s take a little three townhouse project, let’s say three or four townhouse projects. Just to make it easier to understand, let’s break it down per townhouse, okay? So we might be cutting a three townhouse project into three or four townhouse project into four. Looking at it on a per townhouse basis, so a typical townhouse, let’s say, might sell on completion for about $500,000—normal bread and butter townhouse in one of the suburbs. Now that townhouse is probably going to cost somewhere between $400,000 $425,000 to develop. Now what I mean by that is all the costs are going to run up to let’s say about $410,000 $415,000. That cost includes the land, professional fees of the consultants, the approval process, the finance, the counsel fees, all the bits and pieces. So what you’ve got on completion, you’ve got a property that’s worth $500,000. What you’re going to do, obviously, you can sell it at the end and you make a cash profit. You make a cash profit, it becomes income tax paid. That’s great. You get a bundle of money, you pay your tax and you move on.
The other thing you can do—and you can even do a mix of the two—is to actually hold that property at the other end. Now when you’ve developed—let’s say it’s worth $500,000. Now what’s the bank going to lend you? Well typically, a bank on an investment will say, “We’ll lend eighty percent without mortgage insurance.” So they’re only going to lend you $400,000 on a property that only owes you, let’s say, $410,000. So really, all you have to do is leave $10,000 into that deal. And the other $90,000 is profit. So the bank will lend you almost a hundred percent of your cost.
Now if there’s been even a smidgen of growth during that twelve month project, what was $500,000 at the beginning or say even a five percent growth, it’ll be worth $525,000 by the time you complete it. So they lend eighty percent of that and it’s all your costs. So really, all you’re doing is you’re leaving a development profit in as your deposit on the finance at the other end. So the bank is fully funding all your costs. So the equity that you put in on the front of the project to do the development, you can now take out, leave your profit in and hold that property. And really, that’s how you accumulate wealth.
So all of a sudden, you’ve got a property where you’ve got a twenty percent deposit which is just your profit. You’ve got your equity back out and you’re going to do the same thing again.
West: Wow. So it allows you to essentially replicate much more than if you tried to do it on your own.
Bob: That’s right. The normal way is to go and buy a $500,000 property for $500,000. By the time you pay legals and stamp duty, it might owe you $520,000—it’s worth $500,000—you get a yield of negative. So you have to put in your $100,000 from some of it—often it’s equity over other projects like properties or whatever. But what you’ve got to do now, of course you’ve got to wait for normal organic growth, you’ve got to wait for the market to increase your properties in value. When they have you refinance, you harvest your equity. So you’re waiting. You’re waiting on the market.
The other way you take control of and actually create that equity immediately is through property development. And that’s the principle of it.
West: Just from the structure and the concept. Wow. That’s powerful. Really powerful stuff.
Bob: So you accumulate a lot of property quicker. If your goal is to retire, then you’re retiring early.
West: Absolutely. Wow.
Bob: Or you’re retiring with more money.
West: Definitely. Definitely. And I think that’s a distinction that people would do well to read about, go back to Bob’s book, check it out and really do some numbers. And for the same deal, as I said before, you can get up to twenty, thirty, possibly more percentage back on your money. And I think that’s really powerful.
I want to talk about one more concept before we start telling people how they can find out more about you, Bob. Potentially, for more sophisticated investors watching this interview, maybe they’ve got a little bit more money in the bank than someone who is just starting out and they were wondering what they can do, how you can potentially help them. How do you help people with a higher platform?
Bob: Well, a couple of ways. What we’re talking about, I guess, my whole thing’s property development so it’s really property investment but my vehicle of getting me faster to property development. So really, you can almost break property development into two areas:
You’ve got active property development.
And then you’ve got passive property development.
So active property development would be somebody who wants to learn the ropes, get in to developments, do their own developments. Okay? So they have to educate themselves and need a hand on the way through. And they become property developers. They may stay small developers or they may become big developers. That’s active development.
Now the other way is if you like is to get all the advantages of property development, but passively. So what that means, a passive developer, for instance, may be somebody who really doesn’t want to get involved in the day to day operation of the development. One good example could be a brain surgeon. So he’s just too busy operating people’s brains. So that’s a near enough to a 7-day a week job, 14 hours a day.
West: Yup. Absolutely.
Bob: So he doesn’t want to take his mind off that, thank goodness. So what he wants to do, he wants to work his money.
West: Yeah. He wants to use property development as a vehicle.
Bob: Exactly. So he uses that, his asset base and his cashflow, to accumulate properties passively.
So some of these high net worth individuals may come into a project with us. It could be a joint venture structure. We have different structures where people can come in on a passive basis. And that way, they can get the benefits of property development almost—well, not quite as cheaply as doing it yourself because obviously, if someone’s doing it for you…in our case they pay for that, but they can get—eventually into property way below retail price.
Like I say, I never pay retail. I mean I can’t pay retail for anything. Well actually, you know what? I just can’t go out, I can’t buy a car retail. I can’t buy a computer retail. I’ve got to find a deal. So I look for a deal with property.
West: And I’m really impressed by the fact that Bob takes that philosophy and it’s part of his mindset, it’s part of what he believes in. One question I would ask you, Bob, is about how you continue to cultivate your mindset and what are some of the characteristics of the successful students that you have, mindset wise, how they’re thinking, how they’re building their knowledge, what kind of philosophies are they taking into their investments?
Bob: Well I think, first of all, most of the people that come on and want to do a project, we only ask them why, what’s their motivation? Because if they don’t have the right motivations, it’s not going to work. And if things get a little bit tough, they’ll give up.
So having an end plan to it, they may become motivated to achieve that end plan. So once the motivation’s there, that’s the driving force behind it. So it makes them a lot more motivated and open to accumulating knowledge that they need. And if there are little bushfires to put out along the way and they’re motivated, they’ve got the end goal in mind, and they’ll deal with it. It will help them deal with it.
So that’s the right sort of mindset: is to go into it for the right reasons and not just for a red Ferrari. That can be a side road. A red Ferrari and a big house—that’s a side road.
A little while ago, I was talking to someone about the characteristics of a good developer, okay, in terms of being able to solve problems, being a reliable thinker. But as I said, you don’t have to have an IQ of beyond 140 or 150; just an average intelligence but a drive to learn and a drive to succeed. That’s a good work ethic. They’re the basis.
West: Absolutely. And I guess, obviously, when you’re looking at working with someone, you need to make sure that those things are in place. Otherwise, they’re going to waste your time and it’s not going to work. And obviously, time is money.
Bob: Yeah, that’s right. You know, if people move on beyond that or go mentor with somebody, they need to have all the basics in place in terms of that initial knowledge through the course or whatever and then that are of motivation because, you know, I wear a few hats. I have a property development business to run and I can only take on a certain number of mentorees, if you like. And it’s a matter of really choosing those who really want to move forward.
West: Absolutely. So on that note, Bob, I want to talk now about your mentoring programs. You actually offer a few things. We’re going to talk a little bit about your upcoming product which I’ve had the pleasure of previewing just a few minutes ago. But your mentoring program, people can actually leverage off your knowledge and have personal contact with you, is that correct?
Bob: At the higher level, yes. It’s all about… you know, this whole education thing of being educated and building knowledge is about investing in yourself and then leveraging off other people’s knowledge. You can knock five or ten years off your learning curve by accumulating the knowledge of…
West: Well, you’ve had 30+ years of experience and people can get straight into that.
Bob: The initial thing that people need is they need to build their knowledge up of what property development is, what it’s all about. Obviously, the more technical aspects, just the processes of how it works and sort of people that you integrate with. I’ve got a little saying to ‘what is property development.’ Well, what it is, it’s about managing people and managing processes.
So we’ve got the procedural part of property development. We’ve got the processes to go through whether it’s the purchase of the site, obtaining of the approval, finance, project management or sales—whatever it is—the processes. You need to know those.
The other thing is managing people on the way through. You’ve got various people to work with…an architect. The good thing is, you know, property development, you actually subcontract the areas of it. It’s a bit like renovating. You can go and renovate a house. You can just get a builder in to do everything or you can go and then start organizing one trade at a time. It’s been like that with development. You get a really good architect and then if you like, organize some of the other consultants on your behalf and you just control it.
But this knowledge base is the initial thing. So that’s what I call my property mastermind property development course—
West: And where can people go to, to actually get into that? Is there a site or…?
Bob: Well, initially, if they go to www.propertymastermind.com.au, that’s my website where you can download the free ebook. I think that’s a good place to start.
West: Absolutely.
Bob: Once they’ve downloaded the free ebook, then they’ll automatically be on my database. Once you’re on there, when I have a launch, I’ll start to send out a few emails. So I like to send out more content.
West: Just like this.
Bob: Like this, yeah.
West: Absolutely.
Bob: Another good, sort of, good content leading on to the course. And then the course will be available for a period of time. People, if they want to, can purchase the course through my website. It’s very easy to do.
West: Now the course itself, Bob, it’s a monster, of course, I’ll be honest. It’s got twenty something CDs, one big manual and a support manual, four DVDs, software program, retails for $400. Tell us about the actual structure of the course, Bob, and how it’s going to help people take that next level from not knowing where to go into having a blueprint to get into property development.
Bob: West, I built it in a sequential order I know that people need to know by now.
West: You were saying before people don’t know what they need to know. You know what they need to know.
Bob: Yeah, I know what they need to know even if they don’t.
So what I’ve built into the Property Mastermind Property Development Course is all the knowledge that they’ll need to take the next step into property development. I keep saying, you don’t have to be brilliant. It’s all sequential. People that have done it just say, “Look, it is really easy to follow. It’s detailed but it’s not difficult to understand.”
It’s built upon lessons, about forty one lessons or forty one chapters of covering everything from beginning to end. And within those lessons, I refer to a support manual which accompanies the lessons. I have a 370 page support manual. It’s all the things like check list and documents and templates of…
West: Exactly the stuff that you use in your business.
Bob: Yeah, but these are copies out of lots of my projects and the things that I use everyday.
West: But you paid probably tens of thousands, if not more…
Bob: I learned the hard way.
West: To develop.
Bob: Exactly. Yup. And that’s in the support manual saying Welcome to an area of lessons and say ‘refer to the feasibility template’ or ‘refer to the due diligence template.’ You go to the support manual and there it is.
So we’ve got the lessons. We’ve got the support manual. And beyond that, I’ve actually recorded this set of 20 CDs which is really the whole of the 41 lessons in audio. So if you like, you can put that on to an mp3 player and play it at the gym, you can play the CDs in the car. Because some people are more audio— they like to hear, they like to read.
West: That’s for sure.
Bob: So one can reinforce the other.
I put in as well a six-hour set of DVDs or live workshop I did with some of our investors. It was a closed door workshop. We go through the whole development process but in looking at different angles that aren’t in the lessons. Lots of Powerpoints. We’ve probably got a hundred Powerpoint slides in there in the set of CDs as well. We go through a whole heap of things: create a finance, the whole due diligence, the process. 6 hour DVD set.
Now beyond that, something new is I’ve done a series of interviews lately with my inner circle of consultants. So it’s me interviewing them. So I’d interview my property accountant, property lawyer, one of my builders, project marketer, commercial finance broker, my interior designer—these sorts of people. So that’s me interviewing them. That’s in a set of 8 CDs.
West: I imagine—I mean—the experience you bring to know what questions to ask. I mean you could put a newbie in front of these guys and they just wouldn’t know what to ask.
Bob: No. That would be a 30-second interview.
So I dragged out all the knowledge out of them. And that’s valuable.
Also, in my lessons, what I plugged in to the back of those is three case studies. So three deals that we’ve done, three projects we’ve done, real offers— a subdivision and two townhouse projects. We’ve absolutely pulled the deals apart, from how we came across the deals, showed due diligence that we did, how we contracted the deals, terms and conditions in the contract, how the deal came together, how we financed them, how we got the approvals, the project management side, how it all came together, the marketing, the sales at the backend on three of those. There’s no substitute for actually going inside real deals and see how that happens.
And also looking at our early bird special, for those who get in an order early, is I’ve done a series called ‘Under the Microscope.’ What I’ve done, these are sites that we’ve looked at that were on the market for sale and we got in and pulled the lease apart until about these are the things to look for in this particular deal. These are the things I liked about the site, the things I didn’t like about the site, problems that could arise…
West: It’s almost as if someone was looking over your shoulder and accessing your brain.
Bob: Yeah, exactly.
And the things that people come back to me often and say, “What’s the hardest thing with getting in your first project?” And people that are looking at getting into their first project say, “…to know a deal when I see one. If I see a site, how do I really know if it’s a deal?” So part of that is the due diligence analysis. And the other part is the pure number crunching. So this is my, if you like, my due diligence analysis of how I look at a deal.
West: Because, I mean, in thirty years you would have pretty much got it down to a fine art. Would it be fair to say?
Bob: It would be, yeah. And all of that—the due diligence stuff—is in the course. So that’s called Under the Microscope. I’ve pulled out five of those that I’ve looked at probably the last six months with full analysis. Probably an early bird special.
Now there’s something else I’ve put in to the course. It has to do with the number crunching. How you number crunch or feasibility analysis, all that’s in the course. We’ve got four chapters just about how to do feasibilities.
But I put a software program in there. Not just a cheap little Excel that somebody has put together. I’ve seen a few of them around and they’re just full of holes. This is a proprietary software package which has been on the market for twenty years. It’s called Feastudy. The deal is called Feastudy Lite. That’s the program. It’s an excellent program. And the recommended retail price is $440. And it’s great value for $440. It’s all you’ll ever need to do to do small development projects. I’ve put it in my course because I really want people to have a professional presentation when they put it before the bank or before a valuer. And also, it really makes the number crunching easy. I mean who wants to work out interest in a deal the long way?
It’s a great program. It’s constantly being redeveloped. Been around for twenty years. I’ve put that in the course.
West: Wow. Fantastic. So it sounds like, Bob, you’ve literally given the entire toolbox that anyone would need to get into property development from point a to point z: everything they’re going to need, the foundations they’re going to set. And we were talking before about information and education being the first step into getting in without getting burnt massively, and there’s literally no better way to get in from someone who’s done it for so long.
I, for one, am excited about the release of this product and I think it’s going to help many, many people avoid the traps and the misconceptions of getting into property development.
So I guess on that note, Bob, is there any parting words you want to say to people watching the interview, a bit of a sage advice or anything you want to impart on leaving?
Bob: On leaving? Uh, other than no matter what endeavor you want to get involved in, get a good ground. Look, it doesn’t matter whether it’s property or outside property, there’s just so much knowledge out there these days. Do the right due diligence but don’t be afraid to invest in yourself. The best asset you have is yourself and invest in that, increase your knowledge. With knowledge comes confidence. And with confidence comes the inner strength to take that step, that first step.
West: Absolutely. Beautiful. And on that note, just really quickly, if they want to get a hold of Bob’s free report, it’s at www.propertymastermind.com.au. I highly recommend reading the free report if you’re looking at getting into property development or even if you’re just looking at learning about the industry or taking another step in the right direction.
You can read more about Bob’s course from the links included in and around this interview. And I hope you’ve got something of value.
Bob Andersen, thank for talking to us. Hopefully, it’s added value to the viewers and I appreciate your time.
Bob: Absolutely! A pleasure, West.
West: Cheers!
Bob: Cheers.
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