Real-life success stories
Michael & Nicole have experience in both residential and commercial property, covering everything from land-banking and renovating to subdividing and developing.
They know how to achieve profitable results using a range of strategies.
If any of these projects appeal to you, contact Michael & Nicole to see how they could achieve the same results for you.
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HOW TO TURN ONE PROPERTY INTO TWO
The client wanted to buy a property in a high-growth area that had value-add potential and could deliver positive cashflow.
We identified a suitable house on a 1052sqm block that we acquired for only $365,000, even though the vendor initially asked for $400,000.
From there, we helped the client renovate the house (which included adding a fourth bedroom) and submit a DA to subdivide the block into two separate properties.
Next, the client was able to use the equity generated from the renovation to fund the construction of the second house.
At the end of the project, the client had turned one lower-quality house into two higher-quality houses, which were not only more valuable but also had greater rental appeal.
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Cash required for purchase (deposit + costs): $72, 359
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Renovation: $34,500
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Construction Costs: Deposit drawn from equity after renovation
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Combined Value on Completion: $1,280,000
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Time Frame: 3 years
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Equity Uplift: $486,042
02
HOW TO MASSIVELY INCREASE YOUR YIELD
The client already had a negatively-geared portfolio, so they wanted to buy a positively-geared property to generate positive cashflow.
We found a four-bedroom house on a 962sqm block that we knew would help the client achieve their short-term goal and also had future development potential.
After helping the client buy the property for just $500,000 (which was $20,000 under the asking price), they converted the garage into a self-contained one-bedroom. This renovation increased the property’s rental return by 59%, because the existing house was renting for $26,000 per annum while the new granny flat ended up getting $15,340.
At some point in the future, the client will be able to turn all the vacant land into four separate townhouse lots.
Cash required for purchase (deposit + costs): $82,725
Granny flat conversion: $48,425
Rental income – house: $26,000 per year
Rental income – granny flat: $15,340 per year
Cashflow positive (after mortgage and expenses): $15,521 per year
4 x Lot Townhouse Projections
Estimated construction costs: $1,187,482
Estimated gross realisation value: $2,400,000
Equity uplift: $668,682
Estimated rent per lot: $24,960 per year
Cash-on-cash return: 509.86% (169.95% per year)
Return on equity: 38.62% (12.87% per year)
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03
HOW TO MANUFACTURE SERIOUS EQUITY
The client wanted to buy a property with strong value-add potential, so they could generate a lot of wealth in a short amount of time.
We found the client a three-bedroom house on a massive 1214sqm block in a high-growth location.
Thanks to all that empty land, the client was able to build three new standalone houses, while keeping the existing residence intact.
Building new properties improved the client's tax position by maximising depreciation.
If the client ever decided to sell any of the new houses, capital gains tax would not be applicable due to the purchasing structure that was used.
Meanwhile, the client also has the option to renovate the original residence at any time, to generate further equity.
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Cash Required (Deposit + Costs): $167,073
Time Frame: 3 Years
Construction Costs: $924,536
Total Investment: $1,448,234
Projected GRV: $2,385,000
Less costs: -$182,294
Total Equity Uplift: $754,472
Less Sales Costs: -$53,700
Less Cash invested: -$167,073
Gross Profit: $533,699
04
HOW TO SECURE A LOW-COST, HIGH-YIELD ASSET
The client wanted to begin their investing journey on the front foot, by purchasing a high-yielding commercial asset at a very low price.
We found the client a prime office/retail space and secured it for just $270,000 – $10,000 below the asking price.
There were three other reasons this was such a good purchase.
First, the client gained a rental income of $22,880 per year, for a net yield of 8.44%.
Second, the client's cashflow was further enhanced by the advantageous contract, which included annual rent increases of 4% and called for all outgoings to be paid by the tenant.
Third, the client's cashflow was protected because there were four years remaining on the lease (with the final year optional) and the tenant would be unlikely to want to move at the end of the lease (due to the high cost of fitting out a new shop).
Cash required for purchase (deposit + costs): $97,546
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Purchase price: $270,000
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Valuation after new lease negotiation: $330,000 (22.2% increase)
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Lease term: 3 + 1 years
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Rental income: $22,880 per year
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Mandated rental increase: 4% per year
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05
HOW TO SUCCEED WITH COMMERCIAL INVESTING
The client wanted to invest in a commercial asset that would be in-demand with tenants and deliver multiple income streams.
We found a fantastic industrial site that we were able to secure for just $1 million, well below the vendor's original asking price of $1.2 million.
Part of the reason this was such a desirable property was because it was on a busy main road, had on-site parking and was a fully lockable secure complex. So we knew it would be very appealing to a lot of businesses.
This site had three different sites that were delivering a combined $61,650 of rental income per year.
The tenants were on long leases, and had agreed to annual rental increases of 4% and to pay all outgoings.
Also, the tenants would be highly incentivised to keep the property in good order given they would be receiving customers every day.
Cash Required (Deposit + Costs): $403,300
Purchase Price: $1 Million
Valuation after
New lease negotiations: $1.25 Million (25% increase)
Land Area: 1017 sqm
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Rental Income & Lease terms:
Tenant 1: $27,040 per year rent, lease term 3 + 2 years
Tenant 2: $17,400 per year rent, lease term 3 + 2 years
Tenant 3: $17,210 per year rent, lease term 3 + 1 years
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Total Rental Income: $61,650 per year (+GST)
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Mandated Rental Increase: 4% per year
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