lystn

In the first episode of the Property Developer Podcast, the show’s host Justin Gehde shares why he set up the podcast, discusses his townhouse development and outlines what you can expect from future shows. A little background I’ve been involved with property developing for about three years, which is not really that long although it feels longer, and I am currently working a 20 townhouse development in the outer eastern suburbs of Melbourne. We are about to start construction in the next few weeks. Funnily enough this is my first development, and the purchase of the site was my first real estate transaction. How did I get here? Well it’s a long story with a few twists and turns, but what developing story doesn’t have twists and turns, right? My background is actually in corporate communication, so working with large organisations to help them communicate more effectively with their staff and other interested groups. I did that for about 15 years. About five years ago I decided I needed to take greater control of my future and I started thinking about what I would like to do, and after a lot of reflection, I realised that I loved property. But I didn’t want to buy an investment property and sit on it, waiting for it to grow in value over 10 years, I wanted something where I could accelerate things. Then one day I was listening to a podcast and heard a guy talking about property developing, and it sounded really interesting, and I thought ‘that’s it’. So I got in contact with the guy on the show who had done a few developments and joined his mentoring program. And so started a very interesting developing journey for me. The great part about the program was that it taught you how to follow a process to deliver a development. And importantly taught by someone that was actually doing it themselves. Better still the program was based on you doing all the work and learning how to find out all the information you needed, so that you could be self sufficient, and continue to deliver developments for as long as you wanted to. So basically, the teaching a man to fish philosophy. My first potential development site failed I was originally looking for a site in the suburbs around the south east of Melbourne, which was closer to where I live, and zeroed in on the suburb of Frankston. At the time property values in the area were more in my budget, and I was looking for a site to do a 4-unit development. I eventually found a nice block that was just over 1000sqm and secured the site with a due diligence clause, paid a bit more than I wanted to, but I thought I could get six small units on the site, similar to a block a few doors down. So I set to work during the due diligence phase to ensure everything stacked up, and had a local drafty develop some plans for me. Unfortunately, the design the drafty came up with of six double storey units was too expensive to build for what I could resell them for, so I decided to pull out of the deal. I then reassessed the area that I should be looking in and decided that the outer eastern suburbs of Melbourne would be a good place to target. And when I started looking at blocks big enough for a 4 unit development, at around the $400k mark, I noticed that if you spent another $100-150k you could get a bigger block that could fit 6 units on. Development success However, my budget wouldn’t really stretch that far so I decided to see if I could take on a money partner. So I put a little proposal together and convinced someone to partner with me to do a 6 unit site in Croydon. And while I was looking for that site I came across a very large site in the neighbouring suburb of Mooroolbark. Initially I thought it was too big for what I had wanted to do. It was nearly 3000 sqm and located close to the heart of the suburb. It was a deceased estate and had been passed in at auction a few weeks earlier with little interest since.