One of the best ways to keep moving forward – even when you still have voices in your head telling you it’s all too hard – is to cut the task down to the simplest of processes. The old KISS strategy - keep it simple stupid – is your friend here.
Pick a single strategy. Don’t waste time looking at a whole lot of different strategies, you’ll end up a jack of all trades and a master of none and that’s one of the biggest issues that stops people from moving forward. They get sidetracked by the novelty of a bright, shiny new strategy and they drop the ball. They see that somebody else has got themselves a cracker deal and they say well, that must be the strategy that I should follow as well.
The reality is that every single strategy works, but it doesn’t always work everywhere.
When you start to focus on just one strategy, you start to become very, very good at that one strategy. Instead of becoming very wide and very shallow in your knowledge, you start to become very narrow and very deep for the same amount of effort.
As your expertise grows, you’ll be better equipped to hone in on the best areas to farm for your chosen strategy.
So lock in your strategy and map out a five-year property action plan which will detail exactly how that strategy will deliver your financial goals. This allows you to be very clear on your purpose and very clear on why you're on the journey you’re on.
Next you need to figure out which council is likely to dish up the most opportunities for your strategy. There are 537 different councils Australia-wide and every single council has different rules on everything from lot size and setbacks to flood zones and footpaths. Rather than get your head around 537 sets of rules, you need to pair up your development strategy with just one council. Then you're going to start farming the individual suburbs within that council to determine the probability of success for your strategy.
You’ll be looking at things like demographics, evidence of previous sales, both of the raw product going in and the finished product going out. If you can’t find prior comparable sales then throw that suburb away and move onto analysing the next one.
What you want to be doing is looking in areas where the probability of success is very, very high. I describe it as reverse-engineering the suburb: you research what your finished product will sell for in that area, then you subtract your desired profit following in the footsteps of Robert Kiyosaki. His number one rule is pay yourself first. Then you subtract all the typical costs that go hand-in-hand with your development strategy.
The figure you’re left with is the maximum you want to pay for a site in that suburb in order to run a profitable deal.
The next step is the one that trips a lot of people up: suburb analysis. That’s because combing through a suburb property by property to confirm that your strategy has been successful in that suburb is a slow process. It’s not difficult, but it is slow and tedious.
And I think one of the reasons people can’t find a deal is because they're not able to stick with this process. They don't have the patience and the persistence.