A Beginners Guide to Property Investing with Brendan Kelly

Hi, my name is Brendan Kelly in this conversation we continue our journey towards effective
goal-setting and we do so by working backwards.
Working backwards
helps us to understand what are the goals we are setting for ourselves are realistic
or not.
You see the future is always more difficult to see in the past and it's the same for setting
goals that a realistic.
when coming up with the goals that we want to achieve if we take a moment to position
ourselves at the completion of this guy and we look backwards from that position and what
it took for us to get there that will help us to understand the path we need to follow
to achieve that outcome.
in looking at our goals from this perspective we then get to see fairly clearly whether
what were trying to achieve is realistic or just simply a pipe dream so in returning to
our conversation with Mary you get to see the power of beginning with the end in mind
Let's say we have a goal we now in December 16, this is a January sorry this is a 2017
goal.
In 2017 we want in our banks, now we start to figure out this is my invitation to you
turn the page we're talking about calendars now.
yeah. think about the strategic approach you want to take on.
Is it a development, is it a reno, is it a sub-division, it doesn't matter what it is.
It could be a buy and hold.
Doesn't matter what it is.
But I encourage you think about what it is and the numbers that's associated with it.
The strategic approach you need for that in order to secure the profit you want in the
time frame that you want it.
Let's see if I can explain that with Mary.
December 2017 yeah.
You have in your bank account now, $90000 more dollars.
woohoo.
We can have a bowl of Moet and enjoy it, let's say yeah.
That's in your bank account.
What did it take to get that in your bank account.
In terms of time or?
Well how does it appear in your bank account.
As profit.
Cash great.
What from.
From selling the property.
At the time of contract of sell or when?
At settlement.
Settlement.
This had to settle didn't it.
So December 17 it has to settle.
yeah. you want a 30 day settlement yes.
so in November, November what had to happen.
Sell it.
Sell it.
You needed a contract of sell in November.
Alright sell.
Yes.
Cool.
In order to have the sell occur, we need to have done what? market it listed it yeah.
and how long would you say we need to sell it let's say.
4 weeks?
If the market is pretty warm 4 weeks is pretty reasonable.
Let's run with 4 weeks because we really short on time yeah.
Right we're in October now and it is finished.
Does that make sense.
yeah we've finished it.
that's finished everything.
We would need titles by here, we won't need titles here.
But we need to have this in a condition and people go I love it.
yeah.
In October alright great.
How long does it take to do a cosmetic reno?
3 Month 6 weeks.
well if you're good at it 6 weeks 4 weeks do it in 2.
6 weeks, allowing a little bit of latitude and a little bit of experimentation.
I think I know what I'm doing I don't really.
Let's go into I want to do it in 3 month thing.
What are we in October now.
Working backwards, who knows there calendar backwards.
July.
Yeah so we start reno here.
Yeah start reno. that's the latest we can start.
we can do it anytime before then but that's the latest we can start.
Let's look at the other components.
Subdivision.
What's the major issue with subdivision.
Titles.
We need titles.
2 weeks before settlement.
yes.
You must have titles 2 weeks before settlement.
which is mid December.
yes.
How long does it take on average most councils 1 into 2 for a subdivision from start to finish.
4 month, 7 month if we allow 9 month would that be sufficient.
You okay with that.
we allow 9 month.
So from mid December we need to be in mid March to start the process of subdivision.
does that make sense.
Ahhh, well that's a restriction., How long does it take to build.
4 month?
8 month 10.
12. for one house 16 weeks plus contingencies.
Alright 6 month to build, we comfortable with 6 month build.
yep. so it needs to be finished by 6 month before October is when.
Marchish.
Yeah.
March is looking at a pretty powerful day.
So what has to happen then in March.
If we've got to start these things in March.
Take to get to get building plans in and done building plans.
Yeah 12 Month.
So what we down to where.
December again.
We back to December 2016?
Yes.
Do you realise that you're already late.
Yes. which was my point we're now mapping this in time. and if we want that outcome
and we want it by then.
knowing the strategic approach knowing what it takes to do the deal through, we map it
out in a yeah and we go oh we're already late.
yes?
fascinating isn't it.
So in order to have mine at here then we figured out that we really need to be buying this
thing sorry we really need to be submitting plans and permits in December this year yes?
That's 12 month.
If we've got to find the property, that's what another 2 month.
yes.
know the area, that's another month.
really this is a 15 month project starting from today.
Yeah, do we all know what we need to be doing.
Yes hands up who's getting a sense of urgency on what they need to be doing tomorrow.
Yes.Hands up those who has an impression that they're already late.
Yes.
Perfect.
Because that's the job, my role, my role tonight is to have you see what you want in 2017.
And what you need to do to begin it.
So you actually walk out of here and go you know what, there's a sense of urgency about
this.
Because without that sense of urgency, there's a sense of not urgent.
Yeah.
So how might this process work for you how might you be able to determine if the goals
you're setting are realistic or not and how might you determine what you need to be doing
tomorrow in order to achieve the goals you want 12 months from now.
Well broadly speaking there's a process and it's got to do the fairly comprehensive understanding
of the property investing strategy you want to take on.
The general approach for effectively working backwards follows this sort of path having
determined the strategy that you want to take on it requires you actually learning in detail
about the strategy that you're looking to adopt that means knowing all the numbers in
the deal from beginning to end and knowing the timing about the functions that that strategy
requires you to perform for example in a renovation you would need to spend some time knowing
the numbers in the deal you need to spend some time knowing whether your finances are
going to work for that deal or not and what you need to buy your property for you need
to spend some time searching areas spend some time negotiating and then purchase it maybe
sometime associated with the settlement period.
And then there'll be time doing the renovation having completed the renovation that the time
required for you to sell the property having sold there will be time required for settlement
for purchaser who bought it from you so you need to consider than in doing a renovation
project the time from today through the time to completion and the settlement of the property
that you've sold and then the banking of the profit.
Now if you're thinking of making $50,000 a profit from a renovation and you're thinking
that 3 months is enough time then you might find by working backwards that's actually
impractical to achieve if you have a $50,000 profit that you're after out of a renovation
and you wanted that in 24 months time you might find that's too far down the track and
there's not a lot required of you today in order to deliver on that so knowing how the
strategy works helps you determine a realistic goal and this is what we saw with Mary if
you approach your goal setting in the same way that we approached Mary's goal setting
you work from the profit that you're after first just a matter then of assessing the
finances that you have available to you and the price of a property you're looking to
purchase to determine if your profit expectations are realistic.
if for example you are after $100,000 profit and in order to get that $100,000 profit you
need a million dollar property but you can only afford to buy one for 400,000 and you
know that your goal is unrealistic if on the other hand you after a $20,000 profit and
in order to achieve that you need a $300,000 property and you can afford to purchase a
$600,000 property then you know that you can easily achieve that target and you may as
well go for a little bit more but knowing the numbers in your strategic approach is
critical to determine this outcome and it's exactly the same when you're attempting to
assess the time that you set for you to achieve your goal as with Mary by working backwards
from the date you've set yourself to achieve your goal you can determine with some clarity
what you need to be doing tomorrow in order to achieve it.
Remember you can have anything you want but you must be persistent about getting it until
we meet again invest wisely.

A Beginners Guide to Property Investing with Brendan Kelly

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