With eye-opening experiences in the property game, he dives deeper into the story of his toughest property project yet, eagerly explains why education on property development is an absolute must, and spills the mindset shift that eventually thrusted him to success. Plus, he shares what exactly he thinks of $100,000 granny flats! (Hint: It's going to be a good one. Seriously!)

Timestamps:

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[00:14:09] All of a sudden, it's like, 'Hey, I need some actual selling skills. Now I'm working for myself as a buyer's agent, how do I have better conversations with clients? How do I make sure that I'm conveying the value that I present to clients clearly and articulating that so that personal and professional development continues along the way?' 

This is Property Investory where we talk to successful property investors to find out more about their stories, mindset and strategies.

I’m Tyrone Shum and in this episode we’re back with Richard Williams, founder of Brickport and an exceptional long-term property developer and buyer's agent. He dives deeper into the story of his toughest property project yet, and spills the mindset shift that thrusted him to success. Plus, he shares why he's a big fan of $100,000 granny flats!

Tyrone Shum:   

Recalling the series of downs he endured in a joint venture property project in the last episode, Williams now lays down the steps he took after the eye-opening experience—including how he coped with the loss.

Richard Williams:  

[00:00:12] In the end, I sold the property. So I got the subdivision through, I had to get the construction certificate issued, which meant I had to pay Council contributions, knowing that I wasn't going to build. And I put the site on the market; it took a while to sell. 

[00:00:32] It would have been particularly easy to sell, for example, to a Sydney developer, you know, maybe even a mum-and-dad developer, if I had a nice solid build cost for the projects. And we could say, 'Hey, here's what the sale prices are going to be. Here's what the build cost is. Here's a, you know, a healthy profit margin. And, you know, therefore, the land price should be this'. 

[00:00:49] But I hadn't actually ended up getting that full sort of build tender, because I've got to the stage where I'm like, you know, what I know, I'm actually not going to be building the project. So it's a bit of a... I don't want to go and waste to build this time to fully tender the job, knowing that I'm not going to actually build the project. 

[00:01:06] So the approach I went with in the end was I put it on the market. And it took a little while to sell. But in the end, a local builder picked the site up. And then they commenced the build shortly after buying the site. 

[00:01:20] And whilst I took a loss, it cleared my head; it moved me away from that project, and put me in a good space. 

[00:01:25] And, you know, I went and did another project shortly thereafter. And I did that project with a friend of mine. And it was a joint venture, you know; it was just a small little project. 

[00:01:31] We bought a house in Newcastle—a corner block, one title, two lots. We picked up the house; we moved it across onto one of the lots. And all of a sudden, you know, we had a spare lot. 

[00:01:49] Wow. 

[00:01:49] So we had two blocks of land, two titles, one house, one empty block land, and we got the the approvals. And we built an NDIS specialist disability accommodation property. And that's the one that I finished earlier this year. We've got one person currently living in it. We've got another one keen to move in; we're just sort of negotiating that at the moment. We've got another room for someone else to move into. 

[00:01:52] That's been a fantastic journey. You know, again, along the way, there were some issues with that the builder we chose to manage the renovation and the house moved. We had some issues working with them, you know, and they kind of took advantage of us on a cost-plus contract—which, you know, it ate a chunk of our profit. 

[00:02:42] But again, you know, we had a fairly healthy project. So there was profit made. It was a good project. We were able to keep it moving. It was a little challenging at times during COVID. But you know, we got there; we got a good result [and] have kept the property on completion, you know. 

[00:03:00] That house ended up costing about $900,000.00 or $800,100 for the house plus the land, and then the income from that house stands to be about $130,000 [or] $140,000 a year. 

[00:03:17] That's a phenomenal return. 

[00:03:21] Yeah. 

[00:03:23] And is that sort of the reason why now you've jumped more into [or] on progressing more towards NDIS because of the success that you've had with this last project?

[00:03:33] Exactly. 

[00:03:34] In doing that project, Tyrone, you know, I combined my small development skills with learning about specialist disability accommodation and the additional requirements that those properties have the types of needs that the people that live there have and, you know, how you customise the houses as best you can— particularly early on when you're not sure exactly who's going to be living there. 

[00:03:36] Again, you know, my risk management focus—it's like how do I build disability accommodation and maximise the probability of having long-term tenants and minimise the potential for for vacancies. 

[00:04:15] There's parts of Australia where the market for for SDA has been flooded. Lots of mum-and-dad investors went in on the promise of you know, possibly people might have used the term 'government-backed returns' when they're not. And you know, there's lots of houses with not many people who live in those houses. 

[00:04:36] So the strength of doing small developments and disability accommodation is my neighbours aren't building it because, you know, those houses have been there 40 or 50 years or longer. So I already I've got a point of difference that I can trade off, Tyrone. 

[00:04:53] I learnt some lessons on that house. And I'm like, you know... the new ones I'm building they're just two-bedroom houses designed for single residence. But each one of those little villas, you know, still potentially has a $70,000 a year income associated with it. So who doesn't want to build a house that's, you know, a little bit bigger than a granny flat and rents for $70,000 a year? That's a great outcome.

[00:05:17] Absolutely. And it's much lower risk as well in time and demand, you know. Because the biggest issue is that there's not enough supply. And if we do anything bigger, it might not be able to sell as easily [compared to], you know, sort of, you know, a really affordable space there.

[00:05:30] And that's it. And you know, I'm still in that little space where, you know, I've got alternative uses. There's downsizes that are quite happy to move into little two-bedroom, two-bathroom, single-car garage houses that are either strata or torrents titled. It's like, their other alternative is, you know, they go into a leasehold community and they downsize into a retirement-village type property. 

[00:05:53] And when they sell a property, you know, how much do the kids get back? Some of it? All of it? None of it? Not very much? Or they are you know, 

[00:06:01] I've got these little properties. No one's building two-bedders in the market these days, Tyrone. It's an undersupplied part of the market. So you know, I'm confident that I've got a great fallback plan, you know. 

[00:06:16] The returns aren't as good if I didn't get the Disability Income Returns, but I've still got a nice fallback plan. So again, it's about that risk mitigation. And I find that works really well for me with this particular strategy.

[00:06:29] Yeah, I mean, I don't know much about the two-bedder markets. And I typically think that they're usually in apartments and stuff. But if it's working for you in the housing market, I think that's phenomenal. Because you're right, there aren't very many two-bedder houses around. Most of them are usually three- or four- bedders because people want [a] bigger [house] for the family, if that's the case.

[00:06:48] Yeah, exactly. And the three-bedders can work, you know. If you're just adding one bedroom on and, all of a sudden, you've got a three-bedroom assuredly worth more than the cost of the bedroom. 

[00:06:56] But by the time you get to a four-bedroom house, people go, 'Well, where's my double car garage? Where's my second living area? Where's my second and third bathroom and toilet?' They're wanting a bigger house and with build costs at, you know, $3,000 a metre give or take. 

[00:07:11] It's expensive to build these four-bedroom double car garage houses with multiple bathrooms? It's like, do you really need to? Or could you just build a two-bedroom house with one, maybe two, bathrooms in a single car garage and still get a similar return? Potentially you can if you build them in the right spot.

Tyrone Shum:   

Learning key lessons along the way, Williams realises in hindsight that the property in Newcastle led him to an aha moment he would never forget.

[00:07:49] It's like, you know, we don't need to be building big double-storey four-bedroom houses, particularly with the higher build costs. That's definitely been one of the big aha moments. 

[00:08:02] But also, and you mentioned earlier, mindset, Tyrone—one of the aha moments was, and I tell clients this—it's like, you know, we know where we're starting from; we're going to acquire a property. And we know that at the end of their project, we're going to have the existing house, and we're gonna have a second house. 

[00:08:21] And, you know, here's the plan on how it's going to work. But it's probably not going to get there exactly the way we think it is. There's always going to be something that's not quite right, you know. 

[00:08:32] When the builder gets to sites, do we find or not find a sewer pipe where we thought it was going to be? Is it somewhere slightly different? What slight variation are we going to get from the builder? Is there going to be a little bit of retaining where we didn't think there was—you know, we'd generally pick that up on the survey and plans. 

[00:08:50] But, you know, what curveball is there? You know, is there a little bit of asbestos buried in the backyard from when they built the original house? [Did] they just thr[o]w the offcuts in a quarter down the back and just covered it up? 

[00:09:02] So, you know, having a little bit of contingency put aside for moments when things might not go according to plan. It's like, well, you know, if the house at the front had some asbestos in it, hopefully they threw the rest out properly at the time. But you know, maybe they didn't, so maybe we might find a little bit somewhere. So, you know, let's have a few $1,000 tucked away just to cover that unlikely event.

[00:09:26] That's true. It's so important—contingency. 

[00:09:29] As you mentioned, working in the Air Force, you kind of do risk mitigation, and you try to minimise any of the potential worst case scenarios. And having a bit of a buffer in place is always always important to actually run a project, because things always blow out unfortunately.

[00:09:43] It'd be great if everything went smooth and in plan and, you know, you can come out and go, 'Okay, that's the profit I wrote down. That's the profit I'll receive'. It doesn't always work like that, unfortunately.

[00:09:53] Yeah, exactly. And you know, I like to buy properties where you can always add value. 

[00:09:59] The plan is always, you know, put something in the backyard. But worst case, you know, if interest rates really go up, we give the front house a little bit of a renovation and, you know, we just sit on it and hold it for a while. Or we sit on it [and] hold it the same time, [when] we launch the DA, and if interest rates keep going up for the next year or so, it's like, just make sure we can hold the front property. 

[00:10:21] You know, worst case, we could put a granny flat in the backyard. There's options to get transportable granny flats. You know, you're paying close to $100,000 instead of, say, $200,000. But, you know, it would be rare that a granny flat would rent in a populated sort of cities such as, you know, Newcastle for less than, say, $500 a week. All of a sudden, you know, you've spent an extra $100,000 or so and you've got an extra $500 a week in rent. 

[00:10:49] There's all these little sort of plan, you know— B, C, D, and E. You know, if it works to build the house and sell it, great! We can do that. But if the global global environment changes, and [the] interest rates and the lending environment change, it's nice to have a sort of alternate plan on how we can still add value to this property and not lose out in the longer term. 

[00:11:14] So I definitely like to have those, you know, Option A of get[ting] the approval and build the house in the backyard. But if we can't, maybe we just renovate the house in the short term. If we got a little bit more money, we renovate the house and we get the DA fall in the backyard. If finance changes significantly, can we just put a granny flat in the backyard instead? 

[00:11:34] Alternatively, you know, we build the house. And then once we've got two houses, we can sell one, we sell both, we could keep both. It gives us more options. 

[00:11:42] So some people look at development, they say, 'Oh, isn't that risky?' I'm like, 'Isn't it more risky to buy an apartment and just wait for the market to go up?' 

Tyrone Shum:   

Decidedly smart and employing a commendable eagerness to learn more in the fields he delves into, Williams treats education on property development as a must. He shares how he sought resources and mentors in his journey.

[00:12:42] I've always focused on the development side of things. But you know, sort of, there was a couple of companies out there promoting property and property educators at the time. And you know, they all offered slightly different things. 

[00:13:01] Initially, when I went in Tyrone, I was looking for the, how do I develop, you know, teach me the steps about developing? That's, you know, I migrated towards Bob Anderson, who was the go-to property development educator at the time. And Bob was excellent. 

[00:13:18] And you know, over the years I've since done Jason and Amy's course, I've attended Mike Waltons options course. And you know, my focus has stayed on that development. But you know, along the way, I've gotten lots of value out of the 'I love real estate' programmes and similar sort of things to that. 

[00:13:38] But more interestingly, like, you know, once you've got the knowledge and you know what to do, the mindset becomes more important and the 'doing things'—it's like, I don't necessarily need more how-do-I-talk-to-a-town-planner-type conversations or 'How do I learn more about how to give a good brief to my architect or designer?' 

[00:14:04] It's like, how do I have better conversations? 

[00:14:09] All of a sudden, it's like, 'Hey, I need some actual selling skills. Now I'm working for myself as a buyer's agent, how do I have better conversations with clients? How do I make sure that I'm conveying the value that I present to clients clearly and articulating that so that personal and professional development continues along the way?' 

[00:14:32] And the mindset change? Like in 2013, when I did my first property course, I saw myself as an employee. If I wanted to earn more money, it's like, I had to get a promotion. More job or more, more job done to get more pay on a fortnightly basis. Like this is sort of where I was thinking. 

[00:14:51] So even though I'd done small developments, I was still thinking like an employee. 

[00:14:57] And I kind of look enviously at some of those people that decide they're going to be in property full-time. And, you know, they jump right in and they do it well. 

[00:15:06] For me, it's been quite a journey from engineer and employee to, you know, business owner, self-employed, and then you know, building a brand and a business and doing my own projects as well. 

[00:15:22] The end destination is still getting clearer. It's interesting looking at people launching buyers agent companies and seeing them grow some fantastic brands. It's really exciting seeing that happen. 

[00:15:39] But I still see development and value adds as my passion. I don't see myself ever moving away from the small development side of things for myself. And I like to help others with that.

Coming up after the break, he gives a morale-boosting advice that anyone hesitating to step out into unknown must hear…

Richard Williams: 

[00:21:20] So you know, if you've got some skills and some great ideas and things that you can do with money, there's always opportunities. 

The secret to building one's resilience in the rocky road we call 'life'…

[00:22:54] It's like, you know, I've had my experiences and [I've] built my comfort levels up now so that, you know, it takes a fair bit to give me a shake and rattle and lose sleep. 

He highlights how continuous learning is a considerable first step towards your property journey success.

[00:25:26] The phrase I like his 'automobile university'. Pop that podcast on, and put the car in gear and off you go to your destination. Learn while you're going.

And that’s next. I’m Tyrone Shum and you’re listening to Property Investory.

Tyrone Shum:   

Cutting to the chase when asked what he would say if he met himself 10 years ago, Williams gives a satisfyingly short but timeless and relevant answer.

[00:16:18] Keep networking, keep meeting people. Find people with similar interests. And initially, like I searched out people that were interested in property and that's that attended courses. But what I found was that of everyone that attended, you know, there was only ever going to be a few that actually did stuff and did it well and kept at it. 

[00:16:45] One of the realisations I had along the way was that someone said the most important thing for the human brain is to be right, to justify, you know. Because who wants to live with themselves if all the decisions they've made are wrong?

[00:16:59] So no one ever regrets doing a course in education; that was always the right thing for them to do. But what they found was that maybe it wasn't quite for them, or it wasn't the right time. 

[00:17:10] So I found it was really important to not only build my network and meet people, but [also] to stay in touch with the ones that were doing great things and doing more than what I was. So that, you know, as I grew, I could look up at the people and go, 'Wow, that stuff they're doing? That's what I want to do'. 

[00:17:30] It's been a journey from sort of looking at myself as someone that just does a little development to going, 'Hey, now I'm the guy that, you know, I just finished a property. I'm just about to start building three more. As soon as they finish, I've got another one ready to go. Plus, I'm helping a couple of clients with their projects'. 

[00:17:47] It's like, wow.

[00:17:51] Five years or so ago, after I just lost a whole heap of money, it's like, you know, all I could afford to do was half a deal. And now it's like: I've just finished one. I've got three ready to start. I've got another one ready to go. 

[00:18:04] It's like wow, it's—who's this guy? Like, in five or six years ago, I wouldn't have been able to look forward and see myself the way I am. So it's definitely interesting to sit still, take a few breaths, and go, 'Where was I 10 years ago? Like, could I see myself being here now?' 

[00:18:26] Because it's been a great journey, and I'm still happy. Like, I'm happy with where I'm at, happy with the stuff I've learnt [and] so I'm happy because I get to apply it. 

[00:18:37] Yeah, so 10 years ago, what would I tell myself? Keep meeting people, keep networking, and, you know, keep connecting people through. 

[00:18:46] Like, [there are] people asking me about courses, you know— 'What should I do?' 'What should I learn?' I try and guide them as best I can. It's like well, 'Where do you want to be? What [do] you want to do?'

Tyrone Shum:   

Williams is certainly no stranger to dark tumultuous times. As he gives further insight on what he went through and how he got through it, he gives a fitting advice to those who may be going through difficulties.

[00:19:37] It was a challenging time, you know. I lost a whole heap of sleep. I didn't necessarily want to be talking about it with family and, you know, the people that were closest to me. Because I'm like, you know, this is pretty shit for me. 

[00:19:49] I don't want to go and put my big weight on top of other people and bring them down significantly. So I wore a whole heap of that myself for better or worse. 

[00:20:03] Look, if you're in a bad spot, like, it can be better. You might not be sure how it's going to be better. But it's just a case of keep putting one foot in front of the other. And hang out with people that are successful. You know, there's people running some great events on a monthly basis in every capital city. 

[00:20:22] You know, Rob Flux does some fantastic events for property developer network. Cheryl Leong runs some fantastic events. There's a few people out there that put on great events around the country. 

[00:20:35] Get out and surround yourself with good people—people who have done stuff, people who are interested in doing stuff. And who knows? 

[00:20:43] You've got some skills; you just need to work out what those skills are. And practice communicating the value that you've got in what you know. If you've got the skills, but no money [to] work out, well, how do you use what you know to help someone who's got money to do a deal?

[00:21:02] Yeah, so look for problems to solve and help people as much as you can. And eventually things will work out.

[00:21:11] Exactly like one of Bob's favourite quotes was, you know, there's more people out there with money than know what to do with it or that have sort of good things to do with it. 

[00:21:20] So you know, if you've got some skills and some great ideas and things that you can do with money, there's always opportunities. 

[00:21:27] And I need to remind myself that every now and again, it's like, I've got some big plans to do some great stuff. And I'm like, 'Right. I know, the money's out there. I just need to work out how to convey why people should trust me and trust me to use their money to get a great outcome for for themselves'.

Tyrone Shum:   

Indeed, expertly juggling his many hats in the property industry, he aims to guide and assist people interested in going into developments, and targets to build more in the property market's disability space.

[00:22:06] I'm really excited about helping people that would like to do small developments but really don't know how to start and where. 

[00:22:14] I think granny flats are a fantastic little underrated opportunity in New South Wales, in particular. You know, buying a house with enough land in the backyard, and literally dropping a granny flat in there. They are just cheap and cheerful, fantastic, repeatable little products. And in the current market, you know, you're getting good yields, good incomes from those—they're fantastic. 

[00:22:39] Like, if someone's not quite sure about doing a small development, it's like, 'Hey, let's just wind it back a couple of levels. Lets kind of do a little project like this'. It will potentially help your serviceability in the future. 

[00:22:50] And, you know, build up your comfort levels. 

[00:22:54] It's like, you know, I've had my experiences and [I've] built my comfort levels up now so that, you know, it takes a fair bit to give me a shake and rattle and lose sleep. 

[00:23:04] But there's still good opportunities out there or like, you know, if you want to do a small development, you don't need to do it today, you can just get out there and buy the property today. Just rent it out for a year, two years, [or] three years. Take the opportunity in the future to do that small developments. 

[00:23:22] But yeah, so I'm excited to help out people that are wanting to do things but a bit too nervous to do it on their own. 

[00:23:31] Again, like I said, I'm all about mitigating the risk. 

[00:23:36] You know, we might not make absolute top dollar. But I tell you what, 'We've got five plans on how we're not going to lose any money. We're going to make sure we move forwards. And if anything goes bad, we've got our backside covered in five different ways where we can move forwards and move out of the out of the deal profitably'. So that's great. 

[00:23:58] And personally, I'm excited by the opportunities in the disability accommodation. Like, I was thinking and planning just this morning on a flight back to Sydney about what I plan on doing in the disability space. And I'm really excited to build nice quality homes for people that may never have had their own home. 

[00:24:18] Many of these people have been living in institutions or group homes and potentially haven't had their own house. So, you know, to be able to build a house for someone like that, where they can get the care that they need to live independently, is a great opportunity. 

[00:24:33] I'm really excited to help out as many people in that situation as I can in the next few years.

Tyrone Shum:   

[00:24:39] I think you're going to be doing a fantastic job, especially now that you've had success in doing that. There's going to be huge opportunity for you for the future to do that as well to Excellent, excellent. Well, Richard, how much of your success do you think has been due to your skill, intelligence and hard work, compared to say how much of it would be say luck?

[00:25:04] The harder I work, the luckier I get(?) 

[00:25:06] Yep. Very true. 

[00:25:12] It's about learning and then applying that knowledge. If you don't know anything, like, there's so many good property podcasts out there at the moment. Pick your little niche, just, if you've got nothing else available to you just listen. 

[00:25:26] The phrase I like his 'automobile university'. Pop that podcast on, and put the car in gear and off you go to your destination. Learn while you're going.

[00:25:36] Yeah, that's great. 

[00:25:39] You're right. There's just so many episodes or so many different modules of learning out there—from YouTube to, you know, podcasting and video and all that. And we've got such a great access to technology that allows us to do so many great things. 

[00:25:54] Question is where do you go to get that information? Who do you listen to? 

[00:26:01] Going back 10 [or] 15 [or] 20 years ago, everything was all sort of on the newspaper. You'd have to sort of rely on going to speak to people and network and so forth to get information, but now it's just a click of a button we're there.

[00:26:13] It sure is. And I think people should just find the people that resonate with them.

[00:26:19] Check the different platforms, you know—Spotify, Stitcher, YouTube. Just pop it in Google and see what pops out, what grabs your attention. Listen to a couple of episodes; if you like him, great, listen to some more. 

[00:26:35] If you find someone you like, perfect. If not, just keep finding content. 

[00:26:38] There's something out there for everyone. There's plenty of information. And in the first instance, listen to that. If you want to find out more niche information, pick a course, join a group, and go from there.

Tyrone Shum:   

Speaking of learning and networking with like-minded people in spaces that encourage further education on all-things property, Williams shares the meetups he runs for investors and developers. Plus, he shares the most effective way to reach out to him. 

[00:27:05] They're generally in Parramatta—usually once a month. They did slow down for a while there, and they're only just sort of starting to ramp back up. But yeah, I still run an informal meetup generally in Parramatta. 

[00:27:17] We get some property investors and developers come along. We get a mixture of, you know, mortgage brokers and other people. And people just get to informally chat and share ideas. I do have some plans to do some formal presentations as well to get some guests along on specific topics where people can come and learn in more depth. 

[00:27:35] But yeah, the meetups are still going. They're still a lot of fun, social catch up.

[00:27:556] My website is Brick port. B-R-I-C-K-P-O-R-T dot com dot au [brickport.com.au]. Or, they can email me at info@brick port.com.au.

[00:28:08] I have to ask you: How did you come up with that name? It's very catchy.

[00:28:14] It's a street that I used to live on down in Tasmania.

[00:28:18] There's always an origin behind these names. I love it.

[00:28:23] It's got lots of good memories for me.

Thank you to Richard Williams, our guest on this episode of Property Investory