In this episode, he shares with us his strong family ties, and what motivates him to achieve all that he can. We discuss his approach to business relationships and how this works well for himself and his team and the real estate agents and builders he engages, and how this leads to property development success. You’ll get a glimpse into the differences between trying to sell land as opposed to house and land, how he chooses and secures his subdivisions, and find out whether Valery has any hand in the interior design choices!

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[00:25:24]  It's about setting up a foundation. And I'd like to think by the time he's 30, he'll have four or five properties in his name, and a new car, and they'll be very little debt on those properties. So that will be a good foundation for him. And that’s the driver for me.

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 continuing our discussion with Jim Valery, a hardworking family man who rose through the ranks in coal mining and trade unions to turn around and become a successful property developer. Tune in to discover how he went from seemingly unemployable to having sold over $30 million in property.

Valery demonstrates his honourability through not only his work, but also his relationships with his family members. It is a combination of these things that keep him motivated.

Jim Valery:  

[00:00:01] The ‘aha’ moment for me is that I've got a mother who hasn't been well, and she's doing chemotherapy at the moment, she lives in Bundaberg. But I've been able to move her down to Brisbane, and allow her to reside with us, me and my son. And I've got the ability and the time now to be able to provide assistance and care in running her to the hospital and assisting her to be moving through that phase purely because of the team. 

[00:00:42] So I guess the ‘aha’ moment for me is the realisation that we've got the team there now that enables me to have outside areas. If something important comes up, I've got the comfort that we have got the team there to be able to continue what we need to do as a business. But if there's something that comes up in a personal nature, there's also the ability to attend to those matters as well.

[00:01:26] It's having that team, it's having the systems, the right selection process on sites, making sure that we're doing things well to keep moving forward. And having those resources to make sure that we can, because there's always a time where something comes up in our life. And if we've made the right structures around ourselves, we can deal with those things, without losing any motivation or pace or risk to anyone.

Also on another positive track, he shares his other ‘aha’ moment.

 

Jim Valery: 

[00:35:18] The 'aha' moment was through doing the education. It's important to continually improve yourself no matter where you are, what you're doing personal development. You know, we are our best

Tyrone Shum:  

Valery explains how he became interested in units, townhouses and developments, and shares whether he plays a part in any of the interior design.

[00:02:12] Whether it comes from the time that we're given Lego blocks as little kids, and we always seem to like to build something, it seems to be more fun. You can do a land subdivision, and you can look back, and it's not as though you sit there and feel as though you've created anything. It's dirt on the ground and grass on the ground. So that was there before you got there. So all you're doing is shifting the boundaries around it, there's no real 'Look at that'. I can come back in three years' time, 'Look, we constructed that'. 

[00:02:44] So I think inside most people, especially boys and men, there's always that desire to be building something and going, 'Okay, yep, I love the colour I picked there,’ or ‘I loved something I picked there', I don't have those aspects. And I avoid renovation because I've got no ability to look at colours, but I've got the team members to do that. But the realisation in looking back and going that you've built something and you've created something is certainly at some point, it's always of interest to us. I guess it's a realisation for me now that to do those style developments, I am very reliant upon the builder as well. I can do everything right myself, and if the builder doesn't play their role, or if they make mistakes, or they don't build things to the right quality, that has the ability to affect the overall project. And if it's my project it's my name. It's our company name. So I guess it's more that's the viewpoint of me being more into land subdivisions, it's something we can control. It's totally within our control, it's in our skill set. We're not reliant upon others to provide such a significant component of the deal. 

[00:04:06] And I have had builders go into administration and things like that, and it becomes quite hard. So just from our point of view, it's about the realisation that we're comfortable with our skill set and the skills of our team. We don't want to be introducing further risk into a deal, especially a deal where they will be less involved. Yes, we will do some construction elements and they'll generally be along the lines. If we're looking into hold stock, we'll certainly do a build on that stock for us to hold and to create passive income. But we're pretty restrict those areas to ones that we're looking at holding rather than what we're looking at doing with utilising a syndication or investors.

Tyrone Shum:  

New Style Developments has evolved over time, from units to townhouses to subdivisions. We discuss with Valery how subdivisions offer a lot more control and how the marketing process is different than that of units and townhouses, in that with land there isn’t something already physically built. 

[00:05:34] Land's not very sexy, that's why you do something with getting someone with the right design on there, because then you can leverage off the beautiful looking house. And you're selling land, but you're talking more about the house, purely because land, it doesn't excite people. Yes, people want to live in a certain area, they want that access, but to physically put a picture up with a block of grass isn't that exciting. Where if it's a beautifully designed home, it certainly creates more of an emotional attachment. So you're very much right in that. There's a specific way. I think it's important for a lot of people who are trying to sell land, and a house and land, think all they need to do is put it on realestate.com.au and it’ll sell. And that's certainly not the case. It is a specific skill set. And a lot of local agents don't have that skill set. You've got to make sure that you do pick the right people, I believe, and you've got the right back up internally to be driving those people, which is what we have through our team.

He shares whether he prefers any specific type of land subdivision, and elaborates on how he goes about finding them.

[00:07:03] We've certainly moved more away, and everyone starts doing the one to twos and two to three lots of divisions. We've moved away from that now, we're certainly looking for preferably five or six lots, or, up to 30 or 40. We know we have got two seven lot subdivisions, an 11 lot subdivision, and a 33 lot subdivision. So they're certainly the areas you want to play in. 

[00:07:32] And especially in Queensland, if people are doing subdivisions, there is a need to understand that the way that you do five lots or less is different the way that you do seven to 10 lots. And that's different the way that you do 11 to 30 lots. So if you're doing five or less lots, you don't need to disclose your plans, you don't need to have a development approval, you can be selling from the word 'go'. So if the development takes you nine months, that gives you nine months to sell. Let's say it's a four lot subdivision, you've got nine months to sell four blocks of land. Where if you're doing a seven lot subdivision, you've got to get the DA approval first and have the disclosure documents before you can start selling. And that project, whilst it might take you 12 months, you've only got six months to sell them because you've lost that first part during the development approval stage. So you've got more lots to sell in a shorter time frame. So it is important to have those sales systems in place once you're starting to jump into disclosure area.

With his lots ranging in size from as small as three or four to as large as 30, Valery has a lot on his plate. He shares if all of these are located in the Brisbane area.

[00:09:15] We try and focus on Brisbane City Council as a whole. Obviously people will talk about Brisbane being Brisbane, the wider group which might include other councils like Logan or Moreton Bay, but we try and work within Brisbane. We're very lucky in Queensland that Brisbane is such a large council area. So it's got the one set of planning legislation. I'm very comfortable with that planning legislation and I believe that I know it quite well. 

[00:09:47] Other councils... you've got to learn how to drive their online systems. You've got to know the subtleties or differences in their planning legislation. I prefer to focus on Brisbane. It's a very large council, there's plenty of opportunities in Brisbane. So that's certainly the area that we focus on because of that. 

[00:10:08] I feel sorry for people in Melbourne and Sydney, where you've got such small council areas, and you can even walk for a kilometre, and the rules change on what you've got to do in a development. So, it's been a lot harder there, to where we are blessed in having, you know, such a... Brisbane, when it might not be the biggest city, but it's the biggest council in the southern hemisphere, I think, or at least our region. And so, that does give us the ability to learn the legislation, know it well. We've got a luxury to go from, so that that provides a foundation for our prospecting. 

[00:10:57] People forget that property is a people game. So I do my networking and relationship building with agents. So strangely, I don't go and door knock, I don't go and send letters out, like most people or most developers do, but I work very strongly with my relationships. And if you can maintain that, that probably comes from the skill set you learned. And being in the bush, in the regional areas, you've got to learn, and you've got to be comfortable talking with people and interacting with people. So having that comfortability with learning those skills through my previous time makes up my strong point in dealing with people, talking to agents, having those relationships, and doing the right thing by people. And that that leads us—along with the time... again—but it certainly leads us to be lucky, where we get a lot of opportunities. I guess I say lucky, but the more you work, the luckier you get. So it's easy to say it's luck, where really, it's probably an acknowledgment that the team is working very well. But we do get a lot of opportunities presented to us, it certainly keeps us going. 

Valery’s good relationships with real estate agents has been key in finding and purchasing development sites. He delves into how he goes about this process.

[00:12:36] I'll certainly talk to them quite detailed about specifics. And someone's come through with legislation and that, so we'll look at a suburb, we'll download all the right size properties, we'll do an assessment quickly, get rid of runs that haven't got the right financial or they've got flooding, or they've got other restraints, which means they can't do it. A lot of people then will go and door knock themselves, will go and send letters out. So everyone knows regardless of how people do it, once they know how to deal with suburb analysts to shortlist a suburb to work out which ones are the right properties to target. A lot of people will then try and target themselves, we've only got so much time. 

[00:13:32] So my belief is that if I can have strong relationships with agents, I'm happy to give them my lists, and I'm happy to pay them as a buyer's agent. I'm happy for them to be a listing agent, whoever they want to work with. They deal with interaction with homeowners all the time, the homeowners straight away have arguably, a higher level of... a real estate agent is probably slightly higher than a developer in the people's views on ethics. 

[00:14:04] You know, whilst I would say that there are developers and I'd like to think we are one that give strong ethics. But everyone thinks that there's all these greedy developers more this or that. So a homeowner who gets approached by a real estate agent is probably happy to, you know, they're the industry expert, from what people think. So we have that conversation starting with an agent rather than ourselves. Because, yes, we do want them to get brought into the meeting and have the conversation more personalised, but we've only got so much time today. So if I could be working with agents who do that all day, every day, they prospect, I'm happy for them to prospect for me.

Coming up after the break, we hear more about the benefits of good relationships, this time with buyers...

[00:16:45] Once an agent is comfortable that you're treating them as a serious person as well, and you start doing the little things right with them, you do form a bond. People like people. 

Valery’s views on the importance of continuing education...

[00:28:38] We don't know everything, we always can learn and we should always want to learn. And if we have that mindset, where we continually want to learn, we'll always be doing better and improving ourselves rather than resting on our laurels thinking we know everything because the world changes, property market changes, the ways to do things changes.

His struggles with finding employment, and how it led him to where he is now...

[00:33:07] It was a realisation when I put my name down for a job, as a fill-in job at the airport, car parking. I was told that there was a high level of applications and sorry, I didn't make the cut this time. That was a realisation that if I couldn't even get a job parking cars, given what I'd done previously, that it was time that I certainly had to make sure that I created my own path. 

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

As I, and I’m sure some of our listeners, have experienced, finding development sites can be a frustrating process. Valery gives insight into how he creates relationships with the real estate agents he works with in order to secure these developments.

[00:15:44] I think it comes down to that that can be a time thing sometimes, I'm sure. There's been people who at some stage may well have had a young lady who caught their eye never do a lot of work before that young lady had any intention of wanting to get to know them. So, again, we're people. You've got to put in the time, you've got to put in the effort. So you've got to show the agent yes, initially, you might spend a lot of time going to have catch-ups with them. If they give me something I'm going to put an offer in regardless, my offer might be way too low. But I want them to know that I'm prepared to pull the trigger. I'm prepared to put an offer in, and I need to give them the respect that they've taken the time to contact me. 

[00:16:32] So I need to take the time to actually review it, and give them an offer or offer feedback back on what we think the price is. A lot of times, my pricing can be vastly different than to where they want, but at least I'm showing them the respect. And once an agent is comfortable that you're treating them as a serious person as well, and you start doing the little things right with them, you do form a bond. People like people. So if someone feels as though you're doing the right thing to them all the time, it forms... I wouldn't call it a friendship, but it forms an ability to interact on a much deeper level or a much more friendly level.

So how does Valery do his due diligence and make commitments to his sites?

[00:17:48] It comes down to the site, obviously. The more constraints the site shows when you're doing your research. We've got some that you'd happily go unconditional on right away. Because you know what the legislation says. You build up your network, I can talk to my town planner straight away, I can talk to my civil engineer straight away. As you get into a bigger site, it could take a little bit more time, and I think people understand on bigger sites, it'll take a little bit more time. But realistically, as a developer, we're going to want to say that this is such a complicated site, we need so much more time because we want things to be in our favour in having the right buyer, but that not needing the buyer, we don't have to buy that we're still under due diligence. So we want to do the safety way. 

[00:18:52] If push comes to shove, there's very few sites that you could be unconditional on within 30 or 60 days. Unless it's a major, massive, big, big site. But if we look at our 32 lot in Taigum, we're probably talking about 60 days due diligence. You know, we have done some due diligence beforehand. But we're also talking to the right consultant in that time to make sure that we're very comfortable.

With large developments differing so greatly to small ones, Valery explains how he purchases these large sites outright.

[00:19:41] Taigum is one that we've done. It's two sites by the same owner. One site we are settling on, a second site that we have an option on for 12 months to allow us to get the DA. So that's a negotiation one that we were able to have. Options can scare a lot of people who aren't well-versed in property. So being able to explain that and then talk them through it... I guess it comes down to how well you could explain it. 

[00:20:13] But there's always some people who want the certainty because they've made a decision they want to sell, they made a decision that they're ready to move on to the next phase of their life. And they want to start picking where they're gonna live. But they can't realise that dream until such time as you're unconditional. So yes, there's times I think options can work and do work and ideally base, you know, that would be something I'd love to do for every deal. But it's not always gonna work. And if we come back to property being a people game, is that we need to actually think about things from the seller's point of view sometimes and not always try and force them to do what we want to do, if we're happy to work with them. And we'll have a better relationship with the seller as well. So ideally, we'd like it, but we can't always get it.

He shares how he gets the funding to approach these types of deals. Perhaps he has a chest of cash lying around?

[00:21:33] We generally utilise, provide opportunities for investors, as well as financiers' money as well as your own money. So it's a combination there, we do have a good list of investors who always like to know what opportunities we have coming up. I see it as an opportunity. A lot of people will sit there and go, 'Okay, I feel bad about going and asking someone to put money into something', but it's an opportunity. 

[00:22:12] So that opportunity, they can take it or not take it. So we do have a list of we've yet to at least, once we have something coming up. You also need to continually expand that list as people change their mindsets and change where they're going, or invest in something else. So someone who is wanting to invest in property isn't just gonna talk to me, because my deal may not suit them. Or my deal may not be ready for them at the right time they're ready. They don't want their money sitting there waiting for me. So if I haven't got an opportunity for them, at that time, they'll be looking at who else has got an opportunity. 

[00:22:54] So we have to work on the idea that we're always going to be continually reviewing, and looking and providing the opportunity for other people. Because whilst we have got some people there, we can never be sure, when we start negotiating, that they're the right people. In saying that, I'm always confident that we're going to be able to settle on a deal. If I'm not confident, I'm not going to print out the contracts. So there are certainly opportunities out there. And we like to think that we're providing a reasonable opportunity, and our general number is around 15% per annum, or we've also introduced a jury cave, and we're forced to rethink and change the way we look at things. And so we've introduced the cash flow option where someone can take their interest paid monthly to compensate them and to increase your own cash flow. 

[00:24:02] So that's generally about 1% per month, and they can continue to get their cash flow increased by the interest payments every month. So it comes down to what suits the investor as well. So it can't always be about what we want, it's about going, 'Okay, how can we work together?'. It's a long term game. And if we can be working together in the long term, we want to make sure that we do consider what their needs are, as well.

Motivations and mindset are key when it comes to business. Valery shares what drives him and keeps him going.

[00:25:04] My 'why' is in it having something set up. It's a generational thing. I've got my son who works with me as well. At some point, I'd love to be sitting there and sipping beers at the pool and watching him do the work. Not really, because I think I'd still be bored, I still want to do things. It's about making sure that you can set things up with the profession that not only your son, but also the future generations can benefit from them. And it's not about getting ahead yet. So, you know, young fella works in there. And he'll get some of the rewards as well. But it's about setting up a foundation. And I'd like to think by the time he's 30, he'll have four or five properties in his name, and a new car, and there'll be very little debt on those properties. So that will be a good foundation for him. And that's the driver for me.

We explore his mentors, and give details on what the key pivotal points have been along his journey.

[00:26:13] I do education, I've been doing education through Nhan Nguyen at Advanced Property Strategies. Which has been great. And there's also like minded being Matt Jones, who runs the Vision Property Networking Group. And also does joint venture boot camps where it's about getting in there and delving into. Jill, who we both know, works with both groups as well. So it's about understanding that mindset as well, but I guess I initially went into doing the course with Nhan. 

[00:26:55] And his comment is always that it's 70% psychological in development, and maybe 20% skill or 10% time or 10% skill, 20% time. But I always had a disbelief, and it might have been my viewpoint of what psychological is, was different to what Nhan is putting out there. I was picturing getting up in the morning and saying 10 times, 'I'm gonna be successful', or doing those things here, which don't really resonate with me at all. So there's certain areas that I probably don't resonate with, I guess, in a realisation of psychology, the study of the Senate it's about being able to push you, it's about being able to have that 'why' reason to keep going, it's being able to take the step. 

[00:27:47] There's a lot of people out there who were highly educated, but don't have the mindset to be able to take that step and expose themselves to something because they won't trust themselves. So it's certainly in that sense psychological, which is really, really coming to me quite a bit now. I probably understand a lot more than I did at the time. But I'd say they would be the primaries from a mentoring or education, and I'm in Young's diamond group, which is the high level group for himself as well. So that's something that I'm continually doing. 

[00:28:25] And whilst I have done a significant depth of projects, it's a time that we think we know everything, that we start going backwards. We don't know everything, we always can learn and we should always want to learn. And if we have that mindset, where we continually want to learn, we'll always be doing better and improving ourselves rather than resting on our laurels thinking we know everything because the world changes, property market changes, the ways to do things changes. So we do need to continue to evolve. So it's about making sure that we can continually, having that personal development.

Valery shares how continuing education is a key point in this industry, as it is in any other, and how he adapts to changing technology.

[00:29:25] We realise that things we learn change and there's a new app, or there's a new way to do things or there's a new legislation that comes in place. So we've got to adapt and change that as well. And we don't have to do things exactly the same as someone else. But, you know, we can embrace that mindset and the idea that you can do it your way. Take the learnings from other people but adapt it to your way because we've all got our own personality traits. Mine being that I prefer interacting with agents. Other people are really successful in doing the letter approach. So, adapt it to your personality.

Valery explains what he would have done differently 10 years ago if he knew then what he knows now.

[00:30:24] 10 years ago would have been the importance of continual education, but also the importance of getting the right advice to allow holding stock at an earlier time frame. So, I would have liked to have been holding stock a while ago as well, and for whatever reasons it was something that I didn't see as an important factor. It's certainly something I would like to have been able to go back and tell myself 10 years ago that there's a need to be holding stock as well. They could've been the two foundations, continuing education and continuing to improve yourself and make sure that the property's worth more than the cash sometimes.

[00:31:31] I'm excited about division market as a whole, I really do believe that we've got a good four years, at least, coming up. There's been significant cash coming in from COVID, we had an underlying demand in the market prior to COVID. There's been changing in the funding bits of legislation, which means that there's about to be an abundance of private money coming in as well. So I think there's a pent up demand there. So for me that’s the market. We've got some great projects on the books, so that's exciting, to be having good projects may begin to what I believe will be a great market, and you continue to move forward that way and actually hold some as well.

[00:32:41] I think the hard work leads into the luck. So a hard worker will find themselves in many lucky positions. So as I said earlier, for me, it was the fact that I didn't have that fallback option. I'd come out of being a Queensland Secretary trade union, which may be pretty much unemployable from the eyes of the generalised public. It was a realisation when I put my name down for a job as a fill-in job at the airport, car parking. I was told that there was a high level of applications and sorry, I didn't make the cut this time. That was a realisation that if I couldn't even get a job parking cars, given what I'd done previously, that it was time that I certainly had to make sure that I created my own path. 

[00:33:33] So, there was an enormous amount of hard work in there, which certainly made an ability to get luckier now, but that luck is coming from three years of hard work. The skill set wasn't there, no one's born knowing how to do what we're doing now. It's not something that we learned, subdivision, or we learn these skills in school, we don't learn these skills from our parents. The financial wisdom doesn't come from growing up. There's probably some household that does, I mean, there's certainly some if I look at stereotypical... I guess it's certainly Chinese households are far better at providing that financial blueprint into their children more so than a lot of Europeans. It's not so much sought after. And it's not purely restricted to stereotypical Chinese. Jewish are renowned for being good at finance as well. 

[00:34:36] So there's certainly some people who do get that blueprint but generally speaking, most people don't. So we don't have those skills. Those learnings, that knowledge. They're things that we have to acquire not only are too hard working, yes, there are times that we do acquire those skills and we benefit from them. I certainly think that we're benefiting now from hard work and the skills that we've been able to acquire. 

[00:35:06] And yes, you can sit there and say, I was talking to a few consultants before a property meetup and they were saying that we seem to have a lot of projects on the books where there's a lot of people struggling. So there'll be some people who sit there and go, 'That's probably down to luck'. But again, I'd like to think that luck's come from hard work in establishing the right network. So it's not lucky that a certain person will tell me about a site because I've done the time to build up the relationship. So you know, I think luck is very, very, very unlikely to have an impact into things that we do if we do them well.

Thank you to Jim Valery, our guest on this episode of Property Investory.