Property Podcast
Make the Best Out of Your Property Opportunities With Lesley Smith
July 21, 2021
Lesley Smith is back and better than ever with brand new tips and advice for our listeners. In this episode we explore how Smith generated $60,000 in profit while in the midst of a pandemic. She also discusses some of her worst investments, like the time her shares drop 50% in value.
Additionally, Smith teaches us all about giving people the chance to say yes, and explains how it can save you thousands of dollars on your next investment. Join us as she explains how to navigate the tricky world of property investment, and shares her personal habits that inspire her to keep pushing forward! This is an episode you don’t want to miss!

Timestamps:
00:00:30 | Strategise and legitimise
00:07:39 | She saved how much
00:11:08 | Prevail Despite covid
00:16:35 | It’s all about Mindset
00:19:01 | Read until you bleed
00:23:27 | Don’t let fear hold you back
00:16:35 | It’s all about Mindset

Resources and Links:
MLSproperty245@gmail.com

Transcript:
Lesley smith
If you give people the opportunity to say yes, then you can get somewhere and move on with your journey.

**INTRO MUSIC**

Tyrone Shum
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 continue our conversation with property developer, Lesley Smith. We hear how she made a profit of $60,000 on a property in the middle of the pandemic. She enlightens us with her fluid mindset which can help any investor say “yes!” to every opportunity. All that and more to come.

**END INTRO MUSIC**

**PLAY BACKGROUND MUSIC**

Tyrone Shum   
Although Smith is very successful, she is no stranger to adversity. She shares some of her worst investment decisions.

Lesley Smith   
[00:00:30] We purchased a townhouse, which was off the plan. An estate that was starting to be developed, I guess. So we thought, Oh, this nice idea, get a townhouse there add to our portfolio. This was around about the same time that we're buying the property in town. We were told at the time that the value was expected to increase by $40,000 before it was even finally built for us. So we thought that's a good, good proposition to put contracted off the plan. And then by the time the property’s built sort of six months, 12 months later, we've already made $40,000. Without any money down.  

Yeah, unfortunately, because of the way that property prices went in the area, and there were lots of new builds going on at the time, more land was opened up. That increased didn't happen. And it just really plateaued and was only worth what we'd paid for it by the time we settled on it. It and it took quite a few years before it did increase by the 40,000. So we sort of take that as a sign to sell on at that point and make the 40,000 that we were happy with that there's a little bit disappointing. And I guess sort of lesson learned to not really listen to sort of predictions at the time to look at what's around and not expect things to increase by that much. 

The second worst investment we made was that we bought some managed funds just a few weeks before the GFC hit. And we actually took on a second mortgage to do that. We decided we had spare cash and so yes, take on a mortgage, put it in shares. And we don't have to do anything with them. Now, it's not like a property where you have to do stuff with it, we'll have a little go at the dip our toes in the water with shares. Unfortunately, a few weeks later, GFC came along and they plunged to 50% of what we'd bought them for. So that was quite a lot of $1,000 wiped off in one go. And obviously we're still paying mortgage for the full amount. And it took those good eight years before they were even anywhere close to what we'd originally paid for them. So the lesson we learned from that was even safe investments aren't always safe. So it's sort of a bit of a gamble, whatever you do, yeah,

Tyrone Shum 
However, out of hard times comes wise words, here’s the advice that she’d give to anyone currently in a bad investment. 

Lesley Smith   
[00:03:44] Expect the unexpected. And I guess, to always make sure that you can cope. If things don't work out so well. So we were lucky with the shares, we were able to still pay the mortgage that we had on them. If we'd sort of taken on more than we could afford then, we could have been stuck. But now we were able to cope with it. And with the townhouse it was covering its costs while we owned it. So it wasn't really costing us money. Yeah, so you just have to always be mindful of what the worst outcome could be.


Tyrone Shum   
While she’s experienced the downside of investing, she’s also had some eye-opening moments 

Lesley Smith   
[00:04:54]  The aha moment, I think, was when we realized what our mentors was saying to us. So we joined an offer mentoring group, Young Oens, one in Brisbane a couple of years ago. And one thing he always says to us is to give people the opportunity to say yes. And I think with the project that we did it went by that we sort of learned that that is the case. If you give people the opportunity to say yes, then you can get somewhere and move on with your journey.

Tyrone Shum   
Smith explains how she came across the subdivision property that doubled her income 

Lesley Smith    
[00:05:52] We actually found off-market. So we went to see a different property with the agent. But that one wasn't suitable for what we wanted to do. So we were talking to him and explaining what we wanted to do with subdivisions. And he said, he said, I might have another property that might be of interest to you. So I've been talking to the owners, they don't want to put it on the market yet. But if somebody comes along, they're happy to talk.

So we went along to see that one. And that one, was the one that we ended up doing, it went by. So he negotiated with the owners for us, and we put the contract in on it, and we can see the loop. It could be subdivided or had its challenges. But it was a really good one for learning from because it did give us a lot of challenges.

[00:07:05] We put in an offer for it. And they accepted the offer, after a little bit of negotiating backwards and forwards. And then we had the building and pest report done. And that came up with a few things that needed to be sorted out there that we hadn't realized, on the maintenance side, and stuff. So we ended up asking for a $16,000 drop in the price.

Tyrone Shum 
Smith knew it was a bold ask, but she was still hopeful 

Lesley Smith 
[7:39] I knew that we were being very cheeky asking for that. But I had it in the back of my mind for Young says about give them the opportunity to say yes, if you don't ask, they can't say yes. So I was sort of like cringing when we were given the agent, the news that we wanted to drop 16,000, who went and spoke to them, obviously, they weren't very impressed with that they would have liked have kept the offer where it was, but they did end up agreeing to an $8,000 drop. 

So we were very happy with that, because I thought they would come back sort of say no it’s an old property, you know, go away. Pay what we want you to pay for it. And that's it. So yeah, if we hadn't asked for that discount, then we wouldn't have got anything. 

Tyrone Shum   
Here’s how they secured their bold offer and how you can too! 

Lesley Smith  
[00:08:44] We showed them the building and pest report. And we pointed out the things that that needed doing, and that's the biggest one, I guess, was the retaining wall, there was already a retaining wall there. And we knew that we'd have to re engineer it as part of the development approval. But the existing retaining wall wasn't a very bad state of repair. 

And in the end, they agree that if somebody else had bought the property that were looking to live there, they would still have to do some work on the retaining wall, and it would still cost them a lot of money to do that. So we were prepared to take an $8,000 discount, because we knew we had to do something with it. And we already sort of allowed for that in our figures. 

Whereas if they'd sold it to somebody who wanted to own it and live there, they might have asked for a lot more discount because it was gonna cost a lot more than $8,000 to fix it even just for somebody living there. And there were some other maintenance issues as well. So we just pointed them all out to them. Even some of the more minor ones. Yeah, sit back up the reason why we were asking for 16,000.

Tyrone Shum    
So just how well did the property do? 

Lesley Smith   
[00:10:13] We purchased it for 550,000. It ended up costing us about 860 in total. So three, just over 300,000 in development costs. That's including everything, the civils, the engineer's fees, town planners, fees, absolutely everything. And then we sold the land for 320. And the house for 537. So we ended up making… we ended up making about 60,000 profit out of it. So we were happy with that. 

Tyrone Shum  
And how long did that process take?

Lesley Smith  
[00:11:08] we actually signed contracts in January last year. So 2020. And we settled on the 10th of March 2020, just before everything went belly up with COVID. So I think you can imagine you mentioned about having problems with the development in COVID era, you can imagine how we felt just going in for our first subdivision knowing all the costs ahead.
 Just before COVID, so we really didn't know what we were letting ourselves in for. 

But we were quite philosophical Balor, we knew it was a good property and could be rented out. So we thought, well, we'll just see how it goes, go with the flow again. And if we have to keep renting out for a while, before we do the project, we'll do that we'll just see, you know what happens. It did take us quite a few weeks to get tenants in there, because everybody just was staying at home, no tenants will want to move anywhere. 

And yeah, we just struggled to get a tenant, which was probably the worst part of it took us a couple of months to get tenants in there. So we were starting to get a little bit nervous at that point of what was going to happen. But once the tenants were in we start cracking on with all…  we’d already put in the application, everything we got everything come sorted during the contract time so that as soon as we settle, we were ready to put the application into the council. 

So we kept everything moving along as quickly as we could, with our fingers paused on the pause button, ready to sort of stop if if we need to, to COVID you know, postponed things. So then we were able to get all this civils done. We had a great team around us, the engineers, town planners, the civil contractors just all worked together very well. And we just really left them to it a lot of the time, and they got stuff sorted. And then we finished all the civils around September time. Yep, we started to pull out for sale at the end of October. And we got a contract from both the house and the land. The middle of December.

Tyrone Shum    
Despite the COVID-19 setbacks, it was still a great outcome 

Lesley Smith  
[00:13:34] they both settled in February. So if you want to take it from the point that when we signed the contract that was just over 12 months, or about 13 months for the project from start to finish. So that was really good.

Lesley Smith    
[00:14:08] think we were lucky that we were doing the council part in the early part of COVID. I think a few, if it’d been two or three months down the line. I think people were starting to struggle with getting, getting the answers back and the final approvals back from Council. So I think we were very lucky with that timing.

Tyrone Shum  
Smith and her husband have hopes of developing more properties in the future

Lesley Smith 
[00:14:43] We'd like to do another project. If we can. We have taken a little bit of a backseat at the moment. We're helping other people with their projects, some investing some money to keep the money moving. And to help them we were just dumb waiting to see at the moment what good projects come along. We were we are on the Sunshine Coast, the property market has been absolutely on fire the last few months and it seems to be ramping up with no signs of stopping. When you're driving around, you see a for sale sign up. Within a few days, that changes to a sold sign. So you have to be very quick with what you're getting. And it's quite difficult at the moment to get things off market. And to get them a good price because everybody's just trying to get the best price that they can. So we're just waiting our time in the moment. We've got quite a few things going on, personally with renovations around the house and stuff. So we're just concentrating on that at the moment. And then we'll come back into the property project some when we feel ready for

*Advertisement* 

**Play background music**

Tyrone Shum:
When we come back after the break we discuss a surprising outcome of Smiths property ventures  

Lesley Smith
[00:17:39]  she was only nine. But she came up with a fantastic list and lots of things that were out of the box that you wouldn't really expect a child to sort of think of.

Tyrone Shum:
We learn about the mindset that led her to build a property empire

Lesley Smith
[00:24:59] the way that I've always looked at things in my life is for it to be a fluid pathway. 

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

***READ ADVERTISEMENT***

Mindset segment

Tyrone Shum   
Motivation is a key element to Smiths Success 

Lesley Smith   
[00:16:35] our main motivation is to create a secure life for ourselves and our daughter. She's learning a lot from it. Like being a child, she doesn't always understand why we've got to go to open houses, or why we've got to go to that… buy property again on a Saturday morning when she just wants to stay at home and do her thing. But she is learning a lot from it as well. She's learning the work ethic and that you have to work for your money. And is dependent on what you put in what you get out. The harder you work, the more you're going to get out of something, whether that is money or enjoyment, or, or whatever. She actually was quite funny because when we joined Young's program, he used to give us homework at the start to do and one of the things you had to do was list 10 ways that you could make money other than your normal job. 

And my daughter was like, what you're doing Mommy, what you're doing, I sort of explained to her what I'm gonna do that as well, she said, and she got a piece of paper, and she started thinking and writing. And at that time, she was only nine. But she came up with a fantastic list and lots of things that were out of the box that you wouldn't really expect to child to sort of think of. And I thought that was a really good thing for her to be starting to think out of the box and think about other ways of doing things. And you don't just have to go to your nine to five job. You can do other things as well.

Personal Habits and Book Section

Tyrone Shum    
Smith and her husband learnt a lot from books and their mentor 

Lesley Smith  
[00:19:01]  My husband tends to read the books more than I do. I just got my head buried in spreadsheets all the time. I tend to split the roles that way. There was one very good book that he felt very inspired by. It was called Start Now Get Perfect Later by Rob Moore. And after he'd read that book, he was like, we've got to get a property. We've got to get this, we've got to get into it. This was after we've been on Young’s program for a little while and we had been looking and couldn't find the right thing. But I think you can spend a lot of time looking for the perfect project and then you pass by other ones that potentially could give you lots of learnings and some money as well. And it is very difficult balance to make sure that the one you're getting isn't going to be an absolute flop, and that you're just going to get learnings out of it and no money. But It was really after reading that book that we put the emphasis on really trying to find a property. And then when the one by one came up, we could see that there were options there. So you talked about the exit strategies earlier, we can see that there were quite a few exit strategies for it. And although the money that we were going to make from doing the subdivision, we knew by the time we did the due diligence period, it wasn't going to be fantastic money. Young always likes you to look at doing around 20% return to be safe in the project. And we knew by the when we first started looking at it, it looked like it was going to return 20% by the end of the due diligence, it looked like it was going to be turned about 12%.

But for our situation, we were prepared to take the plunge and give it a go and use Rob's philosophy from his book of start now get perfect later. We're glad that we did the project. Obviously, we don't know what other opportunities we missed out on by doing this one. While it was quite a challenging one being a sloping block, and the retaining wall, and a few other sort of features of the engineering on it. So was very challenging, but it did offer lots of learning for us. And now having come out of this one, so we came out with 60,000 I think I got my figures wrong early, which isn't very good being a numbers person, but being the cost of actually around 250. 

eah, so we made 60,000, which to us that worked out 8% in the end. So it wasn't a huge profit compared to what a lot of people make out of projects. But we think coming through the COVID year, we were very happy to make that amount of money, because at the start of last year, so by March time, nobody really knew how the future was going to look like. So we were happy to come out of it and the learnings that we've learned from are taken to the next project, and we know that our next project is going to be so much better and smoother, because of what we've learned from this one, so that was absolute gold.

Tyrone Shum 
In Hindsight, Smith wishes she had been braver earlier in her journey 

Lesley Smith  
[00:23:27] I think I would have said to myself to not be afraid to give it a go. And to give people the opportunity to say Yes. I think 10 years ago, we weren't so confident at putting ourselves out there and asking for things, and asking people to give us a go and to get properties cheaper, all that type stuff. And I think also, to try not to let opportunities pass by there have been some project, particularly in property that we were too scared, I guess, to go into. And I think, you know, looking back and again, hindsight is good. We know now that they might have been a good investment. So hindsight is always good. But I guess not to beat yourself up about the things that haven't gone so well.

Tyrone Shum   
Smith shares what she’s looking forward to in her property development journey

Lesley Smith    
[24:51] I think the endless opportunities that there are in property. And as I mentioned earlier, the way that I've always looked at things in my life is for it to be a fluid pathway. And not to become fixed on, we must do things this way, this is what's going to happen. This is where I'm going to be in five years. So again, with the property, we sort of take opportunities as they come, not to become fixated on, I'm only going to do subdivisions, or many gonna do renovations, again, is to find balance, because you can then end up being jack of all trades and just jumping around from here to there and not learning the skill sets that you need properly. So you have to be careful of that. But to also take opportunities as they come along, and not, not let them pass us by.

Tyrone Shum
[25:46] Leslie, you've shared a great story. You've been along with this property journey, and also the developments that you've done as well. How much of it do you think is because duty intelligence, hard work and skill, and how much of it do you think is because of luck?

Lesley Smith   
[00:26:24] I think there is an element of luck involved. Sometimes timing goes your way, sometimes it doesn't. A lot of it's probably about being in the right place at the right time. So without women by project, we would never have known about it unless we went to the other property inspection with that agent. A lot of it. I'm not sure necessarily about skill. But I think a lot of it is listening to the advice of other people that know better than you so so we've had some great mentors along the way. 

And in Young's group, there's a lot of other experienced people doing properties. So we've been learning off of them as well. And if you take their advice, then they've done it all before they've made the mistakes. So you're less likely to make those mistakes, you can still make mistakes, and you do still have to make your own mistakes to a certain extent to be able to learn from them. But I think it's just all about surrounding yourself with the right team as well. So we were very lucky. Maybe it was luck. But the town planners that we used all those years ago, doing the third strata title property in town. We've stuck with them all the way through. So we've got a good relationship with them now. 

And they put us in touch with the engineer, she's been very good as well. And then she put us in touch with the civil contractor. So everything just fell into place. So you could say there was an element of luck involved in that element of choosing the right people, and really listening to them and taking their skills and expertise on board, and letting them do what they're skilled at. And then we just sort of made it all happen, I guess, you know, we were just there. Putting the money in and how can we sort of coordinate it all.

**OUTRO*** 

Tyrone Shum  
Thank you to our guest Lesley Smith for sharing her amazing story on Property Investory.