Join us as we continue to discuss the strategies behind his success, as well as his mindset that will inspire you to pursue financial freedom. We also hear how he turned an unfinished mansion into over $150,000 in profit. All that and more on this episode of Property Investory.

Timestamps:
00:00:38 | Mindset, Mindset, Mindset
00:03:15 | Investing strategy
00:06:19 | Ford vs Ferry
00:08:16 | “So much space, what a waste!”
00:18:51 | Freedom is calling… answer it
00:20:52 | Read til you bleed
00:22:47 | Put the i in Inspiration
 
Resources and Links:

Transcript:
[00:14:53] and profit after holding costs of about 50k and GST would be around 40, so 170?

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

I’m Tyrone Shum and in this episode, we continue our conversation with developer Alan Castorina. We discuss the mindset that allows him to develop 6-8 properties a year and how the evolution of his favourite book impacted that. We also hear how he turned a $400,000 disaster into an amazing subdivision and much much more.

Tyrone Shum    

Castorina’s plethora of life experience and property experience means he’s both seen the good and bad side of the development world. Some experiences were so substantial, they completely changed his mindset. 

Alan Castorina 

[00:00:38] it's all about mindset. So I just recently listening to Bob Proctor. And he said, you know, you go in a, in a building, and from the bottom level is, how far do you see and go up to the next level, and you see a little bit further and you keep learning through life. And the more you do, the more you can see. Probably the biggest one was landmark forum, back in. Three years ago, I did with Young, joining young in doing his course he, he had the course, go to landmark. And that was a big eye-opener for me. It's all I actually ended up doing the whole course, that whole curriculum, and it's more battle. We often think the world is we're fixed and the world is malleable. Now we can change the world. But that showed me that the world is largely fixed. And we're the ones that have to adapt. And, and every day we have to adapt, you know, people talk to you and you react. But that landmark forum really showed me who I am and how I am how I present in the world. So it's a really good thing to do. We often become a roadblock ourselves, yeah, our fears and the way we react to things in life. And that's, that's what lightened me up. I mean, doing property and shares, doing all that other stuff is just the doing bit but learning about yourself. Is was really a big thing. And it's constantly learning all the time. So I'd say that was probably one of the biggest turning points there. 

Tyrone Shum   

Starting off with Renos, and then moving to subdivisions allowed Castorina’s company to grow steadily. Now they blend their workload together for maximum productivity 

Alan Castorina   

[00:03:15] for the last three years, we've been doing, you know, averaging between six to eight projects a year. And a blend of we started off doing majority renovations because that's what we were used to doing. And then I've been throwing in some subdivisions on trying to build that business up. And now so now it's like 50/50. So currently, we've got, we're just finishing a Queensland renovation in Brisbane, and we're just about to put that on the market next week. I've got a three lot subdivision in the middle ring suburbs in Brisbane. That's sort of towards the end of it on the plane ceiling, they're all the blocks are sold. So just a matter of just doing the paperwork and getting council to stamp it and getting titles. And I've got another project under contract. That's an eight lot subdivision that we're doing a pre-lodgement meeting next week with counsel to see if they will allow us to do what we want to do. And if not, then how they want to do it. So hopefully that we can iron out a lot of engineering issues with that to see if you know moving forward. It's a viable project. Yeah, no, we just sold a few like the one I told you about that settling in a couple of weeks and yeah, so that's the current situation.

Tyrone Shum  

While he tackles both subdivisions and renos, he enjoys one more than the other. 

Alan Castorina   

[00:04:56] I like the subdivisions, my wife's Michelle, she likes the reno’s.

Alan Castorina  

[00:05:06] I like the Renos because at the cash flow, because you know that the one that pool house was to … normally we do them at four to six weeks their finished and so that the income stream is good. You know subdivisions take a lot longer you get you get profits, you know 10 to 12 months apart, but I like the subdivisions because they're sort of more Oh, I like that engineering sort of things. I like that. And I like finding a more like this, you know, trying to design the blocks of land, how we're going to do it and acquiring them. I like talking to people. I like meeting owners at the start. I didn't I was sort of bit shy. But now I don’t mind. I enjoy going to meet somebody and seeing if we can strike a deal together. Yeah, have a win-win for both of us. All that stuff here. Yeah, yeah. And

Tyrone Shum   

Castorina needs structure and organisation when working on a project, this justifies his favouritism of subdivisions over reno’s 

Alan Castorina   

[00:06:19] Renos are like driving a speed a race car. Yeah. So everyone there you know, the guy to change the wheels, you know, everyone's got to be there on time, otherwise, it doesn't happen, you'll lose. Whereas subdivisions slow, but like driving up, you know, one of those ferry’s across Manly. So not to say that you can make errors, but it's more slow moving process. However, you can still make mistakes. And usually, I'd say, for me, I've made heaps of them. So far, it's not planning ahead. Certainly not looking into the future and saying, I'm going to need this guy. So let's, let's organize him and so forth. Or it could be just a mistake that nobody's seen that it's an engineering issue. The sewer line is lower than what it was meant to be, or we've got to do something bigger, like, you know, put up a retaining wall, lift the block up to get the Sewer. Those things are none of no one can see. Potentially early, so they're more costly. errors. Yeah, whereas a renovation we can, we can stuff up on a reno. And it might only cost us five grand, but a subdivision, you could stuff up and it could cost you 50 or 100. That's the difference. But the rewards are much bigger. Yeah.

Tyrone Shum   

A recent subdivision he did was an unfinished mansion that he managed to get his hands on. The amount of work it needed was almost unbelievable for the developer, yet he managed to make a huge profit out of someone else's mistakes. 

Alan Castorina   

[00:08:16] So basically, purchased it through, directly bought through an owner directly. So I sent a letter out, I got a phone call the owner sounded interested in doing having a chat further. So I went to his place and we had a chat, and found out what they wanted. It sort of roughly where I wanted to be too. So we struck a deal off and he wanted, they wanted a quick settlement. He didn't want too much messing around. So I gave him that. And I said I'll just need a week and a half, two weeks to do some DD on the site due diligence and went to the consultants, town planner, engineer and found that it was all good to go. I didn't read down the fizo and negotiate a little bit less because I had a few road crossings to send water across the road and that's gonna cost another 20 grand. settle on that property. Big House 1200 square meter lot. Big House on it. That was basically unlivable, it was built. But they didn't finish it. It was all just and they actually built it over the top of a three bed, one bath house. 

So they built these like bedrooms. I didn't take notice of the plans but it looked like a 10 bedroom house. It’s massive, like 600 square metre house and then half the size. And he built it over the top of another house and then the owners that I bought it off. stripped that house inside took that demolished That house in took out, steady, steady like that and left the shell of the new house. And their plan was to do it up, you know, finish it, sheet the walls and finish the plumbing and whatever fitted out. But they, they must have run out of money. They couldn't afford to do it anymore because it's massive. It would cost... I did the numbers and it brought some carpenters and builders over there. And they said the least 400,000 to do this place, get it back to what it should be. So that was off the cards. So, yeah, so demolish that. Now that that was flattened in a matter of hours

Tyrone Shum   

[00:10:43] how much do you think that house would have been worth in itself?

Alan Castorina   

[00:10:45]  to build that there was massive house to build that they would have spent at least 2- 300,000 on it, because it's all brand new brand new roof.

Tyrone Shum    

[00:10:58] How did you feel when you looked at and went, Wow, this is a brand new house. Obviously, it's gonna cost 400,000 to continue to work on it. But still, it just feels like a complete waste. demolish something like that. Yeah, it's a shame. Could you even lift it up and sold it someone else?

Alan Castorina  

[00:11:12] Nah, no, no, it was just it. It wasn't sealed. So all the timbers were still there. So it wouldn't have needed reframing I say, and having all that timber exposed there for all that amount of years wasn't doing it any good. And the fact that the plumbing, there was no, there's not paperwork. So you know, when you build a house, you've got to go through stages of certification. You know, the subfloor, the foundation, the plumbing, make sure all the protrusion has got wiring, protection, we couldn't find any of that paperwork. So essentially, would have to jackhammer all the cement, which was like 600 square meters of it, and redo all the plumbing work because you couldn't prove to the next buyers that it was protected. 

So it was another thing but all the neighbors said, Oh, what a shame What a shame. But a lot of them, were just standing there for years and years, no one's doing anything for it. So better getting three new houses up there. And that's what we did. So we subdivided into three blocks. Because there's slab down to the back, about a meter, just under a metre to the corner, we had to bring in a lot of fill and raise the backup so all the water, the stormwater would run to the front where it's meant to. On the on the verge in the gutter. And that requires retaining walls on either side. So the civil bill was about 90,000, between connecting the sewers to the three blocks, or providing sewers, water, retaining wall and fill some fencing. Yeah, so that's it. 

And now so now we're in what we call as, as constructed drawings that have just been completed. So you, you basically go and get a DA, you get that approved, you get the drawings done by the engineer, they, we then construct according to those drawings, and then we've got to prove that we've constructed to those drawings. So we get some drawings, and then those drawings are now going with the engineer, they'll sign off on it. And then we'll send all that all those documents all that evidence to the council to show that we've completed to the according to the conditions, and that's called flaying ceiling. And, and then we'll go for titles, which I expect July. And then the owners will take over

Tyrone Shum    

So how much did the whole project cost?

Alan Castorina  

[00:14:03] So purchased for 430,000? Give me you know, can I bring this up. 

Tyrone Shum   

[00:14:16] sure. Sure. This is exciting. This is what I like to hear. Because it's 90,000 to do the civils. I'm curious now you know how much each block would have been sell for roughly and rough estimates? 

Alan Castorina 

[00:14:29] I've got it here now good executive for you. So 430 to buy the construction cost 228. So the 90 was part of that all the rest is consultants and in the blocks sell for 315, 323, 40. So total of 975. Right and profit after holding costs of about 50k and GST would be around 40, so 170?

Tyrone Shum    

[00:15:05] That's fantastic. over what period? 

Alan Castorina    

[00:15:07] 10 months. 

Tyrone Shum   

[00:15:09] That's a very good profit.

Alan Castorina  

[00:15:11] Yeah, yeah, it's good. It's a good one and was easy to like I've done a similar one like this last year, same thing, sloping. All the similar same engineering things. And so I was used to it, it was easy to do. Yeah. So

Tyrone Shum   

[00:15:26] the biggest challenge I think a lot of people come and talk about when they're looking for blocks to subdivide as a developer is that they find these blocks because if you understand the concept of doing it, it's actually a process and just follows a step by step. But the challenge is finding it. Is that what you found as well to be the biggest,

Alan Castorina  

[00:15:43] yeah that’s biggest yeah finding them. And the ones that stack up? And I mean, that there's, there's so many on the market, that none of them stack up now, especially on realestate.com now. And trying to find that needle in the haystack is difficult. So it's a lot of work. A lot of work to do that.

Tyrone Shum   

In some markets, finding a property like that could take months. He explains how you could feasibly do it depending on your schedule. 

Alan Castorina 

[00:16:16] Well, I think it's dependent on market too, by the way, I mean, yeah, some markets are quicker than others, I think, good 12 months, at least, at least, and look at hundreds and hundreds of sites. So so and so 12 months is someone full time. So if you're part-time, I mean, if you're going to look at, say 500 sites before you get one, if you can only look at 10 a week. Yeah, it's it's a lot. So, you know, depends on how much time you have. But I'd say at least 12 months. Unless you're really lucky.

Tyrone Shum    

Luckily for Castorina, he’s built a team that helps with developments so he doesn't spend months at a time searching for deals. 

Alan Castorina   

[00:17:11] got a guy working. He's really good. So he's looking, I do I talk to agents. And I do deal directly with agents. And he, he sort of goes directly with landowners. So we've got sort of a blend happening. And I've got a team of three girls working for me that do the research. So look at sites and do the groundwork, just looking at the contours and flooding and all that sort of stuff. So I'm not looking at the wrong sites in the first place. Because I sent letters out to I don't want to send letters to a site that's fully flooded. 

Tyrone Shum   

[00:17:56] course, so it's very, very targeted. So you've actually already pre-planned where you're going to be even sending out the letters because otherwise you just basically blanketing out letters to people who might not be interested in it just becomes a waste. So you're really, really targeted exactly where you're really wanting these books for.

Alan Castorina   

[00:18:11] Yeah, that's great. Or you send letters to an owner that never gets letters and you'll get the phone call straight away. Yeah, I'm interested in selling, but it's it's like three meters underwater, and not something that you can develop. So you're just wasting everybody's time

Coming up after the break, we explore the mindset behind Castorina’s success 

Alan Castorina 

[00:27:40]  Always look for Win, win, you know, help the next person out. Let the money flow through you to other people.

We also hear the best advice he’s received 

Alan Castorina  

[00:23:01] if there's a problem, it's always here. I'm creating the problem. we only perceive the world through our own belief system,

As well as his book recommendations 

Alan Castorina 

[00:21:33] there's heaps I'm reading all the time. And you have to in every time I read the book, I read it from a different angle.

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

 

Tyrone Shum   

For someone who loved going on holidays and being his own boss, getting into development seemed like a no-brainer for Castorina. 

Alan Castorina   

[00:18:51]  it's, it's, it's freedom. It's, it's, it's a, it's a feeling of freedom. So I can, you know, when you're working the hours in the holidays are fixed. You know, you can only go away when, when the boss tells you, you can go away. Now, basically, we do what we choose. If we want to go away next week, we can. So that's one, I'm home all the time. Sometimes Shell says I'm home too much, but

Tyrone Shum    

[00:19:28] it can be a good thing. Especially COVID.

Alan Castorina    

[00:19:32] you know, it's the little things, you know that we've got money now. Because it's it's to me, the amount of money I earn depends on how much work I put in. So if I put my work and so that money, I can use it. If we want to go on a holiday. We can and if I want to donate it, I can. so there's freedom of what we do with our money and in this things like and then I'm meeting We've all with a lot of wonderful people that are, you know, getting all these new ideas, you know, with new charities, different businesses, all that sort of stuff. So it's Yeah, it's great, because you're in a great environment. So, yeah, and I'm always evolving. You know, I'm not the same person I was last year. So it's just, you grow as you go.

Personal habits and books segment 

Tyrone Shum  

Castorina believes he’s constantly growing and changing, so how did he develop that mindset to begin with? He credits some of his evolution to his favourite books. 

Alan Castorina  

[00:20:52] I like all the Rob Moore books… any book by Rob Moore is really good. The Stephen Covey's book, the seven habits of highly successful people. Any of Kiyosaki’s books are great. Yeah, I'm reading some autobiographies. Now. I'm reading Branson’s stuff at the moment. That is pretty good. Yeah, there's heaps I'm reading all the time. And you have to in every time I read the book, I read it from a different angle. So yeah, all that stuff. Actually, one I just read recently, which is really great. I've only got it on Kindle, but I got Naval Ravikant. He’s an angel investor over in the states and he's really good. You read his material? Really good stuff. Yeah. What's

Tyrone Shum   

[00:22:02] that book about though? What's it called?

Alan Castorina  

[00:22:04] It's the Almanack Naval Ravikant. 

Tyrone Shum    

[00:22:11]  it sounds like a very interesting book to read. I always love hearing some new titles, especially people's autobiographies, you know, I've been reading a lot like, yeah, Phil, Phil Knights on with Nike, you know, Richard Branson's ones. I just love all these autobiographies because it really goes to show this bit of backstory behind how they achieve their success and build those large companies.

Alan Castorina   

[00:22:34] Yes, yeah. That's good. And it gives you inspiration.

Tyrone Shum    

A man as interesting as Castorina must find inspiration from an even more interesting person. Refreshingly, Castorina believes that the best inspiration comes from within oneself.

Alan Castorina   

[00:22:47] I think I think it comes from everybody, Young keeps saying to me, or reminding me all the time, but it's always looking within. You know, always, if there's a problem, it's always here. I'm creating the problem. So, you know, we only perceive the world through our own belief system, you know, our own fears, and whatever. So, and you might, we might have the same situation, and you all might see totally different ways I might react. We feel scared. And you might say, this is great. And it's just because we perceive it, because of our belief system. So something's bothering you. It's because of us. Yeah. And I get told every day, Young keeps saying to me, you know, you're your own worst enemy. So yeah, I think that's, that's, I think if you can be self-aware and look at, look at yourself from outside look how you react and look at your thoughts all the time. You'll realize that, yeah, that off, you're often wrong. Yeah, it's, it's not. It's not the other person's fault. It's not the other, what's not what happened? That's the problem.

Tyrone Shum   

[00:24:06] It's interesting, just to hear that perspective because if you, I guess, take a step back and think about it. It's not always right or wrong. It's about perception of whatever it is. And that perception is, you know, it could be different for everyone and depending on who you are, and who you perceive and so forth, could be thinking it could be right or wrong, you know, it's, it's a good another example I'm thinking of is maybe like when you're got something that you don't want, it's rubbish and you want to check it out, but you put it onto like, you know, Gumtree or eBay and people find it. It's a treasure. It's like that kind of thing. Because, you know, I don't need it anymore, that person might love it. It's exactly what it is in property. You know, somebody really desperately doesn't want this house anymore, because it's trouble for them. But we pick it up because it's extremely profitable for us as developers. 

Alan Castorina   

[00:24:53] exactly. Everyone's different.

Tyrone Shum   

If Castorina could travel back in time and speak to that little boy who grew up in a small town, surrounded by cane fields and daydreaming about planes, what would he say to him? 

Alan Castorina   

[00:25:07] Stop worrying about the future. Stop worrying about the future and relax. You know. I always 100 100 miles an hour. That's how I was even from school. I was always got it. It's got to be this just relax. It's, it's gonna be okay. Yeah, it's gonna be okay. Because it does. It will always work. It always works out. You keep working at something it'll work out. So yeah, definitely.

Tyrone Shum    

Looking forward to the future, what is he the most excited about in the next five years?

Alan Castorina   

[00:25:43] Travel. When we can do it, when we can. I like to build a business up a little bit more to a point where I want it to be and have a little bit, a few more stuff in it. So I'm sort of less required, so to speak. So rather less with me. Yeah, and then travel. So I want to I want to spend, my eldest son is sort of starting to leave the nest. He's sort of he's 18. And spending less and less time. So I want to, yeah, let's take you to places and let's do as many, you know, give them as much experience as we can spend as much time together. That sort of stuff. And, yeah, there's heaps of things, but they're the main ones. 

Tyrone Shum   

[26:30] Last question for you, Alan, as well as how much of your success that you've achieved along your journey is due to intelligence, how work and skill? And how much of it would you say is luck.

Alan Castorina  

[00:26:46] I think you create the luck. And luck, I think this luck is in actually in that book, he says the same thing. Like, you know, if, if you just, if you just turn up one day and that owner wants to sell the house for you cheap. That's luck. But if, if I put 1000 offers in, and I went and look at 1000 houses, and that, on the last day of the year, I had got a owner that wants to sell the house to me, so you're just lucky. But no, I did all that work leading up to it. So it's, it's action, you know, I don't think you have to be super intelligent. To do this. You know, you have to be have a Wits, but have, just do stuff, just do stuff all the time. Be nice to people, be honest. Always look for Win, win, you know, help the next person out. Let the money flow through you to other people. So all that stuff is more important than then I think intelligence and just doing stuff all the time. And luck will happen. You do it long enough. And you'll get lucky every now and then. 

Tyrone Shum   

[00:28:03] yeah, I think it's just about the preparation is what you're saying, you know, wanting to prepared the opportunity to arise in front of you. And because you're prepared luck strikes,

Alan Castorina   

[00:28:12] and getting the right people around you. Yeah, like Young. Getting people there. And, and you rub shoulders together, get some information you share. And you use other people to help you. And then you help other people. And that's where it happens. 

Tyrone Shum   

Thank you to Alan Castorina, our guest on this episode of Property Investory.