🏘 How This PM Made Millions from Developing - Jo Natoli 🔥! 🏡🔥🤠🤝

Name: 🏘 How This PM Made Millions from Developing - Jo Natoli 🔥! 🏡🔥🤠🤝
Uploaded: 2026-02-11T22:42:12.000Z
Duration: 3 h 36 min 38 s

Is Sydney Still King?

Introduction to the Session

The session begins with a light-hearted welcome, emphasizing the fun and engaging nature of the discussion.

The focus is on property development, highlighting its challenges and inviting Joe to share his experiences.

Guest Introductions

Joe expresses excitement about being part of the podcast, which was initiated through a conversation with Seb.

Steve shares personal news about preparing for fatherhood, adding a relatable touch to the conversation.

Importance of Professional Guidance

A reminder is given that information shared is general in nature; listeners are encouraged to consult financial advisors for personalized advice.

Joe's background as one of the first property investment-focused managers in New South Wales since 1997 is introduced.

Joe's Journey in Property Management

Joe discusses founding "The Rental Specialists" and highlights his extensive experience in property management.

He serves on the board and as deputy president of the Real Estate Institute of New South Wales, showcasing his leadership role in the industry.

Motivation Behind Starting His Business

Steve asks about Joe's motivation for starting "The Rental Specialists," hinting at potential dissatisfaction with existing services.

Joe recounts entering real estate by accident at age 17 and realizing he could improve property management practices.

Initial Challenges and Successes

Despite initial fears expressed by his father regarding entrepreneurship, Joe decided to pursue his own business path.

He notes that clients naturally came to him without significant marketing efforts due to demand for specialized services.

Evolution of Property Management Practices

Discussion shifts towards how client acquisition has changed over time from walk-ins to online searches and ratings.

Steve questions how modern technology impacts client interactions compared to earlier methods where clients would visit offices directly.

Understanding Property Management Trends

The Role of Referrals and Online Presence in Property Management

Most business comes from direct referrals, highlighting the importance of word-of-mouth in property management.

An online presence is crucial; educating the audience builds trust, leading to more inquiries and referrals.

Landlords are becoming savvier, realizing they don't need to hire local agents for quality service.

Insights on Rental Market Dynamics

Despite discussions about a rental shortage, data shows an increase of approximately 10,000 properties in the rental market over the past year in New South Wales.

Rents have increased by about 5.6% in Sydney over the last six months; however, there is less urgency among tenants compared to previous years.

Current Trends Observed on the Ground

The aggressive competition seen previously has diminished; properties are renting quickly if priced correctly, often within two weeks.

Good-quality rental properties are attracting reliable tenants without excessive demand or long waiting lines for viewings.

Specific Case Studies and Examples

A notable example includes a two-bedroom apartment in Rosebury that saw a significant rent increase of $10,000 per year due to its desirable features and location.

Rental Market Insights and Challenges for Landlords in New South Wales

Recent Rental Increases

A notable increase of $10,000 was observed between the last tenant and a new tenant in a property, indicating rising rental prices.

Another property in Kingswood saw an increase of approximately $4,000 over a few months, from $510 to $580 per week for a standard three-bedroom cottage.

Demand Trends in Property Types

The demand for different types of properties varies significantly; it is often case-by-case based on location and property condition.

Tenants are becoming more discerning, holding landlords to higher standards which benefits the overall rental market quality.

Popularity of Granny Flats

Granny flats in western suburbs are highly sought after and tend to rent quickly due to their affordability and compact nature.

Current rental prices for granny flats range from about $450 to $570, reflecting significant increases compared to previous years.

Legislative Changes Impacting Landlords

Major legislative changes were introduced in May that raised concerns among landlords but were largely deemed manageable.

While some rights have been adjusted regarding tenant protections, the overall impact has been minimal with business continuing as usual.

Future Legislative Developments

Upcoming changes include privacy regulations and adjustments to standard application forms aimed at improving tenant mobility through a portable bond scheme expected by year-end.

Historical context shows that portable bond schemes have existed before; thus, current fears may be overstated.

Tenant Management Challenges

Investors must exercise caution when selecting tenants as evicting problematic tenants has become increasingly difficult under new laws.

Effective property management solutions are essential for safeguarding landlord interests amidst these challenges.

Changes in Tenant Termination Laws and Personal Journey into Property Development

Overview of New Tenant Termination Regulations

The ability to terminate a tenancy simply because the fixed-term contract is ending has been removed. Now, landlords must provide specific reasons for termination along with supporting documentation.

Previously, landlords could issue a no grounds notice with a 90-day period for tenants to vacate; this option has also been eliminated. Specific reasons are now required for termination.

Personal Journey into Property Development

The speaker's interest in property began at age 13 when they attended council meetings with their father, who was developing townhouses. This early exposure sparked curiosity about property investment and development.

At 18, the speaker partnered with their father to purchase their first property in Dapto, which remains owned by the father today. They reflect on how much property values have increased since then.

The speaker humorously recalls being somewhat of a "nerd" at age 13, collecting house plans and dreaming of designing homes one day, indicating an early passion for real estate design and development.

Establishing a Business in Real Estate

By age 22, the speaker established a rental specialist business while working from home before realizing the need for a physical storefront due to client perceptions of working from home as unconventional.

They found an affordable shopfront in Brighton Le Sands that suited their needs perfectly; renovations were done by their husband at no cost, showcasing support from family during this venture.

The speaker experienced analysis paralysis regarding choosing the right retail space but ultimately took the leap after receiving encouragement from others, highlighting common fears faced by young entrepreneurs entering business ventures.

Development Journey: From Rental Specialist to Developer

Early Interest in Development

The speaker reflects on their early memories and interest in development, indicating a long-standing desire to enter the field.

They met their husband, an experienced developer, at a completed development site in 2000, which sparked deeper curiosity about the industry.

After feeling limited as a rental specialist without support or knowledge of business growth, they seized an opportunity to invest in development alongside their husband.

First Development Project

The couple found a unique site in Hurstville that was only 2.5 meters wide but located on a prime corner block; it was initially designed as a joke by the architect.

Despite its unconventional size, the project received approval for six units with clever design elements that maximized space.

They started their venture with approximately one million dollars from selling most of their rent roll and purchased the site at around $70-$80k per unit.

Pricing and Selling Units

The speaker explains how pricing for development sites is calculated based on the number of units; they bought the site for about $580k total.

After developing the property, they faced challenges when a buyer backed out three weeks before settlement, leading them to find new purchasers for five units while retaining one.

Misconceptions About Funding Development

A discussion arises regarding common perceptions that significant funds are necessary for development; the speaker emphasizes starting small is key.

They recount how their husband began with smaller projects like building houses before progressing to larger developments such as duplexes and apartments.

Economies of Scale in Apartment Development

The speaker highlights that apartment developments can yield better returns due to economies of scale—lower costs per unit lead to higher profitability.

Construction becomes more efficient with larger projects since designs often follow cookie-cutter patterns across multiple levels.

Personal Experience and Challenges

Reflecting on her first experience selling units, she admits feeling nervous during critical moments like signing contracts due to high stakes involved.

Navigating Property Development: Insights from Experience

The Role of Partnership in Development

The speaker discusses the importance of having a supportive partner during their property development journey, highlighting how their husband’s prior experience provided essential guidance.

They describe a division of labor where the husband managed on-site construction while the speaker handled office tasks and contract management, leading to an effective collaboration.

Challenges and Learning Experiences

The speaker reflects on the challenges faced by new developers, emphasizing that successful development often requires teamwork rather than individual effort.

They acknowledge personal weaknesses in managing all aspects of a project, suggesting that recognizing one's strengths is crucial for success.

Advice for Aspiring Developers

When asked about potential changes they would make if starting over, the speaker emphasizes that their success was largely due to their partner's experience. They advise beginners to start with simpler projects like basic houses or granny flats before tackling more complex developments.

The importance of purchasing DA (Development Approval) approved sites is stressed as it saves time and resources compared to navigating approvals independently.

Financial Considerations in Development

A discussion arises regarding profit margins between buying DA approved sites versus developing from scratch; however, specific percentages are not provided as they vary widely based on circumstances.

The speaker notes that many developers previously made quick profits by consolidating sites and selling DA approvals but warns that current market conditions may not yield similar margins.

Future Projects and Lessons Learned

After discussing past successes, the conversation shifts to future projects. The speaker recounts feeling anxious when sales fell through on one site while already committed to another project.

They share details about their next site purchase in Wuna, which included both residential and commercial units. This project was executed alongside finishing work at Hurstville, demonstrating multitasking in property development.

Real Estate Development Strategy

Building a Residential Portfolio

The speaker discusses their strategy of retaining properties after development, leasing some units (e.g., to a baker) while keeping others for long-term investment.

Their philosophy centers on building a strong residential portfolio that would ideally allow them to retire, although they acknowledge they may never actually do so.

They emphasize the importance of using profits from completed developments to cover debts and reinvest in future projects.

Investment Focus and Market Selection

The speaker expresses a passion for commercial investing, highlighting their retention of commercial properties like bakeries as part of their strategy.

They explain the rationale behind choosing Wollongong for their next project, citing its growth potential compared to Sydney's peak market conditions at the time.

Wollongong was seen as an undervalued area with significant opportunities due to its affordability and improved commuting options.

Development Path vs. Traditional Investing

A question arises about why they chose development over traditional buy-and-hold strategies; the response indicates it aligns better with their skills and offers cost-effective portfolio growth.

The speaker notes that wholesale investing is not necessarily easy but is familiar territory that complements their expertise.

Builder Selection Criteria

When selecting builders, considerations include trustworthiness and ensuring proper pricing with legitimate margins to avoid issues down the line.

They mention operating as developer-builders, which allows them more control over projects while maintaining legitimacy in contracts for funding purposes.

Regulatory Changes Impacting Construction Practices

The discussion touches on regulatory changes affecting construction practices, emphasizing the need for proper documentation and design under new legislation (the Design and Building Professionals Act).

This act aims to prevent subpar construction practices by requiring thorough project designs and documentation before proceeding with construction.

Design and Building Practices in Property Development

Overview of Design Regulations

The designs must be declared as buildable and peer-reviewed, ensuring compliance with the DBPA (Design and Building Practitioners Act).

Emphasis on avoiding substandard practices in property development; all projects must adhere to established standards.

Leveraging Strengths in Property Investment

Importance of playing to one's strengths, especially for newcomers in property investment; leveraging existing connections can provide a competitive edge.

Suggestion that beginners may want to avoid complex developments initially but can accelerate their journey by gradually moving into commercial properties or simultaneous investments.

Project Planning and Vision

Discussion about securing a desirable site for development, highlighting the importance of having a clear vision and assembling a competent team.

The project involved obtaining four individual options from vendors, showcasing effective negotiation skills and strategic planning.

Challenges During Development Approval

Despite challenges, the speaker found the DA process rewarding due to creative freedom in project design.

Encountered significant objections from the community during the DA process, indicating strong local opposition based on perceptions of external developers impacting local culture.

Community Engagement and Objections

The proposed site was met with resistance from locals who felt threatened by outside influence; this reflects broader issues of community identity versus development needs.

Highlighting the dilemma faced by developers: whether to consult communities beforehand or risk backlash later. Effective community engagement is crucial yet complicated.

Delays in Approval Process

Initial expectations were set for a 12-month approval timeline based on other projects' experiences; however, this project took two years, leading to significant complications despite no holding costs incurred.

Development Challenges and Strategies

Overview of Property Acquisition

The speaker discusses purchasing properties on an option subject to Development Approval (DA), with one property bought outright. The main challenge faced was not holding costs but the time and fatigue involved in the approval process.

Project Details and Approval Process

After two years, the project received approval for 38 units despite a height overlay issue that was being revised. The new design guidelines allowed for eight stories instead of six.

The approved project includes 32 high-end residential apartments, two levels of basement parking, a pool and leisure area on the third floor, ground floor retail space, and first-floor offices.

A rear lane access enhances the building's design by keeping the frontage clear for retail while providing a thoroughfare from the main street.

Community Resistance and Negotiation Tactics

The timeline of events spans from 2004 to 2006, hinting at upcoming challenges related to community resistance against development projects.

Questions arise about renegotiating options after delays; however, strong communication kept vendors supportive throughout the process.

Philosophy on Negotiation

Emphasis is placed on negotiating terms rather than price during acquisition discussions. This approach ensured financial viability while maintaining vendor relationships.

Concerns were raised about potential objections from locals regarding displacement of small businesses due to development changes.

Local Sentiment Towards Development

There is a noted "NIMBY" (Not In My Backyard) mentality among residents who feared losing local businesses and altering the area's character due to new developments.

Anecdotes illustrate similar community pushback against new constructions in other areas, highlighting common resistance patterns towards progress.

This structured summary captures key insights from the transcript while linking back to specific timestamps for further exploration.

Investment Strategies and Project Challenges

Upcoming Projects and Interviews

Discussion about the release of a fourth project focused on investment strategies, particularly involving children.

Plans to interview various buyers' agents to gather diverse property investment strategies, including development and data-driven approaches.

Project Delays and Challenges

Reflection on challenges faced during a property project, emphasizing the importance of timing in approvals.

The speaker expresses that timely approval could have significantly changed their current situation, hinting at lost opportunities for personal fulfillment.

Construction Insights

Construction phase was described as unremarkable; however, significant delays were experienced due to water table issues affecting the basement work.

Despite initial setbacks, there was strong interest from investors and owner-occupiers leading to successful pre-sales of properties off the plan.

Structuring Mistakes in Development

Discussion on structural mistakes made during the project, particularly regarding trust structures and company types used for development.

Emphasis on the necessity of using special purpose vehicles (SPVs) for each project to isolate financial risks effectively.

Importance of Quality Advice

Acknowledgment that many business owners may not separate their investments adequately; stressing the need for high-quality accounting advice.

The speaker shares personal experiences highlighting that investing in quality professional advice is crucial for successful property development.

Property Development Challenges and Lessons Learned

Overview of Property Management and Income

The speaker discusses retaining ground floor retail space leased to national businesses, emphasizing a strategy of not selling these assets.

The annual rental income from retained properties, including residential apartments and bank office space, amounts to approximately $750,000.

Highlights the importance of effective property management practices, including writing strata management statements to protect interests.

Impact of the Global Financial Crisis (GFC)

A grand opening event for a new building is overshadowed by the onset of the GFC, which severely impacts financial projections.

All pre-sold contracts fell through due to funding issues caused by the economic downturn, leaving them with a $30 million building.

The valuation of their property dropped significantly—by about 40%—due to both its newness and adverse economic conditions.

Debt Management Issues

Following the valuation drop, debt levels increased from 50% to around 80%, creating significant financial strain on the project.

Lessons in Project Management

The speaker reflects on delays in project approval processes that extended beyond initial expectations due to reliance on a town planner who prioritized relationships over project advancement.

Emphasizes the necessity of having consultants who prioritize client interests; failure in this regard led to project setbacks.

Navigating Consultant Relationships

Discusses challenges in identifying whether consultants are genuinely aligned with client goals; suggests asking probing questions before engagement.

Acknowledges fear of changing consultants due to concerns about expertise but recognizes this as a critical mistake that hindered progress.

Regulatory Compliance and Approval Processes

Reflecting on missed opportunities during regulatory processes; emphasizes being proactive rather than fearful when dealing with planning authorities.

Suggestion for future projects includes asking town planners about past issues they faced with approvals as part of vetting their capabilities.

This structured summary captures key insights from the transcript while providing timestamps for easy reference.

Town Planning Challenges and Project Insights

Overview of Project Difficulties

The speaker reflects on the challenges faced during a project, highlighting traffic issues that were effectively managed by an exceptional traffic consultant who advocated for the project at the council.

Despite having excellent consultants, the team was overly focused on design, which led to neglecting town planning aspects crucial for project success.

Commitment to Design Quality

The objective was to create a timeless building that would remain beautiful over decades, emphasizing quality materials like imported timber and hand-blown light fittings.

The team's dedication to design overshadowed other critical areas such as town planning, leading to unforeseen complications later in the process.

Planner's Resistance and Team Dynamics

A question arises about the planner's resistance; it is revealed that he operated stealthily, prioritizing personal relationships over transparent communication regarding project development.

The speaker acknowledges their own responsibility in engaging with this planner without asserting enough control or direction over the project's trajectory.

Gender Dynamics in Construction Industry

Reflecting on past experiences, the speaker notes significant gender biases faced as a woman in construction 20 years ago, including being dismissed by male counterparts despite her qualifications.

Financial Struggles Post-Crisis

Following a total loss from a failed project due to financial mismanagement post-global financial crisis, there was a shift from traditional banks to an investment bank for funding.

Initially supportive through partnership claims, the investment bank's priorities diverged from those of the speaker after two years of support following the crisis.

Issues with GST Facilities

As sales slowed down and did not meet bank expectations, complications arose concerning GST facilities related to construction financing.

The bank began withholding GST refunds from property sales amidst changes in regulations regarding margin schemes affecting cash flow.

Challenges in Property Development and Financial Management

GST Remittance Issues

The bank halted the release of GST funds, intending to use them for a construction facility repayment, leading to complications with the ATO.

This situation resulted in sales occurring without remitting GST, prompting inquiries from the ATO.

Receiver Appointment and Losses

On February 10, 2010, after years of partnership with the bank, they appointed a receiver who took all assets, leaving only $60,000 and personal belongings.

The bank's primary agenda was recovering their funds quickly by selling off properties at any price.

Relationship with the Bank

Despite a long-standing relationship where they were considered partners, the bank shifted its stance during financial difficulties. They had previously assured that bankruptcy would not be pursued.

The speaker expressed frustration over the bank's change in behavior when faced with challenges like the GFC (Global Financial Crisis). They felt misled about their partnership status.

Hypothetical Scenarios and Lessons Learned

If a special purpose vehicle (SPV) had been established for development projects, it could have protected assets from losses incurred by other ventures. The speaker believes this would have prevented bankruptcy.

Retaining equity in six units could have been possible if structured differently; lessons learned emphasize better financial management strategies moving forward.

Future Considerations in Property Development

The speaker reflects on past mistakes regarding financing individual properties through different lenders to avoid shortfalls while ensuring rental income covered costs adequately.

There is an acknowledgment that proper advice could have led to retaining valuable properties instead of losing everything due to poor structuring decisions during financial crises.

What Makes Some Investors Successful in Property?

The Secret to Success in Property Investment

Many feel they are missing a secret that successful investors possess, which leads to different outcomes in property investment.

Knowledge is the key differentiator; some investors build substantial passive income while others remain stagnant.

Joe Tucker and Jeff Miles created the Level Up Property Course to share their proven strategies for acquiring over $100 million worth of property.

The course aims to prevent uneducated decisions on significant purchases, emphasizing that such choices can jeopardize one's future.

This isn't a free course; it reflects years of experience and effort, designed for those seeking actionable guidance rather than generic advice.

Building Confidence and Accountability

By completing the course, participants will gain confidence and tools necessary for building a successful property portfolio if they take action.

Mentoring is included in the program to ensure accountability and help participants achieve their goals effectively.

A sense of urgency is emphasized: starting sooner leads to quicker success in property investment.

Real Stories from Experienced Investors

Lessons Learned from Challenges

Steve shares his gut-wrenching experiences in property development, highlighting that real stories resonate more than superficial success tales.

Despite setbacks, valuable lessons learned cannot be taken away; knowledge and drive remain intact regardless of financial losses.

Property development involves inherent risks that cannot always be mitigated, such as planning issues or unforeseen financial situations.

Importance of Professional Advice

Joe emphasizes the necessity for investors to learn from mistakes rather than feeling invincible after initial successes; this often leads to larger failures later on.

When considering professional advice during procurement processes, Joe suggests consulting a specialist structuring lawyer before an accountant for better structuring insights.

While accountants provide good tax advice, they may not be best suited for structuring investments effectively; specialized legal advice is recommended instead.

How to Approach Business Like a Bigger Player

The Importance of Mindset in Business

Adopting a mindset that reflects the scale of a larger company can be beneficial for growth. Treating your business as if it were already big helps avoid small-mindedness.

Small-mindedness is described as limiting and debilitating, hindering potential growth and optimization.

Optimizing Project Conversations

Engaging in discussions about project structures before execution can lead to better outcomes. It's essential to clarify what needs to be done upfront rather than after the fact.

Seeking advice early on from professionals can help identify necessary considerations and connections without waiting until after initial assessments.

Leveraging Professional Networks

Utilizing networks effectively is crucial; reaching out to experienced individuals for recommendations on consultants or lawyers can provide valuable support.

Personal connections are highlighted as resources for assistance, emphasizing the importance of community in business development.

Future Development Plans

The speaker plans to re-enter property development within 1.5 to 2 years, focusing on building cash reserves and assembling a reliable team.

Initial projects will likely involve smaller developments like duplexes, allowing for manageable risk while rebuilding financial stability.

Risk Management in Development Projects

Managing projects with no more than 12 units is preferred due to lower risk levels compared to larger developments. This approach allows for easier planning and management.

Acknowledging that every development carries inherent risks, the speaker expresses a desire not to create another large-scale business that requires constant attention and resources.

Financial Considerations in Development

The speaker emphasizes that numbers must work for any project undertaken; financial feasibility remains paramount in decision-making processes.

Retaining intellectual property related to feasibility programs indicates an ongoing commitment to informed decision-making based on solid financial analysis.

Understanding the Development Process

The Importance of Feasibility Studies

The speaker emphasizes the significance of feasibility studies in development, stating that as long as the numbers work, they are satisfied with their approach.

They mention having a knowledgeable banker from National Australia Bank who provided insights into project assessments and shared his feasibility spreadsheet for funding evaluations.

The speaker customized the feasibility spreadsheet to suit their needs, highlighting the importance of adapting tools for personal use.

Building Relationships with Agents

The process of searching for development sites involves knowing one's budget and leveraging relationships with key real estate agents rather than just browsing listings.

Strong relationships with two or three agents were crucial; these agents were consistently involved in selling projects back to them after development.

Developing loyalty with agents is beneficial as both parties aim for high prices, creating a win-win situation.

Specialization in Development

The speaker notes that not all agents specialize in development sites; it requires specific expertise due to its complexity and nuances.

They recount working exclusively with three specialized agents who understood the intricacies of development projects.

Networking and Collaboration

The speaker describes how they identified potential sites through collaboration with their agent, emphasizing the importance of local relationships in business dealings.

Their agent facilitated connections between vendors, showcasing how networking can streamline site acquisition processes.

Valuation Expertise

Establishing a relationship with a valuer specializing in construction deals is critical; this ensures accurate valuations during funding processes.

Having reliable valuation support allows developers to anticipate funding outcomes confidently, underscoring its importance in larger projects.

Understanding Developer Relationships

Building Trust with Professionals

Establishing a strong relationship with developers is crucial for success, but it can be challenging initially.

Many developers may lack essential knowledge, such as understanding financial feasibility (feaso), which can impact their credibility in discussions.

The Reality of Development Aspirations

There’s a common misconception that many want to be developers; however, the reality is that few are willing to engage in the hard work required.

Even when purchasing a development-ready site, significant effort remains necessary, especially if external builders are involved.

Risks in Hiring Builders

One of the highest risks in development projects is selecting the wrong builder. It's vital to choose wisely and consider partnerships with experienced builders.

A watertight contract is essential when working with builders to avoid unexpected costs and ensure clarity on project scope.

Creative Approaches to Development

Engaging in joint ventures (JVs) with builders or landowners can provide opportunities for those with limited capital.

Developers should think creatively about financing options, such as land swaps or profit-sharing arrangements, while ensuring fairness in deals.

Final Thoughts on Development Strategies

It’s important for developers to remain flexible and innovative when tackling larger projects or challenges within their budget constraints.

Joe emphasizes the importance of sharing knowledge and experiences openly within the community to foster growth and learning among aspiring developers.

Insights on Personal Growth and Investment

Overcoming Challenges and Learning Lessons

The speaker reflects on their journey, noting that despite past pain, they have gained valuable lessons that can help others avoid similar mistakes.

They express gratitude for the experiences that have contributed to their growth as an investor, business owner, and property manager.

The speaker emphasizes a positive outlook, stating that the challenges faced have ultimately made them better in various aspects of life.

Maintaining Composure Amidst Life Changes

Acknowledgment of the speaker's relaxed demeanor just before welcoming their second child is noted, highlighting their calm nature.

The conversation touches on the speaker's consistent ability to remain chill and stress-free, which is appreciated by those around them.