Mark Rolton Transcript

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Mark Rolton:
I realised pretty quickly that this business actually wasn’t about the deal. It had in fact had very little to do with the deal per say. What was really critical to making this business work and fire to its full potential was the ultimate buyer.

Tyrone Shum:
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’re chatting to entrepreneur, property developer and self-made millionaire Mark Rolton. Originally a construction apprentice from South Brisbane, he has overcome enormous challenges in his career. Learn how he succeeded despite having all odds stacked against him and how he got himself out of hundreds of thousands of dollars of debt.

Starting off as an apprentice builder, Rolton was drawn to the economic benefits of property investment from the beginning.

Mark Rolton:
I’ve come from a background in building construction left school at 16 became an apprentice builder and really found it difficult as a trade person. It was easy you know it was one to do the work but it was a different question when you wanted to get paid. I stumbled into property only for the simple reason when I sat down and looked at my finances I asked myself one simple question was Where are people making the biggest money. Where are the biggest gains financially to be had and steered me towards real estate. There was no science to it.

Tyrone Shum:
A day in the life of Rolton looks very different now than it did when he first left school…

Mark Rolton:
Today I’m on the road. I’ve signed off on some land estates today are one being pre-dominantly 78 lots a given day. I’m a CEO of a fairly significant organisation. We do educate some people selected people through our programs. The larger picture of what we do is our core business is development. We’re in the space of land estates low end townhouses affordable housing is our conversation my back end my portfolio my personal assets extend across to manufactured home parks I run. So today I have the largest privately owned manufactured home park portfolio in the country. So it appears there is no funding it’s just mine and it’s not just the largest but it’s also the fastest growing in the country today.

Tyrone Shum:
Rolton grew up in the poorer suburbs of South Brisbane, and had some interesting experiences going to school in the area.

Mark Rolton:
I grew up in the pretty dark places of South Brisbane. Some of us would know those areas as Woodridge and Kingston. Yeah it was not a great place to sort of to be raised. A lot of issues or social issues that’s for sure. And they were sort of the days where governments didn’t have the kind of person they do today. So a lot of my time. Oddly enough a lot of my classes were conducted on the school over them. They didn’t have the classrooms that they needed. So a lot of that was just basically taken you know in 30 degree heat. That’s how it worked.

Tyrone Shum:
Wow that must be a very interesting way and I don’t think we could stand out there for too long in the sun nowadays.

Mark Rolton:
It’s like can you imagine you know what our what our our politicians would cop these days if that was the case. You know how unfair and how could the funding be so wrong. But back then you had three and a half thousand kids at a high school. The kid probably had about a thousand but it was such a low socio demographic Tyronne that it just you either went to school there or we didn’t have a choice of going to school. And lucky for me my parents weren’t they weren’t so focused academically. You know my father was a coal miner. He dropped out of school in his early teens. My mum worked in a secondhand furniture centre does to keep food on the table. So that was kind of a cut. That’s how it works.

Tyrone Shum:
He reflects on how his experiences growing up encouraged him to pursue wealth through investment as he got older.

Mark Rolton:
The decision for me was pretty simple. You know where my parents faced a lot of headwinds in their marital challenges and divorce. I had determined very early that the reason that they separated was money. All the issues tied back to a lack of cash and growing up in that and I’m talking our family. Let’s be clear I won’t pull any punches. There was a lot of domestic violence in my home a lot of physical abuse and it was very physical in fact and mate as a young kid you see all that you interpret that and you make some very harsh calls and that for me was probably one of the greatest reasons that you know I came out of school hungry. You know I was clear that I am not going to put my family my kids my life is not going to look anything like that. So that was the decision my right there.

Tyrone Shum:
Wow it’s so great that at a young age you made that decision because unfortunately a lot of the people go through that and actually unfortunately don’t. Now on the other side of things so what I encourage you to make those decisions to change because you know to come out of that isn’t easy. You know I can imagine how hard we’ve been growing up through those times.

Mark Rolton:
Yeah it’s a great call. That’s a question that doesn’t get raised too often. You are right. What was the deciding factor. I think the my dad was probably inspirational enough to realise that his life was at where he wanted to be and he fed me enough fodder perhaps to say this could be different. You know there are other ways. And although his life was upside down I guess you know in his. In this case parenting that was available there was enough there Tyronne to sort of say well maybe you should do it differently and that’s pretty cool. You know like he didn’t have the skills or the ability maybe the capacity but he was smart enough and wise enough to hand the baton over and say this is what could be for you. I reckon that was enough. That was the seed and it was up to me to make it permanent.

Tyrone Shum:
Having found the school environment quite hard, Rolton left at 16 to start an apprenticeship.

Mark Rolton:
Look I think I’d copped a lot of bullying.

They could have a label for it. These days were back then you know you were just the odd one out. And I guess through school that was pretty tough it made leaving school look so attractive. I applied for apprenticeship. I ended up getting an apprenticeship as a builder and then moving out of school made that transition so much easier I had somewhere to go and you know I was pretty determined to sort of have a crack and make some money.

So at 16 just turned 16 I started an apprenticeship essentially.

Tyrone Shum:
But it didn’t take very long before he had his sights set on property.

Mark Rolton:
I approached my parents at 17 and I said look I don’t want to be on the tools forever. I want to get in the property. And at 17 I was sort of thinking to myself you know I really should get something and get some sort of plan. So at 17 I coaxed them into being a guarantor and my very first loan and they actually said to me you’re crazy. And I remember my loan repayments were 116 bucks a week and I was earning 171 and they said to me so basically you’re going to give away two thirds is the traditional mindset by two thirds two thirds of your wage into into debt into a mortgage. And I said absolutely. Now I bought a block of land for 39 300 and I sold it. Two years later for 44 900 and I had made more in that period I made more in that period than I was taking home each week. So that was the cue. You know blind Freddie could see that I hadn’t worked for that upside.

I hadn’t really sold my time I hadn’t labored in any way to get what really was back then a massive gain, that was that was literally at 26 percent gain in two years.

Tyrone Shum:
Yeah definitely.

Mark Rolton:
That was that was the door kicked wide open for property from me.

Tyrone Shum:
What do your parents say to did you ever tell them about that story.

Mark Rolton:
Well they were the guarantors and they knew exactly what was going on. When I sold it they were like oh yeah that’s cool and I have you know I took a chunk of change I took like you know six thousand bucks which would take me a long time to earn and put that in my pocket. It was a huge amount of money.

Tyrone Shum:
At the same time, Rolton was working multiple jobs, and starting to grow his own business, in order to accumulate more wealth for investment.

Mark Rolton:
The apprenticeship yeah such a low income and they were massive days like you were doing sort of 10 hour days and getting paid for 8, which is normal. I was working most Saturdays but I was also then you know I realised that I had to earn. I had to earn and if it wasn’t going to be from apprenticeship it would be through other means. So I was packing shelves at night after hours to sort of make ends meet and put a few bucks away. So you know, I was committed I was committed throughout that apprenticeship I finished my fourth year, I got my intentions that sort of stuff and then I started employing a couple of guys that I’d met through my partnership my work and then I just started you know quoting my own jobs. I think at about 19 and a half maybe even 20 at that stage I was quoting my own work I was keeping a large sum of profits for myself and I had two or three guys sort of you know constantly working with me and it was pretty good money. You know that was I was sort of 20 odd 20 and a half at that point and I was sort of taking home 85 95 a year. You know yes I was working my arse off but that’s kind of what you’re going to do in those early years of accumulation.

Tyrone Shum:
Rolton continued to succeed in construction, and quickly expanded his business and profit.

Mark Rolton:
At 22 it scaled pretty fast. I was good at winning the work I was I was that kind of person that would always deliver. That was the difference for me.

I didn’t talk up a big game I would work all hours to bring the result over the line and if a principal contractor said to me you’ve got to be out of this highrise you know within twenty nine weeks we’d be out of there in 29 weeks and that was just unheard of back then. So I had, by the age of 22 to be clear. I had just over 60 employees at 22 which was you know a lot of my staff were double my age and I were like How do you when all this work and I say well now I just deliver. I just get it done. There is no excuses there’s no fluffing around. I just get it done and I just do whatever it takes to get that resolved and that won me a lot of credibility in the world of construction because that’s just so hard to find.

I was 22. I was making pretty good money I had projects all over the place building and I thought what I’ll do is I’ll go back to school. So I studied my eggs at school.

Back then it was called an O.P. I’ve got a great O.P and I thought if I can get myself into uni and study engineering then I can really offer a full end to end solution if I can put myself in a situation where I can design the project I can engineer the project and physically build it develop it or then I’m going to start to make a whole lot more profit on more vertical in that equation.

Tyrone Shum:
He had decided in order to grow, he had to go back to studying, and entrust his business in someone else while he did so. But things didn’t go exactly to plan.

Mark Rolton:
So I appointed a manager to the operation went off to uni full time study at night school for XCOR got a good O.P showed up at Griffith Uni studying structural engineering only to find out two years later that my business my company back then had all but been stripped at any profit and assets.

The manager that I appointed back then to my companies had basically stitched me up to the tune of two hundred thousand dollars in cash.

This was this was the year 2000 and 200 grand mate was a colossal amount colossal. Not only had he basically said he was very clever in how he did it but he basically stripped out 200 dream with the cash out of the business. It also left me with a 230000 tax bill with the ATO. And that was the most frightening because that was accruing interest at 16 percent.

Tyrone Shum:
Having achieved so much in terms of business and profit in the few years since leaving school, Rolton was now faced with hundreds of thousands of dollars of debt.

Mark Rolton:
I was literally 23 years of age with four hundred thirty one thousand dollars worth of debt. Thinking that I’m so good I’m so smart I’ve got it all worked out I was living in a penthouse cars boats jet skis. Life was frickin awesome and I’m looking squarely in the barrel of 430000 dollars with debt to give you some scale and context you could buy a home back then four hundred thirty hundred forty grand. Where I lived so nearly it going do the sums do the sums today. It’s about three and a half million.

Tyrone Shum:
Yeah.

Mark Rolton:
Today’s money and it was frightening.

Tyrone Shum:
Coming up after the break, hear about how Rolton managed to deal with the incredible debt he was handed…

Mark Rolton:
It was day to day week to week and you know at the end of that I just said right no more no more building construction just done with too hard too complex too risky.

Tyrone Shum:
How he got back on his feet and back into property…

Mark Rolton:
I said Look I’ve got a willing seller at X and I’ve got a willing buyer, Y. Can I just kind of control this and flick it on to Y. He said absolutely it’s called an option. Great.

Tyrone Shum:
As well as the worst investment moment on his way back up.

Mark Rolton:
I’m going to be in some real hot water that is the only party that is the only drama filled scenario that I’ve really found myself in.

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

Unfortunately after entrusting his business to the wrong person, and accruing over four hundred thousand dollars in debt, Rolton had to work quickly in order to get his business back on the right track.

Mark Rolton:
Thankfully I was I was able to jump out of uni, get straight back on the tools are basically fixed up situation took the pressure away from ATO and the immediacy of time. They worked with me and I essentially paid down all creditors at that point. And it was really scary situation.

It was day to day week to week and you know at the end of that I just said right no more no more building construction just done with too hard too complex too risky.

Tyrone Shum:
And after all he went through, Rolton was still looking onwards and upwards, to his next great venture.

Mark Rolton:
It was literally sitting there one night in my office eight eight thirty nine feet on the desk just going okay so what’s next. I’m I’m so I can see the light of the tunnel. I’m almost out of this mess. And what’s on the horizon.

Where is the money. And that’s when it really dropped. I was kind of like property.

I’ve kind of got some skill there but it really is where the big coin is made you know all the experts and all the real are the really wealthy affluent people that make their money and property or they’re holding their wealth in property. It’s one of the two and that was the decision. It was not science. It was just a straight out. That’s where the money is I’m going to go get it.

Tyrone Shum:
With such resilience and determination, it didn’t take long for Rolton to stumble across a deal that would change everything for him.

Mark Rolton:
I was literally broke and I was I was big I had nothing in the bank I was trying to make ends meet I was living in a 51 square metre unit driving a dirty old beat up Toyota Camry, cleaning windows, making ends meet on the side and I came across a developer I said to him listen you know Brian where you at is like maybe I need to unload some stuff fast.

I didn’t have the money and there were six blocks of land sitting there. He said Mark they’ve got titles they’re finished and registered the set to go.

He said you know I just can’t flick them. I said well if you give me a small discount you know I could probably connect you with somebody and by them loaded I had met a guy three weeks after that conversation at a barbecue. It was him a friend. It was a mutual buddy of a mate of mine and his name was Stuart and I said to him you know what you do. And my financial planner was like ah okay. And we just got talking about these blocks of land, I said night they’re a walking distance from Coles. I said the finish on the ground. And I said straight up I said you can get him a discount.

I’ll make a small margin the way you do it and you’ll get blocks market your clients. And he said Mark I’m here. So the preceding week you know that’s exactly what you did the following week we put together a document.

Tyrone Shum:
After organising the deal between buyer and seller, Rolton walked away with a cash profit from every block.

Mark Rolton:
I spoke to a lawyer. I said Look I’ve got a willing seller at X and I’ve got a willing buyer, Y. Can I just kind of control this and flick it on to Y. He said absolutely it’s called an option. Great.

Give me one of those and I control the six blocks of land and I made seven thousand profit out of each block. Seven grand clear for me a multiple of a six block that was forty two thousand dollars literally in a day and a half of discussion and I was like Okay what else can I do with this.

It 42000 doesn’t seem like a lot it was cash. I you know I had like three bucks back it was cash it wasn’t credit or equity it was cash and it was a game changer.

Tyrone Shum:
From there, Rolton went on to scale this business model..

Mark Rolton:
The very next deal you know after that transaction I became good at research and plans I listened to the council I was looking at potential upside and the plan as well as looking for holes you know in their planning documents it became really good at sort of finding flaws in what they were doing.

And I came across a very desperate developer and he had 2.8 eight hectares and he couldn’t get the funding to build these tenants. And I just said listen what’s it worth you he told me and he said look if you’re going to do anything I can tell you right now you’re only going get 54 townhouses like that.

And I said well listen if I can auction I’ll give you more than the mark you want X I’m willing to give you over and above that and a serious premium he was chasing one point nine I was offering him two point three five million for the same damn thing. And he’s looking at me kind of like why would you offer 450000 dollars over the market. I said simple because I need 24 months under option because I’ve got somebody in mind that might want this and they’re going to want to do a development approval. I don’t have the money he does he’s going to need some time to execute that.

So he agreed verbally okay if you give me two point three five I’ll give you 24 months. I walk into the council vernix morning and I said to the lady at the counter look I’ve been told I can get 50 for channellers on what can I do. She said Sir we’ve actually changed the dentist and she flicked the computer screen around the face and she said See that bright orange section I said yeah she goes we’ve actually increased the densities there because it’s only like 500 metres away from a Woolworths so fantastic you won’t get 50 for 10 hours on it. You get 93.

Tyrone Shum:
I’m laughing. You just go on.

Mark Rolton:
And smile like you smile just came across my face I was like holy smokes right on. And she was super helpful but she could see that I was desperate and that that you know that just open the floodgates because I knew straight away at 93.

Michael this guy that I knew a large builder slash developer. He was very wealthy. I knew he would take it straight up so literally two and a half days later the option signed I wrote rolled into a meeting with him at a cafe in have office premises back then. And I said listen I got this deal and I ventured on the telephone negotiate a series. I said Bulis is less than half Kiawah you can walk. He looked at me with a high school down the road I said directly adjacent is a primary school. I said it’s literally four kilometres away from the train station. I said it all makes sense.

He looked at me kind of funny goes Don’t talk to anybody I’m buying it give me 24 hours I’ll talk to my bankers. I. Just don’t talk to anybody.

I said you’ve got my work done and you know that deal netted me a million and sixty six thousand dollars. Thirty four days after a song option 34 date was a month. Basically so yeah it changed fast. I took I took the million 66000 I paid out the final.

Some of the eight yo I put money in the bank you know I bought my very first Pausch brand new cash. I mean it just it was shipped out from there.

Tyrone Shum:
After two amazing deals, and a lot more cash in the bank, Rolton describes exactly what he did next, and how he took his business to the next level.

Mark Rolton:
I started getting a lot more sophisticated around deals. I went through a transition to be quite frank with you, I realised pretty quickly that this business actually wasn’t about the deal. It had in fact had very little to do with the deal per say. What was really critical to making this business work and fire to its full potential was the ultimate buyer. It was having buyers in my pocket for the sale saying Yeah,

We’ll take it. Yes we want that. And then we started work with Aldi. I started working with with with Metricon, I started working with Dickson Homes I started working with Tamma Woods, I started with Coral. I started working with large players country and they were just like okay we need 550 block alarm we need a thousand block of land we need 600 blocks of land. Go find a 320 blocks of land and I did you know I just would roll up.

I start discussing things with the vendor or I have a very unique way.

Of revealing the sellers the mentors needs and I got really polished in that regard and I just had to do a deal after deal after deal after him and I realised with a couple of million bucks cash in the bank I didn’t need to be just doing auctions all the time and that’s why I started transition to my own projects.

You know I was still in options and at flick something to Aldi you know and I’d make myself a fast 460000 box here’s 5000 square meters guys knock it out and then you realized you know what they’re gonna make about 9 million out of that damn thing. Why am I not just developing it now you know what I can no more profit getting vertical with it and that’s when the kind of the light went on.

Okay let’s start developing it. Today we develop a master plan communities 400 blocks of the time I’ve just as I said here before I signed off on 78 this morning and it’s like 11 o’clock you know we’ve we’ve become a real player in that low and affordable housing space know and that’s a really sensitive part of the market. You think about how many people today in a very fragile environment can truly afford one point one hundred one point six million in western Sydney you know in a city that is struggling.

Tyrone Shum:
After all the up’s and down’s of his journey in business and investment, Rolton was able to to avoid a lot of heartache by being educated, and shares how he learnt this lesson the hard way.

Mark Rolton:
Although I’ve had a lot of near misses because I was under option I never had to settle or I’d had counsel in front of my eyes changed their mind and if I had a contract on that deal I would have been screwed.

I’ve seen councils say to me bring in a master plan and then go no no no. If I had contracted you know 40 million dollars worth of property that I had another option if I had done then I’d be dead financially I’d be over I’ve had a lot of near misses. There’s only one that came to mind when you said that where I did get myself into difficulty was the fact that I signed a contract.

I saw a developer many years ago and I launched into it. Bullock I knew this was going to work. It was only like 26 or 29 plot of land and I was like yeah the vendor wants X I’ll take it signed a contract and then, this is like a long way back and then I got pre-sales on a grant about seven or eight and just before I was about to settle my bank pulled out, they pulled the funding. And if this was this is pre-GFC dates and they’re all getting nervous they are retreating on lending a letter of offer was worth nothing. Right and I’m sitting there saying, hang on.

I handed over a deposit to settle this thing I’ve already got pre-sales and now I’m going to be in some real hot water that is the only party that is the only drama filled scenario that I’ve really found myself in.

And today we turn over an excess of 160 million per annum. You know that’s the only time was when I walked into a deal and I signed a contract through an agent for a development site. And it was suicide and I owned it. Whether I like it or not I was I was in business and although I was relatively small, the losses back then was still significant to me.

Tyrone Shum:
They would have been.

Mark Rolton:
They were.

Tyrone Shum:
How did you get out about one.

Mark Rolton:
Oh look I had applied to plead with the vendor.

I ended up getting in the car with my lawyer going to the vendor’s lawyer’s office and sitting down and say listen you know my funding has been pulled.

We didn’t know I was a GSC back then that this is the reason why you know the bank has retreated at the eleventh hour.

You can sue me. I signed a contract and unfortunately you know I’m locked and loaded or you can keep the deposit and walk away and resell it.

And I think with a bit of persuasion from my lawyer I think the vendor realised very quickly I was sincere. I wasn’t out to hoodwink anybody. I was about to stitch anybody up.

I was no rogue I was upfront honest legitimate and it was an issue you know and then literally three months later the whole tornado of the GFC unfolded.

Tyrone Shum:
You only just missed that just by little much and.

Mark Rolton:
Actually that was the reason that the funding was pulled.

I was healthy but it was only because banks were retreating that they start to get nervous and so they made it look you know to to to to to the not so sophisticated investor. Contracts are toxic they are deadly.

When you sign it means you were absolutely committed to the end. And if you forego if you’ve got a deposit in there you’ll easily forgo that deposit because you know you are the buyer there’s no way out with an option. I’ve always got the fire exit open. Something goes wrong checkouts or change them on it the D.A. got declined the permit was rejected.
Great we handed back to the vendor and say no hard feelings sorry about that. We did our best and no party is worse off.

Mark Rolton:
Looking back on the 10 years I’d say the hard work is actually maintaining it being smart and looking at the horizon and saying where are the opportunities how do I diversify and scale.

Tyrone Shum:
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’re speaking with entrepreneur and property developer Mark Rolton. After building his business from the ground up, Rolton specialises in property options, and now teaches every day investors how to make huge profits through options. Learn about how options work & the steps to succeed with property options.

In our last conversation with Rolton, we learnt about his strategy to use property options, in order to make significant profit. He explains clearly what exactly he means by an ‘option’.

Mark Rolton:
In its simplicity all we’re doing is offering the vendor more money for the property. Now offering a premium to the vendor,

We must get time in exchange. So if the is with a million our go-to is that we always offer the vendor one point two, one point two six, one point two nine right.

We just give the vendor over and above the market in exchange for time.

Now when you say time how long 12 18 months 15 months 16 months. Whatever I can possibly get because I’m not going to sit there on my hands and and think oh I hope the market goes up that’s a stupid strategy. What we’re looking for is to force value on that asset through the D.A. the development approval process. So I can take you know like this morning for example here’s six point four hectares in Western Melbourne right.

And you know it’s probably worth about three point one. We’ve optioned at three point four six million. We said to the vendor listen we want to give you a premium take our money. But but we need 16 months under option to execute the permit here. The council, they’re a little bit tricky they’re not so friendly. But then I’m going to spend about 300 253 thousand dollars of my cash executing the permit. That’s not the vendors money. And if I don’t complete the deal please understand if I don’t complete the deal the vendor is in fact better off why he’s still got the property.

The title is in their name. It’s under option. But now they’ve got a permit for 78 lots that I paid for. Makes sense? So if you don’t perform if we don’t execute the vendor was going to be better off.

Tyrone Shum:
By implementing an option, Rolton is at no risk, giving the potential to maximise profits after a DA comes through.

Mark Rolton:
What’s cool about this is that by not having that traditional risk of ownership, this is where people go in blind. This is where you know traditional developers blow up. They’ve got all this debt, no way of servicing it. And the banks are just scratching their head go and there’s no way out we’re going to have to roll you. But I go in with no risk. I’ve mitigated the exposure I’ve got an option in play, I control the property for a set time. I spend my capital on the deal and the value to me is I get a massive uplift from the permit now that property is worth three point four six big deal with a D.A. for 78 lots. Hello. It’s probably worth about four point nine five million is my best estimate. Now you know I am literally a kilometre away from Bunnings and Aldi on it so I’m in transit right now I’m driving back to the CBD. I know how hard can it be to get a valuation for four point ninety five million with a DA permit ready to go shovel ready in the ground. It’s a no brained and we’ve basically pulled one point five million dollars of net gain windfall and it’s cost me 250 to 300 thousand dollars.

Tyrone Shum:
You might be wondering why the vendor wouldn’t just take the permit and develop or sell the land themselves, after the permit has been provided. Rolton explains why:

Mark Rolton:
The vendor has no power over the property so to speak. Now, they can’t pull out if we’ve got a 15 month two year option. You know I’ve got I’ve got clients now they’re doing options for 30 months because they just want to hedge their bets. They know the longer that it goes the more valuable the property’s going to be worth.

So you know the vendor has no power to say oh yeah I’ve changed my mind I’m going to go ahead.

Development impossible, they don’t have that luxury. You and I can either develop it ourselves or better still we can just flick it on to an ultimate buyer.

A large development company construction company a group of investors a syndicate and just go hey listen guys. He’s 78 blocks of land with a permit. Knock yourself out. Go do it.

And they they are desperate for deals like that. It makes it so much easier when it comes time to fund it.

They’ve got a permit, a live transaction that are shovel ready they go to their bank and say oh yeah here’s the deal and it’s got a permit ready to go but this takes all the risk off the table for the banker.

Tyrone Shum:
Definitely definitely.

Mark Rolton:
So the vendor doesn’t have that power is my point. The vendor can’t go oh yeah I think I’ll develop it I’ve changed my mind.

I can’t do that. What’s more you and I have a Caveat it over the property which is at the end or can’t walk away.

They are committed to the document and unfortunately there’s no way out of this until the time has elapsed. We’ve had these documents as you might imagine. We’ve done transactions that have been worth in excess of 38 million as a purchase just for the property right. They’ve been challenged at the Supreme Court. An option is a legally binding agreement. The vendor that has no way back.

Tyrone Shum:
After employing this strategy for over a decade, Rolton has become quite the expert, and has seen it all.

Mark Rolton:
Look it’s been 14 years.

To be clear I was nearly a decade and a half my life 14 years of distillation is what sort of occurred here. And yeah look I’ve sat in front of over 2200 Mum and Dad vendors there’s not one objection that they can throw at myself my team where we don’t have an answer for it we’ve been there done that got the scars on the T-shirt to prove it.

Tyrone Shum:
Working with everyday Mum and Dad investors, Rolton describes this strategy using 3 simple elements.

Mark Rolton:
There’s really only three elements to any transaction and they are time deposit dollars. These are the three things that we that we are seeking in any sort of discussion with the or time deposits of firstly got to have time I will give you over and above the market Mr. Vendor or Mrs. vendor in exchange for time I’ll give you two point three million and I know the property is only worth one point nine. I’ll give you a 400 grand premium but I need 18 months to execute a DA. time deposit. We always use a thousand dollars plus the D.A. costs you might have a vendor goes to my properties we’re five enough thrown on a grant. I miss what I said Mr. vendo I’m going to throw down three hundred thousand dollars cash money to execute the D.A.

Now if we don’t perform and complete the deal you end up with the approval.

Right you are the direct beneficiary of our time Skillern money to of indoors really at ease with allay their concerns, Tyrone, because now they’re like okay these guys are legit they’re gonna throw down 300 grand to execute the permit they’re gonna get an architect involved.

They’re getting a structural engineer hydraulic engineer civil engineer enviro veg consultants traffic acoustic consultants. These guys are on it. And if they don’t complete well we end up with the property now that’s got a permit and we could sell it for a whole lot more. My last one is dollars time deposit dollars. That’s the third element because there’s no point sitting in front of end or the guys you know want 50 million for something it’s worth 10. So we’ve got to be able to strike a little bit above the market and I typically work only with say 5 to 25 percent above the market and that’s very hard to quantify unless you really know what you’re doing with the feasibility. I’ve actually offered.

In the past I’ve offered vendors 80 percent more than what the property was worth almost double.

Tyrone Shum:
Rolton knew exactly what he was doing when he offered almost double the worth of a single property.

Mark Rolton:
Let’s be clear you know I knew that there were some things going on some time rummaging in the council and we had learned the council was going to turn light industrial to heavy manufacturing. Right. That means no noise limits you can make as much dust as you want. Vehicle limits 24 hours a day. That essentially doubles the value of an asset in an industrial space and all we did was say listen we know the properties worth 4. to we will give you we will give you seven point nine million but there’s no further negotiations and event eventually that endorse face you should have seen his wife his wife Colleen blesser just kind of looked at me with a saucer kind of eyes and I said look no games no games.

We are going to make profit you stand to two but here’s the deal.

Tyrone Shum:
He explains how he supports his clients through this process, and the software used to work out net profit.

Mark Rolton:
If you know what you’re doing so around the feasibility and this is where really the art comes in. Tiro you know like we spend in our training we spend an immense amount of time in honing those numbers. We work with our clients students to really bring them up to speed.

When I walk out of our training they are essentially a partner. They’ve come to us with the idea of okay I bring you the deal and you throw in all the money for the permit the option deposit you throw in all the cost for lawyers and documentation.

You are basically bring in the money type correct. They need to be precise with how our numbers work.

Now part of our training we give them our software we custom built software that you fill in five seven fields. It will spit out the profit net profit to the last dollar.

That’s how accurate it is. So these inputs are very important and that’s what we spend our time training on. So we would have to ask by saying we would an average Joe start well with that level of training and the feasibility of making that sort of hard work a lot easier.

Tyrone Shum:
Being well-informed and following reliable advice is key to succeeding in property options.

Mark Rolton:
Look for the large stakes involved. Yeah there really is some finessing. You don’t just roll up to events or a game. You know it’s worth four. I’ll give you five million for farm. Those days are gone now mentors are smart they they understand they’ve got very strong counsel legal counsel and lawyers will go well listen it’s got to be legitimate it’s got to be real. But what I would say to you as we’re embarking upon a very turbulent market and an election year we know that vendors absolutely desperate to get out on their knees.

They know they missed a peak in the market a year and a half ago. For most of us in Sydney we missed the market that year after 18 months and then now so fluid they are so willing to talk you know and so realistically no expectations.

I had a conversation with one of my clients last week last Tuesday I had a cup of coffee with him his wife was saying Mark it was only six months ago. The vendors were chasing one point seven million dollars an acre in the inner west suburbs of Sydney. We’re getting phone calls now with all except one point for one point forty million per square metre. You know that’s that’s a 16 percent reduction year in six months six months six months. So it’s going to sound a bit strange and counterintuitive but the best time to be doing options when the market is on its face.

Tyrone Shum:
Coming up after the break, hear about why Rolton got started and continues along his investment journey…

Mark Rolton:
I realised that I love what I do. I’m extremely passionate about property and what it does to people who just love it.

Tyrone Shum:
The resources and mentors that he utilised…

Mark Rolton:
I think Kiyosaki, Robert played a big part in my early development. I think what Robert taught me was possibility.

Tyrone Shum:
As well as the best advice he’s ever received

Mark Rolton:
I remember as I was crossing the street after breakfast a meeting he said to me you’ll never go broke making a profit and that’s stood the test of time.

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

Rolton’s journey has consisted of a lot of up’s and downs. When he started in property, he had just got back on his feet after facing hundreds of thousands of dollars in debt. Now, he shares why he turned to property, and why he continues on this journey today.

Mark Rolton:
April 10 2016 I officially retired I hung up useful last time. And in the next 10 months were absolute misery.

I realised that I love what I do. I’m extremely passionate about property and what it does to people who just love it. You know it really is the golden slipper. I look at it it’s incredible. Anyone can get moving.

I didn’t have money and 90 percent of my clients don’t have money and they walk through the doors. So why continue.

You know I love the chase of the deal. Let’s be clear straight up I am a deal maker I enjoy that process.

And quite frankly I get the victory. You know one of my clients just the other day Tyronne last month to say I’m talking to like seven days ago sent me a video of him picking up a brand new Lamborghini Harakah Didier.

Tyrone Shum:
Wow.

Mark Rolton:
One of two in the country one of two and here’s a video of this guy that failed in business went belly up. Him and his wife almost kicked out of a home.

And here he is now taking delivery of a brand new Lamborghini and killing it a full fledged developer in his own right today. And this guy smashed out 150 keys for his wife. May I share in that victory that keeps my sails full. You know there is a part of me that just like ride on bro ride on.

That’s funny and it’s not all terrific. You know I have still have commercial pursuits of my own.

You know I’m on the march like everybody you know I want to be able to list one of my enterprises in the next four to five years.

You know I’m determined to see that things go very well. It’s a very unique business.

You know I don’t do well and it will be somewhere between a 13 thirteen point five P ratio and that will sort of that will be returned for us so I don’t know on the charges. Well you know I love it. I can’t sit still and I think 10 months of that was a great demonstration. I hated life for 10 months. I was uninspired.

Tyrone Shum:
When it comes to mentors that helped him on this journey, one name comes to mind.

Mark Rolton:
There wasn’t really a lot of people that I was reaching for. I think Kiyosaki, Robert played a big part in my early development. I think what Robert taught me was possibility. There was not specific. It certainly wasn’t mechanics. It was only after spending a lot of time with Robert in the last five six years that I really got to know him. These fundamental principles but that wasn’t available to me back then. You know like I was just like anybody else reading cash flow quadrant. But I suppose it placed within me was this is possible you know like just maybe there’s an inkling as chance as far as mentors and I buy there’s not a whole lot that I can speak from. You know there wasn’t anybody saying here’s the inside scoop here’s the skinny here’s how you do it. That didn’t come till too many years later. Today you know I sit with two of Australia’s 13 billionaires on a regular occasion. I really did lunch with one of them and he was just like so forthcoming with info. But back then when I started out in the hustle I didn’t really have a lot to go from.

I mean you know as I said I would probably say that the raw blueprint was set by Robert really that’s a lot of the wisdom was drawn from. It wasn’t magical. It wasn’t new.

It was just saying oh yeah if you moved from that quarter to that one it’s probably more likely more possible that you’re going to be rich and not to sell time.

Tyrone Shum:
Rolton shares the best advice he’s ever received, when he heard it, and how he’s used it to make decisions in the industry.

Mark Rolton:
You never go broke making a profit.

Tyrone Shum:
Excellent excellent.

Mark Rolton:
I had the luxury of working with a very significant developer here in Australia many years ago. I learnt a lot about exiting large developments transactions and he got himself in hot water and he asked me to consult to him which was quite a unique proposition approach and he said to me listen I reckon that you’ve got some ideas and at the moment I’m sitting with my arse in the wind and I’m about to lose about 40 million dollars. Wow tell me about that and I won’t give his name but you know he you know as well as just his initials were John F sitting down with him. I worked out pretty fast. This guy was wild. Yet golf courses and unit development Sydney had importing businesses the media was extraordinary he said one day I remember as I was crossing the street after breakfast a meeting he said to me you’ll never go broke making a profit and that’s stood the test of time. You know sometimes there are so much money there’s so much money and deals like you know. Recently we shifted a transaction which would have netted us about 28 29 million net a large masterplan. And I actually decided to hit the market and everybody wanted to get in.

It was fast it takes fast money off the table and not sort of lasso itself with the risk and the exposure. 2019 I am very thankful that I stepped down of so that’s held me in good stead.

You know you’ll never go broke making a profit my guy only million telly one point nine.

If I develop I make six and a half well and what’s the time cost. You know what’s the opportunity.

Burn. What else could I be doing. What other options could I have flicked in that space.

Tyrone Shum:
So true. Hence the speed of money to be able to return it back too quickly having to go in a deal minimal risk and get the money back out quickly. Then you are able to move much faster otherwise time on out there which were happier for tournaments 36 months you know could be a long time.

Mark Rolton:
Tyrone it’s. You are so right you are on the right path. You know if I can stand to feed 50000 dollars a day surely it to a large group and make myself two point nine three point six that’s intelligent. That is a phenomenal return on cash phenomenal growth. And we do those deals every second week every week every other day.

You know I have bankers over accountants to shake their head and go whatever you spend 180 grand. You dropped it made four point one six million.

Are you kidding me. Shit like that doesn’t exist. It does in the world of options. So you are right.

It’s the speed it’s the brevity it’s the capital you have out a minimal amount of cash on the line for a huge game and at times in your site NCEA don’t take three four years if they did you’d be doing something wrong. You know the rule of thumb for us is that we only do code assessable approvals. That’s it. Nothing nothing cute nothing fancy code assessable approvals. The council is obliged to prove you don’t go in there with this kind of wacky idea that it’s you know it’s quality agricultural land the current zoning for example you know or something similar and you go in there and say No I’m thinking like 35 stories high rise there’s no way no way I can.

Tyrone Shum:
Knowing how far he’s come, if Rolton met himself 10 years ago he’d have this to say:

Mark Rolton:
Be prepared for hard work.

Hard work. One of the things I’ve noticed that I’ve observed in my own trajectory is that we all are hungry for the skill of money how to earn it how to produce it how to get better at harvesting it and that is one skill set in the hard work I’m referring to keeping it. It’s actually a very different skill. It’s an independent skill of keeping it you know and with a portfolio now nearing 100 million it’s a different frame. It’s like yeah I did this deal and I made you know one point one I made 600 grand I made two hundred fourteen thousand and you punch in the ceiling that’s also but over time you know with with with experience you realise it becomes a completely different skill set of keeping it you know today. One of the messages that I bring home and this is part of you know my stance and one of the reasons that I get out there and I still share with people is because they’re not focusing on the money they should be earning while they slept you know we all think that we sell time between 9 and 5 and sold that time get paid for men you know residual income is where it’s at and no one’s paying attention to it. We hear it.

We discard it and I’m you know I’m on my kids now I’m saying you know like you have got to focus towards residual income.

Tyrone Shum:
Very true.

Mark Rolton:
And what are you worth when you turn off work when you turn off the job. What are you making. And if he answers zero you know it’s almost a fail. We’ve got to start to move shift gears.

So the skill of making it is one skill the skill of keeping it is different. Looking back on the 10 years I’d say the hard work is actually maintaining it being smart and looking at the horizon and saying where are the opportunities how do I diversify and scale. Today I’m in precious metals. I’m in derivatives. I mean CFD I’m in forex I’m in debentures exotic debentures IPOs, reverse mergers property is one spoke in the wheel.

It pays handsomely but it doesn’t define. I’m an investor today. I am I mean in this door and I’m proud to say that if I hang up the shoes you know there’s millions of dollars come through without me getting in the card.

And that’s a comfortable place to be and that being able to disseminate that with my kids. And others and that’s pretty valuable.

You know people are willing to listen to that message because it knows the freakin truth.

Tyrone Shum:
When it comes to his success, Rolton believes hard work and a little skill are all it takes to make it big.

Mark Rolton:
I would say more like I wouldn’t say intelligence so much then my little girl was saying to me yesterday daddy why don’t you have a brain. Which is kind of humbling.

I would say 80 percent hard work and 20 percent skill. You know I just had a quick meeting with one of my clients this morning Hungry Jacks and I was the only thing that was open and you know I think it’s hard work.

I look at this guy and go do this. He is on his way to see him and his partner they’re on their way.

And it’s only because of hard work. This guy has just got he’s got six seven deals on the go at once he’s a diesel shooter you know he’s not you know he’s he’s not worth millions of dollars but he knows that hard work’s the key he’s now using this system to leverage himself and he is going to do so frickin well he’s already banked about 870000 dollars.

Not bad for this peer. No. I know I know that’s just the start. He is just kick the stones off what is going to be a treasure chest of wealth for him. So hard work. And that’s the ratio.

Tyrone Shum:
If you’re interested in reaching out to Mark Rolton or Masslands, here’s the best way to do it:

Mark Rolton:
Go on to their property options dot com dot au or Masslands dot com are you anything like that. You know if they want to learn more you know I’ve got bits and pieces snippets all over the Internet. What have you seen testimonials scattered around the place. You know there’s a there’s numerous ways I can reach out to us buddy.

Tyrone Shum:
I’d like to say a big thank you to Mark Rolton for joining us on this episode of Property Investory.

If you’d like to find out more about Mark or his story head to propertyinvestory.com

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