In this episode of Property Investory, we'll be chatting to David Glover. He's a successful property investor and owner of Bluegum Property, a buyer's agency for land and development for sale properties. David Glover grew up on a small farm in Central New South Wales and studied Engineering at university, which led to him working for BHP Engineering, one of the most eminent engineering companies in Australia. At BHP, he learned how to manage projects and systems, which served him well when he went into the property.
Learn about David Glover's first property, which he bought with his wife Sharna when he was 21-years-old and they were both at university, and how, upon returning from an overseas trip, he bought his first farm, a 65-acre property in the vineyards at Hunter Valley. Join us as we delve into his unpleasant experience when renovating his first property, how he added value to his property at Hunter Valley. We'll also be learning about his advice when it comes to cosmetic renovations and what he learnt during a trip to America, where he met a property investor who was buying a hundred properties a month. So what are you waiting for? Click play, and let's get started!
Glover starts off by telling us a bit about what he does and what he focuses on in his work.
I own Bluegum property and I've recently been doing more property development and acting as a buyer's agent, but effectively I believe that I engineer property value, that's what I do.
I'm an engineer by profession and I was lucky enough to kick off that way, and so I use property projects, very much a project focused, and being a process engineer I actually look for how to create value because at the end of the day value is what people need and that's what generates wealth. And if you don't add value to something, then you're really just trading.
On any given day, Glover is engaged in a variety of tasks, including looking after his children and running his businesses.
It's a combination of a lot. I've got a family, we've got the three kids, so my wife runs her successful business, so a lot of the time I basically enjoy looking after the family. We've got a number of businesses. I've got a horse agistment facility as well. We've got the property business, we've got our property portfolio. So I'm very structured in my daily basis with getting up, heading to the gym and then I've got to get through a little brief bit on email. I'll take care of what's been put down the day before to take care of things. And then you've got to have some time where you're actually thinking about where you're headed. And I'll also do some forward planning as well as keeping on track of where we are with all our projects.
Blessed with two girls up and then Hunter. So spaced around, two years apart. Now they're in their mid-teen area and that's been a whole journey in itself. Sort of 15 years ago, I was one of the first guys in engineering that I knew that actually went out to be the stay at home parent and then move into a phase where you have to learn how to raise a family, manage careers. And then they evolve through those years, don't they, when they're younger through to now when they're teenagers. It's been an interesting journey and evolution of character-building too.
Having grown up on a small farm in central New South Wales, Glover delves into his background and upbringing.
My dad worked in a quarry, actually. It was a cement producing town and so it was a combination of the small town area. But we had a really strong sporting background in our area. It's quite surprising how good some of our sporting teams were, and we had some dedicated teachers in our area as well, it was a little mini-ecosystem I suppose, we were very protected. My wife always ripped me off that I never saw the ocean until I was 18, but that's just one of those things when you grow up in central New South Wales. You don't need to go to the beach every day. You've got dark swamps and big dams where you'd go canoeing and scouts was a big part of my background as well as football and cricket and a community where it's only a thousand people really, you know a lot of people. We joke about the old days where you'd get a paper license and you'd walk into the police station and they knew you.
So you couldn't get away with too much, just also, on the other hand, it was really good cause it was an ecosystem of lots of a different people that knew you and you knew them.
And that's family, that's family because I think when you have a small community, everyone can look out for each other. And also too, if there's anything that, you know, you can also help out with them too. You kind of feel that sense of community.
Yeah, I've replicated that. Now we live 40k south of Brisbane, a smaller community. And it is almost a similar effect and I love it. I love seeing my kids grow up in an area where they bump into people and they know them from their sporting teams and all that. But when you're in the city, when we're in our unit in town, you rarely get to know anyone outside of that unit basically.
He goes on to tell us more about his high school and what he did after he finished university.
I grew up in the Central Tablelands. I grew up there until I was 17, so we're all staying in the Candace area and went to the local schools because that's what we all did, some people went away to boarding school. But we were a small-sized school. I think my high school was 300 people in total. My Year 12. There was 24 of us. We knew each other really well. And then at 17 off to Newcastle uni I went. Headed over there to do engineering.
We were at Newcastle and then I got the opportunity after travelling the world with engineering to move into consulting in engineering. And so it looked like Sharna was with BHP at the time was going to go to Brisbane. So it was like perfect, right. So I took a consulting role in Brisbane, so I came up, moved in with her dad and Shanna got promoted to Melbourne head office and Sharna was in Melbourne. That was pretty funny.
Hired by a well-known engineering company, Glover got a good head start when it came to his career.
I started working straight away. About our third year I got a part-time job with BHP research, but BHP engineering actually, kind of BHP research. So while I was working, there was still the traineeships at the time, but that was finishing up. So they were transitioning it to, call it part-time work. So both Sharon and I were working for different engineering companies. Shannon was in a coal call operation and I was with BHP engineering and it was great. You get to learn in our organization that's actually doing projects and stuff while you're at university, that sort of style completed around when we finished. Most companies started moving away from that style. They don't really employ part-time, but we were lucky we're on that tail curve where you actually worked while you went to uni and a lot of people did. It was normal.
While working at BHP Engineering, Glover was thrown into a lot of projects which taught him many new skills. Changes in the industry were also happening at the time.
We were both chemical engineers. And Shanna went on to do a PhD in that whereas I got straight into BHP engineering and was lucky enough to get taught at a really young age how to be a project manager. And we ran lots of, I suppose small but quite interesting projects and you get your stripes the hard way, you get thrown into some of the sites and you've got to manage upgrades or some changes. At the time there was a big, very big change in the industry with automation coming in, robotics coming in. And there was cost pressures, that was back when we had the recession and they were literally taking out 20% of the workforce at the time. And so you were 20, 21 years old, and you're seeing massive reductions in the workforce, so much so that Newcastle steelworks shut down and the smelter where I worked at Tomio yeah, McKinsey just butchered the place. So you've seen guys that have worked for 30 years just getting told to finish up a couple of weeks time. An interesting start of my career, let's put it that way.
Glover talks about one of the most important sets of skills he learned at BHP engineering, one which came in handy on his property journey.
The project management skills, which, you know funny enough, teaches you system and a process that you get to clarify, follow, think about; it's been tested and hundreds and thousands of times, I mean, I use the system that was obviously developed out of NASA, so I went on to become what's called the project manager's body of knowledge, so PMBOK. You get taught very much deeply that in BHP engineering about how to apply project control principles. So you get taught about finances, returns, seeking value, communicating it to other people. That's become a big thing that I do now with my call option contracts, is explaining the value that we're trying to achieve, the intent, bringing your stakeholders and creating your project plans, creating your budgets, executing the project and then reviewing the project. So it's a framework of discipline that helps one achieve and be able to review and learn.
Whilst working at BHP Engineering his wife and him saved up to buy a place of their own.
So when we were 21, that's what got us going. Tara and I moved in with Shanna's mom actually three months. I lived in their back room. Sharna and I saved all our money for three months straight. We were 20 and we decided straight away that we were buying a place and that's what we did. We did that and lo and behold, we have bought a deceased estate and we were literally 21. And we were still at uni when we did that.
The purchasing of this property occurred before Glover was in Brisbane and his wife Sharna moved to Melbourne, and soon after, he purchased another property.
We'd already purchased the property. We got in really early, I suppose, we decided straight away we wanted that property. When we were overseas, we had some mates live there for us and look after it. And then we came back and we did another property project together. We brought our first farm, a 65-acre property in the vineyards at Hunter Valley and it needed a big clean up and we built a new house and it was actually the day I finished laying the flooring in the build of the new house was the day I literally got in the car that night and drove to Brisbane to start work the next day. And two weeks later, Shannon got sent to Melbourne.
In regards to his first property, he goes into detail about the deposit and how he managed to find the property.
We went for our deposit and back at the time, you didn't get a lot of freebies from the government in a way, right. But we literally saved $15,000 in three months just to top up our deposit. And off we went looking around for what we could basically afford. And it was the first time I met a buyer's agent, so he was a sales agent and Jeff showed us one place and I said, “Ah, no, Jeff, that's sort of not what we're looking for.” In a bit of a chain, he said, “Look, come and have a look at this place.” And he was a surfy dude from the Cohighta area in Newcastle near Charles town. And so it takes us to another agent's property and he goes, “Look, this is what I think you could do this one.”
And I was like, “Yeah, you are so right, Jeff.” So funny, my first property was in effect via a sales agent. I suppose buyer's agency in Australia wasn't really well known back then, but he acted as a buyer's agent and he was brilliant. And I owe a lot to Jeff. He did a great job. He showed us the property and we bought it. And it was a deceased estate. Unfortunately, it went straight into probate and we were a little panicked because we were first purchase and Jeff was great. He sort of said, “Oh, it's going to probate, which means one of the assets in the whole estate had been disputed, but the house was fine.” And he said, “Look, just go back to him and rent it from them while they go through probate, it'll only take five weeks.” And so we negotiated like I think it was honestly, it was like $5 a week or something because it was only supposed to be for six weeks. But four months later we'd been paying low rent and Sharna and I had already completed the cosmetic reno by the point we actually own the property.
Glover explains what probate is, something which played a great role in his first property.
What happened was if the estate's got a slight issue, so someone's either wants to have something adjusted in it or there are problems with some of the paperwork of it, then it's just the process of where they're going through tidying up someone's estate. And so they couldn't complete the sale of the property until that had legally been sorted out with the executives of the estate. So we knew it, there was no risk at the time that the property wasn't going to go through for sale. It was just some background information that was being taken care of by whoever was looking after the estate paperwork.
So it just sounded like a little bit of paper shuffling, which allowed you to have that say six weeks to do your cosmetic renovation and live there on low rent.
Yeah. Always look for a deal when an opportunity comes up, just talk and figure out a way forward and it's surprising.
Doing a cosmetic renovation of this first property was not a pleasant experience.
It was not attractive, Tyrone. Think about this, right, I open up the front door and there's the aisle toilet seat, right? It was a pretty bad state and the smell like that too. And then there was vertical red and yellow wallpaper on horsehair plaster. We took out about two and a half thousand pot plants from the backyard. Seriously.
Was this like a hoarder’s house?
Not cool. I've had worse, but they were hoarders of pot plants, let's put it that way. So that was a pretty easy fix in away. Good fun and nothing was straight in that property, like when you're laying tiles and you're wondering why nothing looks square and for an engineer and especially my wife that just drove us nuts. It taught us a lot and like even the plaster, I mean, I didn't even know horsehair plaster was a thing, you pull off wallpaper and I'm ringing up Ray going, “Ray, there’s like hair hanging out of the plaster.” And he just laughed, he'd seen it all before, so he was like, “Nah, mate, it’s all good.” There are lots to learn, bamboo wharf biddings, and we ripped out the carpet and there were polished floorboards underneath it. How good was that?
He tells us about how much of the work they did themselves and which parts they used outside help for and gives us some interesting advice when it comes to doing cosmetic renovations.
We did some all ourselves, but then I did work night shift at the smelter. So that's when you ran around and you knew all the tradies. So the guy I knew that knew a guy in one of the other parts of the plan, I ducked down one night shift and next day he ducked out, cleaned down the roof and painted it for us. All the mate's tradies. It was really good fun.
When you do property, cosmetic renos and the other part of your life, work shift work, it's the best way to get good money and be able to do a property cosmetic renovation.
Six weeks later, Glover had to go overseas and had provisions in place when it came to looking after his property while he was gone.
We got sent to Canada. So Sharna and I, off we go overseas next year. So my best mates moved in and they looked after the place while they were finishing off uni and their early work phase there for the year. So they looked after it while we were away and it worked out really well. I wish I kept that place, but we sold it because we didn't know any better at the time. And we brought a mortgage foreclosure farm and that was a whole journey in itself.
Glover recounts the events which happened leading up to him purchasing a mortgage foreclosure farm.
On the night shift, Robbie rings out from a mate of mine working down in Carsus and he goes, “Oh, one of the blokes just mentioned there's an acreage up at the vineyards.”
And it's a mortgage foreclosure. And so I rang the agent and then finished night shift, rode on out on a motorbike, had a look at this farm, met the agent there, and I made the offer and I said, “Mate, I've got to go to bed. I'm working nights.” And so I got on the next day and he's like, “Yeah, they've accepted your really low offer.” And so we bought a farm.
It’s like you come home to your wife, say we bought a zoo.
It was like that, she didn't even know, I told her I’d gone out, made the offer, shook hands and said, righto. Like if it goes through, goes through, if not, but he was great. Once again, it's just a matter of offering the right price. You don't try and go too crazy. You try and work with people, not against them. And yeah, you'll often find that you can pick up great opportunities in a flexible fashion.
Adding value to the property happened quite quickly.
It had an illegal house on it, so the guy had built it in the bend of the river thinking that the council would never see it. I went to a council and said, “Oh man, and they said, yeah, we know about the place.” And I said, “Ah, you know, I'm going to build another house on the thing you're going to be hung up on and they go look, as long as you're going to build a new house, we'll just turn a blind eye for the next couple of weeks.” So, okay, no worries, my dad and a few other old blokes, they all came out and that was unbelievable. They transformed from this little two-bedroom illegal cottage that had no running water or sewerage into a fully operational house in two weeks.
Oh, they were awesome, and how good was that to work with those blokes, and they were all retirees and they just dived in and taught me a lot because I just wanted to burn it down and put a caravan in the big shed. They're like, “No, no, we're not doing that.” So out they all came and hooked in and it was amazing what they achieved. Dad and I fenced the rest of the property, and we did the right thing. We built a big homestead up on the lovely view spot. And then life changed. So off we went again.
Do you still have that particular property?
No, wish I did, but geez, we made some good money out of it. That was a huge return. Yeah.
The mortgage foreclosure farm ended up reaping a large profit.
I went in at around 162, 163,000, probably on an acreage that would have been worth, say, 300,000, 350,000. We built a really big homestead on it, big Clarendon three-metre verandahs, and we kept it for about two to three years and we sold it just shy of 700,000.
That’s a phenomenal return. Could that place have had other development potential besides building a homestead? Cause you said it was acreage. So there's a lot of for sale lands.
Yeah, I wanted to do, I was thinking about that, but now you still wouldn't be able to separate it now, you're still sort of stuck around that a hundred-acre and Tyrone, you’ve gotta be careful with acreage. It's great for doing cosmetic rhinos and be smart with, but it's not a thing to… you want to be careful. Anything you need to do a zone changing, I think you're best to just wait for, I had that in Melbourne. When I went down to Melbourne where Shauna was, we bought a five-acre block at Rock Bank and it was in legislation to always be green zone. But look, it's a suburb now. So when you're at Rockburne train station, just around the corner there was an illegal dogfighting place that took 20 skips of rubbish off that property. And it was in legislation to be green zone. So I was like, “Oh, it'll never change zoning”. So I sold it and then two years later the zoning changed. I think it got sold for $2 or $3 million.
I was not disappointed. I made really good money. We had a great time there but it served its purpose but yeah, you learn a few things along the way, don't you?
For Glover, there's one kind of investment that hasn't been successful for him.
Property’s great, shares are shocking with me. I have bought four lots of different share companies that have gone broke, like the brand name ones and a couple of them in property, like they were property businesses and I have a massively intact record of buying shocking shares.
One of the highlights of Glover's property journey occurred when he made a trip to America with his family.
Sharna convinced me to head off for basically three months break to America, we took the kids, we lived over there in Arizona and it was in that time where I went out, you drop emails out, right? Aussie guy in Phoenix, right? So I went and met all about nine different real estate agents. But the second agent I met was Mr, the guy that's basically Mr Zillow in Arizona called Randy Courtney and a second guy I met over there. And Randy, if I ever was able to record two hours of my life, that would've been the conversation, to sit down with a guy that has got basically a bank account of $700 million to buy properties and he's buying a hundred a month right in his office.
It was amazing. And at the time, it was great to have a break, get over there, be a tourist, all that sort of stuff, but also to think about your business activities, life, meet people, look at a different system. The American property system is so different to ours and so I was doing like a study tour and meeting these people and having a look at their Airbnbs and their flips and then to sit down for two hours with Randy Courtney, who was so generous with his time and explained to me all about, Zillow was going into America and how they were preparing for Jeff Bezos to enter the property market there. A simple, funny, crazy email led to that opportunity to sit down with such a legend of the industry over there.
He lets us in on what he wrote in his email subject line that caught Randy Courtney's attention.
The subject line of the email was literally just Aussie guy in Phoenix, right. And that was like the subject line right here. He’d been to like Melbourne the year before or something and that's what triggered it. He was just like, “Oh, it's an Aussie guy. Okay, I’ll want to meet him.” And they were all like that because if you try and meet people in Australia, they kind of feel like you're a competitor. But I think when you're an Aussie guy in America, they just go, “Yeah, I’m with a little Aussie, you know, like this could be interesting.” They don't take you as…and they don't have a competitive mindset anyway. They love to help everyone out anyway. They are always making the pie bigger.
From that conversation with Randy Courtney, not only did Glover have a once-in-a-lifetime experience, he learned a great deal as well.
I sat there for two and a half hours and listened. It was amazing. He told me his whole life story. It was amazing, how he built a business. Why he's flipped franchisors as well in the real estate world. Why Zillow, his own background. His own drivers. He's loved the sport. His passion’s there. It was a mindset, family. Every family orientated as well, so we connected on so many different levels but I didn't have to say much. I literally was just given 50 years of experience jammed at me in two hours and I ate it up. It was wonderful.
Did you manage to get photos and reminisce over that moment too?
Well, no, I never got a photo. But he sends me links. So when he does these, because he's been going into like V blogs and stuff, right. And so he’ll send the link and I get to review his script and stuff, and I'll send it back and go, “Oh, why don’t you try this Randy? And he's like, “Oh, good idea”. And so he's a guy that seeks and searches out people that he likes and bounces off, and he's like the late 50s, 60s, and he's still innovative and looking for feedback. Looking for people to work with. It teaches you a lot doesn’t it.
Huge 17-Lot Property Project with David Glover
Glover, who studied engineering at university, still also works in the engineering space alongside his wife, as he makes leaps and bounds when it comes to property.
I retired out of engineering semi-officially about four years ago. I finished a couple of Australian projects that we worked on.
Funnily enough, my wife's company is an engineering company, so we're actually doing AI technology in the mining lumber defence space. Part of my time at the moment is actually still working in our own business and we've got six people, we're working to develop into a much bigger organization and that is all engineering and currently working on a robotic gold mine in Queensland. So I'm pretty much leading the charge on that project and funnily enough the guy that I'm working with on that mining project, he has pathways education facility and I've been putting together a 21 or 17 adjoining blocks where we can go to 21 up at Coombolture using a combination of coal option contracts and a few other types of contracts; and he's become our off-taker through his network for that project and yeah it's so funny how the world works isn't it Tyrone, sometimes.
So you're currently still during engineering consulting for larger companies and projects like that. Is that what you mean.
Well no I'm I suppose I'm like my wife's P.A. to tell you the truth.
I look after some stuff around Sharna, she uses me as a sounding board for what's going on. I've been running the project controls for and setting up the systems for that business in the background.
And so I'm not client-facing at all, I'm basically facing my wife and helping her client. It's our client and it's our business.
It's a substantial business already and it's fun, I love doing that sort of stuff. You're creating your own business, one that's resilient. We have a very dear friend of ours that has a wonderful business in Australia called Aspen Medical. And so I've seen Glenn's journey there. His dad was my property mentor and my hero in everything. And so yeah we've been blessed to have that network and inspiration and also the fact that we can understand from them, you can get an insight from their systems and processes and how to set up and run a good business.
Glover tells a little bit more about Ray, how he met him and his importance in his life.
Ray was Sharna's...we call him grandfather but he was a family friend of Sharna's and so when I came over to Newcastle, Sharna and I were riding horses together and they were raised horses that we were riding and so that's how I met Ray, Sharna and Ray are very close. Ray gave Shannon away at our wedding and he had a career through the Air Force and then Ray's wife and himself, Lauren Ray, had built a portfolio, they had a business they were able to... back in those days, you talked to the bank manager to get you to know like a loan across the business, what you now call an overdraft. And they went into doing property and cosmetic renos and I used to go and help Ray you know fix all these little issues at this massive block of units
at Hamilton. And then it dawned on me that Ray owned the whole lot.
So Ray was this awesome guy, he'd always wear shorts and made his lunch out of the back of the car and fixed all the lights and all the stuff, and he taught me a lot about cosmetic renovations and just been on the tools together and you know we laid lots of carpets in places together. And then Lorna was definitely the brains behind...she was a wonder she'd obviously she knew a lot about bookkeeping and how to do that and they raised a beautiful family.
And Ray and Lorna were extremely generous with their time and experiences and yeah he was yeah a real inspiration and a real hero to me.
Wow, that's amazing. And he's obviously got a quite successful portfolio, especially he mentioned him owning that block of units. What else do you think you also learnt from him too so you can be the cosmetic reno's, character.
Yeah, Ray was the most amazing man.
He delves into a fascinating property project where he has been focusing recently, which involves call option contracts and conversations with the council.
This year, I focus very much on...I came back wanting to do a bit more with other people's property and other people's money as a journey and so I started to work a lot more on-call option contracts, so funnily enough we'd started with a mate of mine a few years ago. We'd identified a great project opportunity and we'd taken a toehold and then off I went and started to talk to other people about doing a project—and it was actually just going to be storage units—and so there was a project and it suddenly involved other people which is a journey itself, when you start to learn how to help other people and coach. And it's tough when it involves money and discussions around that with other people, so that's a good journey in itself.
So then I started to get into applying call option contracts which took us to a group of six. And so it was looking really good for a massive storage unit, one that you'd do the DA or you just flip off to national storage or someone. So we were getting ready for that but then more and more people joined the project and it evolved out up to 20000 square metres, and so I had a real problem to solve because then it was something way out of my little world and so we started going and having conversations about...we started dropping words like precinct instead of project. So we're like is this a health area or is this an education or entertainment. So you start delving into suburb analysis where you go, this is not only what I could do but this is what the suburb really needs. And so then you start to say, well okay, who do we need? What stakeholders do we need to involve?
So you're like, let's talk to council, let's talk to people, let's talk to people that would want to have an aged care facility, you're an entertainment complex there and then maybe I sort was in that hunt when I said to Shane about it and he's like, “Well, we're looking for an education precinct,” and I was like, “Okay.” And all those conversations with the council, an awesome council up there of the area, he'd given us a really good tour of his vision of Caboolture. And so we were like great councillor Hane, that's an awesome vision, love it, shared it big-time; and then funny enough I'm in Melbourne a week later and Shane goes on and you know we really need a place it's got an agricultural vision and somewhere with aviation, I'm like oh, wow, have you ever heard of Caboolture? And he was like, “Yeah, well actually I have. So it went off from there.
In regards to this project, Glover explains in more detail the numbers and what kind of area or community it will turn into when it's done.
We're working through it at the moment, we've currently got 17 adjoining titles together, I've got 10 call option contracts and a mixture of other commercial agreements on the other seven, and potential to go to 21 and around sort of 35000 square metres. So now we're off learning all about pathways educations and requirements for students that you know need accommodation and there's a huge growth market in year 9 to year 12. There's a lot of vegetation being required outside of the mainstream school education so we believe we've got another line there to follow, I'm going to keep looking for places that will provide these educational facilities, so you build them the right way.
Think of it sort of like a TAFE type of idea where you have hairdressing shops and motor mechanic shops and all that built into your facility.
It has led to trying to get the money for it which is a whole new journey in itself, the last three months.
Glover lets us know what a call option is and how it can help someone purchase property in the future with a set timeframe and price.
So call option gives you the ability to purchase someone's property. So it's like a forward-facing contract, so you simply say, yeah, we sort of want to put out all these titles together, but I can't buy you out right now but what we'd like to do is put the project together. So we need a commercial ability to put adjoining titles together. We need to find someone to fund the development application that would go across all the titles. So there's your value add right. So the DA would always stay with the title. So you need to have that vision about what you're trying to create. So we said, everyone, look, we want to build these big storage units right? So it fits into the town plan, we can put the DA together, once we have the D.A. approved we'll try and execute it by getting it funded ourselves or we sell it to someone that does mass storage unit and there are about six of those companies in Australia, right? So that was the vision and the plan.
So the call option agreement gives you the ability to to be able to purchase that at some time in the future with the timeframe at a set price. You provide value to the title holders because they're going to get a large uplift, they don't need to spend the money themselves on the DA and, individually, they can't do anything except really big market price, where we can effectively offer them 20 to 25 per cent more by the fact that if you collaborate then you can then do a large enough project that an off-taker can extract enough value out of. So it's a value lift everywhere. When you look at it it's a win-win-win situation all around.
So essentially you're creating a whole new community because you're able to join say there's 17 lots together to form something that's going to be substantial with commercial, residential and so forth. Which is amazing and the good thing is you don't have to necessarily purchase all these properties outright because I couldn't imagine how much it would cost to purchase all these. But you're able to go through and do the DA process and work with the council, and get all this in place. So there would be, I would assume, be very strong tight contracts in place because what happens if say, for example, one of the lots do decide to change or a bunch of them decide to change their mind and don't want to go ahead, what happens in those kinds of scenarios?
For sure, then you're done, because yeah, it's true. I mean, they own the title at all times. So the call option contract they can't get out of it. They give you that window for that time and it's locked in place and so they can't. But the other ones that we have, different ones, more like joint venture type documents with, yeah they could pull out and if they do, we have backup plans, we can break the project into smaller ones or we can literally build around them. Yeah, I've been an engineer. I've got a lot of contingencies in there but you've also got to have a bit of...it goes past a bit of trust in this, you've got to end up with a bit of faith as well. You have to develop rapport then you've got to develop trust and then it's got to be seen as a collective effort. And so they don't see you as a developer or the enemy right. It's just seen as a collaborative effort and a call option contract is just the commercial tool that we utilize to be able to achieve what we're trying to do.
I've heard a lot of success stories behind that because a lot of people haven't had to spend too much money except for the DA and the DA, I don't know roughly how much it costs for a project like this. But you know they can range in the six figures to be able to do projects like this. Is that correct to say?
So you're really spending the money upfront to try and put all this project together to get it done through and approved through council without having to necessarily purchase these blocks. And hopefully once that's all been approved, the uplift across the blocks should be able to return I guess the title owners and uplift at least minimum 20 per cent by sounds of it, and then the future commercial dealings in yourself will be able to take a reasonable size, I guess, profit from it as well. So it's a win-win for everyone.
It's a win-win-win, win for the community, win for the current owners and I like to look at it that way, it's a win-win-win for everyone.
Glover tells us about a time when he made hundreds of thousands of dollars by flipping a property despite untoward circumstances.
I did a development application on one of the...so when we the family, we moved up here to a place near Benlee and I brought it knowing that I could subdivide it so we did. We did the DA, where we could change it to a 14 block community. And so we did the DA and I was so focused on going through the building 14 houses right, and I had my funding lined up and everything, and I went to go and get my operational work permits, and at the time my funding the Commonwealth Bank had their first big issue with their mortgage brokers and they went quiet for two weeks and so I was wanting to execute this DA of 14 subdivision.
And then my funding had vaporized.
And funnily enough, I'd already had two people chasing me to buy the project of me. And so I just flipped it and I sat back and I went, wow, I just made hundreds of thousands of dollars basically via all the work that I did during the doing of the DA and the execution plans and having it ready to go, and that was where I really learnt my skill set, was in the project planning phase and the commercials upfront, the organization and that the actual execution and the groundwork and all that was not my place. So yeah, I'm much better in the vision and putting it together, and best for me to sell at that stage and get out.
So that was great learning through some very awkward moments when that happens.
And it's a great thing because one it can mitigate the risk when you think about it sort of strategically because to actually go ahead and build there's also an additional cost that's involved in time as well and potentially opportunity cost.
Getting your money out is hard.
Yeah exactly. So that's what I was just thinking. You know you've actually exited perfectly at the right time because not only have you also completed the management of the whole project but you've also made quite a lot of money behind it too. How long did that project take roughly to get the DA Approved?
Not too bad. It only takes about six months.
When it comes to projects like these, although there can be plenty of money to be made, it does require a great deal of experience and knowledge.
We made 80 grand in five weeks last year on a title split. Yeah, there are ways to do it but you've got to find the right properties that have the titles that will allow you to do it. The title splits are a very lucrative spot. But you've got to have a lot of knowledge, you've got to know how to find them, you've got to know how to negotiate them, hold them. You've got to get it through the council. Yeah, there's a lot to it. Twenty years of experience before you get to do that I'm afraid.
Prior to these kinds of projects, Glover lets us know what he did in the world of property, and also informs us of the importance of getting on the ground and doing the work to execute projects and bring them to life.
Mainly cosmetic renovations, the Airbnb, the title splits. All that occurred until I did that DA and then started to realize that it's better for me to now work more in finding these properties, so as a buyer's agent I can find these opportunities but I've also got the team with the capability to execute.
It's one thing everyone can show you a PowerPoint presentation and a great e-mail that says you'll get 7 per cent if you do a cosmetic reno, it'll go up by 30 grand.
That's okay via an email but someone still has to execute those projects. You've still got boots on the ground, hands in gloves, skip bins, that's where you're really...it's one thing to say it on paper, it's another to deliver it on the ground. So we're good at that.
Yes. And that's the other thing, there's so many things that could potentially come up that's unforeseen when you're doing a renovation because until you start ripping things apart you don't know what's behind it. So you know there could be delays, there could be additional things that require extra costs. And that's the challenge that we all face and we know with renovations, but at the same time if you're doing what you're doing which is getting DA approval, subdividing title searches, all of that kind of stuff. It's kind of a process really of managing and bit of paper shuffling. But at the end of day you know the end result is that you're going to get something greater for the community but not all on top of that you also make money as well too with less than.
The shell street project's been very systemised. How can you put 17 blocks together if you don't have a very good system behind you? CRMs, we're dealing with over 120 people in that project. So you have to run a very good system, not only communication and feedback to people, you've got to run commercial systems.
Systemising a business, it's a journey in itself.
Going back to the 17-lot project, Glover takes us through the steps he has taken so far in trying to complete it.
We identified the opportunity two years ago. We took our first toehold a couple of years ago. And then I got distracted by a couple of mining projects and a couple of other property projects and then got refocused onto it. And it actually has been a six-month journey, so we put our first block together, call option contracts six months ago and then over the last six months, once we went from that I suppose firebase where we had the six titles, we're now having people come to us in the adjoining neighbours and wanting to join the project. So the last edition came from a neighbour who said, “Oh, I really want to join your project.” And so that's been good. It took six months of talking to everybody, to knocking on doors talking to people to expand that out. It takes at least three months to go through commercial negotiations with people and then you've got to find your off-taker. And that's been probably the journey about there have been the last four months, finding the off-taker.
And that included also spent a lot of time in Melbourne talking to the finance world trying to put together...so when I said other people's money, it's things like so you could do a joint venture in a way or you could take private lending from people or you can find a property syndicate. So we just got the phone call a couple of days ago as well that said we finally got the property syndicate authorized. So that's through the Calic finance, wherein Nick just got his first major probably syndicate authorization, he's got a financial licence, he's very good in the finance world. Now that's opening up huge opportunities for us now because now I've got a whole list of people that will loan me money privately. But I also have an opportunity now to tap a syndicated source of funds. So we will go with a joint venture with this offtake and we will...it's a family operation. They have a mining and construction background. So we will complete our commercials with them. But if all that falls down I can always fall back to the syndicate. So it's an interesting time at the moment.
Glover informs us as to just what exactly an offtake is.
Person that's going to take the project. So, in this case, the greater Brisbane pathways education centre is the off-taker, the buyer of the project and effectively the money funder. So for me to pay out all the contracts, the money's got to come from the off-taker. So you think of it in mining terms, right? The offtake is the person who buys our product that we produce and it's the same in the project world.
The offtake is the purchaser of the property.
He also tells us what his job, as someone who is putting together these lots, and how these projects make money.
Putting together structures, because we're putting a business in and we'll have an entity that owns the actual buildings and then we'll have an entity that actually runs the education pathways. And then things like, you make money off billboards and putting on a telecom tower and all that sort of stuff that we do as well.
Furthermore, he tells us how long he needs to finish this project.
We've got at least another six to twelve months of commercials to tidy this right through. We'll want to start constructing by the end of 2020. I think I've got about a two-year construction timelines, so we'll put our first units indefinitely by 2023.
Wow. So this isn't definitely for the faint-hearted.
No, it's not. It's a pretty big project. It's fun.
Glover shares with us his love for reading and the kind of topics he reads about, including a book recommendation of a volume that has inspired him.
I'm a big reader, I probably read a book a week at least. I read a lot all throughout my life a lot of various stuff and I'm not you know afraid to sit down with people that are 20 years older than me and I always try and learn their story. It's just a wealth of experience, so books, I podcast regularly, so every morning at the gym it's a property. So twice a week I listen to you. I've got Brian Feeney's, a big influencer of mine in America. I love Brian's stuff but I also spend some time with people at Brooks dealer that does...she's very good on mindset stuff. And I'll mix it up with marketing, Australian marketing as well, Timbo Reid is really good. So you've got to mix it all up you got to go far and wide in what you're listening to, be careful on who you listen to and then when you find your tribe, stick to them and listen to their podcasts.
Yeah, I read a lot, it gives me a chance to read. I'm very tactile so I love John Hale's book “The Strategy Book” and you know he was the first book where he actively wants you to doodle inside the book, like grab the book and he gives you space to really write a lot of notes.
So if you take something like “Rich Dad, Poor Dad”, it's a very compressed book and you might be trying to underline things but it's a bit messy; with John, he exploded it so you could build out your model and create visual models of what you're trying to achieve.
He goes on to tell us more about “The Strategy Book” by John Hale and what he believes makes it so useful.
John Hales just released a strategy book and John's a very spiritual man himself, and he's released it on Amazon and it's only been out about a month and he's into his second book right now. It's called “Strategy” and he's got a six-step process in there and it basically is great for you to get some focus around you yourself and sort of the value that your business is going to provide.
That's the first I've heard of in being able to allow people to do that you know in a book is sometimes when I'm reading a book I just don't want to write it because I like things that are clean and neat. But if he's saying you know space for you to do that I think that's great because it interacts in the book because people don't get to do that...
I like his spiritual aspect as well. The world of property and business is losing its faith and spirituality and I think we need some of that back.
When asked what's the best advice he has ever received on his journey, Glover is quick to answer.
My nana always told me to find my limit and I always responded to that with a yep, I found it, but I kind of overshot it, didn't I.
For Glover, physical exercise is extremely important and something which he does on a regular basis, for reasons which he shares in detail.
It's been a lifesaver, the last 12 months. I've gone back to play masters AFL and that requires a certain amount of fitness and so I realized I've got to mid-40s and I probably wasn't as fit as I used to be; and you deal with a lot of mental health journeys, everyone does, and so the gym has been a fantastic arena to complement my AFL masters fitness, and we did some park runs this year as well and we did some charity runs. You've got to underpin your week around physical activity.
That's the start. That then leads on to what you do with your alcohol intake, that leads on to what you do with your food intake, that leads on to how you interact with people. If you get to a good start of the day in the gym and you've listened to the podcast, then you generally tend to find that you have a good coffee with someone, you interact better with people, you've got to watch our interactions. I think social media has created shortness in the world that needs to be counteracted with more coffee and more coffee conversation.
He also gives us some life advice when it comes to giving back to the world and society.
To find an organization, if you can't give 10 per cent of your salary to an organization that's doing well in the world, then give 10 per cent of your time. I love our Rotary group, I've been part of the Rotary group here for a little while now and I see that as 10 per cent of my time giving back to service above one's self. And they've got wonderful creeds, you know we've got the four-way test. And you've got to stand up every week and you have to basically justify what you've done in the world to make it a better place, not justify, that's a strong word, but explain to people what you're trying to achieve and you know in Rotary just does a fantastic service to the world and to the local environment. So you need to find something in your life—if you can't give 10 per cent of your salary then give 10 per cent of your time.
If Glover could meet himself ten years ago, he would have several pieces of advice for him.
I need to slow down and slow down not so much what I was trying to do but I would've told him, yeah, slow down. Think through things to another level a bit more, seek better mentors. Yeah. Don't be afraid of coaching, listen to advice. There are people out there that will nudge you along in the right way and some I suppose in the wrong way. But yeah I should have thought through to a deeper level.
It's challenging, ten years ago we were bringing kids into the world. That in itself is a journey too.
So let's talk a little bit about the last question I want to ask is how much of your success is due to your skill intelligence hard work and how much of it is because of luck.
No luck, skills okay. Intelligence is okay. Hard work is good. So it's a combination of for me probably too much hard work.
Probably could've worked smarter.
Intelligence is always expanding, I try and read a lot. I'm getting better at understanding there are questions to people to really understand intent and understanding and getting to a deeper level of knowledge there and then. So that's not just intelligence as in knowledge but emotional intelligence and then skills are every day you learn a new skill, you've got to add and layer up your skill sets.
It was a journey to try and learn how to play AFL a couple of years ago. My kicking was horrible.
But two years later, you finally nail it. I might get more than one point. You never know
This episode was produced by Andrew Faleafaga with narrations and interviews conducted by Tyrone Shum.