Having always had a passion for property, Angelini dropped out of high school early to pursue a career in development. With a few major bumps along the way, Angelini has finally found success in developing property, by opting to work in niche industries and recognising that he must always adapt to the ever-changing property market.
Join us on this episode of Property Investory to discover how Angelini is able to simultaneously remain consistent yet flexible with his development strategy, all the tips and tricks he has learned from his own mentors and his own productive investment habits.
Following in the footsteps of his family, Angelini became involved in the property industry at a very young age and since then, has been making a passive income through commercial and residential development. He shares where they are located.
I’m a property development manager located in the western suburbs of Melbourne. Day to day operations is project management and development management. How I got into the industry I guess it's through a bit of family lineage in the property market.
The accolades that I've achieved in the last I guess 12 years I've created my own property business, property management development management and construction business so I've got a construction background registered commercially and domestic which has given me the flexibility to really narrow down my construction costs in developing. First got into the property development game at a very young age was sort of thrown into the deep end by my father who virtually told me that you've got no other choice, you need to, whatever money you've got saved you need to buy the property. That's coming from my Italian background. We're very much encouraged to invest. Before we even before we travel or move out or anything like that.
Angelini loves his career as a property developer due to the versatility of his daily activities.
Day to day is obviously the developing property consisting of the you know project schedules, feasibility study, project delivery, managing construction contracts, you know trying to get sales, speaking to agents about selling the property, strategies.
So on the day to day there's a very broad range being a development manager.
That's why I love the industry, to be honest with you.
Yeah excellent and roughly how many projects would you say you've got concurrently running within the company?
There's some that's in our personal portfolio and there's also some that are actually for clients that we're managing. At the moment in our personal portfolio, we've got about 10 ranging from small to the medium I'd say in domestic and also into low rise commercial and then for other developments in project management and development. We've got about 5, one being very large.
It was natural for Angelini to go down the property development path seeing as his family has worked in the industry for a long time.
I grew up in the western suburbs of Melbourne a place called Wirrabee. I think it's about 27 kilometres from the Melbourne CBD. Very blue-collar area. My family has been there since the 1920s. Originally started off in market gardens and farming and eventually went into construction building, construction carpentry and into property development today.
Having been somewhat of a rebellious kid, Angelini dropped out of school and started working full time when he was 16.
I actually was well at the time Wirrabee was a bit of a rough area to grow up in. So my father didn't want me to go to school anywhere near Wirrabee so he actually shipped me to school out in Geelong so I used to catch a bus to school I went to Kenya International College and it to take me about 50 minutes to get to school every day and then catch the bus back home. But unfortunately, I was a bit of a rebellious child and I ended up getting kicked out at 17 and I was thrown into the workforce.
Angelini’s first job was at his family business where he delivered tiles.
I was a bit lost as a young one and my family had a tile business and I was actually working there doing deliveries on a truck. Because obviously I was unskilled, I was young and I was strong. But that's all I could actually do. So I was actually delivering tiles for a good portion of my youth.
Working on the truck meant that Angelini was exposed to property development at an early age.
By working on the truck, I got to obviously delivered to all different types of job sites. So I was able to see how different methods of construction were getting, really got me interested in construction itself especially domestic homes, how the process was and I went to all different types of designs, all different parts of Melbourne as well. So it was good that I was able to float around for that period of time and I then decided I wanted to try my luck at some carpentry and I worked for my cousin who is a carpenter so my grandfather on my mother's side was a builder and a carpenter and my cousin was a carpenter so I managed to get an apprenticeship with him and I was basically had two jobs at one stage learning carpentry and also delivering tiles.
Having made many connections through the industry, Angelini was able to save on the typical expenses when he bought and developed his first property.
After carpentry or during I was working on the truck and in carpentry, the first piece of land that I was able to purchase. I was able to get a lot of building materials of different job sites and I was working on. So I made friends with the supervisors and I was able to say look “I'm building my own house. Is there any can I take their leftover bricks, can I take these leftover timbers?” and they sort of said well “that's not a problem we're going to throw them out anyway”. So I used to deliver tiles and then put bricks on the back of my truck and then deliver them to my job site.
They've been extremely resourceful that's also how long. How long were you I guess? I mean carpentry for before you started getting into your own property?
Well I've been in carpentry ever since last year. So we eventually established a carpentry company that had about 25 employees at our largest capacity that we ended up selling out and just concentrating more on our property development and construction.
So how long was that it's the last year 2017. When did you get into carpentry?
It sort of stopped and started. So I ended up leaving my cousin because he ended up getting a job somewhere else. So I basically stopped carpentry and I was able to get my apprenticeship at a later date. Finished my apprenticeship at a later date so probably the last probably eight years.
Working in carpentry helped Angelini learn about the structural elements of a house which in turn, aided his development career.
The best thing about a carpentry is that you get to know the structural elements of a house. That was important for my knowledge to understand the structure and how the frame and the skeleton of the houses is made.
Despite being thrown into the industry without even graduating from high school, Angelini is extremely passionate about his job.
I think that I'm deeply passionate about real estate and about building and construction. Ever since I was a kid I guess all I did was draw pictures of houses. I've always been into art and design so Mum said that I was always a good draw and I just love to design small planes and houses when I was a kid so I think that I would have gone down that track. When I was in high school I wanted to be an architect but unfortunately, I didn't listen in school and I wasn't able to get past too well in maths. So yeah I had to start from the ground up.
Angelini’s first property investment and development project were on a small piece of land which he intended to subdivide.
My first investment property I purchased when I was I think around the end of 16 early 17 I bought a - back then they were called Smart blocks. They were very very small, they were 420 square meters. Now that's probably the largest size that you can get in a subdivision. So when I purchased this block of land, a lot of people saying “you can't even build a house on, it’s so small you've got no backyard”. And I said well that's the only thing I could afford at the time it was 70 000 dollars. So that was my first investment property and was a little subdivision.
As Angelini was only 16 years old at the time, his father became the guarantor for his loan and by the time he was 18, he was able to obtain construction finances from the bank.
What happened was my father was basically guarantor on the loan. So I had put the deposit money down and then I had to pay my father off over two years. So in that time, I was actually working full time because I got kicked out of school so I had nothing else to do. I just started, I was just working that whole time. So I was able to live at home and then save all my pennies and I paid the block off. And at the time that I was 18 and then that's when I went to the bank again and I was able to obtain the construction finance.
I could get my dad to vouch for me because he made sure that every paycheck that came in, he was the first one to receive it.
Angelini accredits his father too much of his success as, without him, Angelini might not have saved and spent his money on an investment property.
I look back at it and I remember vividly at the time I just wanted to buy a car. I've got this money, this is fantastic I wanna buy a car you know, at the time I wanted to do it up and show off.
And he said that you're an idiot. “Trust me”. Then he taught me that the car is always going to depreciate in value but the land will go up in value. I'm so glad but I did listen to him because, I didn't have a choice really, I had to listen to him.
Angelini ended up not dividing his first block of land and instead built a house on it by himself.
At the time I was working for my cousin doing carpentry and I was also working in the truck doing tile deliveries.
So basically I didn't have a builder's license or anything like that so I was my own builder and obtained construction finance from the bank and I pretty much-built everything in the house myself I can comfortably say in that one house I touched every single brick in that house so five o'clock in the morning you know unloading bricks stacking them around the house. Me and my cousin put the frame up together.
Any sort of leftover timbers that I can get from the site we used noggins. It took me at the time probably 12 to 14 months to build but that was because at the time I was cash poor, I could only get a loan from the bank of about 110 thousand and then I had to make the rest work myself so labour was all it was all done by me I guess.
With all his experience now, Angelini believes he could finish the same project in under half a year.
At the moment if I was to contract that house at the moment I'd probably finish it in five to six months. It's a single storey house three bedroom. It was a very nice house at the end of it but pretty stock standard.
I would be smashing that house out now in five months time.
Angelini sold the property in 2008 and travelled to the US shortly after.
I actually sold the property in 2008. So I kept it for a few years so I lived in there. I was able to get the first homeowners to grant. And I think at the time, it might have been 2007.
I think that was just when the financial crisis. Not sure if it was the financial crisis. That was a year afterwards. Maybe in 2008. Yes I sold it in 2008 and that's when I travelled over to the United States. I remember that was just when the financial crisis or something.
What was the reason for travel to the US?
So basically after that one house, I lived in there for probably two years. And I was able to put it on the market because I just wanted travel and enjoy myself and see the world a little bit because I did work very hard and you know I was 22 years old and I just wanted to go overseas and I might enjoy myself. I sold the house 355000 at the time.
Wow, that's a good return.
So yeah it was. So I was able to build a bit of equity and then see what I was going to do the next stage.
That's when I ran overseas and I really saw the global financial crisis put a lot of pressure on homeowners which changed my strategy completely. I was very used to property market on the increase all the time, 2000, 2004, I was like basically saying - and 2006 - like this property market’s crazy. I've been looking at property ever since I was 16 and I'm 22 and the market is going up and up and that's when I went, I travelled overseas the United States. You know I'm still very into the property but I was able to drive around with friends that I have in the area in the U.S. And we were looking at houses that were 800000 at a time and a year later they were worth 400000. It really woke me up, look the property market isn't always going up and up, it’s definitely cyclical.
Despite the success of his first investment property, Angelini definitely had his worst moments when he deviated from his property goals.
You know being young and ambitious and thinking I was spreading my risk a bit I thought that it might be good to venture into the share market. And I thought I had it all down packed, that I'd done my research and I think I bought at the time, they might have been BHP or Rio Tinto shares and I thought oh these things are going to keep going up and up and you know I was reading the paper every day and I lost, I can't remember how much money I lost at the time but also that was a fair bit of money and this was probably 2006 2007. And I virtually just threw away, I just got rid of all my shares. I said I can't keep up with this I don't know what's happening. It's too volatile for me and that's when I really stuck to real estate and property.
Angelini realised rather than diversify his expertise in different fields, it would be better to specialise in one particular industry and reap his gains from one source.
I know that obviously being a young entrepreneur you want to make money wherever you can. It's about ideas and floating ideas around but as I get older and I think being specialised in one particular industry and even narrowing that down and being an expert in something, you've got more chances of making a good living then spreading yourself too far. And that even goes with other businesses in other industries and just being an investor in general. I mean look at you know a lot of that sometimes people can you know make a right move, I just see it as a bit of a gamble and that's I look at myself really and I assessed myself good five years ago and I said “Where am I making 80 per cent of my money, I'm spending 20 per cent of my time” and that was in property development. So you know this, you know I was investing my money into real estate and you know I was only spending 20 per cent of my time where the 80 per cent of my time was only making me 20 per cent of my money at that particular moment in my life.
As for his worst property development moment, Angelini believes it was when he joined a rather uncooperative partnership.
I think of the worst development moment I've probably had was getting involved in a partnership.
Or a joint venture which my partner wasn’t in line with my vision. That was probably the most - It wasn't a bad investment I guess it was choosing the right partners.
Obviously we had a direction of going investing into a property to develop. However sometimes other people don't have the same funds as you or you know to put an equal amount into a certain property. So I would, that's what's made me really try to avoid a lot of partnerships or choosing my partners carefully in all of my development.
As a result, Angelini learned to find people who are committed purely to a business relationship.
Basically, we wanted to - it's always important to say okay look we're going to get into bed together if I'm going to put 50 per cent in. This is how much money that we need to come up with. And once we start construction and this is how much money we need to come up this and the relationship doesn't work if one person is coming up with the money and the other person for whatever reason it may be, can't come up with that money and has committed themselves into a business relationship. So that's probably my worst development story.
And what happened to that development did you proceed with building or did it just…?
Oh well the best thing about development and property is that it's always got an asset value. So you know we ended up coming through. It was an amicable partnership. I said look the relationship’s certainly going to work whether it's the dealer you buy me out or I buy you out and that's what we did and we remain friends to this day. However it really put me, made me aware of a position that you might put yourself into with exposing yourself. You know, you have to make sure that your partner is going to be in that journey from the start until the finish and obviously make their contributions as well.
At the start of every project, you know everyone's high five each other and we're going to make so much money and it's going to be fantastic. But a lot of times people don't take into consideration the what-ifs. What if interest rates change? What if we can't sell our products at this price? You know what if construction prices change?
What if town planning doesn't come through and you have to be able to you know whether that storm together.
Niche Markets and Strategy Adaptation with Tristan Angelini
Angelini believes that the two things that held him back from investing initially were simply his lack of funds and fear of commitment.
Funds was always holding me back. I really want to do up my car at the time and that was my first hurdle and everyone was going out and partying and I was always working. So I suppose trying to balance the two.
So yeah commitment to me is this is very important. And you know it's not all roses but you have to dedicate yourself for a good 10 years of your life in order to see it through and just eventually you'll keep failing and you know you might not see that's the direction you’re going in life. But once you commit yourself, I think you become an expert at it and then it's like driving a manual car after that.
As for mentors, Angelini credits his father and his uncle for teaching him about the cyclical nature of the property market.
I've got my father and my uncle as well who I see as mentors. That was very important for me growing up too because at the time you know we're talking about real estate and you know when I was young when I was a kid I was basically saying I know the market will never go down and it will just keep growing and growing and they sort of looked at each other and say “just wait it'll change and it will change” and they've seen the market cycles.
You know in the early 80s or late 80s and you know mid-90s and the early 2000s they've seen the 2008 financial crisis so they've experienced these cycles and you know listening to what they went through when they were young and they were developing is very very important because you know history tends to repeat itself.
It's great to learn from mentors like your father and uncles and stuff like that. They've just been through it all. They can just tell you know what's happened.
That's right and especially you know maybe there are some kids out there at the moment who may who might not have been as fortunate as I was by having those mentors. And that was the whole purpose of I guess coming on the podcast and being able to radio that message out to the listeners.
And as for the best advice he’s ever received, Angelini reveals it is easiest to find success by sticking to what you’re good at and becoming an expert at it.
Best advice would be, definitely is to stick to what you know and become an expert at it. I know sometimes it's easy to deviate from your track, you know you might get some different investment opportunities and everyone's excited but the best and sustainable strategy is to pick your target, know it inside and out. And if it's selling toothpicks or you know developing property become an expert at it and you'll always make money.
After realising the enormous amounts he’d need to repay the bank after purchasing property, Angelini turned to quick and immediate property developments to ensure he had some sort of income flow.
The best aha moment I think I had was obviously I started buying some residential land and I was building at the time, I had a construction company. I still do.
However just looking at my repayments and I had to keep making these repayments to the bank and got no income coming and then I sort of said to myself “well I've got no income coming in on my land I'm paying for a piece of property but I've got no cash flow”. So it's just an empty, not a bottomless hole because the land is going up in value, but I've got no rental to facilitate my interest component on my land. So that really sort of changed my strategy into trying to buy something and develop it straight away instead of having it sitting there. Or every time I'm looking for a property making sure there's some sort of house or rental income that can facilitate the interest or the repayments on the property. By having tenants rent out his properties, Angelini would have a fall-back method to repaying his loans to the bank.
Buy an empty piece of land and it's empty you can't rent it out. Plus even 300 dollars a week would help. Because at the end of the day it equates if your construction starts you know 18 months later you're in DA or you’re in council for eight months then you've got all your pre-application costs as well. So you keep having to put more money in which affects your cash flow.
Angelini would also adapt his investing strategy to accommodate for any changes in the property market.
I think that you know being ahead of the game and reading the market well is very important because your strategy might change along the way. Our strategy has definitely changed over the last 12 months where we're not actually selling our developments anymore we're actually developing to rent and that's our new strategy.
And as you mentioned strategy has changed. How has that affected say maybe your cash flow or how has that affected the way your business operates now?
Well that's actually probably increased our cash flow if anything because well we were doing 2 part contracts 90 10, 10 90 contracts when we were selling off the plan on some of our residential sites. And you know we've got to obviously we've got 10 per cent deposit from a buyer. And then they settled 14 days after title on a townhouse site.
So, let's just say well building a townhouse development site. We had a contract of sale where we're selling off the plan and we'd have a 10 per cent down payment which is the deposit and then 90 per cent was paid once the certificate of compliance and the title was issued on that say a townhouse development. And basically from month 0 that we sold it until month 12 where we finished the construction and got our titles through, we'd obviously, the market has increased significantly in that time.
So we've sold it month 0 but we're settling later on down the track. And we've seen that we're losing a significant amount of money in that upsell. And you know, the rental market keeps increasing and increasing but also from a tax optimization you know you're paying capital gains tax on that whole entire gain.
So we know our strategy was a rental model which increases our cash flow.
However, there is a downside to selling off development plans.
You also reduce your costs of sales as well. For instance selling off a plan, you got to pay agent fees. Sometimes your titles don't come through in time. Once you've got the certificate of occupancy at the moment, we've got a certificate of occupancy, we can rent some out straight away where the same unit that we've sold in that one development, we actually haven't got titles through from the titles office yet so they're actually sitting there empty for months, the last two months, it's been eight weeks. So that's some of the downsides of actually selling off the plan.
Funding is always different for every property purchase so Angelini advises investors to keep a good loan to value ratio in mind.
It just depends on which site that we're actually going to purchase. I mean if it's got a house on there and we're building around that house you know there maybe some sort of cash flow coming in from one house or if we're demolishing a house. The easiest part is having a good LVR, good loan to value ratio. I would advise not - when you know you are doing property development, it depends on how many units that you're developing but not to do a 20 per cent deposit, maybe increase that a little bit more. So when it comes time to get new construction finance you don't have to come up with that amount of money straight away.
However, to get the required funding, Angelini has been exploring alternate banking options over the big 4.
Well a little bit easier at the moment I mean banks the way you know as we were discussing earlier banks are getting tighter and tighter at the moment. So it depends. You can go through the big four. However you know if you're buying it through a complicated trust structures or buying it through your personal name, the banks want to see serviceability. So it depends at the moment we’re, to get our projects off the ground quicker especially in the last six months, we've been going to alternative lenders that are encouraging development finance.
Since the current property market is slowing down, Angelini prefers to develop and hold his properties and also work in more niche industries such as child care and aged care facilities.
I think that our rental market is going to be quite strong.
You know that's, I guess suggests that our strategy is probably I think the best strategy to have. To develop and hold it and get a cash flow from that same property, until the market does increase or you know the demand becomes a lot more than what, I guess supplies.
That is probably the best, for residential low rise residential developments. That would be I suggest a good strategy. But I think that as time goes on there's going to be other areas of growth for investment in property development in possibly other commercial developments such as child care or in aged care facilities. I think that they’re going to be the growth industries in the future.
Especially so many more kids going you know been born in the last decade or so it knows that just generally around playgrounds or those areas of Austar pop up with more of those things are think government and council staff see the need for that.
That's right. So basically our population is going to increase. Children that are getting born are going to increase I think government subsidies are increasing with some of these childcare centres. So they're going to be good models in the future.
Angelini’s first investment property was a small three-bedroom house, which slowly led him to bigger and better investment opportunities.
Well, I started off with one domestic dwelling in Werribee it was just you know 18 square home, that was all I could afford at the time.
And like I said a three-bedroom single-story dwelling. And then obviously and then from there I have reinvested into another sort solid growth strategy areas where I was able to buy other investment properties and amalgamate them into development sites and that's how I rolled that on and that is probably you know 13 14 years ago.
Rather than working on a broad range of residential developments, Angelini has moved onto more specialised development markets.
We sort of stopped, we've put not the brakes on but we've expanded into other developed markets and childcare centres.
We've got a couple of sites at the moment that they're working with with a national provider in the area that we specialize in. We're looking at a housing affordability model which we think is going to be for a growth industry especially with you know housing prices the way they are in Melbourne and Sydney.
So that's where we see the growth areas happening. So childcare housing affordability such as you know rooming houses and disability, special disability accommodation. They are the industry that we want to push into which is still residential but specialised development so becoming more niche in our developments.
Angelini decided to work in childcare and aged care facility developments after realising how competitive the standard development market is.
With the singles and you know the dual occupancies and the three townhouses is that the market is, it's very competitive.
So I don't like going and buying a property where I'm going to auction with you know there's 10 other people bidding for that property and I know that my profit margin is going to get eaten because someone just wants to enter the market. So that's why we sort of get creative with different sites.
And because we're going to be yielding it with our niche product, not with a townhouse development.
Angelini started developing child care centres after finding out its valuable growth patterns.
We constantly were going to, in the last four years in Melbourne five years, the market has been growing especially in our area and Western Melbourne and it's been growing by 15 to 20 per cent per year and every single time a good site came up.
You know it was 800 square meters, you know it was going to auction and it was selling for 10 to 15 per cent above market value. And we couldn't get into any more development.
So we started getting a little bit more niche-y like I said in our products and starting to pursue a semi-commercial model.
Angelini’s go-to book recommendation is the classic “Rich Dad Poor Dad” by Robert Kiyosaki which was pivotal in helping Angelini start off on the right foot.
The best book is probably Rich Dad Poor Dad from Robert Kiyosaki. That really changed my life from a business perspective as well to learn about what is an asset. What is a liability? And really analyzing everything that you do in life and just gaining financial education is so important.
So it's great even in business. I mean you know I'm not like I said I got kicked out of school, I was basically drop out. And you know I really had a bit of depression when I was young because I didn't really have a direction you know I was working in a truck and how am I supposed to - I can't go to school because I wasn't smart enough and that's what the school and the system ended up telling me. But you know I worked hard and you know I was managed to find books like these and inspire myself to just go and have a crack.
The key to Angelini’s success in development would be his habit to constantly listen to audiobooks and watch YouTube videos about the property market.
A habit would be I constantly, constantly listen to audiobooks and YouTube channels about what's going on in the marketplace and developing my financial knowledge or my business knowledge into my real estate knowledge because markets keep changing and you have to keep to the forefront of that to obviously strategize. Chess is really good. I enjoy playing chess. I never thought I'd say that but yeah it's good for your brain to strategize on how you're going to play your next move and that transitions in life as well.
Now with a young family, Angelini tries his best to balance his work as a property developer with family time.
And obviously you know, I have you know, a lot of time and effort going into my business and now I've got a young family. So now I've got a different ambition and that's trying to balance business and family as well which is I think a lot harder than it is to become an expert at something.
I've got a son who is nearly two so young. I've got a young family at the moment.
There are sleepless nights and I've got to get up but you know I get up at five o'clock every morning and it's getting harder and harder as I get older and older.
He also listens to a variety of audiobooks and podcasts, all on different aspects of the property.
A couple of audiobooks that I've listened to one would be outliers.
Malcolm Gladwell, there's another one by Napoleon Hill this time trying to think like one like Freakonomics that's interesting. The barefoot investor. I've also listened to a couple of ones on angel investing. You know just to do a bit of research. There's one with the ABC and real estate. I mean even listen to simple things like that too because you know it just sort of reinforces what you're doing day to day is you sticking to the basics instead of over-complicating things.
Angelini recommends Grant Cardone’s podcast as well.
Another great podcast I don't mind personally listening to is Grant Cardone.
He’s I think is definitely an interesting chap to listen to. We live in a very unique time where you know from a click of a button at your fingertips you can listen to any sort of information that you want to and I think the new generation should take advantage of that because the information is literally at your fingertips.
One of Angelini’s biggest regrets along his property development journey is the car he bought when he was 20, which he deems was the worst investment of his life.
I’d say don't buy that car because it's going to cost you a lot of money and you could have put it into a property. I would say to myself I'd buy more property, that’s what I would have said 10 years ago.
When I was 20, I bought a car and it was the worst investment in my life and I ended up selling it two years later. I lost my licence I don’t know how many times by driving it and it was an expensive investment - costly.
And what is the most excited about his property development journey over the next five years?
The most exciting thing that I see is I think that it's in property development, it's an older industry that I think that technology is going to catch up. And I see that by being you know in an in trend with technology and having that experience, I think that I've got a great advantage for myself and our company. So I think that's definitely exciting and you know obviously the growth of Australia for migrants in Australia I think that it's definitely exciting the next five years to be in this position.
And even you know a cryptocurrency and blockchain technology I think that's got a lot of room to move within that within obviously the real estate and maybe property investment industry. There's a lot of things that could happen which is exciting.
For our listeners who are interested in Angelini’s property development journey, his LinkedIn is the fastest way for you to get in contact with him.
Look you can connect with me on LinkedIn. Happy to answer any questions and help people I'm meeting. Just type in my name, Tristan Angelini. Or alternatively, you know to contact me through ARKproperties.com.au
This episode was produced by Alex Cooper with narrations and interviews conducted by Tyrone Shum.