Property Developer Drew Evans - director of Caifu Property - will show us how property investing should be as easy as pie through planning for the worst-case scenario. Uncover his journey from a close call in Zimbabwe, to saving $39,000 for his first deposit, to starting his own prosperous business.
Find out the jobs he took prior to building his own portfolio, how he learned your 20s are for learning and your 30s are for earning, what he did to educate himself about the industry and what he’s doing now to create wealth fast!
Can I just find out how did you come up with the name Caifu?
It was made probably about six or seven years ago and I was actually in China at a property conference there, and Caifu comes from the word meaning prosperity, wealth and riches in Mandarin. I came back to Australia and thought, ‘That’s pretty cool.’ It’s kind of a unique name so everyone can sort of go, ‘What does it mean?’ and it kind of kick starts the conversation.
It definitely got me kick started on this conversation - I had to ask you, it was very interesting. Now I know the background to it that's very unique and obviously it would have been an easy name to pick up in terms of domain name in getting all your assets and stuff.
I guess Caifu Property is kind of a foundation company, the better question is about the types of programs that we actually run. So we run programs called Automatic Equity, Equity Development and Equity Builder, which is three different levels of programs depending on all of our clients, because everybody is at a different stage or level of their investing career. We've got a tailor made program for each and every person.
These programs detail a service which cater to the individual’s needs to help them achieve good results in their property investing journey.
I've been working in the property industry in this group for the better part of a decade and my experience is that people - as much as they want to get educated and have mentors and stuff like that - they're probably more interested in actually generating good results. So that's what our business is all about. Education for us is a natural process of dealing with us, but really people come to us access the best results possible, hence why the names are Automatic Equity, Equity Builder and Equity Development.
So what does a typical day look like for Evans?
It varies from day to day, because you do have such a wide range of clients. So my normal day starts off by checking emails, making sure that I'm on top of everything with the team, having a debrief with my business partner Damian, in specific relation to where the property opportunities are. And then it's a case of trying to catch up with as many clients as possible, finding out what are their goals, what are their objectives, what are they trying to achieve? Then a big part of that is tailor-making a strategy to make sure whatever property we're recommending to our clients is going to help set them up, not set them back. So my role at the moment is very varied, but it's all about getting the best possible results for our clients and to make sure that we can help set them up and they keep coming back to us, time and time again.
Definitely! And obviously a happy client means more happy customers coming through the door through word of mouth.
Yeah we're pretty lucky, we haven't had to spend so much money on marketing, advertising. We've got a lot of clients’ success stories that have been featured in all the magazines recently, so Your Investment Property magazine, Smart Property Investment magazine and back in the day, API as well. I mean you look after your clients and the rest looks after itself, so we're very fortunate that we do have such a high referral, word-of-mouth type of business.
Originally from Zimbabwe in Africa, Evans’ life has changed for the better.
I was at boarding school, grew up my whole life there until I was about 15 - and unfortunately it's a bit of a sad story, which now is positive. I grew up on a farm with my family and basically I was at boarding school at the time, my old man called me and said, ‘You’re not going back to school.’ Dad lost the farm, he got badly beaten up and was almost killed, and we moved to Australia in 2001. So most of my life I grew up in Africa. In Australia I lived in Newcastle NSW, as well as now living in Double Bay in Sydney.
It's a sad story because the country had so much potential, a lot of stuff going for it and I guess I'm very fortunate to have such a blessed upbringing. At the time it was pretty sad; having to start from scratch at absolutely nothing and it was very, very successful when it was still operational. But I pretty much lost everything overnight and it was fortunate that we could actually afford to leave the country and all the family is still with us.
Continuing his education in Australia, he then went on to save for his first deposit on a property.
So I came straight into high school in Australia, finished that and then I went to business college and did that for 12 months, then into university for three years. And throughout that time, you know when you turn 15 you have the choice of playing lots of sport - which naturally I'd love to have done - or to start working. And I’ve done jobs here and there, so that's actually how I managed to get into property. I was working four jobs at the time from 15 all the way through to probably 19 and saved up $39,000 for my deposit, which got me into property. Not to sound corny, but hard work pays off in the end.
Yes, yes I totally agree. And you said 4 jobs . What kind of jobs were you doing?
I was managing my parents’ houses, so I had a quite an awesome deal when I was in university which really got me started in property investment. They actually got into student accommodation, so one of my jobs was to help them renovate houses. We bought a couple of houses and there were three bedrooms, four bedrooms at the time and we turned them into eight bedrooms. And I also had to manage the properties, obviously had subleases for my buddies and as opposed to my parents renting out the house on a standard residential lease, that rented out on a per bedroom basis. So as you can imagine, having three properties like that, the positive cash flow was absolutely insane. So that's how I started. Then working in pubs, working on farms, you name it I’ve done it I think - working in restaurants, cleaning dishes.
His experience with one of the largest land package developers in Queensland, although not the best job, provided him with knowledge of the fundamentals of property which he needed to gain momentum in the industry.
I was there for about 15 months and when I first started I remember I had no experience, no knowledge about how the industry worked, I guess I just had a desire to try make and money out of real estate from watching what my parents had done. Basically you get a complete stranger, you walk into the house and find out what the goals and objectives are and coach them to come to the office to speak to somebody at the time who was more qualified than myself. Now that's not a business model that I endorse or believe in by any means today, but it did give me the grassroots as to how property works and how the industry actually all comes together.
While continuing his property education, Evans used his skills to begin developing.
I actually started when I was at the company and I bought a townhouse in the Central Coast, which at the time had actually remained flat for the better part of five or six years, didn't actually do anything. But understanding how that bad experience happened, I moved to Sydney and actually worked for one of the biggest companies that focus on pure education. How do we actually educate our clients to do different types of strategy, in order to generate wealth through using the property? And that's where I really started to kickstart my personal property investment career, where I started off doing very basic development in a normal four-bedroom house and land, make some money out of that. Then did something a little bit more cool and built two four-bedroom houses by doing a strata title subdivision in a regional town, did very well out of that. Then more blue-chip real estate, so blue-chip property in Newcastle, blue-chip property in Brisbane.
But what I realised is buying blue chip real estate, you kind of buy and hope and pray that it goes up in value. As time progressed and obviously the savings and equity built up my portfolio, I then got into more development type stuff where I was building two four bedroom homes on a corner block and doing a Torrens Title subdivision all the way through. Now we're using duplexes and mini development as a fast track wealth creation strategy.
So what is the difference between strata titling and torrens titling?
I'll give you an example of the deal that I've done. So the first one was actually a property in Gunnedah. It was a 2,000 square metre block and the precedence all around it, which is what you always need to look for, was 600 square metre blocks. In my head is a little bit inexperienced, I figured, ‘Hey I'll buy this 2,000 square metre block, put two four-bedroom houses on it and subdivide it, being 1,000 square metres each. Which then once it's subdivided, they have their own individual Torrens Title; which means you can sell them individually of each other.’
Unfortunately due to a lack of experience, with those properties you couldn't subdivide them through Torrens Title, you could strata title them. So the easiest relation to that is if you imagine buying into a townhouse complex or unit development where there's a body corporate or a strata, that's what’s normally a strata title, where you have some sort of shared space you have to contribute to the sinking fund, the admin fund and so on and so forth. So traditionally speaking, in the housing market anyway, we always try and aim for Torrens Title subdivisions - not necessarily strata title subdivisions.
If you buy, build and develop a duplex, for example, most duplexes are strata titled. The reality of the matter is that you are the only owner, so it's like you’re setting up a body corporate for yourself. But if you ever wanted the opportunity to buy one, sell one, sell both, keep both, you really do need to have that option in place with a bank that would take the individual title over one duplex half or over one property. So the example of my property in Gunnedah, I still own both, I haven't set up a body corporate because I'm setting up a body corporate with myself. But when I intend to sell one, there will need to be a community management scheme set up so that the person buying one of the properties, we can share the common expense of the driveway for example. It’s very minor stuff, but it's just an entity or a legal structure of how the property is actually owned.
Yeah it's just these tiny, little details that make the difference though, that's very interesting.
Yeah, huge difference. And again the other development that I've done in Newcastle, I was fortunate enough to buy a corner block and based on the town planning rules, you could actually Torrens Title this development. So as a Torrens Title, you don't have to have a community management scheme set up, you don't have to have a corporate set up and you actually get a whole lot more resale for the property, purely due to the legal structure.
Coming back to his time at the company in Sydney, which focused on property education for their clients, this company’s values seemed to shift and Evans chose to branch out on his own.
The reason I have set up my own company now is because I've taken the best practices out of that company from an ethics point of view, obviously endorsing it for our clients. So what they would do is charge an astronomical fee upfront to join, in inverted commas, their ‘mentoring program’, which when I first started was unbelievable. You know we were doing things that really benefited the clients in a really good way through different types of strategies and property opportunities. But as that company grew, the types of deals that were presented to clients changed significantly where I guess the benefit shifted away from the client effectively to themselves as a corporate entity.
That experience was well and truly priceless for me because I got to effectively with my business partner help clients invest in over $1 billion worth of real estate. Not to sound big-headed or egotistical, but it’s true that I've seen the good, the bad, the ugly and I can tell my personality is the way it is because I know the mistakes I've made in the past and definitely can see a much brighter strategy and future moving forward. That’s where people love dealing with us because we are so honest and upfront and in getting some leverage off our experience, not only our mistakes but also some of the good results.
One of Evans’ worst moments throughout his journey happened with the Newcastle development, which taught him never to get emotional about property and to consider the implications of what you’re setting out to do.
In property investing over the last decade, it's been a massive learning curve. But the example of the development I did in Newcastle, now it was a very successful development and I made a lot of money. But one thing that I did which I guess your listeners can take a lot of value out of is I got very emotional about the development. So the first thing I did is I found the land first, which is good. Second of all I went to an architect and I got specifically architecturally done drawings to see the highest and best use of what I could do on that block of land. Now with the architectural plans comes a huge expense, it cost me about $25,000. And the second thing I guess I didn't really understand was the implications of a sloping block. Now this block from the top to the bottom had about a 1.5 metre fall on it, which I didn't think would be a big deal, but when you talk about the cost of development in construction, I had huge amount of cost to actually doing it.
What kind of cost are we looking at. I mean I know one half this is as high as I am but that is a very big block.
So you have significant retaining costs for retaining walls, especially because I was doing a mutual subdivision at the time. So retaining the walls is a huge cost. Second of all, you've got things like your drop bench beams - which not to get too complex is like your split foundations. So the builder can't come in and just do a site straightaway, pour a slab and off you go, there's certain site preparations that you actually need to do in order to make that worthwhile. Small things like there was a huge amount of trees on the site as well which I wouldn't think would have a huge implication, but all these sort of things start to build up.
After spending thousands in architectural plans, he also had to undertake a great deal of research to determine the best builder for the job.
I then thought that I'd learn the ropes and actually put my DA approved plans out to tender; now that tender went out to seven different builders. So as you can imagine, if you have a look at your inclusions with seven different builders, seven different types of products, there is a discrepancy of over $212,000 for the exact same DA approved plans. So it took me hours and hours and hours to research, ‘Well what does this builder do that builder doesn't? What are the quality of the fixtures and finishes?’ For me that was another huge thing. And I also didn’t really understand at the time what the implications were for things like council contributions and your headworks challenges. As your listeners may or may not know, whenever you're adding density to a site or to a parcel of land, the council puts their hands up to improve the services in the area - that's your local schools, your libraries, your parks, your green space. And then there are other people you have to deal with, like hot water to increase the sewerage of the water facilities on the actual sites as well. So all that sort of stuff, whilst I had a good understanding of it I didn't really understand the implications of how much that actually impacts on your bottom line.
So the learning lesson for me in hindsight is it's good to find sites, but if you approach builders that have already got the specific housing designs that would suit that particular type of land, that's a huge thing to do. I also spent a fortune on landscaping - and I know that's really weird, but at the time I wanted to be a youngun property developer that would drive past and you know, almost be I guess a little bit egotistical to show family, friends about how good I am as a developer. But in reality I drove past three months later and the tenants don't look after the property like you would look after your own home, so that was a complete waste of money.
Having partaken in a handful of developments before this, this was around the time he began attempting some of his own projects.
Personally I'd done four or five probably before that, but obviously helping clients and learning the ropes over the past six seven years prior to that, I’d seen a whole bunch of developments. But I guess this was the second or third one that I tried to do on my own, ignoring the basics to some extent.
Despite the negative aspects of the Newcastle deal, it was also when everything clicked into place for Evans - where all he had to do was to sign some paperwork to succeed!
I've always had a lot of clients that spend an absolute fortune doing renovations and subdivisions, some people made money and others haven’t. But my a-ha moment was when I did that development in Newcastle, where I had a look around where I was working at the time and literally within the space of 50 metres had all the professionals that I needed to do a successful development or a successful project. That’s things like acquisitions, senior finance, legals, accounting. And that was my a-ha moment, which is why I really endorse forcing equity on a portfolio, where realistically I’ve made an excess on my latest deal of $165,000. Literally all I've had to do is sign some paperwork; it’s phenomenal. So my a-ha moment as if you've got time to sign some paperwork, get professionals around you to just do the rest.
For those looking to get into property or improve how they analyse potential investments, Evans shares some of the resources he uses.
I'm a bit of a sponge when it comes to listening to all bits of information, but with that comes challenges because you need to sometimes look at the hidden agenda behind certain information that's publicly available. But I've always been a huge YouTube fan and it's not just specifically related to property but it's also around things like mindset because when you're investing in property, certain setbacks and challenges are inevitable. But really, in order to create a successful journey you need to learn how to actually overcome those.
So I signed up to pretty much every property market commentator there is in Australia just through their YouTube channels, through their magazines, through looking at stuff on the Internet on their websites. But I also make sure that I look at factual based research; so things like your RP data, your core logic, your cordells, BIS Shrapnel and EQM research. So these types of research houses don't have a hidden agenda, they purely make their publications based on the facts - things like BIS Shrapnel that comes out once a quarter, they’re white papers.
That's what I do, you look at market trends, you look at market commentators, but realistically when it comes to property investing you always want to start looking at the macro drivers. What are the population doing? What's the infrastructure doing, both public and private? Where are all the jobs getting created? And then in my own personal portfolio, I look at all the micro drivers - what's the demand and supply? What’s the hill variation? What are the vacancy rates doing? What are the days on market and how quickly is it actually going to sell? What are the demographics of the people that are going to be buying this property, or reselling it to them? So there's quite a huge range of different stuff that I follow personally and it really just comes down to how much time you have to do it all.
There is also a set of criteria that he considers and endorses to his clients when determining what property to buy - and it’s as easy as pie!
One of the things that we do know is I have a full-time acquisitions team, my business partner Damian Lee heads up that team. So their only job is to research the markets and find opportunities that’s specifically going to help set our clients up. Where I fit in is my role is to make sure that from a strategic point of view certain properties are going to help set you up and achieve your goals, above others. So when we do look at any type of opportunity, we always follow the pie principle - property investing should be as easy as pie, as a starting point. What's the population? What is the infrastructure and where are all the jobs, the employment nodes? We then dive down into all the micro factors. Every opportunity we look at will have anywhere from 30 to 50 pages with research and due diligence on the opportunity.
And this is one thing that is really important for your listeners, is you should always do your own research and due diligence. Myself personally - and this is what I endorse to all of my clients - is plan for the worst, but hope for the best. On a worst case scenario, is your portfolio going to be OK? If you don't have tenants, more so when you don't have tenants. What if interest rates are going up, when are interests rates going up? You know, things like that; if you're going to be OK at least that way you know on a worst case scenario and you’re absolutely going to be able to weather the storms, which I guess is inevitable in any type of property investing.
If you're investing in a property, how are you making your money going into a deal? Just recently we helped a client make in excess of $205,000 because we looked at comparable sales in the area versus what our construction costs were.
3 Tactics That Will Accelerate Your Wealth in Property with Drew Evans
So what was the first thing that held Evans back when he wanted to begin investing in property?
To start with it was probably just the lack of funds to get into it, if I'm being honest. I've always been a huge believer - and this is probably being something my parents learned through - you shouldn't work as hard for your money as your money should work for you. Which is easier said than done when you don't have a hell of a lot of money. There's nothing that really has held me back than having the right team around me and the right psychology to get the funds together to actually invest in property.
It appears a lot of people - and I've had a lot of guests on the podcast - they initially said that the first thing that held them back was funds. Why do you think that's the case for a lot of investors?
Well, I think it's just due to lack of experience, as well as obviously not having the funds, but also not mainly thinking outside of the square. When I speak to a lot of my clients - and remember that everybody is different - the hardest part of getting started is getting the first one or two properties because you have to save up the cash so that you can obviously utilise the equity. The other thing is you can utilise somebody else's equity, we can do lots of JV type opportunities which has been really good for some of our clients, thinking outside the square to get them started in property investment.
To go about approaching or finding joint ventures, you are looking to contribute either your time or your experience.
So joint ventures, I guess you can either contribute your time or you can contribute your experience. Now for me it's not something that I endorse if I'm being really honest once you get a bit of money, because my experience is if you do have the funds you're better off doing it yourself because you’re talking about joint ventures and special entities and things like that, it comes with its complications. But if you've got the time, the energy and the resources to go and do all the running around and find specific opportunities, then you can team up with somebody that's already got the funds and work out a scenario where, ’If I put that entire deal together, if I manage absolutely everything, you could work out a percentage split of the profits,’ or something like that.
Determining who gets what percentage of the profits within a joint venture deal ultimately depends on the situation and what each of the partners are bringing to the table.
I guess it comes down to individual negotiation. You know I get approached by developers all the time, asking to do joint ventures with myself and one of the common ones is if I'm doing all the research, all the due diligence, putting it all together and funding something, a 50/50 of the profit upon completion is normally a good JV. But it really does depend on the person putting the deal together, the expense that they have, the funds that the money partner’s putting in.
So realistically then with any type of joint ventures, it's really about the strength of negotiation and how both parties can work out the best deal for each one individually.
100%, it’s a deal-by-deal basis, it’s an individual by individual basis to get a better return.
On finding mentors to help him throughout his journey, Evans says it’s about putting yourself out there and connecting with those who have already hit the goals you are aiming for.
I'm very fortunate to do what I do. Both myself and Damian have got some great mentors. Because I've been in the industry for the better part of a decade and I want to get bigger and better projects, so a few of our mentors are people who are already in the game, already doing what we want to do. So that's all the way through land development, through to townhouse development, through to unit development. It's one of those sayings, if you want to find a good mentor, find somebody that's already done what you want to do and get advice from them.
Just the other day, I won’t tell you his name, but I connected with him on Facebook and I said, ‘Hey, listen mate, I know this is out of the blue, but I've always had such a respect for you, please can I buy you a coffee? And just have a bit of a chat?’ And I guess there's absolutely no harm in asking and two days later, I was having coffee with him and getting his personal property advice and also advice about businesses. This particular guy features on Your Money Your Call every second day on Foxtel; so if you don't ask, you don't get, and that comes with a lot of aspects of property investing and life I guess.
The three best pieces of advice he has ever received on property investing is around why cheap is cheap for a reason, why you should avoid selling and on finding someone to mentor you in the field.
The one I had recently is I get a lot of clients who say, ‘Oh Drew, I’ve already got 25 properties, I want to get to 200.’ And a part of me is like, ‘You know you don’t want to get 200, you want the result that it can generate for you.’ And this is where I guess our business philosophy is very different to those types of investors and those type of investment companies, where best advice was an old mentor once said, ‘Drew, cheap is not affordable and cheap is cheap for a reason.’ That's always stuck with me because just because something is cheap doesn't make it better - and that comes from buying cheap property, to cheap construction, to cheap development. Everything has a price and it's that price for a reason. So that was a good piece of advice which has really stuck with me.
Another one is don't ever sell anything unless it's preventing you from doing something else. That stuck with me as well because throughout my personal portfolio creation I’ve made some mistakes and I've always been forced with the decision, ‘Do I sell them now or do I keep them and hope the market turns?’ And that's what stuck with me - don't sell anything unless it’s preventing you from doing something else.
I guess the last one, which I guess is the theme of this whole podcast, is if you want to do something, find people that have already done it and get them to mentor you or get them to show you how they've done it. What you find - and what I'm experiencing on a daily basis - is those who are successful love to give back and help other people do what they’ve already done, not only from an ego trip but also they are generally people that want to help.
Some resources Evans recommends listeners to utilise in their own journeys include books by Robert Kiyosaki and signing up to valuation companies such as Herron Todd White.
The book that’s probably made a big difference over a decade ago was Robert Kiyosaki’s 'Rich Dad Poor Dad', an investor everyone should watch. I've read Tony Robbin's books back to front, front to back, numerous times. My library is full of personal development books, not necessarily all related to property but more so mindset, psychology and that type of thing.
A lot of property magazines, I recommend that to them, and I also encourage everybody to sign up to all the valuation companies, like Herron Todd White for example, they come out with a monthly report or a quarterly report on the state of the market from the bank’s perspective. Now you've got to remember, banks are always more conservative, but it gives you a good inclination of where the finance markets heading, where the valuation results are heading and things like that. So I’d definitely follow those and then all your property investment obligations; so Urban Developer is a good one, there’s a few there that I can’t think off the top of my head at the moment.
Looking at valuation reports also allows some insight into how the banks are thinking and help you understand more about applying for finance.
Another good one is RP Data, I study that religiously. Even though the challenge with a lot of these results is that they are all historical and as sleazy as it sounds, when it comes to property investing you can't make your decisions based on the rearview mirror, you need some foresight. I'll give you an example, with one of my latest developments, I made in excess of $135,000 in six months, in a market that was only performing at 2.35%, so just below inflation. So again, it really comes down to having experience about what information to take on board versus what information to factor in, but almost ignore to some extent as well.
For many aspiring property investors, the issue lies in not knowing what to do to create wealth through that medium. Evans explains there are five steps necessary to grow a portfolio.
So I guess our focus is predominantly on professionals that earn good money and know that they need to do something in property investment, they just don't have the time, the resources or to be honest, the experience to do it all. So our value proposition is we talk about adding double the value of your salary to your property portfolio every 12 to 18 months.
So in 2018 and moving forward, I reckon for the next two to three years as a minimum, the market cycles are going to get a lot lower and slower. Meaning that you need to come up with ways of adding or forcing value to your portfolio to allow you to continue to grow your portfolio. Because at the end of the day, it's really simple. There's five steps when it comes to actually growing a portfolio - you set up a deposit, you invest in a property, that probably then goes up in value or generates equity as quickly as possible, step number four you get that equity out and then step five, you and repeat the whole process over and over again.
So my personal strategy - and this is obviously what we endorse for a whole bunch of clients, or all of our clients in fact - is how do we get through step number three as quickly as possible? Which is that equity creation phase. Now once you get your equity, you can have the option; you can either move the property on and realise your profit, or you can actually refinance that property to get your equity back out again to continue to grow your portfolio. So our value proposition is how do we get through step number three as quickly as possible - and we do that in three ways.
These three tactics are based on accumulating equity, mechanical momentum and the maturity of the market. By layering the three together, the investor is provided with a surge in equity creation.
The first tactic we use is instant equity and this is what I like to say: If you're investing in a property, how are you making your money going into a deal? Just recently we helped a client make in excess of $205,000 because we looked at comparable sales in the area versus what our construction costs were. And on completion, based on comparable sales, they will make $205,000, which is huge right?
The second thing, or the second tactic we use, is mechanical momentum. So this is where business forces, not property forces but business forces, are driving the value of your real estate for you and I’ll explain that in a second. And the third tactic we use, which is unfortunately what most property investors use - the only tactic they use - is market maturity and that's obviously when you buy property and over 5, 7, 10, 20 years’ time it goes up in value.
So market maturity for us is definitely something that we focus on by buying in the right area, the right location, the right type of property. But we then add the other two tactics, being how we are getting instant equity and how we are getting that mechanical momentum to drive the equity creation forward.
The second tactic, Evans elaborates, is to use business forces to drive the value of your property.
It's a term called mechanical momentum. So we deal with a lot of bluechip developers and land developers. I’ll give you a recent example of my personal investment. I purchased a property on the Gold Coast and this is probably 14-15 months ago, something like that and I paid $339,000 for this parcel of land. And this parcel of land was in stage three of the development. If we then fast forward to the next stage, the land price came out at $349,000. Stage four came out at $359,000. Stage five, $369,000. Through the stages 7 and 8 it came out at $415,000 for the exact same price land, at the exact same location, the exact same aspects - and the same parcel of land was in excess of $70,000 more for the same thing that I paid for, six months prior.
So that's instant equity there and someone actually doing the work for you to increase the value.
Correct! If you look at these big bluechip developers, they all have to report to shareholders. Obviously the shareholders demand a profit, so this is one of the questions I get all the time is, ‘You talk about developing land, what if there is an oversupply?’ I say if we're talking about this particular master plan, there's 200 lots in the whole estate but the developers don't release all 200 at the one time, do they? It’s going to flood the market. Business forces a lot of them have to actually get their instant equity on their land development from stage to stage to stage. And that's where we’re very fortunate, because of the relationships that Damian and I have that we get the phone call at the early stages of the development; we get access at the early stages of development.
To summarise, his strategy is to use three separate micro strategies in conjunction, in order to accumulate wealth across the board.
I guess what we do, our whole business is about generating equity as quickly as possible, so that you can continue to grow your portfolio moving forward. Now the first thing we look at is instant equity, which is if I buy property for $695,000, upon completion it's going to be worth $900,000 as an example. Mechanical momentum - if I'm paying $349,000 for my land, I know that due to business forces, not property forces, it's going to be worth $415,000 in the next six months. And the last one is the market maturity, on making sure we're investing in areas that have good long-term sustainable growth. Because it's the market maturity that's going to allow your property portfolio to double, triple in the future.
The aspects of Evans’ company, which is focused on helping property investors get into the market according to what they need, include three in-house programs.
So our business name is Caifu Property but we have three different programs. I'll start at the bottom, which is the Equity Builder program. So that's someone who is just starting off on the basics and they probably don't have the financial capacity to get into bigger and better deals just yet. The whole intention of that program is to get people enough equity, so that they can give themselves options to get into those bigger projects. So that's the starter or the foundation program we have.
Our core business is the Automatic Equity program. Now that one is all designed about, ‘Well, if we invest in this type of opportunity, how quickly can I get my deposit back out again and move it forward?’ That's probably our core business where we spent a lot of our time. Then the third program is the Equity Developer program. So this is someone who's a little bit more experienced, a little bit more money behind them and are probably wanting to get into bigger and bigger projects because they have the financial capacity and the experience to do so.
His service is results-driven, which provides an all-in-one foundation for all stages of your property goals - from accessing education to making money.
Our business is all about results. So you get educated as a natural part of dealing with us, we'll give you all the stories and all the examples. But like I say to a lot of clients, say if you want to get educated alone, I’m probably not the right guy for you; but if you want to get the results to grow your portfolio, get access to off market opportunities that nobody else gets to see, then definitely I would like to help you. And that's the way I've set up the business - there's three different levels of programs depending on your personal circumstances. And I guess the way it’s set up is I want to make sure that when you deal with myself or any member of my team, you are guaranteed to make money.
A personal habit which Evans attributes to his success is ensuring that his portfolio supports his lifestyle.
I think life is full of a bunch of habits, but I can't actually think of anything off the top of my head about how to… I like to work hard and play hard. It's all about making sure that your property portfolio doesn't impact on your lifestyle, it is going to set you up. And there are going to be some inevitable setbacks and inevitable challenges, but if you have a professional team around you that have pretty much seen every type of property there is - the good, the bad, the ugly - it's definitely a very good starting point.
You mentioned about lifestyle as well - how has your property portfolio actually given you the lifestyle that you've desired and what does your lifestyle look like?
Yeah sure, I'll be careful that I don't come across like an arrogant douchebag.
Honesty is the best!
Yeah, I now live in what I like to think is the best suburb in the whole of Australia, so I live in Double Bay. My property portfolio pays for every single bit of living expense that I have, living in Sydney. It's allowed me to sort of start up and not have to rely on an income to start up a business. Mate, I’ve got all the fancy toys and have two or three overseas holidays every single year, and I'm not worried about funding my property portfolio because I've got the right strategy in place.
And I’ve been very fortunate, but I’d like to help your listeners as well. I mean the way I look at property, it's just a vehicle to help you achieve your goals. And again, I'm one of those guys that loves the toys, loves cars, loves the boats and loves travelling. So property's allowed me to do all of that.
In the next five years, Evans is excited about helping his clients get to where he is while also continuing to build his own wealth.
I’m really excited personally to - I guess the access to different opportunities I have now is a lot better than ever before. So personally, the things I've learnt over the last decade, I'm going to speed up my personal wealth creation and it won’t take me 10 years, I'll probably do it in the next three or four. The types of opportunities there, the relationships that we've built; but then also as a business, I really get a kick out of helping other people do what I’ve done. So personally my portfolio is doing very very well, but I'm going to double that, if not triple that and obviously help clients do the same.
As he mentioned earlier, in terms of future market trends within Australia, he predicts a lower and slower momentum. This will mean adjusting your strategy to accommodate for it.
I think that with the future trends we’re not going to see another astronomical boom like we saw in Sydney and to some extent Melbourne as well. Some of my clients, God bless them, bought property in various suburbs in Sydney and their properties are almost doubled or halved in size in a very short amount of time. I don't think that that's going to be the natural progression in the next little while.
So my take is that you need to start looking at strategies like your instant equity and market maturity and mechanical momentum to force that value on your portfolio, to give you the option to continue moving forward. So I think the market's going to be lower and slower and you're going to have to think about other ways to force value on your portfolio.
If you would like to connect with Evans and find out from him how he can help you and shape a property strategy for you based on your situation, you can contact him via
So the best thing to do is just go to our website which is www.automaticequity.com.au. If you put in your details there, there's a series of videos I've done which is how our business operates and what we actually do. And what I’ll offer is anybody that comes through that website and links it back to your podcast is I’ll actually speak to them for 45 minutes, to see if we can actually help and if we can't, I’ll personally put them in the right direction.
Frequently Asked Questions
What does a property developer do?
Property developers work in the real estate industry and determine property opportunities and profitability. They build and renovate to improve the value of the property, then either selling it or renting it out to tenants.
What is the real estate development process?
Property or real estate development is an activity that ranges from pre-development, construction, and post-development. It is the process of generating value through improvements to real property.
How do property developers make money?
Property development is a massive learning curve. It is important to find a good site and understand the development process. Some made money on renovations and subdivisions. For a successful project, you need to get professionals like acquisitions, senior finance, legal, and accounting. By doing this, you can earn more money.