Home Improvement Concept: Renovate and Sell with Winston White
Winston White is a buyer’s and selling agent as well as a property investor who has renovated and sold at least 15 different properties on his home improvement concept and helped acquire another 20 properties for a company. As part of his work, he helps people get into the property market, usually, those who don’t have a big deposit on hand and helps sellers move their properties who may be struggling to sell in a downturn market. He has experience not only in project marketing wherein he helped developers move their stock but has also worked with house and land packages.f
In this episode of Property Investory, tune in to hear about Winston White’s technique of splitting profits with the vendor to create a win-win situation, his highs and lows on his property investing journey and his lightbulb moment and much much more!
To start with, White tells us a little bit about his background and what he has been doing in the realm of property.
I’ve been a property professional since 2001. I always had an interesting in the property as well from a very young age. I started renovating properties and selling them full of for profit. I didn’t really know what I was doing a whole lot, but had some really good results, had some not so good results. And then I decided to go and get licensed as an agent, so I knew all the ins and outs as well. So that was the first part of the journey. And then I ended up working for property developers and builders in Perth because I wanted to know a little bit more about property development as well.
I did quite a few of my own renovations and subdivisions as well. So retaining the front lot and building behind etc. etc., and learned quite a lot from that experience as well. So worked with another company, where I was typically a buyer’s agent as well and I guess that really opened my eyes to how to negotiate with sellers and buyers and getting favorable trends on both sides of the fence so everybody ends up having to win. And so that was really beneficial.
On any given day, White works as a buyer’s agent, helping vendors who might be struggling to sell their properties, as well as a selling agent.
What I do at the moment is, so I suppose you could best describe it as buyer’s agent, so I’m helping people into a property who can’t get mainstream finance, as well as helping sellers to move their properties who may be struggling to sell in a downturn market. Because we’ve been here in Perth, we’ve been in the doldrums for the last four years.
Buyer’s agent plus part selling agent. So, I suppose you could call it a hybrid. A hybrid. So I’m sort of pre-qualifying buyers, typically I’m looking for where are most of the problems and the biggest problems in many markets for buyers is that most of them don’t have the big deposit to get into property. So we’ve got a number of solutions to actually help them so that can get into property. Obviously they still need the income to service the debt.
That’s very smart because most people who go, okay, can’t afford to buy a property, we’ll just walk away. The situation may be come back in a few years’ time when they do have more money. But if you’re looking from that kind of point of view, because I guess you’re looking to try and help turn over property, then that’s a really, really good option for them because some people do want to get in, but I just don’t know-how. So that’s great that you’re offering that.
And it’s quite a large market as well.
Born in New Zealand, White and his family came over to a mining town in Western Australia when he was 8 years old in 1976. He tells us about his early years growing up in this town and going to school there.
Most of my schooling, primary school, was up there. I did some of the high school there and then I went to boarding school down here in Perth as well. So that was an interesting experience. But most of my schooling and teenage years were in the Pilbara.
The Pilbara is basically an iron-ore mining town. They’re very community orientated. The population was only 20,000 at the most. Everybody knew everyone and I guess you sort of spent a lot of time playing a sport or you’re camping, fishing, a lot of outdoor activities as well. So as kids we certainly didn’t spend much time indoors playing video games, that’s for sure.
White believes it was quite a bold move for his father and mother to move from New Zealand to Australia, and a good decision because the town he lived in was very multicultural and meant that he grew up around many different cultures.
It was a pretty bold move from my mother and father to make that, but I guess it was a really good decision for them to do that because the Pillbra was actually very multicultural as well. So a lot of people from New Zealand, a lot of Irelanders, a lot of Europeans, so I was brought up respecting all cultures really. We had a lot of Muslims in our community as well, very cool people.
Being brought up in a multicultural town like that that where everyone’s out there to earn money in the mining industry, you took it for granted that you were in a small community where everyone knew everybody and certainly most of the time people got on as well. And being exposed to so many different cultures that as a young person I thought everywhere’s the same until you actually leave that environment and find that it’s not the same everywhere.
Moving to Pilbara was also a good financial opportunity for White and his family.
A lot of people had their accommodation paid for and all their outgoings, so the outgoings are very small. I think dad only got deducted $30 a week for housing and all the power was all paid for. So it was a very good opportunity financially as well.
He tells us a little bit about how working in real estate was much different in the mining town he grew up in than in Perth.
That was during high school. I went to boarding schools, a lot of country people went down to a boarding school here in Perth. It was an interesting experience as well. But when I moved down here, I was always doing real estate in the Pilbara as well. So it’s a lot different mentality up there. Particularly in a small community where everybody knows everybody. Typically business was, I’d go to the pub on a Friday night walk out with five listings.
That’s how playing a lot of sport and being well known up there made it quite easy to do business up there. But coming down to Perth that’s a totally different story, nobody knew who I was, so I actually had to get up and work.
After White finished boarding school, he went back out to Pilbara to work in the mines but he soon got bored with the job and wanted to pursue something else.
So in the mine state then it was three union orientated. So we didn’t do a lot of work. We basically drive around playing cards. It was pretty boring.
I just knew people who were doing quite well in property, renovating, and buying property as well. So I always had an interest in that and started reading a few books of course, and going to a few seminars and listening in. And then I just decided that I knew one of the licensees up there, knew their whole family quite well. And, he was a very good mentor to me as well.
At first, education wasn’t a pressing issue for White because in Pilbara people based their business dealings on whether they knew, trusted and liked you but when he came down to Perth, he realised he needed to get some qualifications if he wanted to compete with other people for positions.
Education wasn’t big for me back then until I actually left the Pilbara and then I thought, you know what, cause I kept missing out on positions because people wanted more qualifications. In the Pilbara, I won a few awards up there, mainly because I suppose being well-known up there, playing a lot of sports and being well-liked as well. So people tended to like me and trust me, so they go into a pub on a Friday night and walking out with six listings is not exaggerating as well. That suited me quite well, but when I left and came down to Perth, I kept missing out on positions with that are applied for because people wanted qualifications and that’s why I decided that you know what, I’m just going to work and then I’ll study part-time. So I went back and did a bachelor of commerce and property valuations and property development.
Establishing himself in Perth as a real estate agent was not easy and it took a number of years before White was able to make a name for himself.
Coming down to Perth was 2001. I had to find something really quickly and I was enjoying the real estate side of things as well, there were parts of it I didn’t like, but obviously, coming down and I was looking at it as another challenge and trying to make a name for yourself down here. It took a number of years before you started really establishing yourself, I guess.
Just as a normal real estate agent and listing and selling, and I can remember the crazy hours we used to do, to get out of name out there, you know, doing 10, 12 hour days, six, seven days a week, was pretty common back then. I guess the income of the first couple of years wasn’t that great. But I think after the two years, once you’ve established yourself, then your income starts improving someday.
After about three years in the real estate business, White began to work with a lot of developers, helping them to move their stock, and although this allowed him to learn more about property development and in particular apartments, he eventually decided it wasn’t for him.
After about three years, three and a half, I actually started working with a lot of developers moving their stock. So I had an opportunity to go and work with one of the developers, he was a very good salesperson, mind you. So he said instead of listing properties one by one, you can have access to 30 or 40 properties straightaway. So I thought it was an opportunity and I went to wait for the developer in selling apartments as well. So learned quite a lot in the apartment space.
That’s what it was, project marketing as well. So a lot of off-the-plan stock. And also there was some stuff that was actually completed, so we’d sell completed stock as well. Big learning curve. But I’m glad I did that because then, you know what, after about two or three years of doing that, I actually thought the strata levies and everything else thought like that, I actually thought that some of the strata levies and the apartments from an investment point-of-view, I just didn’t believe in the product anymore.
So I went to work for a builder as well. So doing house and land packages.
White’s first property was up in Port Hedland, where he saved up $10,000, all that he needed to save back then, and purchased a property for 175,000.
That was my first property. I renovated it as well, to increase the value. So when I actually left, I ended up selling it for 275,000. So that was about five years later.
I guess I just wanted, so this is obviously a property I wanted to live in. So I’ve got a big connection to the ocean as well, so I just want to be close to the coast. This particular property was right on the coast, so it had a massive big patio overlooking the ocean. So I thought it was just really cheap to be right on the ocean. So it sat there for a little while because people went very big on fibro homes. By fibro, I mean like those fibre cement sheeting. I didn’t see an issue with it. And it also had a lot of big trees and a lot of maintenance that needed to be done on the property as well. So it has something coastal like that. I just thought it was really cheap. And they were asking, you know, 190, so I probably went in at 179 or 175, can’t remember it’s that long ago.
How did you come across this particular property and why did you choose that particular area as well?
That particular area was…in that particular town there, it’s divided up to where all the white-collar workers tend to live. And it was a really good neighbourhood as well. So I just thought it, and also it was right on the coast, and back in those days because we didn’t have internet, I’d have to go into the real estate agency and pick up a brochure and flick through the brochure to have a look at what was available. And then you basically had to drive around and have a look at most of the properties. As soon as I pulled up and I saw that property and I saw there was no one living in there. I actually walked in and I stood under the patio and I could see the ocean, I was almost sold then.
So just the location, being on the ocean. And I could see myself spending a lot of time out on the patio. The patio was massive, it was bigger than the house.
And that’s exactly what we did. All our meals most nights were barbecues overlooking the ocean.
Despite buying this property near the ocean as a principal place of residence initially, White ended up selling it, and this kickstarted his property investing journey.
I ended up selling that and coming down to Perth with the amount of cash I made off that and ended up buying a number of properties down here as well.
So just renovations alone for buying and selling, slips or whatever you want to call them, trading properties, I’d decide it’d be at least 15. I also worked for a company that teaches people how to buy properties, renovate, sub-divide. So with that company, there’d probably be another 20 that I helped acquire. We’d renovate and sell them and then between the owner and we would split the profits as well, so that worked my home improvement concept. We mainly did kitchens and bathrooms, just renovating them, floor coverings, light fittings, rendering the front. We wouldn’t do any major extensions, and then we turn them over, generally every two to three months we turned them over.
One of his worst investing moments was in 2008 when the market started to plummet and people weren’t buying property anymore or gave offers that were too low.
I guess 2009, people talk about 2009, but it was actually 2008 that the market started to plummet. And I suppose 2006 was when you could basically sign a stat dec and get a loan. But the market started freefalling around the end of 2008, so we had probably two projects that we hadn’t quite finished. We were about to go to market. And when we did complete them, they sat on the market for, well just no one was buying back then as well. So we were forced to rent them out because the offers we were getting were…there was just no money in it as well. So, we were forced to rent them out and wait for the market to recover. And it took a number of years for the market to recover. So it took another three or four years before the market did recover from to the end of 2008.
He goes into depth about this particular property that was one of his lows on his property journey, which, due to market timing and a tenant, wasn’t able to sell.
When we actually purchased it at the time, because, I don’t know if people remember 2006 and 7, the market was growing almost on a quarterly basis as well because of the subprime lending, so money was freely available for people to buy property and that’s exactly what happened. So we purchased the property up in the hills, and it was five acres. We paid what we thought at the time was a really good price. The owner, all he wanted was that his debt gone and he wanted enough to buy a caravan. So we gave him what he wanted, but you know, the real value will, I thought we purchased that for at least a hundred grand under market. And so we had thought we’d spend another 30 to 40 K to increase the value by another 50 grand.
So potentially we could have made at least a hundred k gross profit out of that property once we sold her. But of course, once we finish the renovations, that one took a little bit longer to finish because the owner said he was moving out on such and such a date, but he didn’t end up moving till a lot longer, so it actually held up our renovation. So that was one learning curve, is that once we agreed to purchase the property that we make sure everyone’s out of the property. So the renovations took a lot longer to complete because he just didn’t want to move until he was ready.
So he stayed there for an extra four months, which we still had to pay. And of course we could have gone to the court and by the time we would have gone through and spend all the money to get him out of a property, it would have taken that long anyway. So when he finally moved out and we finally got in to do the renovations, that took another at least six weeks. And then by the time we put it on the market, the market was already starting to fall. The news and the media, which most people are influenced by, wasn’t good as well. We’re talking five acres, a four-bedroom, two-bathroom home. The renovations were really nice, if we purchased and renovated, in our time frame we would’ve sold it and still made money. Because it took so long, the market had swung very, very quickly as well. So yeah, just unfortunate that things like that happened.
The owner—cause I’d moved on from that company—he did end up selling it in 2012, still made a reasonable profit and still made a profit, but he had a lot longer to do that.
A lightbulb moment for White was when he realised a genuine desire to help people reaped rewards and decided on splitting profits on commission with the vendors.
An “aha” moment was a big one. And I found this earlier, is that if you’re genuinely looking for solutions for people’s problems, and you go there with that sort of mentality, people know…they can feel that you’re actually trying to help them as well. Some of these renovations, we were allowed to access the property without even buying them as well. So we would access the property, renovate it then sell it and sometimes we’d pay the seller more money than he could get on a normal sale as well. So we’d cut them in on the profits.
I guess the property we came across was in a suburb called Subiaco and Subiaco is quite an affluent, high-end suburb as well. So the place was an old character home. It was run down, it was a divorce. She just didn’t have the money to spend on doing the renovation. So she knew if she spent money on renovations that she would get a lot more money for the property. The paperwork involved in that was typically we had an option on the property to buy at a predetermined price. We had a timeframe, we would spend the money on the renovations and then we would go to market as well. So we got a lawyer involved to write up the paperwork. She went into her lawyer to make sure that everything was as we agreed upon. Then we spent the money on the renovations and went to market. We increased the value on that property by 250 grand, but we only spent about 50 grand on the property.
The vendor was very happy with that result, she knew if she went to market as it is now, all she would attract was low balls. Whereas if she spent some money, which she didn’t have, that would increase it. So we ended up a really good result on that. So we actually gave her 10% more of the profits and she was very happy with that as well.
And now she’s become a client for life, I would say.
Yeah. She sent us a bit of business as well. Got us a really good testimonial. That was a really good result.
Vendor Finance Strategy With Winston White
Inside this episode, we’re getting into the nuts and bolts of White’s property strategy, whereby he helps buyers with their deposits, particularly in tough markets, by asking vendors to assist with the deposits.
I do use a lot of vendor finance as well. So what that means is typically, if I’m buying the property and I don’t want to put 20% deposit down, I might ask the vendor if they can leave some of the deposit on the table. The payoff is that I pay them a little bit extra, a little bit above market as well to buy the property. So, I guess my strategy for helping buyers into the market is, particularly in a tough market, conditions like this where people aren’t selling their properties, or they just keep dropping the price. Instead of dropping the price all the time, to make it easier for buyers to get into the property, why don’t we help them with a deposit? So typically what I’ll do is I might get the vendor to assist with the deposit. Developers are very open to this because they’re not selling anything and it’s helping to move stocks. So they’ll help with a 10% deposit for example.
In a market that is rising up, this strategy of White’s still works to get buyers into the market, as it is a matter of negotiating a deal between the developers or vendors and the buyers.
If the market’s really good, this strategy still works to get buyers into the market is just by I guess, developers, they’re your best friends when they need you.
If they don’t need you, then you’ve got to find your own stock, I guess. But in saying that, I have used this strategy quite often in good markets as well. And if anything, you tend to have a lot more people who want to buy and get into property but they still don’t have the deposit. So as long as the developer or vendor is getting what they want in their hand and the buyers—you still need the valuation to stack up—is still getting good value, because to save 10% deposit might take them five, six, seven years to do that as well. To be honest, it’s getting tougher and tougher for… the rising cost of everything…it’s getting tougher for buyers to save that deposit unless they’re on really good incomes.
White goes on to give an example where his strategy of asking vendors to assist with deposits was put into play and the buyer was very satisfied with the result.
This buyer…I’ll call him Scott. That’s his first name. So Scott actually just divorced, he’s what we call a phyto worker. So he flies in and flies out of the mining towns and he flies back to Perth here on 140,000 income. Because of his separation, he was forced to go into bankruptcy as well. The good news was that he was discharged from bankruptcy. So he didn’t think he had a hope in hell of getting into property. So we had a look at his income, very good income, we took it to a lender. The lender said, “Yep, all we need for him is that he needs to have a 10% deposit as well”. So we ended up finding a vendor who was willing to participate because their property had been on the market for quite some time. The vendor wanted 400,000 in the hand. So we brought up the offer slightly higher at 440 and created a 10% deposit and you need the vendor’s permission that they’ll elevate that amount back to the purchaser at settlement as well. So we just got on conditional approvals, so he’s going to be moving into his home in about two weeks’ time. So he’s very, very happy.
We sort of went to finance the deposit, so the owner was moving to Portugal well. So I suppose the figure that we got the seller was probably slightly above the current market in that suburb. So he was quite happy with his sale price and the buyer was willing to pay above-market because he knew he didn’t have the 10% deposit.
So both very happy. Vendor’s happy now that he is going to sell them as property because it’s been on the market for four months and he hasn’t had any bites as well. Also, the seller’s happy that now he can move on, you know, go to Portugal with his new wife.
In regards to White’s own portfolio, he has six properties within a family trust which are quite geographically diverse.
They’re spread across internationally, we’ve got some in Bali, we get paid in US dollars as well. There’s a big block back in New Zealand, that’s also owned with other family members.
While White has done his fair share of renovating properties, he recommends to do it only if the property requires it and not so much when the market is quite flat.
If it calls for it, if the property is getting really old and run-down, then we need to re-finance and we’ll definitely do some renovations to tidy them up as well and get them ready and valued. But in a market like where it’s quite flat, you’d probably just want to spend as less money as possible.
When asked why he went into property investing, White cites reading a lot of property-related material and being around people successful in property, as well as the ability for one renovation or subdivision to lead to success.
Investing in property, we’re just seeing really good results as well, I’ve just been…I suppose I’ve read a lot of material and been around people who have been quite successful in property. And it’s given them a lifestyle that is quite envious I suppose, I shouldn’t say that word, but, you know. They’ve done really well at the property and I know from my own experience because there’s been a few times where I’ve actually had the wolves at the door, where you can do one project and then you’re back on your feet again. I know how quickly that one renovation or one subdivision can turn your strategy around where you’re back on your feet again.
White states that the restricting part about the property is your borrowing capacity, which is why he has been inspired by those who have teamed up to invest in property or complete renovations.
Because the restricting part about the property is your borrowing capacity as well. So at one stage or another, just on your own income, you’ll be going to max out and the bank’s going to say “no” unless you have really high income, high yield type properties, and even then, eventually you’re going to max out. So then I’ve seen the good operators who actually team up with others to do the renovations or to do the subdivision or invest together with and we can share the profits and everyone makes a bit of money.
As part of his property investing journey, White has had a number of mentors, gone to seminars and read a lot of books. There is one mentor in particular that helped him shift his mindset.
I typically…these days I look for high cash flow type strategies. But the mentors, in terms of what they’re helping, it’s just going and listening to those mentors is that once you’ve been doing property for a while, you’ll actually know what works and doesn’t work. And if you see something that’s innovative, that provides a lot of solutions for out there, they’re the opportunities you take.
My current coach that I use is a lady by the name of Jill Macintyre, particularly in terms of mindset, because we all have blockages or blind spots that we don’t even know are there. Some time ago I always used to think if I have enough education, I’ll be fine. But there’s no use having all that education or the perfect strategy or strategies if you’ve got blind spots. I started recognizing it only after a period of time to think of, I thought to myself, you know what, I’ve worked with every mentor and I’ve got more knowledge than most people I know, but I’m still not working to my biggest potential, so it had to be the mindset. So, you know, obviously working with Jill Macintyre is, I’ve been working with her for about three years now, she actually installed a lot of self-belief and bigger goals as well.
He then goes on to share some of his favourite books that he’s read that have helped him on his property journey, from books on mindset to volumes on property.
Mindset, I like Robin Sharma, “The Monk Who Sold His Ferrari”. That’s definitely one of my favorite books. In terms of property, any of Robert Kiyosaki’s, “Cashflow Quadrant”. That was a really good book I read a long time ago. Just getting the fundamentals. Any Robert Kiyosaki books are really good.
White goes on to tell us what was the best advice he ever received on his property journey.
I believe the best advice I’ve ever received is that if people are talking about a particular problem all the time, that’s your market telling you there’s a solution that needs to be… that you need to come up with.
I love that one. That’s an excellent one. So basically meet the market, what they want.
Meet the market. Your market’s telling you what they want.
One personal habit that has contributed to White’s success is his dedication to working on his mindset and updating his skills.
I work a lot on mindset these days, so I’m always listening to audios like Anthony Robbins, Robin Sharma, always doing a lot of mindset work and I’m always updating my skills as well in terms of what we used to do in property 15, 20 years ago doesn’t work in the market these days, for example in a letter-box drops, you have to actually get really good at social media marketing. So always updating skills and mindset, I think is really important.
White believes that he would have told himself ten years ago to have self-belief and play it less safe.
Stop holding back and believe in yourself a bit more would definitely be my…I might even slap him. Stop playing small and stop playing safe.
When asked what he is most excited about in the next five years in regards to his property journey, this is what he says…
I’m really excited about, we’re working on online modules and education as well. So for what I’m doing and in terms of vendor finance as well, I’m also helping a lot of property investors improve their yields on their properties as well through vendor finance. So if I set that up in online modules that people can easily access, then I’m quite excited about that.
We’ve got a lot of good results with actually helping property investors because over here the rents have declined and the equities declined. A lot of their property’s underwater, what we call underwater when the debt levels are higher than the value of the property. So we’ve been able for some of them to get in, buyers who can’t get mainstream finance just right now because they need to build up their credit score. They’re still on good incomes and still got stable work history. So we’re putting then into the properties to buy on the basic long settlement where the vendor can get a reasonable price for their property. But all of a sudden it goes from a negatively-geared property to now it’s a positive cash flow property.
While White believes skills do play a part in success, he also believes enjoying what you do is extremely important.
Skills makes up a certain percentage but I’d have to put it most of it down to the system as well and actually believing…I suppose what really resonated with me is that there are certain parts that I really enjoy doing and if I get a really good result for somebody and I know that I have made a difference in their lives—I know that sounds a little bit cliche—that actually gets me more excited than the monetary side. So if you go in to pick up a strategy because there’s a lot of different ways he can go with the property, just pick something that you really enjoy doing is my motto.
For those who would like to connect with White, you can contact him through the following method…
The best way is I’ve got a website which is propertyrescueoz.com. That’s my website. So I’m going to go on there and I’ve got my number and contact details so they can fill in some information and yeah, I’d be happy to have a chat.
This episode was produced by Annie Gao with narrations and interviews conducted by Tyrone Shum.