How to Invest in Real Estate and Make your Money Grow
Fab Marion decided to delve into property investment to make an extra income stream for both his future after noticing his parent’s lack of funds for a healthy and fulfilling future in retirement. Now with his own subdivision and consultant company, Unlock the Block, Marion seeks to help his clients gain assets, reduce debt and create another income stream through property investment.
Listen to this episode of Property Investory to learn more about Marion’s motivations starting his business and pursuing property investment, his greatest learning experiences thus far on his property journey, and how he uses the development strategy to make money fast.
Marion started his subdivision company in an effort to help members of the older demographic liquidate their assets and gain funds for their retirement.
I’m a director of Unlock Your Block a subdivision company in concentrating in Perth and the way we started on Unlock Your Block, myself and business partner after looking for a block in 2015 after we felt a need and solution needed to be provided to our community in the demographics particularly older demographics being able to unlock or liquidate their own properties and either being able to reduce debt, being able to retire. So we felt that there was quite a need for it and that a lot of property owners just simply could see the opportunity that they could unlock their land but may not have the ability to be able to do it or have the funds to be able to do it themselves so we offer quite a unique model and a unique service in that we carry out that entire project management of the subdivision but also we pick up all the costs of the subdivision and Unlock Your Block are reimbursed on the back end of the success and sale.
Marion starts his day with a meditation session and a full breakfast before getting to his office.
I normally like the mornings to be a time where I can control, that really sets the motive for the day so I’ll generally get up, I’d do a bit of medication every day, train three to four times a week so I’d go to the gym and have a nice breakfast and then head to the office to get down to some exciting work.
That’s exciting. So what’s the exciting work entail?
It’s generally looking at, every client got a unique situation and a lot of people associate subdividing or developing as a means of creating wealth. But there’s also a another story of that is that a lot of people are in unfortunate situations that just need some way or shape to be able to find funds to be able to reduce their debt or they get themselves out of the situation for some reason in their life and the situation is changing personally and so we generally get a lot of phone calls, a lot of email inquiry about clients looking to subdivide and we look at why they’re looking for subdivide what’s the reason behind it, the motivation behind it and then look at what’s going to get them their objective in the safest and the most profitable outcome.
Marion grew up in Western Australia after immigrating from Mauritius at a young age.
I grew up in a suburb called the beach bar and I was born in Mauritius and came here at four years old and then first moved to a suburb called Kudō and then my parents built a home in Peterborough and all those blocks were all one big blocks back then it wasn’t the blocks that we see today 700 800 1000 square metre blocks was the norm back then and there was plenty of parks and things around that we always gravitated to and met a lot of the friends that are here today through the same area as well.
Unlike most of his generation, Marion decided to forego a tertiary education to pursue a career in mechanics after graduating from high school. However, after injuring himself Marion found a career in his hobby at the time, property.
I went to a Catholic school both the primary school and went to high school, Catholic as well and it was called Chislan college, met a lot of friends through there and while I was at school and going to university was probably on the agenda of most of the my peers there, I chose not to go down that path and I actually went and started a career in being a heavy-duty mechanic. That was not my driving passion back then in school and I thought well every mechanic don’t need to go to school or university, for that I can get straight into. I was very technical, I quite like the technical aspect and am mechanically minded. So it drove me to do it and I started my career in doing that but always had an interest in the property, read magazines, going to seminars, reading books. So it was always my interest is to educate myself to do that and always applied, always looked at the technical aspect of it and after leaving, I actually left the career on the tools I injured myself, I fractured my back. So it led me to have to start to look for another career and that career was.. Me and a friend, we built our first home then in 2008, built the first home and the bought the block in 2006 and built-in 2008 and the building consultant that had built our home, I was attracted to his car and I thought well if he can drive a car like that and have it everyday work and I want to do what he’s doing.
While an attractive car did encourage Marion to pursue a career in property, it was not the only factor.
The first thing that had me interested was the building consultant, the first time was just the car that he was driving and I thought Well that sounds good and then he told me a bit more about what he did and I quite liked the aspect of being able to help other people build their homes so I decided to put myself into the industry, given that I loved the industry and I was reading a lot about it and it was just real food for the brain so to speak. I decided to jump into it and I started my career in building new homes in 2009 as a building consultant and at that point as well I had built our first home and by constructing our first home, I enjoyed the process and also realized that there was quite an uplift from thinking, manufacturing something from the vacant block and back then it was in a boom so it was right at the peak of the boom. So the market had a lot to do with that but I also like the fact that I could manufacture growth or equity by building and which led me to start the people building allows us to manufacture growth and equity, what does developing or subdividing do?
So from there we looked at every single opportunity of what, learning a lot more about some of the subdivisions in developing and has been doing that as well as in not really talking clients being able to fulfil their development needs and designing and subdividing it really felt like it was, I really enjoyed it because it bought the technical aspect into it as well and I could always relate to that technicality.
While Marion did have a lucky start to his property journey, his growing experience as a building consultant also helped him develop his own property portfolio.
We were fortunate that the first time that we built, my wife and I, fortunate that the home that we had built created equity. So it allowed us to be able to use that and look at what we could do with that equity as well. And then starting my career into being a building consultant and also that career in itself is the reason we were starting a business and be off doing that so we wanted to be helping clients build homes and develop homes. Then we were actually able to be remunerated pay. So it led me to learn the process quite quickly and the only way that we were able to learn was actually to do our own projects ourselves and learn from our mistakes and then apply that over and over again. And by being able to learn from it and then also doing it ourselves and then helping out other people doing it, my learning experience grew rapidly.
And given what we were doing I’m in discussions with the town planners every day, in discussions with designers every day, building surveyors every day with real estate agents so given that that’s what I learned myself in to be able to be involved in that environment than my thirst for knowledge and really led me to become a quite skilled in that area and coming from that construction background enables me to really look at what’s the most economical way of going about it and then applying that to a very simple way that people can understand how to go about it and learn from it.
Marion’s growing interest in the property was purely personal, as his parents knew nothing of property besides that it would put a roof over their heads.
My parents were never in property, when we migrated here from Mauritius, it was just of the information to buy the property and to put a roof over our heads and there was never ever the discussion of property at the dinner table. There was never a discussion of what property could do because that in itself was quite foreign to my parents and property for them fulfilled the need to shelter us and that is, I’m forever grateful for and grateful for the opportunity that my parents gave us.
Marion was also eager to use his knowledge of property investment to help his parents with their retirement funds.
I think it’s more that I got into the property and being able to look at my parents’ situation and how I could use my knowledge and my passion to be able to help them out and that really got me thinking about well, my parents had a property but super is the biggest problem for a lot of people, a lot of baby boomers and including my parents and I thought what is it and how can I do something or learn something to be able to give back to my parents and also give that to a lot of people that are in exactly the same situation as my parents. It’s just difficult to be able to if you worked all your life and then to realise that your super is only going to survive for a certain amount of years and after that it’s got to be on the pension. So I thought well I love property, I can do something with property and there are so many people in the same situation as my parents that would love to be able to retire and or lead into retirement with enough funds to see them through and that’s kind of the mindset behind why I wanted to start something, I didn’t know what it was but I wanted to start something to help out my parents and that generation.
Marion’s hard work in property investment has definitely paid off, as he has helped his parents build healthy retirement funds for their future.
So being able to help my dad do a couple of projects and being able to them from the profits of those projects which the main driver is to be able to top up his retirement fund and so right now he’s on the way to be able to, he’s currently looking for a property to be able to downsize and enjoy retirement and be in retirement without debt. That’s the whole driver behind it. And I thought, the only way I could help that is by being able to do what I do and what I know and the skill set that I have and being able to do projects for the purpose of helping my dad into retirement without debt. So I’m really humbled and pleased to say that we’ve, that’s something that we’ve achieved. For my mum, we’ve been able to, my mum and her partner have helped them with the subdivision, that’s enabled them to subdivide sell something off and build a new home so they’re in retirement, enjoying retirement right now. And I’m grateful for the opportunity to be able to help them with that.
After looking at the family homes around his neighbourhood, Marion was exposed to money-making off the property and bought his first property to renovate and resell in 2006.
I bought our first property in 2006 it was at the time when I actually put my back out being in mechanics and I had a fair bit of time on my own and I’m quite an active person so I was always up on my feet trying to even the after doing quite a lot of rehab, once I was able to move around I just walked around the areas and look at the houses, houses in construction and what people were building. Noticing that a lot of people were building family homes and wasn’t really taking a lot of pride in what they built.
And I thought well I might if I bought in an area you know just reading a little bit of that property back then, I didn’t know a great deal but I knew what I would see and made sense that if people were building homes as an aspiration to live in and I were to be able to buy a block in a location that people would be spending a lot on their family homes and build a home ourselves and then we would be able to benefit from having houses around us which would drive the value of our house or property up. So in 2006, we bought a block of land and back then we could buy a block of land and then had to generate enough savings to be able to build on it. So for a year, my wife and I saved as much as we possibly can and then I was still getting the same wages as a mechanic. I think it’s third-year apprentice mechanic and my wife was a child care worker so we were just saving whatever we possibly could.
After successfully completing his first property investment project, Marion used the profits to invest in more property and kick start his own subdivision and consultant company.
Once we had enough money to be able to build the first property we did and as soon as that was built before the landscaping had even begun, the valuation created quite a substantial amount of equity and we thought that was pretty cool. What we thought and what I’d thought to begin with had actually transpired to be something quite fruitful and we thought well let’s do something similar again so we stayed in that property for some period of time because at that point I started my career as being a building consultant and at the building consultant, we had to build up the business itself and in doing so took a bit of a pay hit or for for the next couple of years not receiving much while help establishing the business for the long term, I guess the long term medication as well. We then purchased, looked at purchasing another property that was close to the city that had the potential to be subdivided. And at that point, it was after the GFC so property prices did take a bit of a dive.
So we thought that was an opportunity to be able to get into our next property in a better location closer to the city and we actually found that we bought a copy that had been subdivided and the owners needed to sell the existing home on the front end they had partly done a renovation and I think they were in need of some cash to finish the project so it worked out that this property, the already subdivided was and with the front house was going to be a better result for us than if we had bought a property and subdivided into that ourselves so we could say in that is that we could renovate to finish off the renovations and we would get some instant equity from that. So we did that. We basically did more or less some cosmetic renovations and that created some instant equity from that property in a short period of time and that became our new home as well. And then from there we looked at well let’s do another project and again looking at getting closer to the CBD getting into a better area and so we purchased another property that was about four kilometres from the city and about 200 metres from a cafe at the very top of a cafe strip. And we decided to subdivide that one. We sold the block, we renovated the front house and created some more equity out of that. And then from there we’ve been staying in this prop him then doing projects using the equity from that and done probably about four or five projects from the equity from the most recent property. So we’re and funding the projects of our client’s properties as well. So that’s where we’re able to pick up the cost of the subdivision from the result of that block.
Marion was attracted to the development strategy because he believes it ensures positive capital growth from day one.
That kind of suits my personality, one I’m impatient and that’s the trait as well, I’m not one to, I don’t really like relying on what the market’s doing to create, to manufacture equity or manufacture growth. I don’t like sitting still and it’s worked out well for us particularly in the Perth market where a lot of property owners have bought at the wrong time and now the market’s taking a shift and those properties that were bought, they’re reduced in value and their income levels have changed as well because job levels have reduced in Perth and as a result, they’ve become clients at Unlock the Block, we’ve had to help them out of that situation and that’s where I think my strategy is that I’ve always looked at how can I manufacture growth and if we’re holding onto property how can we manufacture property that allows it to be positive from day one.
However, Marion’s property journey has not always been smooth sailing, as he has many learning experiences to share.
We’ve definitely had some low points that could have been a disastrous result. So back then, going to a lot of seminars and learning about the property, whilst we were going to free seminars to look at and get an education on property, it’s also behind, realising that these seminars are designed to be able to sell a product that the presenters are trying to promote. And that back in 2011, 2012 the mining was screaming up and so had a lot of investment. The presenters the promoting investing into mining towns based on the extremely high yields and extremely high growth and that mining was set to be an asset and set to be strategy.
And we were quite the naive at that time in the process back then and thinking Well everything seems to stack up. We looked at the information that was provided to us as opposed to us looking for the information and being satisfied and having a level of comfort with what we found. We relied on the information that was provided and we purchased an off the plan property in a mining town and at that time it was producing fantastic yields and fantastic growth and the project was due to be completed in the next couple of years. During that time frame, while the project at this mining town was taking place, the market took a heavy dive and one thing that we did well in the one thing that we’re extremely thankful of is we read through the signed document and we saw that the contract was going to be valid for up to three years and we thought to hang on that’s a long time to be able to be bound to a contract for three years, what if something happens.
By checking the fine print and making their own adjustments, Marion and his wife were able to narrowly avoid an otherwise investment disaster.
We reduced that timeframe to 12 months and then we put the offer through that and because it was a presale, we couldn’t get any deposit from the banks so we had to front up the deposit which was forty thousand dollars deposit down and the market took a dive. The property I remember calling the mining town speaking to some of the real estate agents and they were saying well these properties are now selling for less than half the value of what they were selling before. And given that this is a presale contract you have to go in as a cash, unconditional cash offer. So if it were to settle we knew that we had to basically find these funds one way or another and knowing that it was just, we wouldn’t ever be able to get those funds back and it wasn’t just ourselves there were hundreds of people in the same project that we’re in the same situation and we were fortunate enough to be able to be pulled out of the contract after 12 months because titles hadn’t been issued and we were refunded our full deposit. But hundreds of people lost hundreds of thousands of dollars in this project and the developer actually was done for fraud and reviewed under ASIC and so forth but yet we could have lost a lot of money and we could have put us in a fairly sticky situation from that, we were just lucky enough that we went through that one. If we did anything right out of that one we just read through the fine print and changed one thing on that bit of paper that saved us. And what I learned from that is that we can never rely on the advice of other people.
We can only educate ourselves and have no better certainty in the power of knowledge which helps us. I guess it takes that fear and the anxiety of it and that’s been my motivation ever since it’s just knowledge knowledge knowledge and helping others to create that knowledge.
With that frightening experience, Marion learned to rely only on the information he educates himself on when it comes to property investment. He shares with us his a-ha moments.
I would say that my a-ha moment it was from the definitely from mistakes. So one of them is that to never to rely on the information provided by others, that was something that I really felt that if I put the absolute knowledge and in my hands and the education then I’m going to be able to, there’s no better control of the outcome than ourselves
And building our first home and the equity or the profit that was created from our first time that was really an eye-opener because I thought well it took about eight months to build our first home then within eight months time that the increase in value of the property we made about four, five times our level of income at that time and that really got me thinking well if we can manufacture this for the time then we’re going to really escalate our growth into a fast lane. And so from there, it’s always been that manufacture.
From his work as a consultant, Marion has also learned to consider the desires of his buyers and caters to their wants.
I realised that there was something in that and what was in there the lesson that I learnt from that was the whilst we can always think about how a project or manufacturing something would help us, I always look at, well what about the buyer. What about beginning with the end in mind and thinking well at that time back then, I began with the end in mine and then seeing the end in mind which was the the residents in the area building a family home and I thought well if I can create something that somewhat simulates that then there’s got to be some good in that. And if I’m able to apply that same principle so every time we’ve looked at another another project the house always began with the end in mind. Understood who is likely to want to live in the location. What type of the home are they likely to want to live. What is in demand and need for that community in that location and thought about that, to begin with, and then I’ve always worked backwards from that. If I’ve seen value for the end user and the end buyer or the community and it’s worked for them and then it works for me. And that’s the kind of tick the box for me to proceed with the next purchase.
How to Invest in Subdivision and Make your Money Grow: Fab Marion
When Marion first started out in property investment, he was extremely fearful of the risks that came with it. To counter this fear, Marion did his best on building his own knowledge of the field.
The lack of knowledge is what gives us a level of fear and I think that’s the same for everyone. I think personally speaking for myself it’s always been that if I don’t have, the one thing that I’ve been fearful of is just not knowing enough. So I’m having a thirst for knowledge I’ve thought well if I can gain the knowledge then I’m going to satisfy myself and there is no fear in moving forward because I’ve been able to look at all the possible outcomes good or bad and knowing the bad outcomes and if I’m comfortable with what could happen as a worst-case scenario then I’ve prepared to take that risk because I know it’s coming and I’ve looked at what that plan B could potentially be. With the experience of leaving the knowledge to others and relying on the knowledge of others, I’ve taken that on board and sort of stopped, to go back with what my true values are and we’ve looked at all the possible angles that could potentially happen with the purchasing power and investment property or project then being absolutely satisfied with that, knowing what could possibly go wrong and then that’s given me the pretty much the leverage to be able to just go straight for it and not look back.
While Marion has had many mentors who have helped him on his journey, his most memorable mentor is his current business partner and ex-sales manager.
There are always people around us and it’s not so much in wealth and finance but is people that live a fantastic life in health, what they eat, how they live their day to day life and fitness and so forth. Then we’ve got people that have been through the journey and have got a lot more life experience and development. So that was back when I was a building consultant, my mentor was my sales manager at the time and now my sales manager and I are business partners. So that’s there has been a very strong mentor in my life and been able to help me grow through things that I wouldn’t have been able to to grow and learn for myself.
Rather than receiving advice from his mentors, Marion credits his growth to the knowledge he has gained from reading.
I’ve had mentors in my life but I’ve always grown and learned from reading and I constantly read because it’s something that’s done in your own time, at your own pace. You can learn from it as you want and you can apply it how you wish. So I think I would always say that we just constantly have to learn each and every single day something new that we can apply to our own lives and just keep on working at ourselves and becoming a better version of ourselves every single day. And so yeah I think that’s what I would say is just constantly self learn and read.
While Marion’s consultant company is based around the subdivision, he makes sure that before any solid plans are confirmed, he knows his client’s end goals are achievable via subdivision.
So Unlock Your Block, we try to demystify the whole subdivision and the process and not just a subdivision but just property in general and put it to really simple terms for our clients and it’s nothing to be afraid of. It’s just the information provided it’s very simple as to where we start and where we finish. And so clients generally know that we are somewhat related and involved in subdividing, where we differ is that we always look to again thinking back to what I apply my life or as think of what’s, to begin with the end in mind, look at what’s the motivation behind someone looking to subdivide and a lot of the time it’s down to reducing debt, to wealth creation or to help out in retirement. So we kind of get to the bottom of what it is that our clients are looking to achieve and then from there it’s quite simple in being able to look at the begin with the end in mind of if they were to subdivide what’s the end product going to look like and is there a demand for that end product and looking at price points of what that product could potentially be worth and working backwards from that. So we first we look at is subdividing actually going to be beneficial for them.
Marion makes sure he and his clients settle on even the smallest details before going ahead with any investment deal.
That’s the first and foremost we believe we would we definitely want our clients to be well informed is that if this subdivision is not actually going to given the results thereafter that we told them upfront and so we help them find that information and then we look at what is it going to mean to them at the very end of it. Are they going to unlock cash or are they going to unlock equity? Are they going to reduce their debt levels at the very end of it. So we help them find out that information again by beginning with the ending mine and then working backwards. And by that then it becomes really clear if they go through the subdivision process, this is what it’s going to mean for me. I’m going to be able to pay off my debt and being able to send kids to school or I’m going to be able to produce my backyard and to be able to put funds into retirement. So that’s the main thing and if that seems to work for them then we run through a what we call a detailed scope of works and we just work out exactly what it’s going to cost to subdivide and give them that detailed information and a confirmed price of what the actual costs are going to be.
Marion also gives his clients the choice to fund their own subdivision plans, or to source their funds from his company itself.
Then they have the option to either choose to if they have the ability to fund it or whether they want to Unlock Your Block to pick up those costs of subdivision. And so at that point a lot of some clients actually have the money to the other do they just prefer not to take that risk.
They prefer that they keep their funds and then that we pick up the costs knowing that if we’re an invested partner then we would want the best out of it for them as well and we genuinely do. With the way we go about our business with the absolute integrity because that just forms part of our personality and they make sure that it works for them if it works for them and it works for us and we’re all moving forward and we’re not any joint venture partner or anything else like that we just charge fees for our services, a fee to project manage and there’s a fee to provide the finance. We just want to keep it very simple and so that our clients get the maximum results out of their property. And we’ve been able to change lives for many clients and it’s just really humbling to be able to do that and that’s what’s most rewarding.
This rewarding process typically takes up to nine months according to Marion.
The general subdivision process takes between eight to nine months. There’s looking at all the approvals of physical works and the clearances and then lastly to be able to get through to titles it’s generally about eight to nine-month process.
While most business owners may be focused on expanding their company and increasing their profits, Marion simply wants to make enough passive returns to spend time with his family.
There’s one good thing about manufacturing and that’s making profit or making equity. But the one downside to that is cash flow because there are more funds going out than there is coming in and the cash flow is really lumpy. So that’s one thing that we’re doing doing quite successfully well and now I’ve got two beautiful girls and time is something of value and I appreciate the most at this point in time. So now we’re at a stage where our strategies are to continue to manufacture but continue to manufacture to convert I guess, to buy time and time is something that we can’t replace. So I’m at the stage where we’re manufacturing to reduce the level of a particular project to be able to pull funds back out of the project and for that project to be passive from the very beginning and then that’s going to enable me to continue doing what I’m doing for the fun and the passion that I have but also allow me to pull back time to be able to spend with my girls and family time and so on. Yeah at the moment I’m converting, the looking at manufacturing, to convert capital into income.
Marion’s only regret on his property journey thus far is not starting Unlock Your Block sooner.
If I met myself 10 years ago, I’ve actually been satisfied with my journey. I’ve really enjoyed the knowledge that I’ve gained the experience that I’ve gained the people that I’ve met. And 10 years ago I was as driven as I am today. I think if there’s anything, I’d probably the wish that Unlock Your Block started back then because I can see that there’s a real need for it. There’s a lot of people out there that unfortunately they just don’t know what we’re doing, they can’t see a light at the end of the tunnel and if they knew, if they had known what we do and allow them to be able to get themselves into a better situation than we could have been able to help them on a decision that maybe prevented something that they didn’t want to do. But otherwise yeah I really enjoyed my journey.
Excellent and say what are you most excited about in your property journey over the next five years?
One is I’m really excited in being able to do what I do for absolute fun and passion and that is really, it’s that I can convert my capital for time so then it’s going to give me choice to do what I want to do on an everyday basis and that one is spending time with my family and two is being able to educate and help others and grow a team in a community around us that just is able to help one another out and without the need of having to generate income from it. So I’m really excited, I’m very excited about that and being able to have that ability to be able to do that. It’s not like, we’re just not dependent on having to survive from that.
As an avid reader, Marion recommends investors to read books not only on property but also from different genres such as self-development.
I’ve got hundreds of books and my study library at home is probably my best room that I’ve got in the house to chill out and I’m constantly reading. At the moment from one of your listeners actually reading The Millionaire Fastlane yes which is a fascinating book fantastic book. The Think and Grow Rich was one of the books that really inspired me to read other similar books as well. Definitely The E-Myth Revisited as far as business and being able to create a model that can be replicated. As far as property, there’s many property books out there. As far as the inspiration to someone, there’s Andre Agassi his book Open. Yeah, there’s plenty you could go through many of these. There are so many books and it really depends on what I’m feeling at that point in time which would lead me to the type of book that I will read. So I consider it as one that is the absolute fantastic because if I’m looking for something on self-development I’ll read a self development book, I’m looking at for business, into some property. I’ll generally gravitate to what to read what I’m feeling at that point in time.
Marion believes that reading is the most contributing habit to his success in property investment, and life in general.
It’s a habit one I’ve got. I think behaviors and habits are a big thing in being motivated and wanting to make the most out of every single day. Reading would definitely form part of that and reading in all aspects of life, not just in wealth but in spirituality in love and health. And I think that’s all part of being successful. It’s not just about financial success. There’s a whole aspect to that that involves every aspect of your life.
And to conclude this episode of Property Investory, Fab Marion shares his contact details.
The best way is to contact myself or us at Unlock Your Block is through our direct line which is area code of Perth is 08 and the number is 61611790. Or you can reach us at email@example.com.
This episode was produced by Andrew Faleafaga with narrations and interviews conducted by Tyrone Shum.