The Sydney property market is full of opportunities for those looking to create wealth through property development. Here are the stories of those who’ve been successful at it.
Sometime around July 2017, the Australian property market peaked. Property prices around the nation reached record highs, to the delight of those who’d positioned themselves well in this market.
But there’s a reason that it’s called a peak, after all. The market heads south after that, and it only becomes a peak when people look at it on a historical price chart. If it’s a particularly bad downturn, such as the recent one, it’s going to leave developers and investors terrified.
In the recent downturn, this was especially true for the capital cities like Sydney and Melbourne. Prices took a dive and developers didn’t want to go anywhere near those areas. They thought that any attempt to build property would result in a loss.
However, smart developers can thrive even in unfavourable housing markets. Furthermore, the downturn appears to have slowed down by the end of 2019 in most areas, including Sydney.
The biggest city in Australia experienced the first price rises after almost two years, which encouraged investors and developers to go back.
Right now, there are a good number of developers who are making serious money in the Sydney property market. Just to show you what’s possible, let’s have a look at the things that some of the most successful developers are doing.
1. Danny Ciarma
Over the course of the past 15 years, Danny Ciarma has completed 20 successful development projects. He currently runs a development company called Urban DC, which always has a few big projects going on.
Although he develops all over Australia, his biggest projects happen to be in the Sydney property market. He’s developing a building of 22 high-end apartments in Rozelle and is also planning two more projects in Rose Bay and Bondi Junction.
As you might imagine, he is making the kind of money he’s always dreamed of from these projects. But what’s his secret?
You might think that there’s got to be a formula or advantage, probably one that’s not within your reach.
But that’s not true. It’s within most people’s reach. And truth be told, things weren’t always perfect for him.
To begin with, Ciarma once struggled financially. In a story similar to most working Australians, he worked as an architect for barely enough money to cover his car loan and weekly rent.
However, his passion for property would prove stronger than the obstacles he faced.
Like many developers, he started out as an investor to build capital. At the time when he bought his first apartment, he had $4,000 in the bank. He turned to his girlfriend and his credit card to come up with the $9,500 deposit for a loan.
He bought a $95,000 property afterwards and flipped it for profit. With the gain, he repaid his girlfriend back and got out of debt. After that, he set out to repeat the process. He’d buy and flip a properties to build up his capital.
Eventually, he put away enough money to fund smaller developments. Little by little, he climbed the property ladder and became a millionaire multiple times over.
Care to guess what his advice is for developers who struggle to get into the Sydney property market?
‘So the only way I can suggest is that you just have to start within your means and build it up. What people need to understand is that if you buy one little house or a little apartment, as time goes on and properties keep rising – which over time I believe they do – and you end up with free equity in there.’
In addition, he always emphasises the importance of knowledge. For him, there are few things as important as being ready before someone gets into property development. Otherwise, the projects are likely to crash and burn.
To get the necessary knowledge, he suggests that you use the familiar approach of starting small:
‘Probably the easiest thing to do is get a job with a developer and learn project management skills, start off as a junior assistant project manager and work your way up to development manager.’
Over the next five years, he plans to build on his success as a developer. Excited about the projects that are currently underway, Ciarma vows to keep living his passion.
2. Andrew Bodnar
Andrew Bodnar has one of the most impressive property portfolios out there. His a great example of a thriving property developer in the Sydney property market.
The adventurous soul that he is, Bodnar started with almost nothing and ended up with a property empire that transacts in the range of hundreds of millions.
His biggest developments are in Western Sydney and the biggest project in Liverpool boasts 262 units and over 30 stories at a staggering $100 million. He also has ‘smaller’ projects in the $30 to $50 million range.
But before he got into developing, he worked as a real estate agent. In 2009, a builder came to the agency looking for help in selling his properties and he took it on and it turned out to be his first step to property development.
Little by little, he learned property development from the builder, who was happy to mentor him. When he was ready, he completed his first project of 16 duplexes. Encouraged by the positive results, he decided to go all-in.
Over time, he branched out and started to work on larger projects. All in all, Bodnar has experience in developing townhouses, apartment buildings, hotels and commercial buildings, among others.
For 15 years running, he partnered up with other developers. And later on, he started his own company called Kingdom Developments. Over the past three years, the company has completed a number of major projects, generating hundreds of millions of dollars in the process.
With all his experiences and successes, he has plenty of useful advice for aspiring developers.
His first suggestion is to get into the right frame of mind. He does a whole lot to keep himself motivated. He starts every day off with some reading and then getting out to catch some sun. This energises him and gives him a clear head to make big decisions.
Other than this, he also has a noble goal that drives him forward:
‘My goal is to be able to give away 90% of my income and live off of 10%. And a lot of people think that rich people are actually greedy. But the thing is, the richer you are, the more you can give. And for me, my end game or the reason I do it is that I want to be one of the biggest givers in the world.’
As for taking on big development projects, he advises caution but fearlessness in taking on the risk. He explains that the risk is often lower than many thinks, yet it holds the potential to jumpstart bigger returns:
‘By co-owning the property, it lowers the risk from a co-ownership point of view. And also, you’ve got multiple exit strategies because you’re not just in it on your own; you’ve got other people that are involved to help.’
In the future, Bodnar hopes to expand his reach and diversify his portfolio with the goal of preserving his generational wealth.
Opportunities Are Waiting
As you can see, the right Sydney property development can make all your financial dreams come true. It certainly did for Ciarma, Bodnar, and other property developers. There’s a variety of strategies that you can also use.
It certainly pays to learn from the examples of developers like Ciarma and Bodnar. If you want to achieve the success of that magnitude, you can borrow what you’ve learned here and applied it to your own strategy.
Of course, there’s still a lot that you’ll have to figure out. But remember, you don’t have to go at it alone. Rather, you can have a good team around you to support you in your quest to grow your wealth.