property developers

Creating Value, Money and Real Estate with Property Development

Joining us in this podcast is property builder and developer Henry Vila. Working with his business partner for their company Franco Buildings, Vila lets us in on what a day in his life looks life and the intricate and unique processes his team goes through when working on a project and creating value with real estate development process.

Explaining the consultation process he goes through with his clients, Vila also delves into the challenges they face when first coming into the property development world. On a more personal note, we find out what brought Vila from Venezuela to Australia, and what he’s done on his journey to get to the successful stage he’s in now. Following this, he’ll talk about his property development journey and reminisce back on his first deal. Lastly, he’ll share with us how he’s able to complete large scale developments in short amounts of time and the tips and tricks that you should take into consideration before beginning or continuing on your property journey. 

“The one that really drives us every day is our ability to create value for other people.”
-Henry Vila

Working as a property developer and builder, Vila explains the focus of his property journey

I am a property developer and a builder with the Franco buildings. Yes, so a lot of my property journey has been focused on property development and construction both for our own use and for clients. 

With a focus on residential properties, Vila explains the general process Franco Buildings undertakes when working with their clients

A lot of what we do is residential development, particularly multi-units. They seem to be 80 or 90 per cent of what we do. We do a few apartment buildings but they are probably not as big of a part of what we do as some of the other properties we do. 

But definitely in the residential area. 

A lot of what we do is increase the density of existing property. So if you have a property on a big block and there a single house there, what we help our clients do is we knock down that house and then build two, three, four or five townhouses or units depending obviously on the land and where it is and what the market can sustain, with a view that then they will go and I’ll sell that product to make a profit in the process. 

Acting as not only a property developer and builder but also as a consultant for his clients, Vila explains what a given day with his job involves:

It’s actually fairly, fairly consistent and to be honest a little bit boring. So there’s two things that I do every day. You know one of them has to do with building residential projects. So project management and the administration of those projects and we tend to have anywhere between three and nine projects going on at the same time so going to site, liaising with trades and suppliers and getting properties constructed. The other part of what we do, which is, to be honest, is probably more important for us has to do with providing advice to our clients on how to maximize their return on their existing properties or their return on the development properties that they’re already running. So you know, very often we have clients who are thinking about doing development or are doing development already and they just don’t know necessarily what product to build or how to build it and how to optimize the construction cost. So that way obviously they maximize their return and we play a key pivotal role in providing them advice in those areas.

Thinking back on his client’s experience, Vila shares his opinion on the challenges people often face when getting into property development.

By far the biggest issue we see in the developing world is when people don’t do their numbers right. So it’s very easy if you’re not involved in the industry, if you’re not a builder or if you’ve never done property development before. 

It is very easy to underestimate the development cost of a project like this whether it’s living out big expenses during a construction project or even during the design and permit process or the D.A. process as it’s called in other parts of the country. Or whether it’s you know living out things like GST or council contributions and all of those things can be on themselves bigger than the potential profit of the properties. So I has the ability to turn a perfectly positive project into a property that doesn’t provide the profit that they already expected. So we see that happening a lot with new developers, what we call the One Fund on developers, developers who really get emotional about the process. You know, maybe pay too much for a site without necessarily doing their numbers correctly and not paying too much or now they’re at a point where they need to execute even if they’re not going to make any money during that process. They get burned out never do it again and sort of retire from the industry. We also have seen a whole lot of builders, particularly lower end builders will be in financial struggles in the last few years and that they’ve seen development as a way of generating pay for the construction companies. So they’re happy to not make a profit in the development side of the project because they’re making a profit on the building site of the project and that’s a sound business decision, but it basically leaves their builders hanging from a thread. So if one thing were to go wrong, then you know the project and sometimes even the builder ends up going under. So definitely the biggest recommendation is to do your numbers correctly, do your feasibility, make sure you include every element before making a decision. It’s a lot easier to say no to a building site or to a development site before you buy it [rather] then after you’ve paid too much for it. 

He also explains more about the rezoning aspect of developing and the potential profit loss that can occur if you make a purchase at the wrong time.

Probably five years ago – we used to buy sites with the permits already in place, you know the D.A. already in place just ready to build. Because for us it was easier to buy them that way, start construction straight away and shorten the lifespan of the project. More recently what we found with a lot of those projects is that the people selling those sites have effectively extracted all profit from those development sites upfront. 

So there is no profit left for the actual developers. So we’ve done enough of these projects over the last 10 years to now know the process end to end, and that’s part of the reason why we not only do it for ourselves and all projects but also help some of our clients kind of leverage that experience as well. 

Thinking back to his childhood, Vila shares where he grew up and when he moved to Australia. 

You can tell by my accent that I wasn’t born in this part of the world, so I was born in a place called Venezuela or the edge of the Caribbean – much warmer than Melbourne these days. I studied engineering over there. After doing that for a few years, I moved to the United States on and off, before finally moving to Australia nearly 15 years ago and ever since I’ve been calling Australia home. 

Very nice, very nice and when you said you moved here, was that with parents, or did you move here yourself with family?

Really it was just me and my wife. I have 5-year-old twin boys who have now increased the size of the family so. 

 Vila shares that despite moving to Melbourne first, he had also lived in Brisbane during the mining boom, before coming back to Melbourne to continue developing property… 

Then there was a period of about three and a half years somewhere in the middle where I moved to Brisbane.

We had a few big projects running in Brisbane and we needed someone to take care of those. We really thought it was a growth area, particularly in the, I guess in the peak of the mining boom, we saw a lot of opportunities there. Then once obviously then the mining boom finished and the market kind of slowed down, those opportunities that crystallize the way we thought. So I decided to come back to Melbourne and concentrate on the market I knew better, and in a market that is a lot less exposed to mining and commodities in general. 

It is here that Vila’s career path led him to work for various companies before he finally met his business partner. 

My career is a little bit interesting. So I used to be a corporate I.T. guy a long, long time ago. And from there I moved into consulting, project management and ultimately that kind of led me to do kind of construction and engineering. And obviously in Australia, it’s a big industry for us, so once the opportunity presented itself to transition fully into property development and construction, I took it straight away. 

I worked for a number of big corporations here and as I was training and understanding the market better, ultimately I met someone who today is my business partner, who’d been running the building company for a little bit. He was in a growth path. But like many builders, his biggest challenge was who could cool his seat next to him that could understand the philosophies of the organisation and could drive growth in the same way that he as founder could grow it. So because we had a longstanding relationship we were a good fit for each other, so I ended up joining the organisation full time and yeah now we’re well and truly on that growth path within the last few years. 

But what did Vila study at school in order to get into the property development and begin his own business?

I studied engineering and computer sciences. So universities over there have a little bit of a structural difference to the way Australian universities work, in the sense that there are degrees are much longer, so I went to university for five years and they’re a lot more academic – is probably the way I will describe it so. Back then there wasn’t a lot of degrees in I.T. or business systems or anything like that. So you had to study engineering first and then after that specialize yourself – in my case, I specialized in computer sciences. So that background in core engineering became really, really useful once I was transitioned into property. 

While these qualifications definitely assisted him with his company, Vila suggests that it was his parent’s accounting jobs that influenced his passion for business and finance as well… 

My parents are both accountants of different types. One is more of a practising accountant, the other one is more of a corporate accountant. So from the very beginning from a really really early age, they helped me understand business and finance really well. I mean some of those really really basic concepts serve us a very good base to understand how to build and grow businesses across a number of different industries. So general basic skills and knowledge that can really be useful much later on. I had a couple of you know early ventures back in the dot com days, and following that. And that set a good base for when I decided to kind of go on my own and establish my own company. 

With such an integrated skill set from engineering, project management and I.T., Vila shares how exactly his property investing journey began… 

Definitely an interesting journey. A bit of an unexpected one, there’s a little bit of luck involved, you know, being in the right place at the right time. So as an investor, my first property was a little two-bedroom unit in a place called Drouin up in the Gippsland country Victoria. You know, I bought it with the intention of living in it, and it didn’t quite pan out the lifestyle. So after a year, I turned it into a starter investment property. It was a great investment property by itself you know, it had a positive cash flow and it was positively geared. It was [also] low maintenance, so [it was] pretty good. But more in the traditional way of investing in property, it was only much later when I started building my own house in Melbourne that I got much closer to that particular project. You kind of followed it on a day to day basis together with the person that today is my business partner in Franco buildings. And I had the opportunity to see both the similarities between managing a construction project and managing all the types of problems that I managed in the past. 

But also you know, how exciting it is to build a new home, a new house, a new dwelling from effectively a patch of dirt. So I fell in love with the process and immediately I started looking for opportunities to get more involved in projects like that, to get more involved on a day to day basis on the process and the running of projects. And then once I was hooked, there was no going back. 

And how exactly he landed his first property development deal… 

So the first property that I sold sort of end to end was a two townhouse development that my business partner had already started in Surry Hills. So I came on board sort of halfway through that process or maybe a third through that process – but enough to see the end to end construction of the property all the way to sell. 

So you know obviously lots of learning through that process. A lot of preparation, so that project we ran together. So both my business partner and I were project managers in the deal. So that allow me to learn from the experience he already had and the systems we already had but at the same time, look at the project with sort of new fresh eyes [and] have a look for opportunities to improve processes, implement new tools and I guess take a lot of experience I’ve had managing other projects and how those learnings and those tools could be used in property to improve the outcome, shorten the duration of projects and get a better result. 

Delving more into the nitty-gritty details of this first project, Vila explains what his first development was and the amazing outcome that ensued after auctioning it off.

I got two townhouses in Surry Hills. it was a fairly upmarket area here in Melbourne. 

So at least on houses where are almost identical copies of each other, there are four bathrooms four and a half bathrooms really high end in terms of finishes and really high-quality construction. It’s a market where they expect that most rooms will have an ensuite in it, which is why you see so many bathrooms in that process and they also expect a certain level of quality, not only in the construction but also in the finishes. So you know Tasmanian Oak in their floorings so kind of throughout, a high-end carpet in their bedrooms. 

You know German appliances, the top end, architraves and that kind of details, spas in almost every bathroom, frameless showers, floor to ceiling tiles, high ceilings and ultimately that kind of top finish. So that was a really, really good experience for us to reinforce one of our core principles which is you know the building of high-quality properties rather than just going for the lower cost. It also ended up paying back to the developer who was kind of funding this particular project because both the units sold for about 10 per cent above their expectation that a real estate agent had quoted. So one of those that sold at auction, sold for nearly one point eight million dollars. And the other one sold sort of privately shortly thereafter for up for a similar sum. So ultimately a great result for a property like that. 

He also explains how long the process took and why it was possible to complete a rather large scale development in such a short period of time… 

We built it in about seven months. But it included a period of rain which again, Melbourne is notorious for. So depending on what time of the year construction starts, 

There’s about a month there that needs to be kind of taken off, so the real kind of effective time of construction was probably six and a half months. 

But the way we execute our project is high speed. We’re probably faster than 90 per cent of the builders in Victoria because we not only plan them ahead but we have a series of kind of tools and techniques that we deploy throughout the construction to ensure that there is effectively very little downtime. We don’t sit around waiting. We make sure that the next step is ready to start as soon as one trade comes out, the next one goes in and sometimes even in parallel if that’s possible because we know for most of our clients, for unflawed projects, you know a shorter project has an intrinsic value in terms of holding cost and speed to market.

With such a successful first project, Vila shares how many properties he’s completed to date.

It’s hard to take into account because we’ve done all sorts of different things. But it’s probably easier if I talk about the last four or five years. We built about 40 units every year. Both a combination of our own projects and projects that we do for clients. And obviously a mix of you know sizes of actual properties. So there are projects in there that are single custom houses, there are projects in there that are maybe five or six townhouses. We’re building 14 apartment building at the moment. But in general, our average is about 40 units every year. 

Vila also shares with us an experience he’s had with a client where a lack of planning in the development process led to numerous setbacks… 

I have plenty of disaster stories in my investment career but thankfully not in development. This one had to do with a project where the permits had been processed to get sort of experience here through the council. And in the process of doing that, a few decisions have been made around the structure of the house, the location of the house and size of the rooms and the distribution of some of these properties to kind of make it easy to go through council. But the person going through that process did not necessarily think about the construction stage. I’m not exactly sure why but they might have thought that’s the builder’s problem or we’ll figure that out when we get to the building stage. So we obviously get involved in the building stage and the moment we had a look at the plans we realised that a few of those decisions that had been made suboptimal. But the plans by then were already approved so the client had two options. Option one, build it as it was designed in the plans and end up probably spending between a hundred and fifty or two hundred thousand dollars more than they should have, with no expectation of getting that money back through the sale. Or going back through the whole planning process again through council, and get a new D.A. or a new building permit and get that approved, which will effectively set back the project eight or nine months. So it was one of those lose-lose situations. The client decided to do what I considered to be probably the less painful option, which was to go back to council and redo the process. But all of that, that could have been saved by thinking about the project end to end from the very beginning rather than thinking necessarily one step at a time without considering the consequences of some of those decisions. 

Yeah that’s a shame. So what was the end result? What happened?

That project has gone through council now, so it’s been probably nine months since they went back to council. But they will get their permits and their property will be built. And those properties will be sold. Unfortunately, that investor will have lost a significant amount of money in the holding costs, so hopefully, they would have learned out of that experience, and get the builder involved earlier next time.

Focusing more on his own personal story this time, Vila talks about the amazing a-ha moment where he realised what he could achieve if he got into the property world. 

It was very early in my development career once I got involved in a couple of projects that I was able to see end to end. It was in that same Surry Hills project that I was talking about it in a different part of the interview, and was when I realized that one of the great things about property development is that there are no losers in the process right? There are no losers in the game. What I mean by that is in a good structure a well-executed development project, everyone makes money and everyone gets something out of it. So you know the owner of the site can maximize the resale value of the property because often sites are used for development or can carry a premium and they tend to be happy with that. The developer obviously makes money through the development process and the construction process, suppliers of trades can make a decent earning out of providing skills and work and materials for the construction projects and the ultimate buyer who buys the end product also ends up with incredibly quality home that they can either live in or add to their investment portfolios as a rental. So there’s really no one in the cycle that ends up losing or is worse off, provided the property gets structured properly. And you know that’s one of the things that I love about development, that’s one of the things that we made important in development and keep as a tool in our arsenal and kind of our life calling. It’s not you know, it’s not about the money, it’s not about you know the interesting things that we execute or the challenging exercises that we do every day. All of those things are important but the one that really drives us every day is our ability to create value for other people. 

Secrets to Success in Property Developing: How to Create Value in Real Estate with Henry Vila

Henry Vila Value Property Real Estate
Henry Vila Value Property Real Estate

Despite being fortunate enough to have friends and colleagues that assisted him during the beginning of his property development journey, Vila delves into the mindset that initially held him back… 

There is something that holds a lot of people back. It did hold me back for many, many years. Luckily I kind of again surrounded myself with the right people to get around it but that was my perception of that. So one of the things that is very different in property than it is in other vehicles is the ability to carry debt. And when you have a perception of debt as something that is bad, like my parent’s did or like my own upbringing led me to lead where you try to pay off debt rather carry it, that can become a really limiting factor. So there’s good debt and bad debt and once you understand that you can use debt for your advantage and to be honest to achieve things that you could not achieve any other way. 

It was through reading and research that Vila’s outlook on property changed, prompting a sudden interest in the property world that would forever change his mindset…

A friend of mine gifted me a book from Robert Kiyosaki called Rich Dad Poor Dad which is mentioned in the podcast a thousand times with any of your interviewees. It was one of those times, I’m one of those who kind of read the book and was suddenly sparked with enough curiosity to go on to understand more, to want to talk to people and to see how this work. Luckily my analytical mind was well-equipped to have a look at the evidence and realise that a lot of those concepts were valid. Like I said once that clicked in my head, there was no going back, I could never see the world the same way. 

Vila explains that it was by changing his mindset and listening to the stories and experiences of numerous people, that he was able to succeed in his property development career.  

There’s all sorts of things that I’ve done over the years, everything from specific sales training to specific building training to specific material training. But I think the one that’s made the most difference is the mindset, what I’ve done with that mindset and the people I’ve surrounded myself with. Again I’m gonna be a big preacher, but I’ll mention a lot of the people that I’ve heard at other places but obviously Robert Kiyosaki, Tony Robbins, all of those guys. And again I’ve developed a mindset where I’m open to listen to anyone because you don’t know where the next pearl of wisdom can come from, and sometimes it’s out of these big figures, sometimes it’s from what I call the little people, a colleague, a tradie, someone in the street. I think getting that mindset of openness and learning and being able to relate the stories other people tell you to your own reality is probably what has made the most difference in my development career. 

He also adds what he believes is the best advice he’s ever been given…

The best advice I’ve ever received is to help enough other people get what they want, because that’s going to make them help you get what you want. So that makes it a cultural service of creating value for others without necessarily thinking directly about what’s in it for you. Trusting that if you do enough of that, that it will all come around and you’ll be in a great place. 

Touching on the mindset side of things once more, Vila gives us an insight into what he thinks is the mindset approach that has helped him succeed in his journey…

For me, it’s all about the way you look at problems, the way we look at problems. So people, in general, don’t like problems, they think they are something bad and that they should be avoided and that a life without problems would be great. I have a different view. So my view is that our problems are opportunities and that my daily job is really solving problems, solving problems for us, solving problems for others. If we focus on the next problem, on that next step, then everything is going to be fine. Many people kind of look at, “Well we have a big development project” and then they get overwhelmed by knowing that there will be twenty hundred problems that will arise during the entire duration of project and they don’t know how they’re going to solve that last problem, so they give up even before they start. So for me, I guess in terms of how we want to do every day, what I remind myself of doing every day, is to look at problems as opportunities and also when problems arise, concentrate on that first step. Let’s solve the first portion of it and then once you get there you can concentrate on the next one and keep plodding along until you achieve the results you want. 

Delving into the nuts and bolts of his property development strategies, Vila explains the processes involved in finding that perfect site and conducting feasibility studies

The way my process runs and my strategy in property development runs is I start with the end in mind. I don’t look for a site straight away. I don’t necessarily look for an area straight away. We analyse the market to see what end users are demanding, where people want to live what kind of houses or what kind of properties they want to live in. Where’s the demand increasing where is decreasing? And we followed a little bit of a method where we – particularly in Melbourne and in the South East of Melbourne in particular which is where we do a lot of our work. There is a little bit of a wave moving from the inner suburbs all the way out to there to the outer suburbs. So we follow those trends and we try to get a little bit ahead of them because developing property takes about 18 months. Once we know what’s what’s being demanded, what people want, where people want to live and what kind of house they want to live in, then we start having a look at where we can buy lots of land or sites to build that kind of property. And that leads us to the right suburb, the right path of suburbs and the right streets within those suburbs. Then ultimately to get into the kind of specific negotiations for specific sites and specific properties. Once we have a property then we go through a process of deciding what the end product will look like. Again because we are builders ourselves we manage the end to end process, so in that early planning [stage] we take into account construction costs, the effect of design decisions, making those construction costs. So we optimize our process to make it both easy to go to council or at least as easy as it can be to go through council these days, but also to ensure that the end product is as close to what the market wants as possible. Once you go through council and get a D.A. or a planning permit – depending on which state you are – we go through the process of creating construction documentation, building permits detail drawings and structural engineering. And then we proceed to start the construction which takes anywhere between seven and 12 months depending on the project. Somewhere in that process depending on the project and depending on where the project is we tend to involve real estate agents, obviously our tradies as well, but real estate agents in particular so we can understand if we’re going to do sales off their plan or if we want to wait for the project to be fully built before we take it to the market. Again, this is done with the view of optimizing the results of each specific project and in cases where we work with clients to optimize the results for our specific claims. 

He describes the end goal his building company has in mind when developing properties and how they figure out the trends the market wants… 

Our development projects, to be honest, are rather boring sometimes as we tend to follow a bit of a recipe. So the biggest two trends in Melbourne at the moment that we’re trying to address are increasing density. So you know gone are the days were not the minimal requirement for our suburban house was to be of 750 square meters of land or a thousand meters of land, a big house, four bedrooms, two bathrooms, a double car garage… Those properties they still exist in the other rings but in the inner and centre rings, they’re just not affordable anymore. So there is a push to increase density in those areas. You know, put two townhouses where they used to be one, or put three townhouses where they used to be one. So we look at a lot of those problems. There’s a big trend that we’re following, sometimes in parallel with this first one which is the ageing population. So a lot of people who have been living in these houses in some of those suburbs [have been living there for] 20, 30, 40 or 50 years. They’re at a point where you know the children have grown up and they’ve gone on on their own way and now they’re stuck with a house that might be too big for what they want or that’s too hard to maintain. You know they don’t want to mow the lawn, they don’t want to live on maintenance that a traditional suburban house needs. But at the same time they don’t want to move. They’re in a place where they’re used to the locality, their friends live around them, they’re used to where the shops are and they know where entertainment areas are. So what do we tend to do is we tend to establish projects that will allow those downsizers to take the opportunity to continue living in the communities they’re living in and take advantage of their lifestyle that you know that the place offers them, while at the same time having a low maintenance kind of new feeling property that will take them from there for many years. 

He also talks about the unique process he goes through in order to find the ideal development site… 

We start with the end in mind, so we start by asking ourselves, how much will these units or townhouses sell for? And that tends to set the frame for the entirety of the rest of the process, that’s effectively the bucket of money that we have to spend on a project. Now some of that will go to the landowners, to be honest, the land is usually the last component. Some of that will go to the construction and the construction costs tend to be – we kind of optimize it a little bit – but they tend to be largely fixed. So what we tend to do is we tend to conduct a full feasibility study where we take into account you know their end sales price of the property minus the sales expenses so you know commissions for the real estate agents, GST, taxes and those sorts of things. Then all of the remaining bucket, we subtract or we’ll take into account what we call the development costs. That includes both the construction cost but also the other costs that are related to obtaining planning permits or D.A’s, to getting design engineering and working drawings out of that process. That tells us how much will this property cost to develop and the residual of that is how much money we can pay the maximum we can pay for a block of land but without any profit. So we tend to take that amount of money, subtract out of that what we consider to be a fair profit for the project and then we go shopping with the rest of the money. We know how much money we can afford to pay for a site. So we go to the market directly looking for sites with the characteristics needed for that project where there’s no meterage or the frontage or the right zoning. But also with a very, very clear idea of how much we can pay for a block of land. If it fits that criteria then we buy very, very quickly, we tend to take two or three days to make an offer. If it doesn’t fit that criteria we immediately put it to one side and move on to the next. 

Once a site is found Vila explains that a number of people from his development team get involved in the planning process, to make sure each project can run its course smoothly…

Once we find a site and we negotiate and we’ve locked it in, immediately we start deploying our team – our development team – into the property. So there are a number of professionals that get involved very early in the process. Everything from arborists to make sure that they are no trees in the property that will cause an issue or that we can’t maintain and what the design parameters have to be to protect those trees. We have land surveyors to do a feature survey of the block of land and immediately we get involved our own architects and town planners to start thinking about the specific design and specific dimensions of the properties that we will build into the block. All of those documents and all of those activities with a view are very quickly putting a package together, an application package to go to council to obtain a planning permit or a D.A. – a planning permit in the case of Victoria. Then once we have all of that, we have in Victoria what is called a pre-submission meeting with the relevant council, where we have a conversation with them about the project we want to do, what we’re trying to build, how we think it’s going to impact the community and make sure that we address all the council’s requirements approach. Once all of that has been done then we submit to the council and then the way it starts that process tends to take eight or nine months and to move from that point to the point where we get the permit.

However, regardless of this efficient planning, Vila addresses the fact that there are holding costs to be covered and explains what his company does to cover these costs… 

There are few mechanisms that we used to address and it really depends on the project you have and the opportunity and the particular block of land. In a lot of cases, we try to negotiate long settlements. It’s not uncommon for us to buy properties with settlements 10 or 12 months away. That gives us enough time to process and complete all the processes of obtaining permits without effectively owning the land and without effectively having any holding costs for the land beyond the deposit that we paid upfront. So sometimes that’s not possible, and when that’s not possible then the holding cost during that period gets factored into the feasibility study that we run for the project. 

He also explains what he does in order to find projects that allow for longer settlements… 

It’s very very important to have the owner on board in this negotiation process. 

Sometimes it’s all good, sometimes it’s not, I think it really depends on the needs of the vendor or the needs of the seller. So if we find a seller that doesn’t really need to move out straight away and is happy having a year to plan what their next move is going to be, then that tends to be a very good match for us and our projects.

Thinking back to all his previous property developments, Vila delves into why most of his projects work out and why he’s never had to stop a project and sell it before developing…

There are two reasons why we don’t end up selling the property. The first one is we make sure that all those conditions that will lead to us abandoning a project or not selling the property, we make sure that all of those things are boarded upfront when we buy the site. So that’s why we meet with the council before we submit the application, and that’s why we really only buy sites where our chances of success in the development process are high, rather than when there’s a surprise or something that is not all clear or where there are risks involved that are beyond what we are willing to accept. The other reason why we don’t tend to abandon them is because being a builder, we already have all the team and the mechanisms for us to drive projects to completion. Sometimes we bring joint venture partners along the process. If for whatever reason we decide that it’s important for us to share the risk or if we have a joint potential partner that is particularly interested in working with us in some of these projects. But in general, we tend to finish every project we start, so we haven’t had one and we haven’t done yet. 

He also explains that depending on the project itself, his projects can either be sold prior to completion or after…

It really depends on the project. So most projects we run will have a certain amount of pre-sales while the construction is happening and it tends to be aligned with the location of the project. So projects in more affordable suburban areas are easier to sell off the plan. And by selling off the plan we can you know, we can allow people to get access to those properties at a lower cost because they’re obviously reducing our risk by buying upfront and also obviously they don’t get access to the property immediately, they need to wait three or four months until those properties are completed. However, there are projects where pre-sales are just not practical. Particularly in the high-end suburbs around the bay in Melbourne is a good example. People just don’t tend to buy these properties or pre-sell off the plan. They tend to wait until they can see it and feel it or until they can actually confirm the level of finishes that have been put in there, whether they like the colours or not, whether they like the appliances that are being put in there or not. So we tend to have that dual strategy you were in a lot of our projects we tend to do pre-sales and in other projects, it’s just not practical to do pre-sales so those get planned to run all the way to completion and then go to sale. 

With so many successful projects completed, Vila talks about why he’s still in the property development industry and where he thinks he’s at in his journey…  

The main reason why I’m still in property development is I still feel that I’m really young in this game. I still feel that I have 30 or 40 years of doing this and I’m enjoying it to be honest more than I did the first day. It’s a really, really fun process to have and it’s a fun process to go through. It also provides me with a very rare opportunity to create a lot of value for others but also obviously a lot of value for me personally, both as a personal growth instrument, but obviously financially. So yeah, you’re talking about my journey and I think my journey is just starting.

“I’m open to listening to anyone because you don’t know where the next pearl of wisdom can come from.”
-Henry Vila

Looking back to the past, Vila tells us what important advice he’d give himself if he could go back ten years in time… 

The biggest thing I would say to my younger self is to be patient and that’s really important in what I do today but it took me 10 years to figure it out. To not jump from one thing to the next, from one strategy to the next or from one vehicle to the next because it has not worked in the 6, 12 or 18 months that I’ve tried it. Most things in life take time, development, in particular, takes a lot of time and patience is incredibly important. So I am naturally impatient, so I’ve had to do a lot of work to develop the patience to drive these projects from the very beginning to the end. 

Letting us in on the secret to developing patience, Vila leaves us with the strategy that he uses to make sure that he’s always being productive with his time… 

There’s a tool I personally use which is to create a pre-commitment.  So that pre-commitment, as well as being patient, I’m also fairly committed. So once I’m committed to achieving something, I relentlessly pursue it. And we’re talking about not giving up a bit before, I tend to you know once I commit to achieve or work towards a particular, I tend to follow through very well. So the way I manage to control my impatience is by creating those commitments even sometimes artificially when they’re not needed. So I will go to commit to pursuing a project for 18 months and I’ll put it in writing, or sometimes in a contract even if I don’t have to, just to ensure that since it’s written out, now I need to follow through. So it’s really, really hard for me to kind of get away from that kind of personal commitment to me, or my business partner, or my clients before that time. The other thing that has helped me a lot is too have enough things going on at the same time. So we don’t have one project that runs for 18 months because what happens in most projects is that there are really, really busy times and there are really really quiet times and in those times is when my impatience kicks in the most. I can’t sit still, I can’t not be adding value or not be doing something. So the way I manage that is I have enough projects so that there’s always something going on in my life and that actually forces me to slow down. I know it’s a little bit counterintuitive but because I have enough things going on at the same time, it’s very easy for me to look back and think where have the last 6 or 12 or 18 months gone because I’ve been busy doing what I do best and doing what I love. 

Having been so successful with his property journey so far, Vila explains what he’s planning to achieve over the next five years…

We’re excited about a number of things, so we’re on a growth path as an organisation and I am personally as well. We’re trying to double the size of our business in the next 12 to 18 months. We’re tracking really, really well in that process, but we’re also excited to see some of the new trends and the new kind of properties that are starting to make appearances in a market like Victoria, where traditionally most properties have been of a particular type and a particular shape and a particular finish. It’s almost like there’s been this cookie-cutter approach to houses for many decades. Finally, with you know with people like us, migrants coming here and getting more exposure to the younger generation, a lot of those bargain finds are falling down. So I’m really excited to see the kind of properties we’re gonna be building you 10 years from now. 

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