23 Jan Unearthing the gems – Nhan Nguyen
How to find opportunities to un-earth properties before anyone else – even before agents – is the specialty of Nhan Nguyen. He gives us some tips on how to find them and how to secure them ahead of the crowd.
Kevin: One thing I do know is that as we enter each year, we tend to look for new opportunities, but quite often, we need to reflect back on what worked last year, what are the strategies that are working for many people? And I’d like to refer you to Nhan Nguyen from Advanced Property Strategies who always makes a lot of sense and we spoke to on quite a number of occasions last year. I’m going to pick up on that conversation with him now.
Hello, Nhan. Welcome back. Happy New Year to you, too.
Nhan: Thanks, Kevin. Thanks for having me. Great to be back.
Kevin: I know your specialty is finding these properties with a bit of a twist, going directly to the owner, unearthing these little gems. Is it becoming harder for you to do that, Nhan?
Nhan: I don’t believe so. I believe that the information is always there in terms of different zonings, different opportunities that either most people aren’t aware of or real estate agents aren’t aware of. I believe that the market with everything goes in cycles, so I definitely believe that every year, there are opportunities.
People are still going to mortgagees-in-possessions, people are still getting divorced, in terms of motivated sellers. People still move on in terms of opportunities. And as long as you’re clear in what you’re looking for and you educate yourself, I think that’s really where it’s at.
Kevin: You’ve become very much an expert in a particular marketplace. How tight an area do you look in when you’re really starting out, Nhan?
Nhan: Personally, I am focusing on about three postcodes and that’s about it. That covers about six to eight suburbs at any one time, and I become an area expert on that. I do have sub-areas that I do focus on, however three postcodes is enough for me.
I say to people, with two to three postcodes, if you know what you’re doing, you can make seven figures consistently year in and year out. I’m not the only person doing that. And as you get better and better at this game, you start to expand closer to the city or into different areas like commercial, industrial, and expand your repertoire.
Kevin: When you’re looking for a property, do you have a specific property in mind, or are you more looking for the opportunity, the seller?
Nhan: There are a couple of things that I specifically look for: one, a certain type of deal. At this point in time, I’m looking for land subdivisions. Sometimes the land subdivisions I find have a twist on them, where you can put townhouses on them or you can put a childcare center or petrol station on them. The things I’m looking for are generally a little bit larger than the average mom and dad. But when I started, I was just looking for the one-into-two or the renovator.
And I definitely look for a type of seller as well, the motivated seller, someone who is definitely keen to sell, maybe needs the cash now and is happy to offer a bit of a discount there and may not be aware of what other possibilities there are on their block.
Kevin: That expertise, you built up over a number of years, haven’t you? You just don’t wake up one morning and say, “I’m going to become an expert at looking for blocks where I can put on a motel or a service station.” There’s a lot of study that has to be involved in that and a lot of experience as well, Nhan.
Nhan: Absolutely. I suggest people think big and start small. Start with either a one-into-two or just a cosmetic renovation. People often say that there are no splitters out there or no subdivisions out there. I know at least on the north side, there are at least 8000 or maybe even 10,000 splitters there, one-into–two subdivisions, and that’s in the Brisbane City Council region alone. If you go into other regions, there are many, many more.
I think there are two things. One is definitely educating yourself, starting small, getting familiar with the process, the town plan, getting together your team – your engineers, your surveyors, your real estate agents, your solicitors, your accountants, putting together that team.
And as you build momentum, as you build capability, as you build your cash capital, it allows you to do bigger and bigger projects. Also, your confidence will build to do bigger projects as well. There’s no need to rush in and be a hero in this game; you really want to be a long-term player to be able to last the ebbs and the flows of this game as there always is.
Kevin: It’s amazing where the opportunities emerge. I was on my morning walk this morning and I walked past a property that had been on the market for quite a long time. It was a boarding house and it was obviously, I thought, over-priced. But what it was, was that it required someone to see the twist in it.
As it turned out, Nhan, the person upgraded the boarding house and did some cosmetic improvements to the outside but was actually able to get a splitter off the back of it, which now looks as if they’re going to be able to put a house in there. I would never have thought that. They did it by pulling down a garage.
There are opportunities all around. I guess you just have to be experienced enough to know when they emerge.
Nhan: Yes, and be looking for them, be open to them, and I call it being deal-ready. I even had a text message this morning from a real estate agent. I’ll read it briefly; it won’t take too long. It says, “I have an off-market splitter block commanding city views, etc. Offers over a particular figure. Call me or text me for more details,” and the agent’s details are there.
You know what? Whether that deal stacks or not, and I’m not really interested because I’m not looking for splitters, I’m looking for bigger projects, but if you’re in the marketplace and you’re cashed up, you know what you’re looking for, and you’ve done the ground work…
And sometimes the ground work can take three to six months, to choose your suburb, figure out your budget, determine your strategy, figure out a basic template of what is going to work financially. You have to pay $600,000 to be able to cut a block into two, or $800,000 to cut a block into two and make it profitable. It does take that time, and when those deals come up, then you can pounce on them. Otherwise, you will miss out on them because other people are ready.
Kevin: Another lesson in that, too, is that you’ve built up that network. That’s why you’re getting those sorts of texts from agents. They know that’s the sort of buyer who you are.
Nhan: Exactly. That’s what you’re wanting to do: to build up over time and build up a repertoire of the types of deals that you can do, whether it’s a splitter block, a cosmetic renovation, a subdivision. That’s where the money is at, I think, if you’re open to opportunities.
Sometimes it even takes getting properties under contract, getting it subject to finance or subject to due diligence where you can put a deposit down, check it out, and eventually, you may not even buy the property, terminate the contract subject to due diligence, get your deposit back, and at least, you’re pulling the trigger, practicing doing due diligence and commanding extra knowledge because you’ve gone to a town planner or the council to get their advice and clarification on “Does this work? What frontage do I need? What’s the slope that I need, can I get the stormwater legal point of discharge?” All those items need to be addressed before you actually buy something.
And sometimes it actually takes stuffing it up a couple of times, but not necessarily losing a whole stack of cash, to be able to get clarification and learn.
Kevin: Those valuable lessons. Very wise words and very well said, too. Nhan Nguyen is from AdvancedPropertyStrategies.com. Thank you very much for your time. We’ll talk to you again soon.
Nhan: Thanks so much, Kevin. Thanks for having me. I look forward to being back soon.