EP 140: How To Understand Profit In Property Development

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Return on cost (ROC) is a crucial metric in property development that measures the profit of a project as a percentage of the total cost. It is essential for both investors and developers to understand and calculate ROC accurately to assess the financial viability of a property development venture. The importance of annualising return on investment (ROI) is a key factor that is often overlooked or misunderstood by stakeholders in the industry.

Annualising ROI is crucial for accurately evaluating the profit of a project over a specific time period, typically one year. This is important because it allows investors and developers to compare the return on their investment to other investment opportunities or benchmarks, such as the interest rate offered by banks. By annualising ROI, stakeholders can make more informed decisions about the potential returns and risks associated with a project.

In this week’s episode Hilary and Bob discuss how to understand profit in property development. They share insightful tips and insights on the topic, including a reminder not to judge a person by their car! So stay tuned to learn from the legendary Bob Anderson, gaining valuable knowledge about maximising profit in property development.

Episode Highlights:

Bob’s tip of the day [01:10]

How to understand profit in property development [03:38]

Clarifying the email offer [04:59]

Explaining return on cost (ROC) [08:02]

Return on equity vs. return on investment [09:44]

The significance of ROC in property development [13:07]

Differentiating between loan and equity partners [13:51]

The structure of equity partnerships in development [17:32]

Final thoughts and upcoming webinar [26:11]

Resources:

To learn more about our upcoming webinar; How To Develop Commercial Projects please click here: https://www.propertymastermind.com.au/how-to-develop-commercial-projects/

For more information about Hilarys book 3 Wines In, how to increase your self confidence today without the hangover tomorrow, please click here: https://hilarysaxton.com/3-wines-in/

To get inspired and to start taking action, listen to Hilarys podcast: Bounce Back Better. Available on Apple, Spotify or wherever you get your podcasts.

Ep. 175: How Assumptions Can Cost You Money In Property Development

In this week’s episode, Hilary and Bob discuss how assumptions can cost you money in property development. They dive into the potential pitfalls of making assumptions and how it can lead to significant problems if due diligence is overlooked. They also emphasise the importance of thorough follow-up and critical thinking in property dealings and interpersonal interactions. Tune in and learn from real-life mistakes and how to avoid those costly pitfalls!

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Ep. 174 – How Much Money Can You Realistically Make In Property Development

In this week’s episode, Hilary and Bob dive into the question: how much money can you realistically make in property development. They discuss various types of projects, the impact of location, and the importance of understanding profit margins. They also highlight the differences between duplexes, townhouses, and larger developments, as well as strategies for maximising profits through effective financing and investment approaches.

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Ep. 173: From the NRL To Property Developer (with Gary Martine)

In this week’s episode, Hilary and Bob talk with a previous mentoring student Gary Martine. Gary shared insights from his diverse journey and emphasised the importance of relationships in achieving success. Also highlighting how these connections have played a crucial role in both Bob and Gary’s life.

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Kind Words From Our Students

Gary Sherdon

"I would have no hesitation in recommending this course and have done so on many occasions."

I would like to thank Bob and Hilary for the opportunity to participate in The Property Accelerator. I enjoyed the learning experience both online and in person. This has allowed me to implement knowledge and given me confidence to pursue Property development. In this time I have committed to two duplexes and am currently working on a splitter. The splitter involves a boundary realignment plus renovation and then construction of a second dwelling. This is being done in a JV arrangement (another of Bob’s strategies). I would have no hesitation in recommending this course and have done so on many occasions.

Patricia Bal

"I thoroughly enjoyed your course and believe it is the best one out on the market"

I thoroughly enjoyed your course and believe it is the best one out on the market. Thank you for making your knowledge available, greatly appreciated! Thank you for being an inspiration.

Greg Bohlsen

"We were so impressed with the quality of the education that we also signed up for to become one of Bob’s Mentoring Students"

18 months ago we attended Bob’s Development Course knowing absolutely nothing about property development. We were so impressed with the quality of the education that we also signed up for to become one of Bob’s Mentoring Students. Within 6 months we were DA approved; within 18 months we are building 5 x two-storey townhouse on a block of land less than 5kms from the Brisbane CBD, and within 24 months we are looking at a profit of $600K!

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