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TPC Gold | A Step-by-Step Property Development Guide with Peter Koulizos

In today’s bonus episode, we’re joined by the “Property Professor” himself, Peter Koulizos, as he breaks down the 12 essential steps to property development success. 

From setting goals and crunching numbers to working with council, Peter shares invaluable insights drawn from his years of experience.  

But property development isn’t always as glamorous as it seems. As Peter candidly reveals, it’s a high-risk, high-reward game with plenty of challenges at every turn.  

That’s why we’re tackling the tax side of development head-on, including: 

  • Why understanding GST and capital gains tax is critical 
  • How to avoid costly surprises 
  • The importance of choosing the right accountant 

Plus, Peter reflects on his very first development project—what went right, what went wrong, and the advice he’d give his younger self. 

For the full episode, tune in here: Episode 241 | 12 Steps to a Profitable Property Development – Chat with Peter Koulizos 

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Further Resources from “Property Professor” Peter Koulizos

As mentioned in the episode, here’s the 10-part video series on one of Peter’s property developments: 

 

If You Enjoyed TPC Gold | A Step-by-Step Property Development Guide with Peter Koulizos, You Might Also Like:


Transcript

Bryce Holdaway
Alright, so before we go to the last one, we’ll round them off here. Number one was set your goals. Number two was research, research, research. Number three was find a development site. Number four was choose the best site. Number five was draw up your plans. Number six was crunch the numbers. Number seven was work with council. Eight, select a builder. Nine was organise the finance. Ten was all about project management. Eleven was about the real estate agent and the property manager. And Pete, number 12 is… 

Peter Koulizos
The taxes. You need to understand the taxes because when you buy an established property investment and you sell it, right, you’re going to have capital gains tax. Hopefully if you’ve made a gain, right? Same with development. If you build something and sell it and you make a profit, you’ll pay capital gains tax. But the other tax that you will pay in property development, whether you make a profit or a loss, is the GST. So they don’t care whether you made a loss on the whole deal, the taxman wants their GST component. Now, if you go and see an accountant before you even start, they’ll tell you things like, you should register for GST. We’re going to do this under something called the margin scheme. All right, you have yourself all set up, and we’re gonna put this in this entity. Maybe because you wanna sell them straight away and you’re gonna make a big profit, why don’t we put it in your wife’s name who earns less than you?  

Ben Kingsley
Or a company structure.  

Peter Koulizos
Yeah, or a company structure. Go see your accountant first, work out the structure, get to understand what taxes you might be liable for. But a lot of developers have come unstuck because they’re happy to, well, not they’re happy to pay the capital gains tax, but they’re willing to pay the capital gains tax. But that GST…  

Ben Kingsley
10%, bang.  

Peter Koulizos
That’s being paid whether you made a profit or a loss.  

Ben Kingsley
Yeah. So on that point, not every accountant’s created equal, are they?  

Peter Koulizos
Nah.   

Ben Kingsley
So your local accountant that might be doing your typical tax return, like a volume tax return provider, not the type of accountant to go and see. You may need to get a specialist referral to an accountant who does this type of work on a more regular basis and can give you all of the pros and cons of the different types of structures and all of the tax impacts around it.  

Peter Koulizos
Certainly the accountant that I use in Adelaide, fantastic property specialist. But for those people that either don’t live in Adelaide or live somewhere else, simple things like somewhere on the contract it’s going to have is GST applicable or not. If your accountant can’t answer that question, you’d better go find another accountant.  

Bryce Holdaway
Absolutely. Hey final one for me is if you were to, we’ll do a little bit of time travel here Pete, we go back to your very first development that you ever did. What advice would the current Pete give to the Peter back then on that first development that you didn’t know at the time?  

Peter Koulizos
If only all the deals were like that! So I buy a property in a seaside suburb of Adelaide called Seacliff. And I get just the approval to build two. Just the DA. I make 50% profit. Just on the DA. Next person that buys it, they sell it a year later. The bastard also made a 50% profit, which to me is an illustration of timing the markets is also important. Because the property market was going up anyway we were making a profit, so I thought I was a genius making 50% but I went to all of that trouble.   

Ben Kingsley
The buy-and-hold strategy works.  

Bryce Holdaway
What would you have said to yourself to back yourself in staying a bit longer and don’t give away your margins?  

Peter Koulizos
I mean, I know so much more now obviously than I did before. But you’re right mate, the best way to make money in property is to buy and hold. It’s not the only way, but it’s certainly the best way.  

Bryce Holdaway
Well, I think it’s a good place to stop mate you’ve delivered some great gold. Mate we appreciate you coming on, I think our listeners will benefit from your wisdom, your experience and doing this in the trenches, not only for yourself, but also having to impart that on to students so that they can do it as well. 

Peter Koulizos
I just want to stress again; property development is not easy. You know, we’re having a laugh here and a bit of a joke. But the reality is property development, small scale residential development, let alone big scale apartment development, is not easy. It looks sexy and exciting, but it can be very risky. Be careful.  

Ben Kingsley
And I think, you know, if I was to close that out, there’s a couple of people that I’m talking to and mentoring around this stuff. And I’ve said to them, look, I’m not the expert. I’ve got some baseline knowledge that I can very much help you. One of the things that’s really clear in watching them is the uncertainty. Why can’t you give me certainty on this? And it is just a constant wheel of uncertainty. And you’re trying to mitigate risk and you can’t because no one can give you definitive answers in this space. And I think if you go in there, knowing that it’s going to be white water on some days and it’s going to clear up the next day and then more white water the next day.  

Bryce Holdaway
Stay out of the waves.  

Ben Kingsley
Stay out of the waves. That’s the piece here and I know that’s frustrating because you want to invest in something you think is: I’ve done my homework, I’ve done my due diligence, but it still can be a rough ride and no one can give you certainty. So once you get peace with that and you understand that it’s high risk, high reward then you might enter into this area.  

Bryce Holdaway
Pete, we’re gonna put some links in the show notes, a couple of the resources that you talked about, if anyone wants to reach out to you and say good day, they can do that. But mate, as always, it was a pleasure having you on The Property Couch and keep doing the great work that you’re doing at PIPA and everything you’re doing locally in South Australia. And we’ll see you next time when you come along and join us. 

Peter Koulizos
Thanks mate, I appreciate it. Thank you, Ben. Thank you, Bryce. 

241 | 12 Steps To A Profitable Property Development – Chat with Peter Koulizos

Raise your hand if you’re curious to hear the profitable, 12-Step Process to Property Development…?

Now, keep it there if you’re already a developer, or you’re keen to give property development a crack yourself or, hey, maybe you just wanna build on your property investment knowledge before you lock yourself into anything?

Righto then folks, if your hand’s UP, then this episode was tailor-made for you!!

‘cos today we’ve dragged the big boss back into the studio — Mr Peter Koulizos!! And he’s about to unpack some of his best stuff on property development!

For those who haven’t yet been privy to the Property Professor’s gold on gentrification (EP 30 and EP 47) or the Five Golden Rules of Property Investment (EP 30) or his most recent episode on negative gearing (EP 204)…  it might become clear to you now that our good mate Peter Koulizos — Chair of Property Investors Council of Australia (PIPA), property developer, specialist in property valuation and economics (with a teaching degree, a Graduate Diploma in Property and a Masters of Business – Property) —  is a SERIAL Coucher and one of Australia’s leading property investment experts whose opinion we greatly admire!

Sure, he’s got all the qualifications and skillset, but he’s also got invaluable, in-the-trenches experience, ESPECIALLY when it comes to property developing… and not just a little bit, mind you folks… a WHOLE LOT of it!

So… let’s just pick the Property Professor’s brain, yeah?

He was in town, so we’ve dragged him back into the studio!

Resources mentioned…

The TOP FIVE Highlights…

  1. The framework to figure out if developing is (or absolutely isn’t) for you
  2. The 12 Steps to a Profitable Property Development (and what to look out for during each step!)
  3. The gross profit you should aim to get BEFORE embarking on a development project (including the “worst case scenario” profit)
  4. The difference between planning approval and building rules approval
  5. The lenders that have an appetite for financing developments right now

Get Noteworthy Answers On…

  • What’s likely to happen with legislation in the future?
  • How did Peter get into property and the development space?
  • What are the benefits of “buying and holding”, even for property developers?
  • Is “buying under market value” realistic?
  • What can you expect when working with councils?
  • What’s a crucial factor when developing?
  • How does private certification work? Are there issues?
  • What are Peter’s best performing properties?
  • Can you be an “armchair developer”?
  • What level of risk is involved?
  • What should you tell the real estate agent you’re going to do with the developments?
  • Can you find a development site without having to pay for research resources?
  • Who do you need on your team?
  • How important is a Town Planner in all this?
  • What’s the biggest blind spot when selecting a builder?
  • Is there a Rule of Thumb on how much to spend on project management fees?
  • What advice would he give his younger self when he was a first time property developer?

Quote of The Day

“You don’t want to go from zero to hero.

You don’t want to know nothing about property straight to property development!”

– Peter Koulizos

 

47 | 2016 Property Outlook and Findings on Gentrification – Chat with Peter Koulizos

Peter Koulizos is back on The Property Couch podcast! The last time Peter joined our podcast, Bryce and Ben couldn’t stop discussing about his thesis on Gentrification. This time, with his thesis almost at its completion stage we are more than keen to invite him over and discuss in detail the findings his thesis has uncovered.

On top of that, as a bonus, they will also be revealing their 2016 Property Outlook for the Australian Market. With the dropping auction clearance rates in Sydney and Melbourne market, the increasing high density apartments in the Gold Coast area and the up and coming investment spots in Brisbane, this segment is a must-hear for all those who are serious about property investing. Some of the issues that they’ve touched on in this episode are:

  • Which part of the cycle is each state currently in
  • Things to look for when selecting an investment grade suburb and property
  • Type of properties to stay away from
  • Development or changes affecting the economic activities in each state

 

Resources mentioned in this podcast:

  • Peter’s Book: Top Australian Suburbs: A Guide for Investors and Homebuyers – Click here
  • Peter’s Book: Property vs Shares: Discover your knockout investment strategy – Click here
  • The Property Couch’s Book: The Armchair Guide to Property Investing – Click here
  • If you are interested in joining Peter’s course, please email him at: [email protected]

 

If you like this podcast: “2016 Property Outlook and Findings on Gentrification”, don’t forget to rate us at our iTunes channel (The Property Couch Podcast) and our Facebook page. If you have any questions or ideas, feel free to drop us your thoughts here: http://tpcaustralia.wpengine.com/topics/

030 (Part 1) | Five Golden Rules of Property Investment – Chat with Peter Koulizos

The Property Couch has reached Episode 30! To celebrate this, we’ve got The Property Professor, Peter Koulizos joining us to talk about the Five Golden Rules of Property Investment. Ep 30 The Property Couch with Peter Koulizos - Part 1 - Five golden rulesPeter comes with a high pedigree in property investment, holding a teaching degree, Graduate Diploma in Property and Masters of Business (Property) and specialises in property valuation and property economics. Combining Peter’s background with Bryce’s role as a Buyers Agent and Ben’s knowledge in Mortgage Broking and you have a great team of property investment insiders who shares the same passion when it comes to wealth education.

The first golden rule from this trio, is never compromise on location. We’ve emphasized this a lot of times and have also previously mentioned about it on the Buyers Decision Quadrant episode. But time and time again, we see investors making the same old mistake and their argument usually evolves around the land size, affordability and depreciation benefits.

Find out the rest of the Golden Rules of Property Investment in the podcast.

 

>> Episode 030 (Part 2) | What is Gentrification and Signs to look out for – Chat with Peter Koulizos

 

If you like this podcast: “Five Golden Rules of Property Investment – Chat with Peter Koulizos”, don’t forget to rate us at our iTunes channel (The Property Couch Podcast) and our Facebook page. If you have any questions or ideas, feel free to drop us your thoughts here: https://thepropertycouch.com.au/topics/

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