house property income tax rules

west: welcome, folks, to today’s interview.and today, i’m very privileged to have with us mr. bob andersen. now bob has been involvedin property development for a very long time, over thirty years. and he’s in a conglomerateof people who control over $1 billion worth of property. and that’s a super, super impressivestat. what’s more impressive is bob not only hasa personal portfolio but he’s also doing it day to day and he’s also teaching peoplehow to do it. so we’re very lucky to have bob with us today. and i want to welcome youto today’s interview, bob. bob: thanks, west. great to be here. west: absolutely. now tell us, bob, when youspeak to people and they ask you what it is

that you do—because i know you’ve gotsuch a range of skill set—what is it essentially that people need to know about you? bob: well west, primarily, i’m in the propertyinvestment, property development area. but ultimately, what i do is i use property developmentmore as a vehicle for getting property investment at cost price whether it’s for myself orfor investor clients. property development is really a vehicle to accumulate the assetclass of property, primarily residential property. so yup, i’m a developer but there’s areason for being a developer. so what do i do? i’m a developer and i’man investor and my clients are all investors. west: so a lot of people who are kind of thinkingof getting into development but maybe they’ve

only done a couple of residential or maybethey haven’t done any property and they’re looking at getting into something on a smalllevel, is that something that you help people primarily and teach people how to do as well? bob: yeah. i heard mal saying, “never payretail.” so myself, that’s part of the reason i got involved in property development,really. it was a vehicle for getting property investments at a—well, not wholesale price—butabsolute cost price. so people, sometimes they haven’t done adevelopment at all and they’re investors with one or two investments of their own andthey see that potentially property development could be a great way of accumulating propertyinvestments fast and at cost. so with those

people, i have a whole property developmenteducation program for those people who want to make the next step up from property investorto just more property developer. west: wow. and i think there’s a perceptionin the public that you’ve got to be some sort of sophisticated, right up there andhave done hundreds of deals before you can into development. i mean that’s kind of—wheni was going through—at least, that was the perception. i mean if you look at a lot ofthe property work out there and books and tapes and seminars, they always show you aprogression where development is like the ultimate goal. but you’re saying that peoplecan—with some knowledge—get into property development and make it work for them.

bob: yeah, they can. i think one of the firstthings that people need to do is to know why they want to get involved in property development. west: so find their reason. bob: yeah…and a good reason. i was talkingto somebody last week. he actually wanted to become involved in property development.so i put the question, “why do you want to do this?” and they say, “oh, i seeproperty developers and they’ve got big fancy houses, they drive red ferraris. theyoften have young women hanging off their arms.” and i say, “well, that’s not a reallygood… it makes me sound very unsuccessful.” you know, i’ve been married for thirty years.i don’t drive a red ferrari. and i haven’t

got the biggest house in the suburbs. but i think you have to go in there for theright reasons. and initially, as i said it’s a vehicle. it’s a way of accumulating wealth.it’s a way of accumulating property. so for those people, get the reason right first.and that’s important…having the right reasons. then the next question is ‘well, how doi get involved?’ and really, just like everything, you have to be educated. you have to gainknowledge and increase your knowledge for leveraging off people with far greater knowledge. west: absolutely. and you’ve got to learnfrom people who are in the industry and doing

it and are the real deal. i mean, there’skind of a lot of pretenders out there and obviously, i’m not going to name names oranything but there are people out there who don’t walk the talk and there are peopleout there who don’t actually do what they claim to do or say they do. and you have arecord that just speaks for itself with all the developments that you’ve done: resorts,hotels, government buildings and all those kind of things that do that. so how can people, i guess, identify who tolearn from and what kind of signs can they look for when looking for a means or lookingfor someone to actually leverage from? bob: i think they’ve got to do a littlebit of their own due diligence, really. in

my case, i’m a real developer. i have adevelopment company, positive property strategies, where we’re involved in projects all thetime. even currently, you know, retirement villages, combination projects, townhouses,units—we’re always doing projects. and so i’m a real property developer, therefore,i have the ability to pass that knowledge on. we’re like talking about people who maybe trying to pass knowledge on that are not property developers but they’re outs…look, you’ve got to do your own due diligence on the subject. west: so you’re a developer first and you’reteaching people afterwards. you’re not teaching

people first as your core business and thenkind of trying to do property development on the side. and i think there’s a big distinction,a big difference there. bob: yeah, exactly. and i’ve developed thiscourse. it took me quite a long time to develop it. it’s basically the culmination of nearlythirty years of experience that i’ve put into in my course. and i think that showsfor anybody who really sees it. west: absolutely. bob: credibility’s everything, really. west: definitely. and i definitely like tochat a little bit about it later because, you know, before our interview today, bobwas actually giving me a little sneak peek

at the course. and it’s really excitingto see what he’s put into it. it seems like kind of a labor of love that he’s actuallyput almost everything into his brain that people can follow in a blueprint. but before we get to that, bob, why don’tyou tell us maybe a couple of strategies that you recommend in today’s volatile environmentwith regard to property development? how can someone get into property if they don’thave, you know, a million dollars in the bank? and how do you specifically help people wouldbe a really good addition to how people get in. bob: yeah. well look, knowledge is power.so first thing people need to do is actually

to educate themselves—make an investmentin their future. and that requires spending some money. that’s fine because the greatestasset is you have is yourself. so you need to invest in yourself. and there are sourcesof knowledge out there. when i started, when i originally sort ofmoved from, if you like, from a short period in real estate into property development,there’s nothing out there. there were no books, there were no courses, there were nomentors. i did it the hard way. i made a few mistakes along the way. so increase that levelof knowledge. and then ultimately, you know, you have tomake the first step. some people keep accumulating knowledge, accumulating knowledge but theynever make their step. eventually, you have

to make that move. i always say you don’thave to have an iq of 150, you don’t have to be a multi-millionaire, you don’t haveto drive red ferraris to get into property development. so start small. you might be looking at somethinglike a duplex, two townhouses to get or maybe a triplex of three. you can get into thatfairly readily. if you have no cash at all and you’re building up this experience,you can look at more creative ways of getting into things—joint ventures. i’ve donea lot of joint ventures and there are so many different ways of structuring joint ventures.you might look at joint ventures as a way of bringing in somebody with some money…

west: and you provide your time. bob: …and you provide your time and theknowledge that you’re building. there are all sorts of things out there. thereare things like using fancy stuff like call options and building equity into deals andthat sort of thing. there are creative ways of getting in that requires knowledge of that.and also, look, at the end of the day you’re going to do some work. so there are creative ways of getting in.but finance wise too, on the smaller projects, some of the banks are coming back in and startingto lend retail finance going for twos and three townhouses at higher lvr’s. so thereare some too good opportunities to get in

on the ground floor. west: absolutely. so even if you don’t haveany money, you can still get your hands dirty and get some experience. and once you findsome really good information that you can act on and find, i guess, a strategy thatsuits your personality, i guess—in a way, bob—i mean, you were saying before thatthere are so many different things you can do but some people like to do something that’smore attuned to their personality and their risk profile i guess. bob: that’s right. some people are moreentrepreneurial. basically, i’m a property developer or a property investor. also, doyou make entrepreneurs… there are things

to suit people’s personality. some peopleare more creative than others. but, you know, there’s a deal around the corner for everybodyto fit everybody. west: absolutely. and i think, even that mindsetin itself, people are saying that there aren’t deals out there. and someone like bob whois day in and day out… there’s always a deal. bob: yeah. and look, if you miss out on adeal of the year, the next one’s only a week away. west: absolutely. absolutely. wow. that’spowerful. so what are some of the strategies that yougive, bob, to people who may have a little

bit of cash lying around and maybe come tosee you for, you know, “how can you help me, bob?” what kind of things do you sayto those people and maybe if you can give us a case study of how you’ve helped someoneor given someone some advice or a strategy that has saved them some money or made thema lot of money? bob: one of the first things to do beforeyou say, “i’m looking for a site,”—the first thing you do is not look for a site—thefirst thing you do is have a look at your structure. you need to get your structureright. and that will depend on what you’re going to do. are you going to look for a siteto flick. are you going to develop something and sell it? are you going to develop somethingand hold, the structure will vary.

have a look at the finance and how you’regoing to fund this thing: are you going to use your own cash? are you going to use somebodyelse’s? how it’s going to be funded. but beyond that, before you start lookingfor a site, is to decide on the answers to those questions, then we have look at whatsort of deal fits the person. west: so kind of do it like a mini businessplan. bob: yeah, a mini business plan. yeah, exactly. some people come to me that they’re alreadyinto development. they say, “look, where do go from here?” some people will say,“look, i want to get into it. where do i start?” just start with the knowledge. onceyou’ve got the basic knowledge, then you

can build upon that with a mentoring programor whatever’s the next step. now at the moment people arrive with a deal and a title.they already started. it’s amazing, you know. you see something has started. it’sscary sometimes but actually some people are actually in their first project and are quitelost. and i pick up people at various stages. but as far as helping people in the deals,um, i mean you’ve met ben smith recently. ben runs my portfolio turbocharger program.ben started off basically as a mentoring student and i know he’d be right for the deal witha land subdivision, potential joint venture for a 20 lot subdivision. and i was like helpinghim with that in terms of how to structure the deal, how to structure the joint venture,how to make the win win with both parties.

that was a great outcome. it was a great outcomefor the land owner. it was a great outcome for ben. and that was a 20 lot subdivisionwhich actually, the way it’s financially structured, meant no money into the deal forthe actual developer—it’s a 20 lot subdivision. great outcome. west: wow. it’s crazy. bob: i often use that one as an example becauseit’s a very good deal of having… you can actually get into a deal and create at least… west: so ben obviously didn’t know thatby his own back. but he got into the game and he came and saw you because he knew youwere actually, you know, you know what you’re

doing and you were able to systematicallylook at all the different aspects of the deal and put something together that was a win. bob: that’s right. that was a ‘no moneydown’ deal. west: wow. powerful stuff. so if someone is sort of getting—you mentionedbefore people kind of just dive in and they don’t really know what they’re doing.and i was also reading in your book, which we’ll talk about later, but what are someof the most common mistakes, bob, that people make when they try and get in their firstproperty development deal and they just, you know, they don’t know what they’re doingand they can potentially lose a lot of money?

what are some of the pitfalls that peoplecan stay away from based on your experience from the most common list of things? bob: one thing that scares me is that oftenwith people starting out is they don’t know that they don’t know. it’s a dangerousthing. it’s a good thing to know that you don’t know but when you don’t know thatyou don’t know, that is very dangerous. and sometimes i go in some of the large propertyforums and you go and you see people coming up with a question, “i just bought a developmentsite. what do i do next?” they’re asking other people out there who have never donea development for advice. that’s pretty scary stuff.

so where can they go wrong? well, due diligenceis a big thing when you’re looking for a site. some people just launch out, they believea real estate agent. nothing wrong with real estate agents but caveat emptor: do your owndue diligence. i always say, first thing, get a little teamtogether-be it an architect, be it a town planner and do your due diligence on the site.it might be a site without a development approval. what’s the zoning? what’s the likelihoodof success on the development? what’s the yield? what can we get on it—two townhouses,four townhouses? some people just launch out, buy a property without knowing and it’squite scary. so yeah, initially, the right sort of duediligence.

know the structure before you enter into acontract. some people just launch into a contract signing their own personal name with intentof developing and holding and then they find out, well, i don’t really want it in myown name after all. and it’s an expensive business to try and take it out and sign personalname back into a trust or a company—whatever the structure is. so get these things in placeearly. west: absolutely. so i guess it all comesback to educating yourself and making sure that you have at least a base level of education.personally, i actually respect people who dive in and do stuff but i think when thereare things at stake, such as people’s lives and people’s families, you’ve got to actuallyhave that base foundation. and i think a great

step, as we’re talking about before, isgoing to bob’s site and getting his ebook. i just spent the last few days reading ita few times and it’s an amazing, amazing resource. if nothing else, it’s free. itjust teaches you everything…all the basics of property development. and so bob, for people who want to know alittle bit more about your book, how did the structure come? and i’m guessing, over theyears, you’ve thought, ‘how can i put together something that just teaches peoplethe backbone of what i do.’ bob: well, i wanted to get the basics outthere because i was bumping into people all over the place, i was seeing…

west: you’re always getting the same questionsprobably. bob: they’re all the same questions andyou know, as i said, you go into some of the property forums and you see what they werereally doing. so i thought, ‘look, at least let’s get some basic information out thereabout the development process, the sorts of development you can do, what are the risksor basically the advantages of doing property development. it’s about a 41 page ebookand it’s free. so that helps as well. west: and it’s pretty damn good. bob: it just gives people a bit of a feelfor property development: what it’s really about, what some of the advantages are, whatthe risks are, how you can get into deals.

obviously, here you can get a lot of wealthfrom it as well. so it’s a good first base, if you like, to go to. west: absolutely. and one of the things inoticed about it is people can start doing this in their spare time. i mean they don’thave to quit their job tomorrow and start going full—you know—full time property.they can actually learn and kind of do it on their weekends. bob: look, i don’t want to make propertydevelopment sound like it’s really easy. but it can be. with the right help, it’srelatively easy. look, very often people have done a courseor start to mentor or have what i call a day

job. and most of them are quite happy or quitecomfortable to do, say, three townhouse projects—let’s say that’s an entry level: 2 or 3 townhouseproject—in their spare time while they‘re currently in a full time job. a lot of thatcomes from two areas. it comes from getting the right help when you’re doing it. andthen getting the right team of people around you. and look, the thing is, once you start doingit, once you’ve done your first project, like you might do a 3 townhouse project—let’ssay it’s a moderate but a successful one—you might pull, let’s say, $70,000 profit pertownhouse. at the end of 12 or 18 months, it’s $210,000 worth of profit. but it couldbe a cash property if you sell them. it could

be even better if you decide to keep some,because then you can hold it as a long term investment. and because you don’t pay taxunless you sell it, you’ve got this accumulating asset that you can still harvest the equityof. so all of a sudden, you know, the property development part time thing is making 3x or4x as much as the day job. so the temptation is whether to do it full time. west: for sure. bob: some do it sometimes. some people arehappy to do a little project every couple of years. use that to build their propertyportfolio with a long term goal, whether that long term goal is…it’s usually retiringearly, change their lifestyle. some people

might develop three every 12, 18 months, 2years. sell one, keep two. sell two, keep one. use the extra cash. west: i guess that’s all part of their strategy.like the overall strategy that you were talking about before—putting down on paper whatit is you want out of it. i mean if you want to travel the world for the rest of your lifeand drive ferraris, you’re going to have to probably work a little bit harder thansomeone who just wants to be able to live and have their expenses paid by their investments. so on that note, i was reading one of theprinciples you were teaching bob, (in the book) where you teach people how a propertydeveloper saves way more money than a retail

investor for exactly the same deal. bob: yah. west: give us a really quick summary of howthat process works. i thought that was really fascinating. bob: okay. let’s take a little three townhouseproject, let’s say three or four townhouse projects. just to make it easier to understand,let’s break it down per townhouse, okay? so we might be cutting a three townhouse projectinto three or four townhouse project into four. looking at it on a per townhouse basis,so a typical townhouse, let’s say, might sell on completion for about $500,000—normalbread and butter townhouse in one of the suburbs.

now that townhouse is probably going to costsomewhere between $400,000 $425,000 to develop. now what i mean by that is all the costs aregoing to run up to let’s say about $410,000 $415,000. that cost includes the land, professionalfees of the consultants, the approval process, the finance, the counsel fees, all the bitsand pieces. so what you’ve got on completion, you’ve got a property that’s worth $500,000.what you’re going to do, obviously, you can sell it at the end and you make a cashprofit. you make a cash profit, it becomes income tax paid. that’s great. you get abundle of money, you pay your tax and you move on. the other thing you can do—and you can evendo a mix of the two—is to actually hold

that property at the other end. now when you’vedeveloped—let’s say it’s worth $500,000. now what’s the bank going to lend you? welltypically, a bank on an investment will say, “we’ll lend eighty percent without mortgageinsurance.” so they’re only going to lend you $400,000 on a property that only owesyou, let’s say, $410,000. so really, all you have to do is leave $10,000 into thatdeal. and the other $90,000 is profit. so the bank will lend you almost a hundred percentof your cost. now if there’s been even a smidgen of growthduring that twelve month project, what was $500,000 at the beginning or say even a fivepercent growth, it’ll be worth $525,000 by the time you complete it. so they lendeighty percent of that and it’s all your

costs. so really, all you’re doing is you’releaving a development profit in as your deposit on the finance at the other end. so the bankis fully funding all your costs. so the equity that you put in on the front of the projectto do the development, you can now take out, leave your profit in and hold that property.and really, that’s how you accumulate wealth. so all of a sudden, you’ve got a propertywhere you’ve got a twenty percent deposit which is just your profit. you’ve got yourequity back out and you’re going to do the same thing again. west: wow. so it allows you to essentiallyreplicate much more than if you tried to do it on your own.

bob: that’s right. the normal way is togo and buy a $500,000 property for $500,000. by the time you pay legals and stamp duty,it might owe you $520,000—it’s worth $500,000—you get a yield of negative. so you have to putin your $100,000 from some of it—often it’s equity over other projects like propertiesor whatever. but what you’ve got to do now, of course you’ve got to wait for normalorganic growth, you’ve got to wait for the market to increase your properties in value.when they have you refinance, you harvest your equity. so you’re waiting. you’rewaiting on the market. the other way you take control of and actuallycreate that equity immediately is through property development. and that’s the principleof it.

west: just from the structure and the concept.wow. that’s powerful. really powerful stuff. bob: so you accumulate a lot of property quicker.if your goal is to retire, then you’re retiring early. west: absolutely. wow. bob: or you’re retiring with more money. west: definitely. definitely. and i thinkthat’s a distinction that people would do well to read about, go back to bob’s book,check it out and really do some numbers. and for the same deal, as i said before, you canget up to twenty, thirty, possibly more percentage back on your money. and i think that’s reallypowerful.

i want to talk about one more concept beforewe start telling people how they can find out more about you, bob. potentially, formore sophisticated investors watching this interview, maybe they’ve got a little bitmore money in the bank than someone who is just starting out and they were wonderingwhat they can do, how you can potentially help them. how do you help people with a higherplatform? bob: well, a couple of ways. what we’retalking about, i guess, my whole thing’s property development so it’s really propertyinvestment but my vehicle of getting me faster to property development. so really, you canalmost break property development into two areas:you’ve got active property development.

and then you’ve got passive property development. so active property development would be somebodywho wants to learn the ropes, get in to developments, do their own developments. okay? so they haveto educate themselves and need a hand on the way through. and they become property developers.they may stay small developers or they may become big developers. that’s active development. now the other way is if you like is to getall the advantages of property development, but passively. so what that means, a passivedeveloper, for instance, may be somebody who really doesn’t want to get involved in theday to day operation of the development. one good example could be a brain surgeon. sohe’s just too busy operating people’s

brains. so that’s a near enough to a 7-daya week job, 14 hours a day. west: yup. absolutely. bob: so he doesn’t want to take his mindoff that, thank goodness. so what he wants to do, he wants to work his money. west: yeah. he wants to use property developmentas a vehicle. bob: exactly. so he uses that, his asset baseand his cashflow, to accumulate properties passively. so some of these high net worth individualsmay come into a project with us. it could be a joint venture structure. we have differentstructures where people can come in on a passive

basis. and that way, they can get the benefitsof property development almost—well, not quite as cheaply as doing it yourself becauseobviously, if someone’s doing it for you…in our case they pay for that, but they can get—eventuallyinto property way below retail price. like i say, i never pay retail. i mean i can’tpay retail for anything. well actually, you know what? i just can’t go out, i can’tbuy a car retail. i can’t buy a computer retail. i’ve got to find a deal. so i lookfor a deal with property. west: and i’m really impressed by the factthat bob takes that philosophy and it’s part of his mindset, it’s part of what hebelieves in. one question i would ask you, bob, is about how you continue to cultivateyour mindset and what are some of the characteristics

of the successful students that you have,mindset wise, how they’re thinking, how they’re building their knowledge, what kindof philosophies are they taking into their investments? bob: well i think, first of all, most of thepeople that come on and want to do a project, we only ask them why, what’s their motivation?because if they don’t have the right motivations, it’s not going to work. and if things geta little bit tough, they’ll give up. so having an end plan to it, they may becomemotivated to achieve that end plan. so once the motivation’s there, that’s the drivingforce behind it. so it makes them a lot more motivated and open to accumulating knowledgethat they need. and if there are little bushfires

to put out along the way and they’re motivated,they’ve got the end goal in mind, and they’ll deal with it. it will help them deal withit. so that’s the right sort of mindset: isto go into it for the right reasons and not just for a red ferrari. that can be a sideroad. a red ferrari and a big house—that’s a side road. a little while ago, i was talking to someoneabout the characteristics of a good developer, okay, in terms of being able to solve problems,being a reliable thinker. but as i said, you don’t have to have an iq of beyond 140 or150; just an average intelligence but a drive to learn and a drive to succeed. that’sa good work ethic. they’re the basis.

west: absolutely. and i guess, obviously,when you’re looking at working with someone, you need to make sure that those things arein place. otherwise, they’re going to waste your time and it’s not going to work. andobviously, time is money. bob: yeah, that’s right. you know, if peoplemove on beyond that or go mentor with somebody, they need to have all the basics in placein terms of that initial knowledge through the course or whatever and then that are ofmotivation because, you know, i wear a few hats. i have a property development businessto run and i can only take on a certain number of mentorees, if you like. and it’s a matterof really choosing those who really want to move forward.

west: absolutely. so on that note, bob, iwant to talk now about your mentoring programs. you actually offer a few things. we’re goingto talk a little bit about your upcoming product which i’ve had the pleasure of previewingjust a few minutes ago. but your mentoring program, people can actually leverage offyour knowledge and have personal contact with you, is that correct? bob: at the higher level, yes. it’s allabout… you know, this whole education thing of being educated and building knowledge isabout investing in yourself and then leveraging off other people’s knowledge. you can knockfive or ten years off your learning curve by accumulating the knowledge of…

west: well, you’ve had 30+ years of experienceand people can get straight into that. bob: the initial thing that people need isthey need to build their knowledge up of what property development is, what it’s all about.obviously, the more technical aspects, just the processes of how it works and sort ofpeople that you integrate with. i’ve got a little saying to ‘what is property development.’well, what it is, it’s about managing people and managing processes. so we’ve got the procedural part of propertydevelopment. we’ve got the processes to go through whether it’s the purchase ofthe site, obtaining of the approval, finance, project management or sales—whatever itis—the processes. you need to know those.

the other thing is managing people on theway through. you’ve got various people to work with…an architect. the good thing is,you know, property development, you actually subcontract the areas of it. it’s a bitlike renovating. you can go and renovate a house. you can just get a builder in to doeverything or you can go and then start organizing one trade at a time. it’s been like thatwith development. you get a really good architect and then if you like, organize some of theother consultants on your behalf and you just control it. but this knowledge base is the initial thing.so that’s what i call my property mastermind property development course—

west: and where can people go to, to actuallyget into that? is there a site or…? bob: well, initially, if they go to www.propertymastermind.com.au,that’s my website where you can download the free ebook. i think that’s a good placeto start. bob: once they’ve downloaded the free ebook,then they’ll automatically be on my database. once you’re on there, when i have a launch,i’ll start to send out a few emails. so i like to send out more content. west: just like this. bob: like this, yeah. bob: another good, sort of, good content leadingon to the course. and then the course will

be available for a period of time. people,if they want to, can purchase the course through my website. it’s very easy to do. west: now the course itself, bob, it’s amonster, of course, i’ll be honest. it’s got twenty something cds, one big manual anda support manual, four dvds, software program, retails for $400. tell us about the actualstructure of the course, bob, and how it’s going to help people take that next levelfrom not knowing where to go into having a blueprint to get into property development. bob: west, i built it in a sequential orderi know that people need to know by now. west: you were saying before people don’tknow what they need to know. you know what

they need to know. bob: yeah, i know what they need to know evenif they don’t. so what i’ve built into the property mastermindproperty development course is all the knowledge that they’ll need to take the next stepinto property development. i keep saying, you don’t have to be brilliant. it’s allsequential. people that have done it just say, “look, it is really easy to follow.it’s detailed but it’s not difficult to understand.” it’s built upon lessons, about forty onelessons or forty one chapters of covering everything from beginning to end. and withinthose lessons, i refer to a support manual

which accompanies the lessons. i have a 370page support manual. it’s all the things like check list and documents and templatesof… west: exactly the stuff that you use in yourbusiness. bob: yeah, but these are copies out of lotsof my projects and the things that i use everyday. west: but you paid probably tens of thousands,if not more… bob: i learned the hard way. west: to develop. bob: exactly. yup. and that’s in the supportmanual saying welcome to an area of lessons and say ‘refer to the feasibility template’or ‘refer to the due diligence template.’

you go to the support manual and there itis. so we’ve got the lessons. we’ve got thesupport manual. and beyond that, i’ve actually recorded this set of 20 cds which is reallythe whole of the 41 lessons in audio. so if you like, you can put that on to an mp3 playerand play it at the gym, you can play the cds in the car. because some people are more audio—they like to hear, they like to read. west: that’s for sure. bob: so one can reinforce the other. i put in as well a six-hour set of dvds orlive workshop i did with some of our investors. it was a closed door workshop. we go throughthe whole development process but in looking

at different angles that aren’t in the lessons.lots of powerpoints. we’ve probably got a hundred powerpoint slides in there in theset of cds as well. we go through a whole heap of things: create a finance, the wholedue diligence, the process. 6 hour dvd set. now beyond that, something new is i’ve donea series of interviews lately with my inner circle of consultants. so it’s me interviewingthem. so i’d interview my property accountant, property lawyer, one of my builders, projectmarketer, commercial finance broker, my interior designer—these sorts of people. so that’sme interviewing them. that’s in a set of 8 cds. west: i imagine—i mean—the experienceyou bring to know what questions to ask. i

mean you could put a newbie in front of theseguys and they just wouldn’t know what to ask. bob: no. that would be a 30-second interview. so i dragged out all the knowledge out ofthem. and that’s valuable. also, in my lessons, what i plugged in tothe back of those is three case studies. so three deals that we’ve done, three projectswe’ve done, real offers— a subdivision and two townhouse projects. we’ve absolutelypulled the deals apart, from how we came across the deals, showed due diligence that we did,how we contracted the deals, terms and conditions in the contract, how the deal came together,how we financed them, how we got the approvals,

the project management side, how it all cametogether, the marketing, the sales at the backend on three of those. there’s no substitutefor actually going inside real deals and see how that happens. and also looking at our early bird special,for those who get in an order early, is i’ve done a series called ‘under the microscope.’what i’ve done, these are sites that we’ve looked at that were on the market for saleand we got in and pulled the lease apart until about these are the things to look for inthis particular deal. these are the things i liked about the site, the things i didn’tlike about the site, problems that could arise… west: it’s almost as if someone was lookingover your shoulder and accessing your brain.

bob: yeah, exactly. and the things that people come back to meoften and say, “what’s the hardest thing with getting in your first project?” andpeople that are looking at getting into their first project say, “…to know a deal wheni see one. if i see a site, how do i really know if it’s a deal?” so part of thatis the due diligence analysis. and the other part is the pure number crunching. so thisis my, if you like, my due diligence analysis of how i look at a deal. west: because, i mean, in thirty years youwould have pretty much got it down to a fine art. would it be fair to say?

bob: it would be, yeah. and all of that—thedue diligence stuff—is in the course. so that’s called under the microscope. i’vepulled out five of those that i’ve looked at probably the last six months with fullanalysis. probably an early bird special. now there’s something else i’ve put into the course. it has to do with the number crunching. how you number crunch or feasibilityanalysis, all that’s in the course. we’ve got four chapters just about how to do feasibilities. but i put a software program in there. notjust a cheap little excel that somebody has put together. i’ve seen a few of them aroundand they’re just full of holes. this is a proprietary software package which has beenon the market for twenty years. it’s called

feastudy. the deal is called feastudy lite.that’s the program. it’s an excellent program. and the recommended retail priceis $440. and it’s great value for $440. it’s all you’ll ever need to do to dosmall development projects. i’ve put it in my course because i really want peopleto have a professional presentation when they put it before the bank or before a valuer.and also, it really makes the number crunching easy. i mean who wants to work out interestin a deal the long way? it’s a great program. it’s constantlybeing redeveloped. been around for twenty years. i’ve put that in the course. west: wow. fantastic. so it sounds like, bob,you’ve literally given the entire toolbox

that anyone would need to get into propertydevelopment from point a to point z: everything they’re going to need, the foundations they’regoing to set. and we were talking before about information and education being the firststep into getting in without getting burnt massively, and there’s literally no betterway to get in from someone who’s done it for so long. i, for one, am excited about the release ofthis product and i think it’s going to help many, many people avoid the traps and themisconceptions of getting into property development. so i guess on that note, bob, is there anyparting words you want to say to people watching the interview, a bit of a sage advice or anythingyou want to impart on leaving?

bob: on leaving? uh, other than no matterwhat endeavor you want to get involved in, get a good ground. look, it doesn’t matterwhether it’s property or outside property, there’s just so much knowledge out therethese days. do the right due diligence but don’t be afraid to invest in yourself. thebest asset you have is yourself and invest in that, increase your knowledge. with knowledgecomes confidence. and with confidence comes the inner strength to take that step, thatfirst step. west: absolutely. beautiful. and on that note,just really quickly, if they want to get a hold of bob’s free report, it’s at www.propertymastermind.com.au.i highly recommend reading the free report if you’re looking at getting into propertydevelopment or even if you’re just looking

at learning about the industry or taking anotherstep in the right direction. you can read more about bob’s course fromthe links included in and around this interview. and i hope you’ve got something of value. bob andersen, thank for talking to us. hopefully,it’s added value to the viewers and i appreciate your time. bob: absolutely! a pleasure, west. west: cheers! bob: cheers�