This is  the ultimate goal you want to achieve with your renovating

 If we use the travel analogy, you might decide you want to go on a holiday and end up in NEW YORK in 4 weeks’ time..

So there’s an outcome and a timeframe

With your Reno plan, you need to decide what you want to have achieved and by when.  

 It’s a good idea to express it in the present tense as if it has already happened. This helps to engage your subconscious mind.               

Here are some examples…

1. It’s 2029, and I have a portfolio of properties producing a cash flow of $150,000.
2. It’s  2023 and I have completely replaced my day job salary of $90,000 with cashflow renovation projects.
3. It’s 2026 I own my dream home in my dream location mortgage-free. 

That’s your big Kahuna?

You need to adapt to change and optimize your results.
If there’s something that we have learned from the pandemic it’s the need to be willing to work with change in order to succeed.

Plus, once you start working on your plan, the doorway to opportunity tends to open up.
Using our travel analogy, you might have planned to stay a couple of nights in Los Angeles then drive to Las Vegas. 

But you hear from an old friend who is living in Phoenix who invites you to come and stay a few days.
You don’t want your plan to be so rigid that you can’t take up that wonderful opportunity.

The process of planning really helps you to stay focused and intentional about what you’re trying to achieve

General Dwight D. Eisenhower said:
“In preparing for battle I have always found that plans are useless, but planning is indispensable.”

While you must be really clear about what your end goal is, how you get there will change according to the things that you learn and the opportunities that arise along the way.

For instance, legislation changes affect your projects, they can make one strategy less effective, then you need to look at another strategy. 

Stephen and I had purchased a large block to build townhouses however there were changes in the legislation that impacted our original plan.

We changed to a different property and strategy and the detour provided the opportunity to pick up a cool $600k lump sum in the process.

For the majority of Australians, the family home represents MOST of their wealth Most Australian homeowners amass way more wealth through their homes than they could EVER save.

By being strategic about buying and renovating your PPOR you have the ability to make millions.

“I personally think if property is your thing, owning a family home is really important because it’s an opportunity to make a tax-free profit.”
~ Bernadette Janson

When you have a family home, you can build your equity quickly with renovation rather than waiting for organic growth. Renovating is like jet fuel for the growth of your equity.

That equity build-up can give you a bucket of cash to help fund your other projects.

Tax-free profit is a pretty powerful incentive but you also get to practice your renovating skills in a relatively low-risk way.

When we make decisions about the home in which we will bring up our children and create memories it’s not uncommon to lose sight of logic and reason.

The decisions are almost always tinged with emotion and lead to overspending.

If you find yourself scouring the timber yards for an exotic (and expensive) species of timber for your floors or you spend enough to feed a small country on your new kitchen it’s time to take stock.

Manage your  emotions and your budget wisely so your renovation adds more value than it costs so you can free up extra equity to start building your empire

Another opportunity your family home can provide is additional cash flow. 

If the space in your home is under-utilised, some minor alterations may enable you to rent out a portion of the home to create additional cash flow to fund your goals and maybe even pay off your mortgage.

Let’s say you’re an empty nester and you are rattling around in a big home. You, my friend, are on the brink of a major windfall,
should you choose to take up the renovation challenge!

Let’s face it, your family home has grown in value in the time you have owned it. By selling, you will be into millionaire territory.

 But wait, there’s more.  If your home is a bit tired and dated, you should be able to achieve an extra 10% to the sale price (after costs) with a makeover.

And when you buy a doer-upper as your new home, you can save/make hundreds of thousands more.

Stephen and I pocketed a total of approx $500,000 in our downsizing operations.

Guess what, that’s your first project. 

 If you can’t afford the home you want, buy what you can afford.

Renovate and sell, go again and keep going until you have worked up to your forever home. Renovating for financial freedom is a step by step process.

This strategy is called climbing the property ladder and the beauty of it is that your profit is tax-free*

So let’s say your long-term goal is to produce, let’s say $200,000 income per year, or it might be 50,000. 

Now let’s say you’ve harnessed the potential of your family home and you’ve got that bucket of equity that you can use for your next project.

 If you’re really happy in your job or running a business and you have sufficient cash flow and equity you would be wise to skip this step for now.  The third type of project, wealth building projects will build much more wealth over time. Achieving financial freedom with renovating is a muscle you can grow stronger with time and experience.

You may not have that option though, especially If you’re not happy with your job or you’re not earning enough income, your next type of project probably needs to be a cash flow project.

Cash flow projects are generally flipping to produce lump sum profits to:

1. Create cash flow to replace the income from your current job or business
2. Build up a chunk of cash to buy your first home
3. Make cash to fund other projects
4. Pay for school fees, holidays, or your mortgage.

It’s just like having a job, if you don’t work, you don’t get paid.  In order to get leverage, you do need to start holding property as soon as you can

My suggestion would be to keep turning over projects until you have replaced your income and are in a position to be able to move on to wealth-building projects

Put simply, flipping can be risky.  

This is because the market is fluctuating constantly and if you buy at the peak and sell in a trough, you can lose a chunk of your profit margin to the fluctuation. Add to that a few nasty surprises and a bunch of rogue trades and you are in a pickle.

Get educated, learn the system, and how to do research and due diligence.
Build a team of trades and professionals to help you make the right decisions.

Most importantly, have a solid plan B so you are never forced to sell.
You only lose money when you sell and if the market turns, hold until it recovers.
I have found that every time my profit margin has been impacted by market fluctuations, holding the property for a bit longer has solved the problem

Of course, your feasibility needs to have been solid in the first place. If you have based your feasibility on unrealistic numbers, you are in trouble before you start.

We do have a lot of renovators who are doing very well with straight flips.
It is not safe for a newbie with no training and no support because you can easily come unstuck.

We’ve done really well in terms of flips is we’ve put together the joint venture strategy. So, that someone that’s not quite as experienced can team up with someone that’s more experienced. And so that they have that I guess, expertise with them on a day-to-day basis, cashflow projects are very exciting.

Consider stacking strategies, to add more opportunities for profits, add a buffer against changes in the market.

If you were to add a subdivision strategy to your reno, you might seriously increase your profit potential but it does depend on where you are working.

Let’s say you’re in North Melbourne, land big enough to do a subdivision is going to require a much bigger budget.
If you are working in say Wollongong or Ballarat, then that’s quite possible that you could find that sort of project at a more affordable price.