How this investor found success in property development through joint ventures
development

How this investor found success in property development through joint ventures

How this investor found success in property development through joint ventures

by Bianca Dabu | October 17, 2017

Jason Byron has capitalised on his intelligence and experience throughout his property investment journey—convincing other investors to fund joint ventures as he works hard to generate profit for all parties involved.

property development, investing, property investment

The property investor has recently explored development of real estate assets, and even though he does not have enough capital or serviceability, his desire to succeed has motivated him to push forward.

He shared: “My whole thing is that we built up our nest egg of properties through doing joint ventures with people, taking chunks … doing a deal with their money [and using] my intelligence [to maximise growth].”

“There's plenty of people out there that, if you can prove it to them, will invest with you,” Jason added.

Find out how joint ventures have helped him be a more sophisticated property investor, and how a good and well-structured system basically set him up for success:

How do these joint ventures work?

Jason Byron: We did our first property in the country [out] of our own money. We ran out of money because that's all we could borrow at the time.

Then I found a property up in Queensland, which was $575,000 and we knew that it would make money because it was one of those split-a-blocks, but the house was actually on one lot. So, it wasn't a hard task for us—it was just split the title and sell the land off. I really wanted to do it [and] so did my partner ... At that stage, we just said, "Hey, we've found a deal. We know this works." And then, we put it out to the community that we were in at the time and had someone come along and fund the whole thing … It's no different to what we do today with developments.

Essentially, you just find someone with a big block and convince them to split it?

Jason Byron: Well, we give them options. We say, "The whole idea is that we want to take a percentage for all the work that we do with it, but we don't put any money into it. Not a cent. So, we will do all the work and we'll prove to you that it works. We'll show [you] our system."

I'm very system-based. I kind of learned that after doing so much military training … My dad was very system-based in his business [as well], so I'm the same. [I show them the system] so people understand [better] when I present them a deal. It's like a business plan—very step-based.

The idea was that when I would find something, I'd just say to people, "This is exactly what we're going to do. At the end of it, this is how much profit we're going to make. We will either split ... the total profit [by selling] the whole thing off or ... we'll get the value at the end and we'll get the equity, [then] we'll split that," so they can hold it if they want.

Is it hard to find people who are willing to do these joint ventures?

Jason Byron: Not at all … That's never been the issue with me. It's proving it to the person. To be able to sit down with them and say that you've done so much due diligence that this can't lose. And even if it did lose, what's your buffer?

That's why I do probably development now … why I'm just knocking down buildings—because you actually build the equity in the finished product. So, that's a lot more risk-averse for me than trying to do a reno[vation] and pray that someone's going to pay a big price for it.

How exactly do you find people to do joint ventures with you?

Jason Byron: Mix with people in different communities and different networks … that love property.

How did your first joint venture go?

Jason Byron: The first deal we ever did, I made $160,000 profit. And it was always going to make that because I'm splitting off—it was $575,000, sell the house for $500,000, split the land [which is worth] $300,000, at least … It was just so simplistic that it would work. I didn't have to shift the house or anything like that.

What’s the best way to convince an investor to work with you?

Jason Byron: Find areas where I would be able to get land value—that's the best way to convince an investor, for me.

Do you usually try to invest within the suburbs of a city?

Jason Byron: Yeah. I've always done that ... I've always liked that demand. I've always like the fact that people always are hot for that type of market and I don't see that fluctuating at a big point as if it could fervour out.

How have joint ventures helped you succeed?

Jason Byron: I've never been worried about the actual value of the purchase because I've got someone always to be able to finance that for me because I've got the skills. I can prove it … At the end of the day, it allows me to go into areas of higher value and always strike a win.

Has it ever gone wrong for you?

Jason Byron: No, not really. I mean, there's always things that are going to happen when you take something and then [do] all the paperwork. Someone asked me this the other day and I said, "No, we're actually coming out pretty well the whole time because we've always had a system that knew what to do when we had any challenges.’

So you're going to have little issues—simple, tiny little thing to fix … You're going to have to just make sure you use your professionals.

Would you say that a good team actually adds value to your assets?

Jason Byron: I think that's where people fall down, [and] where I haven't. I've picked really good professionals … I'm the person that gets twenty quotes for something, and I'm the person who gets twenty professionals to give me different opinions so I'm not only making myself smarter, but also, I've got people that I can find out who's the smartest.

Phil Tarrant: It's the smart way to go. Ask plenty of people and then get the information so that you can make an educated decision on these things.

Tune in to Jason Byron’s episode on The Smart Property Investment Show to find out how his portfolio grew from a countryside home to $20 million development properties and how growth corridors are his chosen path to success.

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