146 – Todd Sloan: How Your Renovation Experience Builds Value For Real Estate Investing
Your renovation experience builds value for real estate investing. Choosing the right project to enhance a property plays a significant portion to future owners in increasing its property value.
Watch Episode 146 on Video:
How Your Renovation Experience Builds Value For Real Estate Investing
- [01:07] Get to know Todd Sloan
- [02:38] What draws Todd in podcasting
- [04:26] The three core beliefs around the property
- [07:48] The Adelaide market and location of Todd’s agency
- [10:38] Affordability buffer going up
- [11:33] Todd’s renovation experience opportunities
- [13:31] Look for the opposite of what you’d sell
- [16:36] Comparative sales analysis
- [18:05] Concerns about losing a listing
- [19:32] Importance of asking the agent with their renovation experience
- [20:25] The scariest thing Todd experienced in his property career or real estate
- [22:23] The Value of getting an insurance
- [24:08] The wet trades in Todd’s 10-day renovation
- [26:26] The objective of his reno
- [28:55] Biggest learning and tips to renovators
One of the things that drew me to property was the more I learned, the more I felt confident. Whereas compared to shares, I felt the more I learned the more I realised, I didn’t know.” ~ Todd Sloan
Todd Sloan: The Real Estate Agent And Renovator
Todd Sloan is from Adelaide and he’s a real estate agent in South Australia, and host of a podcast called Pizza and Property. He is also an avid renovator and recently finished a project called 10-day Renovation. Todd’s real estate journey started when he was playing with Lego as a kid as he was obsessed with it.
Three Core Beliefs In Property
- Adding Value. For Todd, if you can’t add value, he’s not interested. He is very much a sweat-equity person.
- Cash Flow. He likes positively geared properties, something that’s going to produce an income from where it’s positioned.
- Risk Management. Mutual understanding with your partner or business partner of what you are into. If anything does not go well, you both know what may happen.
The Real Estate Agency Location And The Adelaide Market
The agency is located down South in Christies Beach. There was a bit of a joke in the office he was the global specialist because everyone just worked in their little patch and it was one thing that Todd looked down on.
In 2018 Todd started to work a little bit more borderless and now everyone in their office does it. He now has many more listings; he is selling a penthouse in the city, waterfront properties down to Port Elliot. It’s something that you couldn’t do 20 years ago.
Todd has been selling a lot of entry-level stock for investors. He has a strong European background and he says there’s been a family problem, because nothing’s happened in the Adelaide market for 10 years and no one’s talked about. All of a sudden these $270,000 houses are worth like three $330K and they were jumping up even higher again.
Current Renovation Opportunities And How To Consider Properties
With the current market state, Todd believes that there are renovation opportunities but it isn’t consistent, with many overpriced.
This is a tricky situation for Todd. It’s like a $64 million question. At the start of the year, they were selling properties for $330K and all of a sudden they can sell it for close to half a million dollars. So it varies depending on how the value goes up and down.
Most of the time, when finding a property, you look for something similar to what you want. But for Todd personally, he looks for the opposite of what he’d sell, the one that’s horribly presented. And that’s generally where the gems are found. The ones with a perfect sales campaign and beautiful presentation would have strong promotions but in the long run, will have strong competition against you.
Renovation Experiences and Expectations
The first thing is going through a comparative sales analysis. Todd is looking at all the reports of the million-dollar properties and by straightaway looking at these, he’d compare what a million dollars looks like in this market right now.
It’s important to list everything beforehand. Todd may be talking with some of his clients for years.
He remembers one instance, that was around April, everything was listed because there were a few off-market offers that they got. That’s how he always approaches things that don’t always go to market. Getting the paperwork done and getting everything up and running then connect the dots off-market.
Importance Of Asking An Agent About Their Renovating Experience
Bernadette Janson shares to Todd that there are quite a few students, particularly agents who don’t want to renovate the property. Where in fact, she knows that It will make a significant difference to the sale price.
Todd said that it’s essential to ask the agent what their experiences with renovating are so you will know the reason as to why they are saying no. Who knows if they just do not know anything about it, that’s why they are declining beforehand.
It could be out of their comfort zone that’s why they’re thinking to just do it as is because if you start asking more questions to them, they will start feeling uncomfortable or not look like the experienced one anymore. Todd has said to one gentleman before to not renovate it, because he could see his standard of the renovation experience was not good. It was like you’re going to overcapitalise and do a poor job.
The Unforgettable Renovation Experience In His Property Career
Todd shares it was during his very first year in real estate and sales. He got a call from a vendor who moved up to Queensland and this was one of the first houses he sold by himself. He got a random call from a lady walking a dog telling him she got his name on the signboard and that she just wanted to let him know that the hot water service on the roof is gushing.
As he checks in, it’s leaking full-on like someone is standing on the roof of a two-storey house with a hose. He called the vendor straight away and as he was turning off the tap. He was informed to leave it on and it’s just one of the heat waves, some kind of heat release valve. He left the tap on. This happened a week before the settlement.
On the day of settlement, he was asked about the hot water thing and thought that maybe it would be a problem. So he was asked to turn it off. When he walked in, the entire first floor had collapsed all of the gyprocks because the water had been leaking down the side of the house. He had no idea what to do and was completely inexperienced at this stage. From there, he informed them that they will need to call the insurance company.
The Value Of Getting An Insurance
Make it a policy that you don’t cancel the insurance until after settlement. Insurance can support you in replacing or repairing any damages to your property. It’s vital to determine what kind of coverage you have and how much your policy might pay for a covered claim so you can be better prepared if you ever need to file one.
The experience is a perfect example of why you need to get insurance. Not just building insurance but get contents insurance too. On another note, they have done whatever they can and turned it into a positive thing since they didn’t like the kitchen anyway. They ended up getting a new kitchen for free.
The Wet Trades In Todd’s 10-Day Renovation
Todd doesn’t like painting tiles in wet areas and he thinks it’s not a good idea. But when he found ThermoGlaze, which happens to give a 10-year guarantee with their work, he grabbed it. So for the bathroom, it was done with ThermoGlaze and that was all sprayed. They got a tiler, a new vanity, and new showerheads. It was a very quick fix kind of reno and it ended up costing around $4,000 for the bathroom.
For the kitchen, they did paint all the bricks externally and had to fix it up. He did all the painting apart from a couple of lads that came from AirTasker to help. They came through the property manager up there and he paid them to help out for a couple of days.
The Objective Of Todd’s Renovation
Making sure he can increase the value and to pull some equity out, his objective is to increase capital and income.
It’s a deal where there was already a three bed, one bath on the front, and a granny flat. It’s quite a big block so you can fit all three structures on. The existing granny flat and the three-bedroom and one-bath is going to be rented out as one structure.
Beforehand, it was rented out for $290 a week, which was already a pretty big discount for where it is. If you can spruce this up, give it a nice freshen up with the bathroom, kitchen and new flooring then it can get $500 per week.
By the time they were done, it’s looking like it’s going to be rented out for more like $580 a week. The back granny flat that’s about to be finished should be rented out for around $350 a week. All of it will bring around $900 a week in cash flow.
Biggest Learning And Tips For Renovators
His biggest personal learning is to stop telling himself that he’s still 21 because that hurt, like it was him and his other half and they are both in their mid-thirties.
Working underground in the mines, he does 12 hour days. And that’s just how it worked that now hurts a lot more when you’re 35. He was underestimating the need for recovery partway through life so he discovered an ice bath partway through that helps just with his body. It’s like 10 minutes of horribleness, but that was good afterwards.
The other thing is the actual coordination. He just gets in there and just starts doing things like he’s a creative person. Whereas his other half Bianca, she’s a lot more organised with systems and structures. They complement each other well. She’s still very creative, and that’s more of a strength.
If you want to expand and expect other people to know what is going on, you can’t expect them to read your mind. I think that’s a bit of what I need to change around.”
~ Todd Sloan
The Next Project For Todd Sloan
In the next project, he intends to turn it into a PPOR (Principal Place of Residence). He is going to put everything into the property. He even went from having a portfolio worth $300 thousand to $1.7 million. Todd is finally looking forward to having a PPOR. He just got this little unit, but he can’t help but buy this using his head and not his heart. While it’s going to be a PPOR, it’s also a project that he wants to make good equity on. He sold a unit for $321,000, identical to this one which was renovated. He purchased this one for $225,000.
Australia’s Home Buying Guide Book Give Away
Todd has kindly offered to give away some copies of his book Australia’s Home Buying Guide.
We are sure there will be lots of tips in there for anyone.
What we’d like you to do is if you could promote the book on Instagram, share it and tag The School of Renovating and Pizza and Property in your post.
We’ll get in touch with you and get your details. Todd’s very kindly going to send those books out to you.
She Renovates Facebook Group
If you want to meet up with a group of savvy renovators. I would say come over and join She Renovates Facebook Group. It’s a completely FREE Facebook group and it is growing at the rate of knots.
We hit over a thousand members just recently, and now it seems to have picked up momentum. They are all savvy renovating women and men working their little hearts out to live a better life through renovating.