The 9 Key Steps to
Help You Profit from
Every Acquisition
Chris Lang
0425 791 254
[email protected]
 Chris Lang
A Typical Property Transaction …
BUY
Enhance & Maintain
SELL
Make
Secure
Take
At what stage in this process do you
make your Profit ?
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Identify & Shortlist
The Right Investment
Properties
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Identify and Shortlist the
Right Investment Properties
The process involves matching up your
Investment Objectives with a number
of proven Buying Criteria.
And then, rating each of the properties
you think may be suitable.
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Your 8 Investment Objectives
The chosen property should :
 Have enduring value
 Generate ongoing cash flow
 Provide steady growth
 Promote super growth
 Maintain lending appeal
 Create future collateral
 Allow cost control
 Offer Tax Benefits
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Your 12 Buying Criteria
The main things for you to consider are :
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Tenant Calibre
Lease Term
Age of the building
Flexible design
Lease Structure
Little competition
Good position
 Emerging trends
 Passing Yield
 Zoning
 Title options
 Vendor motivation
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Tying It All Together
By combining your Investment Objectives and
Buying Criteria into an interactive matrix …
That way, you are then able to quickly and
easily Rate your potential Acquisitions.
And you can do that online
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Assess, Analyse
& Compare
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Assess, Analyse & Compare
You need to create a projected
After-Tax Cash Flow
This is where you collate 18 elements of
each property; AND distil them down into
ONE single figure for easy comparison.
This Internal Rate of Return (IRR) provides
you with the after-tax Return on your
Equity, for each property you consider.
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The 18 Financial Elements
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Purchase Price
Stamp Duty
Acquisition Costs
Due Diligence
Loan Value Ratio
Loan Set-up Costs
Interest Rate
Tax Rate
Passing Rental
 Rental Reviews
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Un-recouped Outgoings
Ongoing Management Fee
Depreciation
Holding Period
Estimated Selling Yield
Selling Costs
Initial Cost Base
Capital Gains Tax
Let’s look at an example of how this works.
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“Pre-Value” Your
Acquisition
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“Pre-Value” Your Acquisition
Financiers lend based upon their agreed
Loan to Valuation Ratio (LVR)

A Common Mistake that Investors tend to assume is
a stated 70% LVR means … you’ll be able to borrow
70% of the Contract price for the property.

BUT the Financiers’ valuations can often
come in at less than what you’ve paid.
THE SOLUTION …
Your chosen property needs to be “Pre-Valued’”
by a Valuer acceptable to the Financiers.
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Negotiating the Deal
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Negotiating the Deal
There are basically only 3 components for
every deal you’ll Negotiate …
 Power
 Time, and
 Information
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Negotiating Tools & Outcomes
Approach
The Result
Outcome
_______________________________________________________________________________
Convince
You Win – They Lose
Short-sighted
Capitulate
You Lose – They Win
Costly
Compromise
You Lose – They Lose
Unsatisfactory
Collaborate
You Win – They Win
Rewarding
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Know Your Negotiation “Variables”
 Cash Flow
 Deposit
 Depreciation
 Due Diligence
 Purchase Price
 Settlement Date
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Validating Your Purchase
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Validating Your Purchase
To ensure that you obtain the best possible
Price and Terms … ALWAYS “believe” what
the Vendor says about the Property.
BUT, simply reserve the right to
check it out thoroughly.
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Your Due Diligence covers 3 aspects
 Legal Documentation
 Contract
 Leases
 Financial Aspects
 Outgoings
 Capex
 Physical Condition
 Building Fabric & Equipment
 Essential Services Compliance
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Lock In Your Finance
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Lock In Your Finance
You can choose a top Property,
and negotiate a truly great Deal.
BUT then, watch it all unravel …
simply because you have not paid
enough attention to your Finance!
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Making your Finance work for you
Step #6 may be “Lock in your Finance” …
BUT you need to have already confirmed
your source of potential finance BEFORE
you sign any Purchase Contract.
IDEALLY you should …
 Work closely with a competent Finance Broker.
 In the current market, fix your Interest Rate
for the length of the Lease.
 Make sure YOU instruct the Valuer.
Ongoing Tax Benefits
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Ongoing Tax Benefits
You can legitimately shelter a large portion
of your accessible income, through using
Depreciation Allowances.
There are basically 2 types of Allowances:
 Division 40 : Depreciable plant & articles
[eg: Carpet, Light Fittings, Equipment, etc.]
 Division 43 : Capital allowances & Structure
[eg: Building Fabric and Hard Landscaping]
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How Much of Your Property
is Depreciable?
Type of Property
Division 40 Proportion
CBD Office
30 – 55%
Office Fitout
40 – 80%
Shopping Centre
30 – 60%
Industrial Property
10 – 45%
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Enhance & Maintain
Your
Property Investment
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Enhance & Maintain Your
Property Investment
After Settlement is when you start to implement
your “Super Growth” and Maintenance strategies:
 Subdivide the Title
 Conduct Essential Services Inspections
 Refurbish and Upgrade
 Implement a Preventative Maintenance Program
After 12 Months …
You should strive to keep your Property
in “ready-to-sell” condition.
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An Insight into truly
Effective Marketing
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Effective Marketing
With Traditional marketing …
The Success of your Selling Campaign
has been measured by …
the number of on-site inspections
generated for the property principally, via the daily media.
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Effective Marketing …
Solely focuses upon the actual number
of highly-qualified buyers that your
campaign generates.
And you are only able to do this by
adopting the latest in cost-effective
“Stealth Marketing” strategies.
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Traditional Vs Stealth Marketing
Traditional Sequence
Media Advertisement appears.
Phone call to Agent.
Property Report dispatched.
Prospective buyer receives Report.
Inspection arranged.
Preliminary Analysis occurs.
Buyer
Timeline
Day 1
Days 2-3
Day 4
Inspection takes place.
Advisors contacted by Buyer.
Further Reports sent to Advisors.
Requests Contract Documents.
Days 4-5
Advisors receive Reports.
Contract Documents arrive.
Days 5-6
Advisors request further information,
and give their advice.
Days 7-9
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Stealth Marketing Sequence
Buyer
Timeline
Media Advertisement, and Direct email
campaign.
Prospect views Website.
Preliminary Analysis occurs.
Advisors contracted (from Website).
Contract Documents available online.
Day 1
Advisers view information on website,
and prepare to give their advice.
Inspection arranged.
Days 2-3
Inspection occurs with Buyer’s
advisors fully briefed.
Days 4-5
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Traditional Campaign
Cost
Advertising
Brochure (2,500 A4 2-sided colour)
Property Report (200 bound 20pp)
Direct Mail Campaign (2,000 @ $1)
On-site Board
$37,000
850
840
2,000
980
TOTAL
$41,670
Stealth Marketing Campaign
Media Ads
Website Production
Direct-email Campaign
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36 Investor/Developers
5,420 Potential Investors
On-site Board
Cost
$14,700
4,000
N/C
N/C
980
TOTAL
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$19,680
Comparing the Results
Campaign Style
Campaign
Costs
Buyer
Timeline
Traditional …
Stealth Marketing …
$41,670
$19,680
7-9 Days
4-5 Days
Potential Savings
$21,990
3-4 Days
How does this work in real life?
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Tracking your Campaign Response
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Campaign Response …
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Campaign Response …
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Campaign Response …
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To Improve your Chances of Success …
You need to know the Rules of the Game!

THINK of a number between ‘2 and 10’.
 MULTIPLY that number by ‘9’.
 ADD the 2 digits of your answer together.
 From that single figure … SUBTRACT ‘5’.
 Now, CONVERT that new number into a Letter …
Where: 1 = A; 2 = B; 3 = C; and so on.
 Think of a European COUNTRY beginning with
that Letter.
 Take the 2nd Letter in that Country’s name
and …
 Visualize a 4-legged ANIMAL starting with that letter.
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Questions & Answers
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Potential Syndicate
Members
Equity per
Member
Total
Investment
2
$250,000
$500,000
4
$150,000
$600,000
12
$75,000
$900,000
18
TOTALS
$2 million
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Commercial Property Cycles
ONLY in the final 3 years, are all three Cycles are “in Sync”!
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Indicative Growth
f
Capital City Office Markets
Sydney
Melbourne
Brisbane
Perth
Canberra
Adelaide
2005 2006
2007 2008 2009
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2010 2011
The 9 Key Steps to
Help You Profit from
Every Acquisition
Disc #1
• How to Identify and Shortlist the right Properties.
• A quick way to … Access, Analyse and Compare.
• Pre-valuing your Acquisition for Comfort.
Disc #2
• Negotiating the Deal to your advantage.
• Validating your Purchase.
• How best to Lock-in your Finance.
Chris Lang
0425 791 254
[email protected]
 Chris Lang
Disc #3
• Setting up your ongoing Tax Benefits.
• Enhance and Maintain your Profit.
• An Insight into truly Effective Marketing.
The 9 Key Steps
to Help You Profit
from Every Acquisition
Disc #1
Chris Lang
0425 791 254
[email protected]
 Chris Lang
The 9 Key Steps
to Help You Profit
from Every Acquisition
Disc #2
Chris Lang
0425 791 254
[email protected]
 Chris Lang
The 9 Key Steps
to Help You Profit
from Every Acquisition
Disc #3
Chris Lang
0425 791 254
[email protected]
 Chris Lang
www.gal.com.au