Don’t make the same mistake I did.
The third property I ever bought ended up becoming our family home.
Like most people buying their own home, the process felt emotional and messy: missed opportunities, hesitation, and the lingering feeling that I’d probably paid too much for it.
It was also my first experience with property development.
Here’s what no one tells you about development; whether it’s a renovation, subdivision or new build.
Everything takes twice as long, and costs more than you expect.
I bought a 900m² block in Brisbane’s eastern suburbs for $900,000.
The plan was simple on paper:
- Subdivide it into two 450m² lots;
- Build two homes;
- Live in one;
- Rent out the other.
Eventually, I’d sell the investment property and wipe out most (if not all) of my home loan, achieving a critical milestone in what was my goal to never worry about money again.
That was the idea at least.
The real estate agent probably thought I was crazy because I signed the contract without even stepping inside the existing house.
In my defence, I was planning to demolish it anyway, so I didn’t see the point in looking inside.
What I underestimated was the subdivision process itself, which took 15 months. Some of the delays were unavoidable, but most came down to inexperience and not knowing what I didn’t know.
Financially, I had stretched myself to the limit.
I used all my savings for the deposit and purchase costs, then borrowed against equity in my other properties to fund the subdivision.
By the end of it, my cash buffer had been wiped. I was basically one vacant tenant away from struggling to pay my mortgages.
The pressure got to me and I decided to abandon plans for the second build and sell the extra block instead.
My uncle (who was, and is, also my mentor) warned me against it. He was so confident I’d regret the decision that he even offered to help cover part of my mortgage repayments during construction.
But stress clouds judgment and I wasn’t sleeping properly, so I chose not to take the risk.
I sold the block for $500,000 and after subdivision, holding and land costs, I walked away with $0 profit. Not a loss … but not the outcome I’d envisioned either.
I then built our family home on the remaining block, and we’ve lived there ever since.
There is one side of all this that still sticks with me. The couple who bought the land from me built almost the exact house I had originally designed for the site.
Their build cost around $400,000, meaning their total project cost was roughly $900,000 all-in.
Two and a half years later, they sold the property for $1.53 million.
That profit would have nearly wiped out my mortgage.
It was an expensive lesson.
But without this mistake, my most profitable property deal probably never happens.
I’ll share that one next week.
