Kelvin Cheah and Amabel Lim had a plan to create wealth for the future as they were preparing to finish university.
“Soon after we graduated from university, we started to explore avenues for wealth creation and financial freedom,” they explain.
“The plan was to create a secondary stream of income in addition to our full-time jobs that would in the future replace the need to work and provide us with the flexibility to spend time with family and friends, as well as enjoy our individual interests.”
Kelvin and Amabel would research various investment avenues including shares and options, but “the touch-and-feel aspect” of property would be the one to capture them. A little over a year of research, early Saturday mornings and countless inspections, they pooled their savings and, with a little help from parents, purchased their first property for renovation in July 2009 – a three-bedroom house in the Melbourne suburb of Reservoir for $283,500.
“For our first project, we wanted to be hands on with the renovation to learn how things worked and how long tasks took to complete, since neither of us have a building background,” say Kelvin and Amabel.
“The renovation experience highlighted the number of trades, quotes and suppliers that we needed to simultaneously manage, which was challenging trying to juggle with full-time jobs. Reflecting on the experience, the thought of managing multiple renovation projects while working full time did not seem sustainable or achievable.”
However, they made it work – Kelvin and Amabel would schedule on-site meetings for either before or after work or on the weekends depending on the availability of the tradies. The final result was a success – after a cosmetic uplift, the property sold for a profit of $63,000 less than a year later.
Kelvin and Amabel quickly moved on to bigger things – in that same year, they started educating themselves on property development. By October 2011, they had their first development project via a joint venture with another developer who had already completed one project.
Learning from the best
Kelvin and Amabel took a very hands-on approach not just to renovation, but also when it came to building their knowledge about property investing.
“We attended as many property seminars as possible, accumulating knowledge, deciphering what it all meant and then figuring out how to best use all the information,” they share.
“We actively volunteered to help out at these seminars, which provided us with opportunities to meet the speakers and even assist at a couple of project sites to understand the mindset of a property developer. Our involvement in the property community resulted in us having mentors from whom we could seek guidance through our first renovation project, and even until now.”
At a glance
Years investing: 11
Number of properties sold: 41
Value of properties sold: $9.2m
Even though they had to share the profits from their first development with a partner, Kelvin and Amabel saw it as necessary given what they were learning in the process.
“We treated it as education, and it was an invaluable experience that really set the foundations of our development journey to date.”
They also made the effort to stay in touch with agents, which made them privy to good deals.
“We continue to build close ongoing relationships with local agents so off-market development opportunities are brought to us. We’re focused on building a strong team of experts who we can trust,” say Kelvin and Amabel.
Over the last few years, Kelvin and Amabel have made excellent progress through their “10-year strategic plan” – momentum that is much needed especially now that both have gotten married to their respective partners and are starting families.
“The plan involves a continuous evolution of our own experience and capabilities as we increase the complexity and profits of our projects in order to eventually hold onto commercial assets that will generate the target passive income we have set for both our families,” Kelvin and Amabel explain.
“We have experienced a few downturns in the market since we started developing; one of the reasons we continue to develop is because we are able to make decisions that will influence the success and profitability of the project, compared to a buy-and-hold strategy where external factors are largely responsible for the property’s growth or decline.” This is very relevant given the current COVID-19 situation, where they have full control over the timing in which they launch their marketing campaign, and can pull on different levers based on how the situation pans out over the next few months.
Kelvin and Amabel have been able to create value in their projects by “incorporating smart design into the quantity and types of property that we build to suit any given market condition.” They are also able to proactively manage risks associated with developing, particularly with due diligence activities during the acquisition of a new site.
“Both of us are still working full time, and the skills that we have acquired in our corporate jobs, such as project management, scope and budgeting, team management, data analytics, negotiations and problem solving, have been transferred and leveraged into running successful development projects.”
Making the most of time
Many people complain about not having enough hours in a day, but for Kelvin and Amabel, it’s simply about effectively planning how to use your time.
Since they commenced developing in Ballarat in 2011, they have been managing projects remotely from their base in Melbourne by enlisting the help of a team of agents, builders and consultants. In addition to balancing property development with corporate work, Kelvin and Amabel have even found enough time to cultivate their personal property portfolios while raising young children.
“Our goal with property investing is relatively simple, and that is to provide each of our families with flexibility and options when it comes to work, lifestyle and where we invest our time. We plan to continue acquiring development sites in order to maintain a sustainable pipeline of units to build in years to come,” they say.
Kelvin and Amabel are also giving back all the knowledge they received to help them on their journey.
“One of our passion projects is working on our developments with investors who have an interest to learn about the process, but who may not have the time or experience to complete a project on their own. It gives us immense satisfaction that we are able to pay it forward with our property knowledge!”