Mary Palaric’s approach to property has not only been shaped by her investment history, she has also been able to use decades of experience as a corporate executive to help make her projects successful.
Mary told Bushy Martin on the Get Invested podcast that good strategy, people, process and systems are all crucial to a successful property investment, particularly when joint ventures are involved.
“You need to have the right plan, the right intent or vision, and you need the right people,” she said.
Mary honed these skills over a career that included heading up HR and payroll departments as an executive in State Government, at BHP Billiton and at KPMG, before a redundancy gave her the opportunity, and the capital, to change course. She attended some property courses and found “a new tribe” of likeminded people.
“(I) saw a lot of people that were trying to achieve things but … didn’t know how to move forward, and I knew that that wasn’t going to be me.”
It was at one of these courses that Mary met her first joint venture partners – an architect and her husband, who was an accountant with experience working for developers.
“We decided to do a joint venture because we all figured that on our own we couldn’t actually implement some of the strategies that we were interested in doing.
“I felt that I was working with experts in the sense that these were people that understood property and the accounting side of things.”
Mary believes that the best deals are those where the investor can add value through a range of different strategies.
“I talk about stacking strategy and stacking value,” she said.
“When we were doing our principle places of residence we (would) renovate and then sell them and be upgrading … you get a bit of money but you don’t get a lot of money.
“But if you choose properties that you could apply more than one strategy to, for example a renovation and maybe a small subdivision, or split a block… and maybe sell the land or build, or strata a small apartment block, you’re creating more value than a simple one off renovation. You’re leveraging the opportunity within a particular site.
“So a renovation plus something else, because the renovation on its own I don’t think gives me enough of a return for the effort.”
For Mary, there are a number things that have to line up before she will get involved in a joint venture.
“One is the deal itself has got to be a very good deal, and I would advise that everyone no matter what part of the deal or what role you play in the joint venture that you need to do your own due diligence.
“So if you’re, for example, presented a particular opportunity you need to scrutinise it. And I think having a bit of education around how to do that is really important. Generally don’t take that kind of opportunity at face value. You definitely need to have the legals around a joint venture (such as) joint venture agreements… (and) I would ask that you did due diligence on the people that are involved, what’s their track record, can they actually service the loan.
“In the end it is trust backed up with good structures and good legals.”
Mary now has a number of joint venture properties, and her company Imagine Property has partnered with a builder, buying small apartment blocks that are run down, but have a lot of potential.
“We renovate them, we might strata them, and if they have a land component we might subdivide the land and construct a duplex.
“So the strategy is about maximising the value of that property, and what we like is that you can still keep an income going because you’ve got multiple properties within one, the strata titling automatically uplifts a property, and the renovation will usually do that too.
“We believe we’ll get about $1 million dollars of equity that we’ll create.”
Mary now plans to do four projects per year, but not forever. She doesn’t want to retire, but her success in property means she’s getting closer to her dream of spending time travelling.
“I want to live in a perpetual spring and summer, so I’ve got plans to go to Croatia. My mum left us a little plot of land so next year I’m going to go there with my twin brother and check out whether we can build on it.”
Listen to the full podcast interview here.
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