Investor In Focus - Melissa Morgan - Part 2

For Sydney property investor and developer Melissa Morgan, managing multiple projects throughout the city and beyond goes with the territory. After two decades of building her portfolio, real estate has become a full-time concern for Melissa, who invests in partnership with her husband. She commenced her portfolio with a small renovation, developed a passion for property and has built it into a family-friendly occupation. Since we last spoke to Melissa in August 2017, she’s seen a renovation almost through to completion, teamed up for her first joint venture development project, continued work on a duplex development and is now eyeing off a value-add project in Queensland.

Positioned just south of Sydney’s central business district, Melissa has almost completed renovating an inner-city Chippendale terrace, which she has owned for more than seven years. “The location is amazing, opposite the almost completed Central Park development with a shopping centre and park,” Melissa says. “I’d always planned to keep this property long-term, so why not make the most of it?”

With the Development Approval set to soon expire, Melissa went headfirst into the extension and renovation with an optimistic budget of $200k and significant contingency funds. 

Challenges set in shortly after commencement, including boundary wall issues, an entire new hydraulic plan and a huge amount of soil and waste removal. Melissa says the final amount will likely be over $250k but despite these challenges, she remains positive about her efforts and is aiming for a significant increase to rental yield once the work is finished. For less experienced investors facing similar situations, she says it’s important to accept there will be hiccups along the way, but you need to keep the end goal in mind. “It’s a little like fighting daily fires but it’s all part of why I enjoy it – the constant problem solving and seeing the end result.”

Melissa’s capacity to maintain a big picture focus has made going into her first joint venture development a natural progression, with a four townhouse project in Sydney’s Eastern Suburbs on the cards. She met her joint venture partner through a property forum online and soon found out they had a shared accountant in common.

“It just made sense with our similar development experience and goals” Melissa says. “We have complementary skill sets and so far it’s been a really good decision.”

Her joint venture partner saw the off-market project which had Development Approval in place in Waverley. 

Now focussing on an off-the-plan sales campaign,. Melissa is having 3D computer-generated imagery developed to bring her vision to life, picking end finishes for the properties and enjoying the new approach.

Also keeping Melissa busy has been a duplex development in Dulwich Hill which now has the slab down and the framing almost complete. It’s similar to a previous duplex development she took to completion in Leichhardt and she says this kind of ‘cookie cutter’ approach makes it less hands-on. Plans at this stage are to keep one of the properties and sell the other, providing equity for future projects.

On the horizon is adding a granny flat to a Logan, Queensland, property in Melissa’s portfolio. She says the rules around such developments are changing soon, so she’d like to get in before that time. “It will take about $140k to build and bring in $280 rent. It’s easy from the numbers perspective and relatively straightforward. It makes sense to build something to increase the cashflow and serviceability.”

Having built a solid network of different investors and developers, Melissa has reached a stage where she’s able to enjoy relationships with likeminded people. Ever present is the support of her husband, who is now working on his mortgage business. “We’re both in complementary industries and can support each other,” she says.

Melissa sees a future in more joint venture projects, both with her current partners and other potential ones, especially where she could bring her substantial skills and property experience to the fore.

For other investors keen to pursue a joint venture, Melissa admits they got lucky with someone who was very similar to her husband and herself, sharing a similar mindset and goals. “It’s very hard to find that sort of thing. Often a joint venture can be imbalanced but ours is split 50/50 regarding money and skills and it’s working very well,” she says.

You can keep up to date on Melissa’s projects via her Instagram account @mella.morgan