Reno OS v1.3
The short rulebook: principles, the 9 gates and the 6-stage package card.
v1.0 5 Sep · v1.1 6 Sep (Approvals & Compliance) · v1.2 10 Sep (engaging trades; the Hamilton contract) · v1.3 23 Sep (six-stage package card, adopted at G5). Applies to 16 Springvale St and to the next buy-renovate-sell / buy-renovate-hold deals. How it is used day to day, with worked examples and a glossary, is on the Playbook.
1. Why it exists
Marcos's diagnosis (5 Sep): Thrive was executing service packages without an integrated design or an analytical structure. Reno OS is the minimum framework: nine sequential gates, each with an explicit kill criterion; a single package-approval rule (ARV ÷ cost ≥ 2.0×); an all-in cost nobody can leave out; and a compliance dossier built during the works, not at the end. In a renovation run with individual trades (no head contractor, no full working drawings) the unit of management is the work package — and v1.3 gives every package a card with an exit criterion per stage.
2. Standing principles
- All-in cost, always completePurchase + duty + legal + reno with contingency + holding (interest-only plus fixed costs × months) + 2.75% commission + marketing. Break-even GDV = all-in ÷ (1 − commission). Never compare ARV with "purchase + reno".model
- Package ratio ≥ 2.0× (ARV ÷ cost)Each $1 of reno needs $1.03 of ARV just not to destroy value. Below 1.03×: cut. Between 1.03× and 2.0×: only with a sale justification (compliance, an item on the buyer's B&P).G5
- Non-discretionary floor kept separate from the discretionaryTermites, mould, waterproofing, rough-ins, painting, B&P items do not go through the ratio — they are preconditions of sale.G5
- Design and approvals are compliance, not finishesAs-built + drawings + engineer + certifier. Not subject to the ratio; it protects the whole ARV. Enters the model before G5.G5
- Building approval before the works, never afterRetrospective approval in QLD: inspection from ~$935, 2–8 weeks, and the certifier can order a finished wall, ceiling or waterproofing opened.G5
- Never owner-builderQBCC-licensed trades or a licensed builder (works over $3,300 enter the Home Warranty Scheme, an asset at sale). Owner-builder over $11k: notice to the buyer, one permit every six years, a note on the title for seven years.G4–G5
- Domestic building work over $20,000 = Level 2 contract (Schedule 1B, QBCC Act)Plans and specification attached, price, dates, warranties, Consumer Building Guide before signing, deposit capped at 5%, variations in writing and priced beforehand. A quote plus an invoice is not a contract.stage 3
- The contracting party is always the trustee — ThriveCo One Pty Ltd ATF Thrive One TrustNever a partner personally; otherwise the warranty and the Form 2 line at sale are orphaned.stages 2–3
- Before the first payment to any builderQBCC licence verified with the regulator + Home Warranty Scheme certificate (works over $3,300) filed in the correct owner's name. Without the certificate, the cover does not exist.stage 3
- Payment milestones only against physical evidenceDated photos, the certificate for that aspect (Form 16 / Form 4 / CoTC) and an inspection — never against the sequence of invoices. The moment to ask for the document is the moment of payment; afterwards the leverage is gone.stage 5
- Payment claims answered in writing (payment schedule) within the BIF Act 2017 timeframeAn invoice citing BCIPA 2004 cites repealed law — do not assume good practice on the other side.stages 4–6
- "By others" scopes are holes until they have an owner and a dateEvery line excluded from the builder's contract (kitchen, flooring, electrical) needs a named contractor, a price and a window — including the obligations nobody claims, such as the smoke alarms for Form 24.stage 1
- Owner-supplied items are critical path and warranty riskA list with purchase dates, delivered to site before the trade's window; the product warranty is ours, not the builder's.stage 4
- Contingency is untouchableIt exists for termites, mould and structural surprises — never for finishes.G5–G7
- If the premium comes from the land or location, the optimal spec is the cheapestTest the ARV thesis before spending above the base spec. Comps = settled sales, ≤ 6 months, ≤ 1 km, same floor-area band; a listing is not a comp.G1 · G5
- Reserve price in writing before listingBelow it, convert to hold-and-rent.G8
3. The nine gates
| Gate | What must be ready | Dies if… |
|---|---|---|
| G0 Mandate | Inside the buy box: ticket ≤ $1.1M; ≥ 400 m² for a renovation; Gold Coast, Brisbane bayside or Sunshine Coast | Outside the buy box. Five minutes, no exception for "opportunity" |
| G1 Closed comps | ≥ 3 settled sales in the last 6 months, ≤ 1 km, same floor-area band | The evidence is asking prices, not settlements |
| G2 Feasibility lock | Maximum price calculated before any offer: GDV − reno with contingency − holding − exit − acquisition − target profit. The vendor's ask is information, never an anchor | Ask above the maximum + 5%. This is where Springvale got away |
| G3 QLD due diligence | Form 2 before the offer (encumbrances, easements, covenants). B&P focused on termites. City Plan overlays (flood, bushfire, coastal, vegetation; Koala Priority Area in Redlands). Measured area, not the listing's. Title: owner-builder notes and Form 21 for all earlier works | Material encumbrance or area variance > 10% |
| G4 Capital and structure | Loan agreements signed, SPV/Trust set up, Australian-resident trustees, irrevocable foreign-beneficiary exclusion clause in the Trust Deed | Clause missing → AFAD 8% + FIRB ≈ $80k that wipe out the margin |
| G5 Scope freeze | Every package with a ratio ≥ 2.0×. Contingency declared. Fixed quotes from QBCC-licensed trades before buying materials. Design package engaged and BA issued before any works that need one. Delivery regime in writing (never owner-builder) | The approved total pushes the break-even above the defensible P50 — or the works proceed without a BA |
| G6 Works compliance | Evidence collected during the works: Form 4 per notifiable plumbing job (10 business days); photos + AS 3740 certificate; Form 15/16 per wall removed; electrician's CoTC incl. interconnected photoelectric alarms (AS 3786, Form 24); QBCC licence per trade. BA if there is a secondary dwelling with a kitchenette. PSC after the deck and landscaping, within 90 days of settlement | The pool certificate lapses, or works under a BA finish without a Form 21 — the buyer's bank refuses, the insurer refuses, council may enforce |
| G7 Mid-works checkpoint | Actual vs allocated, package by package. No package paid without the critical-line gate and the evidence for that aspect. Remediation, waterproofing and the pool are the three the buyer audits | Variation > 10% — it becomes a partners' decision, not the site manager's |
| G8 Exit strategy | Agent chosen through the R1 window, not by a casual referral. Form 2 built with the solicitor ~2 months before listing, with the compliance dossier attached. Our own B&P before listing. Photos before Christmas. Gold Coast window: late Jan to Mar; Dec is dead; April is tired | Going to market without a written reserve price, or without a complete Form 2 (rescission up to settlement) |
| G9 Offer decision | Accept, counter or convert to hold-and-rent against the G8 reserve. No offer in 6 weeks → automatic repricing | Holding the price above the reserve while burning monthly holding costs |
Where 16 Springvale St is today: between G5 (23 Sep) and G7 (23 Oct) — see 30 Days and Workfronts.
4. Package card — six stages (v1.3)
Applies to every package over $5k. Marcos's stage names, adopted at G5 on 23 Sep. The live board per package is on Workfronts.
| Stage | What must exist to leave | Who signs | Money |
|---|---|---|---|
| 1 · Strategy / design solution | Scope written and measured (m², lm, levels); a drawing where there is an interface (deck × glass × coping); the list of approvals and evidence the package will generate (BA? Form 15? Form 4? CoTC?); the B&P lines R# it closes; the 2.0× ratio if discretionary | Package owner + integrator | Package BZ confirmed; indicative EAC |
| 2 · Quotes | ≥ 2 quotes on the same scope and drawing, in the name of ThriveCo One ATF Thrive One Trust, with ABN/QBCC when > $3,300, explicit inclusions and exclusions, payment milestones tied to physical delivery (never > 50% before the end) | Package owner | Package EAC = lowest reconciled quote |
| 3 · Selection / contract | One-page comparison (price · scope · licence/HWI · payment · risk on the buyer's B&P) → approval authority G2 (> $5k or > 10% of the package = four partners) → written contract, variations in writing | Four partners (or two, per the authority) | Deposit only against a signed contract |
| 4 · Execution | The contract's physical milestones followed on site; a dated photo per milestone; any new scope goes back to stage 1 (it is not resolved on site) | Package owner | Interim milestones against photo + measurement |
| 5 · QA / evidence | The document the buyer will ask for: Form 4 / CoTC / Form 16 / AS 3740 / AS 3660 / AS 1288 / HWI + photos; filed in the Remediation/ folder by R#; quality walkthrough (the standard is the product benchmark, not "that'll do") | Integrator + one partner who is not the owner | Nothing is paid without the previous milestone's document (G4) |
| 6 · Final payment | Balance released; actual cost posted to the ledger against the package BZ; R# line closed; lesson recorded in Reno OS | Integrator + treasury (single account) | Δ = EAC − BZ with cause (scope · price · omitted · contingency) |
Roles: the package owner runs the supplier and the site; the integrator (Marcos + Claude) keeps the board, the sequence between packages, the BZ × EAC ledger and the evidence dossier; the gate decides money and scope. Without a general design, the integrator makes sure the partial drawings talk to each other.
5. Buyer's finance-ready checklist (QLD)
What the buyer's solicitor and bank look for, in order of blocking power: Form 21 (all works under a BA) → complete Form 2 → Form 24 (smoke alarms) → Pool safety certificate / Form 36 → Form 4 (plumbing) + AS 3740 (waterproofing) + CoTC (electrical) + Form 15/16 (structural) in the dossier → QBCC regime (owner-builder notice if applicable) → B&P and termite certificate. Each line has an owner and a moment in the plan; whatever is not in the dossier becomes a price discount at the negotiating table. State of 16 Springvale St on Compliance.
Package → approval matrix (Gold Coast): structural walls = BA if structural · granny flat / secondary dwelling = BA always, DA if an overlay applies · deck = BA (exempt only < 10 m² and < 1.0 m; like-for-like restoration = accepted development) · patio cover = BA (exempt only < 10 m², < 5 m, < 2.4 m, outside setbacks) · new bedrooms = BA if an opening is created (window, ventilation, NCC ceiling height) · bathrooms = no BA if not structural (Form 4 + AS 3740 + photos) · roof = BA if > 20% of the area · pool = the fence needs approval · electrical / AC / solar = CoTC · landscaping = council if the crossover changes; wall > 1.0 m = BA · painting, flooring, non-structural kitchen, styling = free.
6. Agent windows R1–R4
- R1 — during the works, before buying the kitchen and tiles2–3 local agents visit; questions without leading; input for G5 and the listing-agent shortlist.G5
- R2 — flooring and kitchen installedBroker preview; off-market buyers.G7
- R3 = G8Agent selection, pricing, photos and styling.G8
- R4 — four-week campaignLeads to G9.G9
7. Founding lessons
G2 — a flip's profit is made at purchase. If G2 fails, the other eight gates are damage control. On Springvale the maximum price was set by the vendor, not by the feasibility lock; the current break-even and the scenario ladder are on The Deal.
BA before the works (6 Sep). The works started before the building approval — the design and approvals package has to be engaged at G5, not discovered at G6. Every week without a written position from the certifier is a wall that may have to be reopened.
The Hamilton contract (10 Sep). A package was contracted at 6× its allocation, including a bathroom that did not exist in the budget, and started a month before the gate that should have approved it. When the works run ahead of the gate, the gate stops being a decision and becomes a rubber stamp. Hence the 10% rule and the reconciliation of every quote against the WBS before it becomes a contract.