Buy One More Property In 2025 Before Missing The Next Boom

Then they'll solve your money problems, right? So the whole narrative around what they do is just solving money problems. Now shout out to the money guys. Now on the screen right now is a chart that the money guys made. And I thought a really good way to kick off this session would be to just highlight the power of taking action. Right. The co. Basically, this chart helps people understand, well, if I act earlier versus later, what is the consequences on it? So can I run you through it before we get into the presentation?

I like it. Let's, let's do it.

All right, so let's dig into this one a little bit. So on the left hand side, you've got someone's age now. 0, 10, 20, 30, 40, 50, 60. Pretty self explanatory. Now this middle section here, which is called your wealth multiplier, right? That number shows how hard every dollar is working for you by the time you hit 65, right. So if you, to lay this one out, if you're zero years old, so you've just come into this world and you invest $1, by the time you're 65, that $1 will have turned into 647.47 dollars. That dollar goes so far. And as you go down, you can see that because there's less time, there's less stability to compound, the value of each dollar goes down. And I'm going to go to the extreme other end. If you're 60, right. Each dollar is only gonna turn into $1.35 by the time you hit 65. But isn't it amazing to watch that drop off on a chart, right, of just how powerful it is to invest earlier than later. Like what a difference it makes to get started today rather than delaying it 10 years, right. Or which I must admit at times in my life I've delayed and regretted that myself.

I think we all have always say.

We want to start earlier, right? And then in this, this last column here, right, which I'm quite a fan of as well, is this is how much you have to save per month to have a million dollars at 65. So if you start when you're born, it's just $13 a month.

It's pretty good, right?

Or if you're 10, it's 35 and the later you leave it, that's how much more you have to get together to make that. So. Yeah, I love it. So guys in the chat, have you ever seen a chart like this before? Aaron?

I think, I think there's always been a chart in the background whether it's been our education to do what we're doing now with talking about mortgage brokering or any sort of wealth creation. It's just if we can bring it to the forefront occasionally it does strike a chord, right?

Oh, absolutely. This is even more congruent with the topic we've got tonight. Now, Sunny's asked a really good question in the chat here is how do you calculate the wealth multiplier? So if you type in money guys wealth multiplier into Google, take you to the blog where I got this image from which shout out to the money guys. Again, I really love this chart. And basically it's looking at the power of compounding, right. It's looking at how hard every dollar had to work to get to that range. So they've got some maths behind it. I think they base their maths on 7% returns on average over the life of that, which over 65 years is a really, really cool way to look at it.

Absolutely. Bit like the eighth wonder of the world, right? If we take a bit of a Albert Einstein approach about that compounding interest.

Marvel that we have, it's just a wonder. So, Aaron, what are we here to talk about tonight? What are we covering?

We want to talk about how to get the next property before the end of the year. So being that we're in August, we've got August, September, October, November, December. And how do we. How do we get that. That property before then and not into Christmas? Because sometimes they get chaotic with banks down times and so this is going on leave, but that's where we're going. How do we get the next one before the end of the year? Because there's still time.

There is still time. And I want to know in the chat right now who's actually on the hunt to get one done by the end of this year? Is anyone actively looking now? Is anyone trying to work out how to pull it all together?

Progress.

He's looking for one.

Yep. Sam's there, Chris is there. Female there. There's lots looking.

I don't blame you. I don't blame you at all.

I feel it also heating up in the market. We. We've seen the increase in chatter as well.

Seems like a lot of people are doing it. I'd love to know for some of these people as well, it's like, what. What's stopping you guys right now is the finance thing, the biggest thing holding a lot of people. I mean, would surprise me if that is an A factor, being you're on this webinar tonight. But is there any other factors out there that are really decent deals? Talking about deals, definitely. I'm. I mean, what do they say? The total volume of listings is definitely become an issue. We've got borrowing capacity. We're going to help you with that tonight, guys. Saving for a deposit, what structure to use. Got some great ones in here, Aaron.

Yeah, it's a good one.

Oh, we're definitely going to cover a few of these.

All right, well, we'll kick it off with the, with the next one. So tonight, presentation information has been provided under general advice. Any advice contained in the material that has been provided without taking into account your objectives, financial situation and needs. Before acting on any advice, you should consider the appropriateness of the advice. Having regarded to these matters. That's. Do you have a better way to say that there, Charlie?

I love how formal you say that every time. I feel like it's so proper. And if you're like compliance officer was on this webinar tonight, I feel like there'd be like a round of applause.

Give me an A tick on the one.

Yeah. But I'll put it into English, guys. Now tonight we're going to go through some what I would consider pretty juicy stuff. There's some real pro boobs you can pull in here with finance to make a big difference to what you can do to your property portfolio. However, we're speaking very generally, which means that if anyone was to act on the things that were in this webinar without getting proper advice of how it applies to them. Right. Well, in all honesty, you probably deserve to lose your money because there's a lack of risk mitigation and using professionals. I myself use professionals to buy properties. Aaron uses professionals. The best thing you can do is if you see an idea on here and you go, geez, I really love this and I want to see if it applies to me. It's make sure you speak to your broker, your accountant, your financial planner and see how it could apply in much more depth.

And we'll invite you to engage with us as we go through.

Absolutely.

So who are we, Charlie?

Well, me, I'm just a. I won't even. How can I put this, guys? I'm a business owner, definitely, but I'm a property enthusiast at the front of this. So as it sounds, currently I've got a portfolio of about 10 million in property, which big thank you to you, Aaron and Karina and the mortgage Strategic mortgage broking team. Because without you guys, I wouldn't have been able to put that together. It's been a phenomenal journey and I'm thrilled to be able to do something to make such a difference in my life. And one of the things that makes me so passionate about it is I've had such good wins in this area that I come on these webinars and just want more people to have the same things that I've been able to achieve. So we'll call me the property. Enthusiastic. But who are you? Aaron.

Well, I'm Aaron, I am the guy that looks after people like you, Charlie, in multiple. So the one that gets the people to have the runs on the board in multiples. I've seen it even in the last 12 months of being able to complete over $150 million worth of lending for investors, whether employers or self employed, we've been able to see all the positives. We've also when people have got themselves into trouble and they've come to us, we've helped them out of that and we see that people might end up listening to some half baked video online, they might set up structures, they might sell properties just because someone told them to and then they might even end up getting multiple brokers doing multiple borrowing capacities and then with end up with nothing and confusion in the end. So wanted to be able to share tonight with, with the actual case studies. Not fluff, not theory, just real down to earth stuff about what people have actually done to give you real examples and help you get on the path to buy that next property with the green calendar things of August, September, October.

November, December, there is absolutely time to get another this year. All right, let's jump into it.

Cool. So why now? Now this might be a busy slide, but why now? If you can see this slide, it's like you've got like tax entities, you've got rate cuts, you've got refinances, structures, valuations, loans, interests. Whether we're going to go before Christmas, we might have to sell conditionals, all that stuff. So why should we start now is because there's a lot to do if we want to get that property with the different ways that we can lend money, we have to start now. So why now? There's a bit to do.

Some people, there's a two prong approach to this at the moment, Aaron. Like absolutely. I think if you are going to buy a property the nitty gritty of like, you know, it can take time to set up a structure or it can take time to do a refinance or it can take time to find the right property as you know things like that. But on the other side of it, I mean, I think you have to look to the macroeconomics and I'm of cautious of saying this is not financial advice here, but I'm pretty sure the government just denounced a 5% deposit scheme getting pulled forward like this week. Right. They're literally lighting a fire under first home buyers to come into the market.

Is that the dangerous word, first time buyers for investors.

There's a few rate cuts in here as well. It's a quite a bullish environment at the moment. I could understand why many investors would want to get in there and I could say of course, you know, do your own research, but I could really understand why many investors would want to get in now potentially front run some of this heat coming into the market.

Well, the other things that there as well is if we're actually going to go for a refinance and we'll go into some more details about when these things can happen and how far we go. Like could take you a few weeks to get the refinance. If you go into from a bank to bank setting up any entities setting up an SMSF could be a bit more time. And if you need to sell a property off, not that that's a really favorite word with some investors, but if we need to do that and you don't have a buyer yet, that's a bit of, bit of prep that has to go in there, right?

Absolutely, yeah.

So what we're going to jump in tonight, we're only going to talk about the lending stuff like if you've got anything about accounting, financial planning, locations, all that sort of stuff around property investing. We are not experts that we are going to be talking about the lending. We're always going to relate it back to how it relates to lending. Even though sometimes the location and properties can affect your lending. We are going to stick with the lending today. We're going to cover some concepts around the timing and how that works to be able to give you the best opportunity to start now to get that next property before. Before Christmas or before the end of the year. I thought I'd throw the Christmas word in there because that's not too far away either, is it?

It's a little bit early I did think but we can roll with it.

Roll with it. At least Santa Claus doesn't come out in my slides tonight. Cool. So our first topic wanted to talk about strategic restructure. There's been a few masterclasses that we've done to reference back there's been stuff on how to structure things, how to do entities, how to do SMSFs, some of the, some of the creative financing things. But one of the things that can take a lot of time in someone's, someone's ability to buy the next property is the first pictures, like the guy that needs to do a home loan refinance that could be internal to the same bank you're at to be a bit quicker or it can go to another bank. The second picture is the guy carrying his equity around. It was pretty clever of him and that can take some time to get it out. The right reasons, the right cash out strategies with the banks and things like that. And then we've got the sale property where we need to find the buyer, we need to go through that process and then we need to come out the other end with the debt repaid and the equity in our hands so we can go for a bigger strategy to our investment. So the time that it can take on some of these options is if we're going to go to the internal to our current bank that we're at. If it works, that's going to be the quickest. But if we go to a different bank, that could take up to four to six weeks. And I suppose the quickest refinance I've done with someone has been five days to another bank. But the longest I've done a refinance with someone it's taken six months. So depending on the complexity that we're dealing with, that has to start as soon as possible. The ninja tip with anything that we're looking at here, whether getting a refinance done, equity done or a sale done, is that we can always rely on the banks to give us some conditions on the conditional approval so we can get the timelines of the banks done at the same simultaneous time that we're doing the refinance. We can do the pre approval for the purchase when we get an equity out. We can still do the pre approvals when we're doing the sale. We can always do a purchase based on the sale actually going through. So the biggest thing here is that even though it takes time, we want to be running things simultaneously. So that's the bit of a global aspect there, Charlie, on the strategic break it down.

I want to break it down a little bit because I find myself, I even get caught out here still quite a bit. So I just, I'll cover them one at a time. But I think one of the things that is often negated many of us as property investors are likely going to want to use, let's say equity from another property to help form our deposit for the next month. Right. And if we're not prepared or we haven't done the refinancing or our loans aren't with the right bank to do that, what can happen is we can get caught up and lose months before we can even get to the stage where we've got borrowing power or got the green light to actually buy a property. So if someone is looking to buy a property this year, one of the first things they should be really doing here is going, am I still set up with the right loans to help me get that next property? Am I financed? In a way. And I think the caveat is, is that that might have been true 12 months ago, but today that could be out of whack altogether. So something I've been learning a lot from you, Aaron, is like, you know, you might have bought a property, you've had it for a year, but the valuation might be much better with another bank. And you know what, the lending policy is better with another bank now. So it was great, got the property, it was the right lender and the right loan for the time. But that's all changed. And before I can take that next step to the next property, they're the types of things I've got to explore. And that's just like one that's just getting your deposit there.

But we found with the valuations we can get even 50 to 60 to 100 grand in the, in the main difference between lender to lender and it may not be the sharpest rate and it's probably not going to be the most expensive to be between lenders to get the right valuation to get the money off the table. Right. But they can give different outcomes. Like the worst, the smallest valuation difference I've seen is about ten grand. The biggest I've seen a $960,000 difference in evaluation from one company to other within a two week period.

How's that for a chunky deposit?

So one misses out on the opportunity and one gets it.

So right now there's 122 of us, roughly, maybe a little bit more on this webinar. But I look at it and I go, what are the chances right now that many people on this call haven't got their property with an appropriate lender for today and now for valuation and that's deposit they don't have to come up with. There was someone in the chat that was literally saying, I'm saving for A deposit. If that had a person, had a property and it was with the right bank, there might be equity there to go. I say might be. I don't know their circumstances, but that's just one example of how this could play through.

Yeah, yeah, absolutely. And a lot of things that we need to know is that brokers do have access to upfront valuations, which is very common to know. But what you need to do is do a strategy around it by ordering upfront valuations with a couple of different lenders. There's some sequences of timing of doing that and there's making sure that we're not going to get the lenders we use. A panel value is behind it. Making sure that we're getting different company valuers like CBRE or Opteon or any of those names that people might have heard. Getting two different ones is going to go a long way. Even personal on my Property did a did evaluation. One was 75 grand higher and the other one. And they will value the place 24 hours apart.

Now, I just want to highlight these guys. So let's say you got a portfolio and the value of that portfolio is a million bucks with one of the banks. If you were to move that to another bank and they valued it at 1.1, well, that extra a hundred thousand dollars has now created some equity which you could then potentially use for a deposit on your next property. Right. So this is where getting refinanced and in a really appropriate way could unlock your next deposit. I want to go a little bit deeper than that, though, Aaron. So something you told me about with some of my properties. So for context here, I have some properties that, let's say the loans are like five or six years old. Had those investments for five or six years in some cases. You told me that potentially, let's say I bought a property five years ago and I put a 20% deposit down or maybe a 10, who knows? And then it's gone up over five years. That that loan might be on a 50 or 40% LVR now, but I might have a new property I've just bought and that one's on a 80 or 90% deposit. That there's actually value in rebalancing my loans. If I rebalance all my loans and our appropriate structure, that might actually unlock borrowing power as well, because maybe my new loans aren't seen as risky. Could you elaborate on that a little bit?

Yeah. So that can come into like, there's, there's. There's an absolute point of using mortgage insurance to be able to get loans. But if you've got a property that has equity in it and you rebalance it, you can avoid that whole cost situation there by rebalancing your loan. And that comes into. Also when we rebalance the loans we might be taking, the common one is we take equity from the owner occupied and use that as the deposits and things to be able to deal with the purchase of the next property. It's the same thing when you're rebalancing loans. And we went through a lot of restructuring stuff in the previous masterclass, but. But if we. And that can help also when we're going to potentially riskier locations of properties that are determined by whatever source that you have. So where they might restrict it to a 70 or even a 60% LVR and we've got other properties to help get the achievement of that goal. Or it might be a construction or something else. So rebalancing the loan to value ratios can reduce cost and do what we can to avoid extra lending costs like mortgage insurance. Not that that's a bad thing to do when you're starting out. Absolutely. I paid mortgage insurance on my stuff when I started out. But as over time we should be able to revalue properties, reforecasting loan terms for serviceability, getting the multiple valuations and not necessarily going after the sharpest rate, but just going after a rate that allows us to get to the next property.

Absolutely. Now, I've got a great question here from Vasco and just to clarify your point here, when we talk about rebalancing loans, let's say you've accumulated a property portfolio of five properties, you know, and you've done that over a number of years. They'll come a point where you want to refinance the lot and then balance out the loan levels. So maybe you've got one where it's paid off a lot and maybe you've got one with a huge loan rebalancing those, hence the name rebalancing can be a huge, huge advantage there.

Absolutely.

That's a great point.

And then the, the, the equity, the refinance and then selling a home, I know that this, this can create that opportunity where you're repaying debt and repaying debt opens up your borrowing capacity, realizing the whole gain of a property. Because when we refinance, we can only get up to 80%. Maybe we can push it to a bit more risk at 90%, but then there's still that untapped 10% in there.

Yep.

We've Got some selling costs, we've got some capital gains, all that sort of stuff. But if we can realize the whole gain, that can actually open up the lender's borrowing capacity servicing. And if we can realize the whole game, we might be able to use that deposit and our residual borrowing capacity to get a bigger asset than we actually have or move the money into the market where it's going to service the best. And that can be part of the strategic restructure.

Love that. Got another question here from Sunny and I hope you don't mind I bring this one in. So Sunny's like, well, if I've already paid mortgage insurance, like what's the point? And Sunny, I put it in the text here as well. But the point is to unlock more borrowing capacity. So if you have a high LVR loan, that may be limiting your future borrowing where if you're able to change that, you would get access to potentially more borrowing power in that example.

And it's also about the cost analysis too. So if you paid mortgage insurance on one property and it's gone up in value and we can have, maybe it's a sneaky, it's all gone down to about 85% LVR and we want to get it back up to 90, maybe we can use your current lender to only have an additional cost of mortgage insurance, not a full new cost of mortgage insurance. Better still, we could get a valuation with another bank and maybe we can avoid mortgage insurance altogether and, or those, those sorts of things come into what, what I'm looking at. Or the cost analysis could be if we did have to change and we did have to pay a couple of grand in mortgage insurance to get the property that's going to go up by 10 grand in the next 12 months. It could be a different, it could be a different analysis.

Right? Yeah. I look back on that in my own journey. If I was willing to use LMI more aggressively, I could have probably bought more properties. I mean, things have turned out well, but I think there's always that element of fear. I or I had it at least. So are we right, are we right in saying here that really the step one for anyone who wants to get another property this side of the year is of course come and get your borrowing power done. But deeper than that is to make sure they're spending time analyzing their current portfolio for where these optimization points are. Aaron, like what can be refinanced, what can be moved around? How can we get deposits out? Like it's much more than how can I borrow right now.

Absolutely. It's all about thinking about that, putting into some goals which we'll talk about soon. But if we want to put it into a time spectrum, if we were to start on this today, when do you think we can buy a property? So I've, I've done a little bit of a forecast here but if we're refinancing and doing equity and a pre approval, I believe the. We could potentially be settling as early as the end of October and every delay that we have from today onwards we'll push that further and further towards December. If we have a sale pending getting the buyer, which is really the key thing here. And if we are all here, maybe someone else's, someone, someone's getting rid of someone's gold that they want to buy, maybe that could be the case. But depending on a buyer we could even get that all done by the end of November depending on getting the right buyer. From a. A bit of an average forecast on actually getting this particular strategic restructure done to buy next property.

Well, the thing is I really think about this as well from, from my experience it seems that like towards the middle, let's say by December, there's not really a lot of new listings coming on. Right. The listings slow down and people really like leave for January and all the rest of it. So if you haven't found your property by December ish, it can get really slim pickings. Right. So the whole notion of getting on top of that now would make a huge difference here. Now I will put in the chat here as well guys. So if you haven't had your borrowing power done and you're wanting to potentially buy a property this year, then I highly encour encourage that you speak with the strategic mortgage broking team so they can come in and give you some really specific advice. I have seen some questions to come in here that are very specific to someone's individual circumstances. So if you want someone to unpack that with you, go through some of the things here about where your deposits could potentially come from, then book in with your team. Aaron Karina and the crew at Strategic Mortgage Brokers will be able to dive into this and give you a more clear answer on that. So what's our next one here, Aaron?

This one. I thought we go to love songs. No matchmaking. Strategic matchmaking. This is about bank policy. I was trying to dress up bank policy to be a bit more cooler.

I think you nailed it.

I nailed it.

You nailed it. I think this is the, this is the Coolest slide I've ever seen by far. There's a close second.

That's the question. Does any, anyone, anyone love their bank as much as this stick figure in, in the chat? If you want to put it in the chat. Anyone love their bank like this guy does?

I mean, I'm up there, but I'm not that close.

I was talking, talking to one of the staff today and I used to have the word bank in that thing and we went to lender to make it a little bit more palatable, but I think we hate them as much as anything except for when they can get us the gains. Right. But on strategic matchmaking, this is about the policy stuff. So I wanted to say very few property investors are going to be straightforward with lending. If you have more than one property, more than one bank, differences in income, couple, not couple. Had kid. No had kid. On maternity leave, not on maternity leave, all these different things. There's going to be a lot of variation between what your borrowing capacity is going to be and then to make it specific to you for your circumstances, that's where the lending policy comes in. And lending policy is not necessarily just lenders don't compete on rate because if they competed on rate, we'd probably have a bank offering nothing as interest. But we have lenders that compete on rate but also compete on the policy and the needs specifically that they are aligned with. Whether it's a property investor, a first home buyer, a mom and dad owner, occupied or a business owner, they all serve different needs. But I have to tell you, most property investors with more than one property, with more than one bank, there's going to be some bits of pieces of their circumstances that it's going to have to be unpacked and that's going to take some time.

Aaron, can you give us an example here of how policy might change and how that might be really good for someone or maybe not so good for someone? Yeah.

So we have had a couple of clients recently in the last six months being self employed and they've been able to use just their director's wages. So whatever their day to day wages that they have to draw through their business, through the payroll, they've been able to use that to get their mortgages up until going into the later part of Sep, August and into September when it's going to be potentially the new tax return or relying back on the traditional methods of tax return. So they were using their pay slips and an accountant's letter to say, don't worry about the business, just use Our just treat us as a payg person. So that's one option. The other one is that we have had a couple of people come to us recently where the 2025 tax return. Yes There are people that have smashed out their tax return for a self employed person right away and we've even got the notice of assessment and they're able to use 2025s in isolation instead of looking at what happened in 24. So we can use one year's tax returns, we can use combined of two years tax returns. We can explain the differences in tax returns. We've got employed people that may have changed their job back in June and now we don't have the right year to dates because we've flicked over the calend. They've got allowances, bonuses, all this sort of stuff that comes in there. We've had people returning to work from having a baby. We've had other things where we've got profit going into a trust that holds property and that's confused a few lenders except for a couple of majors. Add backs has been a really interesting issue around what we can add back what we can't. Child support whether you pay it or receive it and the age of the, the children, private school fees whether they're in the, in living expenses or not. Like we got credit issues. I've had people buying super properties with credit issues, repayment history issues. I've had someone with like 20 directorships as well come in to uncle.

Of course you did. Why wouldn't you?

Yeah. And collaboration with accounting, that's another one that, that's going to take a bit of time but it gets us in the right position so that we don't to the application without having an outcome.

Right. So across all of them what a wide variety of things a lender can assess you on to decide if you're borrow worthy or even to what amount. Right. Is, is the nuance there how often do these policies change?

Well that, that's the, that's the strange thing like if we look at serviceability, if that was a policy that's all online calculated so literally it could change in two seconds. Policies can change all the time. Like we've, we've had a, we've had a lender come into the market if anyone's, if anyone's interested in co living. We had an announcement this morning that one of the main lenders that charges you around that residential rates is now withdrawing. They're out. They've got too much exposure. They're out. So that's like a monthly or a couple of monthly updates depending on the exposure of the lender. We get weekly updates from lenders, we get emails all the time. We get from a broker point of view a lot of the lenders have these people called business development managers that update us at certain points in time or come to visit us so they can change policy whenever they like and they the new policies can be relevant to whether you've got a conditional approval or pre approval in place as well. They have some leniencies in that area but they can change at any time.

So in the example of the co leaving many people would have loans they wouldn't even re qualify today with the same lender because they're getting out of that space. And what I find really interesting about that is that you know many property investors there may be better opportunities with lenders than when they got the loans they had today. Right. I love that example is like, you know, imagine you've had a really good year, maybe you got a bonus or you did really well in business. Like it would be your advantage to use a lender that was only looking at one year of accounting in that example.

Absolutely.

Your borrowing power would go up significantly but in other circumstances you might be able to get a far better rate if you use two with another lender because maybe you're not going to maximum capacity there or whatever the circumstance may be.

Yeah. So the one year's lenders like there's only one if not two right now. But if we get to January where we can show the last six months of trading and it's equal to the the one years we can we have a bunch load more lenders. Come on. So sometimes it's time, sometimes it's that. So it's all about matching the policies to your circumstances. And that that really brings us to the ninja tip like the best thing you can do with a broker. We don't know where you're when you on board with us or you're engaging us with us. We don't know which lender we're going to. We might have a hint or throw a, throw a token name of a lender if you've ever heard of it before. But if you provide everything upfront to us, you be transparent with your position. Brokers are not the bank and we don't even know where we're going at the moment. So being upfront with us is easier. We're able to do the credit checks without hitting your credit file. We're able to do the valuations up front, we're able to do multiple calculators. So if you are going for a purchase and you've got a pre approval, it may not be worth the paper it's written on. Right. Because that lender may not like the property you buy. So what's better than a pre approval is a broker with a backup option and a pre approval in place. So given everything up front allows us to quickly get to the solution that you need and which options and which backup option we're going to have when you go purchase.

I love this so much. I'm still shocked to this day. I remember back when we were doing a refinance with me a number of years ago, Aaron, and for whatever reason, CBA loved us at the time. We had a lot of loans with CBA and then all of a sudden we got my borrowing power done and with CBA again, It was like 450,000. But when we looked to new banks, ones that were never like we didn't think were a big deal, I think NAB was like, oh, we'll give you 2 million bucks. It was crazy. And I couldn't believe how much of a difference it was. But what had happened with the education you've given me is it's just that lender policy had changed that all of a sudden NAB's terms really suited my circumstance and then we could get cracking again. So it can really be guys, and I want to make sure I'm making this point in the chat. You might think you're out of borrowing capacity or have very few left and it could be a policy or two that change. Mix in with a couple of rate cuts and all of a sudden you've got a phenomenal opportunity with the right lender. But the nuance here is you've got to work with a broker that's actually going to spend the time understanding this stuff and really digging in past the big four banks. Now, I've had some shitty experiences with brokers that. How can I put this? They just get lazy and want to use the same lenders because they've got contacts there. It's easy for them. But again, it may not be your best position. So for everyone out there, I would just say be very cautious. Not all brokers are created equal. Not all of them stay up to date with the lending policy like the strategic mortgage broking team. And that could be the difference in you getting the next property or two or three, if you play this right. So definitely worth if you, you know, of course, if you're with your broker and you love them and all the rest, like quiz them on this stuff. But I would highly encourage for everyone in the chat here to make sure you're speaking to someone like the strategic mortgage broking team because this is, this is the difference. This is where they specialize and why so many of their clients are able to grow such substantial portfolios.

Leave you with a couple of pieces of gold here like you heard about afterpay and the buy now, pay now, later schemes. Oh yeah, oh yeah. So some lenders actually treat that like a credit card or treat that in a bit of, a bit of a living expense occasionally because of what you might use on it. But there's a couple of lenders policies that are quite strict. So if you do have one of those facilities and it's like four grand, they will count $2,000 as a liability to you if you have that open because it does have to be paid off quickly. So they just halve the limit and that's your liability. So you gotta be careful with this stuff. Credit cards is another one. Some, some banks will take 30%, some takes take 48% of your credit limit and rental income. That's a big one. Some banks are still sitting at 75% of the rental income plus your expenses and some are sitting at 90% plus your expenses. And then yet there are a couple of nice little lenders in there, 80%, no investment expenses because they just consider the 20% they shaved up the soft done.

And there's the nuances. Guys, I'll put a link in chat again if you're someone that wants to get some of that wisdom on your portfolio to see where you can get your borrowing power too. And get this, which I still love this slide. Aaron, you might have won the best slide ever with this. But get the right bank aligned to your circumstance so you can make a purchase this year. Love this one.

Okay. All right, next one. Strategic entity structures. What we have here is that if you're going to buy in any of these before the end of the year, there's a couple of timing things that are going to go on. There's a couple of things you're going to have to do first. So what I mean with this one we've got the first circle being a company, the second one being a trust. And for lending circumstances we prefer a corporate entity as trust trustee for the trust. It's so much easier to deal with. And then with the self managed super funds, that's another entity structure as well. And they all have Slightly different timings to be able to buy the property before the end of the year. So the biggest thing that I can suggest with any of this stuff that we're going through tonight, you need to have your borrowing capacity done first. There's no point going to the people that set up this stuff and give you the extra advice around tax and relevancy for you without knowing that you can actually do it. No good setting up yourself, maybe super fund and then realizing you can't borrow in it. No good setting up a trust and just having a fancy piece of paper and not being able to borrow. So doing your borrowing capacity first is the best thing. You do need accountants advice and other people's advice as well, because there are so many different ways that you can set up a trust, so many different types of trusts and how they relate to the tax world, the capital gains tax and all that sort of stuff as well. But from a lending point of view, the same lending loan that I can put in a company, I can put in a trust. So it's the same, same loan the trust, we just like it as a company, as the trustee, because it acts much differently, much better for the borrowing. And the self managed super fund, it's totally separate again, but takes a lot longer to set up. So borrowing capacity first, accountant advice and the setup process, application search the property, then property and settlement again. With any of these things with timing, we want to be able to do as much simultaneously as possible. And there's a couple of different ways we can do that with these, these entities, because some are a couple of weeks to set up and some can be even up to eight weeks to get regulated by the ato.

So this is the inside you're digging into here.

Yeah.

So regardless of someone's circumstance, like let's just pretend someone is suitable for a trust in this example.

Absolutely.

The time it would take to set up a trust is more than if someone was just buying in their personal name.

Correct?

Right.

So if we want to get one property.

There you go. Right. So if we want to get a property this year, we really want to make sure that we're on top of this from our accountancy point of view and then the admin side of it, I'll also say in personal experience that every property I bought with a trust has taken additional time because you might have to get a justice of the peace or you might have to get a lawyer to certify some documents or get some extra legal advice on a trust structure or something like that. And by the way it would be very encouraging of making sure you do get some legal advice if you are going to get trust structures set up because they can have unintended ramifications if not done properly. Yeah.

Legal advice is on most. When you buy a residential property in a trust you're going to get the same home loan as if you would get outside of a trust. But they do most often than not for purchases will ask the directors and guarantors of the trust to get legal advice whilst signing the loan contracts. Because you can't hide from the bank in these structures they will find you all the time and they link you into it quite heavily. So that's what companies and trusts and super funds, they pretty well mandate legal advice all the time when you're getting a loan on that. I've gone through it multiple times. Legal advice. I know you have Charlie. It's probably the same thing over and over again but it's just a part and parcel process.

Well, I'm going to touch on this a little bit further, Aaron. I've recently done the SMSF thing so I've got an SMSF now and that in itself just to set up was like a six week process.

Yep.

Now if I hadn't started that process to if I was wanting to buy another property this year and there was opportunity to do that in an SMSF structure that was right for me. You really want to get your skates on and get moving in that example.

That's right. So if we take that into account. So we've got about two weeks for a company in trust and the other little problem with companies in trust is that we need the name and the company set up before we can do the pre approval. So it's always good to get your borrowing capacity done so that you can go after it. You can always do the refinance, equity release and stuff whilst that's getting set up and then hit the submit button on the trust when the names and everything are done. Selfmany super funds the quickest I've seen a self managed super fund be done is four weeks but that's having the ATO on side. The average is about six to eight weeks to get an SMSF done. But there are some ninja ways you can deal with it. We can do pre approvals without the SMSF set up but it does eat into maybe one to two months of your pre approval. So we try to suggest that we do pre approval. We do the borrowing capacities with more than one lender. You go get it set up and once You've triggered your rollovers, then we can do your pre approvals from there so that we can suck up the time and when. If we're looking at trying to get these done before Christmas, like company and trusts, if we're going to set it up today, we're probably looking at like a November settlement, smsf. We're probably looking at like an end of November or even early December if we are starting today.

All right, so that's the admin side. I want to cover a different side. Many of the people in the chat when we first got into this webinar were saying that one of their challenges is borrowing capacity. Yeah, right. So, you know, sure, it takes six weeks to do an smsf, but the thing I would really encourage people to look around here as well, and we've done a whole webinar on this, which I believe Karina has already put in the chat around structures is that for someone that's looking to create more borrowing power, the utilization of these structures may actually be their strategy to get one more property this year.

That's right.

So you might be someone who's close to maxed out in your personal name, for example. And this is the time when you need to, if you want to keep progressing with your portfolio, you might need to look at that smsf, SMSF as a way for you to keep going or potentially depending on your circumstances again and absolutely speak with someone on the SMB team before pursuing this. This might be your time to venture into trusts and a debt siloing strategy, which I think we've seen a little bit on in more recent times in the property space. So for some of you that are newer to this game and maybe just buying in your personal name to this point, then this is the time where you want to explore a conversation with a broker about how these structures can actually increase your borrowing power. And I can see here Sunny is buying a trust. Sorry, is buying in a trust with a corporate trustee reduce my borrowing capacity versus buying in my personal name for an investment property? You may actually find the opposite is true. You might might actually find that using trusts is a way to increase your borrowing capacity. I say might because I don't know your personal circumstances, but I have certainly found for myself that the utilization of these different structures has allowed me to borrow much more than I would have been if I just used my personal name.

So if you take your like for like borrowing capacity, just looking at whether you buy the next property in your own name or you buy it in a trust, there is A slight downwards pressure on your borrowing capacity when you do it in a trust. Because in the main, most lenders don't allow the negative gearing, whereas they allow the interest to add back in your personal name. So it can change your borrowing capacity there. But the gold, the gold is. You can talk to us. And there's a few lenders that actually take the negative gearing into approach into account.

There you go. So see, isn't that interesting because I find that it's like a couple of people in the chat have gone, but negative gearing isn't allowed in the trust. And this is where lending policy can change, this is where times can change. And all of a sudden your abilities in that structure may be different. Now, of course, your personal circumstance and the type of property and all that plays a role here. I don't want to downgrade that.

And just a reminder, we're talking about lending here, not the accounting side. Totally talk to your accountant, because the negative that's in a trust in your actual tax returns is not going to really offset your income. It's going to probably stay in the trust. Right. And there's different strategies on that. So we are not talking accounting, we are talking the lenders. Look at the borrowing capacity. Just to let you know, around that negative gearing, add back in trust and stuff. It's just lender policy, not the overall accounting one.

Oh, but isn't it interesting, Aaron, how that topic just kind of leans into.

Sleeps in there, doesn't it?

I think people forget though as well, right? It's like, you know, properties inherently aren't negatively geared. It's how much debt you take, right? So you can have a property with a 5% yield and it would be negatively geared if you left a 10% deposit, but if you left a 30, well, then it isn't right. But it depends on. Do you know what I mean? Like, I think we forget that you can make any property, all properties are positively good.

You want a positive cash Property, just put 100% deposit down.

You're right, absolutely. You can buy in Mossman, possibly geared. I know it. You can do it. I'm not saying it's a wise strategy, but this is where we've got to look to the nuances. And then if your goal is to grow a property portfolio, well, maybe you're willing to do certain things so you can acquire more property and you'll deal with your negative carry in other ways.

There's such a, such a big minefield of negative gearing. I would say trusts are Delayed negative gear and approach negative gearing in the way of what's in the media at the moment. That's a tax strategy. So I would always recommend people have an investment strategy first. And a byproduct of that is a little bit of tax. Right.

That's such, man. We should do a webinar on that, just dividing the topics, because this is where the mindset of it is. If you're someone running around with the belief that you can't have a trust with any negative carry and that's why you wouldn't use it, or negative gearing, not recognizing the advantages that could potentially come from that, like, sure, it might mean that you can't offset your personal income, but if you can get some extra properties that are growing far past that rate, it might be worth it for you.

That's right.

So looking at the bigger picture can be a really, really powerful thing. Now, guys, there's some fantastic questions coming in. If we get through these slides, we'll come back around and we'll do some Q A, as I love, at the end of these sessions. Let's keep going.

Aaron, do you like cooking, Charlie?

You know I do.

I gotta. I've got a recipe here for you.

All right, lay down.

There you go. So have you ever baked something and you've started at the last step of the recipe instead of the first step?

I can't say I have.

You can't say I have. Okay.

I don't imagine it would go well.

But you've started a recipe with a picture in your head about what it's going to look like, right?

Of course.

There you go. So when you're going through the steps, if you potentially are going to stuff up a step, you know that it's potentially going to change the outcome, right?

Oh, definitely.

So the next home loan you get affects the next one that you're going to have. So probably really butchered that now that I talked about the recipe. But basically, if you pick a home loan with the most lenient lender today, that's going to give you $2 million worth of lending, and you only need $500, $500,000 of it. Probably not a best move. We're probably better off going to a lender that's only going to lend us maybe five or six hundred thousand dollars, using up that borrowing capacity with that lender so that we keep some powder in the gun to go after the more lenient lenders. But it's still trying to talk about the structures and the strategy, refinances all that sort of stuff in the middle too. So we want you guys to know that as a strategic mortgage broker, we want to know what your goals are and we want to know what you're doing not with the transaction you've come to us with, but what are you going to do next? Because where you go next may change us From ANZ to 1st Mac to CBA to Anz, depending on what your circumstances are. So that's the big change there. So we want to know what you're going to do now, so we know what. We want to know what your picture is so that we make the right moves now with the right recommendation of lender before we go to lender B for the next purchase.

Aaron, I'm curious about this one. How many times have you had someone come to you where it's literally the last loan they got, if they thought about it differently, would have saved them a world of pain today?

Absolutely. There's so many people. We get a lot of people that come in and they've done all their properties in their own name and they've gone, cool. I can get my last property with not sure whether I should name the lender. There's a lender there that will supercharge your borrowing capacity, but they'll charge you the interest rate to match it. So your cashflow screwed. You have to do P and I and it's all bad. So they get their next property and now they can't hold onto anything and now they're trying to sort it out and there's no room to move. They've exhausted their borrowing capacity and it's just hold on for dear life and hope that I go to work the next day and get some pay rises? Right. There's other ones that I've come. They've come to me and they've used one lender and they've used that one lender of last resort for absolutely everything they've done. And now we've just got to untangle it and they've capped out. So it's. There's so many things there that we've seen where they've just done too much in their own name. Too much with one lender too. Too much with. Or not even had the option of going to another lender.

Now in the chat, guys, I'd love to know, have you ever worked with a broker that hasn't just focused on the loan you have now and has actually thought about what is the loan coming after that or how the approach is going to be to the next property. Because I feel like I've been very fortunate because I got onto Aaron and the strategic mortgage broking team very early. But my previous brokers, it seemed they were just very focused on the here and now and there was zero consideration for if I wanted to buy more investment properties later on. Zero. Where one of the things I love about the strategic mortgage broking approach is like if I say, hey, you know, I'm trying to get to arbitrarily 10 properties and I'm on property number six, they're not going to take a loan that they know is going to make the next ones harder and they're going to really make me aware of the decisions of like, well, if you do take this, this is the impact. And I feel like a lot of investors, ones I've spoken to have found themselves in circumstances where maybe they wouldn't have bought that last property, they would have done something differently so they could set up to play the bigger game. But it's just turned into a bit of a regret cycle. So again, really important things here. I love this one. Raul's put in the chat here. You'll love this comment. My current broker doesn't even focus on the current loan at hand. Not exaggerating. It's definitely time for a change for you. Yeah. So I share your pain though, right? It's the worst when you work with someone and it's like I don't know if they're too busy or don't have the skills, but it's just like going nowhere too funny. Four to five calls to remind him. I'll put the, I'll put the link in the chat again, man. But if you want to speak with someone at the strategic mortgage broking team, I can assure you you won't have that experience. He asked me what's the R. I think you need to send your broker the money. Guys chart I put at the start of this webinar Raul, about, you know, the cost of waiting too long here. Now Carmel's asked here where she said so Aussie home brokers are not strategic. So for clarification on that, Strategic Mortgage Brokers is the name of Aaron and Karina's company here. Right. Which is there. And the reason the company was named that is because they take such a strategic approach with lending which you've got a little look at across this presentation today. Right. So the lender policy, the restructuring, how we use different structures, setting up this loan so we can get a loan after. Now the unfortunate side of the industry is I Think if you got a hundred brokers right, so you pulled a hundred brokers together, you would be lucky if three of them knew half of this stuff. Now, it's not necessarily their fault, but it is your fault if you don't hunt around for someone who is an investment specific broker. And that's why we put these things on, is so we can make sure we're educating people at the options that are there for investors. Like investors specific brokers, like strategic mortgage brokers. Very, very different than someone that's potentially bought a franchise at Aussie home Loans or Yellow Brick Road or whatever it is. And I'm not again critiquing them at all. There's definitely segments of the market, like first home buyers and just mom and dad's buying their house. They serve them really well, they do an excellent job at it. But if you're someone trying to build a investment portfolio, you want to make sure you're working with the brokers, the accountants, the financial planners, the buyer's agents that focus on investors. And you'll find it's a very, very different approach they take. Now I have even more deeper insight into this, although I'm not sure she'd be thrilled I mentioned this. My wife used to be a broker for Anz, and I can assure you right now this is not the stuff she was focused on. But she was excellent if you just wanted to buy a house and you lived in the local community. And she was great at that. So from that point of view, she was awesome at her job. But this world is a different world, so. And that's the message we really want to post on or share in these master classes.

Yeah, I'd add to that. I was listening to a podcast this morning and they were trying to tell me that I needed a commercial mortgage on my residential property, Insider trust. And I just, I just feel that that was just so wrong. Like you can still get your residential interest rates, you can still get your residential offset accounts and good terms and conditions inside your trust. It's not like you're going to be defaulted to being a commercial loan and getting loan terms that are exuberant or interest rates or call strategies or taps on the shoulder all the time. You can get a 30 year set. Forget one. And I was just so. I was listening to it. I'm going, oh, should I listen to this any further? It's like boiling inside.

Happens all the time. I must frustrate you a lot, Aaron. I can imagine it does. Now, I can see some questions still rolling through yeah, we'll push through on some slides here but guys, I'll come back through the chat and grab any of these. But if anyone does want to ask a question in the chat, we can get, we can get to that as well.

We can, we can probably go to questions, mate.

All right, we're on for questions guys.

Woo.

How's the time? What a segue. I wish I was.

Our time is really cool tonight. Like last couple we've, we just got really excited and gone over. But tonight like let's, let's bring on the questions.

I'm the worst timekeeper for these really. I feel like we should sack me as the timekeeper. I get too excited anyway. So we've got a question here from Rohit where it's like, do you charge fees for your clients if clients are doing an equity release to work with you? Or is it, or essentially is it just from the commissions, Aaron, like is there any charge for people?

So we can't claim that we are 100% fee free. There is some fees on certain circumstances of clients. In the main, when people are starting out their journey with us and we know them from the get go, we can get very efficient at what they need and then we do have the option to just hang on to doing just the fees, just the commissions we get from the bank. So if you're doing your first investment property, combine that with a first investment property in your own name, for example, first investment property into your super and you're doing that combined together we can do that and help you guys out with no fee on that one. But if you do come to us with a straight SMSF loan, we do have a small fee on that one that we can get into with your specific circumstances when you come to us. If you're going to go into sort of big battles around estate planning, estate disputes, divorces, credit problems, major credit problems that are going to take us a long time to sort out. Extra paperwork, extra people to coordinate to. We're probably going to have a fee for that. But in the main we're very efficient at what we do for property investors and we want to have you have a little bit of pressure on us that we want to get speed to outcome for you because if we get an outcome and a settlement for you, you get your outcome, we get paid and everyone's happy.

I think that's a great answer, Aaron, but I just look at it as like, well, what are you paying and what are you getting? Like I'd much rather like I think of Raul's comment here where he's like, you know, his broker's not charging anything but you got to call him four to five times a day. I'm sure in that circumstance I'd rather pay a little bit and get great service. Right. I think it's an important thing and if you're going to get access to many great strategies then I think could be worth it noting I don't think you charge fees very often at all. We've got another question here from Nassim. Can you please explain what banks would need from our accountants so the loan in the trust with a corporate trustee wouldn't impact our borrowing capacity. Now I realize there might be some different things in that. Do you want me to reword it Aaron, or are you happy to have it?

I'll have a crack. We want to exclude. The basis is that we want to exclude the lending or get the, get the, get the new lender. We're going to be blind right to the fact that we have a loan in the trust. Well you're going to have to have it cash positive. It's going to have to run.

At.

A profit to be able to exclude it. That that's the headline thing. The lenders go does that entity wash its own face? Does it take care of its own stuff? And if it does they. There's two ways to prove that. One is that we have a lender that you can self declare that and that will exclude its own lending in different trusts. And then we have the lenders that will want an accountant's letter to verify that it's running positive, that that's really it. We can exclude things like property depreciation and stuff that's a non cash thing has to be cash flow positive. There's not much around it other than that.

I agree with this so much. I think unfortunately trusts have been butchered on YouTube and that there's a perceivement that it's like oh, the trick is you buy heavily negatively geared property and then somehow get a dodgy accountings letter and then you can just keep borrowing unlimited. And like even if that was true, that wouldn't lead to good things. That'd be actually really dangerous. Right. So I would hate it if that was happening because I think our property market would become very unstable. But I think what people want to know is the borrowing power side of things. So I'll share my personal experience. I'm not going to share, I'm not going to say what you should do. I'm just going to say what I did right is like in your portfolio there's going to be certain times where you want growth year assets that are negatively geared, right? They've got a big negative carry and you buy them in your personal name because you want a negative gear. That's the big advantage. But to balance that, you're going to want to have some cash flow plays in it. And they're the ones you're stacking trusts, they're the ones where you can utilize certain borrowing strategies. And again, please speak to someone at Strategic Mortgage Brokers in your account and a buyer's agent. I don't know how to pick locations or anything like that, but it's like the properties that are going to have better cash flows, they're the ones you want to stack in trusts. They're also the ones where you might want to chunk up the deposits. So they are really positively geared so you can do some really cool things. And then in the third category, what I've done is I've taken a growth year property that's a little bit negative and I've taken a more cashflow property that's definitely positively geared and I've paired them in a trust and then between the two, they are neutrally geared and it enables me to take care of such things. Right. So there's different things you can look at there. The other side of that is sometimes you might have a negatively geared property that just needs some time. Like rents go up, you can pay down some debt, you can do some cool refinancing with someone like the strategic mortgage broking team and then you're off to the races. Your once negative trust is now a neutral or even positively geared trust. And in that example there, that would enable you to silo that debt or exclude that debt and to be able to continue your borrowing journey in that way. So just some nuances there and there's.

There'S, there's things like if you, if you're going to load up the lvr, if you're going to load up the offset account and then use it as the deposit for the next one. Like it's gotta be logical that what you're doing and the best thing, the thing that, to emphasize what you said, Charlie, the cash flow management is more paramount than the borrowing capacity here. Like if you're going to load up trusts and they're going to be excluded from lending, if you can't deal with your cash flow, you're going to, you're going to have a wipeout strategy. Like the biggest problems I see with Property investors is never borrowing capacity. If you've got a job, a good underlying income, you've got some properties, you've got some lending, you've got your head screwed on. It's basically the two biggest problems are generating the deposits and managing your cash flow. I say that from a position where I am, I am a broker and we've got a team of brokers that unlock borrowing capacity all the time.

But you're also an investor yourself, Aaron.

And I'm an investor myself and most of the team is as well. So we're living and breathing it too. But we can see it in the big property portfolios and the low property portfolios. It all comes back to deposit creation and cash flows now.

Love it. Let's have a look at more, more of these ones here. Rohit has asked, may I please ask who does portfolio acquisition forecasts if the plan is to get to 100k passive from property in 10 years time and you've mentioned here potentially a buyer's agent. Yes, I would probably see a buyer's agent or a financial planner and one that focused on property would be the two I would go to for a forecast. If you wanted to do a really good job of it, I would go to both of them and then compare the plans. Right. So many buyer's agents and many financial planners do a fantastic job with these. I'm, I'm cautious of recommending any just from the point of view is I don't know your circumstance. Right. So the right buyer's agent for you is the one that can get people like you a great result and the right financial planner for you is the same thing. So again your circumstances matter a lot in who you work with. Do you want to add anything to that, Aaron? Yeah.

Yeah. So when we're, when, if we're looking at this slide here where we're trying to the next home loan affects the next one after that that comes into the collaboration with what type of property you're going to buy as well. So we've, we've, we've seen it across buyer's agents. Some will specialize in the low cost properties, the high cost properties. Some will have a minimum rental yield and we've seen some people at the minimum rental yields around that 3, 3 to 4% mark. Now with some of the crunches that are out there depending on the location, we've got some still trying to get some still achieving the fives and the 6% rental yield. So when you, when you're putting a lending strategy across your Portfolio strategy, we always are going to tap you on the shoulder to either ask your buyer's agent what your rental yield is and then map out some properties from there. But we do need the actual market data. So there's no good putting lending strategy together with whatever rental income we put into the calculator because we can put, we can put a million dollars a week in the calculator for rent if we want. Because it's really hypothetical. We want to actually collaborate with your buyer's agent and your team to be able to map out the lending that goes with that property strategy. But I'd echo your comments. Buyer's agents and financial planners can get in there to make sure your financial plan is pro property as well.

All right, I gotta, I know you're gonna love this question. All right. I've been, I'm always like excited to ask you it. You ready, Aaron?

Okay.

Are there any circumstances that you'd recommend cross collateralizing properties for borrowing capacity? I'm watching Karina's face as well. She loves this question.

Also I'm gonna say no. It's, it's not an area that I would love anyone to get into. We probably uncross more people than we cross. Now I'm going to say, and you probably heard me there, I said I've crossed people before. All right. Typically when we're crossing it's usually, it's usually known what they're doing. It's usually in the commercial or business space for a specific purpose. Like there's if we put a business loan on some of your equity versus having a business loan that's unsecured, you could be paying like, you could be paying like say a couple of months ago it was like six and a half, seven percent for a business loan secured by a mortgage or 15% if it wasn't. Like you've got to understand the cost justifications there. Owner occupied, commercial or commercial where you're buying a commercial and the bank's policy that we only match to is only allowing you to do a business loan linked to your link to your residential. Like that's an interesting thing to discuss and look at the opportunities and calculations for. But most of the time in residential you can avoid cross securitizing all, all together. If you're worried about the extra application fee a bank's going to charge you like you go to CBA and you're going to go to a. No frills their, their low cost product and you've got a few hundred dollars application fee for each loan. Pay the few hundred dollars because the cross securitization, all that's going to do is save you an application fee and make you at the mercy of the bank. So residential, I'm 100% against wherever possible with commercial, as long as we understand.

It'D have to be like a level of last resort and you'd have to have a very good reason to do it. But it's not. Not encouraged.

And I've been thinking about. I can't think of reasons for cross securitization outside of the commercial business space.

Okay, well, a great answer there. Now, Wayne's asked a topic, Charlie. I mean, it's even for me. How are we going, Charlie, off topic. Can I ask a question about your portfolio? Okay, if you don't want to get into it. Are you resi only or also commercial? And sorry, there's a. How many properties? What's the workload like to manage it? I'm interested in swapping from commercial back to resi, but concerned on the workload required. So I'm 100% resi. I haven't got any commercial. I feel like I have a good understanding of resi. The only reason I'm not in commercial is I. I have not explored that world or got educated on it to this point. I mean, there's many ways to make a dollar and that could be a fantastic one. But personally for me, I love residential property. That's where the game is at for me. As for how many properties I think we've got at the moment, it's about 16 or 17 different tenants. Now, we've of course got a couple of properties that got a duplex or a triplex type things, but that's about there. The workload, transparently, it's significant. So I'm very fortunate that my wife helps out in that department. She's an accountant by trade, which certainly helps. And she deals with the property managers as well. But I think the different question is, is it worth it? So when we look at our returns, I think it's very worth putting in the time to get the type of returns we do. So I'm completely for it. But by no means is this a passive index fund strategy. Right? We get in there and do stuff to get the returns we do. So hopefully that's helpful nonetheless, we'll see if we can grab some more questions on this chat here. All right? Now, Carmel, you've asked a fantastic question here, but it is very, very specific to your circumstance. I would highly encourage that you book in with the strategic Mortgage broking team to unpack that a little bit more. Now the only reason I don't want to ask you a question is because I don't want you to act on anything that's said there because I think there's more stuff required around it to give you really good advice. Now I will read it out. Aaron, you can give some general.

Okay, cool.

Carmel, I would definitely encourage and I'll put the link in the chat again. Ah, damn it. Now the chat's moved. One second, here we go. Carmel, example I own a property, $750,000. My income is only 65,000. So Aaron, we've got a $750,000 property and a $65,000 a year income and I have cash in the bank. I have been given a Pre approval for 520,000 and and there is no plan for my next property, just pre approval. I was told a trust is no good because of what I earn. I don't have an accountant. What's your advice?

I think, I think explore all options. Like if you've been told a trust is not worth it, you're probably best off getting the information so that you know for yourself that it's not worth it. If you. That's a decent pre approval that you've got. So that's pretty cool.

That's where I'm Susan, that's a really good pre approval and you've got that income there.

So I would have to echo. We'd have to unpack that on a specific basis and I always encourage one. So if you've gone to one accountant and they've said no. If you've gone to a broker and they said no, not trusts, find one that's going to actually give you all the information so you can make a well educated choice. Otherwise you just going after a property without without or a pre approval without you. You're looking in the rear vision mirror all the time. You want to be turning the headlights on and driving forward.

Yeah, I'm with you. So Carmel, it's a really good question there but there's a few things like for example, if you've got a partner or kids or anyone else in your life where a trust might have some advantages that might be something worth exploring like there's many reason to do it. If I was you, I highly recommend get the borrowing power done with someone like the strategic mortgage broking team first have understanding of why your pre approvals there and what are your options and then you can go down the route of like what structures or types of property might be suitable in your circumstances, if any at all.

Lots of, lots of times that I get people that come in and I, I do a borrowing capacity up and I might, I might, it might just slip my mind that I forget to ask them what, what rental income they're expecting off their rental property and then they go oh well that's, that borrowing capacity is lower than my, my, my other broker said. And I said oh, okay, well that's strange. What, what rental income did they use? Oh, I'm not sure. And that's a big key giveaway. If you don't know what rental income has been used in your borrowing capacity figures for your next property, you might end up in some pretty hot water when you're in your, your financial cool off or you've just paid an exuberant buyer's agent fee without being able to complete the project. So make sure that you know with the pre approvals how much of their rental income is because most of the time we can put everything, anything into the rental income calculator. We just got to make it market relevant.

Love it. All right, we've got time for one more here and I love this. We're going to use Ross's question here. So Ross has written in. How do you fix the situation where you have all your properties in your own name and you maxed out now changing the ownership from your personal name into a trust or whatever it is will trigger CGT and stamp duty. How do you, how do you think about that, Aaron? What would you do?

Yeah, so I always go, let's get your baseline borrowing capacity done and make sure that we've exhausted all the lenders that are actually cost relevant to your situation that we can't. We've had examples where people have come to us with eight or nine properties in their own name and their ninth property was able to be put into a trust. They had a perspective that they didn't want to sell anything at the moment. They were doing some other things. And this, this property, next property that they're going to get was the next one for a period of time. If I look at the bigger property portfolios that I look after or see in the business here, we see over time people will naturally move, move to a point where they're going to have more properties in trust than properties in their own name. And most of the time I see a sell to realize the gain then rebar rebuy into trusts. That's a fairly common one because you avoid the stamp duty there. And as Long as you've got the other tax metrics to minimize whatever you need to there, that's always a good thing. If you are going to. We've, we've seen in the recent times a few minor cases where we are moving properties into a trust. So I would say get a full borrowing capacity assessment across all lenders making sure that we're not going to get ripped off by any sort of lenders. The last resort that are really high interest rates and we. And also probably going after a buyer's agent that will help you understand the metrics around your properties to be able to make an educated decision whether we're going to hold them and maybe restructure them or look to sell them and move our capital to another market that might perform better for us.

It's a great answer. I just want to throw in one thing on that, Aaron. I think there's a. In the business community, right. We have this amazing mindset that it's like, you know, you win or you learn. Right. There is no long now in property. Right. It's like if we get caught in a situation where in this example maybe we put everything in our own name and it's a bit of a mistake, you just cop it on the chin and you move on. Yep. You've got to transfer something into a trust, CGT and stamp duty. It's cost of doing business.

That's right.

But over the longevity of your investing career, that'll be a rounding error. Like that's not going to be the thing to break you. But I love your point, Aaron. Around like, you know, if you've built a portfolio, it's like great gut check to be like, well, am I really out of borrowing capacity? And if I am, are these all properties I actually want to hold? Like I never envisioned I would be selling properties and I think I've sold four across my journey or five. We're coming up to like I was very much, oh, I'm just going to buy and hold things. But in different times, markets move different opportunities. Like there's got to be some fluidity to the game. So please don't end up Ross. And I say this here, someone who ends up stuck because you're a little bit fearful of a bit of a CGT event or a little bit of extra stamp duty costs. Like you got to play the bigger game, you got to play the long term game.

Yeah. Cost of opportunity always comes in and we, we always say from a broken point of view, you need once you've got your property portfolio set and you go into a bit of a. A rebalance a period of time where we're going to refinance readjust the loans you got when you got the properties may not be the loans that you want forever. All that stuff can all those incremental changes in your property portfolio if you've got a few properties can change your outcome on your borrowing capacity. $10 across all property port roll properties 0.25% off the rate off all properties. A re extension of the loan terms. Just a note on re extension loan terms that going to 30 years is not a bad thing except you have to think about it slightly differently. If it's your own occupied, you put back from 10 years to 30 years, you can pay it off in 10 years. Still you just telling the bank I've got 30 years to do it. So take that into mind too.

There you go. Well, I'll tell you what Aaron, we might round this one out. We've run a little bit over but hopefully your wife won't be too mad at me. So I just want to say a big thank you for everyone that's joined us tonight. I know finance can be a dry topic at times and I think Aaron does an excellent job with his stick figure man of making it as intense in as entertaining as we can. So we're going to round this one out from here. If you do have a follow up question, please engage with the SMB team or Strategic Mortgage Brokers team. They'll be able to help you out in that regard. I will put the link in the chat one more time to make sure we've got it there. But if you are someone who's gone, hey, I want to get my borrowing power checked. I want to see how this can work for me. Booking with the team and they can do a deep dive on your personal circumstances and the borrowing side of things. Do you have any farewell words, Aaron?

No. It all comes back to borrowing capacity. Doesn't matter what we say, always borrowing capacity. Get it checked. It's free to have a chat.

All right guys, thank you so much. Have a pleasant evening. Managed to save the chat.

Cool.