Small Talk Big Ideas - Rob Flux - Property Investor Network

Thanks for joining us for the Small Talk Big Ideas podcast. A podcast to enrich your soul where we have conversations with inspiring people about all things property, business and life. And now, the host of Small Talk Big Ideas, Ian Ugarte. Hey, welcome to Small Talk Big Ideas. And today we are talking to Rob Flux, who is a property investor and just like me, actually wants to get people into a big better position by using the skill set in his brain and teach other people to do it. Learn today how he actually got into property very young, just like I did and had to wear through a fairly significant cyclone in the. In the whole history of Australia and where he's got to. Now let's enjoy Rob Flux and his version of the world. We have Rob Flux with us here, extraordinary property developer, educator, very similar to me. How you going, Rob?

Not too bad, Ian. Yourself, mate.

Oh good. You are looking quite healthy through all of this, mate.

I don't know how because I literally have not left this room.

It was probably two weeks ago that I went out to get some mail out of the letterbox and I went, geez, this is the first time I've seen sun for two weeks. So it's pretty sad.

I've heard a few stories of people going out I've heard a few stories of people going out to clean their letterbox just so they can go outside.

It's a bit crazy.

So everything above the waist is looking good, but everything below the waist I think is. They're calling it the corona curve.

Yeah, right.

Flattening one curve and increasing the other one. So Rob, obviously behind you you've got a couple of banners there, you've got the Property Developer Network and you've also got your safe card. Do you want to talk about those?

Oh, you want to go straight to plugs, mate?

Okay man, let's go for it.

Yeah. Okay. We run two brands, so I guess the two, they're sitting behind me. So Property Developer Network is a community where we have monthly events in Brisbane, Sydney, Melbourne and growing to connect like minded people that are up and coming property developers. We figure that none of us have all the knowledge but collectively we do and we kind of do some masterminding to help each other's projects out. We get industry expert in every month and we have people sharing real deals. So good community. I think of it more of a drinking club with a property problem.

And so.

That'S my social outing is that group. We're the largest networking group of its kind in Australia and quite proud of that and have delusions of grandeur of going global, mate. So, so, and the Renault Save card is a subscription based card that gets trade level pricing at 40 odd suppliers and better than trade at a number of suppliers including Bunnings, National Tiles and Wattle, et cetera. So. And we're getting massive discounts on that because of combining the spend of everyone using the card.

Yeah. And you were just saying that there's some builders now coming on and using the Renault Safe card because it's cheaper than what they can buy from Bunnings.

Yeah, correct. So because they know that, you know, I'll do a hypothetical. If they're doing 10 homes a year and they, they come on board and there's, you know, 20 or 30 other builders doing 10 homes a year, that combined spend is massive. Yeah, yeah. And that applies to all of our suppliers, not just Bunnings.

So. Yeah, and so plugs all out of the way. Good. Let's get on with the rest of life. You, like me, bought a property pretty young and like me, I think you had the assist of your parents in.

A roundabout sort of way. So I bought my first house at the age of 18. The backstory is that I grew up in Darwin. They, mum and dad had a brand spanking new house that was eight months old. They got blown away in Cyclone Tracy and with no insurance or anything like that, they were in a pretty terrible way financially. And when they rebuilt the house, instead of being a nice up in the air, airy breezy thing that you need in the tropics, they bought, they built this concrete bunker on the ground that, you know, concrete reinforced and hot as hell. And so basically I bought the house off of them and they stayed and paid me rent because that was the only way that they could financially help me because they were in a, in a bit of a tight bind themselves.

So it's actually the other way around. You helped your parents out rather than, and I mean obviously they assisted you by selling your property. But yeah, it was the other way around really.

Yeah, but it was mutually beneficial. But as an 18 year old you still go out partying and drinking and doing all the things that 18 year olds do. And eventually they sat me down and said, you can't continue this lifestyle. And I went, well, it's my house, it's my rules. And at that point they went, it's time for us to go. And that happened to be in the middle of the, the 1990s recession when interest rates were up at the 17 and 18% mark, so started renting per room Mate, way back then.

Did you live the mortgage pay and you lived in there as well?

Yeah, correct, yeah.

Okay, so you, you were.

One of the first, one of the first adopters.

Of the high income real estate system. That's pretty awesome. So in with the benefit of now, how do you see that situation with your parents?

Well, that was the best thing that could have ever happened to me. So I went on and bought my first investment property at 21 and owned my first house outright at 24. And yeah, I guess a good run that was largely buy and hold in the first stage of things and negative gearing and I would never ever, ever do that ever again. And it's probably the worst advice I ever got, but it served its purpose and I learned plenty from it.

Pull up, pull up that shot again of Cyclone Tracy because it devastated like it absolutely wiped it out. And you know that I actually spoke to a guy who was, I doubt he'd still be alive quite a few years ago who was telling me that they went around Australia and they bought every caravan they could possibly buy around Australia and drove them all up there. And his job was to nail star pickets in and chain them down to the ground. And he got paid a ridiculous amount of money to put that in. And then once all the houses were rebuilt, he then went back and for the same amount of money and the same charge, all he did was took a grinder to four post and took the chains out and the caravans got taken away. Like, it's just amazing what happened there.

Yeah, I can't say that. We certainly lived in a caravan for about three years underneath the floorboards of what used to be the house. We showered in the backyard under a garden hose with some corrugated iron wrapped around as the shower screen. So, you know, times were tough, mate.

Oh yeah.

But that's what builds character.

Yes. So were you actually sitting within the cyclone when it happened?

No, we were very fortunate in that we had already pre planned to come on a driving holiday down, down to Brisbane. My dad's family is down here. We had the car packed up, we were ready to go and when they said the cyclone was coming, Mum and dad went, well, let's just stay, make sure the house is okay and then we'll kind of leave the next day. So Christmas Eve lunchtime we were sitting at home with a car fully packed up and at that point the cyclone turned away and they went, well, we're already packed, let's go. So walked downstairs, jumped in the car and we left and we didn't realize that it actually hit until we got to Mount Isa, so turned back that night and took out the house.

Yeah. Ok. So it would have been pretty devastating to come back to that, I presume, but character building nonetheless. Yeah.

I was quite young and as a kid you don't really know the ramifications. You just kind of. It is what it is. So, you know, we didn't feel like we were poor, but we certainly were.

One of the experiences that I remember distinctly was our primary school was flattened, so we had to go to school at the high school. So we had to go past the primary school every single day and there was a giant hole in the wall of the library. And so on the way home, we would just walk through the wall, grab a book, go home, Mum and Dad would read it to us. And then the next day on the way to school, we just fling it back through the hole again and return the book. So, you know, we were never stealing. But.

It'S amazing. It's amazing the things that happen. So you've gone off, you've bought investment properties fairly young and you make your way to Brisbane, obviously.

Yeah. So family relocation.

The wife at the time and now ex wife was in a fairly high job in Optus at the time. Optus had the contract for Northern Territory government and when they lost the contract, we had a choice to either get fully funded relocation or a redundancy. And we went, well, it's a free ride. Why don't we see what's happening in Brisbane? And down we came.

So what year was that roughly?

Whatever year today is minus about 16 years. So I can't do math in my head.

Early 2000s. Early 2000s.

And you were investing in property, but had you ever done any development up to this point in time?

I'd done value adding, so renovating properties and forcing additional yield onto them and that sort of thing. But not development per se. No.

Right. And so you then decided that you did want to get into development and, you know, you've got the largest network in the country at the moment with property development, but it wasn't always that way. It started pretty small.

Yeah. So I, like many others, went and did a number of actual education courses and paid some exorbitant fees for some. That may not necessarily be the value that they protested to be without putting any disparaging remarks against anyone. But what I found out of that was that there were two real common challenges with most of the programs out there. They were generally inspirational. So they get you to do something, but they don't tell you what the something should be. So there's no detail. And then the mentoring is very generic and doesn't really give you the guidance that you want. And.

Me and about five other mates went well, we've all paid for these programs and we've got some knowledge but we don't have all the knowledge. So we kind of started helping each other's projects out. Just sitting over my kitchen table and as we started to get success, each mate would kind of invite a mate and they'd invite another mate and all of a sudden I found I was running a public networking group. That was never the original plan, but here we are.

So you decide that you're going through, you're doing a number of groups, starting to ask questions, you're helping each other out doing developments, which is what you really need. You need mates in the game to be able to bounce off and ask questions of. And then the network starts to grow.

How many of the original six of you are still part of the property developer network?

There's two others that are. That are in the group, but there's only one being me who's I guess.

Genuinely active. So the couple of others, one became extraordinarily successful in their own right and doesn't need the network and has kind of gone off on their own boat. And a couple of others that just went well, property development isn't for me and.

Yeah.

But a couple of quiet achievers mate that sit there in the background.

That's good. What's your. What was the first real development deal? So either a subdivision or a duplex build or whatever it was.

It was a townhouse project that had a couple of. A couple of pre existing 46 houses that were rooming accom at the front. That was student accomm. And I know how you feel about student accomplishments.

How's it going right now?

Actually really awesome.

Good. Yeah.

Haven't had a single person ask for a rent reduction. Haven't had a single person leave.

So that's great. That's great.

Yeah. And it comes from. Irrespective of what your strategy is, it comes from proactive property management. So there's nothing recognizing the issue.

Yeah, there's nothing more important in property than having the right managers putting people into your property and managing them once they're in there. Because you know, the days of. I just don't understand some managing agents that sort of just pick whoever put them in there then complain when they have to track them down and they'd stop paying bills and all the rest of it. And then they take no responsibility as well. Which is why we always make sure that we've got some like, you know, we, we've got. So when they come up and say, well here's our agreement with you, we'll go, we go. Here's our agreement with you, we want you to sign this too. We want you to send us photos every six weeks. We want you to do all of that sort of stuff as well. So I hear you, I hear you a lot with the management side of it. Go on.

We've got tenants that I've got one tenant that I've had in that property for 10 years because if you get the right tenant doing a degree, it's going to be a three and a half or a four year degree. If you treat that tenant right, you'll have them for the entire period. There's a lot of misnomers about them going home for holidays and things like that and them not paying rent and it's actually not true because they signed a 12 month lease knowing that they need somewhere safe to store their gear and when they come back they want somewhere to come back to. And we only sign 12 month leases with our guys and most of them stay for good two to three years. Yeah.

So what did you do on the rest? You built some townhouses on the rest of the property?

Yeah. Put six townies at the back and turned four of them into rooming a comm as well. And yeah, it's nice, healthy cash flow, mate.

Did you sell any of them?

Yeah, I had to sell a couple just to appease the bank just for pre sales, but.

Managed to keep effectively 19 rooms out of those. And that is essentially the cash flow that I need to live. If I pulled up stumps and did nothing else, that one project got me out.

You know, you don't, you know, you can't do that though because you end up bored shitless like most people that pull up stumps.

Which is why I still work 18 hour days, mate, because I.

That's right, I'm with you. I'm with you. So you, you know, you've done Brisbane deals, but you don't just have a network in Queensland, you do this all over the country.

Yeah, correct. So we've got Brisbane, Sydney, Melbourne, as, as to where we run our physical events and the concepts apply everywhere. The legislation is different. So there's different terminologies, there's different buttons to click on different pages. But the essential, and you'd know this from your own teachings, the Essential framework that everything works under is the same. It's just really plugging in. Use this website instead of that website, use this terminology instead of that terminology, it all applies and there's a couple of little idiosyncrasies you have to worry about. 537 councils means 537 variations of how to interpret the same thing.

Exactly.

But that's the fun of it.

Yeah. What are you actually trained in other than the property stuff? What did you do for work?

20 years in it. So designing multimillion dollar data centers and disaster recovery solutions and doing.

Yeah, big shit for big people. So flight center, Virgin Blue, bhp, people that couldn't afford their stuff to stop working.

Right. One tel. Just joking.

No, not one tel.

Back then when email first came out, I think we went to three different providers of email and all three of them went broke. It was one Tel Orange and there was someone else and then we went to Telstra and one of my mates sent an email out to everyone that we knew and said just be careful because Ian and Christine have sent three broken and Telstra's next. So it was crazy back then, that.com era and what they were doing. Absolutely ridiculous.

Yeah, well, going, I, I guess going through the dot com era I, you know, rolled out Y2K at A. I was working for a credit union at the time. I've done some crazy stuff working inside prisons, inside prison walls.

What's your take on Y2K? I think it's, you know, I'm, I've got a very strong opinion around a lot of things that happen. I don't know if you ever noticed it. I've got a strong opinion but Y2K is one of them. Yeah, Y2K is one of them. Where I just go, what a load of rubbish. With a huge amount of money spent for no outcome. What's your view on.

So I will counter that in that there are actually a number of disasters that did happen but because of the proactive stuff was actually very well managed. Prevention is way better than cure when it comes to any incident. We were working at the time I was working inside a financial institution. We did our tests on that and if we didn't do the work that we did, we would have been crippled. So, you know, for us that was critical. Working in the NT at the time, the Northern Territory government, their email system actually had a massive failure because they didn't roll out the patches correctly and when they went to put the patches in, it was a US owned software product and us And Australia have our dates and our months back to front.

You've not read your email for three months. Let's delete every email in the entire government.

So I saw some hairy things, but they were recovered pretty easy, right?

Yeah. So I, I, you know, I, I, we actually built a seller still plumbing back then. And my brother and my father's company built a $350,000 three bedroom apartment in a plant room on the harbor looking at the Opera House and Sydney Harbour Bridge for the three families of the engineers to stay there on New year's Eve. So $350,000 for one night is basically what they did. I thought it was bizarre and nothing went wrong for them, so it was lucky, obviously. What do you do in your spare time? The six hours spare.

What's spare time, mate?

No, I very much love rugby, so Local rugby fanatic and I got season tickets to the, to support the Queensland Reds. So I like going and enjoying a beer while watching them lose.

Followed them. I've followed them from the first time they were shit until they won the, until they won everything and now they shit again. So that's how you can tell if you're a fan. Right. If you, if you're still there when.

Absolutely.

So do that like socializing with mates and I, I've kind of built a family out of this property developer network community that you know, we, we hang around and socialize after our events and. Yeah. That I take pleasure in, in watching other people grow, mate.

Yeah. That's awesome. What's, what's one of the, what's one of the most quirky deals you've done or a good story about some of the deals you've done?

Oh, there's some stories that I'd like to tell you about the current one, but I'd like it to finish first because I still got to work with some of the consultants.

Mate.

It all comes down to human interactions and you know, people are people and they come in all sorts of variety of flavors. And so you gotta navigate some very dominant personalities, some very quiet personalities and there's always backstories in that interaction. Don't worry about the money. The money happens as a byproduct.

It's just one of these things that people, people go, oh, I want to go into development or I want to invest in property. And it's not that easy. It's not, it's not a simple easy thing.

No, no, it's. I like to think of it as get rich slow rather than get rich quick and slow and Steady and you can do it safely.

Yeah. I think someone asked me once before, how do I end up with a million dollars in my bank account as a developer at the end of the year? And I said, start with 10 million and you should have a million left at the end of the year. That's about how it works. If you're going to start with, with, you know, Eyes Wide Shut, what's your advice to someone who wants to get into that? There we go. Get rich slow. Seth Godden, Rich slow. Yes.

What's your, what's your advice?

Have some very basic philosophies in get your strategy right first. Once you know what your strategy is, that then determines all of your next steps. A lot of people struggle with bright, shiny objectitis and they see every strategy works, but they see somebody gets success with one strategy and then so they jump over there and they stick there for a little while and then they see somebody else on a different strategy get successful and they jump over there and they don't stick to it long enough to break through that learning curve. And so when they're flipping and flopping, a lot of energy goes in, but not a lot of productivity comes out.

Yeah, that's what I call it. Yeah, it's what I call the restless puppy dog. You know, they're just from backseat to back seat, using all their energy look, you know, running across the backseat of the car. And then finally when they get to the park, they're so stuffed from running at the back of the car that they've got no energy to do anything else. So, and I notice that's one thing that you consistently say, and I always agree with this, this that you say as well, is that not one strategy is right for everyone.

Correct. And so we take quite a bit of pride in running an event to just help people choose their strategy. And if that strategy happens to be something that we don't, teach all power to them because now they know that the course that they go and do is going to be the right course. Because what I see consistently in my community, which is one of the things that really peeves me, is that they'll go to a slick presentation and be sold into the fact that that's the only solution. And when they get there, they find out that that solution didn't fit their circumstance. And it wasn't that the solution was wrong because the solution has helped many, many people, but it just didn't suit their circumstance. And so if we can get them to work out, well, what strategy suits me, go and do the right course, then you know you're going to get much better value out of that. Because two people sitting doing my course or your course or the next person's course, if it suits one person's strategy, they'll think it's massive value and the person sitting right beside them will think it's a waste of time. And I prefer to have people that just get value.

Yeah. And we're pretty strong on both of us. You know, I'm very strong when I am talking about my program that I say, this is not a silver bullet. This is not easy. You've got to be committed. And if you're not willing to talk to people, this is probably not a program for you. And if you don't have the money, this is not a program for you. You know, I'd much rather see you financially stable than financially unstable on the. On, you know, betting the last dollar on joining a program, that's for sure. And we've seen that time and time again and both of us push people away. I mean, I really like the fact that one of our first interactions was actually about creating a. A group of property educators that are on the same page about actually protecting people and helping people rather than watching some of the things that happen in this industry. It's an awful industry to be part of. And luckily someone like you and, you know, we've got Jane Slack Smith and we've got a whole bunch of other people that, you know, have got some integrity about them. And moving forward with that, what's the best way to get in touch with Rob Flux?

Well, they can come to our Property Developer Network Facebook page or they can come to our Property Developer Network website. If they Google Property Developer Network. We pretty much own the first two pages of Google. I think somehow they'll find us. Yeah. And we've got three or four different ways that you can engage. We've got the meetups, We've got, I guess, the Facebook community. Yeah.

Awesome.

Just Google.

All right. Tell them that Ian sent you, right?

Yeah, absolutely.

All right. Any final famous last words? What's your favorite quote?

That changes from time to time as things are changing around me. So right now, one of my favorite ones is a Warren Buffett quote. I'm going to say two Warren Buffett quotes that kind of work back to back. So be greedy when others are fearful and fearful when others are greedy. And I think in this current market that is very apt. And the second one is that risk comes from being uneducated. And so in the current market there's a lot of people thinking it's risky, but if you're educated, you'll see through that. And that allows you to be greedy by being educated.

Yep. Absolutely no worries. Okay. Rob, thank you for your time. Thanks for your story. I love the Darwin part of it. That's really awesome.

Thank you mate. Appreciate it.

Have a good one. Thanks for hanging around the Small Talk Big Ideas podcast. We hope you enjoyed that and pulled out plenty of information that'll help you move forward. If you want to find out or listen to more podcasts, please subscribe, follow us on social media or go to ianyugatte.com to find out much more about what we do and we'll see you next time. Thanks for tuning in to the Small Talk Big Ideas podcast. We hope we've succeeded in our goal.

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Look forward to catching you on the next episode of Small Talk Big Ideas with Ian Yagate.