05: Active Property Investing With Peter Koulizos

Did you know with just two investment properties and one single renovation that you could put over a million dollars in the bank? It's true. And why stop there? Welcome to your property Success podcast, the show that explores the practical steps to making your property investment dreams a reality. And now, here's your host, the freckle faced farm girl made good all the way from Dubbo. Ladies and gentlemen, Jane Slacksmith.

That's. I made that up.

Well, in actual fact, you didn't because it's true. I've got freckles and I'm from Dubbo.

Right, from Dubbo.

Maybe not a girl so much anymore.

No, that's true, that's true. We should call you a girl. Should we?

You should call me a girl.

But you are from Dubbo. So when was the last time you were in Dubbo?

Oh my goodness, I was in Dubbo. My parents actually moved from Dubbo almost five years ago now and I have not been back since. I've had family from Dubbo visit. Very fortunate to.

They should have some kind of parade for you or something. There should be awards for good property investing.

Maybe a reward for a good podcast. I'll take one of those. So, John, we have a fantastic episode coming up today as we're being joined by the property professor, Peter Kalisos. Peter is a very successful property investor, property developer, and the national coordinator of property investment training at TAFE Citizen.

Yeah, I've been looking forward to this episode, Jane, because I really like Peter's methods and ideas, particularly around the creative deal making that he does and the development to hold strategy.

Yeah, look, he is going to be sharing a lot with us today and he is going to tell us about one of those creative deals, which is the poppy, which stands for property options for pensioners and investors. And this is a very interesting strategy whereby instead of buying the house now, you enter into a contract with a homeowner, usually a retired person, to buy it later, but at today's market value.

And so I guess you get all the capital growth but without the headaches of managing tenants and all that kind of thing.

Absolutely. So he's a very successful buy and hold investor like myself as well. He's also a property developer, which I know you're interested in, John.

Yeah, I'm definitely interested to hear more about this development to hold strategy. I know he's doing this in areas that are predicted to grow, like holding the developments instead of selling them. Bit of a hybrid really.

Yeah, look, he's a really smart cookie and if that wasn't enough for you. He also teaches would be valuers at TAFE how to value properties as well.

And he's an author.

He is. Is there anything that this man cannot do, John?

I don't think so.

So please put your virtual hands together for today's very special guest, Peter Kalisos. Peter, thank you so much for joining us.

Thank you, Jane.

Peter, you are a very successful property investor yourself. Can you just save us all some time and just tell us the magic formula for property investing, please?

There are formulas, but it's not just one. Like you make money in property in a different way to. I do. And a number of my past students, they make money in property in a different way to me and you. So there are a number of different formulas that you can follow. But the first step is. Well, you need to take the first step.

Yeah. And what's that first step?

Well, there's too much analysis paralysis.

Yep. You know, action.

Yep. So it's, you know, let's study the ABS stats, let's read this report, let's go to that seminar, let's do this course. And a classic for me was when I first started teaching in property at an adult education center, I had a student in my class who was interested in property. I happened to meet her 13 years later and she said, peter, I haven't bought my first property yet. Now I could have, you know, said something or had a go, said no, that's all right. But there's a typical, you know, somebody who's probably gone to a dozen courses, probably read 20 books but hasn't done anything yet.

And I think it's sometimes people just need, they have the knowledge or they have the access to the knowledge, but it's the confidence or even a guide or someone who says to them, you know, okay, so what are you going to do next? And often we don't have mentors or you know, property professors or people who are going to keep you accountable. So being part of a community that's like minded, that's kind of going. So where you're up to is probably a good thing.

And that certainly helps. Like one of the good things after the students finish the TAFE course is we have like an alumni.

Yeah.

So we get together every three months and I mean the end of the year is a Christmas function which is different. But the other times we'll get guest speakers in or I'll do a presentation so they stay in touch with each other. Because it's one thing to, to do a course and you know, that might take you three Months. But then what? But if you are with like minded people, then you are encouraged to take that next step. And for me that's one of the most disappointing things about students who do the course. They're just not willing to take that next step. You don't have to be a genius to invest in property, but once you've got that knowledge and the students that do my course, like they'll come to class for a total of seven or eight weeknights and plenty of support in between that time and plenty of support afterwards. But some of them just won't take the next step.

So that's probably, I mean if we moved on to the biggest mistakes that you've seen, that's probably the first one is the analysis by paralysis, having too much information and then not taking the first step of action. Is there anything else that you've seen? People that have the big mistakes, what would they be?

Going to a seminar with your checkbook.

Leave your checkbook at home.

That's right. Go to as many seminars as you want, but you leave your checkbook at home.

Especially if they're trying to sell you a house at the end of it, right?

That's right. You know, so often I see, I hear people when they ring up and inquire about the course or at the first one or two lessons when we ask, you know, so what's your experience in property? You know, a lot of them will. Not a lot, sorry, not a lot of them. But a number of them will say, oh yes, I own an apartment in wherever it might be. And how did you come across this apartment? Oh, I went to the seminar and I bought off the plan. And after the first hour of the course they realise, geez, maybe I shouldn't have done that because I teach things like the value is in the land. You should put most of your money into the appreciating asset, which is the land, rather than the depreciating asset which is the build. You've paid a premium for something that's brand new the day after. It's not brand new, just like a car. Why is somebody going to pay you the same money? Thankfully, this time around, one of the students was able to sell their off the plan apartment before it settled at a profit.

It's unusual these days.

It is, it is. But he took on board what he learned in class and now he's looking for a period style home in an inner city suburb of Adelaide.

And I think the really interesting thing that you touched on there, mistakes that people make, is often I think that. That when I talk to people and they have made a mistake, you kind of have to acknowledge it and move on. And a lot of people get caught and go, look, property doesn't work. I bought a property, and I talk to taxi drivers all the time when I'm heading off to do courses. They go, what are you doing? I'm teaching a property course. And they go, oh, I had a property once and it dived, and they kind of give up. And I think it's often because they didn't have that kind of roadmap set out for them or they design themselves that kind of says, look, these are the kind of things appreciating asset, yada, yada, yada, add some value, create some equity. And.

And also, you know, your ego might need to take a hit and you might have to sell at a loss, but you also have to consider opportunity costs. Some people say, no, if I sell now, I'll lose. I'll wait five years. All right, because you hope that in five years time it's worth more. Yeah, but imagine if you took a, let's say a 10 or 20 or $30,000 loss today, put it into a better asset, which actually grew much more in value. So it. It is very disheartening for people who get sucked in by education seminars, which are just cleverly disguised sales pitches. But. Yeah. Yeah, that's right. Well, there's only, you know, nobody's perfect. We all make mistakes in life. Admit it, learn from it.

Yeah.

Don't do it the second time. Learn from it. Move on.

And that's what I say, my renovation students, which is, you know, review your renovation at the end, repent, because there's going to be mistakes and then just move on, you know, because if you don't learn from those mistakes, then you just become like the next person who's going to. And you're going to make them again and again. So what about you? Have you personally. I mean, I know you're an active property investor. Have you personally made some mistakes?

Yeah, look, my biggest mistakes are selling property when I shouldn't have.

Yeah.

I mean, we're all geniuses in hindsight.

Yeah.

Oh, you know, I should have kept that because, you know, three years later, the price doubled or whatever. But, you know, I had lots of property 10 years ago, decided to sell, and, well, I have four kids. We live in a lovely house. So we've put it all into the children and to the house, and now we're getting back into it again. But I think to Myself, if I'd kept all of those investments, you know, I would be a lot wealthier than I am today. But then I'd be living in a crappy home and I don't want that.

No, sometimes you make sacrifices for that.

Period and other property people would say, oh, Peter, you should have kept your investments. But there's more to life than money.

Ah, exactly, exactly. Which is where we're always trying to get to. Look, I reckon the true commodity for the wealthy is time.

Oh yes, very true.

I just worked towards having more free time.

Very good.

So how did you get started in property?

I bought my first investment. It's a very interesting story. Even though I grew up in a real estate family, my father was always telling me, you should buy a house, buy a house, buy a house. But I was a young lad, I'm not interested in buying a house. I want to go out and play football and, you know, chat with the girls and do that sort of stuff. So I didn't buy my first investment property till my late twenties. But I wasn't the best saver in the world. I mean, we had our own home, but that was it. But I knew, I thought I knew a bit about property. So I went to my brothers in law and I said, boys, I have this renovation, you give me some money, we can fix that up, sell it, make a profit. Now we're going back 30 years, right? So I said to them, if you each give me $6,000, we'll buy this house. That'll be enough money for the deposit and for some simple repairs. We'll get planning approval to put two of the back and then we'll sell it. But I never had $6,000, so I had to buy, borrow the $6,000 from one of them. And that worked out well. In the end they gave me $6,000. By the time we had bought and sold, they got their $6,000 back plus another $6,000 on top.

Nice return.

Very nice return. 100% return on equity. I think we made about a 20% return on investment. So that was my first one. Then we bought a group of three units out in the country. Again, country is cheaper, so we were able to afford them. And so now we're getting into the late. Sorry, into the early 1990s when it was much easier to buy positively geared property. So we bought going back a long time now. Then I bought a house that we. Where the agent was selling it as keep the house and cut off a block. I worked out you could keep the house and Cut off two blocks. So I put in an offer that day.

So you sold the blocks and kept the house?

Yes. Yep. Then bought some units, groups of units. But then as more and more kids came along, we need bigger and bigger houses. So, like, we extended and renovated our original house twice, and then we had to go buy a bigger house. And so it just grew from that. And yes, I should have listed. If I made another mistake in property is I should have started earlier. I should. I started in my early 20s rather than my late 20s. But you know what? We're all geniuses in hindsight.

Exactly. So I guess the, the thing that's always intrigued me when we've had a chat, Peter, is you've. You do teach, you know, the, the very much the methodology that I agree with. The low risk, find value in the market. When you buy, add value. Cosmetic renovations, hold the property. But you yourself have actually done some pretty interesting things. You've done developments, and you teach a development course, a workshop even. You make people do the work.

Yeah. So unlike a lecture where you just sit back and listen, you actually have to do the work and some homework, which is challenging. Yeah. New to people that haven't done it for 30 years, since they were in high school.

So your developments, you've. You've kept those. How can, can you give us a bit of a summary of those?

And again, you know, one. If I, If I can cut to the chase with the property development workshop, what a lot of the students will learn is a lot of the time it's not worth building because the value's in the land. You know, if you can do the subdivision and sell the land, percentage wise, you'll make more money than if you.

Build the house and have a lot of a year less stress as well.

That's right. And I say to the students at the end, you know, I know you've spent all this money doing the workshop and you've come to class all these nights, but in the end, I hope you realize the money is in the land I have built. Cause I have kept. I have never built to sell, but I've built to keep. And keeping brand new property is great for the depreciation benefits and the tax, but you should never be buying property just for the tax benefits. But let's say in my example, development cost me $400,000, but the whole project is worth 480. So my tenant pays me rent based on the fact that the whole thing's worth 480, but my mortgage is only based on the fact that it cost me 400. My depreciation is based on that final cost of 480. So you know, the tax benefits have been fantastic to me. I wouldn't encourage people to go and buy brand new but to build it so you keep the developers profit. And what I teach in class is 20% gross profit.

Good.

That's a very good way to start a portfolio because you don't have so much of a negative cashflow actually if you're smart with the depreciation benefits, it's probably neutrally geared, doesn't cost you anything.

The key to your developments and we've talked about before is that you target where you buy them as well. So you put all of that knowledge and research that you teach to place.

So if you're going to build and sell it automatic, it almost doesn't matter where you, where you do it. Providing the number stack up. You can do it 2Ks from the CBD or you can do it 22Ks from the CBD.

As long as there's a market who wants. That's right.

But if you're going to keep them, you want to make sure you build in an area that is either up and coming or is on the upswing of a property cycle.

So this 20% profit, gross profit, yep. Tell me, is that across two units on one title, four units, six units, what are we talking about? Everything.

So if we're talking about the mum and dad investor, probably would do one into two, maybe up to a one into five or six. I would aim for a 20% gross profit. If you're doing a larger project you would expect a greater return because the greater the risk, the greater the return that you see.

And from a lending point of view that's what the banks think of as a minimum Anyhow, they want to see 20%, you know, otherwise I mean 10 or 15% might feel like a lot of money to mum and dad investors. But the reality is that, you know, the banks have a lot of experience in what works and what doesn't and contingency cuts. And they want to save 20.

No, because you know, part of your role is to lend money or find borrowers. If you're doing four or more or three or more.

Almost impossible to do residential.

That's right, it's a higher interest rate cause it's a commercial deal. So the banks see the risks as well. The other thing I teach in class is not just the 20% gross profit. You do a scenario analysis so you Hope to make 20%. What's the worst that you're going to do, what's the best that you're going to do? So you're not just focused on one particular number. And I say to the students, you might have two particular developments that you're interested in, but in one of them, in the worst case scenario you would lose money, but in the other one, in the worst case scenario you wouldn't lose any money. But in the best case scenario you may not make as much money.

Minimum downside, minimize the risk.

Nobody ever went broke making money.

No. And we like that. Now you also have done something quite innovative with an option.

Ah, yes.

Now it confuses me. I have to, I've got to put my hand up to that. But it's not a typical option. There isn't. Tell me, can you work this?

One of my lecturers in the TAFE course who's a property lawyer, he and his business partner have come up with something called a poppy. So it's property options for pensioners and investors. So basically I have the option to purchase a pensioner's house at some stage in the future. So I pay the pensioner a certain amount of money every month and that continues on until they either leave the house or go to retirement village or they want to sell the house and then at that time I have the option, but not the obligation to buy the house.

And do they have the obligation to sell to you because you have the option?

Yes. Yeah. So I'm number one, cab off the rank, just to give you an example. So if I've bought a period or character. Sorry, I've got an option on a period or character style home in a suburb in Adelaide called Unley. So for those of you that are interstate, you imagine that you have an option on a property if you're in Melbourne, in Toorak, or if you're in Sydney, it's a period style home in Mosman. So very expensive, nice area. So for me, I've ticked a number of boxes already because I'm in a great suburb and I got the great.

Type of property and the typical property for the area.

That's right. So the reality is, as an investor, I didn't want to pay the equivalent of one or two million dollars to buy the property and then get a measly return. So for me, the bottom line is I can reap all the capital growth without the hassles and without the loan.

So it's not, it's not taking your borrowing capacity, you haven't had to put a huge deposit down. So just that option the benefits to you that you have the right to buy in the future, have you agreed on a value or how do you actually determine the value?

So I buy it at the value at whatever it was when we signed the agreement. So for me, the longer they live.

Live there as opposed to live.

That's right. The happier I am. Because if they were to sell it now, which is only two or three years after I got the option, yeah, I'll get some growth, but not a lot. But if they move out after 15 years, that's even better for me because in theory the property would have grown even more in value. And it might sound strange, but for me the greatest advantage is I don't have any tenants, I have an investment property, but if the hot water system breaks down, it's not my problem. You own the house.

Amazing.

I don't have any insurance, I don't have any land tax, I don't have any of that. And the pensioner likes it as well because basically the money that I'm giving them is an additional 50% to their pension.

Wow. So how do you work that out?

So the cash flow is worked out. If an investor was to buy it, what would be their cash flow over a 30 year period? So generally speaking, an investor would be negatively geared in the beginning and then positively geared so as to keep the cash flow the same for the pensioner. They've averaged it out and said, it'll cost you this, it'll be this much every month.

And how does that affect their pension?

It doesn't. That's why they love it. You see, it's like, you know, if somebody was to increase our income by 50%, our life would change. Which is exactly what's happening with the pensioners that live in the house.

So they get to keep their home where they want to be. Sometimes when people retire asset rich, no cash, no super. Especially if they've done it tough or they're older and so now they're actually getting some income to help them stay in the home, had the lifestyle that they want and without the burden of worrying about finding another property or moving out. So how do you engage with their family?

Okay, so one of the stipulations in the contract is they must consult their family so that the family is fully aware what they are doing. Now, the family may not agree, but in the end it's up to the pensioners to sign off. But they must have spoken to their family about what they're going to do. And for most children, they would say mum and dad you enjoy yourselves, you know, we'll take whatever's left over, that's fine. Because they understand that their family, that the mum and dad are cash poor. There is in the suite of options they provide, there is a family poppy. So the children can formalize the arrangement. Just like I'm an investor, I don't know them. I have a poppy. There could be a family poppy. So it's formally documented, one or more of the children will give the parents an income stream, a monthly amount, whatever it is, in return for the option to purchase the property at some stage in the future. So that can be done as well.

Fabulous. Now, your option payment that you're making, do you get any deductions on that?

No. And I mean there are some negatives. So now I'm not an accountant.

No, me neither.

I should have found this out before I came on air. But my understanding is it'll come off the capital cost of the building because it's a capital. That's right. So it's a capital input rather than making a loss on an annual basis which you can claim every year. The other negative is I don't decide when I take up the option. It's up to the pensioners that are living in the property. But for me there are far more advantages than disadvantages.

And even if at that time you can't find that you can buy, you could do potentially a back to back settlement. So you could pass on that.

I don't actually ever intend to buy this house, I'm just going to pass it on.

Okay, fine.

So let's say in 10 years time it's doubled in value. I'll say, you know, I'll pay you what we originally agreed on and then I can pass it off to the next person at an increased price.

Tell me this, the excitement I'm getting here. So one of the benefits that I see also is that, that let's say 10 years worth of capital gain is not currently under our tax regime taxable because it's on the person's home. So that, you know, you might be buying a million dollar or having an option to buy a million dollar home that in 10 years time could be $2 million. You have the option to buy it. A million dollars they have, they're selling the property. So effectively they're not paying any capital gains tax because it's their home. But in addition to that, the purchaser is getting a $2 million property for a million dollars. And in your case you'd be flicking that on and maybe not having to pay stamp duty twice.

Either I pay stamp duty on the option, but because the option is worth so little compared to what the house is worth, like the stamp duty is in the tens, maybe $100. Cause I pay that option fee every year. So far as the tax is concerned, if I'm claiming a tax benefit at the end, that must mean that I'm paying some sort of capital gains tax at the end. Again, I should have consulted my accountant about that. But for me, you know, to get all that capital growth without having the tenant hassles in the meantime, or paying.

Interest and paying all those, don't have.

To approach the bank. No land tax. Tenant has no.

It's definitely a twitch.

It is.

Now, I know that you have to deal with someone who understands these contracts and there might be someone that you could recommend that you've dealt with Poppy Australia.

So if people Google Poppy Australia, they can popi. Yep. Poppy. Yeah, P O, P I. One of the gentlemen that runs it, Sean Ryan, he's a. He's a lawyer. He's a. He actually lectures in my classes back in Adelaide. Very nice bloke. And then he's got his business partner as well, Brendan. But I think it's a great product. I don't know what people's thoughts are on reverse mortgages, but I personally hate them. Because for the poor pensioner, even if you don't borrow any more money, you still owe more as time goes on because of the compounding effect. And in this way, you own your own home, you don't have somebody else over the top of you telling you what to do and you're not worried about spending your money. Here's this person giving you some money. Life is pretty good.

That's great. Now, do they get an upfront as well?

Yes, an upfront payment plus a monthly option for that.

There's a lot of positives.

There is. So it's all very legitimate, which I like, because I would never be involved in anything that was unethical or immoral. But the way I'm doing a social good, because I'm the pensioner's life has almost changed completely. And for me, you know, I can, in theory, I will capitalise on all that growth without having all the houses in the meantime.

Exactly. Well, obviously, Peter, you're well positioned to talk about many, many things. And you've written lots of books as well. Well, I know two books anyhow. The Top Australian Suburbs, which was great. And you co authored the Property versus Shares book. Now, I personally read it and think that property came out on top, but I think it was a good equal match. So I don't know what kind of feedback have you had about this? Because it's always a conversation of people who are looking to invest their money. They want to know, is it property or shares? And the market's always changing.

I wrote the book with Zach Zachariah, who lectures in the share investment course for me at tafe. And look, from a commercial point of view, you couldn't say that property won or shares one, because then you only either get property investors buying it or share investors buying it. So again, if you cut to the chase, the answer is you need both. But in the real world, you need both because diversification. You and I love property.

Right.

But if we wanted some cash tomorrow. You're not going to sell your property tomorrow. No, but with our share portfolio, we can get the cash tomorrow. And the beauty is we don't have to sell all of our share portfolio like we have to sell all of our house.

Exactly.

So there are advantages and disadvantages with both. So if you can have property for the fact that you can gear against it far more than you can for shares, it's less risky. But if you can have some shares because you can liquidate them very quickly, then you have the best of both worlds.

Good advice, good advice. Well, let's move on with. I've got a list of questions I hope I can get through. But I guess, I guess the thing for me that I think the listeners would be interested in is obviously you've got a lot of experience and you've taught a lot of people. I'm really trying to, I guess, lock down the keys to success and what people can do to kind of follow a roadmap or a process. We talked about taking action. What else would you add to the list of things that people would do to be successful in property investing?

Okay, so to be successful could be measured by a number of different ways, but the first step is to set your goals. So somebody might consider success as renovating profitably on a regular basis, whereas another person might see success as owning three rental properties. And whether you renovate, whether you buy and hold, is dependent a lot on what your goals are. So do you want to retire richer, retire earlier, earn some extra income, maybe earn some extra income on a regular basis to work part time or give up your day job? Because if you want to give up your day job, buying and holding investment property is not going to do it. Not unless you want to give up your day job in 30 years time when the mortgage is paid off. If you want to give up your day job, you either have to renovate regularly or you have to develop. So work out what your goals are, which is actually much harder than working out what the strategies are. So work out what your goals are. Go see your mortgage broker to work out exactly how much you can borrow based on what you own, what you owe, what you earn. Go see your accountant. So basically what I'm getting to here is you need a team of people to help you.

And qualified, experienced people as well.

That's right. I mean, there's plenty of free stuff out there, but what I find is a lot of that free stuff has a vested interest in being out there. So you might have to pay for the advice or pay for the information, but that's just a reality. If you want to make money, you have to spend money.

Well, you wouldn't go to a free doctor, really, would you?

I certainly wouldn't. I haven't heard that one before. That's good.

Can I use that?

You can.

I just came up with myself. And I guess the thing about what you're saying around goals and giving up your day job, the fact of the matter is that if you're going to borrow money, you're going to have to have an income source anyhow.

That's right.

So, you know, I speak to a lot of people who come along to courses who want to give up their job on Monday. It's like, hey, hey, let's get you some money first and make sure you can pay it back. You know, so you really need to, you know, be it developing or renovating profitably, you need to have, you know, at least two years of being able to do that to show that you have an income to support you giving up your job as well. So it's not a. I think the thing around goals is that it's fine to have a goal, but you need to have the time frame.

That's right.

And the plan to achieve that.

That's right. As you say, you're not going to give up your day job the day after you finish the course. But realistically, what's going to happen is you're going to have to say renovate or develop while you're working full time. And then a short period down the track, if all goes well, you can work part time. And then when you have a lot more confidence, and more importantly, the bank has confidence in what you're doing. All right, then give up your day.

And just confirming the reason that you say renovate or develop is that you're actually maximizing the equity or bring forward the equity that you'll be getting if you just buy and hold for 30 years. So you're trying to maximize that return.

Buying and holding investment property is the best way to make money in property, but it is not the only way. There are many different ways to skin the real estate cat and for me I just don't have the patience to buy and hold. That's why I've, in the early days we've renovated, I do developing as well. Yes, I could have been, you know, much wealthier than I am today if I held all those properties. But I can't just sit there and do nothing. You know, I'm teaching people how to make money and I've, I practice what I preach because I've made it in a number of different ways. However, I do go back to what I said at the beginning. The best way to make money in property is to buy and hold. But that's not the only way, especially if you want to give up your day job or work part time.

So it's the active investment strategy rather than the passive investment strategy that's going to allow you to supercharge or bring your goals being achieved sooner.

That's right.

So goals, setting the goals is one thing. What else do you see successful people doing?

Setting the goals, knowing what their strategies are, mixing with like minded people. Some might have mentors or teachers or whatever you want to call it, so they have support around them. Because I mean property might be the number one thing in your life when you enroll in a course, but it may not be the one number one thing in your life five or ten years down the track. But if you want to have a great lifestyle from property, you're going to have to do it for more than five years. So you need that support around you, whether it's other like minded investors or somebody who knows a lot more about it than you do. And that way you've got a much better way of achieving the success because it's not going to happen overnight.

It's interesting, it's one of the things we've got a private Facebook page and the members in there. A lot of the feedback I get message on is it's remarkable to see there's other people who think like me. I thought I was the only one. You know, I think often we kind of go through an education phase or a self realization phase when we go I need to get better educated, I need to find you Know a messenger who's done it before, someone who I can, I can have a look at their information. But I also want to talk about this for someone and often you don't have the chance to do that. When you're reading your book and I find myself, I sit there going, gosh, this is such a good strategy. And I highlight in a book, I go, who can I talk to about it? I know my husband's going to go, I don't know what you're talking about, Jane. So it's nice to have that community. And sometimes you do just have to start with a team of professionals because they're the ones that you can talk to and you know where their information is coming from too.

That's right. And if those professionals are happy for you to learn along the way, then that's the best way to go rather than paying for somebody to do it each time. Learn as you go along the way.

Okay, so tell me this. I'm going to ask you now. I guess the thing that I'm really interested in is how you've practically seen people put into place some of these things. The goals, the strategies, finding a team and finding a community they can talk, talk with. You mentioned a lady earlier that had done a course and 13 years later still hadn't bought a property. You obviously have some success stories too of your students. Do you want to share some of those?

Yeah, look, number one is you need a positive mindset. You know, it's one thing to come along to class and listen to what's being said, but you need to be able to put that into practice. And if you have a positive mindset, then you're more likely to do that. And thankfully a number of my students have done that. They may come to class not feeling that confident because they're inexperienced, don't have a lot of knowledge, but they do the course. They're surrounded by other like minded people, not only in class but also after the class is finished. And then they've gone on to buy a number of properties or they've renovated and some go on and develop Like, I wouldn't encourage anyone to go from knowing nothing to developing like, cause developing is the riskiest scares me.

I'm not that brave.

So I think a positive mindset, a willingness to learn and a willingness to listen.

So a willingness to learn and take action. And you reference the fact that you've got a popular course because there's no exam. Do you find the fact that you've got a workshop now and there's homework. Do you find the fact of actually making people go through a process of having to deliver and doing the work is sometimes the biggest issue we find people fall over.

Yeah, because the Fundamentals of Property Investment course is just basically a lecture. Sit back and listen, but by all means ask questions. But the workshop is very different. The workshop, I'll provide the resources, the online stuff we get in experts, they're here to help you. And yes, you're going to have to do some homework. But just like school, if you need to hand up your homework and you haven't done it, you just might wag school so you don't come to class, which is very unfortunate. And I've seen it. Those people who are willing to put in the effort and probably because they have the passion for it, I can see that they are going to be the successful ones. But those who just sit back and just want to soak it up and let maybe other people do it for them, it's just not going to happen.

It's kind of like the, you know, a lot of. A few years ago the secret was a big thing. It's like if I, if I will it, it will happen. And they kind of missed the step in between was like, well, you can will it, but then you did the work and then it will happen. Well, and I guess the other thing is that I find with some of the students or people that I talk with, you know, they have a positive attitude, they have an abundant kind of mindset. You know, they've got themselves positioned and often the inexperienced people are more successful in getting involved in doing the work. Because when I speak to experienced investors, there's sometimes there's a bit of not shame or embarrassment around the fact that some of their portfolio, they've done the work now and the analysis and they go, in actual fact, these are dogs. Some of these are dogs. And I don't want to put my hand up and say I've got 15 properties. In actual fact, five shouldn't be there. And I think sometimes you have to, as an investor, you have to take that on the chin and go, you know what? Probably going back and reviewing my portfolio and seeing where it is and doing the same research before I move forward is one of the biggest steps and acknowledging the fact that you make some mistakes.

I had a classic example in the, in the property development workshop that we did where there was a student in there who had already done two developments and I can't remember the numbers exactly, but if I just give you an example, so let's say he bought a block of land and he built four and he sold them. And I said in class, you'll make more money just from subdividing the land than you build. He said to me, pete, that can't be right. I've done it twice. I've made very good money. I said to him, you go back and check out your spreadsheet, take out the building costs and all the time and just look at the percentage profit. He came back the next week, said, peter, you're right. You know, I made, I think, an 18% gross profit with building, but I would have made a 20, 23% gross profit if I didn't actually build. So the willingness to say, either yes, I've made a mistake, or I could have done better, then you are willing to learn. But just because you come and do a course and you may have done some investment before, doesn't mean you know it all. Like, I mean, I've been. I grew up in a real estate family cause my father was a real estate agent. So I remember going out with my father as a young lad and helping him with renovation projects. But I learn new stuff every day. You know, I'm not ashamed to say that even though I'm supposed to be the property professor, I learn new stuff about property every day and I'm happy to listen to other people's point of view and take it on board. I may not agree with everything, but you need to be open to new ideas. And as you said earlier, you need to act upon them.

And I think, I mean, you know, often when. And I know when I was asked to write my book with Wiley's, I was like, I spent a year going, look, seriously, there's nothing new in property that I can say. And they're like, they want to know your story, you know, And I think that the fundamentals of successful property investing, there is nothing new. But there's, as you say, there's always some twist or someone doing something a little bit different or a change in the economic environment or, you know, I'm actively looking at crowdsourcing, you know, information at the moment. But, you know, there's so many little twists and changes that you can apply. But I think the fundamentals that you've laid down of successful, you know, starting the goals, know your strategy, have a team, have a process, take action, regardless of what your strategy is, you put that in place in property or any investing, and you're going to be successful.

That's right.

Okay, so tell me this. Where You've seen people in the past apply some of your learnings or yourself. Is there some, you know, we kind of touched on some of the off the plan and, you know, buy new information. But is there some big traps out there that people should try to avoid?

For me, it's be wary of property marketing. It might be disguised as education, but often it's not. You know, read as much property stuff as you can, go to as many seminars as you can, but don't think you have to buy straight away. Go home, think about it, let it sink in. Speak with some other people that may know more about you, about property or about the tax implications or whatever it might be. So we've talked a lot about analysis paralysis, but the other one is, you know, jumping in too quickly, which is being sucked in by clever marketing. And before you know it, geez, I've just bought this off the plan apartment. Oh, yeah, it'll be all right, It'll be all right.

But time will heal all wounds, right?

And in property, it does. Generally, time heals all wounds. But you might have to wait a very long time.

You may not have 30 years to achieve your goal. And so it brings me to paying for education. I mean, obviously you're in the business of educating people and people pay for that and you're paid to deliver it. I know when I started off I was looking for free information. I just didn't have the cash flow to put into paying for education. And now I look back and realise that the time I kind of missed being in the market, I could have jumped forward if I had.

Look, and, and it does seem a big hurdle for some people. Like, you know, most property courses are going to be in the thousands. You know, the TAFE one that I teach is 2000. The property development one is about 2000, which, which is a lot of money. But when you consider the profit that you can make, it's not, what's $2,000? If you've learned how to do a project which can make you $100,000, and that's not. And that doesn't mean you have to come back the next time, spend another 2000 and make 100, you only have to spend it once. You know, what's that biblical saying, Give a man a fish, feed him for a day, teach a man to fish or a woman, and they can eat forever.

And I think, you know, I know for me, in the beginning, the hurdle of the price was a big thing to get over. And as you say, you look back in hindsight and you think sometimes you look at you, oh my gosh, I would have bought in this place and $50,000, you know, spending, spending 500, 1,000, 2,000, $10,000 to save it and or buying in a better place, that it allowed me to grow by $40,000 a year. You know, it's something I can't communicate because until you've been there and look back, you can't see it.

That's right.

Now Peter, you lecture would be valuers.

As well, property valuation. Yep.

And we have, oh gosh, we have a lot of people doing deal analysis all the time and doing comparison. There's a bit of a mystique around who the valuer works for, how they do these numbers. Sometimes we even wonder where they got their qualifications from when we look at some of the valuations. I'm just wondering from a deal analysis point of view, if people put on their valuation hat and they try to be a valuer and go out and have a look at a property, what should they be looking at?

Okay, so first thing in valuation, like with real estate is location. All right, so you're looking for properties in the same area. However, there are many suburbs around Australia where you can be in the same suburb, but they are very two different localities. One might be full of housing commission, like if we go to Flemington for example in Melbourne. Right. So there's the section near the Flemington flats which you probably don't really want to buy next to, but then there's the other section where there's lots of nice period style homes. So it's not just getting the same suburb, but it's getting the same locality. Now if you can't find enough properties in your particular suburb, then it's okay to go to the neighbouring suburb. But again, it needs to be similar in nature. Like if the property you're looking to buy is surrounded by government housing, then you need to compare it to other property that is also surrounded by government housing. So in theory, once you've got your location right, then we're looking at the size of the land. So if you're comparing apples with apples, they need to be similar sized properties. Then the next step is similar sized house. And in Melbourne and Adelaide and Sydney, the year the house was built, I don't necessarily mean a specific year, but period style homes are very important. So when you're looking at houses like a 19, if we have two houses next door to each other, one was built in 1920 and one was built in 1980 and they're both the same size. The 1920 house would probably sell for a lot more than the 1980s house. So you need to keep that into consideration and the condition of the property. There are many other finer points, but from a, you know, somebody who's trying to do their own valuations on their own property, location, size of land, size of house and condition of house.

So you can't compare a two bedroom weatherboard house that's surrounded by housing commission. I think you're getting a good deal if you're comparing it to the median in the area. And the median area is a three bedroom period property on the other side of the street.

That's right. And as somebody who's in mortgage breaking, who sees a lot of valuations that come across their desk, there's market valuation, but then there's also valuation for mortgage purposes. And I'll give you a classic example of a couple of students of mine who were buying in a seaside suburb in Adelaide called Christie's Beach. So there were two properties for sale. One was on 850 square meters of land, one was on 750 square meters of land. Same suburb, very similar locality. The one that was on 850 square meters of land, the house was almost unlivable. But the one that was on 750 square meters of land already had a tenant in paying rent. The bank valuation came back on both. The one on the bigger block of land came back at $340,000. The one on the smaller block of land came back at 350. Because when the valuer is doing a valuation for the bank, it's how much can I get for this if I have to sell it in four weeks time at fire sale? Now, the 850 square metre block had much more development potential, but the bank doesn't have time to go get planning.

Approval and they don't care about potential.

That's right. And interestingly, the one on 850 square meters had a bank valuation of 340, sold for 400 at auction. The one that was on 750 square meters of land had a bank valuation of 350, sold for 361. So the point I'm trying to make is bank valuations are not necessarily market value. The definition of market value is what could this property sell for if both parties are knowledgeable and nobody is desperate to sell? In plain English, that's what it is. But for bank valuation is what can I sell this for in the next few weeks if I have to? And because the house was unlivable, the price has to come down.

And I'm seeing on valuations now there's the, you know, the environmental, the risk analysis, the risk assessment is really, I'm having conversations regularly with lenders and valuers over a four rated environmental rating risk, which might be. It's in a bushfire zone. It's like, well, every house in the Blue Mountains is in a bushfire zone. You know. And so those kind of risk ratings really have come to the fore in the last couple of years, haven't they?

And a lot of society is very wary of risk. And in particular, valuers, their insurance has skyrocketed. So they are very conservative. Yeah. And so banks who are also lending the money are taking particular notice of those risk assessments. And anything, I think it's anything greater than a rating of 3, banks have a second and third look at.

Absolutely. Now, Peter, you did write the book top hundred Suburbs, and I know you're in doing research on all these things all the time. You can rattle off suburbs in every state so everyone can really relate to them. If people are listening to this in a year's time, two years time, three years time, rather than making it specific to now, I'm really interested in what you've seen in your research over the last 10 years or so of the areas or the common traits that these top suburbs have that people can potentially look at for themselves.

Yep. So for me, the key is proximity to the CBD or proximity to the scene. A decent land component doesn't mean a huge block of land because like 100 square meters of land in Toorak is going to be worth more than a thousand square meters of land in Caroline Springs. So it's buy something with a valuable land component. Even if it's a unit, that's okay. If the unit's 60 years old, the building itself is not worth much. But what you're paying for is the land. So the rule of thumb I teach in class is 70% of what you spend should go towards the land component. And generally you do that if you're buying an oldish type of property. And the common theme running through many of the suburbs is gentrification. So if I wrote the book 50 years ago, suburbs like Richmond would have been in there. So Richmond in Melbourne, Balmain and Paddington in Sydney. Now, if you pick up the book now, you'll see other suburbs that I think are going through that gentrification process or about to, like in Melbourne, Footscray, West Footscray, Yarraville and Seddon are a long way down that Track, but certainly Footscray West Footscray just starting, Maidstone as well. We go to Sydney, places like Enmore, Erskineville or the areas just starting to gentrify include say St. Peter's, Sydney in Adelaide, places like Torrensville, Thebarten, seaside suburbs like Christie's beach and Portnalungo. Because gentrification, basically gentrification means these suburbs were down and out areas. If we use say Richmond and Melbourne where it was full of crime but over time the criminals move out or the bad element moves out. And those who are working in the city, the white collar workers on a white collar wage are attracted to the nice character. Well they're not so nice when they move in. They have to renovate them and they're happy to pay the big money to either rent or buy there. And the fact that everyone else is fixing up their houses lifts up the prices of everything in the area. So I think being able to spot areas that are gentrifying is a key to long term buy and hold.

It's interesting. There is a period of time there when the bad element moves out and there hasn't been the opportunity identified by others. And there's this parochial kind of mindset of Newtown Paddington, you know, down and out and you wouldn't buy there. And that's really the time to get in, isn't it? And those people who get in then when it's, you know, your friends and family are saying oh, you're not going to be living there, are you? Is when you should be buying because in 10 years time they're going w, you know, you were so lucky.

Yeah, isn't that amazing? The harder you work, the lucky you get. Isn't that amazing?

That's a good comment. I agree completely. Okay, I'm going to now hit you up for some resources that you use or you teach. I mean preferably free. But some websites, where do you go to for information? Where would you recommend people, you know, start their research?

So the ABS website is good. I'm actually writing an academic paper at the moment and I'm using the ABS website extensively. However, the ABF's website over a long period of time reports facts slightly differently. You know, like it says, might say in Adelaide in the year 2001 there were this many people living in it and then in the year 2011 there were this many people in it. But what does Adelaide mean? Is it the statistical division? Is it the greater Capital City statistical area? So you have to watch out for those anomalies. But generally if I go to the ABS website you go to the left hand side, click on census data and then you go to Quick Stats.

So Quick Stats is my go to.

Place for me too. If you want more detailed information you go to the next one down which is Community Profile and you click on that and you get even more detailed information. So that's one place that I go to because I'm interested in developing. This one's not free but it's pretty cheap for what you.

Okay, share it in there.

It's called near map.

Okay.

Nearmap.com it cost me $100 a year but unlike Google, basically Near Map has maps and allows you to measure distances, measure area. But unlike Google which is satellite photography, this is aerial photography. So you get much better clarity. Yeah. So from a developer's point of view.

So you're using that to see distance to train stations.

Area of land.

Area of land, yeah. And is that Australia wide?

Yes, that's Australia wide but it has historical photos. So you can go back a year, a year ago and have a look at the map as what it was like then. Go back two years, three years. I think it might go back a total of four years but it has might have 15 or 20 series of photos and that's a good way to see what sort of developments having in the area because you'll see a change in the roofs and you can see if there's lots of new roofs in your photo or maybe there's lots of vacant blocks of land from time to time which means there's new development going on. So Near Maps I like, I use RP data extensively.

How do you use that? There's so many different things that you can use in RP data.

There is? Alright. When my students do the course they get RP data access. Now if you RP data access on its own cost you a lot of money, like it's $2,000 a year but again if you're going to make $100,000, what's 2,000? But so what I look for is how much if I'm looking at a particular property. So I've looked, I've seen it on realestate.com so I've seen it on realestate.com Jesus, this looks good. First thing I do is go to RP Data. How much did it sell for and when did it sell? Because if they bought it last year and they're selling it again then why is that happening? All right. The other thing that RP data has is an on the market history. How Long has this property been on the market for.

And rental.

Yes, rental. So it has a lot of information. It's not free because you did specifically ask me for free ones. But there is free info on RP data. If you go to their. You can get suburb profiles or if you just go to the rpdata.com homepage, then you can get information on what's happening in all the different capital cities as well. So they're useful sites. The Australian Property Investor magazine has a online newsletter, Profitable Small Developments that comes out every month. I subscribe to that. Google Earth.

Ah, tell me about Google Earth.

Ah, well, in Google Earth, I mean Google Earth does wonderful things, but so far as South Australia is concerned, you can also download and I don't know the technical term here, but you can download data. So when you go to Google Earth you can see where the heritage listed properties are, you can see where the proposed subdivisions are, you can see what zoning the property is in, what policy area it's in. Now I don't know if you can do that in other states, but it overlays it. There's a technical term, it overlays it onto Google Earth. It is. And that's free. Fantastic.

Well, I'm going to have to check out those overlays and Google Earth because I have to say that yeah, every I put my hand up and say that I bought a heritage listed area and it did create a few issues with renovation, but I knew it before I bought. So I did take into account. But yes, it's having that kind of information is interesting, especially the zoning as well. Changing of zoning.

And that's one of the things that I teach in the property development workshop and I act upon myself often. We can make money because everyone else thinks that you can only put two on this site, but you know that the zoning is about to change and you might be able to get three, four or five. That's where we can make the money. The other way you can make the money in any sort of property is because it's not a local agent and they're actually underselling the property. And often you were saying to me what holds people back? Sometimes people think if they can buy it for $10,000 less than the advertised price or $20,000 less, it's a bargain. That's a good buy. No, it's not. Not if they're asking $50,000 more than it was worth. But what I encourage my students to do is research, work out what it's worth. And if you see a property that comes on the market and your eyes light up because you think, hang on, it should be worth more than that. And you go to the home open and you've done your research, don't wait, make an offer that week because somebody else just as smart as you is going to make an offer sooner rather than later. But research is the key.

And I have to say also another mistake I've made is this seems too good to be true. I'm going to have to go and spend some more time researching this because obviously I've missed something and it turns out that it was just a really good deal and someone needs to get out.

And in all states you'll, except Western Australia, you'll get a cooling off period. So you can do your due diligence during the. If you're not sure, go get the building inspection, go see the surveyor or the lawyer or whoever you think you need to get. But secure it by signing a contract and then you can do a lot more of that research afterwards.

Well, I have to say we have got so much information here. I've been taking notes. I've got all these great new websites and things that I'm going to check out and I'm definitely going to check out those overlays in Google Earth. You can, you can bet that. So thank you so much for coming in and having a chat to us and I hope you come back again sometime.

I'd love to. Jane, thank you very much for the invitation. Always love chatting to you because we always go for a bite to eat in the lovely Lygon Street.

Carlton, you're on. Well, John, what did you think of that?

Yeah, that was great, wasn't it? I really like his approach. I mean, they're all active strategies that he's pursuing. But he's also got those safeguards in place. For instance, with the poppy strategy, he's in the blue chip suburbs that are predicted to grow. And the same with the developments that he's holding as well.

Yeah, that's what I love. He does a lot of research and even though these are more advanced strategies like development and options, he is playing the long game for capital growth still. And so he's building on the fundamentals that everyday buy and hold investing people use every day. So I like that he's looking at an asset. He's creating a higher and better use for it. He's investing in areas with multiple drivers of growth, not those one industry towns. He's doing the demographic research to establish that there's a demand for what he Wants. So these are strategies that I guess we've heard about previously. They're fundamentals, but he's got a bit of a twist on it. So. Yeah, I loved it.

Yeah, it's great, isn't it? And he said that buy and hold was, in his opinion, the best way to invest in property. But he said, but it's not the only way. And in his case, he can't just sit around on his hands, he likes to get in amongst it.

Yeah, he's absolutely an active investor, which is great. Well, let's talk about some of these active strategies. What did you make of the Poppy strategy?

Yeah, I think it sounds great. It sounds like a real win win for the vendor and the buyer. He has the exclusive option to buy the property at the time that the vendor chooses. So it can be in five years or 10 years or whatever that is. But he also has the option not to buy the house. So if he wants out of the deal, he can get out of the deal. And he's buying at today's price and not the Future value in 5, 10, 15 years. So I guess it's the growth over that time period where his profit lies.

Absolutely. He's kind of like locking in the future growth with today's value. But you know what the win win that I really love about it is the vendor, someone who's maybe retired and the only way that they can actually put food on the table is to seal up their home. And this gives them opportunity to stay in the home. They might get a lump sum of money up front, but he's paying them monthly as well, kind of an income which doesn't affect their pension. So I think it's really a good strategy. And everyone wins.

Yeah. If you were to put your mortgage broker's hat on just for a moment, is this the type of thing you could get financed for? Or would this have to come out of your savings or a line of credit or some other way?

Yeah, so let me have a think about that. So there's not actually an asset that you're securing against. It's an option so, you know, you're paying an upfront and it might be 5,000, $10,000 as a, you know, a kind of, you know, good faith option of entering into the agreement so that you can't, you know, borrow for directly or secure against. The monthly payment is just a payment that you'd have to make as well. So, you know, although in theory, you couldn't get finance just for that, you could actually use finance for it. So you could use your line of credit or obviously you could use your savings to actually make that initial contribution and then the ongoing fees and I guess just.

You probably should explain for people who might not know what a line of credit is.

Sure. So a line of credit is a different type of loan product that banks offer. So what most people have is the standard variable rate or variable rate interest loan. And this line of credit is actually usually different. Lenders have different requirements, but usually it's a 30 year, kind of like a big credit card. So with the standard variable rate, you're usually paying principal and interest. Obviously investors try to pay interest only and not have to pay the principal down and put that money on their home loan. But the line of credit is like a credit card, it's interest only. You only pay interest on what you use. So if you had $100,000 line of credit and you handed over $10,000 as this option FE, you'd actually only be paying interest on the $10,000. Now, obviously chat to your accountant, but you know, if this is for the future purchase of an income generating asset, the interest on that may even be tax deductible. So could be interesting.

And while you've still got your finance hat on, you compared the Poppy to reverse mortgages. So could you tell us what a reverse mortgage is?

Look, a reverse mortgage, I've only ever done a handful of these over the last 12 years and they are quite unusual and possibly with, I guess how the economy's going and the baby boom is number of those retiring in the future, there might be more and more of these. But essentially you enter into an agreement that the lender is going to take a certain percentage or, you know, give you a loan against the value of your property. They use a bit of that loan to make repayments and you have that money available to you. It's not an ideal situation. It can suit some people. You know, at the end of term when you want to kind of sell your property, you don't have a property worth $500,000 that you get the cash for. You might only have $100,000 left. And obviously those who are expecting to inherit that money often get surprised and a bit upset about it. So it's not a complete solution for everyone. Sometimes people want to stay in the houses. It is an option. But yeah, I think Peter makes a really fair point that this Poppy strategy potentially could actually be a better, fairer solution for everyone. But he also talked about developments in subdivisions and I know this is right up your alley. John. But he said percentage wise, when we look at percentage on return of an investment, the money's in the land, not the development. So I'm interested in your thoughts on that.

Well, it's an interesting point, isn't it? I mean, both of our current developments are going to sell above the price that we originally estimated in our feasibility, which would be pretty well in line with the capital growth that has occurred in those areas over that time. So that'd ring true with what Peter's saying there. But I can understand where his student was coming from. You know, you do all this work building the development and, you know, making sure they're right for the target market and only to find out that you could have saved yourself the trouble of building in the first place. So it's not kind of what you want to hear, but.

But we could probably get the numbers off you in a couple of months on what you could have done.

Yeah, that's right. Our last one will be sold in a month or two. So I'll go back and do the exercise and I'll let you know.

Okay, good. Well, we've been talking about your development in our community for a couple of months now, so I know everyone would be interested in seeing this, but we held to that, that the selling with the permits rather than actually doing the whole development yourself, you know, it's kind of one of those things that you kind of think, well, you know, I'm a developer, I develop where in actual fact, there's a lot of money in just the first stage of that.

Yeah, it's true. Lots of developers buy with permits in place and we do this, you know, and from a developer's point of view, there, there is a lot of advantages of buying with permits in place. For instance, you avoid the downtime and the uncertainty of lodging the DA or.

The planning permission, especially with councils taking years sometimes to approve things.

Yeah, that's right. And you might not end up with the original project that you'd hoped to end up with, which maybe, you know, you've got one less on the site or it's a different, you know, facade or whatever. We've certainly had that happen that we haven't ended up with the facade that we originally wanted, which actually affects the bottom line because you don't have that same street appeal. But apart from that buying with permits, the finance is just so much more straightforward. So it's just a standard development finance. You're not having to hold for a period of whatever. It could take up to 2, 3 years to get planning permission in some councils. So it's just a straight up development finance for the period of the build. And also lots of developers, particularly the builder developers, they need that throughput of work because they have the teams of guys that they need to keep working because they don't want to lose them to another builder or whatever. So they need to move from one job to the next and keep that momentum up. So, yeah, lots of reasons that a developer will pay a premium to have permits in place. So, yeah, good strategy. Don't do the build, just sell with the permits.

And I think that's a really good, great thing. I took from what Peter was saying is there's a lesson there for us is actually look for the opportunity and, you know, it might be fun to do a renovation and choose color schemes or do a development and, you know, put your own little stamp on a block of land, but if there's another option that's more profitable, then potentially you should take that, you know. So, I don't know, I remember going back a few years ago and we had this small mastermind for, I don't think it was four of our ultimate guide to renovation students. And one of the ladies there, you know, she came across this amazing deal and we all got really excited for it, but she said, I'm not going to take it because there's no renovation. We're like, well, it's always fun to do a renovation, but if you don't have to and you already got a profit, you know, why. Why go do all that effort?

Yeah, good. If no renovation, don't do it. Yeah, it's a means to an end, isn't it? The renovation is not the purpose of the exercise. So, yeah, if there's profit without it. Yep, all good.

Well, and that's another thing that Peter said. You know, he obviously teaches a lot as well and has a lot of students, and he was saying, you know, teaching's one thing and having that understanding and information, but taking action is completely different.

Yeah, it's interesting. He talked about there was people that did his course, you know, agreed with it, took it all in and at an intellectual level, accepted that it worked, but didn't kind of correlate to actually taking the action. And I guess this is the. Yeah, we see this too. It's the torment of the educator, isn't it?

Oh, my God, absolutely. And, you know, we're so committed to having 100% of people kind of take the information and become successful. And I remember I was talking to a lady on Customizing a course that I'd written to the US market, you know, and changing some of the terminology so it made sense. And she said, don't go to all the effort of writing a course just for us because only 5% of people read it all. So you could just buy this one off the shelf that I've already written because five other property educators in the US have done that and no one knows because they don't read it. I'm like, no, that goes against every grain in my body. I want people to read it and apply it. So, you know, education's a good thing. And you know, even free seminars, a good thing.

You had some stuff to say about free seminars. You know, go to as many as you like, but leave your checkbook at home.

Exactly. Good information. And you can always go home and think about it and come back and pay later. If it's genuine, they'll still take your money, won't they?

Yeah. He said he often comes into touch with people too late, doesn't he? They've been to the seminar and bought off the plan or something similar, which, you know, we see occasionally too.

Oh, absolutely. And you just wish he could get to them sooner. But you know, sometimes you make mistakes and you have maybe an underperformer in your portfolio or you bought, you know, over the market value and it's going to take a few years for the market to rise, but you know, it's a hit to your ego, but sometimes you just have to accept it. You know, having an underperforming property in your portfolio has a lot of opportunity costs. It may not cost you a lot per week, but maybe that 2, 3, $400,000 in borrowing capacity could be used elsewhere making you money. So considering reviewing your underperforming properties in your portfolio regularly is a good strategy.

You also finished with some good advice for people. We talked about the danger of analysis paralysis.

Yep.

And relay just.

We can relate to that sometimes, can't we?

That's right. A bit guilty of that. And he, yeah, he told a story about a lady that took 13 years to get started and yeah, we've got a few stories along those lines too.

Absolutely.

Yep.

And the benefit of surrounding yourself with like minded people, which is, yeah, crucial, isn't it?

I think just having that support. Sometimes you feel like you're the only voice or the only person who's sitting up there at midnight looking at these real estate sites. And the fact is that you're not alone. Just find where your community is.

Yep. You also said, and I hear you say this all the time. Start with your goals. You know, goals inform your strategy. So that's a fundamental that we've heard across all of the episodes so far.

Absolutely. And then the final one that I wrote down here in my notes, the value of education. If you want to make money, you have to spend some money. And I think the best investment you can make is investing in yourself and your own education. So some really great words of wisdom from today's up amazing guest property professor Peter Kalisos. And you can find out more about peter@theproperty professor.net.au well, don't.

I think it's that time again.

Oh, God, I was waiting for it. You know, John, this surprises me, and I hate to say this publicly, but people keep telling me how much they love this segment.

How could you not?

Yes, it's that time again where you get the chance to test your suburb knowledge with. While the entire nation holds its breath, ladies and gentlemen, it's time to play Suburbs against the clock. The rules are simple. To play, all you have to do is answer a question about 10 suburbs in the city of your choice. Within 20 seconds, the lucky winner of suburbs against the clock will win one year's free access to your property Success Club. Your Property Success Club is an in depth monthly masterclass which gives you the practical tools needed to grow your portfolio yourself without having to spend a fortune on expensive seminars or even leaving your own home. So who do we have standing by to play suburbs against the clock?

Graham, you there?

Yes.

Oh, well done, Graham.

You're gonna kick yourself when you see this question.

Graham, which city are you playing for?

I'm in Sydney. So Central Coast.

Oh, yeah, he can do this. This. Yeah, he can do this.

Central. No, now, you've got to play for Sydney, surely.

Okay, we get for Sydney.

Yeah, we'll let you go up to the center because I reckon he can. Yeah.

Yeah.

Well, maybe you can go up because. Yeah, I reckon coming up with 10 suburbs in the Central coast might be. Might be pretty tough, especially with your criteria. Yeah, that's right. But you know, you can chuck a few Central coast suburbs in there. I don't think it'll matter too much. No, all you've got to do is come up with 10 of them in 20 seconds so you understand the rules. Okay, Graham?

Yes.

Okay, so the question is in 20 seconds, name 10 suburbs that have freeway access.

Mount Kola, Hornsby, 2 seconds. Castle Hill 3. Castle Hill, Carlingford, Camden, Campbelltown, Bankstown.

What did you get?

Eight.

I Got nine. And I reckon that he was about to say one more. What was that one that you were about to say, John? Graham, Sleep. Yes. Oh, that was the one that I. Another winner.

Geez, we're tough around here, aren't we?

Okay, we're gonna get tough.

Very tough.

Well done, Graham. Good job. And the fact that you were able to put some of those Gosford Central coast type suburbs into was. Was well, well played.

Yep, yep. Thank you very much.

See ya.

All the best.

So if you would like to be a contestant on Suburbs against the clock, simply email supportourpropertysuccess.com oh, well, John, that.

Is it for today. So guys, join us in episode six when we talk to our next fabulous guest, Bernard Salt. You heard Peter in today's show talk about the crucial information that he uses demographic research in analyzing a suburb. Well, our next guest, Bernard Salt, is probably Australia's best known demographer and social commentator on this. So he has so much important information to share with us about the population and demographic trends affecting the Australian property market and how we as investors might use them to our advantage. So another exciting episode coming up. And if you would like instant access to the transcript of today's show and all of the show notes and the links and everything mentioned on the show, links including strange Bureau of Statistics, near map, RP data, and to Peter's Books, the top Australian suburbs and property versus share book, then go to www.yourpropertysuccess.com ep5. That's YourPropertySuccess.comau forward slash the letter E for echo, P for Papa, and the number five. So that's all for today. Stay safe and here's to your property success.

Ladies and gentlemen, it's important for you to understand that you need to take care in applying what you've heard on this podcast to your own personal circumstances. Everyone's situation is different. And while we go to great length to ensure that everything we share is accurate, the information in today's podcast was based on personal experiences and opinions and is not intended to be specific to your circumstances. We are not real estate agents, financial planners, lawyers or accountants and are not liable for any loss, damage or misunderstanding caused by reliance on any information provided or inferred. We highly recommend you seek out the services of a professional or mentor to help chart your own path to property success. I don't know. Look, maybe I need another take. Oh, why? I'm hungry.

Okay.

Well, I never read. Well, when I'm hungry.

I didn't pick up on that.

Are you sure I didn't sound a little peckish?

No, not at all.

You sure?

Yeah. No, honestly. Do you want something to eat?

Oh, that'd be nice.

Yeah. Yeah, no problem. We've got some pastries and some tea or coffee. What do you feel like?

Is that Vegemite?

Yep. Do you want me to make some Vegemite on toast?

Oh, that'd be great. Thanks, John.