Jane Slack-Smith and John answer questions about suburb research for renovation projects. They cover dot maps, Residex reports, census data, market indicators like days on market, and renovation risks including asbestos. The hosts emphasize using spreadsheets and disciplined research before inspecting properties.
Chapters
Hello everyone. And this is the third module for the Ultimate Guide to Renovation, subject of due diligence. And this is our Q and A call for that module. And of course I have here with me my co creator of the Ultimate Guide to Renovation, John. Hello, John.
Hey, John, how are you?
It's a bit hot down here, isn't it? We're not used to this heat in Melbourne.
No. Well, it's freezing yesterday and the day before.
I know it's summer, they turn on the heat. Look, this week, hopefully you've completed module three, suburb due Diligence and found out what it takes to find the pockets of potential within a suburb. Like the last module, some of you may be thinking, oh my God, that's a lot of work. And the truth is, yes, it is a lot of work. But just like finding the right suburb, the rewards are well and truly worth it. So stick at it. It does take some time and we don't expect everyone to have that spreadsheet done this week, do we really?
No, definitely not.
Look, it really is interesting once you start to dive deep into the information about a suburb, what it actually reveals. And I kind of alluded to this last week when I said, often I speak to people who say I bought in my suburb because I know it so well. And when you ask them the questions, what's the median price? What's the major demographic for the area? What are the drivers of growth? They really don't know. This is about really finding that information about the suburb and giving you some resources where you can find it. Now you can go back to this anytime in the future, got access to all these modules forever and we will have that available for you. And this is a great time for you to actually just learn what's involved in pulling everything together and where you can get the information. Several of the seasoned renovators that we had in our test group said that looking back on their past renovations and their past due diligence, they did. They really felt that they were flying blind at the time. They felt they were really concentrated on where they were buying and they really thought they knew the suburbs. But this process, they actually took them back to the drawing board and it had them questioning the actual properties that they bought in their portfolio beforehand as well. So that's how powerful this exercise is. It's not just for newbies starting out and getting a real direction of where to start and what to look for in a suburb, but it's for those people who've got a portfolio and really evaluating is this Something that I want to keep. And was this a good investment decision? I think as we found out from some in the test groups, they kind of thought they had a great portfolio and they looked back and went, yeah.
They'Re simple tools but they're deceptively powerful. You can't beat good fundamentals. And I think all that thing with all the software and all that kind of stuff is you don't really need a lot of that fancy stuff, you just need good fundamentals.
Exactly. Other than that resmx100 report, everything else is free. All the resources to how to find this information, which is good. It's all about practice, not purchase. It's a really good rule of thumb when thinking about spending money on these kind of things. And that goes for buying the property as well.
Absolutely.
Look, I know there's a lot of questions this week, so I'm going to get the quick housekeeping out of the way. Firstly, if you are on your computer and you're experiencing any problems hearing us, or perhaps we can't hear you during the questions, there's an option to call in on the telephone. The telephone number can be found in the sidebar under the Audio options drop down menu. Now, you can also set up your microphone there and your speakers as well if you're having any issues and test those. So if you do have a question, please raise your hand. All you need to do is raise your hand by pressing the little hand icon in the sidebar menu. It's really quite small and hard to see, but look for the little yellow hand and press on that and I'll know you have a question at any time. If I'm just chatting on here, talking to myself and talking to John, we're having a good old time and we haven't realised that I've hit the mute button like I did last week, please jump into the question box and let us know. But that little hand button, it does live directly above the audio tab. It's at the very top of the GoToWebinar control panel. So clicking the hand button will notify me that you have a question. And when it's your turn, I will unmute your line. When I do unmute your line to take a question, you will get an automated message saying, your line is now unmuted and then you know that you're on. You can ask questions by writing your question in the question box at the bottom of the control panel. And I'll always try to get to those in the time we have available. But I really do give priority to the spoken questions. And that's because it's really a lot easier for me to understand a question fully and get to the bottom of it if you can ask it to me and I can answer you in real time. So as always, there's never such a silly question out there. You know, I just encourage you to put your hand up and ask the question. People are at the beginning. My goodness, I'm learning things every day. I'm sure you are too. So, you know, the more you put in, the more you get out of it. It's the same for the Facebook page now these Q and A calls will go for an hour to an hour and a half. I just ask that for the sake of the group that you limit yourself to one question and perhaps a quick follow up question and that way no one misses out. As always, be sure that you're making good use of the Facebook group. Ask questions there as they come up. And there's been really great discussions going on this week. We've had things on asbestos color schemes. We might even get to them a bit later.
Yeah, the asbestos fund ran for a while. That's quite in depth.
Yeah, I reckon I've got some interesting thoughts on that too. I might share a bit later. And look, just a reminder, this is not a tech support call. Goodness, if you're going to depend on me for tech support, we're all in trouble. If you are experiencing any problems with your video, they won't download or anything else, I can't fix it and we can't fix it on this call, please email me@supportourpropertysuccess.com we'll get right on to fixing it. Usually what we find is we get people to run a test of their video. How do they do that?
Yes, speed test. I can send you through. There's a website called speedtest.net sometimes it is the culprit that it's very low speed. But often if you pause the video at the start and just let it load up for 10 seconds or so and then play, then it can come good. What it does is the network or the video host dishes out videos depending on what your bandwidth is. So if it sees that you're on a low bandwidth, for instance if you're on adsl, it will dish you up a low resolution video so that it will play properly for you. But if you're on a high speed Internet it will dish you up the highest definition video. So we do have the option of downloadable videos which will be up for Module four, we're sorry we didn't get those up earlier. We just had a few technical issues getting it sorted with the new website. So they'll be up as of midnight tonight with with module four. So you'll be able to download the videos if you are having any trouble playing them or streaming them.
Great. So as you know we're here, obviously I've got a technical expert next to me and we'll do what we can to fix things up for you and improve this as much as possible and make it as easy as possible. I'm getting NBN next week. They've just dug up the front of my house so hopefully, you know, I.
Miss out by three doors, they stop three doors down.
After you put so much effort into creating high definition video for us, we can watch on our tv. So this week you've been through module three, the suburb due diligence system that will reveal to you the pockets of potential within your chosen suburbs. Now I just want to check. Can someone just type into the question box for me? Can you see that suburb due diligence slide that I've got there? We've got the price pin map. This module was designed to show you exactly how to systematically research suburbs back based on the criteria of your chosen property investment strategy. Now remember, you did that way back in module one and now you can see how important getting that set up first. Although it's a little boring and you think I want to get into pulling up tiles and ripping up carpets and things, it's so fundamental for you and your property portfolio growth in the future. Now I guess the thing is that we believe there are pockets of potential but they don't exist in every suburb. So module two, we really looked at narrowing down the suburbs and now we're getting into a lot more depth. This week in module three we've covered the pockets of potential in each suburb. We've gone through that Residex renovated suburb report and as I said, that's really the only resource that I think if you have to pay for something that I would pay for.
Yeah, what is it? $250? Yeah, I think it is $250 well spent though.
And they have the renovators report for the state, the top 100, the top.
100 and then the suburb report and.
Then the actual suburb report. And then we went through the price pin map. So another map, we've done the not dot map. Now we've got the pin map. The power of the web. Now look, I've shared with you over 30 websites and these are the sites that I use that I go to to grab information. And often when I'm speaking to clients and they're telling me of a great hotspot while I'm chatting to them on the phone, I'm pulling up using these websites going, really tell me more about it. Because I think in two or three minutes I can pull up and know a lot more information often than what people have at their hands. And that's using these websites I've shared with you. Then we went into demographics and census information. Someone recently told me I shouldn't say the word demographics because it turns people off. It sounds so statistical and boring. I should just say the typical people in the area. This is what we're studying. This tells us about the typical people in the area. And the typical people like the typical properties and they rent them and they buy them and they're our clients.
Okay, well for me, because I'm flipping, it's just the target buyer.
The target buyer, yeah. For flippers. Exactly. So. Exactly. That's exactly what we're after. And I hope you really enjoyed that census demonstration that I had up for you. Those little five minute tutorials on a lot of those websites that took three months, 19 emails to convince the census guys that the tool that they had in the 2001 and 2006 census that allowed me to go in and find exactly what streets had own occupiers and like, was such a powerful tool. And for those of you who have got a bit of time in your hands, jump in there. And you don't just have to pull it up by where people are sitting on the household at night. You can pull it in there and look at everything from how many properties are over three storeys or whatever. So that took a lot of effort. And I know that you're the only ones in Australia who have access to it right now. I know some others are working on it.
I use it all the time. I like looking at the income. High income pockets.
Yeah, well you do that as a flipper because you're really targeting owner occupiers.
Yeah. So I'm looking for that whole birds of a feather thing. You find little pockets and sure enough, I look at it and see, oh, that's a high income pocket. I wonder why that is. And then I drive down the street and all the lawns are kept well and the facades are really nice.
Nice cars.
Yep, yep. Nice cars in the driveway.
Then we covered the area expert, which, you know, it does take about three months and to really become an expert in the area. Having said that, within six weeks, I reckon that you could be within 5% of predicting what property prices are at. And we just want to add the extra dimension for you and show you how to look at the renovation potential for those properties that you're looking at. The selective method, which was how to visit properties and work out what the resale or revaluation level is. So how to know what the potential is and what you can sell them for or what their value is. After renovation. We looked at the Open for Inspection checklist. This is kind of the record of your first assessment of the property. And we have in the next module a whole lot more checklists to actually help you drill down into the property's potential. Then we have the rental property inspection checklist. What to record when you're assessing a rental property. The percentage difference between what the property was listed for and what it's sold for. How much per square meter the property sold for, buying around the median. I mean, there's so much that was covered in this module. I have to say, I love this module.
Yeah, it's one of my favourites at the same time.
Okay, so just like last week, I know unless you've got superpowers, you probably haven't completed the suburb selection exercise yet. And that's okay because it does take some time to do it properly and it's really important that you do it right. So today we're going to dive straight into the questions about this important module and let's see who'd like to go first, see who's got their hand up. Okay, Excitement. There's no hands upper, but some retinue, some written questions here. Okay. Has anyone been able to find the hand? Don't be scared. All right, I have no hand at this stage, so I'm going to go to one of our questions. Roslyn. Oh, thanks for answering my question. I heard it on the replay from last week. Great to hear that you're listening to the replay. Which is the better method for finding properties, the area expert or the selective approach? P.S. the census video was excellent. Okay, so what do you think? The area expert or selective?
I think if you flip him because it's such high risk, my opinion is you really need to become an area expert because you're just. You're putting a lot of money on the line. So that's the approach I take. And you know, you can still get it wrong even when you do that. But you. If you know a suburb better than the agent and what I find when I go and do the opens each week and I do it for kind of if I'm going into a new suburb, I'll do it for about three months or so. And often the agents will be asking me about properties because I'll be seeing them all and I'll say, oh, what did it go for up the road? And that kind of thing. So you get a really, really good understanding of your market. And I look at everything, even the properties that I'm not buying, mind you, I only look at houses, I don't look at units, but I basically look at every house on the market. And that gives me a really good feel for what's selling in what pockets, what it's going for and what I can expect to pay it, I should be buying for, but also what I should be reselling for. And part of that is I'm getting to know the agents. So I get a really good network of agents that call me up as soon as they think of an unrenovated property. I pop into their head and they get me on the phone. So there's that. And off market stuff comes to you that way. And the other thing is that I'm recording that data, the price per square meter, whether it's unrenovated or dated or renovated. And really the only way to do that is to go through the property because you can't really tell a lot of the time off realestate.com or domain if the property is dated or you know, because most properties look pretty good in the pictures. So it's not an action until you get through that you can track at that level. And in my opinion you need, if you, if you're putting big bucks on the line because you lose a lot in the transaction as we've set up in the first couple of modules when you're flipping, so it can go south pretty quickly. So in my opinion, suburb expert for flipping.
Okay, and what's the benefits do you think then, John, of the selective approach?
Well, I think not everyone's going to be up for two that for one. And if you use all the other tools thoroughly and you know what you should be buying at, then I guess it's just a case. And you can see there. And my rule of thumb is too, when you're reselling, you don't want to be reselling at the top of the street, so you want to be selling. We aim to sell at about the 80% mark and that way you're not trying to set street records or anything. Like that.
And that's where that renovating report, the Resx renovation report comes in. We sound like we have shares in the company, but we don't. The only reason I say that is because the actual suburb renovation report actually shows you the disparity within the street. So you've actually got. It ranges from one to 10. They've taken the number of properties in the street and if it's 100 properties, then there's 10 in each range. If you can buy at a 2 and sell at an 8, that's great. If, if you're actually flipping, you kind of need to do that. If you're renovating to rent, then, you know, buying the two and being able to create a price point just above the median, the six is where I would aim.
Yep, yep. And also I think when you're holding, there's a little bit less risk in the transaction because you know, you don't lose that kind of 6 or 7 or even 10% in the transaction.
Exactly.
So you've got. So in that case, if you've done all the power of the web stuff and all that research at home and then you just go and look at the properties at the resale level or the revalue level and work backwards from there, you're still in pretty safe territory there and it's not going to take up three months a weekends kind of thing.
And the thing with that selective approach, although you're looking at that end price point, working your way back, you really have to be very good at looking at the cost of the renovation and anticipating any issues that come up as well. Meaning I know you've had issues. I've definitely had issues. Where, I mean one that comes to mind is the fact that we had a toilet that went to ground and we had to put the sewage in, you know, but did we actually have to put the sewage in? We contemplated after we spent the $8,000 in doing that because we were just responding to what we thought was knee jerk reaction and fixing a problem. So I think that, you know, you can't always anticipate what the renovation costs are. But as you'll see with our budget.
Was that a particularly smelly house?
No, it wasn't. You know what it is. It was near Coogee, so it was in Sydney, so it was on sand. So I think it kind of, I don't know, I don't want to know about it really. But it didn't know it wasn't a smelly house. We didn't have a lot of decor issues, either.
You often see the storm water that just runs straight out under the. And that often goes under the house, because you see houses where the underside of the house is lower than the outside. So the. In other words, the soil outside the walls is higher than underneath the house. So all the water gets down under there, and that causes all the stump issues and all that kind of thing.
Good. Well, I hope we've answered that question for you, Rosalind. Oh, you can't. A lot of people can't find their hands on the iPad app. I don't know if I can hook up to the. I don't know if there is one on the iPad app, though. Gosh, we're going to have to try that out. Great. She's happy. Okay, let's have a chat to Sajiv. Does he want to talk to us? Sajeev, do you have your microphone on? No, no one's got their finger up and up. Maybe if I unmute Sajeev, he might chat to us. Sajeev, can you hear us? No, he's not going to talk to us either. Okay, well, we'll just chat. Oh, he's on the bus. Okay, no problem. Gosh, we can do this anywhere, can't we? You'll probably get a lot of people listening in. So you're wondering how accurate are the figures, like average days in the market and discounting in a changing market, like, at the moment? Very good question. In other words, how long does it take for sites to reflect the sales from, say, last week? I've got to be honest with you, I don't know the answer specifically to that. I think what I have seen with, say, discounting and days on the market is that the data is updated every month. So I see that the Australian property monitors and the information that's coming through domain and realestate.com being updated pretty much every month, but that information is usually a few months old. So my. I guess. How would you call it? My second guess or my backup information is I depend on that Heron, Todd White, which are the valuers. I depend on their monthly report because their valuers are out every single month valuing properties throughout all of Australia, regional and capital cities, and they are giving feedback of what they're seeing. So, you know, if they're saying last month, you know, beginning of the month, they're saying last month. We saw this, this, this. They're talking about last week. So that's the most up to date information. You don't get the discounting or the number of Average days. And I think the important thing with doing the spreadsheet, correct me if I'm wrong, John, is that it's kind of like a way of tracking it. So as you start tracking this information, you're seeing the number of days on the market coming down and you're seeing the percentage of discounting coming down. You're actually starting to see that there's indicative signs of movement in the market. So obviously at the moment, where are you on the bus? Ajeev, are you in Sydney? Melbourne, Brisbane, Perth, people everywhere. Tamworth, Sydney. Obviously, in the Sydney market, we've definitely seen movement going on and it's been really, really fast. And I know I've got clients who are being quoted four weeks ago that they're going to be able to buy a property at 1.2, and turns out that 1.29 doesn't get it. So we're seeing the Sydney market move very quickly. Interesting conversation with the value of CBRE in Brisbane yesterday was that they talked about the market being hot. And I know there's a lot of people buying in a lot of the northern suburbs at the moment in Brisbane that I'm dealing with. And although the market is hot there, they're saying that it's at the point where the asking price is being met by the buyers. So they're not actually seeing the prices going up, they're seeing the asking price being met, which means obviously no discounting. So when you start seeing that, and that's live valuer information that's happening every day. 80% of their business is being sent out by a bank to do either a refinance or a purchase. And there's so many refinances going on. This is data of current valuations also that the valuers are getting. And this is why I value the Heron Todd White report and the valuers that I speak to from all the other companies is that because there's such a high percentage of refinancers, this is not market information that's being publicised, it's only the property sales that are being publicised. So they actually have availability to all this extra information as well. So I know that it's kind of hard to look at these information in isolation and that's why we've kind of created that spreadsheet so that people can actually look at the information and they can say, okay, let's just get a feel for it. And it really. I mean, it starts at the dot map, doesn't it? And that's. I know there's a lot of bit of conversation this week about, you know, gee, this would be easy to be able to put it on the computer and we could systemize the analysis. And you've tried that.
Yeah. Oh, look, Scott, who's my. Who I work with, is my JV partner. He's a computer engineer.
Genius.
So.
Yeah, that's the word that you mentioned.
Yes. Well, he is. If he's listening, he is a genius. And he does. Yeah, he's able to do that for basically everything. Put it in map form. I personally, I find. And people learn differently. Personally, I like to have it up on my wall and I can walk past it with a beer in my hand and stop for five minutes and look at it and see if it checks out with what I saw on the weekend and that kind of thing. I find that more useful than going into my hard drive and pulling up a PDF or something like that. But people learn differently, so whatever works best for you.
Exactly. And I just think that dot map exercise really lets you. It's something you need to mull over. But the actual physical exercise of when you've selected your suburbs and you're doing the pin map and you're actually, I think, subconsciously, you start picking up the names of the streets, you're picking up the location. And even if it is subconscious, you might have set up a Google alert for suburb already. You may have set up a buying criteria alert on domain or real estate. When an address comes up, you're thinking, that's the wrong side of the highway. Or you're thinking, oh, that's the kind of golden triangle that I want. And going through that exercise really gives you that extra information.
Yeah. And in this week's module, module four, you've got an agent criteria template too, that you can fill out and actually put the street names on there, if you like to, and give that out to the agents to tell them what you're looking for.
So if you haven't done your buying criteria exercise, go back and start because it's all going to fall over from now on.
Yeah, that's right.
And so I hope, Sajiv, that we've answered your question. Hopefully you haven't got off the bus and lost connection, but that'd be good. WI fi on a bus.
That's great. I love that. I love the fact that someone's traveling on a bus through Sydney and listening.
To this and we can select a suburb for us to do analysis on. Okay, Anyone else got a question for us? Otherwise, I'm just going to have to keep chatting.
No hands. Shall we talk about asbestos?
Do you want to talk about asbestos?
Such an uplifting topic.
I know. Oh, my gosh. Why not chat about asbestos? So this week we had a question about asbestos. Let's just jump over and have a. Not yet. Move some things. Just checking to see that you can see my screen. So this week, what we did in the. We had lots and lots of questions, didn't we, in the Facebook group. Can everyone see the Facebook group there? Yep. So, basically, in the Renovator network, what we saw was a lot of questions around a lot of different things. And there was a really good question there by Keith Mewes. He's one of our beta testers. Yeah. He's just bought a property whilst he was doing the course in the Hunter Valley and he is doing a fine job of renovating it and we're kind of getting a bit of a blow by blowing. And he really wanted a definitive answer.
About what, Stripping wallpaper off asbestos walls?
Yeah. And Tracy, I can see that, yes, you wanted to know a bit about this too. She's got a property that she's just bought that's got this issue. Look, you know, I know there's a lot of conversation about it and just to give you an example of how seriously this is being taken at the moment, I had a valuation come back for a client who was purchasing a property in Western Sydney and the valuation came dead smack on the purchase price, which everyone was happy about, which always is one of those hurdles that you have to jump over. But the value I had put down on the recommended rent, that it was uninhabitable for humans due to environmental risk. And when we went down to the risk rating and looked at environmental risk that he rated 4 out of 5, it indicated that there was a small shed at the back that was made of asbestos that had a kind of like a punch hole in it, no bigger than two fists, that he said had issues associated with it. Despite the fact someone's paying 300 bucks a week to rent the place, it was uninhabitable. And the bank then was put in the awkward position of having to decide whether they wanted to go against the value. As an advice and take that property on, I can tell you, in three hours, I became a bit of an asbestos expert. Spoke to the piston building inspector and the valuer wanted to have an expert value expert asbestos removal person's quote. And the client had actually indicated to the. The building inspector that he was going to knock down the old chook shed and it was going to be gone. So it wasn't a main issue. Using the best practice, asbestos removal. So that is how serious that kind of stuff's being treated. And as I said in the Facebook post, my aunt's father died from asbestos related illness. That could only link back to the many houses that he renovated through the 70s and 80s. So it's serious stuff.
Yeah, it should.
And I cannot but think that you're ripping wallpaper off a wall, that you're going to disturb the under side of the wall.
Yeah, it's possible, isn't it? I mean, you wouldn't know if you've got nails that are popped, they'll be exposing fibres there. Or if you've got sections that are damaged, for instance, they've been bumped into and that kind of thing. Yeah, it's really tricky. So I think. And company and trust structures are probably the two areas that I'd least like to give advice out of it.
No. Disclaimer. Disclaimer. We're not experts.
Yeah, that's right.
At all. But I think the.
I mean I have done it in the past in my. In my properties, but I've really taken a lot of care and followed the guidelines as to how I've removed it. And there's information on there. If you're even thinking about doing that, then make sure that you go to put all the safety measures in place. I'm not going to describe them here in case I get some of them wrong, but.
Yep, exactly. And what else did I see that I thought was interesting? Here's a question about Google Alerts. Okay. Someone was missing out how to do a Google Alert. Hopefully everyone's found out how to do.
That now, so that's great for your streets. And also any infrastructure changes, Zor council announcements, lots of little seed words that you can put in there that will pull up some interesting stuff.
Suzy put out this free PIN app. I don't know if we've got to the bottom of the fact of whether it was hers and everyone's been collaborating on it or not, but there's a pin app that's underway there that I thought was kind of cool and I think that was all that we had going on this week. Excellent. So let's jump into some more questions. What do we have at moment? Change back to your screen. What we have is a question here from Nathan. Oh, he's trying to raise his hand. My gosh, this excitement. Let's see. Nathan's raising his hand. If he hasn't, I'm at A. Oh, yes, I've got a hand. Nathan, can you hear us? Yes, you can, but can we hear you, Nathan? How disappointing.
Oh, it's a shame. Check your volume on your computers now. Your speakers aren't still plugged in there, are they? Jane, have you pulled those out?
They're all good. We can hear everyone. How disappointing. Nathan, I can't seem to hear you at all now. All right, hang on.
Let's have a go here. It might be me. Maybe go again, please, Nathan.
Okay, Nathan, I'm going to have to hang up on you again. All right, we'll read the question. John said the Area Expert is good for flipping by default. Does this mean for a buy and hold strategy, the selective approach is best?
Depends how much risk you want to avoid. I mean, I'm just used to doing the area expert now, so I'm really comfortable with it. But I understand that, you know, people are not going to have the time to do that, you know, use up all their weekends. But then again, sometimes I think, well, it's only three months, you know, how much do you want it?
We're talking about hundreds of thousands of dollars.
Yeah.
So recap. Selective. Why do you think that selectives takes a lot less time than the Area Expert?
Well, you're not going through every single thing on the market. You're really just going through the stuff at the resale revalue level and then working backwards from there. So obviously you still need all the other data to work out that you're not paying over the market because your aim is still to buy under market, but you've got a little bit more safety net there because you've got your capital, you've got your three prongs of the Trident strategy, whereas with flipping, you've only got the two. The critical figure is always the resale with flipping, because if you're not absolutely sure you can get that price, then you're in really high, high risk territory. And again, our aim is not never to sell at the top of the street, never to take the highest sale on the street and say, all right, that's our resale level. It's always just around that 80% mark. So just the very good average homes at the top of the 80% mark.
Yeah. I have to say, from a cosmetic renovation point of view, you know, I've always done the area expert strategy as well, in the sense that I would feel uncomfortable not having all the information at my fingertips. And this is often why people get buyer's agents involved, because they don't want to do that amount of effort.
Well, that's the other option for you.
And it doesn't really matter. I wouldn't necessarily say that by default, if area expert is the flipping, selection, flipping method of choice, than the selective method is for buy and hold. Because I think that. Did I say that right? Yeah. Buy and hold. Because I think that if you've got the time and you want to put in the effort, going and looking at rental properties and looking at what the market wants and just simple things like that.
Because you recommend one for every 10. Yeah.
So one. I look at one rental property for every 10. 10 properties I inspect just to see what the market wants, to case out the agents and see how they're performing because I'm going to hire them at some stage and I also want to see how the property is presented. And I know I had a client who had a property on the market recently. Thrilled A bit. There was 50 people out the front to rent it after they finished a renovation and sent in a friend of theirs to check out how the agent went and she was like, I don't know if the car garage is actually on title. Not sure. Haven't got the keys to the back door. Does the dryer come with the property? Dunno. All that information was actually on the website saying, yes, yes, yes. They were unprepared. Fifteen minutes was open, 50 people had a crash through and they were really upset. And that's not an agent I'm going to be hiring in the future to represent my property. So just little things like that. If you're going to get in and become the area expert, not only are you going to know the agents for buying, but you're going to know the agents for renting as well.
And going back to that market tracking, where you're talking about is the days on the market and the discounting current. If you're actually out there doing it, you're seeing that in real time and recording it in real time too.
Exactly. Good question. Thank you for that. Sorry, we couldn't hear you. Rosalind, when you go through the suburb sales and pin them on the map, do you do both houses and units in all sizes? 2 bedroom, 3 bedroom, 4 bedroom, 5 bedroom, bedroom? If so, how do you differentiate that on the map? My goodness, that would be a very busy map, wouldn't it? I think that's probably when you would actually pull in the electronic map.
But just choose one of the houses or units.
It's your buying criteria. So your buying criteria is not going to Be houses and units. So if your buying criteria is saying house, you know, your strategy is converting a two bedroom to a three bedroom, then you're obviously looking at the two bedroom houses. So, you know, although that's a little difficult. I don't think I've ever broken a pin that down to the number of bedrooms.
No.
At all. That would be a big deal.
No, at the moment I'm just doing two year sales. Two years worth of sales data for every house in the suburb.
So thanks for that. Christine. Hi there. I've had a manic work week. Go for it. She's done it. So she's only able to get a small part of module three or you'll be delighted when you get to the rest. I know I can revisit the modules again and again. Don't want to be falling behind. Can I access the webinars? As I thought you mentioned it was possible.
Yep, yep. The audio file, the MP3 is in the Facebook page. If you do a search for webinar, webinar, that's the easiest way to come across it. Or in the bonus section of module 2, because we're doing the module 3 webinar now, you can find it there as well, which is a video that you can download. The screens, not huge, it's I think about 400 pixels or something like that. But these webinars go for an hour and a half. So we thought it better just have the one video, even with a smaller size, than have several videos of a larger size.
Okay, I'm just going to try to demonstrate for you. Can you guys see my screen? Okey dokes. So. Oh, Nathan. No, we couldn't hear you. Let's see if he wants to say anything else to us. Do you want to say hello to us again, see if we can say hello? Nope, nope, we can't hear Nathan.
Sorry, Nathan.
Okay, I'm going to quickly see if I can change some settings and see if I can hear Nathan again. Hello, Nathan. Okey dokes. Sorry, Nathan. Gosh. Next week.
Next week.
Next week will be 12:30 that we hear you. Okay. Another question after you've done the initial three months area expert research, do you need to do it again before you buy another property in the same area?
I would think at the moment.
The moment you would. Yeah. The market was moving. I would normally suggest that in a standard market, when we're not obviously on the rise, that we would be looking about every six months. If you're going to go back, you just revalidate the information you're not going to see differences in the pin map and you're not going to see differences in the dot map or the areas.
Or really the demographic too much in that shorter period of time.
But you may see some differences in your spreadsheet. So the discounting days of the market, the rental yields, there could be a little bit of a change. Rental yields, often you will see a rental yield start moving upwards as people want to live in an area and then you'll see the investors come in because there's demand in that area as well. So that's why that's so important to have a look at the. Now, I did have someone earlier today who sent me one of their spreadsheets that they were working on. You know who you are. Did you want to share that? Put in the question box if you wanted me to go through that and not go down to your. Kelvin, not go down to your actual suburbs that you've selected. Yep, he's gone. Yes, it's okay. So I don't know. Show my screen. Let's see if I can show you my screen. Let's see if you guys can see. Yep, you can see my screen. Great. So let me just pull up an Excel spreadsheet that Kelvin has done a lot of effort on. So some of the questions that Kelvin very generously has allowed us to look at this for him and wanted to know, was he on the right track? Was he doing the right thing? Had he missed anything? He did a bit of analysis in this area, looking within a price point around 450, as you can see. And he also had a criteria of being within 15ks from the CBD. So that was his criteria. You might even want to put down some of the other criteria that you have, you know, when you have it. So you might have, you know, for instance, I don't know, you might even write down here exactly what you're after. So capital growth, past growth, rental yield, et cetera. But this is what he's come up with for Sydney within that area. So he's gone through and listed kilometers from the city, the postcode, the median price, the quarterly growth, first one year, three year, five year and ten year growth. Now one of the questions that Kelvin had was he was looking at the API magazine and he wanted to know if he was targeting an 8% capital growth, how there wasn't that many suburbs that had 8% capital growth because he was looking here at this 10 year capital growth. So the issue with that, Kelvin, and this is an issue that a lot of People have is this is actually past growth. So all the information that you're going to be seeing in these magazines is past growth. So you're not actually going to be pulling out future growth from these. And understanding what future growth is can be really difficult as well.
Yeah, it's crystal ball, Daisy.
It is. And the only person, well, the only group that I know that actually does it is Residex that is doing the predicted growth with all the statisticians and the conversations, the councils and things that they do. So I can see that's an issue. So I guess my first concern though is that you, you probably are worthwhile pulling out the areas that are obvious within this. So you've got 75 different suburbs, about 60 different suburbs that fit within the postcode, that you're looking at a lot of these and you're looking in the unit market. A lot of these in the unit market are within that median price. And I can see that you're targeting that. One of the things that he also said was you had some five suburbs that you came up with and you listed the surrounding suburbs near them and you said one of them that you thought was really good because the median price seemed to be the strongest. And we had a quick conversation before this webinar about that and I think there's a bit of false security that you might have in that assumption and that's why the dot map is so important.
Yeah. Well, I would worry if you, particularly if you've got both, if you've got the suburb with the highest 10 year growth and the highest median price, that would suggest to me that you'd miss the boat in terms of the ripple effect. So the dot map illustrates that really well. When you see the suburbs that have got high growth and it's often pushing out from a centre, like talking about last week that Sydney has several centres where growth kind of emanates out from. But Melbourne would tend to be the CBD that comes out in a ring around the CBD and you'll see that the suburbs closer to the CBD will have a higher growth rate than the inner ring suburbs. Yeah, than the next suburbs.
And they move quicker. They move first.
Yeah. And as they go up in price, then everyone gets pushed into the next suburb. So you'll see suburbs that have got a higher growth rate with the suburb next to them that have got a lower growth rate. So those lower growth rates are the suburbs that you want of the 10 year growth as opposed to the.
Because they've already moved. And I had a conversation with a client this week who was saying that they were targeting Dulwich Hill for a purchase. And I was saying, oh yeah, I looked at that in 2002 and she said, well, you would have seen a lot of growth since you bought, since they started looking a year ago. And she said, yeah, it's nearly unaffordable. And she said, how did you pick it 10 years ago? I was like, well, it was a trickle effect. No, I knew that when people couldn't afford Newtown, they'll be in the next area. And it's funny, I'm now having conversations with people. People are saying, oh, Dulwich Hill, it's so expensive, we're in the next area. And they're looking at Canterbury, which was the extra suburb. And it really comes down to how long you want to hold your portfolio for. If your goals are saying that you want a portfolio to be at a certain performance in 10 years time, then if you're going the next suburb out, then it may take 10 years before it's starting to move. Whereas if you're the next suburb that moves, you could have a good six to eight years of growth.
So.
I definitely wouldn't be starting at the highest, strongest, best performance in the past. I'd definitely be looking at the ones that are on their way. And I know that in the surrounding suburbs tab, which I'm not going to reveal to everyone, your secret selections there, Kelvin, but you've gone straight into that. And my concern for you is that you've missed all of this data and this is the gold here, this is where you kind of sit back and start going. So let me have a look what's happening here with rental yields and days on the market and clearance rates. And I'm gathering that your suburbs are buy and rent, buy and hold strategy rather than the flipping. So. So for that you might. These things are not that relevant in the demographics. This is kind of what the flippers look like.
Absolute children.
Yeah. But for where you want to locate your unit, for percentages that travel on the bus and I think I did an exercise in module three on Kingsford and it had like 43% of people were taking the bus. So I wanted to be within 300 to 500 meters of that bus line. So, you know, university, travel, to work, do you need a car park, port, et cetera. You know, if you market is the renters, then you want this. If you're flipping, you don't really. This is not that important. And that's where that we don't Call it demographics. What do we call it now? The average, the target target buyer, target renter or the average person in the area. But that census information will actually show you what streets that people percentage of renters are in and percentage of owner occupiers. So that's important. And also buying when we get down into next week and really getting into the checklist of selecting a property that kind of percentage of own within a block of units, that's one of the things that I don't even think we have one of our checklists but that's one of the things that I like to know that there's a higher level of ownership in the unit block but in the area it's mainly renters because I want people that are taking pride in the property and we're talking about pride in the surrounds. They're going to be active on the body corporate, not just into the slum lord. Let's do the little amount as possible. So for me in a checklist we'll get into next week, although I target areas and streets where the renters want to live, I target the unit blocks where there's mainly owner occupiers. We're not strata don't have lifts, pools, tennis courts, etc. Off topic yet again. But my concern there Kelvin, is that you've kind of started narrowing down the suburbs you want to look at without having done this stuff. And this is straight out of the back of the magazine as well. So where you're looking in the magazines and if you can't find this information.
So the spread of value stuff, I know a couple of it's out of the top 100 report but you've still got the median prices per bedroom there.
Which still is a property reporter.
Yeah, some of you's got it as well, but some of you went down, we discovered today, which is another place.
Some of you is about three days down.
Yeah, apparently it's coming back. So that's a good thing because that has the medians per bedroom and the yield per bedroom and all that kind of stuff. But that's really just a quick rule of thumb about a spread of values in a suburb. If you can compare the two and three bedroom houses for instance, and I assume it would be pretty similar with units.
Yeah. So thank you Kelvin for sharing that with us. I hope it added a little value for you. I'd hate for you to run off and have a look at those five suburbs and think that you've, you've really targeted those because it's like that dot map exercise, unless you kind of put the rest of this into play, you're not going to get all the information. And I know that these websites that I've shared with you this week are a useful resource for module two as well. So going back to module two and the dot maps and we do have people who start with the dot maps and go, oh, wait a second, I'm seeing this area. Let me just jump in and start the spreadsheet. They get in the spreadsheet and they get back into the dot map. To answer the question about how often do you have to do the kind of expert research on the area? I wouldn't be overwriting any of these spreadsheets. These are gold for you guys. And this is in two years time. If you've got the equity available too and the means to go and buy again, then you may still look at this area, it may still fit your criteria. And I would be going back and looking and comparing the information that you've pulled up here because as you can see, you've got a lot of suburbs and a lot of information. So it may not be the suburbs that you're selecting this time, but it might be the next suburbs. So there you go. How should I reduce the number of suburbs to do analysis on? First point would be price point. I'd say, you know, you've got a lot there and you've got a good target of upper limit and lower limit. You're not being outrageous. I would suggest though that, you know, looking at the upper limit at a 540 and if your target's 450, that's a lot of negotiating in a hot market. So you might start limiting that, you know, in the Sydney market. Yep, Sydney market. To we know that discounting is pretty much not happening there. So you might even limit that at the moment to even 480. So you can knock out a lot of those suburbs. Just looking at these price points and remembering that you're trying to buy a lot below this median price point to make the money that you want to make. So we're talking about if you can negotiate, negotiate the 480 way down, then that's where you're making the money. So I think to get rid of 60, you've got 60 suburbs there to start really narrowing it down. I would potentially start with reducing that upper limit. Do you have any thoughts there?
No, look, I like to start with a dot map and that way I'm only really putting stuff in a spreadsheet that I realistically think is going to have the ripple effect. So that's a way just to shorten things to start off with because that way I'm not just sticking everything into my spreadsheet that's in the median that I can afford.
Wing's just got a quick follow up question there. Did you transfer the data from the Investor magazine for each suburb? This is a question for Kelvin, I think. Did you do that, Kelvin? I imagine that's where you got the information from.
Well, that's available.
So this information, RP data, Australian Property Monitor. This information would definitely come from the magazines. Yep. Australian Property Investor magazines where Kelvin got it from. You can buy it off him for $29.95 this spreadsheet once he finishes it. But yeah, so this look, I just really encourage you and as John said, the dot map is going to give you some focus. So you're not looking at every suburb in Sydney within 15k's your price points and wipe a lot of the rest of them out. You start looking at what growth has been experienced and we're starting to see some impressive growth here as well. But those suburbs that have really taken off and shown a lot of growth, you might just start considering that they might not have a lot more in them. And that's where I would start. But I really encourage you before you start targeting your four or five suburbs unless you've targeted those based off the dot map as well, get in here and start filling this stuff out and don't go and waste your time doing checklists and inspecting properties until you finish this.
That point that you made about having a lower priced suburb that's going to experience more growth because it might not be the immediate next one, but it's the one after. It took me a while to understand that because I always thought, well, wouldn't you be better off getting the most expensive suburb you can afford and therefore it would be multiplied. But if it doesn't have that real catapult of growth that comes when one suburb spills into the other, you can have a lower price suburb that will go up three, four years in a row and it will be up over 10%, it's going to be a lot more money for you than the higher price suburb that grows at a lower percentage rate.
And at the moment you probably don't have to wait that long.
Yeah, you think so? Well, it's got to go somewhere, doesn't it?
Exactly. I'm speaking to people. I mean I shared with you last webinar. I spoke to the chief Economist from Westpac. I had lunch today with a number of real estate agents, etc. And just had a chat about and mortgage brokers, what they're doing in what they're seeing in the outer Victorian or out of Melbourne. And one real estate agent in particular was telling me how strong the Geelong market was because the government even yesterday announced that they're moving. I think the disability department there, TOC is there, most of the insurance hub, they're moving people there. But they're actually, and this is why Google Alerts is so important, they're actually giving them incentives of $28,000 to have people move there. So we're talking about very large government departments being encouraged to move to Geelong.
The department's been given everyone in the.
Department, they're moving the entire department there. So they're actually telling the workforce, encouraging them to move and it's only 45 minutes now anyhow by car, but still to encourage them to move to Geelong, that they've got that. So people are rocking up with pretty much a deposit. So, you know, if you had that under Google alerts, Geelong, under Google alerts, that would come up and you'd be sitting there going, interesting, there's a department that is about move here and there's 500 people and they're all being given $26,000 to contribute to the purchase of the property. What's going to happen? A I'd be asking where is the first and foremost, where is the department going to be located? Same thing happened in Sydney, out at Newcastle. I'm thinking, is it Meriwether or Adamstown? The council moved their chambers out to that area and all of a sudden there's shopping areas and everything was. So that was all pretty exciting. Go Geelong, says someone, my one and only investment property is there. Nice work. I think Wing's about to be getting a bit. Oh, now here's another thing and this is one of the brokers told me if you track population predictions and where the populations are going to move and you read things like I think there's a Touch of Salt is one of the articles, is a regular in Australian Property Investor by Bernard Salt from kpmg. He's probably one of the most vocal and preeminent demographer and excited person other than me about census information. We get together and have long chats. Actually I even convinced him to write a forward for my book, which was nice. That wasn't a subtle plug for the book but he did some tracking of property prices and population and you saw you Know the. In Melbourne in particular, he was concentrating on the conversation that we're having that what is it? North, south, east, southeastern corridor picked up with the freeway down to Frankston.
Yeah, yeah.
And now they're talking about, you know, the population, look, going to make up numbers here. But essentially they'd been about. And I'm just going to use these numbers as. Do not take me as gospel, but this is the reference point. 20,000 started in the north. 40,000 was the population growth down to the south. And they're expecting like 80 to 100,000 going out to the west in the next 10 to 20 years in that taneat area. And speaking to a broker there today and saying there's a lot of people buying house and land packages out in that lower economic group, but also out in that area. And he was saying that at the time of construction completion, as soon as they've paid their builder at lock up, revaluations are all coming in 10% lower. So if you imagine building and you think when you build that you're going to make money because you're buying land and you're buying discount, you're not buying established and they're all coming in 10%. So just looking at information in isolation, I'd encourage you to be wary of because just following predictions on population demand in the short term might prove not to be a good sole piece of information to depend on. Do you have anything to say about that, John?
Not really.
Okay.
I suppose I think the thing about new estates, that whole thing of scarcity of land and everything as well, and.
There'S so much land out there. I know when I was an explosives engineer at one stage they had me go and quote on, well, pretty much blowing up an entire paddock that was to become Carolina Springs. And in the end they decided that was probably too risky. Mind you, they hadn't seen my prowess as an explosives expert. I could have done anything without creating any risk, but blew up Caroline Springs. Well, in actual fact, instead of the probably three weeks of work I could have done in getting them through that basalt plane on the rock that they needed to get through to do their foundations, it took them 12 months with Jack Hammonds and big hammers to do the same thing. There you go. There's just my little.
That just reminded me of something when I was just back in Caroline Springs there. I remember years ago you only did that mentally.
You didn't say that in public. Now you've now done it.
I thought it was a good idea that you were going to blow it up. Remember a few years ago when Broadmeadows had three years worth of growth? Do you remember how much that was? It was something like 16, 18 and 20 something. Or it might have been two years over 20 or something like that. And then people predicting it early on and everyone that kind of knew the place. Broadmeadows, for those that not in Melbourne, it's traditionally been an outer suburb characterised as a bit of a bogan suburb and that kind of thing. And everyone was turning, but the predictions were that it was going to come up and everyone was turning their nose up at oh, I wouldn't live at Broadmeadows and all that kind of stuff. And then three years in a row it tipped over from the neighbouring suburbs and up it went three, four years in a row. Grew like over 60% from memory.
Well, the same thing happened when I was looking around Newtown and Dulwich Hill. People were going, this is grunge. I said, really? Really? There you go. Okay. Oh, Wing, I can see you having a palpitations there. You're saying, oh my goodness. Did Kelvin actually write all those things out of the soft copy API? You're wondering if you can actually get all the data electronically. And the answer is, unfortunately not legally, no.
No.
Because I think at the back of the API magazines or down the bottom you'll see that this information can't be done, produced, reproduced or whatever. Kelvin. Hours of typing and sore eyes. Everyone's looking sad.
What I've done in the past is actually got onto Odesk for relancing.
I don't really legally tell people this.
Yeah, that's true. I didn't think of that.
So yes, get someone else to fill in the data for you. I did something similar for. They had all the suburbs in Melbourne. They did a. What was the study that they did? Oh gosh. It was like the best suburbs, the lifestyle suburbs where people are happiest. And they had all these things about closeness to infrastructure and councils that were responsive. I'm like, this is kind of stuff I want to know. And I had someone on Odesk that I hired at $5 an hour to go and spend 10 hours doing that. And I liked that information. I'm not suggesting you do that. I'm just saying there's hours ahead of staring at tiny little numbers. But this is why the dot map helps because you can actually start selecting the suburbs you're interested in.
Okay, here's what you said about Suburb View website. So I actually put an email in to those guys today at Suburb View, because those property reports did disappear overnight, as you rightly pointed out, and I was really surprised to see that too. So he's just revamping his website and he said within a couple of days that they will be up and running again, was his response. So hopefully that's the case because that's a really, really good resource that Suburb View and Wing.
You've just got a comment there. You said this year house and land package experienced high valuation variance between 10 and 30%. Is that positive or negative? It's fast on his typing tonight. Is he seeing positive, negative and in what areas? It would be nice to actually unmute people, have microphone conversations.
Got a new computer today. Sorry guys.
All states are. Look, you know, I'm definitely. What am I seeing? I'm seeing people in the Hunter Valley. Someone here asked me about the Hunter Valley. Let's have a quick look at this question up here. Any inside Goss on Cessnoc? We've spent the last three months, every weekend doing every open inspection and it all looks okay. Would you give a nod? Oh my gosh, Nigel, I haven't done anything close to what you've done on Cessnoc. Let me think where. I have clients buying at the moment. I have clients building townhouses and buying flat properties in the Hunter Valley and I have seen and had to go argue a number of valuation reports based on high risk ratings associated with market volatility. Gosh, my memory serves me right. Let me think a bit more about this. The market volatility was based on the fact that the mining industry has come off and the Brankston Bypass construction teams needing rental properties anymore. So Cessnock in itself.
Is.
Well, you know, it's mainly mining associated. You know, you push out to broke, etc. And there's the wineries and a little bit of tourism. But I don't. I mean my personal experience, having lived in Singleton and driven through there for years on end, was that unless there's been some dramatic changes, it was never part of the tourist stepping stone into the valley. It was the place people drove through the fundamentals, the things that you need to be looking at around Cessnock. Is the right areas in Cessnock. That renovator report, if there is one for Cessnock, should help you with what streets that you should be buying in the effect of the infrastructure. I would actually get into the council as well, the website and if it's not on the website, I'd be going and chatting to maybe some of the town Planners or some of the people in council, they're usually pretty bored and no one chats to them. So if you're asked to talk to them, you can usually get them on the phone for half an hour or so and just ask the question and even call up the local valuer's office and just say you're looking and buying the area. What's their feel that's happening to the market? Because ultimately they're the ones that are going to be talking about market volatility on the report that property you buy and give to your bank. So although I can't give you the nod, if you've done three months of going to every inspection, you should really know. And if you're still questioning it, I'd be questioning whether it's the right decision for you, because you should definitely know by now that there's opportunity there. And I don't know. Are you seeing the market move in the three months since you've been looking there? No, not really. So that might indicate that it hasn't moved. It might indicate there is some market volatility. I mean, some of the concerns about those mines closing down and putting off people, etc. In the valley, I would definitely assume has some screens up. Yeah, has some concerns.
So.
I'd be doing some research. Look, ring the valuers and just see what they're saying. See if the town planners or anyone in the council is willing to have a chat to as well. If you're not seeing the market move there, it might just be. If I was looking, seeing that in a suburb that I was targeting and I was seeing the suburbs around it move up, then I would think that I was pretty good onto a hot spot. But if I wasn't seeing any movement in the area, and it's harder with regional towns because there's difference in demographics and the economic drivers within 10 or 20 kilometres often that you find in that area. But I'd be doing some more research before you put some more legwork into going to every inspection. Does that make sense? Probably devastated him. You okay? Does that help? Yep. Okay, well, next week come back to us after you've done module four and let us know, you know, if you've come up with anything. We've got some. Oh, interesting. Ok, we've got a question that says should we wait to do the research? Because December and January is funny time in real estate. So put off doing the research if the market's moving so quickly because it could all change in January. Look, I think we've Already said that we don't think that. You know, normally you would probably not do the research other than every longer period of time than three months. But I always hear about this January and December and the market dies and no one does anything. And I've obviously got a mortgage broken business. And I hear mortgage brokers spend January on holidays and I think I must be the only mortgage broker who works through January. And I'm the busiest. Maybe it's because no one else works, but I often field in clients questions who've been on holidays. Often I have to tell them that it's the holiday vibe that's got them and Noosa is not a good place to buy. But go and do the fundamentals and research, et cetera. But look, I really think if you're buying in an area that's hot and the market's moving so quickly, do not expect to see. I know your lawyers don't work for two weeks over Christmas in January and the banks pretty much shut down too, and everyone else is in caretaker mode. That doesn't mean that people haven't got properties on the market and wanting to sell. I've always targeted for my rental market to try to rent properties out in late January, February, because most of my properties are near universities. So buying properties around December, if that was your plan, I wouldn't be stopping personally. And I think you're not going to see I'd be interested. But I think you're going to get a whole lot more value out of module 4, 5, 6, 7 if you've done module 2 and 3, or at least made a very concerted effort in doing some of these, doing the spreadsheet and the dot map, and I wouldn't hang back, but one of the reasons that we have the second lot of Q&A calls about four or five months after we finish the first lot is we realize that this takes a lot of time and effort. And we don't expect people to be doing a dot map last week and doing a pin map this week and next week doing inspection and the week following buying a property. And the week after we're up to module six and let's do a cosmetic renovation. We're not expecting that timeframe. That's why we wanted to give you that second lot of Q&A calls at three or four months afterwards, because we're really committed to your success here. We know that this is going to take some time and effort and analysis, and we want to be able to answer the questions to assist you at that time.
Yep.
Good. All right. Where are we? Gosh, we're getting to the end. Anyone manage to get their hand up? We might even get a question.
No more hands. Okay, well, there'll be some good buying. I've been in a position where I'm selling before. I hate selling in December because, you know, if it runs into, you know, after the second week, really you're in trouble because they've kind of got you over a barrel as a seller because they know you either going to have to hold on and put it back on in February in the March market or you're going to have to kind of come to the table. So I like that as even though a lot of you won't be in a position to buy because you haven't, you're only up to module three for future reference. It's a nice time to be buying if you can get in that position where you're negotiating it kind of second, third week of December.
Exactly. And people are buying too. People who are relocating want to be in place by January. So I've got clients at the moment who are using buyer's agents and last week the only way to secure this gorgeous three bedroom house in Narrabeen or semi in Narrabeen at 1.54 million this week because the owners bought a house elsewhere, it's 1.45. So, you know, you're making 90 grand basically because of the virtue that people have to move and they've been committed. So, you know, I think at the moment there's nothing that's going to stop the market. So don't miss out, don't stop your analysis now. Let me just see if we've got lost anything. Okay, so Jane, with suburb selection, as you said, discounting is not happening in Sydney at the moment. So doesn't that mean you should look at other markets as it doesn't meet the first criteria of your Trident strategy? Really good question. And I think this is something we touched on last week. But the reason that I personally came up with the Trident strategy was that I didn't want one strategy to make make money. And I wanted to make money in the short term, long term and in the medium term through renovation. And I guess one of the things that you find in a hot market is that negotiating discounts and buying below the market is just really hard. And I have done it in hot markets and I've usually done it because people don't see the potential of a property which you guys are going to have a trained eye for or they think the property, and that is like even dirty, grungy properties, or they don't think that people want to live in Dulwich Hill or Broadmeadows or, you know, name the town that people don't want to live in Fortitude Valley, and they become, you know, the kind of darlings of the area and capital growth. So, you know, I still think there is opportunity. It is so much harder to buy below the market in a moving, fast moving market. And that's why we do have the three prongs, because it's not about having one way of making money, it's about having three ways of making money. And sometimes you get it wrong and hence you have to fall back on the other two. Sometimes you just can't activate one. Maybe you don't have the money to do a renovation. Maybe you can buy below the market by $50,000. Maybe you can add $50,000 in value by doing some clever $10,000 twist renovation. You've made 100 grand there, but there's no growth. Well, you've made the money. It might be time to get out. It gives you the opportunity to make money and it gives you an opportunity to fall back on the other two prongs of that Trident strategy. I definitely wouldn't be. If you're targeting that Sydney market. And as I said, the Westpac economist basically told me last week that they're expecting another 10% year of growth in Sydney. And as I shared with you, two of the properties that I have in Sydney went up by 16 and 19% growth last year. There is still money to be made, and depending, you don't have to put in place every one of the three strategies. There's three ways to make money. If you can have all three making money, it's great. But it's basically a risk minimization plan that says if you get one wrong, you've got two more to fall back on.
I'm never happy with the way the.
Market is, are you?
I'm not happy now because it's running too hot and it's hard to get places under market. I wasn't happy last year because no one was putting their properties on the market. There's hardly any stock. It's never perfect. There's always something. Something going on that's not in your favor kind of thing.
You know, the thing that I love the most is that the people I speak to about our portfolio, they turn around, they go, oh, you were just lucky.
Could you?
You bought in and the number of people go you bought in that area before it took off and you were just lucky. It's like really like wing has found out. There was months of research and spreadsheets and, you know, nigel mentioned about cessna. Exactly. And so, you know, it's. And that's where you just go, you're right. I was lucky. Eight times. Amazing, isn't it? Let's see if I can do nine. So, you know, it's about having a risk minimization plan in place. And you can't always enact every one of those strategies. But I wouldn't be leaving the market right now because you don't think that you can buy below the market. In actual fact, I would not be adverse to paying asking price. Or if you see the potential and you see a growing market. I know one of the regrets that I had when I was buying in Sydney in 2002 was that the six months that took me to buy, I saw prices go up by $50,000. So, you know, buying even a little bit more than what the market would bear at the time to get in to make money in renovating it. Gee, six months could have given me a property that the other side. That was done. Okay, we've got a final question for this evening. Christine has obviously got good typing fingers. I'm going to see if I can get your. Your mic working. Christine, can you hear us at all? I mean, can we hear you? Hello? Okay, next week.
Next week.
Okay, look, she says, well, how about you read this lovely question for us, Johnson.
Last Monday night, I listed the services of a buyer's agent Before I enrolled in the course. Last week he presented a property to me in newcastle region that was a two bedder in good condition. Recently had a cosmetic renault, but I don't think it was by the current vendor as she had the property for three months. Can you just scroll down a little bit for me? I'm immediately suspicious as to why someone is selling after only three months. The agent said it was financial reasons. What other questions could I ask in a circumstance like that? As I don't want to just take what the agent says, so I don't want to take the agent's word for it. So what are the other questions that christine could ask?
It looks like it's a great property to convert to a three bedder. Okay, christine, so tell me about this property. I mean, the buyer's agent is probably the person who's going to know the questions to ask and knows this agent. So they can probably case out this much better than any of Us can in giving you some insight here. I would definitely be suspicious if there was someone that was selling so quickly. The buying and selling costs are just going to kill this. I've got to be honest with my mortgage broken hat on. If someone has bought a property and gone through the hurdles to be able to prove it to a lender that they can afford it, then it would have to be a very dramatic change in financial circumstances to then make that unaffordable for them. So my number one concern would be getting a building inspection done and finding out intimately what's going on. And if you can be there when that's there, I'd really encourage you to be there so you can ask these questions and get them to spend a little bit extra time in finding out what the issues are. There could just be something that, you know, buyer beware kind of stuff is being covered up. It could genuinely be someone having serious financial issues. And we know, you know, God bless all of us, it doesn't happen to us, but that can happen and. But, you know, the kind of conversations, pieces that you might have, you know, it's difficult. I imagine you've engaged a buyer's agent remote to where you live and so it's difficult. But I often would go and kind of knock on the doors of the neighbors and have a chat to them and find out what's going on. I don't know. I would also be going on the council website and finding out there's some kind of development application that's been put in for the properties that are nearby, because I know I've seen people go in and think they've got the dream kind of property and then find out about three months later that when the sign goes up next door to say that they're putting in building six units for the next year next door. So, council website, hoping this is helping. Is there anything else you can think of, John?
No, the only thing I just think something's gone on, hasn't it? Because they're going to be losing a lot in that transaction, so they're going to be going backwards for tens of thousands of dollars. So something's triggered that.
Yeah, I'd definitely be curious and cautious and it could be a great opportunity and it's up to you to kind of uncover why they're moving on. But yeah, I think that it's a good question to ask and yeah, I'd definitely be having a look around that we will jump into wrapping this up. So, basically, thank you for your questions tonight. Looks like you've had a sneak peek. Everyone's very exciting. I like that. Probably be off the air next week. Look, I'm going to wrap it up. I know we're out of time. If you have any further questions, once again get in the Facebook group. If we don't have a chance to answer them here, we'll go over there and have a look at them as well. There's a lot of people there. Harness the information. We've seen some great conversations this week about asbestos, etc. There's someone on there who's having a bit of issue because they don't have Excel, who doesn't have Excel. So we're going to do some work around trying to make this space spreadsheet into anyone can use it. So stay tuned with that. Also the audio recordings are available. Will be available tomorrow in the Facebook group and in the bonus section of the website. Module 3. The easiest way to find these is just do a search in the Facebook group. Top right corner there's a tiny little mic magnifying glass put in webinar and up they'll pop. So in the next few days, Module 3's webinar from tonight will be there. I might have to black out the Resnext reports. What do you think? As always, if you ever disclose any information on this call and you don't want other people to see it, let us know. Really appreciate those of you who shared the areas that you're looking at tonight with us and, and hope we've added some value there. As of midnight tonight, module four will be available. This is really exciting with the option.
To download the video.
Yeah, it is. For those people having some bandwidth issues, we should be able to help you out there. We keep building on the foundation that we've created in this course. We're happy to take feedback and make some changes this week. Module three was a real hands on week in the sense that you really had to get a bit dirty into the statistics and the numbers and checklists and stuff.
Two big modules. Module two and module three are two really big modules.
Number one is pretty big too because of the buying criteria in the goal setting and people skim over that and it's such laying the foundation. Module 2 and Module 3 are just kind of like take the blinkers off and have a look what the potential is out there for you to have the information to make some real absolute certain. You know, as I said to Nigel, was it, you know, if you're looking in an area for three months and going, you know, is this happening for me, then you might have to start asking some more questions about it because you know, these spreadsheets and pin maps and things should really give you an opportunity, opportunity to go, yeah, I'm on the right track here. Everyone else is going to think I'm lucky in about three years time. Module four is designed to help you find potential properties. These are the ones that are going to suit your particular buying criteria and your personal property investment goals. So it's really where the rubber hits the road. It's an extremely important module and I really look forward to your questions. Next week we're going to get into really looking at the properties and what you should do when you first walk through them. So thank you so much everyone for your contributions this evening. It's so great to see so many of you on these calls. I know a lot of you are listening to this recorded and it's difficult to make all these calls. I know from courses I've done myself that's the case. And I often are listening months later after the actual calls have been recorded when I'm shivering and people are talking about hot weather, wondering what they're talking about. But I just need to tell you that you can go back to these calls at any time at some stage in the future when you're looking at your next property after the one you're going to buy now, and in a couple of years time you can come back and listen to this call and go, ah, yeah, I forgot that. And that's why I have to do the spreadsheet and the dot map and pin map and all these exciting things. It's really going to nail it for you guys. And yeah, all the best to your property success this week.
See ya.
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