Module 5 Q&A Call - 17-12-2013

Hello?

Yes, Roz, we can hear you. Can you hear us?

I can hear you. Ok, Jane.

Yep, Great. I've got a few people joining us. Hello everyone and welcome. It's Jane here. This is Module 5's Q&A call. And of course I have with me the co creator of the Ultimate Guide to Renovation. Hello, John.

Hey, Jane. Hey everyone.

This week you hopefully have completed module 5 renovation costs and loan approval and if you did, you have learned about how to work out how much your renovation will cost and then the steps you need to take to obtain finance. This week's module was one of the larger modules. There was nine videos in total. And as I said last week, some modules are larger than others, but. But each has a very deliberate selection of content and each runs its own natural length. As always, I'm looking forward to your questions this week. So I'm going to get rid of the housekeeping right up front. If you're on your computer and you're experiencing problems hearing or perhaps we can't hear you during the questions, there is an option to call in on the telephone. The telephone number can be found in the sidebar under the Audio options drop drop down menu. You can call that number from a landline, a mobile or even using your Skype account. So when you have a question, all you need to do is raise your hand by pressing the little hand icon in the side menu. It's quite small and hard to see and as we learnt last week, people on iPads don't have a hand. So just jump into the question area, tell me you've got a question and I will unmute your line if you.

Can send me it. There is a spot where you can raise your hand though, isn't it?

It's just not a hand in the iPad.

Yeah, I think so. Someone said that last week.

I think she did and then she couldn't find it. It was a mistake.

If you do find it, I think you can take a picture on an iPad by doing both buttons at once. So if you could send me one of those if you actually do find it, that'd be great and I'll stick it in these slides.

Has anyone here found the hand on their iPad? Not as yet, but the audio tab lives directly on the GoToWebinar control panel, so clicking the hand button will notify us that you've got a question. And when it's your turn, I will unmute you. When I do unmute your line, you will hear a little message that says your line has been unmuted. So you know that you're on. You can also ask questions by writing a question in the question box. There's never a silly question. I really encourage you all to raise your hand. In actual fact, John just broached a question with me this evening. He said, I'm going to ask you this up front because it might be a silly question. I said, there's no silly questions.

Everyone feels like it's a silly question.

Exactly. We all do. As always, be sure that you're making really good use of the Facebook group, guys. Ask your questions there as they come up. Don't let yourself wait for a week or until the end of January now until you have your next call be. Because there's people that are on Facebook. They're willing and ready to help. In actual fact, we've had a lot of activity there this week. What kind of discussions we've had there, Jordan?

Oh, it's been really good. Tracy has settled on a property that I see and she's got some pics that she's posted there, which is great. And we had a bit of discussion around what improvements we could make there. So, yeah, that's going well. So congratulations, Tracey. I'm looking forward to seeing that as it progresses.

Make sure you do those before and after shots for us.

Yeah. And Keith has also settled on a property this week in the Hunter Valley, New South Wales. Congratulations, Keith.

Well done.

And I guess we probably should point out that both Keith and Tracy were testers for the ultimate guide to renovation. So, you know, I just wanted to point that out in case you're sitting there thinking, hey, am I supposed to have bought a house yet?

It's been week five. What have I been doing with my time?

So, no, no, you really should take the time and do your due diligence and. Yep. So that's great. It'll be good to watch those projects as they progress. And then. Are you seeing something there?

No.

No, you're good. The other thing is Craig Trethewey. Craig's the policeman from Emerald who was featured in our promotional videos a lot. He was great in those videos. And he had some quotes. Nicky said that he had four quotes for a pest inspection ranging from $2,500 to $5,500.

Wow, that's a big change.

It goes to show that it pays to shop around and get a few quotes. And your sis. What's your sis been doing? You're up.

Oh, my goodness. She has been so busy. She is. She's settled on a property. The tenants have moved out and she's made some plans to fly from Sydney to Brisbane this week. She grabbed my mum, who was an interior decorator, and she's dragged her up there as well. They got very, very involved in looking at how to renovate this property. She had a great buyer's agent working for her who did some analysis on what could be done on the property. And the renovation strategy was definitely part of the strategy of buying this property. It has gone up in value by about $30,000 since you bought it three months ago, which is fantastic.

That's good, isn't it?

Isn't it nice? And it's funny you ask, because I know that you kind of get caught up in the renovating of a property. And she'd been up there for two or three days and been to council and been to agents and they'd all said that in Queensland it's a bit different, you need to have a deck. And she got builders in to quote on decks, and in the end she got all the costs back from 25 grand to 38 grand. And she had some return on investments, on the rental yield improvement and on the value add. And I pointed out in the spreadsheet that for a $38,000 investment, she was actually going to make $25,000 in value, and it probably didn't add up. So she went back to the drawing board. Because it's really easy to get caught up in a renovation, especially when you're getting quotes and having one builder up against another.

Well, you're kind of looking at the place and you're just thinking, well, it needs to be done, I just need to pay for it kind of thing. But that's why I always like to start doing it backwards. So starting with the end value in mind, what am I going to get to the place resold? What does it owe me? So what did I buy it for? What are my expenses and what profit do I want? And then the actual renovation component, my budget doesn't really change. Or if it does change, that's a disaster, because that's coming directly out of my profit. So then within that budget, you've kind of got to decide, right? You're not going to be able to do everything. And there's stuff that you just have to prioritize. If it is the deck, then that money is going to have to come off somewhere else, otherwise all it does is it comes off your profit.

Exactly. I think it's so easy to get caught up in the renovation and the fun of it and looking at it and thank goodness my sister had spent some time and also getting some analysis on what the end value would be. In actual fact, she paid a valuer to go and do an analysis on the different options. She was considering what the end value would be. So she had something definitive and it costs about $200.

That's an excellent way to do it.

Yeah. So look, she's on the Facebook group. Peter Slacksmith. I'm sure she would be very happy to share her experience. In particular how to renovate remotely, because I know that's something that we all struggle with.

Yeah. And there's a couple of people in the group that are keen on learning a bit more about that. But yeah, it's difficult, isn't it?

And anything else that came up that was interesting?

No, that covered off Nigel Moore, who had some questions on the last call, which was about the same subject. Buyers, agents. Oh, we had a bit of a discussion around the former Prime Minister's house. Julia Gillard. 250k over reserve.

Wow.

And I posted that one and some other post there from Steve Peritch, who's always good value and a great contributor.

Yep.

Hi, Steve. And that's about all, really.

So it was all pretty good. We had a lot of things happening and a lot of really active people. So we had some really good stuff and people were pretty interested.

Yeah, people seem to be getting into it more and engaging more. So it's great. It's headed the way we planned it to go and it can be a really good resource for everyone. It just requires participation really.

Well, let's move on to module five. Before we do, let's just cover off the fact that this is not a tech support call and goodness gracious me, they're going to depend on me for tech support. We're all in a bit of trouble. Please email supportourpropertysuccess.com if you're having any trouble whatsoever. As you can see, we're continually trying to listen to your suggestions. Concerns, improvements, opportunities. We now have all the videos downloadable. I've just tested them actually in itunes, which is all very exciting. Seen all the artwork come up and.

Everything comes in a picture and your name.

I hate it. John. When I buy a course and I download the audios and they don't number them or anything, they're just in so many different orders and no one takes the time and effort to do that. So kudos for having done that for us all, making it easier. So now I can definitely listen to.

I like to listen to stuff in itunes. Too. So I'm actually listening to the course again in itunes to. So I can work out the improvements for next time.

If you learn anything, let me know. Okay, so let's move on to module five and a quick review for module five. We went through a lot of things this way. The costing formulas. So kind of some general rules of thumb on cosmetic and structural renovations. John and I discuss this all the time, mainly because everyone wants to have a rule of thumb, don't they?

Yeah, it was one of those ones that we both kind of said sometimes they're kind of not worth their salt. But at the same time, it's just nice to have some kind of guide. But it's better than nothing. But I think the safest way to go is just as I said before, starting from backwards, what's your resale level? So for that you need to know your comparable sales. And then that dictates how much work is involved, how much the renovation's going.

To cost you, how much you want to make.

Yeah. How much you want to make is your profit, and then what your costs are going to be, and then that kind of dictates what you buy for. And that's the way. I think that's the only really reliable way to see whether a project stacks up or not.

Exactly. And if you can't, I mean, you then have the starting point and you have the ending point, and you know exactly by looking through the market and looking at properties in your open homes, what the ending point should look like and what it's selling for. So working those costs back, the costing is, I guess, the thing that really holds most people up. And geez, I have to say, that budget that's up there at the moment.

Yes, it's back up. You may have noticed that the budget appeared kind of on Monday morning. Sorry, on Tuesday night, midnight last week, and then disappeared again. So we kind of had some pretty immediate feedback on that. And so we pulled it back down and we've worked on it all week, and we've now got a structural renovation budget and a cosmetic renovation budget, and we've got a tutorial that we'll be doing in the next week or so. Yeah, in the next week or so. That will be up shortly, too. So it probably looks a little bit confusing to start with, but I think it just.

You had to dumb it down for me, really. I went through the structural renovation budget and just went, oh, my gosh, what are these clip things that I have to know how many I need per plasterboard thing? I'm just doing cosmetic renovations. Can we take this out? Is this all too much? And we didn't want to overwhelm people. So we have two versions.

No, that's right. We wanted to. When you actually get to finally use it, that you're going to have a good experience with it and not going to look at it and go, oh, too hard. Give me something else. So it's designed to work with your property evaluation checklist. So as you go through the rooms, starting at the top down and marking off what needs to be done. And then you can either get quotes for that, depending on your kind of experience level, you can just work with the top section, just add your quotes directly into there, or you can go down and use the itemised section. And even if you're not experienced, you know, something like the painting section, the itemized section will help because you've got the price of, you know, everything from paint.

Well, gives you an overview of what you need.

Yeah, doesn't it? Yeah. And then those. The spec drop down is basically to say, right, here's what we think is bargain price. If you can get it for this price, then that's great. You're probably better off doing your costings on the average price.

Which is. I mean, there's the retail price.

Yeah. Which is kind of. Hopefully that would be worst case scenario.

But that might be where people start for their first renovation.

Yeah.

And look, I have to say, John, the effort that you've put in, putting some of those extra. Gosh, the intellectual property. What did you say to me yesterday? The price alone of the course is worth the list of the plants that you can use in the landscaping after, what, 20 years of trial and error of what the landscaping can look schmick. You've actually listed the actual plants names that people can walk up with their little list and go, here it is, this is what I want.

Yeah, well, it serves as that too. It's a bit of a guide to which kind of items that have worked for us in the past. The landscaping is a good example. We spent time kind of, you know, I'm not a landscape gardener, but I've hired landscape gardeners and just, you know, grabs what has worked and put that in my budget and kept those plants. And it's all those architectural plants like cordylines and yuccas and all that kind of stuff in there and the grasses and that kind of stuff. So even that will help a bit.

And even like you've put down some of the brands and names of the white goods that you use in the kitchen and the bathroom, etc. And given a price for that. So people have got no idea. I mean, we've gone up there in the bonus section, the Aki center cost guy, but that's kind of like, you know, that's a real shot across the bow, if we have no idea. And I think you go in there and you have a look and it says, how much will it cost me to do a kitchen? And there's anything between 8 grand and 24 grand. And to be honest, I did an $8,000 renovation on the kitchen. I had the same kitchen quoted up by Domain to come and do the exact same kitchen for 24 grand. So that 8 to 24 is actually the same standard.

Yeah.

So, guys, I really encourage you to jump in there and have a look at that budget because as you probably won't appreciate this, and for those experienced renovators, I'm sure we're going to get a huge amount of feedback because it is by far beyond any renovation budget that I have seen in any course across Australia. And in actual fact, someone was telling me about a course that's come out recently and they've got a budget estimator without actually having any real costs in there. And they estimate that budget to compare $1,500, if you want to download that yourself.

I showed it to Craig today, actually. He's in the middle of a renovation. Craig Trethway, who we were just talking about before, and he loves it. He's going to be using it on his next one. Sometimes it's not until you actually put it into use that you appreciate the biggest.

I don't know how to actually rave enough about this for people to really realize the value. But just take it from us, go and check it out. It is by far and beyond one of the best tools that you will have and be able to use in.

The course and add to it too. So I think it'll grow. As you grow, it'll grow. You can put in your own quick calculations. So those quick calculations section is something like if you get your, say, all your floors sanded, for instance, and then you go and measure up all your floor space and then next time you know the cost of what the floor sanding will cost. So you make those little quick calculations and you can do that for painting and plastering and all those things. So each time that you come to do a costing on a property, you don't have to go through and do it item by item. You can just go straight to your Quick calculations. And that's where you start to get really good at doing your due diligence on a property fast and working out really quickly whether it's yay or nay.

And that's one of the things we try to do. Also in that bonus section we've got a calculate your own rule of thumb calculation. And the first one is for you to actually calculate what your rule of thumb is. It might be cosmetic renovation. The value has to be 135% or 140% of the purchase price. The structural renovation might be 170, 180%, but it's around you, calculating for you what your rule of thumb is. And then you've got that quick calculator and that second tab you can go to any time and go, okay, I know it's always 135. They're asking 400. Can I get 556 for it? We're trying to give you guys the tools and the experience and knowledge by not just giving you the the answer, but telling you how you can actually build that yourself and have something that's meaningful that you can use time and time again in the future. Having said that, I think I'm up to the second point. How much cash do you need for your 80 to 90% LBR, which is that calculator? How to get pre approval, when to get pre approval, why pre approval is important. And just be aware with the NCCP guidelines that came back out in 2012 that every 90 days you really need to have your pre approval done again through lenders. They want to make sure that your circumstances haven't changed. Every time they do a pre approval they will hit your credit file and your credit file and the number of hits on your credit file will go towards your credit score. And there's only a few lenders that publicly say they don't credit score. But the reality is that I've seen in my business that credit scoring as being one of the biggest hurdles of 2013 from a finance point of view. We also talked about finance structuring and finance for self employed people. We talked a little bit about low doc loans and where they've gone since the NCCP. Look, there is some back and they're probably 2 to 3% interest rate higher. Yeah. Having said that, I know people who have done renovations and have paid 3% a month, 4% a month for finance, for private finance to get a job done. If you look at it, I know I put some of my first renovation on a credit card at 20% interest. But if you look at $10,000 and at 20% interest for six months, it really wasn't going to be costing you all that much money. So you need to do your numbers first.

Yeah, it's cost of doing business.

Exactly. It's about how much you make. It's about that profit calculation, isn't it? Information about your credit cards and your credit file. Remember, for every $5,000 limit on your credit card, you can borrow 20 grand less. It's really important that you understand that banks will look at your complete limit, not your balance. Some lenders, if you can prove over three months you've paid off your credit cards, they will forget them, but the reality is that they're there. Usually credit cards and credit enquiries fall off your credit file after about five years. But we've seen that credit cards continually being monthly, almost continuing credit hits are going on to your credit file now, alerting everyone that you have that credit file. Lenders, mortgage insurance, we talked about that being an opportunity cost. I shared with you my story that I had a 5% deposit when I started and I saw that the $10,000 cost of mortgage insurance was an opportunity cost. We talked about interest only loans, we talked about lenders terminology. You can't really go and play ball with the guys until you understand what they're talking about. I just wanted to give you a heads up on that also how to use a line of credit, what a line of credit is. Even had a conversation with a client today who's quite an experienced renovator and property investor. And we just went through line of credit, credit card, what you don't use, you don't pay interest on. Line of credit is usually 0.15% more expensive than a normal variable loan just for the flexibility of a being able to pull on the money at any time. But Also usually they're 30 years interest only so you don't hit that five year mark and have to go and reapply for another interest only period. And the convenience of that can outweigh everything, especially if you've gone and bought other properties and loan portability. So that's one of your questions.

I've got a question about that. I won't ask it now, but I'm interested in that.

So we've got quite a few people online. Has anyone got a question or anything that they want to contribute about this week? Maybe I'm talking to myself again. It does happen. Let us know you're there, guys. Anyone have a question?

Stick your hand Up. All right, my question it is then. So portability firstly, can you just, maybe just do a general recap and just explain what loan portability means?

Yep. Glad you asked. This is the silly question, is it?

Yeah, no, they get sillier.

Okay, look, portability is a tool and it's a tool that renovators can use, and it's a tool. I've done a lot of research into how, how to help some of my clients do flipping without continually hitting their credit file. The thing is about a flipping strategy or a buy, renovate, sell strategy is that every time you purchase a property, if you are actually actively getting a loan secured against a new property, your credit file is being hit. And we're seeing time and time again, if you're having a pre approval and you're renewing the pre approval, and even sometimes your lender will hit your credit file at pre approval stage, hit your credit file at formal stage, you might have two or three enquiries from the one loan. As I said, keeping that credit file clean and without inquiries is imperative. There's lenders out there that will do credit scoring, and credit scoring is one of those mythical things that no one really knows what goes into it. But you know the length of time you've had at your home, length of time you had in your job, do you have a home phone connected? Do you have bank account numbers? If your mortgage broker or branch loan officer puts in that you've got cash of $50,000 versus savings of $50,000, it's considered to be more advantageous to have savings of $50,000 with the bank account noted than $50,000 in cash, which could be under the bed and cannot be proven.

So.

I guess there's a couple of things that you need to know about portability. The thing that I like about portability in particular is that it gives you the opportunity to move alone and to a new security and under the guise of flipping, buy, renovate and sell that new security. So usually portability has been set up for homeowners. I'm only manipulating the strategy to allow for my client base, but set up for homeowners who are moving their loan from one lender to the other, the ease of moving it.

So they're going to sell from one lender to another.

Sorry, from one security to another.

So they're going to sell their house and buy another house.

Yeah. And usually what most lenders need, the hundreds of lenders that are out there. And to be honest, there's probably about 15 lenders that are the prime tier one, tier two lenders of most of those lenders, what they require is what they consider to be a back to back settlement, which is on the day that you sell your property, you actually move that or port that loan to the new security. So that is traditionally how portability works.

So does that mean all the parties have to be there at exchange in one room and literally goes through. I went to an exchange once, it was really interesting. Everyone rushed in, signed everything and then it was all over. And they kind of talked abruptly to each other for about five minutes and then off they went again.

I went through probably the most horrific exchange I've ever been through last Friday. I had the client solicitor call the client and the client called me to say they were $58,000 short and the funds hadn't turned up from the incoming bank for the new funds that were supposed to be there. We finally tracked down the bank and all the solicitors were saying that they were going to leave within 15 minutes. We finally tracked down someone within the incoming bank who said, yes, the money's there in an account waiting for them. I said it's no use in the account. You said you'd turn up with the check. And I managed to beg, plead, bribe, you know, all of the things above to get someone from that office to run down to the local branch and get a bank check and run back up in exchange. And yeah, it's always easy to those things.

Is it usual for you as a mortgage broker to go to the exchange?

I wasn't at the exchange. It was in Sydney, I was in Melbourne. This is me via phone. And 56 phone calls later, within 15 minutes, managed to get a bank check out of someone up to finish it. If you can do anything you put your mind to it is what I find now. So the rest of your portability questions, I know you had a few.

No. Well, you kind of answered one. One was that back to back one. So you can kind of only do it if you've got another security for it immediately to go in the case of the other side of the house. Okay, so if you were for instance to have a term deposit or something like that.

Glad you asked. So this is my sneaky strategy for flippers, which is moving that loan to a term deposit. So let's just say if we look at property, we know that banks consider property to be safe. We look at shares, they'll usually lend you 50 to 60% of the share value as a loan. You look at property, they'll lend between 80 to 95% of the property value. So they can't see property as a safe security. When they're looking at funds or cash that is such a safe security, they're looking at lending you maybe 95 to 100%. So if you've got a $250,000 loan, you really only have to put maybe $260,000 or $250,000 in the term deposit to secure the loan against. Now, it's an interesting strategy. So you buy, you renovate, you sell the property, you move the loan against the term deposit of cash, and then you move it to the new property when you have found the new property. Now, I can only think of two or three lenders that would allow you to do that using the term deposit. And usually they're thinking, you know, they'll say, yes, they do it. But reality is maybe three to six months tops, some can push out to.

12 months that they'll leave it there for.

Yeah. But you have to remember you're paying interest against that loan still.

Yeah.

You've got no income coming in and you're paying interest against the loan, and you can't touch the funds that are turned.

How do they kind of go, all right, it has to be a certain amount of time for the interest for the term deposit.

Most lenders, or of the two or three lenders that do it, they usually have a term that you can have it there for. It's not indefinite. The reality is they're getting interest on something and it's not really going up in value, is it?

What's to stop you cashing in your term deposit?

You can't. So they've secured that completely. Yeah. So kind of like a caveat.

Yeah.

But having said that, one of the lenders who I really explored greatly around this substitution of securities, what they call it, for the portability, substituting security of one property for the term deposit for the next property. Every time you change the security, they'll actually hit the credit file. So the portability benefit is gone. Because what you're trying to do with portability is A, not have to seek reapproval, but B, not have to get a hit on your credit file.

Yeah. I guess if you. For someone, though, for instance, if they're doing it full time or their employment status has changed, then you'd probably still take the hit on the credit file.

Absolutely. Unless the lender is one that will go. Too many hits on the credit file. I'm not really happy about this.

Yeah.

So you just have to be aware of that. So that whole term deposit, removing the security is good. One of the things you have to be aware of is that you cannot change the terms of that loan. So if you've got a $250,000 loan against a $400,000 property, that loan to value ratio is a certain amount. If you then go and move that $250,000 loan against a $300,000 property, the loan to value ratio has changed. So you can't reduce the loan to value ratio. You have to pretty much buy the same value or above value so that you're not actually ever reducing that loan to value ratio. And obviously, if you get into mortgage insurance, then all cards are off the table.

Right? Okay. Because that would make it upside down if you went with a property that was less value.

So if your strategy is to do this and this time you've got a $500,000 loan, but next time you need to increase it to 600, won't work. So you might spend three to six months of paying interest on a loan secured against cash that you. That in actual fact is not going to get you what you need at the end, which is a loan of 600,000.

Okay, all right. So I've got my house, I've sold it, I've stuck my loans portable. So I've secured against a term deposit and then it takes me a couple of months to do my due diligence on a new suburb or I buy another property and then I take my loan from the term deposit and put it on the new property and it's, let's say it's above the value of the last property. So then do all the normal kind of checks and stuff apply bank valuations of the new property and all that stuff?

Absolutely.

So it's just like a normal application.

It's like a normal application without them reverifying usually the fact that you can afford the money because they've already given it to you for 30 years. In most cases it's about substituting the security. But they want to check that that new security is actually security that A, they want B is of value and C doesn't diminish or reduce your loan to value ratio. So we've got a question here from Wing that says, what do you mean by moving it into the term deposit? It's just the security that the loan is actually secured by. So once you get your costs of your contract of sale, sorry, your contract from the lender, the lender is going to say, we are going to lend you $300,000 secured against 32 James street in Valmain.

So it's not the proceeds of the sale wing, it's the actual loan itself. So it's the entire mortgage essentially.

But the proceeds of the sale usually go towards the term deposit. So you're actually moving the proceeds of the sale, the cash you need the cash to move to secure against.

Got it. Yep.

I'm going to confuse things just for a second for those who want to really go advanced and pause this, think about it, forget it, come back in a few years and go, oh, that's what she meant. If you think about taking. So this is just a little aside. If you think about taking a loan against an investment property, the initial loan that you take, bar any renovation or construction costs that are actually against that property is the highest loan that you'll ever get against the property. So if you've got a $500,000 property, a 20% deposit means you've got $100,000. So the loan is $400,000. So the highest loan that you can have against that property at that time is $400,000. If the property then goes up to a million dollars and you go, woohoo, I'm going to take some equity out and go buy another property. The new funds. Well, the purpose of the new funds is for the new property, not for the existing property. The purpose of the funds are to go and buy new property, accessing that equity. So the highest amount of loan that you can ever have, bar going back to borrow for the renovation of that actual property is that initial loan you take out. So if you're someone who has a lot of cash and you say, look, I want to have a, I want to secure the biggest loan that I can get against this $500,000 property, then what you might do is, you might say, what I'm going to do is I'm going to go and put in additional cash into a term deposit. So it's going to be secured against two securities. So you're going to take the $500,000 loan out against the $500,000 property, but the second security would be another $125,000. So that your $500,000 loan actually represents maybe an 80% loan to value ratio against the entire security value, one being the first property worth 500 and the second being the term deposit worth 125.

So it's the one line against two securities.

And when the property goes up in value to maybe $625,000, you just go to the bank and say, can I have my $125,000 term deposit released from the security? Now? It's exactly the same thing that you would do if you went and cross collateralised property. You'd say, I want my $500,000 property. I'm offering my other $500,000 home for $500,000 in cash to buy a property. So you're not paying mortgage insurance. You're securing with a second security. But it represents, you know, the fact that the loan as a total is only 80%. I know. This is advanced.

Yeah, I know. It's really brilliant.

But it is, isn't it? Yeah, I'm pretty excited.

It is Very, very.

And I mean, it's only for people with a lot of cash.

Is that still a line of credit or can that be done as a line of credit? Can you just. Or I guess it's the same because you're not.

Okay.

Yep.

And I mean, you could do as a line of credit, pay a little bit more and have that $500,000 there, you know, But. And I guess the thing. Let's go back. Oh, it's a bank guarantee. It's like a bank guarantee says wink. No. So. Okay, Julie, I see. I understand. Yes, it is pretty when you like, as I said, pause this, jot it down in your notes, come back in a while when you've done a few of these or if you're experienced. Think about it. The thing about portability is that you're securing the loan against the property that you're buying. The reality is, if you're one of those people who has paid off their home loan and paid it all down, and maybe you've got a $600,000 home and you've got 100 grand owing on it, you've got a huge amount of equity. If we did a quick calculation and said 600,000 times 0.8, that represents an 80% loan to value ratio. So we're leaving 20% on the deal, no mortgage, insurance. So it's $480,000 of equity available. But remember, you've got 100,000 you've already spent, so there's $380,000 there. Now, if you went and set up a line of credit against your home for $380,000, you pulled it out, bought a $300,000 property, covered the cost, did the reno, sold the property. Property has no loan against it. You're using your line of credit against your home. Put the money back in your line of credit until you find the next one. Do it Again, do it again. The banks approved that $380,000 line of credit for 30 years. You never have to go back and ask for that.

That's the way I do it.

And that's the way you would do it if you had the cash in your home or the cash available to do it. Portability is an opportunity to utilise another methodology that allows you to kind of move the security. So move the security of the loan against the security of the first property to the loan against the term deposit and then the loan to the new property. So that's it. We've got a few questions here about that. Why banks freaked out Nathan, about your hits on your credit file? Look, I have this conversation with banks quite a lot and every now and then I speak to a credit assessor that illuminates one more key to the puzzle that says things like the savings versus the cash terminology or putting in loan accounts. If they ask for three telephone numbers, put in three telephone numbers, even if they are the same. They have computer generated statistics that show, and most of these banks, CBA, Westpac, etcetera, over 100 years worth of timeframe. They have so many statistics that show the people who default and they can actually characterise very, very easily the typical defaulter. And the typical defaulter is someone who actively goes out and seeks credit regularly, who actively uses credit as a management tool of their unfinancial fitness. For want of another word, they can't budget, so they get another credit card and the banks essentially look at a credit file and they credit score against your credit file. And your credit file is basically what you can download from mycreditfile.com vita or Denim Bradstreet. And it essentially tells you who's made inquiry on your file. They use that as one component. As I said, they use so many other things. Time in the job, time and home, your assets to age ratio, how much should you have in net assets by the time you get to a certain age? They add all of that up and say, is this person at risk? And I have to say I've seen in 2013 some of the most obscure high risk ratings come in as clients where the lenders have said, we're not doing 90%, we'll only do 80%. And you look at this person and no one can qualify or quantify why. The special computer that says no money for you today, like, what's it, Little Britain? The computer says no. Yep. And we've gone back and we fought it and basically said the computer said no. And we don't know how the calculation's done and no one within the company knows how the calculations are done. So, you know, you test things and sometimes you'll get a good person on the other end of the phone and say, can you make the wife the major applicant one and see if that run that decision and see what happens? And can you manipulate things to just change the order of things? Not fraudulently, not declaring anything falsely, but what happens and just see if it is something that can change things. So yeah, the credit file is something that you should keep clean. Understand? I mean, I have an alert on my credit file. If my credit file ever gets hit. I get an SMS to say that my credit file's been hit. Every year I get a copy of it.

So should people be clear about that when they're going in and checking out different loans or with their mortgage broker, should they be saying to their mortgage broker, hey, make sure that they don't be hitting their credit score here, there and everywhere.

Oh my gosh. And can I say there's some really, mortgage brokers work, usually they work under what's called an aggregator. And the aggregator, the banks don't want to talk to 10,000 mortgage brokers. They want to talk to maybe five to 10 aggregators that aggregate lending for the thousands of mortgage brokers and negotiate commissions and all those kind of things. And so there's probably about 10 major aggregators out there. And of the aggregators that are there, you know, I guess that it's, it's, it's their relationship with the banks as well that are important. And it's, I've lost my train of.

Thought here asking not too many hits on the credit file.

There's a lot of, but there is a lot of new mortgage brokers coming into the company. And the aggregators have some really good software. And they have the software where someone sits down with you at night over a Tim Tam, a cup of tea in your home and they say, hey, let's just see which bank will say yes. And they send it to five banks at once and that's five credit hits. And I had a client recently who'd been through, surprisingly quite a well known broker. They had been to a course that had told them to go out and get as many credit cards as possible to put on their renovation on. And they applied that night online for five credit cards and had them all declined. And they hit their credit file all at once and the mortgage broker then took them to a lender and the lender declined. And so we had to work pretty hard to get them a loan. But just the inquiries, the credit cards. Funny thing is, I picked up at Christmas time last year in New Zealand a property book. And this guy, I was reading this book going, oh my goodness, I'm sure there's legal suits against half the things that he's recommending. But he essentially suggested the same thing. Go out and get five credit cards on the same night because the banks won't check your credit file until the next day and see that the other lenders actually apply for it. Australians seem to be a little bit more advanced in that respect.

Not many other respects, of course, as well.

I aggregate through a company called Choice, which is owned by Advantage, which is backed by nab. And most of the major aggregators these days, you'll find are actually backed by banks. Someone in the last three to five years went, gee, as a bank, wouldn't it be handily if we controlled all the mortgage brokers? So you'll find more and more that that's the case. So let's have a look. I think we've got another question here. I have an Anz home loan with a professional package. It came with a $6,000 credit card which you don't use, but they insist that you have. I think you'll find. Yep. I called the credit center, asked them to get rid of it. They said it's condition. The professional package. That's exactly right. It had the vague impression it was optional to get it when I signed up. Anz insists that you have that credit card. They won't let you reduce that limit. Other lenders and other professional packages don't make you take the credit card option. I know, it is a bit sad, isn't it? Yeah, look, it's one of those things, you know, I get to hang out with bank people and they think a little differently. And one of the conversations I had was around why that's a requirement. And they believe, once again, based on their statistical modeling, that if you have three products with a bank, it's near impossible for you to move. So if you have a credit card, a savings account and a loan, the pain of moving is so great that you go, you know what, I'm just going to stay. So one of those things, I guess Anz has decided is their credit card. So, yeah, you're stuck with it, unfortunately. And it's not easy to get an Anz credit card either, or maybe without a loan. But if you just have a loan wing, I think you might find this a Little bit easier. I don't know about you guys, but I get letters at least once every two months from different credit card companies saying, we've just upped your limit to 20, 30, $40,000. Congratulations. Or would you like to have a black card or a platinum card? And I'm like, no way, just give me the basic boring card.

Do they have any truth to them at all, those letters? I mean, do they actually have. Because they haven't done a hit on your credit files.

If you signed it, if you sign up, you'd get it. But they haven't actually signed you up. They can't sign you up without you asking.

No, but how do they know what limit they can do?

I saw a client once in Sydney and she had $80,000 worth of credit cards. Now if you think about that, $80,000 worth of credit cards. So what we said was that for every $5,000 you could borrow 20,000 less. So that affected her borrowing capacity by $320,000. And what went on? Further discussion. I went through, what's happening with your budget? Why do you need this many credit cards? Because I was concerned obviously for writing a loan for her based on that. And she said, oh, no, no, no, I don't actually use them. It's just they keep sending them to me. And it's nice sometimes to have the platinum card. When you go out for dinner with people and you go, I've got the platinum card, like, no, no, no, let's get rid of them. So she, she used maximum like $1,000 a month. So we got rid of the credit cards and all of a sudden she could buy her dream home. Always good. They send invitations, letters to certain postcodes deemed to be better off suburbs, and that's how you got offered one. Well, that's interesting. I know that. I went to a talk recently by RP Data that was designated for mortgage brokers and they essentially said that there's a number of tools that companies that monitor sales etc are using at the moment. But they essentially said that you could put your client's database into their system and anytime one of the properties came for sale, you could send them a letter to say, hi, your property's for sale. I notice you're doing what can I do to help you? And they also have the opportunity to go in. And this is not just Happy dad or the, all of those kind of modelers can do that. You could go in and you can target a certain suburb with a certain median price as the properties come on the market. So yeah, Nothing sacred these days.

Nope.

As we've found out in kind of getting our message online and the course online, you can definitely find out a lot of information if you've got the time, effort, knowledge, know how and will to do so.

Absolutely. Has anyone got a question they'd like to ask us in the flesh as opposed to typing?

Oh, gosh, maybe you've got a hand up. Anyone got a hand up? No hands at all. Watching. I'm watching. Scrolling, scrolling. Hands, hands, hands. Okay. No hand on the iPad. Okay. Okay. So there's a couple people here saying they're stuck in the research. Absolutely. You guys, we're releasing these videos one at a time, basically because we want to introduce you to the concepts and lead you through them. At this stage, we know that the really hard bit was the first six modules, and that's why we really concentrated on getting you through this. When we get to the next two at the end of January, we know that you progress through all the way up to module 10, 11 and almost 12. So we're here also to answer those questions. The thing is that what we're really keen on taking you through is don't get stuck on the research, understand? It does take a while. Our beta testers started August.

Yeah, you're pushing me now. I think. That's right.

August. And we're talking December now. So, you know, August, September, October, November, December. Four or five months. And I wouldn't always spend three months looking into a suburb. Also, and if you've got a question.

About any of the previous modules too, you're welcome to ask it on the Facebook page, too. Oh, yeah, or now, it doesn't necessarily just have to be about module 5. If you've got a question, ask it, whatever it is.

Yeah, exactly. So let's. Well, I know that Nathan's going to try to ask questions, so how about we see if we can unblock his microphone? We'll give him a go, see if we can hear him. Nathan, is your microphone working? Okay, everything's on. We're talking. All you need to do if you're having trouble with your speakers is go to that audio section and click on Settings and just go to audio and see what speaker is set up. Play yourself a sound to test that it works. Nathan, we have you off mute. Your microphone doesn't work. That is. Okay, I'm going to answer your question anyhow, being the kind of kind person. It's Christmas, isn't it? You said in the past you're not a fan of trust funds. Well, I think I'd be happy to have a trust fund personally, but it's probably buying in a trust is what you're talking about and you found that buying in your own name is your preferred method. Well, look, I guess that's. This is definitely a conversation you need to have with your accountants or with your financial planner.

We should have a little sound effect that I can press and just go. Disclaimer.

Disclaimer Jane, don't answer this. I actively sought out an accountant early 2000s that could help me structure things. And I used Dale Gatherum Goss. He wrote a great book and it's been updated in the last 18 months called trust Magic. And he pretty much said that you can claim anything you possibly could think of in a trust. Things have changed. Anyone who has had a trust will find that in the last year or so they probably had to give their accountant an extra thousand dollars to change some of the requirements. I guess the fear that is associated with asset protection originally sought me to get a hybrid discretionary trust for the company acting as trustee. So at any time I could decide, you know, of my husband and I in the trust as directors and beneficiaries, who was going to get the funds, the cash, if one was working, one wasn't, you know, what was the benefit going to be, etc. To that person. And you know, there's all the question about negative gearing being held within the trust or being allocated and all of those kind of things. I guess the gripe that I had was that one of the benefits of having a trust was that the perception was if I had the title in the trust's name and I had the loan in my name, if someone sued me, the trust owned the asset and I own the debt. So all they could get was the debt from me. I understand that in recent years through the family law en courts, and don't quote me on this, but once again, speak to your accountant. What does that disclaimer sound? Disclaimer Ding ding. Accountant or financial planner that, you know, family law courts essentially said if we can see your name on any document, we can chase it through. So to some degree, maybe the asset protection that I personally was seeking has gone. The income distribution and the benefits may still be there. Now, remember, I invest. Sorry. My renovation strategy has always been cosmetic. However, John, yours has been structural. And buying within trust and having some of the tax benefits of that is something that people who do structural renovations I'm sure would.

It's probably worth checking out anyway. There are accountants that specialise in that kind of thing. And, and yeah, that's what was recommended to me and that's what I'm using. But it's all pretty complicated.

I just, I don't understand it. And I know every year my husband actually we're having this conversation at the moment, he says you have to go and do all your tax returns so we can do all our tax returns and you know, we end up doing two or three tax returns for different all the properties. Oh my goodness. I'm not even going to share with you the pain and effort involved. But the reality is that there are so many different trusts. Family trusts and unit trusts are a trust type that most lenders will take without any question. A hybrid discretionary trust with the company acting as trustee is a little bit more advanced, has a little bit more complexity and I've seen in the last three to five years most lenders will not accept those trusts. There's probably two to three lenders that will. So I found myself as a mortgage broker pretty much in a situation where I couldn't refinance to another lender that I wanted to because they wouldn't take the structure that I held my property in as a security. So I became limited by where I could actually refinance to. So that's something else to take into account. There's obviously bear trust associated with self managed super funds as well as. And you just need to be aware when you are setting up this structure that you understand the benefits, you understand the cost, you understand the setup cost, the ongoing cost, why you're doing what the benefit is for you, how it fits into your strategy and you also have to understand the complications and effects it has on you getting financed. So as I said, most lenders hate hyper discretionary trust companies acting as trustees. All lenders, if you have a trust, they will require a trust deed. They require it to be certified by the person who set it up. Essentially. Sometimes they'll take a JP to say that it is the most up to date trust and they'll take two to three months, two to three weeks usually to review that trust deed and they'll charge you possibly an extra $600 to do it. So that's trust. Can you recommend a good accountant in Melbourne? Yes, I can. Send me a message on Facebook and I'm more than happy to put some thoughts up on that. I can't see the cosmetic renovation budget. John.

I was just looking for Lou and the attendees because I was going to put that one on. It's nearly ready we went back and we simplified it a lot and you.

Dumbed it down for me. Be honest.

Well, no, actually, I flicked it out to a few people and it was. Yeah, it was overly complicated for a cosmetic renovation.

I just didn't want people to get to have a look at it and go, oh, my God, that is so far advanced from my very first cosmetic renovation. I can ever use this without seeing the benefit of going, wow, there's so much in here that's going to save me time, effort and money by getting this right. And I think that's that cosmetic renovation. The fear that we had, if we put it up, everyone would download it, and that then became the budget that you used forever. And I just want this to be right before we put it up again. And we're 24 hours away.

Yeah, I would say so, yeah. The person who helps with this, and you'll see her in the Facebook group, is Lou Pilkington. And she's helped us with a lot of the design work around the supporting material, all the checklists and all that kind of stuff. And so she's been really, really wonderful.

We've had. I mean, so many of the beta testers have contributed extra in so many different ways and modified spreadsheets and said, hey, we think this would be better and we really value that. We had another private Facebook group set up just for hotspotters who were doing the pin map, dot map.

Mainly the dot map.

Yeah.

I think they probably got into the BIM maps now, though.

And we've got people in Perth, Brisbane, Sydney, Act Western Sydney and Melbourne doing dot maps. So, you know, it's. And as we said before, you know, if you want to share information, please feel free. Not everyone has the same buying criteria as you, but there's information there. We've even seen people use Google Maps and some versions of other maps and do it electronically. And as we said, you know, the very first time you do it, I really encourage you to grab the dots and grab a map and do it by hand.

I like doing it that way. I just don't think you can beat it. It's better than logging onto a web page or whatever. Even though I believe Google haven't said that, I'm going to give you a tour where you can do it the other way. Google Maps has apparently updated stuff that you can upload spreadsheets or there's some way. Scott was telling me during the week, that the Google Maps have just made it easier to actually do that. But I still like it. I stand in front of mine with a beer and I look at all the suburbs and I think what's happening?

Why is happening here? Yeah. And I mean we found last week in one of the questions someone was saying there wasn't enough of a discrepancy to actually change the color of dots they had. So we don't change it from a 10 year growth. Remember the long term growth is important. But change the interval of what you're actually putting the different colors up and you'll start seeing it speak to you.

Yeah. So smaller increments instead of having it was down to point percents in the NV said, do you remember what we.

Came up with last week rather than less than 5%, weren't we doing 1 to 2 and then 2 to 3? Or was it half percent?

No, I think it was half percent because the range I think for Sydney was coming in at like 4 to 6 or something like that. Most of the suburbs it was quite, quite low.

And who else has a question here? We've got the top of the hour. Been chatting for an hour, People. Oh, great. Glad to see you got the book. I had an email from someone. I actually had a chat to someone during the week who bought the book and she sent me a photo, actually I put it up on LinkedIn. I tried to put it on your property success's Facebook page and failed dismally. But she called it her bible and she's gone through and I think she has nearly every line and every page highlighted. So I don't know how useful that is, but she was amazed. Actually she was. I mentioned she was a bit overwhelmed having attacked me, which is you. And I know that's kind of a joke, but anyhow, someone who had a course was actually saying that you can talk to them on the phone for $20,000. Part of the $20,000 package. Gosh, they must be giving you so much more value. Okay, guys, well, you know, I don't know. What would you like to do?

Well, we can pull up the budget.

Really? You want to put. Oh, you're going to go there.

Can you fill it up on your screen?

I can do that.

This is the structure.

We're excited about the budget, aren't we?

Well, this will help before the tutorial comes along. Anyway, it's a really high level run.

Through those who aren't on the Facebook group and I can see that there's a couple people there who are asking to join basically. What do they do?

John, if you aren't on the Facebook group, it's facebook.com thereenovatornetwork. So all you need to do is just hit the ask the join button and then we can sign you in. So it's pretty easy. Or if you're getting stuck with that, if you send me your email address that's linked to your Facebook, then I can actually send you an invite from the group.

Okay, well, let me show you my screen and give you an idea of what this budget really looks like. I guess we're pretty excited about this. Now, this is a structural renovation. So this here, the project progress is basically all the information from the other spreadsheets come through from here. But if you want to just use this page alone, you can. The acquisition and finance, essentially, it goes through and you can kind of like put a bit of an estimate down.

Would you mind just popping back just for a sec to the project progress? I just wanted to make sure that kind of come across that all your tabs across the bottom, so each of your sheets for each section there end up coming back here to the category section. And. And then when you put in an estimated cost, so when you're doing your costings, that will all come across into the estimated cost column. And then when you get your invoices in and you put those in your individual sheets, that'll update back here at the project progress into your actual costs. And then the profit and loss will tell you how you went, whether you came in under your budget or came in over or it kind of tracks your progress. So that's kind of not a bad thing to look at as you're doing the job. As the job's going along, you can kind of keep track of how much you got left in your budget and how you're looking in terms of profit and loss as you work.

As you work acquisition and finance, as you said, we try to list down as many people as we could think of. Obviously you can add others in finance costs, etc. Because sometimes you just forget about the costs that are involved. And this total, as John said, jumps through to the project progress section, you'll.

Find a few less sections on the cosmetic renovation spreadsheet. So this is the kind of.

This is where I got overwhelmed with the feng shui consultants when I came out. Having said that, having a mother who's a material decorator who used to feng shui me all the time, she used to put a growing plant in my wealth corner.

Oh, really? You had a wealth corner?

I have a wealth corner.

No wonder you've done so well.

My mum, eldest Daughter back, left corner, wealth corner. Make sure the plant there is not dead. Yeah, so there you go. Permits and planning. Obviously, in cosmetic, we don't need this. And hence my eyes started blurring and I was like, gosh, this is going to be so good when I can do my first structural renovation, because I'll actually know what I need if I don't call John first. But here's all the information you need to think of. I think for the cosmetic, we kind of grabbed a few of these people, like the interior decorators.

Yeah. So the important ones are still there.

And we just moved them into another section or had them there. The clearance and demolition once again.

So this is the kind of template for all of your pages here. So if you were just doing. The simplest way to use this spreadsheet is simply to you've marked something that requires attention in your property evaluation checklist. You go and get a quote for it, and you enter it into the quoted price column at the top of the spreadsheet in the trade, quotes and fixed price. And that's as simple as this spreadsheet can be.

Or you can get into more detail and start getting some quotes.

So what we've done there is say for an arborist or a tree remover, there is. I've put in a guide price. That's the price that I would typically pay for those guys. Now, if you want to use that guide price, all you do is use the spec drop down menu.

Playing with the tools.

And if you put it on bargain there, you'll see that that is. Oh, no, it's not, is it? Oh, sorry, that. Scroll across a little bit more, Jane. Well, actually, can you just delete that 180. Yeah, there you go. Okay, so delete that. So we'll demonstrate it this way. If you put it onto bargain, you'll see that that unit price continued is literally that guide price. So that's what we're saying is the minimum price that you'd hope to pay the bargain price. But if you put it on average, you can see that that goes up to 165. And then if you put it on retail, up it goes to 188.

What are those percentages that you use?

It's 10% and then 25% on top of that. So that's what we're using. But it checks out pretty well because I've kind of tested it on a few things. So if you really wanted to be conservative, you could run through and put everything as retail. But more than likely you probably do your costings at average and if you can find a cheaper price for a tree arborist, go and change that guide price and then make your own rules of thumbnail. But this is a way that you can actually, if you don't know the prices of things, you can go through. Because as we go further down the spreadsheet, you'll see we've got this for basically every item.

So essentially you start with the quotes. If you just want someone to have a quote, if you want to get them by the hour, you go into this section. And if you want to get into some detailed information, you've got some guide price here for things like asbestos, tipping fees and landfill.

Yeah. You know what might be good, Jane? Jump onto something like the painting, which will be relevant to cosmetic renovations, and then that's probably a nicer one to run through.

Oh, there's so many tabs here. Painting.

Yeah. Okay, that's a pretty good example. So, for instance, if you've got a quote for the entire job off the painter, obviously you just stick it in the quoted and that's it. And then when your actual comes through, when the invoice comes in, you put it in the actual column. And then if you were to go back, we don't need to now, but if we would go back to our front page there, it would tell us whether we've got a profit or loss there, depending on if the quota came in relation to our estimate. So the top section is just for your quotes, then you can go down to hourly rate. So this for me, because I tend to hire tradesmen by the hour, I use this a fair bit. So I might go, oh, well, that's, you know, let's say six, that's two days work. So that's 16 hours. 16 hours work for the painter to do this. And he'll probably have his apprentice with him for those hours too. So I might put 16 in for that. And then, yeah, through you go. And you can do it that way. Or perhaps because often what will happen is I'll ring up the painter and I'll say, how much are you going to charge me to paint a garage? And they go, oh, yeah, it's probably.

Going to take 20 meters square.

So that's the kind of thing I'll often use that for, or if I'm using labourers or carpenters and that kind of thing. But then if you go down further into the detailed costings.

These are the things you need to know that you need if you're going to do it yourself.

Yeah, that's right. So that's some of the stuff. I mean, even doing a cosmetic renovation, if you weren't hiring everyone, this is all stuff that you would use, like filler and gloves and sandpaper and builders Bolt. And again, that's the. Over the years, I've tried to source everything as cheaply as I possibly can. The tightest person builder going around. And so the guy price at bargain. If you can get it for that, that's great. And if you can get it lower than that, then tell us where you're.

Getting it and we'll get a trade discount for everyone. That's it. This builders bolt. I always thought if I was a superhero, this would be my weapon of choice.

Yeah, Builder's Bolt is fantastic.

I just buy cans of it and keep it around that and no more gas.

Yeah, it is good. Now, did we skip over the quick. Is there a quick calculation there in this spreadsheet? Just up a little. Yeah. So the quick calculation, if you've got. For instance, now I've got mine as $49ameter. So the last place that I got painted, I got painted the whole interior of the house. And I went back and I worked out, right, so what's the square meter of the interior of my house? And then I divided. I got the. My end price, my final invoice, and I divided it by the square meters and that gave me that guide price. So now I've just got a quick rule of thumb guide that it cost me $49 a square meter. That's in the floor plan square meterage to get my painting done.

And as we said, you know, guys, this is kind of a guide for you. So once you've done your renovation, you can go back and do those calculations. And once you've gone and done those calculations, you can say, you know, what is your guy price? And you know, we know that prices change whether you're regional or in different capital cities. So you create your own guy price and make it.

And then, yeah, same thing for your. When you get down to your paints or equipment or whatever, if you don't want to. If you say, oh, no, I can get it for cheaper than that, all you need to do is just leave that set to none. And then you can add in whatever price you would like there. And that just goes across and completely ignores my guide price and the spec column altogether. So that's really there just for. If you don't know the price of something and you don't want to spend the time kind of going and looking for it, you can just use the guide price. Probably a good idea is to use it on average rather than bargain. And then if you can get it for a bargain, all good.

Now I really enjoyed some of the things that I looked at and went, this is great. Talk about intellectual property here. You know, Tyler, hourly prices, you know, the labourer, the waterproofing, that $50 a day, the person charges $50 a day.

Now that should be. Sorry, that's a typo. Can you change that meter? It should be a meter, yeah.

So the tiles and labour per meter squared. Now, you know, things that you had in here, the information about, you know, the cement screed, the tape that's needing for waterproofing, you know, the membrane itself and the name of the membrane that you've used the wall tiles and what you found them for. Now this gives people who've got no idea the charcoal porcelain tiles for the floor. We talked about what we will talk about in the next couple modules, the ceramic ones for the walls.

Module nine. Yeah.

So, you know, you're getting a bit of a guide here. And once again, you know, you could go retail on these prices or not, but at least you've got a number here that when you go out to get quotes and they go, oh, I'm going to give it for you, a bargain at 35 bucks a meter, you're thinking, okay, is that realistic or not?

Yeah, actually I just saw there, that's a good example of actually where that really is quite a difficult one to get. I think if you're going to like your tile marts and that kind of thing, you're still probably going to find 26 bucks a meter difficult to get. A lot of these prices were not the bargain and it probably for stuff like tiles, it probably get caught out a little bit there. But a lot of these guys are Chinese importers and they're kind of dodgy little places at the back of, you know, a row of factories and that kind of stuff. I mean, they're not dodgy, they're legitimate businesses.

But you have to do some looking.

You have to do some looking to find. And often you don't get the same stock the next time you go around. Next renovation I roll up and they haven't got any of the same products they had last time, which is a.

Really interesting point in actually calculating the amount that you need for tiling. What kind of extras do you add? 10% or.

Yeah, 15, I think. Yeah, 15% with the tiling.

Yeah. Because you find the color matching Is an issue.

Yeah.

So you know you want it from the same batch.

Yeah. And you're best off spending a little bit extra and getting, getting more than you need and then just flogging the rest on ebay.

And I think I share one of my little secrets of using the kickboard under the kitchen for putting all the extra tiles in and things under my rental property so that the rental manager says there's a tile that needs to be fixed or whatever. I actually have them on a few extras. I have a few extra oyster lights there as well.

That's great.

I know he's got the kitchen. Well if you think of that kickboard.

It just flips and flips off.

Yep. So I keep heaps of stuff under there.

Yep. Great.

You can't really fit a tin of paint, but I have the same color paint for everywhere so I just kind of like. Yeah, but anything you need for touch ups you might just have a screwdriver and a paintbrush and you know you can run into a property and you.

Know I like the. I've got a mate that for his rental properties he just uses white paint. No tint, not whisper white, not antique white. And that way he can.

Like an asylum, wouldn't it? Yeah.

He can just walk into any shop, anyone and just pull a tin of white paint off and it's always the same.

Now look, I love what you did here, John, when your costings on the cabinetry and you know, giving people a bit of an idea of what it costs and for the installation, delivery handles. Now I have to say I'm going to ask you where do you get your handles? Because boy, I did this kitchen and I think you'll probably see photos of it later on that had I did great big drawers so that I could have used it as a pantry and everything because I didn't have storage in the rest of the property. And I had something like oh gosh, 30 or 40 handles and 20 bucks each. You know, I was, oh my gosh, it was up near a thousand bucks just for handles that I hadn't really considered. And at the time when I was talking to the kitchen guy, he was like, seriously, you gotta go with mine because they've been galvanized and whatever it is, they're not gonna rust. A year later there they were rusting. It took me six months to get the guy to come change the handles. The exact same handles. Lot like these exact same handles on eBay. Six bucks.

Yeah.

So.

Well that's. Yeah, I find a lot of guys from And I'm trying to think of the name. The last guys that I'm using. Yeah, they're an ebay store, the guys that I'm using at the moment.

Are you using Renault D?

I use Renault D too.

And then this is, you know, his for you. Here's a colour, the Osprey look, you know, stone, granite, 500 bucks a meter. The cutout, which you don't think about for the sink. And if you want to have one of those little handy holes for your bin and anything special that you're adding in, you know, this is gold, guys.

Gold.

And what was the other one that I really liked was where we got into the electrical appliances. Electrician per hour, apprentice per hour, reworking, rewiring, the mains per meter squared, the exhaust fans. You're actually going to get the Ixl tastic three in one, four in one. So you've got some costs here. So a lot of this stuff does translate to the cosmetic renovations. The pendant lights. These are some of those fabulous lights that you used in that last flip that you did, aren't they?

Yeah, the habitat ones are those. Like. They're not a bird's nest, but they're a round kind of black.

Yeah.

You would have seen them in the rooms of the. And I think I got a feeling they might even just came from either.

Ikea.

Yeah, ikea. Yeah.

Yeah. That's where I've seen. And you know, so don't. Hey, just. I've got a question for you. Down lights.

Yep.

Last time I put in down lights, this guy convinced me that I needed to have a power plug next to pretty much every down light, so that if I. They weren't in series, so if one blew, I didn't lose the light and I could replace them easily. Which meant that I had a ceiling full of power points and costs.

Yeah. I reckon you could have replaced them for a couple hundred years and still come ahead of that in terms of cost.

I gotta say, I felt a little duped at the time, but it sounded so compelling.

Yeah.

Which is. Happens between renovations.

Yeah. Look, the cheaper lights do go out all the time. I've had them that the. I've used one brand and they didn't even make it through. I couldn't even have them on for the length of open for inspection.

There's something going on about down lights at the moment. There's a special going on.

I know we've changed. They've changed all the rules around down lights. And I was speaking to builder the other day about it and he was saying he won't even go there. Now he uses these ones. They're 16 bucks each. Take a look. Yeah, otherwise they're off his builder's warranty.

Fair enough. Hey, Klipscel Satin Omis, double PowerPoint. This is a whole lot more expensive than the norm. Yeah. Special one.

They're like that. You know how you have all that home automation C bus stuff?

Yeah.

So they have these really pretty switches which have got like, they look like they're a little glass panel and then you've got the little silver switches. So they're those just. They're the same switches they use in that home automation.

So we're talking high end structural innovation. We're not talking a $300,000 property.

No.

That's a regional town. Yeah.

And you can see the price there reflects that. Yep.

So, yeah, this gives you things like.

Two Gang and so on. That's just electrician speak. So you kind of need to know that when you're ordering. So two gang is just a four switch. So it has four switches on it. Yeah, gang is just the mechanism.

Data points. Dishwasher, the old Omega 450, the stainless steel cooktop. You know, you've even. Gold, guys. Gold. Get into this. Get excited. We've got a question here that says where do you put all the extras? Well, we've got an opportunity here to put some contingencies in. And there's extras pretty much in.

There's other. At the end of. Yeah. And you can add a row there as well.

So this is your spreadsheet. We're not going to treat you like idiots and lock it down.

I'm not going to be able to give you a supplier for everything in there because otherwise I'll never get any work done. So you can maybe do a, do a Google on them at some stage we might try and put together. Well, we're trying to put together a trade list. So at that stage, hopefully there'll be some things we can add in there that feed our control price and get down even lower.

Yeah, we were talking to someone about getting a group discount on national suppliers for many of these items as well. So stay tuned. We're actively working for you. And yes, those people who omit the.

Bonus spreadsheets for the course.

And to those people who are asking about our advanced Excel skills. Yes, that's us. With some help from Lou.

Yeah, that's right. Sorry, Tracey, I don't know what that means. The bonus spreadsheets for the course.

Oh, isn't that nice. The best they've seen. We're getting lots of feedback here saying they're pretty impressed with our. With our budget. We're pretty impressed too. Seriously guys, get into it. Until you've either done a renovation or you attempt to kind of cost out a renovation, you won't fully appreciate the incredible thousands and thousands of dollars of time effort that this will save you. And even as I promised you, right down to the landscaping of the beautiful plants that you could put in place. Awesome. Yes. Loving the feedback. Gosh, look at all these people talking to us. Got a quick question here. Is there any one place that all of the extras, spreadsheets and bonuses and things can be found? No, there isn't. Every single module has the bonus section. We don't have a 1.1section for every mod. One section that you can go to for one page. It might be something that we can do at the end which is the list of all the bonuses together under each module.

Maybe that's something we could think about. No, I mean there's things.

It's really hard. Everything we do is very difficult. Smoke and mirrors.

It is actually. A lot of it is. I've been thinking it that I'm thinking out loud now and don't commit to anything.

Okay.

Go for it. There's ways we can probably present the bonus section. I was thinking it might even go over the left hand side there. Oh, sorry. On the right hand side. And the calls could go over the left hand side underneath the bonus section heading. So I'm thinking as the calls build up over time, perhaps the Q and A calls would go on the left and the bonuses are on the right. But maybe there could be an extra section. I'm not quite sure where it'd go, but maybe there could be an extra section that had all of the. The bonuses in one spot. If that. As long as it wasn't confusing and you knew which was for which I reckon that would probably be alright.

Well, we could probably at the end of module 12, have the bonus section consolidated.

Yeah.

Yep.

We've got some more stuff that we're going to add come March as well. It's going to be an evolution as we go on.

It means there's more. And all these people have access to this forever.

Yeah, that's right.

Fantastic.

There will always be something I'll be tinkering with.

Okay. So if some people want the bonuses in each section, some people want them on one page. You know what? I'm pretty sure we can make everyone happy. Free steak knives. I don't know. What do you reckon, John? Are we committing ourselves to too much? Let's see what we can give you some. We'll give it a red hot tie. Okay, guys, if you've got any more questions, please put them up now because we're coming to a close. I really encourage you once again to jump over there and check out that Facebook page. Well, not that Facebook page, but there is a Facebook page. Goodness.

What were you doing?

Oh, sitting there on my other Facebook page looking at what was going on. So this is the Renovator network and you can see here that we've got a lot of people asking questions about things. Oh, Keith's renovating, obviously. He's got fish and chips and he's beer out. So please, you know, there's a question there on styling, quite a lengthy question on styling for open spirit inspections. The conversation about buyer's agents and Tracy's before and after shot. Can't say that I like to see the afters. And so make sure you get on there, introduce yourself. It is Christmas. We'll be on and off and trying to respond to your questions as much as possible. And, you know, stay tuned. We've got a few weeks until we speak to you again, but don't think that you're being left alone. You're going to have every module we released at midnight on Tuesday night for every week coming, which means Merry Christmas. Next Wednesday morning there'll be module seven.

Yeah, there will be.

So, you know, that's the end this week, guys, in module five. I hope you enjoyed the wrap up. We wanted to make sure that you saw all the information that was there and, you know, you could see where we were and what we were doing and make sure that you knew the information that was available to you and how to use it. Because we're really committed to helping you with your renovation success. And as you can see, we'll do what it takes to make sure that you become raving fans of this. And when we launch again next year, you'll be our biggest advocates out there telling everyone that this is a must have.

Yeah. Hopefully those bonuses coming from bribes and steak knives and whatever else it takes.

Yeah, it's nice. I'm getting three or four emails a week from people who are either begging to get in the course we're delaying or who are just in it and raving about it. So we've got a really great group of people. Basically. Module six, midnight tonight. I think it's four minutes past midnight actually, but you'll be getting it. It's an interesting module. It's about how to acquire a property using systematic approach to offers, negotiations and options. I really love some of the tactics here about putting in multiple offers. And we alluded to that last week and we're going to go into a lot detail next week. So we're not going to have questions next week. We wish everyone a safe and very merry holiday break. Hopefully you do have a holiday. I know quite a few people are renovating over this period of time or like me, checking out some renovations that have recently happened in other states. And all the best and goodbye from me.

Yes, Merry Christmas.