Q&A Mentor Call - October 2023

And welcome to October 2023, the monthly Q and A call for your property success club. Now, this has been going for the last 10 years of monthly calls, so if you want to go and check out all of the goodness that's been shared over the last 10 years, go and check it out in the guides that you'll find up above. And as always, big disclaimer. I don't know your personal circumstances. My very special guest today definitely doesn't and will be able to give you some general information about what's happening in the market. We're going to catch up on all good things that my very special guest, Todd Sloan's been up to, maybe even have some thoughts about what may or may not happen in the future. But as always, we're here to answer your questions, give you some real insights of what's happening that can help you create your own property success. And I'd love to welcome Todd as my very special guest. Hi. How are you going to.

Good, Jane, how are you? It's been a while.

I know. Actual fact I just went and checked out your podcast to see how long ago it was that we were actually talking on your podcast. It was over three years ago.

Geez. It really has been a while.

Okay, so how long has the podcast been going?

About four years. There was a more recent one that you and I did together. We did that panel episode. I reckon that was only about a year ago.

Yes, that was. You had a number, had a property and you had a number of experts say, what would you do?

That's right.

That was fun.

That was good. That was a really good episode. But yes, it would have been like 2020, I think, when we very first spoke. So we started the show back in mid-2019, so it's been going for a little while now.

So I know how hard it is to do podcasts and how to keep consistency, et cetera. I'm about to start a new one in the next month, so watch his face. But you know what I've really loved about your contribution? You were a real estate agent. No longer, I understand.

Correct. Yeah.

And you created the podcast, but you're also. And everyone in this group is going to love this even more. A professional renovator. So you have like, so much information that you've been able to share to people and you've spoken to so many different experts and people who are out there actually doing it over the last, what, four years in the podcast. So we're real incredible insight. So I'm just so happy to have you here today.

Thank you. And that's selfish. Hat on. That's probably been one of the most beneficial things for my own portfolio progression is the amount of people that I spoke, have spoken to and continue to speak to over the years, the amounts of nuggets of gold that I get both on and off the podcast from them. I genuinely don't think I would have been able to have built what I built in such a short time if I didn't have it.

So tell me this. Give us the background of Todd and how you got into property originally.

How long form is this, Jane?

Give me the shortened version.

All right, so the synopsis. I was a diamond driller for a little while because I was trying to produce a TV show that could get off the ground. I read Steve McKnight's book, Zero to 260 in Seven Years and it lit this little spark. However, then I had an accident on a drill rig, couldn't walk proper for about four years. I spent, I now refer to them affectionately as my professional alcoholic years. Numbed the pain with everything you shouldn't number the pain with very much fell off the bandwagon. Then something turned for me. I started doing big charity challenges. I walked from Adelaide to Melbourne, then rode a bike from Darwin to Adelaide in 14 days. And then I started going, let's focus a little bit inside, and started looking back into property. And I remember that was that reading that Steve McKnight book that twigged it for me all those years ago. But I just never took the action. So I thought I was about 30 and I went into full sacrifice mode. I called up my mum, I was like, mum, how do you feel about having me live in your spare room? Not that I couldn't afford to have my own place, but I just thought, let's, if I'm going to do this, let's do it. I'm a bit of an extremist that way and started buying a few because I was a very new agent and I wasn't very good to begin with and I was only basically on my base commission, so I was on about 30, 40 grand a year. I think it was 38 to be exact. And so all I could afford to buy was regional renovators and started renovating regionally and just kept building that up and up and up. And now I'm sitting at 10 rental properties and before all of the interest rate rises, it was positive by about 70k. But it's still positively geared now, only just, but with a combination of the positive Gearing in the beginning and the equity, it was enough for me to be able to leave my job as an agent and go full time on the production studio.

That's amazing. Oh, my gosh. Okay. As someone said to me the other day, I want to double click on a lot of those things that you just said. So it's interesting. Interesting. You know, that. That kind of injury story from your mining. I remember I was an explosives engineer and I went over to Malaysia to give a keynote talk to the Quarrymen's association there. And they took me out to a number of the quarries before I went to give this talk. And I remember talking to this guy in this jewelry, and he had this kind of patched up hand or this kind of a bloodied bandage and. And I said to him, oh, geez, you know, what happened to you? And he said, oh, I got my hand caught in the rig last week and it pulled off three fingers. I was like, oh, and you're back at work. He said, oh, my God, that was so good. They gave me half a day off. The safety standards, so different.

Yeah, my God.

And I was here talking about the explosives safety and explosives in quarry sites, and these people were on cycles and thongs and losing hands, and I was like, oh, my God, it's a different world.

So they would have found your safety standards almost humorous for them, wouldn't they?

It was actually a really unique situation because, you know, someone paid me to come out and give this keynote and I got up and I started talking about, you know, mindsight and quarry safety, and all I saw was this sea of dark heads looking down. And I was just like, oh, my gosh, this is not resonating with them. I'm pulling out some great stories here. Not one giggle, nothing. I was like, oh, God, these guys, they paid a fortune to bring me out here. I've really let them down. And when I got off stage, I just said to the country manager for this group, look, I'm so sorry. I don't know. I don't know what happened, but, you know, I really apologize. He said, no, it's great. And all the guys were going up to him going, best talk ever. And they're Muslim. They couldn't look me in the eye. I didn't real. I didn't know. And so they were, they were congratulating everyone else on my great talk. And I'm sitting there going, oh, my God, what is going wrong? So just goes to show, you need to know your audience, don't you?

I like that. That's a very. I would never have thought it.

Me neither. But I tell you what, my cousin just your story of cycling from Darwin to Adelaide, he's to cycle, he's a professional athlete. And he's just. From Mexico. No, no, Canada to Mexico in 12 days.

That's insane.

He did the alt Tour de France last year, which is the original Tour de France. So he left three hours after the. The major group left and did like they used to do, like fall over at the end of the day and sleep in the gutter kind of thing and you know, buy milk off farmers on the way. And he didn't have any of the stops and he rode every stage in between every stage. You know how they get bussed between stages and stuff. And he beat them by a day.

Back to Paris and he left three after everyone.

Yeah, what a machine. Yeah. His name's Lockie Morton. It's insane. Insane. But yeah, he's just, he rides professionally, but he does that as his kind of fun stuff. And you know what's really interesting about that is that. And I'm going to bring this back to renovation because as renovators, we really have to have this skill as well is that he practices things going wrong. So you know, renovators, you know, we're always kind of. We're detectives and we're trying to fix things and we're trying to anticipate things. And as something comes up, you're like, okay, how can I fix this? What can I do to help me, you know, get through this? And you really have to have some resilience sometimes because, you know, swamped with all of this kind of. Okay, didn't see that coming. And his preparation for the Tour de France was to go up into the mountains, into the Alps and get lost and see what's the worst things could happen, like two punctures, etc. So that he could actually deal with it without going into panic when he was actually unsupported. Doing the Tour de France, it's such.

A good way to do it. And it sounds insane, but I did similar things because then when stuff does start going, going wrong, you don't feel overwhelmed by it because you've already put yourself into such a tricky situation. Like I remember training when I was doing, because it was about 200 km a day I was riding and I would go out in 40 degree heat, but I'd purposely only take 2 liters of water with me, which normally you should be taking more like six to eight liters of water. But I Wanted to see what my body would do and I pushed it to those limits of dehydration. So I knew what it felt like and I knew what like extreme calorie deficit felt like. But it was more so that I could then identify those indicators very early on because it takes you quite a while to actually recover from extreme dehydration. So when I was on the ride, I knew that if I got to that point that it was all over, I wouldn't be able to do it. So I could then go, wait a second, this is that feeling. Keep going. Like, don't, don't even get close to that problem. But you don't know it until you've got there. But also it doesn't feel that bad because you're like, I know what to do. Just, just do this.

Well, you don't have cognitive reasoning working either, right?

Yeah.

It's David Goggins, his latest book, never finished. He talks about that. He, he's a marathon ex Navy seal, but he's a machine. Yeah, he, he goes out into the desert and he does, he does the weirdest stuff like that. So practice, I call it my Resilient cv. I'm building up this resume of resilience so that when something me, I'm like, okay, I'm ready, mind you. Well, let's let me tell you, you know how this kind of, in my first, well, not my first one of my early renovations, I remember plumbers coming to me and saying, you know, the toilet out the back, it goes to ground, it was never plumbed. And I like, oh my God, obviously I'm going to have to plumb this toilet. And so we had to rip up the concrete, plunk, put the sewage line in, you know, plumb it down. So we had this toilet and I was in fix it mode rather than that thousand foot view that went, do we actually need a second toilet? Which was actually the better question to ask because you, you often get into it, right. In the renovations, you don't actually have that chance to sit back and go, okay, like, yeah, what's the bigger picture here?

How much do you lean on your former career as an explosives engineer? Like being in the safety side of things as well, which would be extraordinary. Like mining and safety already so together. But then putting the word explosives into that would be even more so because I personally, I find that I lean on so many formal lessons that then translate into renovating and property investing. Do you do the same? Same thing. And it's like, oh, this is just like X. Yeah.

It's, it's interesting. I think it's the underlying foundational knowledge. Like I remember at university I, it's a four year degree and I did, I wanted to do safety as my thesis and risk assessment and the board, kind of the School of Mines board went to conversation and said look, safety is almost like a human resources thing. If you're going to do that, it might end up being an arts degree. And I've just done three and a half years of mining. I was like really? And then I guess safety is not really that important in mining. So we're in like late early 1990s and I was like, safety is going to be really important. They're like, don't know. And then you know, obviously I convinced them and I did this whole thesis on risk assessment and risk assessment had just been bought out from Canada and it was really new. And then as you know, risk assessment, you used to risk assessments for nearly every job that you even turned up to in the mining industry. So it became the way of doing things. And for me looking at property investing was exactly the same. I was like, so what's the risk? What's the likelihood of that happening and what's the consequence? What's the likelihood of hells angels bikies renting this place and doing oil changes in the lounge room? Like pretty low. What's the consequence? Well, I'm going to have to replace the carpet, etc. Can I minimize the risk? I could get landlords insurance done. I can do this, you know. So I think to your point you kind of. For me the risk assessment was always a way that I could actually go, well, you know, what's the likelihood of me buying a one bedroom unit? That's going to be a great investment opportunity because there's no other one bedroom units here in this small regional town. The likelihood of someone needing this, it could work out. Even though I know that everyone wants a four bedroom house in this town, what's the consequence of me getting this wrong? Well, I've just schlepped out a couple hundred thousand dollars and I've lost my money. Is that a risk I can minimize? No, because I can never change that one bedroom into anything else. So it's not a risk I'm going to take on. So I could put pretty much all of my property investing decisions and my business decisions through that filter.

I find that sometimes we even have the answers. We just don't know where to connect the dots between what we already know and what we need to know. But it's about repurposing and it sounds like that's exactly what you're talking about there.

So tell me about renovating. How has renovating, you know, how do you, how often do you renovate? Are you renovating at the moment? What's your most successful renovation?

Most. Okay, so a few questions then. So renovating to me was everything if I. Because I was on such a low income and because I, I feel I started very late. Like I technically bought my first property when I was like 20, but it was a unit. It was the classic story of everything you can do wrong, I did wrong. Apart from it being off the plan, it was like three years old, so it wasn't technically off the plan. And I sold that 10 years later made when everyone else's properties doubled. Mine went up by like 40 grand or whatever. It's technically made money, but didn't really. So then I knew that I had to manufacture equity if I wanted to actually do this in a. What I felt was a more reasonable time frame. So by being able to both increase the yield and then also being able to increase the capital value, that was why my focus was, was solely on renovating the first place. I very much did diy, not stuff that was like I never did my own electric, electrical work or plumbing. I don't do stuff that I can kill myself with or I can create big damages with to do.

Basically.

Correct. Yeah, yeah, exactly. I won't touch that. And I've got a friend that actually does all that and it isn't qualified. But I've had other people check his work and it's like, oh, apparently this is good. But I just kind of look at that and go for the little bit I can save. If I do it wrong, that's going to cost me a lot of money. So I again, a little bit of the risk assessment side but, but in, in terms of then taking that skill set, I then started basically just upgrading the, the properties from more regional to more capital, then going interstate, doing my. Probably my favorite one was the worst and the best one all in one was a 10 day renovation that my wife and I did in Brizzy. And the organizational side of that was a lot of work. This was during COVID as well. So we got all of the, I call it like the Renault box. Cost a couple hundred dollars to get this whole container sent up there. And I was lucky that my dad's, the company he used to work for, had a warehouse up there so we could actually store it at the warehouse and it was purely because, I don't know if you remember all the delays during COVID but sending stuff and, and stuff could just not appear for a month. So I actually sent it up there a month before because I thought I'm not going to fly up there and not have the box. Turns out it was two weeks late, so it only had to sit there for a couple of weeks. But my wife and I did. I think it was about 14 hour days every day for 10 days straight. And it was coordinating a team of probably about four or five other workers and, and also us just doing everything that we could. And that's been a really good one. So that I bought that was that 303,000 I bought the house for and then we developed a granny flat out the back, but it already had one granny flat as well. So it's almost like an unofficial block of units. It's not quite, but, but almost. And I think that, that the value for that came in at something like 750 and I think we end up spending 470 all up, but the yields off the charts now. So I think it's over $1,000 a week. Combined.

Two granny flats and a house.

Yes, well, because it's a three bed, one bath house and then a one bed, one bath granny flat and then a new two bed, one bath granny flat. So the one bed, one bath and the three bed, one bath rents out as one dwelling and the two bed, one bath rents out as a separate dwelling. And it's why like when interest rates went up, naturally wasn't happy about it. No property investor was stoked when that started happening. But I also wasn't worried because it was like the buffer that I built in was, was so fierce by forcing that value upgrade with renovation. The equity that I built as well, there's like, I've got this. This is. Okay.

It's interesting because that's part of the, that risk minimization, isn't it? So it's like, well, if you, if your property can't do it yourself, you're going to have to have that buffer of cash somewhere or equity somewhere that you can access. And I think that when we look at the good years in property and we had a number of years of very low interest rates, which were great, but the reality is, I know personally, one of my loans went from a fixed rate of 3.3 to a variable rate of 9.3. And on a million bucks you're paying 60,000 extra in interest, which you have to earn 100 grand for. And it's like, let's come up with 100 grand or you're forced to sell. So, you know, having those risk minimization strategies, like the, you know, ability to have a cash flow or having the ability to add value or manufacture equity quickly, really gives, you know, an extra layer of protection rather than, okay, I have to get out of everything.

Absolutely. And so now, because I left being an agent, so I left a pretty stable income. It wasn't very stable to begin with, but as I developed the skill set and the client base, it became very good. My heart just wasn't in it. Like, I. I was good at it and I enjoyed it to a certain extent. But it was actually a comment Tim Ferriss made on one of his podcasts, which was, was it something like doing the calcification of your mind comes from doing the same thing over and over again or having the same conversation over and over again? And it got to a point where there's this thing when you're an agent called a listing presentation, and it's all about listing the properties. It was almost like a play that I'd written. Like, it was just this thing. And it was like, okay, potential vendor, insert lines here. Doesn't matter what you say. I've done this 5,000 times before. I can walk down any path. I just wasn't growing as a person anymore. And it's like the fact that I was good at it almost didn't mean anything anymore because as Ray Dalio says, meaningful struggles and meaningful relationships, there was no meaningful struggle anymore. And I knew it was time to get out. And so I. And it was quite good as well, because I started when my very first time I pulled out equity. It was like $40,000. It was just this little bit, but it was like, yeah, it's just enough to go again. And then by the end of, it was pulling out like half a million plus. And it's okay now this. This is now enough to really change things. And so because I've started the business, like, we've got PMP Studios, so we produce podcasts for other people as well now. And as well as doing pizza and property podcast and a raft of other other bits and pieces, but I've now disappeared from the banks. So I've had the last 12 months off of renovating. The last property I bought, I bought with the idea of renovating. It's a block of units for four units in Queensland. And it's very much. It's rented out now or rented out to government housing, but it's it's a renovator. It's like, it's that borderline. It can just be rented out.

Yeah.

But it's, it needs some love. So. And I knew that I disappear for a year or two. So that's, that's on the back burner to, to tackle in about a year. But right now I've actually got a JV partner that we actually just started the hunt a few weeks ago for, for our first project and so very much looking forward to putting that first one together because as I'm sure you know, when you take a bit of time off it feels weird. Like it just feels like that's. Yeah, I don't know, it doesn't feel right. It always feels right to have projects going.

It's interesting. I, I actually ran a masterclass this morning for my other Facebook group, the your success club, not your property success. And it was around creating abundance, but actually understanding the money stories and the stor that limit you. And it's about being aware and awake to the comfortable and the familiar because you know, a lot of the stories that we tell ourselves, I mean what just astounds me is that 95% of your beliefs, your routine and how you operate in the world is set by the time you're 35, not actually open to a whole lot of new things. And so you know, you have the routine that you get up in the morning, you do the same things, you have the same filters that you see things through. And I was saying it was very similar. You know, when I grew up on a farm in Dubbo, the main gate to our house is about a kilometer and you know those big river gum trees and you know you drive around them and you know, it became just a known route that you would take. And as you, over the years, as we drove that route, the, it was almost like you got your tear your tires in, in the ruts and they just self guided and you'd get home, you go, oh, I don't remember the trip. You know, it was just familiar, it was easy. And you know, I'd been doing it since I was like eight driving on the farm. So it's just like. Yeah, but sometimes those environmental things that came up, there was flooding or tree branch would come down and you had to take the other path and you had to be conscious and you had to be aware and you couldn't get into the old ruts because you got in, you'd get bogged because there'd be water there. And so you had to have A more conscious journey. And I think often what we do is we get into the comfortable and we sit back and we go, yeah, you know, this is just the way we operate. I can turn up for another 10 years and give the same spiel to the vendor or for a listing agent, or I can actually go, you know what? Not enough. I actually want to make a bigger contribution, leave a bigger imprint into the world of what I've done. Which is what you've done really, isn't it?

I'd like to think so, yeah. And I think it's still very much just in its infancy, but I kind of feel like what you're referring to is almost like nlp, like Neuro Linguistic programming. You're familiar with that? I've recently got into a new podcast, Modern Wisdom, and it's with this guy, Chris Williamson interviewed Jimmy Carr, who was normally just known for telling lots of dirty jokes. If you're easily offended, do not search Jimmy Carr's comedy because it's very much. But if you want a lot of wisdom and a lot of mindset, listen to an interview with the man. Because when he's not telling dirty jokes, he's actually incredibly insightful. And this is exactly what he talks about. And it was one of the other triggers, I think, that he kind of put in my mind a little while back. And the way that he put it all. Censored this a little bit. There's nothing you can buy at the mall today that you're going to give a crap about in two years. And I thought it was so true that just this kind of perception of things and the importance that we put on it didn't make any sense. The importance that it needed for me would, needed to shift to that growth as a person and as you were to I guess to kind of go on your analogy, to forge another path to stop going on that same path. Just because it feels familiar, it doesn't mean it's. It's right.

And yeah, it's addictive as well. Right? Because in times of stress, and we talked about that, resilience resume. But in times of stress, you default to what you know. And you know, Dr. Joe Dispenza talks about the fact that we have 400 billion pieces of information a second that are bombarding us, they go in. But we only can process 2,000 bits of information. 400 billion, 2,000 bits we can process. Our energy efficient mind goes like, let me help you as quick as possible. It just goes back to our past experiences, beliefs, conditions, limitations, thoughts of how Things work and we filter through that so often we don't see other opportunities. We don't get the 10,000 foot view and goes do we really need a toilet out the back? So let me move on. Podcasts the market. We're going to talk about the market. You're interviewing a lot of interesting people. You're dipping in, you're seeing what's happening in the market. What is happening in the Australian property market at the moment.

So a lot. And there's two things that I think are probably the biggest standout. One isn't a standout yet and I don't know why it isn't and the other is very much still a standout. I think there might be some overlap. Perth is the hottest of hotspots at the moment. Adelaide's still going well but I think that the markets. It's called but looking at Perth, the amount of supply and demand is like. We interviewed a young man, his last name escapes me. Jared just recently and sorry Jared, if you're listening to this, I forgot your last name at the moment mate. But he came on the show and was talking about the different stats with Perth. The amount of supply that they've had drop off has just been phenomenal. It's a very easy market right now with the entire country looking at it to get capital growth out of. There's a few concerns with that as well. We've had other investors come on the show and say that Perth's economy isn't diverse enough and so much of it is reliant on mining that if mining does take a hit or if there's more of a global economic hit, that's usually one of the first things to really go backwards. So in the short term I hear a lot of people backing Perth but in that kind of medium to longer term I hear a lot of people concerned about Perth that we might just be having a bit of a repeat that happened in I think it was 2005, 2006. Perth actually correct me if I'm wrong here but overtook the entire country.

And then Darwin.

Yeah like it's.

Yeah.

And then no one talks about Darwin. But the, the other thing that I feel no one's talking about yet and I know I'm going to be having this conversation more and more is is Melbourne. Melbourne's maiden house price used to have a huge disparity between like Adelaide and Melbourne. It's like our maiden three years ago was like 370, 380. Melbourne was 750, 800, whatever it was roughly. And now it's like Melbourne's mid house price is like whatever it is 950ish, something along those lines. And Adelaide's is like 750. And so hold on a second. That gap's really closing. And I remember reading this article with CoreLogic that was, it was a couple of months ago that from 2020 to I think it was May or June 2023, the Melbourne market as a whole had actually only increased 1.6%. And I thought why is no one talking about this? Why is like Melbourne's just overtaken Sydney as the largest populace in Australia. They've got $125 billion Metro project which is scheduled to be completed in 2082. Melbourne is investing in Melbourne and it's Melbourne like it's. It doesn't make any sense as to why it's not getting any attention just yet. My thoughts on it, I'd be very interested to hear your thoughts. But it's potentially a bit of the yield compression because with interest rates going up you're still sort of buying a $700,000 house and renting it out for $400 a week. It's harder to hold more. But I feel that Melbourne's definitely going to be on a few investors radars in the next six to 12 months.

Yeah, I mean there's a few things that you mentioned there that I find interesting especially being an investor in the market for the last 20 years is that we often, you know, we're all taught to be present but I think sometimes we kind of need that historical perspective as well. And if you think about it, one of the, and being a low risk investor and a strategic investor around like this is long term. I want 20 years. I want to buy for a certain amount of have it double in value every 10 years, 20 years. You know, I have the choice to get out if I want to get out. And so for me I've always had that, that bigger perspective. My, unlike you coming from the mining industry and now, you know, having had most of my friends that I graduated with are now CEOs of most of the biggest mining companies in Australia and the world. So you know, we kind of graduated up and we're 30, 35 years down the track. And so you know, I hear what they're saying about what's happening in with the economy and what's happening with commodity prices, what's happening with trade agreements and this is variability right of all of a sudden China says we don't want York and all of a Sudden, you know, the, the biggest mining commodity for Perth goes down. And I've always been a person who's watched the numbers so I've tried to do the of correlation of you know, what happens in the market when. And I've never been able to predict Perth and Darwin and you know, my heart's always gone out to people for the last 10 years because you know Perth has done nothing for 10 years. You buy something 10 years ago, it's worth the same as it was in 1921. And so that linkage to commodities had me concerned and has always been a reason why I can't with any knowledge base say you know, invest here other than yeah it's about their time. There's a supply and demand problem. But as soon as there's going to be some kind of and I believe will be some kind of trade sanction or etc that happens. Some kind of, let's say government or some kind of intervention that we can't control all of a sudden it's off the cards again. Same thing Adelaide. So two or three years ago I was like, you know where, where are people who are going to be coming here after Covid from overseas going sanctuary of Australia? You know we're, we're bounded by gut, by sea, we're kind of a little protected if we have to go down and lock down again. If people come to Australia where are they going to come to and how do I track where they come to? Well most of them go to Sydney, Melbourne, Brisbane. Sorry, Sydney, Melbourne and Perth. So there's eastern seaboard. I've already decided, I can't predict Perth and I'm not going to put down any thoughts on now a immigration intervention. Sydney, Melbourne is where most people go. And then Brisbane we've had, we've just incidentally we've just had this kind of flex where we've got internal immigration coming back to Melbourne which I think needs to have a look at as well. It's always been Queensland. This is internal immigration. That's kind of changed a little. We've also got how do immigrants get their permanent residency quickly? Because I'm thinking well if there's all these immigrants coming to Australia, put my mortgage broking hat on, my property hat on. Where are people going to go? How long before they're going to be able to borrow to purchase their own homes? When is that going to hit the market so that we can go well you know they've been here for two years, they've been here for three years now they can start Buying. And so we know that most people go Sydney, Melbourne, Perth when they immigrate, then these are going to be the markets that they come to that's going to have an elevated lift when they can buy in two to three years. And then I thought I wonder how they can get their permanent residency quicker. And so I started interviewing immigration lawyers. I was like, where are you telling people to come to? Because there's immigration lawyers just for the Colombian community and immigration lawyers for the Indian community. Where are you telling people to go?

Don't you get like more points the more regional you go and guess who's Adelaide? There you go, we're a regional town.

Years ago I found this out and I was telling the people in this group like by the way, I reckon Adelaide is going to go because and all of a sudden I had, I, at that time I was actually employing three Colombians and they said, oh my, our nieces and nephews who are here in Melbourne are actually moving to Adelaide because they, they get more PR points quicker for going to a regional. And I was like, yeah, Adelaide uplift. And so, and obviously there's been a lot of infrastructure, not infrastructure expenditure there. You know, there's been a lot of money, new Silicon Valley kind of stuff going there, some of the big banks putting their big, you know, customer service centers there. So there's been that as well. But if you look at even like the stamp, the land tax changes in Melbourne, you look at some of the legislation changes in Queensland, you know, with the flick of the pen, Adelaide may no longer be regional and with the flick of the pen we could immigration. So if you look at this like 20 year view, it's the same as looking at the 20 year view about buying in Perth. It's like with a legislative kind of change, what could be really great, which is, hey, you know, you can have granny flats or not pay land tax extra if you're an investor or all of the things and some of the strange things they try to introduce in, in Queensland, then you, your whole investment strategy could go under. So I'm always trying to like look at things that aren't subject to those kind of changes that I can't control. But my husband used to say to me when, like I remember when we were living in Sydney, he's like, look at the disparity between Sydney and Melbourne. This price point is not realistic and not consistent of the difference. Just as you've just picked up the difference between Melbourne and Adelaide. It's like there's opportunity in Melbourne now And so we've always looked at that over like the long term and gone, hey, wait a second, there's too much of a gap. And Sydney had its big push. Brisbane had a push. Always the bridesmaid. It finally, you know, caught a growth spurt.

But Melbourne missed bridesmaid Brisbane. I got to remember that.

Exactly. I mean, my, my poor sister. I think I told her it was Sydney and Melbourne have gone, it's Brisbane's turn. Traditionally, it's Brisbane's turn. I told her this about seven years ago and they missed it. I was like, we went back into a decline and Brisbane didn't get their growth. And that that cycle happened twice. They finally come through, but Melbourne missed it this time. And I think it was because of the very restrictive requirements that are put on lockdown and the economic effects of that. We missed that last market push and so we missed that growth. And if you look at it now, I think you're right. I think there is some real pricing opportunities there. But I think it was really a once again a flick of the pen kind of legislative requirement that affected it. And it's not the underlying growth potential that Melbourne has.

Well, and I think that a lot of the changes that happened legislatively as far as tenants rights or I don't even think you're allowed to say tenants actually more excuse. I'm pretty sure it is renter and there's new language. Dead set. This is actually a thing.

Oh my God. Okay.

In. And this is in Melbourne.

It actually happened at all the other things. I can call people and not call people. I can't say tenants anymore. Okay. Someone else's house and paid for the opportunity.

Yeah, but some of the changes that happened were quite negative for landlords. Again, forgive me if I'm using the wrong terminology, but I look at that and I think that I can see that those changes happening Australia wide eventually. I know that South Australia is already going through some legislative changes. I think a lot more, and I use the term term power very loosely, but it's going to be taken away from landlords. And I think that when there's more of an even keel as well, that's probably going to be another thing that's like, well, now it's not unattractive for Victoria because, well, that's how it is if I buy property anywhere and, and even the land tax side of things. I mean, you see what Chuck tried to do late last year in, in Brisbane, amalgamating everyone's portfolios, doesn't matter what state they're in. I still think that if they got away with that every state would have done it because it's like well if you're doing it, we're doing it. And it would have just been this like quadruple land tax effect but like South Australia did it back in, I think it was 2018 essentially like to make it simplified when we don't care if it's in a trust anymore, we can see what you're doing and it's just again it's only going to be a matter of time until other states go well okay, well if you can do that, why can't we do that? When that a few of those legal terms or like you said with the flick of a tick of a pen when that evens out. I think that's going to be a driving forces as well.

But and I think if you look at all of the kind of trends, well the trends I've seen over the 20 years and it's like you know, NRAs and flipping houses because of no, no capital gains tax in New Zealand and then co living and granny flats and buying in Denver $40,000 houses and or buying in mining towns and then there's ndis. Now you look at the changes in ndis. Now you can't purpose, it's very, very difficult to purpose build an NDIS house with a guarantee that NDIS is going to take the property. And having spoken to the people in Canberra going look, I've got a number of clients are really keen on doing this. Is there a heat map that tells me where the need is? So we know what suburbs you, you would be interested in. They're like nah, you build it, submit it and we'll let you know. So six months you build something purpose built that would have like I had a mentoring client who was looking at this opportunity in Geelong and Corio and I was like a $250,000 build for townhouses, two townhouses each. If they wanted to have the highest level of ndis, it's number of levels they needed to have like the extra weight.

The hoist thing.

Yeah, all of this, the doorways and everything. It was, I mean about 600,000 each to build. So huge difference. The difference in rent was like $25,000 each a month. Sorry a year to 90,000 a year. So very attractive. But they had to build it, submit. Could, did you want it? NDIS wait six months. No tenants in there wait six months until they went okay. And now with the flick of the hand NDIS is going oh look, a Lot of people have taken a lot of advantage over this scheme. We're going to go through and review the properties and things even more and you're like, I'd hate to be halfway through one of those big builds. And he's seeing that a flick of the pen has actually changed whether or not I can actually make money out of this commitment now.

Yeah, a friend of mine, I actually got married in Bali about four months ago now and we're having a chat because he actually works for like an NDIS company. He's one of the managers. Some of the yields he was telling me about were just off the charts. But I completely agree with what you're saying. Unless you've got almost some kind of a commercial five plus five plus five or ten, like something that gives you security, that is a lot of extra money to put into something or dwelling no one else is going to pay you extra for. No one else is going to care that the kitchen cabinets are at this height instead of this height and that they're like auto swivel to open or whatever the parameters are. So yeah, I don't know whether it's.

Some construction people out there who've got a deal with the government. I'm just like, you know that wink in a deal, it's not good enough for me to go through my risk profile.

I, I like the idea of different strategies and that's what we focus on the podcast all the time. It's always about not saying my way is the only way. It's about saying let's look at all the different ways and then what, what applies best for you because everyone's situation is different. But I'm completely with you on that one. The amount of risk that's attached to it and the amount of. Actually it's not even so much the risk, but I guess it translates to risk but it's the control that's completely out of your hands. Yeah, that's, that's the thing that, that's never really sat right with me about.

Ndis and I think, you know, I'm definitely a low risk investor. You know, pretty much all of our properties are next to either a hospital or university. Not going to move soon. There's going to be an on tap demand of tenants unless they close them all down and send them home and whatever. But you know, there is and there's, they're in growth areas that by nature of where those universities or hospitals are, they're usually within 10ks of CBD, which is not always affordable for people but it's a way of thinking about, well, what are the major infrastructure or employment hubs that people have to go to? What about if we can have something that is a typical type of property. So just in case I have to resell it or rent it, the biggest markets available to me. So I'm always looking at the best possible thing I can afford close to where people need to live, the typical property that they need and making sure. Can I actually renovate it and add value? Can I manufacture the equity quickly so I'm not waiting for it. And you know, for me, if I always put things through that filter, it pretty much works.

Yeah, yeah, I like it.

I can show you my. Because you were talking to this a little earlier, this Trident strategy, right? So we were. Who's essentially saying, you know, if, if we had. And you were, you were saying that what you wanted to do was, you know, you were manufacturing the equity in the property quickly. You know, if you can use negotiation schools, your knowledge, your, your insights, your, you know, investigations to actually buy below the market, better for you. And if you got in your growth area as well, you know, you've got this opportunity where you can actually have the growth of the property that goes up, which is going to help us get out of the market because cash flow is going to help us hold it. But it's, you know, a lot of $20 a week properties are never going to get us to that million dollars that you might need to put in the pocket at the end of the day so that you can retire.

I'd be interested to get your thoughts on this because this, this is my take. I was actually talking to. His name's Jared, a young lad that works for me. And, and we're basically talking about getting him into the property market. And I said to him that it's a tricky thing for me because I actually wouldn't recommend someone does what I did to start with, if you said, should I. Someone showed me the first property I bought, not the unit, the renovator, and said, what do you think of this? I'd probably say, don't buy it. But the thing that I struggle with though is it got me to number two, which then got me to number three, to number four, so on and so forth. It was a stepping stone action. Yeah. And this is where I kind of look at it and think that sometimes, even if you're not getting the best opportunity, that's like every single box is ticked. Wow, look at this. Sometimes you are better off actually still just taking action. And going, all right, well, six out of the boxes are ticked or five out of the boxes ticked. And it can get me to the next one because whilst that one's done, okay, like it's, it's gone up. I bought it for 62 and a half thousand dollars like it was, it was basically free. And now it's probably worth about 250 rents out for 300 a week. Like it's, it's grown. But I'm sure I could have done better buying elsewhere. I know I could have done better buying elsewhere, but I wasn't in a position to. And this is where I actually be very interested to get your thoughts on. Do you normally say to people, no, wait until you're in the good position or take action if you can see it's still propelling you forward?

Yeah, it's a good question because it's interesting because I was just looking at. So I've got a new course coming out about basically renovating your mindset and the conversation there I was looking at conversations I'd had with people because I was always. I've always been a student of flow and success and understanding why some people got my courses and some people didn't take action and what was holding them back. And hence, you know, my really going deep into understanding people's beliefs and money stories etc, that they're running. But there was a lady who had come to me and said, you know, I've been waiting five years for the market to do what I thought it would do and it hasn't done it and I'm not sure what to do. And I googled or searched her name, my emails. Two years ago, we'd had the same conversation. The market hasn't done what I expected it to do. I'm still waiting. And so I see what you're saying from the point of view of sometimes inertia actually sends you backwards. Like even if you think you put your money in your bank, you put the money in the bank in your inflation is higher than what the bank return is. You are actually going backwards by putting money in your bank. But we feel it's safe, you know, safe as houses, safe as putting money in the bank. So sometimes we don't have that oversight. And when I think of that, the action you can often course correct when you start taking action, your boat, you can't change the sales if you're at dock, you have to get out and go, okay, this is not really the direction I want to go. I want to change my sales with property It's a little harder because you make that big financial commitment to buy a property. If you've stuffed up, you could be set back for many, many years. But so what I would suggest is that the action can actually be the research. Talking to like minded people, listening to podcasts like Pizza and Property, you know, listening to what people are saying and making it a dedicated plan that says, look, I only need 5% deposit or 10% deposit, but I'm going to make the most of the purchase that I'm making. So yes, the action may not actually be a purchase because once you do make a bad purchase, often it can hold you back for years. But it doesn't have to be the perfect purchase, it has to have the framework that suits your strategy. Your strategy might be creating a co living space, it might be renovating, it might be flipping, it might be building a granny flat, it might be regional cash flow, but it's around how that fits into the bigger picture. And I think a lot of people don't start with that vision and they're waiting for this perfect situation to turn up. And a perfect situation turns up, especially.

When you're looking back through your emails and seeing the same conversation two years ago, more than likely you're going to get that same email in another two years down the track.

Exactly. And that's, and that's the depressing thing. Right, well look, before we finish up, I'm really interested. I mean you're speaking to so many people, you're in the market yourself, you're looking for properties. I haven't asked you where you and your JV partner are looking. I don't want to address, expose the market too much, but what do you, you know, we've got interest rates, this conversation about are they going to go up again? Inflation, the market. We had a look at a couple of, you know, the Melbourne and Perth markets. What do you think's going to be happening, what do you think is going to play out in the next six months in the property market in Australia?

Interest rate RISES Everyone I talk to is talking about potentially another rise or two on the very near future. But as far as the next 12 to 24 months, every single, and this just seems to be the general consensus is we're going to start seeing some rate cuts in 2024, possibly towards the end of 24, end of the day, they had to put them up. They're emergency lows. They were never going to stay there forever. And even when we were staying at 1.5%, like in 2019 before all of this happened. That was still a very low rate in itself. So it feels like we're just back to more of a normal. But the thing that I also, I think, and this is, this is all very crystal ball kind of stuff. No one actually knows even. Yeah, yeah, but, but I don't think we're going to see them come off much. I think there's going to be some people that are going to have their fingers crossed that all of a sudden they're going to drop by 3% or it's just like, no, I don't think so. I think the idea of it is to then get us back to a bit more stability. So maybe we might see a half percent, possibly a fall. But I think if anyone's going great, I wish my cash flow is going to get back to where it was two years ago. I don't think it is. I don't mean to sound pessimistic there, but personally I'm looking forward to a couple little cuts that will be nice. But as far as the actual market in itself is concerned, this one really comes down to who you subscribe to. If you really follow like more the Philip J. Anderson model. The wheels are about to fall off in two years time and we're all doomed. Maybe, maybe not. If, if you look at. I know there's actually Simon Presley, I'm pretty sure you've had him on the, the show a few times before. Very talented man. And the way that he talks about the market and population growth, the supply and demand issue that we've got. There's still a lot of steam in the tank over the next two years. I'm hearing very polarizing opinions as to where the market's going. Interest rates people seem to loosely agree on. But as far as the market, we're either headed for a boom or a bust. As far as the.

It's interesting you say that because you know, you've probably been part of this as well. You know, they, they surveyed the experts about what's going to happen next month in the interest rates. No one ever is held accountable. No one comes back. 80% of experts say the interest rates are going to go up. And everyone goes, oh. And I know when I've been interviewed for it, I'm like, oh geez, I really got that one wrong. No one came back and slapped me for it. It was just like it was a number that the, the media had to publish on the day. They really didn't care. And they had a few names that people recognized to give it some kudos. And if you look at a crystal ball situation, you know, we went into lockdown in 2020. We couldn't visit properties, we couldn't show properties, we couldn't leave our own homes. But the market did what we didn't expect it to do. It didn't crash, did it? You know, we had this kind of, you know, this growth opportunity and then it kind of came back a little bit and interest rates and all these kind of things that affected it. So we can't, as much as I try to predict what's going to happen in with the numbers and the population and immigration. 500,000 people, my gosh, you know, we had to find homes for these people and we can't even house our own and we've got all these first home buyers. I had a conversation, a first homebuyer this morning and she was just like, gosh, you know, what can I get with $600,000? Who would have thought that would have been difficult a few years ago? And so, you know, we've got all these people with, you know, these kind of gosh, you know, where am I going to find a property? How, how are our kids ever going to find property? We've got all the immigrants coming in. How we're going to deal with this? We're going to be great because we got, you know, this rental demand and we can push our rents up. But then all of a sudden the government says you can only put your rent up every two years and not more than this. And we've got all these legislations, the difficult. And then we've got Cashmore and Phil and the people who believe in the 18 year cycle. Is it whatever it is?

Yeah, 18.6, I think it is, or something like that.

It should have happened this time, but it could happen this and it's happened for the last 200 years and you just missed it and you know, all these kind of things. So we've got the very long historical data that says every 18.6 years there's a big bust, it's coming. We've got all this other data that says we've got half a million people keep turning up and we're going to have to house them somewhere. We've had over 2,000 businesses that were builders have gone broke. So they're not. We don't have all of these approvals coming through. We don't have all these starts, where are they going to live? And we. So we're having all of these information and at the end we have human nature which we can't predict. And we have, you know, half the people going, bugger this, Victoria, we're off to Queensland. Or, you know, I'm out of here. I'm going to go move to Bali because I can live on $10,000 a year and it's nice all year round. So I think that human element always makes the crystal balling really difficult. And as you said, the numbers can be argued either way, growth or no growth. And that's why I just think you just go. You go for the typical proven by most the property that's going to get you to your goals with the fundamentals. What do people want to live in? What's a typical property? What can you afford?

And I think that's where if you're prepared for it to go either way, that's the best place you can be in. Like, I've been learning how to fly a plane for a little while now, and I'm about to do my first solo flight. There's one thing you do, there's a whole bunch of checks before you take off, but there's one thing that you do before you take off, which is three what ifs. It's. What if we don't get to full power to actually rotate at the right time in the Runway? You go through what you do, then what do we do? If we get airborne but we can't climb? Well, then this is what you do. And then it's what do we do? If we get airborne and we can't turn back, but we're already airborne, we lose an engine. Well, this is what you do.

Yeah.

And by. By doing that, we. Before you take off means no matter what happens, those three most common things that could potentially kill you, you can react. They're fresh in your mind and you can just react to them straight away. I feel that it's the same kind of thing is very applicable to property that if. Doesn't matter if Phillips Right. If whoever. If we're about to boom or bust, if you're going to be okay if it booms like you set yourself up, that it's like, well, most people are okay for booms, but you can take advantage of it. You can go, well, but it's like if the other's right and we actually go kaput, it's like, do you. Do you have the necessary. What do I do in place? And that's, to me, the big thing.

And I think having. I mean, we've seen the biggest savings buffer ever in Australia during 212021 and now we've got this huge deficit. And I mean, it makes sense to me to have whatever strategy you go with, have that buffer and paste to be able to cover yourself off in case there is some extra interest rate rises or just in case there is a change in the way that you can increase your tenants, your rental that you ask for. But just so that we have those kind of, well, what's the risk? As you said, it's like that resilience cv. Let's test what could happen out and can I recover from it or can I sustain my current position?

Yeah, absolutely.

Oh, go Todd. Well, I want everyone to go and subscribe to pizzaandproperty.com check out the podcast over four years worth of podcasts. So you've got a lot of information there. And as Todd said, you know, he's always interviewing people from different perspectives so he's not going to lecture you on the one way. And watch his renovations. There's some really great little videos there on some of the really great quick little renovations you've done. So really appreciate you coming along, Todd, and having a chat to everyone and sharing your knowledge.

Thanks. Thank you very much for having me, Jane. It's been a pleasure.

Well, thanks everyone and once again, you know, we look forward to having a chat to you next month, the last Thursday of the month, 1230 Eastern Australian Standard Daylight Savings Time. And as always, here is to your property success. Bye for now.