Your Property Success Mentor April 29 - 04 - 2016

Hey everyone, just coming up to the top of the hour. Jane's right next to me. But just before we start, as you know here at your Property Success, we love to spread the word about low risk, no nonsense property investment. And so these calls often contain some really great content and questions that would be extremely helpful to others. So we routinely record the calls and reserve the right to share that content down the track. So by participating in this call, you're acknowledging this and for some reason, if you prefer not to be included on a recording, we just ask that you contact our office on 1300, 963646 within 24 hours and we can just edit you out of the call over to Jane.

Well, hello everyone and welcome to the call for April, which is very exciting. My gosh, where is the year gone? John, I know, as always, I'm really looking forward to hearing from you tonight. And I have got a lot coming up to tonight as well. Lots of interesting news, lots to share. John and I just had a quick little chat offline and we've decided we had to edit down what we've done for the month because we've been so busy and some great topics for us to explore and flesh out together as well. So settle yourself in for the next hour and a half, make yourself comfortable and get ready to chat because we do want to talk to you. Now. Just a reminder, these calls are exclusively for my mentoring students, the students of the Ultimate Guide to Renovation and my Investors Choice Mortgages Diamond Clients. So if this is the first time on the call for you, very warm welcome to you and please don't be shy. We're friendly, so just say hello. These calls generally take place on the last Thursday of every month, sometimes move them around a little bit, Christmas and Easter, etc. But you know, we've got a lot to look forward to for the rest of the year and we've got so many things that are coming up that we just can't wait to talk to you about. And of course you will receive email reminders each month about these calls as they're approaching, so you won't miss out. So for those who are new, know that we've got you back and we'll be reminding you to get on the call for those of you who are listening to the recordings. And we have have hundreds and hundreds of people listen to the recordings. You know, welcome guys and you know you missed out on a great talk if you had opportunity to share your actual question. So make sure you jump on live when you can.

You can ask questions on the recordings, but it's just not quite the same.

No one answers. So as always, I have the co creator of the Ultimate Guide to Renovation and my business partner with me, John Hubbard. Hello, John.

Hey, Jane. Hey, everyone. I was just trying to get the right slide there. Did we forget to tell people? You can call in or did I just miss the slide?

Oh, you can make a call.

Okay.

Yeah.

If you can't make, we have got a voice message number so you can call in and leave a message if you can't make it.

Look, we've been calling out this number, 1376 triple 19 for two years now. Yeah, we had one person who took.

The call, Lorraine called once. Yeah.

And she was on the call as well. So we got to hear it. But it was nice. So, you know, thanks, Lorraine. I'll keep paying my monthly fee and.

One day someone will and I'll leave this slide in here.

And yeah, we just forget to tell people about it. It's all good. So, busy month, John. What are you up to?

Well, bit of exciting news. One, we've got a good offer on one of the townhouses that was as people have been listening to the past months of calls, have been listening to the whole saga. Yeah, that's right. Longer than it should have been, the whole saga of doing this one. So this is on the second development, the one that's going faster with the faster builder.

So as a quick recap, John's got two developments going on in Melbourne at the moment and the second one is outpacing the first.

Yeah, and it's. We. I kind of was predicting, tongue in cheek that it might finish before the first one, you know, six months ago, but it actually is going to finish before the first one, which is an actual fact song. Yeah, well, we signed tomorrow, so I'm always cautious of calling.

You know, I would have been doing champagne last week.

Yeah. So it's good. It's good. But it's interesting, isn't it? Because I mean, for feeling good, pretty good about it now, but. And we got a bit over what we had done our numbers on. So it was a good price and it was still off plan. So it means that we've got a bit of room with the second one to go to auction. It set a good benchmark that we can, you know, refer people to.

So would you prefer to go to auction or sell prior or is this nice to have one in the end go to auction?

It's a nice position to be in. Yeah. So I mean, going off the, getting it off the plan, you take a little bit less, but it might be. Sorry, I just had a message come through that there might be a little bit of double up audio going on here. So I'll just see if I can.

Is that better, Pia? We fixed that problem. Okay. So we had a bit of audio. We're okay now.

If anyone else is having problems with audio, just type in the chat box and we'll see if we can fix it up. Yeah, so selling. The advantage of selling off the plan is one, the bank's happy because they've got their sale and their money secured basically. So it just takes that kind of risk out of it for them or they kind of. Not that they're on your back anyway.

But they're just kind of monitoring situations.

Yeah, that's right. They monitor the situation pretty carefully. So it's good from that point of view. It's also good from the point of view is you can, you've got a date when your cash is then released so you can do it again. So developers like it for that reason. Often the bank forces developers to do it. So if they've got over like a common thing is over three townhouses, for instance, you have to have off the plan sales. At least show one or two off the plan sales. So no, it's good. It was a good, good result. But it reminded me it was only, you know, a couple of mentor calls back that, you know, we're sitting looking at the market for 2016 and well, you know, I was pretty nervous, I have to say, and Jim and gloom.

Reports in the media.

Yeah, that's right. I mean, even though I was kind of thinking, oh, I can't see it going backwards, but the same thing, you've got it in the back of your head that you've got a lot of money out there on the line and it can go either way. So it's, it's been one of those things that's made me reflect a bit over risk and, and I guess what you're willing to put on the line for the, for the reward kind of thing. Yeah, so it's high risk, but it, there's, there's certainly, it looks like, you know, won't count the chickens because we've still got three to go. But it looks like there'll be reward in this case. But yeah, there was.

You guys, you guys have done it smart. You've had a mentor, you've, you've done your numbers, you've re crunched your numbers. You know, this Is. Wasn't something that was. Let's have a go at developing, which is often what some of the conversations I've had with people say, you can't make money in it.

Yeah, yeah, I think so. And the mentoring in particular was invaluable. And I think that's just a lesson for life really, isn't it? Find someone that's done it before and tap in, you know, add value to them. In which, you know, in our case was in the form of thousands of dollars a month plus a cut of the profit. But for that we. We gained.

You made thousands and thousands of dollars.

Tens of thousands of dollars. And. Yeah. And you just. You don't get that. No one. Someone like that's not going to waste their time with you for pittance, you.

Know, so they value their time. They've made the mistakes.

Yeah, yeah, that's right.

So you're kind of jumping ahead of the 20 years of mistakes that they've made and got the glean the diamond. So.

Yeah, absolutely. And just having that fallback. So if you, if you do have those questions that you can come, you know, you can say, all right, have you experienced this before? What have you done in this situation? And actually in. It's more almost been psychological in a lot of ways, because the. We haven't actually used. There's only probably been three or four phone calls like that. But it's knowing that they're there. I mean, they were probably pretty important phone calls, mind you, too. But knowing that they're there gives you peace of mind.

Well, 11 years ago, I started as a mortgage broker and, you know, I did two things that I think most new people in business don't do. One was I got a list of 30 questions and I rang 30 brokers and got basically the key performance indicators, the best brokers, by saying, you know, what phone plan are you on? How do you get your clients? How do you get commissions? What lenders do you use? You know, do you have an office or everything? So I kind of got the best. The best. And then I got a mentor and I paid the mentor and, you know, I was making 10 calls a day to him. And then, you know, two years later, I was making maybe two calls a week. And. And now I chat to him, you know, maybe. Yeah, maybe three times a year. So, yeah, I still have. Have him in my life.

And you still have. Yeah. That's interesting because someone was saying, and why is it that you hang on to Ralph now then?

Look, he's more of a friend and I think a sounding board then me asking the silly questions that I did in the beginning because I was just not confident. But at the end of the day, you want someone who's done it and he was really successful. So I really wanted to hear from someone who had done it, had made the mistakes and could help on everything from business planning through to what's the best lender for construction.

Yeah. Now someone asked me the same question the other day. Now that you've done a few, you know, why do you bother, you know, paying the money each month and whatever. And in our case it was, he's quite a way ahead of us now. He's not doing, you know, a couple of side by side townhouses and that kind of thing. He's now doing larger developments. But and the other thing that he does and introduced me to a whole world of that we've just kind of stuck our toe in a little bit is the whole world of private finance and private investors.

Tell us about that. Yeah, well, it's because I know a lot of people here, you know, unless you're exposed to it, you have no idea that there's a different way of financing things.

That's right. And it seems to, I mean, I can only. My experience has only really been with what he's told me in his group of people. But it seems to be, well, well, firstly, the attitude to money is you can get money and money has a cost. So you can get hundreds of thousands of dollars off someone for 12 to 15% interest, basically. And that's the, that's a year.

So they usually charge you like 1% to 3% even a month.

Yep. So that's the, that's the cost of, of money. So, and then, so the whole conversation is different. And then he has these kind of private investors, he calls them armchair investors that either just put in, you know, let's say 100 grand and get 115 back. But it's normally bigger. You're talking bigger figures at the end of 12 months. Or they have, and they normally have a caveat on the investment as well. Or in other cases what he does is it's like an equity partner that he literally walks them into the bank with the finance, the development finance. They take on the risk, I guess, and the loan and then the security for the loan against their house or their assets or whatever it is. And, and he runs the, the job basically. And then they take a, and they've actually in, in one, the one example he was describing is they paid for the development as well. He really just ran the job and then split the profit. So that was just another model. Or he just has all these, you know, say two or three people and they just put money into one development and they just pull out their, their 12 to 15% at the other end. But so all of this different kind of configurations of private finance that exist.

Obviously risk for them. So that's why they're charging more for their money.

Yeah, but yeah, and the way he was doing it was with one or two is they have a caveat on the property. So if the property, when it, when it sells, they're guaranteed to get their money back. Yeah, that's right. Yeah.

Great. Now did you have any pictures for us? Oh, I do because we've been watching this. Oh, no one else can see this. Tell us if you can see this, guys. I want to make sure that you're not missing out.

So hopefully that's coming up. Yeah. So that probably hasn't changed too much since you saw it last. The. I can't remember when I showed it to you last time.

There was no roof. Oh really? Okay, I'm sure there was no roof and there was no windows.

This is the slow one.

Okay. This is the slow one. And we've got a fence.

No, the fence is going to. The fence is going to go. So it's going to have piers and, and wrought iron in between and all that.

So where are we seeing the two house?

So in the middle of those windows, those two central windows, there's the. That'll be a wall between those.

So the entries from the front for one and from the side for the other.

No, you can see the two entries where those porticos are. So one of the porticos is missing its piers.

Okay.

Because it's kind of right. It's precariously over the driveway which you can't see from this angle.

Now is this the one with the lift?

It is. The one on the left has got the lift. So that's down to the garage one underneath. Yep. So all rendered and so on. Now this is probably a month ago now, I reckon. I took the facade but I stuck it in there just because I didn't want to just show the internal shots. Because you were.

Show us the internal shots. So this is what we want to see. Oh, two way. Two way fireplace.

Yes. So double sided fireplace that'll have a chrome surround. So you've got to use your imagination a little bit here with the, you know, it's not painted and finished and everything. But then I'll have a chrome surround. And all this will be staged obviously when it goes and there's a little. So the front is. This is the formal lounge in the front as you walk through on the right hand side and then out the back there is a second lounge. And then on. If we look at the right hand side there and then towards the windows is the dining that you'll see in a minute. And the, the kitchen off to the left around the corner. So this is really. It's a downsizer market. So the, the tip, the agent said that they're likely to come from probably within 500 meters property. Real shortage of options for downsizers. I think I've mentioned probably multiple times on the webinars. So this front room is semi formal. So it's not formal in that we haven't used like a colonial or a Victorian cornice. We've used more of a, a classic kind of deco cornice which is like a classic modern or mid century modern type look. But it does project a little bit onto the probably 150mil or so onto the ceiling. So we're able to achieve that using the same technique to make the front a formal lounge but with a classic modern look. Because the important thing with this demographic wasn't to make it too contemporary. What I found out though when I was researching though, particularly in talking to the designer, the interior designer, was you could make some false assumptions on what a downsizer would go for. Like if, if you think it's all going to be period reproduction and oldie furniture and so on, it's actually not the case. They're buying modern houses and they want the modern houses because they don't want the dusting and they don't want all that kind of stuff. So the advice was to no go modern, but just not, not too modern. Yep, just a classic kind of look. So that'll have cornice that goes all the way around there. That's why that bulkhead's there. So you can kind of.

You can't see John pointing, but he's playing diligently.

Oh, there we go. I don't know how I did that. Yeah, you'll see corners. That's where that bulkhead's there on the left hand side above the door.

Okay. Around here?

Yeah, that's right. Oh, there you go. You're very good at this.

Yeah, they learned to use a Mac one day.

Yeah, there you go. So that's the floorwoods. They look bloody terrible in that shot. But they're engineered boards. That's in a. It's called Budapest. So it's a little bit of an aged oak. It's an oak flooring.

Engineered.

Engineered. So that just means instead of having a board that say 19 mil thick that can go directly over joists.

Yep.

Mind you, most flooring is secret nailed over sheet flooring anyway. But not to get too technical, but it comes in a board which is really just a veneer of oak over a piece of ply. So it's, it's engineered so it's perfectly straight and the joints are straight and so on and, and that's the way to do it. So it's not like a, a floating floor. It's. It's, it's a step up from that, but it's a, it's a, a step short of actually a solid floor, which is interesting. A fully 20 mil thick oak floor. So oak's very expensive, but yeah, you.

Get the look and it has the wear and it doesn't have the cost.

That's right, yeah. Yeah. Although the cost isn't that much different. The, the big. Probably the biggest difference is it's pre finished. So although it doesn't look at there, that's in a matte finish because there's plaster dust all over it. They didn't cover the floor quick enough. But in, you know, in real life it actually does look pretty good. Yep. So that's. I just wanted to show you this. I might be the only one interested in this, but the.

Let me tell you if I'm interested. Go ahead.

Can you, can you guess what is any, any guesses?

Okay, typing in, guys. Guess. Are we talking about this long thing in the middle?

Yeah. The thing over the window there, Is.

That like a pelmet?

Yes, that is, yeah.

Pil recessed. Yeah. Hider of. For the track for your curtain.

Yeah, that's right. So what that is, it's just a couple of bits of timber that's been wrapped around with plaster.

Stacey calls it a ceiling curtain.

Oh, that'll do.

We can term that as a whole new term. I like that one.

So on one side of that, on the left hand side there, what will happen is the cornice will run around that. So which will come down to the bottom of that kind of the beam if you like, on the left hand side and then on the other side will be shears that run from the ceiling to the floor. So a gray, A charcoal shear that runs down. But that's just a technique, a really easy technique for sticking a. Rather than the alternative to that and which you used to see with Mid century modern houses was that you'd have a drop ceiling and you drop your ceiling down, you know, 120 mil, say, and then the reset and then you leave a recess right at the end wall so you could have your concealed pelmet. But this is the other technique of doing that.

Seems complicated. Dropping the whole ceiling just for a little corner.

Yeah, that's. That's what design's all about.

Yeah, but this is better. I like it.

Yep. There's the stairs. There we go.

Oh, fancy. Lots of storage.

So exactly the same technique that we talk about in module 9. Which of. For those in ultimate. Ultimate God renovation. So which is all. All about not going custom and getting. That's a Chinese kitchen prefab. Yep. And they bring it out flat pack from China or assemble it in a factory and ship it out. And so we've got a professional installer that installs it.

What discount do you reckon on a prefab versus custom?

Well, I've just, I've just done it because the, the builder wasn't keen for whatever reason on the second one, so we went with a custom kitchen and it was, it was about at least 50 cheaper going this way.

Wow. Yeah.

And talking tens of thousands of dollars.

With a kitchen, me chatting to that builder.

Yeah, no, he wouldn't, he wouldn't kind of budge. It's kind of too late now.

Nice down lights. It's probably where his profit margin was.

Yeah, well, it's. It actually. He gets. He's cut on basically everything, but. But no, it's just, you know, he's sitting his ways and wasn't, wasn't keen to do it. But I think in years to come these, these imported kitchens will just become the norm because it's, it's almost impossible for a cabinet maker to compete in.

So many things, isn't it?

Yeah, that's right. So that's it for my show and tell.

I love it. Thank you for sharing. So signing tomorrow. We'll wait till next month to hear. So completion dates.

Well, they're both, they're both probably eight, eight or nine weeks off now. Yeah. I reckon maybe even, maybe even sooner with the second one. So. Yeah, we'll see. And then we've got a campaign that will go on the back of that.

So I'd love you to show us next time the artist impressions that they did for the brochures.

Oh, yeah. For the other one. Have I shown? I don't think I have. Okay.

I love the fact they have like reflections and mirrors and things. This is Extraordinary. I looked it and thought it was real.

Yeah. They're amazing what they can do these days.

So finish them off and staging campaign on auctions for the.

Yeah, and we'll do some, we'll shoot some videos and stuff like that for them as well as. You know, I like to shoot videos.

Yeah. And we always revert to our natural.

That's right, natural Tims is there's marking around them. Yep. So that'll be good. So it'll be interesting. And then it comes the choice of what do we do next. So I think I might enlist you for a brainstorming session around that.

I mean, I'm in.

So that's. That's probably the longest session I've ever had.

I know. Gosh, John, shut up.

What about you then?

Oh, well, back to me.

Yeah.

Well, I had a bit of an exciting day today. I went off to the property couch with the boys over in Power wealth and had a chat to Ben Kingsley and Bryce Holdway. So they're doing, they're doing a great little podcast. So check it out. Download an itunes. I gotta say I'm a bit embarrassed in saying this, but I had a quick little listen to it and make sure I didn't sound like too much an idiot and I laughed at my own jokes. Is there anything wrong with that? Anyhow, had a great time talking to the guys and I've known Bryce for many, many years pre his time with Ben and they're both really good guys so. Yeah, they are. They're just really legitimate and so that's. It was nice having a chat to them. Yeah, we covered things. Renovation, my background, how I got into it and I share some secrets that all our tucked up people know anyhow and anyone who's read my book. So yeah, no, it was really, it was nice and lots of fun and oh gosh, I've spoken to so many people in the last three weeks. So you know, we decided to run a few webinars. So we were going to do a podcast last year and we.

Bryce. Bryce.

And yeah, they said, we said you go for it first and test the waters for us. So they've shown us what to do. But we, we were really keen to. Actually there's been a few topics that come up and I just keep getting asked about them in the media to, to comment on and from people who, you know, in the Facebook pages etc. And so we thought we'd pull together a webinar. So I was really, actually I was really proud of our webinar last Thursday Affordability.

Yeah.

So is that on property affordability? And have people given up on the great Australian dream? And this is on the back of the MLC wealth report regarding the fact that a lot of people felt that their kids couldn't afford a property and in actual fact, they worried for their own financial future in the next 10 years. And we, we spoke to, you know, Hans, chief economist from St. George bank, and Eliza Owen from Residex and Cameron Krushchev from RP Data. So we had some amazing guests. And, you know, I was really. That webinar was available for three days and now it's down.

So the people inside your property success club will get it.

Yeah, so the people who are members of the club will get access to that. And so it was really good. And we actually spoke to the most amazing people. You know, a lady who almost became a mortgage had to sell her properties and mortgagee sale was working in the mining industry. You know, she lost a job. She had a property in Cairns. She read my book, she watched all the free webinars because she couldn't afford to, you know, really make an investment, anything. She took us up on the Ripe House offer and she did some research and she found if she could actually renovate the property and push the rent up by $50, she could, it would pay for itself and she didn't have to worry. The alternative was she was going to mortgagee sale because she could not afford to pay it. And, you know, she. The Ripe House information gave her some confidence in that market.

Listen to a few free webinars and.

Yeah, so she listened to our webinar, she would listen to the entire. The four videos we released on the Ultimate Guide to Renovation. Took notes, did the renovation, pushed up the rent by 50 bucks a week. Now this woman is living in a van, right? So, you know, that whole rent to invest angle that we were also looking at where, you know, I for many years rented where I wanted to live and invested elsewhere.

Yeah, she's at the extreme end of that.

Yeah, she was like, whoa. And then we spoke to Sandra who, you know, she's at the other extreme end where she's got two investment properties and she's living the margarita life in Mexico. So, you know, it's really. There are affordability issues. The rent to invest strategy is something that can be, can be an opportunity for people to do something outside the norm. And here's the thing, right? Young people who don't have potentially the money to buy where they want to live are limited to, you know, they might have $60,000, for instance, which could cover, you know, a $400,000 property pur with stamp duty. And they're like, no, there's nothing that I want to live in the cbd, around the CBD or close to where I want to live for $400,000. So with that 60 grand, they either blow it, they put it in the bank and earn interest and pay tax on it, they have a go on the stock market and, you know, we've seen what's happened in the market in the last months or you know, the fact that they. The alternatives of doing nothing to investing wrongly or potentially looking at an opportunity to invest in an area that might have a $350,000 medium house price and, you know, 9% potential growth and, you know, 5% yields and things, and they're in the market in 10 years time that's doubled in value and they've created hundreds of thousands of dollars. You know, for me it just makes sense. So, you know, as you can see, I'm passionate about this, so I'll move on. But I was pretty excited and I'm preparing the next webinar now. Yeah, 12th of May, 8pm Yep.

And that's going to be another cracker, I reckon too.

Yeah. Well, I've had some, some pre chats to some of the people I'd like to interview and Kieran, our good friend from Australian Property Investor magazine Now he spent 23 years as a valuer for Heron, Todd White, et cetera.

Oh, is that right?

Yeah. So he's, he's seen it from both ends. So, yeah, I'm really looking forward to chatting to him. Also talking to Angie from Bis Shrapnel. So, you know, I've been watching those guys for many years and their prediction reports they put out every October and you know, I think there's. Well, what I want to investigate is what people get wrong and how they buy in the wrong areas and they're repeatedly buying the wrong areas and what are those wrong areas. So investigate that and the drivers behind that and then maybe share some right areas and the characteristics and the clues. We'll drop some crumbs of the clues of we have people who are getting it right.

Yeah, yeah, that's right.

But look, guys, I'm really keen to run some really interesting webinars with. I mean, I've got a great network of people and John and I speak to people all the time in the property industry and if you've got some ideas, I want you to put your fingers on the keyboard right now and tell us, what would you like to hear about in a webinar and who would you like to hear from? Because, you know, I'm sure we can six degrees of separation, Kevin Bacon kind of thing. We're sure we could touch. Touch the lives of many.

But yeah, yeah, there's lots and lots of things. I mean some of the items, ideas we were chucking around was some of the different strategies, for instance, on renting. I mean we've just discussed what, what occurred to me then as you were speaking was there's so many different courses you, so many different avenues you can take like the rent. There's no one strategies that's just right. It's the one that's right for you. And you talk about those rent vestors, but there's other people that are doing, for instance, using the Airbnb, we've got people inside the renovator network who are renting out their couch to get to the next.

Next deposit.

Yeah, that's right. Or they might be doing, you know, multi room accommodation and stuff like that. But. So any ideas that you've got that you reckon would be worth it?

Everyone's being very silent, John. So I think we just have to make up our own or assume that they're not interested. Okay. But we know the replays that thousands of people listening, so they were people.

On the replays are typing like crazy at the moment.

So. And an interesting thing, one of our properties has come up for rent.

Oh yeah.

And we, you know, we've got McGrath's managing this property and they had a few inquiries but this is in a suburb that the median is now 1.7 million for the house. So, you know, this is the house, you know, we bought it for 620 and it's gone up and I don't know, it's probably worth 155 now, but so it's on the market for, you know, 850rent. We had lots of people through, interested three bedroom house, very nice, good feedback and a number of applications. And one of them was from the Department of Housing. Yep. Which completely blew me away. And it was the Department of Housing because they don't have enough accommodation for people who need housing commission properties. But these people needed to be near transport shops and the hospital because one of the people is ill. So it's. They actually said elderly sisters in their 40s. Now I'm in my 40s and I gotta say that kind of rubbed me up a little wrong way in the fact that I'm not elderly as far as I'm concerned. But yeah, so I've got. So it's kind of interesting. So we're pursuing that. We just added in a couple of extra inspections, make sure that they. They, you know, look after the. The landscaping, et cetera, as per the agreement. And. Yeah, so it's something. And they were taking it for three years with I think it's like 10% rental increases each year.

Okay, wow.

So 7 to 10%. So. Yes, very, very interesting. So we're going to have housing commission people living in a 1.7 or $1.55 million house. So.

So what were some of the things that you. When you were weighing that up, give us a thought process. What were the pros and cons?

I guess the. We were looking at, you know, obviously it's been on the market now for two weeks. So we've had some applications, we've rejected some applications. So every week it's on the market, you're losing $850. But I'm prepar that for a while until you get the right tenant.

Right tenant, yep.

And so we did some research on what happens when. And I haven't signed leases or yet, so, you know, we'll see how it goes. But the Department of Housing, if there's any damage, because your worry is that you're going to have, you know, Hell's Angels move in and start changing oil in your lounge room kind of thing or putting holes in walls. And. And that is such a stereotype of people who are living in housing commission, as we both know. But, you know, so there's the, the, I guess the fear of damage. We've got landlords, insurance, and McGrath's have rented to these people before, or Housing Department. Housing department housing before. And they said they're so on top of any maintenance or issues.

Wow. Okay.

And I guess they'd have to be, wouldn't they?

Because who would go near them?

Exactly. So, you know, they cover. They cover those things. They make sure they're happy. We decided that we wanted to have three inspections a year so that we could just make sure that if there was a problem, we weren't letting it go for too long.

Yep.

And yeah, so basically there was. There was opportunity. So, you know, the reason we share these things with you guys is just to float, you know, what's. What we're doing. But it might be of interest to you because, you know, sometimes there's things that are outside the box that come across our desk that you don't see. So yeah, there you go. Very interesting tenant. So stay tuned, I'll let you know. And so, and I was a Churchill.

Fellow, so just excellent for someone who doesn't know what that is. What is it?

Okay, so right back in, look, I think it's 1965 when Churchill died, there was decision to make a door knock around Australia. They knocked on every door in Australia, gathered some money and the. They wanted to gather a million pounds. They gathered two and a half million pounds, essentially round numbers and they put that in the coffers. Very smart people managing that investment. It's up to 90 million or something at the moment. And the idea was the people from the colonies, so it happened in all the colonies of United Kingdom. If you could promote someone's area of interest and pay for them to go overseas and study something specifically that would come back and benefit the country, then that's a good thing. So they have people in the arts and they have someone who was in my year was a counterterrorism policeman and I had someone did a china painting and it was a, you know, a QC researching, you know, some, some legal issues and we had someone from the Australian Ballet and you know, just amazing people and incredible alumni. I remember chatting to this guy, an older guy and it's like, you know, what do you do? I'm in construction. Oh, you know, and you know, how's that going for you? Oh, pretty good. Turns out it was John Holland, you know, so, you know, they're nice people. They select about 10 from each state, around about 100 people a year from the thousands that are nominated. If you have an interest, Alzheimer's, you know, something that would benefit you, I really encourage you and if you want some thoughts on that, please contact me. But they're calling for nominations now, so it's a very rigorous progress process but that you go through. My sister and I actually won fellowship me and Victoria in Sydney in the same year in 2000. So we did a bit of sympathy.

You had your application down pat there?

Well, yeah, well, few news and so and I studied innovative blasting techniques for mine site rehabilitation and she studied some environmental best practices for the agricultural industry. So you write your report, come back and promote it so that people can take it and apply it. So it's pretty exciting. Anyhow, they have a fantastic event. So we had an event where behind closed doors, you know, Chatham House rules. What goes on the room stays on the room. And we had the treasurer of Victoria come and talk to us about some pretty innovative. Innovative treasurer palace talk about innovative things and he really, gee, I was really impressed with him, his knowledge across so many topics. And he had people firing at him about, you know, questions, social questions and infrastructure questions and defense questions and contract questions. And he could answer everything.

It's amazing, isn't it?

And the interesting thing was he said, I lay awake at night worrying how I can fund some of these social enterprise things that really will make a difference in the world. And it really gave that human touch to the politician.

So, yeah, it's not a popular, you know, a popular opinion, but I used to work with a few politicians when I was in video production as well. And, you know, there was exceptions, but for the most part I was amazed with their ability. For instance, in our game, which was video production, they would come in and have to read a script from their advisor, take it on board within a very short amount of time and process all the ramifications for that if it wasn't, if it went wrong kind of thing and then, and, and do it. And they were, nine times out of ten, they were far better than any of the actors we work with. But it just amazed me how fast they had to process a really quite a deep brief on something, you know, and make a decision which had lots of ramifications.

He was kind of funny. He was saying, you know, he had two siblings that were doctors and one was in mining. And he went to his dad and said, I want to be a lawyer. And his dad said, well, everyone's going to hate you. And he said, I'm going to be a trade unionist and said, well, everyone's really going to hate you. And he said, I'm going to be a politician. He said, that's it, you're out of the family. So he was a funny guy too. But two things that came out that I can mention. Turnbull actually put him in charge of housing affordability and he has just announced now that foreign investors, they're going to increase the stamp duty and land tax for foreign investors, which is really interesting. But another interesting thing and I'm going to explore this because I'm actually going to interview someone on this whole Dark Tower concept.

Yeah, I love that.

Which is the fact that there's a lot of overseas investors buying properties and not renting them out. So there was a myth that I heard that I've been tracking down that there's 10,000 units in Melbourne CBD that have settled. The lights never go on and the water's never been connected. And I think I've got to the source of it. So hang Tight for that WEBINAR on.

The 12th in London, there's this group called. I think they're called the Cave Dwellers and they run around with torches on the head and go through all the abandoned underground stations. I can see them going through these abandoned dark towers.

You know the dark towers. We can do dark tower tours. And here's unit three. Never been opened, but settled in 2016, so we're going to talk about that. But he's exploring a interesting phenomenon which is charging landlords 1% of the value of a vacant property that's been vacant for more than two years. If you're not in prison and not in hospital and the property hasn't been up for compulsory acquisition and that goes to fund domestic violence, people who need emergency housing, because apparently it was a thousand last year who just had to get out of the house for terrible situations and there was nowhere to put them.

Yeah, yeah.

So, you know, some really innovative stuff. Exciting.

Hey.

I went to the drive in Coburg drive in, saw Eddie the Eagle, made me cry. Set up a little lounge in the back seat and sat there eating my carrots because I'm on a great detox at the moment.

We go there too.

It's a great place, isn't it? I love the idea of driving.

It's only one of two left, is it?

I think so. I remember saying Greece back in the 70s in the Dubbo drive in. That was your highlight. Mum and dad left when they realized that was a bit too rude for me, but it was exciting and. Yep, so I'm on a detox at the moment. Three days of headaches, giving up.

What?

Sugar, alcohol. Oh, what dairy. Apparently I'm going to be clear of the head and be able to. Super thinking, super brain. Well, I've managed my way through the known caffeine and the three days have headaches, so I've detoxed and I haven't gone back to caffeine. I'm really proud of myself. Ten days in.

Yeah, it's good. I did that last year, but I've gone back on it, but I'm going to come back off it again. But I did feel much better not drinking coffee.

Well, my personal trainer boot camps me a couple of times a week and he's said it's a great thing and so I'm giving it a go. So there you go.

Good for you.

That's it. Well, let's get into questions because I'm sure.

Oh, yeah, there's other people here.

We just stop chatting to ourselves. Module 7, everyone's up to Module 7, the ultimate guide to renovation.

How fast is that going?

I reckon so. And that's a really great module that's on. We always talk to people about the biggest fears about renovating. It's managing tradespeople, managing budget. So the quick quote calculator that's in module five is that calculator that you use to manage the budget and plan, you know, plan the renovation that you're doing. And yeah, this is a great module. I really love it.

It is, it is. And lots of, lots of really practical tips around how to manage the trades and you know, things like fixed price versus hourly rate and that kind of thing. So they're questions that always come up and inevitably what happens when people get in and do the first modules is they end up. We get a lot of the questions that get answered in the, in the latter modules. But I think this, this module in particular is going to answer a lot of questions.

And the module before was a bit of fun too. Module 6 with the negotiation and auction techniques. We always get a lot of fun comments around the crazy lady.

People think it's you, the crazy lady, but it's actually Medine.

I know there's someone crazier than me, Madine. Wait till I have my clarity of thinking in 28 days time.

Does Medine even know she's in the course? It's the crazy.

I should tell her.

She made a, have just told us that in private.

You know, Chatham house rules. Oops. There you go. What stays in Tugda stays in Tugta.

Yeah, that's right.

So yeah, so if we've got any questions anyone has obviously on any of the modules, please put them up. We better get to housekeeping so we can get to some questions. I see people chatting in and I know that, you know, we'd love you to, to talk to us as well. So quick, quick.

There we go. That was the slide I was supposed to go to.

Very impressive, Jonas. Like you prepared this before managing the schedule, the software. Yeah. So yeah, as we said, some really good topics in there. And for those people we know we've got a lot of alumni who go back through the modules as they buy properties or as new students come in and support them along the way. So go back in and check those. And module two is in the next couple of weeks going to have something pretty spectacular in the location masterclass as well. I'm really, I'm so excited about this.

Yeah, we're playing with that today. So we're moving online from spreadsheets to online.

Yeah, so all those people on Max will not have to deal with Excel and macros and things and it's going to be pretty fancy pants. So we're going to answer, put all the, all the information around those suburbs that we collect data on monthly together for you and make it as easy as possible.

Yep, absolutely.

So, questions. So some quick housekeeping. If you're on your computer and you're experiencing any problems hearing or perhaps we can't hear you during the questions, you can call in using a phone. So you can find the phone number in the sidebar under the audio options drop down menu. And you can call that from mobiles, landlines, Skype. We've had people on iPads, on buses call in. So we know it all works. If you're on a PC, it might look like this. So when you do have a question, all you need to do is raise your hand by pressing the little question icon in the sidebar menu. And this tells me that you have a microphone and you have a question. So clicking the hand button will let me know and then I will unmute your line and it will say your lines are muted. You know you're on. We can then have a chat and you can also put in some questions in writing. We're getting some now. I say that I'm terrible at pronouncing names. Jackson has got quite a few in there. Anyhow, hope you've got a microphone and you can tell me how to pronounce your name. But look, it's a lot easier for people to hear the question and get a full background to it and for me to come backwards and forwards with you and really get to the bottom of it so we can add as much value as possible. There is no such thing as a silly question. With John's many, many years in trades and developing and video production, we probably won't answer video production questions. Mining, renovating and property investing and finance, etc. We can usually attempt most of your questions and get to the bottom of them. So as I said, these calls usually go till 9:30 or until the questions run out. We just asked that. If you do have a follow up question, make it a quick one or you know, so people don't miss out. If not, we'll get back to you. So we haven't actually missed a question yet. And I have to say I think the last webinar we did we had someone who had just put in an offer. Remember that?

Oh yeah, yeah, yeah.

So we had someone, Gabrielle, who just put in an offer on a property. He was having that, what do we call it? The post purchase nerves. Yeah. And he was in a seven day cooling off and we went through the entire analysis.

Did you, you know the result?

I do. He decided to back out.

Wow.

So, yep, he, he went and verified a lot of the data that we discussed and we, we spent quite a lot of time with him because no one else is putting up their hand. Yeah. And I think we did his entire due diligence doing that pretty much. So grab that webinar.

Yeah.

It was fabulous.

For him.

Too much so. Yeah. So he was very grateful. So. Yep. Gabrielle, I don't know, maybe you're there and you can share your story. But anyhow, this is not a tech support call, guys. If you are having problems, please send your simple technical issues to support propertysuccess.com we try to get back to you as soon as possible and we'll get the right people fixing your problems. So let's not dwell, John. Let's talk to people. I can see we've got lots and lots of people online tonight and let's see if anyone's got their hand up. Up for a question.

Well, I've got a couple of written ones first. Let's have a go. Well, firstly, Leslie, does the quick quote calculator periodically get reviewed for current rates of labor materials? I must say it hasn't in at least the last year and a half. But the good thing about the quick quote calculator is you can change the numbers any way you see fit. So it's also got the ability to put it in a kind of a budget level at a medium level and retail level. So you can change any of those numbers in there. So for instance, if you wanted to be safe, if you suspected maybe breaks a change a little bit. Yeah, just put, put it at the retail level and that should give you, you should be pretty safe. In my experience particularly it was a gripe when I was a tradesman many years ago is rates don't change that quickly. Yeah. So and, and prices tend to be for most stuff getting lower. That's certainly been my case with, you know, stuff for the developments is there's more and more imported stuff, local manufacturers having to compete. So I don't think it will change that much, but let me know if it does.

Yep, yep.

Okay, so I'll check if any more hands are up there. No hands up at the moment. So I'll just continue to take some.

Well, we might see if any of these questions actually have microphones We've got who. Okay, I'm gonna go with this name again. Jixon. Young. Jixon. Jixon. Have you.

I'm just going to put it here so we can see it. Hang on.

Have you got a microphone? And you put your hand up because I see you've got quite a few questions and it could be handy.

All right, so the first one is. Hi, Jane, I want to have a hundred thousand dollar passive income per year, but I don't want to use the sell strategy. Then how many properties do I need to achieve this goal?

May I share my screen with you, John? And we might have a temporary to do you want to see if he's on the line? Yeah, we've got his microphone on maybe so I stop embarrassing myself for my bad pronunciation. Yep, there he is. Here we go. We're just going to unmute your microphone just to see if we can hear you. Hello, it's Jane here. Oh, hi. Hello. We hear background noise. Okay, they're having a chat. This is good. Well, look, let me answer this question. I'm gonna jump over to my computer and show you. Xiao. Yes.

Okay. I thought I could do it from there. That's all right.

Just ring supportourpropertysuccess.com let's just jump over here. Hopefully you guys can see that this is my portfolio calculator on the investorschoice.com website. So pretty proud of this. You can go up here and access it through resources and the calculator or over here there's a big blue button that says calculators. Now, now the interesting thing. So this is the third tab. So let's just say that you would like to achieve $100,000 passive income in 10 years time, all from property. So we're assuming that you're not selling any of these properties. The exit strategy often that people have is that they do sell. So let's say the median Property price is 500,000 that you're buying. 90% loan to value ratio, 7% growth over the next 10 years, 2.5% selling costs, 5% return, 2.5% inflation. Now you can change any of these and we hit calculate and it says you need six properties to complete this goal. So basically what it says, 100 grand in 10 years time based on inflation is 128,000. You will need 2.56 million in the bank earning 5% to get a pre tax income of 128,000. Now this is where you stop. Because if you want to have your portfolio working for you and not selling. The exit strategy of selling the portfolio down, this tells you that you need $2.56 million in property paid off earning 5% to achieve that. So you can kind of jerry rig this and say oh, I don't think I'm going to get a 5% return. I'm only going to get a 4% return. This just does that calculator and says well look, you're going to need $3.2 million in the bank at 4% or you're going to need $3.2 million of unencumbered property. So you are not paying loans on any of that. So that's the way you can work this. I guess the we just turn that back to 5. For the instance for those people who do plan on selling the properties, what we see here is that the portfolio in 10 years time would have to be worth $5.8 million. And this is based on these assumptions. And that's going to allow you to achieve after you've paid capital gains tax at your marginal rate, after you've paid the selling costs and the loan off, 2.5 million in the bank. So you can see the LVR is around about 50% of that period of time. Now at that period, what I've done then is this calculator then calculates back to today's dollars and said look, you really need to have 3 million bucks worth of property now to achieve that at a 90% loan to value ratio. So 3 million and 90%. So that's you know, 2.7 million in loans. So that's why that $3 million here is different to this kind of $3 million here. This is completely paid off. So to answer your question, if you want $100,000 and you're not going to have the exit strategy of selling the properties, you want to retain the properties, pay down the debt, it'll you know, put cash in etc, then this is the number that you need. So I hope that answers that for you. Great.

All right, let me see if I can find a couple more. Oh, a couple of suggestions Sharon suggested for the up and coming webinar house relocation.

Oh yeah. So this is kind of like they do this in Brisbane a lot splitter blocks. They move a house onto other side of the block so often they don't subdivide. They have the two properties on the one title. I've tried to do this in my mortgage breaking business for a few clients and I get a quiry about this once every six months. And it's regarding the issue is that lenders will not fund it until you have the utilities actually connected on the site. So you can't go and spend the 50 grand, get a loan to buy the. Get the $50,000 property, move it to the site and connect services. You have to wait until you've paid all that yourself and then they will allow you to then get a loan against it.

Oh, so the services have to be connected. This might sound like a stupid question, but do they have to be connected to the house?

Yes.

Okay.

Yeah. Because the assumption is there's another property on the same block anyhow, so the services are connected to the block.

So you couldn't just have, for instance, a temporary. Like, you know, you can get the mains in off the street and have it at a temporary pole.

No, no. Okay, all the way in. So. And the valuer will confirm that with an inspection. So it's something. Sharon, let's put it on the list. It could be something as an innovative technique to get dual occupancies. There's a lot of people interested in multi, multi occupancy kind of.

Yields, as Ellie said. Here, webinar on multi room accommodation.

Okay, there you go. Well, maybe there's a. How to maximize your yields on your property. We could look at maybe four or five different methods.

Yeah, absolutely. Okay. Another one from Mandy. If you've got the money to invest, where would you go to invest from? In between Melbourne and Brisbane. Okay. Can you suggest any suburb to look at?

Ooh, Mandy. Well, I imagine that what I would invest for now in my portfolio position and what you would invest in my be different. And this is, and it sounds like a little cop out, but I will give you some thoughts on other things as well. The thing is, look, as John said, you know, there were some worries about the market and slowing of the market in the beginning of the year. And I still think, you know, from an affordability point of view, we can't expect the market to go up continuously. I did have a read of the reports that were put out by bis shrapnel and there's, you're talking 3 to 5% potential pullback in Sydney for instance, but we're still getting like 70% clearance rate. Sydney, Melbourne, and we're still getting the numbers through as well. So, you know, it's not like there's been a real slowdown in those markets. And as we know, Sydney moves first. Melbourne, Brisbane, Perth, usually. So we've seen, I think we've seen Perth take a little longer to respond than we expected, did I say Perth or Brisbane? Brisbane's taken a little bit longer to respond than expected because of its association with the mining industry. As to Perth, so you know, people sitting in, you know, I don't know, sitting in Toorak don't really care that someone in Port Hedland has lost their job which malicious as it sounds, it doesn't affect their day to day lives. Whereas you know, that fly and fly out person who was paying rent in Perth will have an effect on that landlord's position and potentially rental yields in that area. So you know, there's no direct correlation in some of those markets. So in my opinion, I think, you know, I think Sydney is very expensive when you look at median property prices, a million dollars. But I still think there's some really good buying opportunities and I think more and more as the market quietens there might be some even better opportunities for the savvy investor who's prepared to do the research. And look, Melbourne has still got a lot of legs to it and I've always said it's got six to nine months post the Sydney market coming off and I can't really see the Sydney market cooling all that much. So I still think Melbourne has some great buying opportunities and obviously cheaper than Sydney does have worse rental yields. So it's probably going to take you, cost you a bit more out of your pocket. And just be mindful about the negative gearing potential changes that could come up in the election. But you know, if they do, I've got to say I don't think anyone who holds a property will be at risk of having negative gearing pulled from them. I think it will be grandfathered which means that they will respect people who are in that previous legislation space. So for new investors, for new investors and you know, Brisbane has felt a bit of pain because the mining industry and I think they've always limped along behind Sydney and Melbourne. But you know, I've been talking about Brisbane as a buying opportunity for the last 18 months and I still believe that there's some fantastic opportunities there. Lower median price, getting some fabulous properties within 10Ks, the CBD for you know, under 600,000, which is unheard of in Sydney and Melbourne. And I'm talking properties as in houses. There's some good growth areas, there's some great infrastructure drivers that those guys got going on. But then, you know, you might just even look at, it's like those larger regional areas, the Newcastles, the Wool Wollongongs, the Geelongs, the Bendigo, Ballarats, and you know, the, the Toowoombas and the Sunshine coast and never ever wanted to be recorded saying this, but the Gold coast, there are some, some opportunities there, you know, the huge hospital on the Sunshine coast and you know, there's so much stuff and that those large regional centers do have multi economies, so they're not just linked to one source of economy or employment for the town. So, you know, I think, I hope I've helped but I think there's some buying opportunities, I think there's fabulous opportunities in Melbourne and Melbourne, if you have a look at the Residex report that comes out monthly, has outperformed Sydney for the last 10 years on capital growth overall. So, you know, and it's cheaper and it's got the proven record if you can afford it. As I said, Mandy, we might be in different buy places but from a buying criteria, if you're an ultimate guide and renovation student, stick your guns in that module one and two and define your criteria, exactly what you need and you'll find the suburbs as they come up.

Okay, we've got a hand up and I apologise in advance if I'm going to murder your name, but I think it's Tan. So I'll just unmute and we'll find out.

Hello, Tan.

Good evening, Yen, how are you?

Hey, I'm good. And yourself?

I'm good. Good. I would like to ask questions, come back to. I think in more than two it's suburb selection. I still get a little bit, maybe our budget. Because my budget is about 300 to 350k.

Sure.

And yeah. And if I did the dot map and then when I look at the dot map it look like if with my budget at 350, middle price is on out of the, I think 3, 30 kilometer from CBD.

Yep.

So it looked like the, the best I can think of is 5 to 6% annual growth.

What city were you looking at?

Melbourne.

Yep. Yep.

So look at. Because I, I only thought of the southeastern suburb like Dannenong and well, and because of that I just see on the dot map look like 4 to 6%, 6% in the past. So is it good to invest in the house in 4 to 5% or I had to select the unit nearer CWD or I had to wait.

Congrats on finishing the dot map. Anyway, that's the first achievement.

Well, yeah. Good. I'm going to put a.

What you call resident report within the city suburb. Yep. They do the report and I put on the dark map but I look, look like in the east southeastern suburb, only 4 to 6% growth.

That's a predicted growth report that you've purchased or the renovator report.

Yeah, I thought very few like get 7 or 8%.

Yep.

So with my money in myself in like to do the reno everything, should I invest in the unit which is nearer to CBD, I can get less than 30k or I have to buy the house which is for maybe 3 to 4% growth. I have one, but I look like very. I don't know how they grow.

Yeah, I have one, but yeah, look tan. It's a really great question and first and foremost I'm going to chastise you. And that's because you only segmented part of the dot map. You have to do the whole thing. And the reason I say that is because people do get a bit parochial about, look, I know this is a good idea, so I'm just going to do the northern suburbs. And often when you do the dot map for the entire city that you're looking at, there are going to be some treasures that come up that you may not have considered. So I do encourage you to go back. But hats off to you for getting the predicted growth report and applying that on top of the dot map. Because in the hot spotting workshops that we run and the one that we did in February in Melbourne, that's exactly what we do. We take the dot map, we do the entire dot map for the city, then we have I go and buy purchase about five reports that are $250 each predictor report, the renovator report, all these reports from different entities and we apply that to the dot map as well. And then we apply that to the criteria of the location masterclass spreadsheet that you find in module two. So we get down from 30 suburbs very quickly to three suburbs. Now here's some problems that you're facing that I'm hearing, that you're facing and it's not uncommon and that is I've done this research but I'm not within 20Ks of CBD. I'm in 30Ks of CBD and I'm now, now weighing up what is my money going to get me there and is it going to get me to my goals? So the goals and the financial plan that you kind of path for yourself in module one, which is what are the buying criteria I need, I need 4% yield, I need a 6% growth rate. If you can't achieve these in these areas that you're looking, then sometimes there is even a grieving process you're going to have to go through. And we've talked about this before.

John did suburb midstream.

Yeah. John did a whole, what felt like a lifetime of research in one suburb and realized that it wasn't there. And you had to three or four.

Months going to all the open for inspections.

And so with your money of 350,000 it is going to be hard. You know, we're Looking at over 800,000 median price in Melbourne. So it is going to be hard to find that, you know, the house, and I'm talking established house, not house and land packages, 40ks out. But it is going to be hard to find that. So what you do have to weigh up is where can I get more value for my money? And I'd even encourage you to think outside of Melbourne for that. So it might be Geelong or it might be Bendigo or it might be Sunshine coast in Queensland because you're going to get more money, more bang for your buck in those locations. And yes, there's fear of renovating remotely or, you know, how do I do this? It's so easy to be around the corner or in the area that I live. But the reality is, you know, this is a number. I'm not going to say game, but it's a number plan that is going to get you to your results and there's no point in using up your borrowing capacity and your deposit and then your renovation dollars on a property that might be renovated nicely, may be in the area of the pricing disparity, but potentially does not have that growth dynamic to be able to get you to your goals that you set for yourself. So one idea could be go more regional or go to another capital city with a lower price point. And I'm hearing a lot about Hobart at the moment as well. But that could be one option. The other option, as you've already highlighted yourself, is could I get a good unit? You know, and definitely, you know, you're going to get a unit for that price point a lot closer than you are going to get a house however you want to work. And I remember doing an analysis for a mentoring client once and she was saying, I don't know how I got it so wrong. And she had a one bedroom unit in Box Hill. It was like 5% of the population had units and only 10% rented. So, you know, you want to still make sure you've got the typical property for the area. So it's not like everyone wants a three bedroom house and you're buying a unit because you can afford it in Thornbury. Yeah.

So what are some of the other things? If you're thinking, if you're an investor looking at units, what are some of the other rules of thumbs? You like, for instance, you like like so many in a block or what are some of your other rules?

I definitely don't like high strata charges and they usually come with lifts. So properties without lifts, which usually limits you to three to four stories. And I rather, I'd like to have a larger percentage of owner occupiers in the block as well because they usually more proactive of taking care of the property where when it does need to, you know, let's all get together and throw 20 grand in and render the place and add, you know, $250,000 in value.

How do you work that out?

It's based on square meterage, so it's actually based on your ownership.

So as per se, sorry, how do you work out?

Owner occupied.

Yeah.

Yeah. So I, as part of any due diligence I've ever done on buying a prop, a property unit, I've gone and accessed the strata management plans and meetings and annual meetings and they will say things like, you know, John in, in apartment five has, has. You want me to change my screen?

Oh yeah. Someone was just saying, I can't see your screen. So I was just going to come back.

You're going to use it again, you might want to show yours. Oh, no change present.

Okay, sorry, go ahead.

But you, you read those and it gives you a feel for who the owners are as well. But I'm not averse to knocking on the, the actual doors of people and saying, look, I'm thinking about buying a unit in this, in this area. And I'm just wondering, you know, you know, do you own Giant property now? I'm renting, but old Mrs. So and so up here and they own so you know, it's, it's once again it's getting a bit up and close and personal. But yeah, I like, I definitely look at the sinking fund and make sure if they do have works planned in the, those in those body corporate meeting minutes that they have doing things that there's money already in the sinking fund. I'm not going to have to go and put a lot of money into it. They have plans for upkeep. You know, they're, they're not saying no to. Renovations is always a big one to me. So if they've actually said no, someone can put their air conditioner in or no, they can't you know, do something then it's a red flag of how, how I'm going to get my, I develop my renovation done. So.

But yeah, imagine just broad strokes that a smaller, you know, one with for instance four to six units in a development would be better than for instance 30 to 40.

Oh yeah, yeah, absolutely, absolutely. So yeah, looking for the small ones. I love the old art deco units that have some character and you can add some value to them. And you know, there's the whole conversation about whether you should be on the ground level or up higher and you know, having your own little backyard or shared courtyards and all of those things that you can go into. But you know, I think that you know, a nice unit in a nice area in a well kept street with low strata fees and this is usually associated with, you know, three to four levels and a smaller block, good home ownership and you know, you know, if you can afford that closer in an area that has some growth and it is a typical property that's in demand that people want to live in and you know, obviously they have over 30% renters in that suburb, then I'd be kind of looking at that. So hope that helps. Tim?

Yes, I have another option like when can I wait? In one or two years. But I worry now one or two years the house will go up.

Yeah, it's kind of, a lot of people wonder about that whole should I time the market and if the market comes off in a year's time, will I be able to pick up a property 20% less? We haven't really seen properties drop that much in good quality, established properties that we're talking about buying. We have seen those in the oversupplied house and land package areas and the inner city units, etc. So I've always bought even at the top of the market when I could afford to in the best area that I could afford to buy. And I think, and you know, I just think of this one lady that I had spoken to so many times in 2006. She was going to wait until the Sydney market crashed and she's still waiting. And you know, it was going to be 450 purchase price and now it's 950 purchase price where she wants to buy. You know, it's just insane kind of numbers. But the reality is that I'm not going to be someone who says property prices always go up because we know that there's always corrections and, but you know, corrections that people are talking about are the 3 to 5% kind of stuff. Which if you had a 20% growth last year, we're not going to shed any tears over it for you. I'd caution waiting. You're doing your research and good on you for doing it. I suggest that potentially you go a bit further out in completing your dot map for the houses and you may even want to get super excited and get a new map and do it on units. Yep.

Yes. Yes. Have another option. Even though I have a little bit long driving to. I just worry about it because I'm working everything.

Yeah.

If by the time I get the suburb and it's too far away.

Yep.

To inspect closely. Very hard. It's like one week only one time or something.

Yeah.

But it's very short. You got to think of the long term though, that's there'll be a little bit of short term pain but if you get tens of years and look.

I remember waking up at 5:30 to drive across town across Sydney and then pick our traffic on the bridge to let tradies into a secured apartment block so they could get on with their day at seven and then get back in time for work by nine and it was a pain for all of those three weeks and that properties are doubled in value. So you know, sometimes you just gotta live with it.

But it's like even if someone asked you with a year of commuting somewhere for 20 years of growth at x percent normally it's gonna be a pretty.

Easy decision to make if you can future pace yourself. You know, just see the future and go back to module one and see and visualize that what you're trying to achieve. But thank you so much for your valuable questions.

Good on you for doing the dot map.

Yeah, good stuff.

All right, lots of questions. Leslie, you may have talked about this before. Out of interest, what's your thoughts on Defence housing as an ability investment?

Lesley, full disclaimer here. I used to own one and I used to own one and be so happy with it. I used to speak for Defence Housing Australia as their finance specialist around the country many years ago. So I'll tell you my experience on it and I'll tell you the pros and cons and what to be aware of. So let's start at the beginning. Defence Housing Australia many years ago found that they were losing defense defence personnel and when they.

Not in the field of battle, not.

In the field of battle but at home and they were, they were sacking themselves and when they did the exit interviews they found out the wives are really didn't like living on Base with other military wives. They wanted to be part of a community. So they took the initiative of purchasing properties and developing properties. They'd go a developer and they'd say you're doing a development, a house and land development of 300 properties. Properties we will take the best 20 or 30. They have to be different, they have to be scattered around. They have to be specked out to this spec. Exactly. And so if you drive through these developments, the only houses with curtains at the end of developments are the DHA houses and the only ones with gardens, so very high quality and it's for their people. Now where you might be spending 5.5 to 8.5% normally for your rental management fee, you'll be paying about 16.5 half percent for them to rent to manage your property. Now for that they do. They're active property managers. But any problem that tenant has like husband's away on deployment and wife has to hang out the kids clothes on the clothesline and the backlight's gone out, they will be there within hours to put the backlight in. So it gets done. So anything that's kind of of the oven has blown up, they'll replace it free of charge. At the end of the tenancies. They repaint, they recarpet. We got to select the color schemes that we wanted, which is nice but they're very prescriptive. So they came to us and said, so we bought a property in Seaforth, it's Manly in Sydney. I'm going to get to the location part of this very soon. The buyer beware. But we bought blue chip area where you would, after our analysis we would buy any property and it just happened to be a DHA property that had a year lease that had six years remaining on it. There was a divorce situation. The rental, the selling agent had no idea how to sell this property. So they put it in the commercial property section of the newspaper. And Todd, my husband found it and went, let's check this out. Beautiful four bedroom property, you know, in a house of a median price of 1.2 million, you know, bought it for 600. The market's now 2.2 million. It's dragged up our property value. We had guaranteed rent paid every day whether it was tenanted or not for six years. They came back after six years and said we want it again. But now we need not a 500 mil wide concrete path to the clothesline. It has to be 750 and we need to have air conditioning not just in the master room but in the other rooms. And we're like, don't want to do it. And they said, what if we give you an interest only loan to do it? We're like, oh well, it's not going to add that much value for us either. So we negotiate it away for a little bit and we didn't do those changes and we got another three years. And then they said, and at the end of every month, every year they send a valuer out to do a comparable valuation on the rental for that property against other four bedroom houses. Not against the market, but against specific properties like that. Now we had property, we had our rents go up. I know I've spoken to many DHA clients recently whose rents have gone down and I've helped them argue why the rent should go up by providing some analysis. But they do do that independent valuation. You can contest that. A lot of people think that it's very safe. And here's the big disclaimer. And I always said to dha, when I speak on your behalf, I will be sharing this with people. Is that location is the key to property investing success. So having someone pay the rent for property, it's not going up in value in my mind is a silly issue of your money. I didn't buy in a lot of the, you know, into DHA properties and a lot of the regional centers because I wouldn't buy a property there. So just the fact that it had the protection of the guaranteed rent would not be enough for me to do it. Now I know that DHA and I'm actually good friends with the marketing manager DHA now and they have continued in marketing DHA properties although they're always at a shortage and they essentially run a online auction every Thursday and they check pull out the names of the properties that are available out of a hat. Okay, it's not a hat, but a little bit more technical than that and you don't know if you're going to get one or not. But you know, and often people don't even inspect the properties before they buy them. So I've had one. I bought it as an established property, not as a new property. I didn't buy it in a new development, I didn't buy it regionally. And I'm still very happy that property day. It's no longer a DHA property. It's a property that's has fantastic rental return. We always had, you know, generals and things living in our property but.

Oh really? As opposed to just, you know, corporals.

No, we love that. We love the people who do the work. But no they are like surgeons and things. So you know.

But I suppose it was a good.

It was a good area.

Yeah. I've got a friend who actually builds out at Mernda and Defense housing by place his places which are like you know like four bedroom that's the Myrna is the very last it's the frontier of housing development. The very last suburb about what would it be maybe even 40k's maybe from the city.

I don't think we've ever been there.

Yep. Not.

Yeah, not close. I wouldn't live there so I hope.

That helps if I was a soldier. Claudine's got a question. It would be great if this webinar could touch on the proposed changes to negative hearing. If labor win and their policy is introduced, where will the likely opportunities be? What if anything should we be thinking about and doing now with both impending purchases and or properties within our existing portfolios?

Great question, Claudine. I have recorded a quick little interview that I did with someone. I think I'm going to put her on my you Property success Facebook page on SAP and it's just on this topic because I think it is really important. I was speaking to Angie from Bis Shrapnel in preparation for this other webinar and yeah, he had some thoughts on it and I do want to share those with you because I think there are some real concerns that are being raised and I think they're almost unfounded. And I was asked today on the property couch by Ben Kingsley, my opinions too. And if anyone's ever listened to the property couch, I think about four episodes ago Ben ranted on for about 15 minutes of why it was crap and why they shouldn't do it. And in his capacity as property investment what is it? PIPA Property Investment Professionals of Australia association president. He also had some thoughts on it as well as his personal thoughts. So yeah, let's just, let's just leave that. But there's a lot of information. Watch the your property success Facebook page. If you haven't liked it yet, go like it and you'll see that that quick little three five minute thoughts on it. But I think it's something we're going to keep as a watching brief and as information comes out on the budget next week, we're looking more and more to what implications can have. Also just go scroll back through my Facebook page in your Property Success Ultimate Guide to Renovation Facebook page and Investors Choice. Because I had a chat to Chris Richardson, I kind of grabbed him as he came out of the bathroom and interviewed him on these topics. He's from Deloitte. He actually worked for the federal government in. In treasury and actually formulated some modeling on this many years ago. Here's some defined definite ideas about how capital gains tax exemptions after 50. The 50% should actually be reduced after a year, two years, which would have more implications.

You've just given an invitation to everyone that says you go to the loo from now on just to hang around outside and wait for you to come.

Up with my iPhone. Can I interview you? Okay. I don't stalk people in the bathroom. I just noticed as he was walking out who it was. Chris, do you mind if I have a chance chat?

Okay, so you got. There's lots coming up on. On that Claudine with the. With the webinar next week, next Thursday. And yeah, as I said, Jane's on. On the Facebook page. But great question. Claire's got a question. I found it hard to find a good team of tradesmen. Where do you start to look? What are your techniques and questions that you ask?

Claire, are you in the ultimate Guide of Renovation? What do you think about investing?

Think.

Let's see if Claire's there. Can we see if we can get Claire's microphone on? Claire, do you have a microphone? No microphone. Okay, Claire. Claire, if you're in the ultimate Guide of Renovation, then this module that is released today is all for you and all about this. But if you're not, let me answer it anyhow, for everyone else in the call, getting good tradesmen is really difficult. And usually when you have one, you keep them and you tell everyone about them. The good thing is that if you've got friends or family or work colleagues who have found good tradesmen, they're happy to tell you about them. So first and foremost, I would always use the referral network to get a tradesman recommended to you. I always go for three quotes. So, you know, it might be someone who's referred to you. It might be someone you find yourself or someone mentions. And it might also be, you know, I've always looked in the local papers to see those that are advertising. So that's where I always start looking for them. I've definitely used, and I always want to say Airbnb, but it's not. It's Airtasker. I've used Airtasker to get little, little jobs done that, you know, you say, hubby, hubby, will you do this? And he doesn't do it. I'm like, I don't want to do it. So I've also used services seekingservices.com I think, you know, they've got a. A great model where, you know, people don't turn up, which is always the biggest problem, people not turning up to quote. Then, you know, they kind of three strikes and they're out and they kind of. They can't bid on your work that you put up, your job that you put up. Someone might want to type in here. There's another site that I know people regularly say that they use G. You.

Said service seeking, right?

Yeah, yeah, there's another one that I know that we've discussed this before.

Central.

Is that the services central?

Service central.

Yeah, Service central. So, yeah, they're good.

I like tradies. Tradies like working with good tradies. So I think that's always a winner for me. If you've, you know, you've got an electrician, if you've got a plaster you work with, if you've got a tiler that you work with. And they tend to group together a bit to you, like, but. But chippies are kind of. They know everyone because they're there throughout the job.

Yep.

So they tend to know everyone. And a tradie, particularly if you've got a run coming behind another truck, you definitely don't want to work with a tradie a second time that you've had to come over the top of that's left a real mess for you in terms of things out of square or out of level or whatever.

And as John said, often if you've got a really good tradie who finishes off like you'd like them to do, and they're respectful and you pay them on time and you respect what they do. They like working with other good tradies and they will tell you who they are. And what I love about this, John, is that they project manage it themselves.

Absolutely, yeah.

They ring each other after hours, those.

Little clicks, because they're doing this all the time and recommend each other because they just work. They tend to work together. You know, they might be a job apart for a couple of months or whatever, but they tend to be, you know, more often than not, they spend, you know, the majority of time together on. On the same job. So they just get used to managing each other and they don't believe what the owner tells them, oh, it'll be ready to go on Friday. And then they ring up their mate and they go, is it really ready on Friday?

Friday, yeah.

So they just. They manage them. Manage Themselves.

So rather than spending 10 on a project manager, sometimes you can get them to themselves.

Yeah, absolutely.

Y and yep.

So but I think the thing is to just check, check the references. So even if it is recommendation, I, what I like to do is say, can I have a look at your last job? Or can I or can I have contacts for your last three jobs? So I'm not interested in them just cherry picking what, what they want to show me, you know, the best jobs they've had in the last five years or anything like that. I want to say the last three and I want to talk to the people directly. And if they won't do that, then that rings alarm bells to me. The other thing that I do is if I get a quote, I never follow up on them to say, hey, have you got that quote for me yet? If they don't get back to me with a quote, I don't hire them. Or if they get back to me in three or four weeks after I've asked for the quote, I won't hire them either. Because if I'm chasing them at the quote stage, I'm going to be chasing them all the way through. And I just don't want to work with people like that. It just wastes my time. So that's good point. Yeah. That's another thing I do.

Now Lorraine says she's found some good people on Gumtree. Yep. I've employed people off Gumtree. I love Gumtree. I buy things off Gumtree. You know me always, always after a bargain. And Stacy says, don't say terrible things about Miranda.

I'm sorry.

Because her munda, her forebearers settled there in 1860 and her father, great great grandfather ran a successful meal there.

So it's a much nicer place.

But she said she'd rather not live there. Okay.

So Rosemary, I want to find a property which has a house with a lettable part upstairs in brackets, upstairs, downstairs or granny flat and is on a large enough block that I can subdivide and sell a block.

Multi twist.

Yeah, multi twist. Yep. I want to spend about 300k for the initial purchase. Saw a place at Coffs harbor which satisfied the criteria. I'm looking for other ideas. I assume that side is not of areas in New South Wales or Queensland.

Interesting. I've actually one of my very dear friends is looking at this opportunity right now in a fabulous inner city suburb of Brisbane and they've got the opportunity to actually just close off a spiral staircase in the top level and rent the bottom Level out and the big backyard is, is where they could develop townhouses or another three bedroom house at the back. So Rosemary, you're doing a twist on a twist on a twist. And I gotta say, you know, we do love the idea of, you know, renovating.

Better use.

Yeah, yeah. Renovating the front of the property and potentially building on the back of a large block. As long as the resultant size of those blocks is still a typical property that is salable in that suburb. And we've looked on SQM research before on how to, to do that. So I won't go into that again because that's just a little throwaway that you just need to be wary of. But it is possible to do and I would just urge you, and I've got a client who's done that in Geelong as well. They haven't done the subdivision on the back, but they have plans to be able to do that. But they've separated the top and bottom area and you know, independent entrances, independent laundries, shared backyard, not such a big deal. So you, I think probably, you know, this multi letting and twist on twist thing is something that's coming up as a webinar. John.

Yeah, yeah, absolutely.

So we might record these three questions and talk to you ladies later.

But I mean I've seen, I know I've said this on the webinars before, but we saw a lot when we were looking to buy developments. We're looking to buy with permits and we know for a fact as we go back and do the due diligence on the property, we could see what people were buying them for, for they're holding them for, for whatever, let's say six to nine months. They'll getting their permits in place, you know, spending let's say 20 to 30 grand and selling them again for, you know, 2 to 400 grand more than they bought them for kind of thing and with a very little outlay. So it's a really good strategy, 30 to 50 grand that people are doing in some cases less. Because if you can get a plan, you know, and if it's just dollars and cents and you're not trying to design it yourself and do all the things that you want in your own house. If you just pick a plan up that's already in the area and one of the ways to do that is to look at the development applications. So choose an architect that's doing developments in the area and approach them, see if they've got a plan already in, in existence that you can just use carbon copy make it suit the the block, get your permits and. And then away you go. So that's another twist strategy that doesn't require a lot of income or a lot of money up front.

But Rosemary, I love the strategy. You know, we obviously start at the beginning and teach people how to renovate, but we have a lot of people in the Ultimate Guide to Renovation Facebook Renovator Network page that are looking or have done something similar to what you're suggesting. So, you know, make sure you throw your question in there and have a chat to those people as well because I think there's some really great opportunities to that higher and greater uses. John says of course, properties. So thanks for your question.

Jackson. Apologies, mate. Maybe some phonetic spelling in the thing there. Good question though. I want to know. I think there's something with the silent.

J and X as well.

Yeah, something like that. I want to know, during a gfc, will the bank call back most of the people to repay the loan? Usually what lvr what will ratio will make the bank worry about this? As I heard some people bankrupt during the past gfc, this happened to them.

Look, this is a really good question. I'm going to put my mortgage broking hat on here because as I saw the GFC approaching, I took some risk minimization strategies for my clients that.

Just.

In case this happened. And that was around the fact that I had seen and heard that over in the US that if there was unused lines of credit, the banks were actually essentially, what would you say, putting a restriction on not being able to pull out those extra funds. And that really worried me. So let's just say you had a $400,000 home loan and you had $100,000 line of credit and you used 50,000 of that for investment and you wanted to use the next 50,000 for the next purchase. They were. What's the word? They were quarantining that money or not allowing you to use it. So one of the things that I use is, and I usually use a line of credit for clients in accessing equity because even though usually it's a 0.15% increased interest rate, it does have the benefits of. And some lenders do this well and some lenders don't. So line of credit, Evergreen Line, line of credit for 30 years interest on us for the whole period of time, like a big credit card, you only pay interest on what you use. And then there's some really dud line of credits. And I don't want to be terrible in saying this, but Macquarie bank where they go to like principal and interest after 10 to 15 years and say where is it? That wasn't a line of credit so you have to start paying it back. So you know, make all line of credits aren't completed, aren't equal. But what I was doing is instead of creating a line of credit for clients, that $100,000 I was creating as a standard variable loan with an offset account. So the $50,000 we would pull out that was unused and put into a savings account. Now banks have never quarantined a savings account because the loan is $100,000 fully drawn. So there's one tactic that if you are worried you could possibly minimise your worries. The other thing I do is, you know, I had eight investment properties, I had six different lenders across them. I never wanted to have more than a million dollars with any one lender because I didn't want to be on the radar when a GFC or there was or potential any property collapse. And we're talking, you know, if you had an LVR of 90% and property prices dropped by 90% the loan is equal to the value of the property. So there's no equity in there. Banks get uncomfortable, that's why they charge you mortgage insurance.

Just so I understand you're saying that million dollars is some kind of milestone amount.

Yeah. So the way, I mean I've just seen the fact that sometimes when I look at banking policies it's like, you know, we have a delegation lending authority up to a million dollars with a mortgage insurer over that we have to go and speak to them or the maximum loan is a million dollars interest only and then we have to go principal interest.

So it's a bit of a threshold.

They're kind of telling me that's their threshold and that will move obviously as wealth and etc increases. So I've said for my clients I usually go to about $800,000 maximum lend with one lender. So I have the capacity for the extra 200 to pull down as an equity draw without having to change lenders in the future. But I look so I have a banking hierarchy that I apply which essentially is, you know, we talk about the big four or five lenders, you know, for your home and maybe one investment property. So you're getting the benefit of the professional package with the interest only loans with the. Which is about to change too. The banks are about to make us justify interest only loans on homes. Got a whole lot to say about that let me tell you. But interest only loans offset accounts, free valuations, blah blah, blah. So you get all the bells and whistles and as you go down you go to the next lender that has different servicing requirements and then you go to the next lender that doesn't have the offset account and doesn't have the redraw but you don't need it because you've got that against your home, your non deductible debt. So I apply a banking hierarchy. So it's a really good question. I'm not even going to embarrass myself from trying to pronounce your name again, but it's really good question. In so much that people do worry about. So it's not so much the LVR I always try to restrict to a lending amount. And I think you can protect yourself if you see this coming up and converting maybe your line of credit to an offset account, putting in the cash in the interest only in the offset account associated to your interest only loan. But it is a worry. There is risk minimization strategies that you can put in place and I think just being considered a mum and dad invest and not having 5 million bucks worth of money with one lender and they go, hey, let's give you a personal. And I've had a really dear friend of mine, you know, said, you know, I'm an accountant. The banker said to me, because I'm an accountant, they'll give me a 90% loan without mortgage insurance. You know, I'm going to go ahead and do that. And so she went to them directly and she got the loan. They said, well you've got over a million dollar loan and you're very special to us, so we're going to give you a personal banker. And the personal banker changed hands and the new personal banker said, we've reviewed all of our portfolios, we're worried that you've got a 90%, no LMI loan. Can you get your husband? Of course. Which kind of didn't go down too well as you can imagine because the property wasn't even in her husband's name, but hers alone. And she's quite capable of having conversations about finance all by herself. Big girl and. But she rang up, she said, what am I going to do? They've just called in $250,000 to pay in the next 10, you know, 10% down. I was like, hey, wait a second, you've had this for four years, let's not panic, let's do a revaluation. And the property had gone up enough so that it was actually below an 80% loan devaluation.

They bothered to do that.

No. So you know, that's why I said that's why you need me as your mortgage broker. Don't go to these fancy banks and private bankers anyhow, so. But yeah, so you know, there's ways to protect yourself. There is ways to protect yourself. So you know, stay cool, watch, watching brief. But you know, if, if you are worried, maybe convert those line of credits to, to offset accounts against interest only loans and you know you're in the same kind of position cash flow wise, but you've got that money out of the loan and into a savings account.

Right.

Vitaly, what do you think of investing for cash flow in general, specifically in share houses in Cairns? I know someone is getting net cash flow of about $25k to $30k on a house purchased for 430k.

Gee, 430 and cairn sounds expensive. I know people buying at 120. Oh, good question. Okay, so this kind of comes back to the cash flow versus growth and funnily enough I have had Cairns flagged as a potential growth area in the last 24 hours of conversations I've had with people. And the whole premise behind that is, gee, the low Australian dollar remains that, you know, there's overseas people flocking to us as a tourism destination and therefore, you know, wherever there's a tourism destination there is opportunity. But you know, I think you, we've seen people in buying in Cairns who haven't done so well and it's one of those fluctuating areas. But having said that, they are putting a huge marina and development in there and putting some infrastructure in there. So first and foremost, foremost cans off the table. Let's talk cash flow. So investing just for cash flow is fine if that fits into your long term goals of what you want to do. So if you've got an area, you buy a $430,000 property and you're happy for it to be worth $530,000 in five or 10 years time and you're generating an income of $25,000 a year, then you know you've got your money working for you, generating an income and not necessarily the growth. And I've always just argued why can't you have both? So I think share housing is fine. It's difficult to manage share housing. I've tried it a number of times and rental managers don't want to manage it. So usually you have to give someone a bit of someone in the house discount or free rent or whatever. For them to manage it. And we're talking about locks on doors and we're talking individual fire regulations. Yeah. So you get over a certain point of tenants in different states, different regulations, you come under fire regulations and boarding house requirements, which adds a whole complexity and cost to it if you do it off market. And obviously we don't recommend you do anything illegal. But if people who are potentially doing that off market, I know people in Newcastle who are renting by the room and are doing very, very well in doing it. Newcastle has great fundamentals for growth and I hesit to say that you possibly could get a property there for five, maybe 550,000. But I think that cash flow by itself will generate you an income. It will be good while it lasts. But the fact is, the way that you exit a portfolio and build wealth and have money earning money in the bank for you is to have the growth. And I just really urge you not to give up on that.

Lisa, we're based on in no hands up, by the way. Have you noticed this?

No one wants to talk to me.

People have got sore hands. I think so.

It's because we're so scary, obviously.

Oh, here we go. No, here we go. Leslie. Leslie, let's have a go.

Leslie. Hello, Leslie, Hi, can you hear me?

Yeah, loud and clear.

Oh, hello. There's a lot of talk at the moment about regional investing. How do you do that economically? Like, do you have to go there personally to see the properties? If so, how many visits do you need to go up there? A lot of what you're saying is go out there and have a feel of the street. If it's a unit, go talk to the neighbors and all the rest. I'm like, well, that's lots of visits they're making. That's right. What are you doing for the next five weekends? That's right. I don't want to fly to Hobart every weekend. There's nothing wrong with going to Hobart every weekend. Mind you, the happy hour virgin specials come out for an hour a day, don't they? That are quite cheap, look to be serious investing regionally. And it doesn't matter where you invest, we always proclaim 80 to 90% of your research should be done online first. Where you start targeting the suburbs. If you've got access to RP Data Professional and even Ripeout, you can get down to the street level of where the renters are and actually target the streets that you want to invest in. Now, I wouldn't waste a get to know the area touchy feely. Trip on just doing that. I'd be doing some research on that trip as well and doing some open for inspections. So I'd find some properties that fit what you're trying to achieve. Make the use of at least the first visit. I know people who speak. I know John Edwards from resident used to go and speak to to the local chemist. Jacob from Ripe House speaks to the local news agent. You know what's happening in the area, what's happening in the town. They make a time to speak to the town planner and the council. They speak to the real estate agents. They try to inspect 3, 4, 5 properties with agents from different agencies. Get a feel for how they all operate as well. Get a feel for the area, drive the area. But you've almost narrowed down to the streets that you're interested in in before you visit. So it's maximizing your time. Now the other thing that you might do is try to find a buyer's agent in that area. So once you've actually nailed down the fact that you do want to be buying in Hobart and you do want to be buying in West Hobart and you do want to be buying within 500 meters of the bus stops within West Hobart, you really narrowed down what you're after. So when you start talking and visiting these properties, you can even ask the real estate agents if there are buyer's agents in the area. They will definitely know them because they will be the ones that are talking to them about off market purchases. These guys might have off market purchases that aren't even available yet because people don't want to advertise through agents or the agents can't advertise them so they offer them to the buyer's agents first. And what you can do is negotiate with them to do the inspections for you and negotiate for them to even negotiate the sale for you. So you could actually outsource that part of it if you wanted to. But I do know a lot of people. I was speaking to a lady who's right in the depths of Northern Territory and she's saying I can choose any city in Australia because everything feels like a million miles away. So where should I invest? So I think the thing is that you can do 80 to 90% of it online and then go and do that, hit the ground and get the feeling for it. Make your contacts then. And then you should have those real estate agents if you're specific about your buying criteria. This is what I'm after. And when it becomes available, I'm not a cash buyer, but I've got cash and I've got a pre approval. I'm ready to buy. Then they'll be talking to you, so they'll be contacting you. Right. Okay, thank you. Okay, Leslie, all the best.

Thanks.

All right. I love chatting to people. So much better than just reading a question.

And good old Lorraine.

Oh, Lorraine. She's got a hand up. Oh, no, her microphone's not working. Maybe you could open that other one. She's double booked in.

Oh, she. Let's have a go.

Hi, Lorraine.

Oh, no, there we go. First one works. Lorraine, Hello.

How are you?

Lorraine? If it works. If you weren't on one of these calls, I'd be sad now.

You make me feel I shouldn't be here.

I don't know.

I know.

I want you. I want updates. I want to hear what you're doing.

Okay. I just thought I put it out there to everybody and to say that, you know, the renovation that we're doing is coming along really, really nicely.

Oh, thank you.

We're probably about four weeks out from. We reckon by the end of May it'll be back on the market.

Okay. So for those who are new to this and we've been following your journey in the renovator network, you and your daughter are flipping a property.

Yes.

And you bought for how much?

335. We got it for.

And can you tell us where Wyong.

Wild on the central case.

And what was the plan and the end value and what are you trying to achieve and what have you done so far?

Okay, so we bought there because we decided we wanted to do a renovation and we had certain areas where we said, you know, this is where we could travel, you know, easy and things like that. So anyway, by having the target areas of where we were looking, we were able to find this very quickly. What we're doing is we've changed it, we bought it as a two bedroom, we've changed it, we're changing it to a three bedroom.

Beautiful.

And we're doing a. And, and you know, we've moved the laundry and, you know, new kitchen. We were going to just do a renovation and a bit of an update on the bathroom, but we've ended up doing or in the process of doing a full renovation of the bathroom. And all the time it's going back and forth to the spreadsheet and checking numbers, making sure that we're on target or if we need to pull back somewhere, we will. So we believe that we'll sell this for anything. 440 and above.

Nice 440, 450. And what do you think that you will spend on.

On it.

In the renovation cost.

In the renovation costs? Well, I do it all. I do buy the cost of buying, holding and the selling. And that is under between 395. So we believe in about eight weeks we'll do about 45, maybe more.

Lovely. Well done. And have you been using the quick quote calculator?

Well, I haven't because I've been doing this Excel spreadsheet. But I have to say that I've been using my card.

Ah, your reno saved card. All the new alumni are going to get in the next 10 days. Yeah. And if you've got a lot of savings.

Oh my God, you would not believe the savings I've had.

Tell me, tell me.

The paint. The paint. We got the paint for like, I think 30% off. We've gone with a brand that come that is from the United States of America and it's called Sherwin Williams. And it has been the best paint to paint with. Our lights we've got from down there. 45% off. Plumbing, I mean, they've been absolutely marvelous masters, honestly and truly.

Because you've got the discount at the masters card associated with it.

Absolutely.

Yep, yep.

Great.

I know every time I go down there, I.

You think I. I did the kitchen package of renovation I did last year and I got the entire everything in the kitchen for $1,700 through Harvey Norman Commercial Deal through the Renault save card. So, yeah, I'm an absolute advocate. And for those people who are new to the ultimate guide to renovation, yours should be in the mail in the next 10 days.

Yeah, yeah, yeah.

So I'm so glad to hear that you're saving so much. It makes it easy, but it's, it's.

Just some points get better, you know, like you're doing the bathroom and you go, all right. You know how everyone does the usual little narrow feature tile?

Right.

Now that feature tile come at the price of around $230. We're like, oh, geez, you know, that's a lot of money. Well, you know, going back to that same tile place and just getting a different lady. We've actually gone in and got a whole feature wall. The whole wall is featured. And it's like a beautiful stony, Rocky thing for $540 or something. Not just a strip.

Wow.

Hey, put a picture up in the renovator network. I want to see it.

Oh, I'm going to, I'm going to. All the walls are knocked out at the moment and the, and the kitchen.

I have to tell you about the.

Kitchen because, you know, we had a Bunnings bloke come in and, you know that came back at $7,000, right, for a package, you know, like you have to put it together. And I'm like, oh my gosh, this is expensive. So I, I looked on, looked around and found this.

Yes, this. I know where you're going.

That was advertised on. No, it was advertised on Gumtree.

Right.

This bit of a kitchen. So I thought, you know, it look brand new. And I went, I'll ring up, I'll get on into contact with this person and see where they bought it. Maybe I might have been able to go and add to it, like go back to that same company and get the extra bits and pieces where we need it. Well, blow me down. This bloke is a. He's a old cabinet maker or kitchen, you know, designer. And he, he's come in and he's actually given us a price of the kitchen, which includes an island bench, which includes the dishwasher, which includes the oven, which is a ceramic touch plate, the. The range hood, the taps, the sink for 5,900.

Wow, nice.

That is. That's. Was that Gumtree that. You saw it on Gum Tree in Loving Gumtree. That's where I sold my kitchen on Gumtree. You know, I had, I had a guy who, you know, the guys who turn up with the bins that you fill up with. I had a Skip. The Skip guy in Sydney and I used him for many of my projects and he used to, to. He actually had a thing going on with the guy somewhere or other. But Kerry Anne, Ken used to change her bathroom and kitchen every two to three years and they'll be brand new. So he'd go in and collect them all in the skip.

That.

And he'd had this. He had this warehouse of the most amazing complete kitchens and things and they're just amazing. And he was plugging them.

People chuck out good kitchens.

They do, they do. I see. Sold mine for 500 on, on Gumtree and, and got my beautiful spout for my bathroom.

So I did that too. I bought a secondhand kitchen and then put it in my rental property and then painted it up and, you know, did the whole resurfacing the bench and it was great.

Yeah. Oh, Lorraine, I'm so glad because I was hoping that. You mean on the call because I really. I love hearing the updates. So next call we are going to be here about imminent sale.

It'll Be on the market.

I can't wait.

And I, I just want to say too, that, you know, I'm sort of networking with a few of the people on your renovated network and I'd have to say without those people and the input. And so, you know, I think networking is absolutely paramount and moving forward and, you know, going back and forth with your group, you know, it's been terrific. So they're a great bunch.

I'm so glad you.

Thank you.

You're taking a lot from the community. We've really worked hard on making sure that they're, you know, sometimes you have to cut ties with people who aren't supporting you and find the new people who will. And I love the fact that everyone's so supportive in the. Even in the your property Success Club Facebook page and the ultimate guide to Renovation page.

Yeah. And you get, you know, you get back out what you put in too, don't you? Because you made an effort there to make yourself known and ask questions and.

Contribute to other people's learning as well. So thank you so much for sharing. Thanks, Lorraine.

Thank you very much. It was wonderful. Thank you guys. Thank you.

Bye. Good luck in the next weeks. Few few weeks.

Okay, Lisa, we've only got, we're running over time here, but we've got a couple of written questions we're just trying to get through. So, Lisa, we're based in Devonport, Tasmania. Have done the dot maps for here. Launceston neither have many opportunities in brackets. And the Sunshine coast as we'd live there and may look at Geelong as well. We're still trying to get our head around how we can effectively manage Renault's and Tradies interstate state when both working full time. Do you have specific suggestions for those of us in regional areas?

I'd love to see someone do a dot map of Hobart because it keeps us coming flagged up every now and then. So Lisa, it's a good question and I don't think it really matters if you're in a regional area. You know, I was in Melbourne and ran two remote renovations last year of proposal properties in Sydney and my rental managers helped me with both of those in the fact that they were actually actively getting quotes and letting people in to look at the properties. In the end, for one of the properties I had my, my builder Lenny go in and he, you know, he recommends some of the trades that he knew as John and I spoke about earlier that would be do a good job and you know, know, I engaged them separately so there wasn't Any, you know, extra cost associated with any project management fees that I paid at the end of every day they'd send me photos and they didn't send me photos. There's one guy at the roofer and send me videos with, you know, it's raining men kind of music going in the background. So I was always being kept up to date with what was going on as well. And if the timeline was slipping or something, I could manage so managing remotely, not such a big deal. The fact of the matter is that if you don't know someone in that area and finding people in the area, you're probably going to have to hit the streets and do that research and meet the people on site and validate or vet those tradies. Now, having said that, if your rental manager does come back with three quotes and recommendations about tradies that they have worked with previously or had their landlords do work with, because bear in mind, they want to get the property back on the market and rent it too, so their income goes up that they're, they're a good referral network for you to use. So I know it's kind of scary renovating remotely and I do know people who, you know, go up to a place on the weekend and renovate and then come back and work and then go back to the place on the weekend. The fact of the matter is it's going to take five or six months and that's the property off the market and potentially you could get it done in a few weeks. And, and really, you know, most renovations should, you know, cosmetic renovations should take under four weeks anyhow. So it might be a little bit of pain in the short term if going up, you know, once for a few days and taking some time up work and getting, you know, the quotes in and meeting the tradies and, and.

Even maybe supplying the material. I think that some, some of the time the best bang for buck you can get is just sourcing the materials, like for instance, the ovens and the kitchens and all that kind of stuff. So you might actually spend your time doing that. And even if you do do a trip up, you know, I, I did a trip up to my property that I had in New South Wales with the, the van stacked up with all boxes of, you know, white goods and all that kind of stuff. And that saved me a whole ton because buying locally in Orange, I could, couldn't get anywhere near the prices I could in Melbourne.

Yep.

So, yeah, that you might find that's the best use of your time. If you're doing a trip there?

Well, it's interesting. We. We're living in Sydney. We moved down. We flew down to Melbourne to check out the properties many years ago. And we realized that we needed to, you know, I think it was change some light bulbs and. And clean some cobwebs out. But these roofs were really high and we needed a ladder. And we didn't want to go and buy a $200 ladder for, you know, two hours of work. So I went and hung out the hardware store. I waited to someone, looked at the ladders, and I said, I'll hire it off you for 40 bucks for the next two hours. And they were like, well, we're gonna buy it anyhow. Okay. So, you know, and they even dropped it off and picked it up and, you know, came and had a chat to us. So, you know, you can be a bit innovative, but, you know, Todd's had definitely picked up, packed up the car and taken everything up. When we've had a change of tendencies to do the. The cleanup that you have to do, and sometimes not having those, you can.

Spend some time buying that stuff at the right price, you know, when it comes up on sale and all that kind of stuff.

And. And as I've said, you know, often what I do is the kickboard underneath the. The kitchen. I hide a bit of paint and some tiles and some light bulbs and light fittings and things so that when I go up there, I've got everything I need other than the ladder.

Was it you that was telling me, you know, it was Medine. She does everything in just stock white, like, not, you know, whisper white or anything like that. The white untinted off the shelf at Bunnings. Yeah, on all of her properties. So no matter where she is, she can walk into a Bunnings or any paint store and get one, grab a white.

So I just have antique white usa.

Or.

Or.

She doesn't have to wait for the tent, though.

Yeah, underneath, she's in and out. I already have the paint underneath it.

Oh, in the, in the kitchen. Yeah.

So. So. But what was I going to say? There was another thing that I was going to add to that, was that. Yes, so you could fly up and, you know, your rental managers could actually come down to, you know, getting you the. The quotes, and then you could do the refereeing reference, reference checks on, you know, online, on phone, etc. And have a chat to the guys and have a chat to their last jobs, and then you could fly up and look at the jobs. If it was a big project. You're not going to do that for a plumber or for, you know, tiler or whatever. But you know, we're talking, you know, if you're doing major works and getting a builder for to do a big work. But having said all that, so you could do quite a lot of that pre. And you know, you'd be surprised. You know, put a lockbox on the front of the property so that the tradies agents. Yeah, so the tradies can have access with the keys, etc. And get the job done. And, and just make sure that you're getting the report back to you. So don't be completely scared about renovating remotely.

Great. And lucky last Claudine, again, can you please elaborate on the changes proposed to interest only loans? Sounds scary.

I think I want to do a webinar on this too because I've got some very interesting thoughts on this. So I attended a seminar for mortgage brokers a few weeks ago and Gaydon's lawyers are kind of like the advocates for the mortgage broking industry and they work a lot with ASIC and Apple and changing regulations and all of those things. And you know, there's been some significant changes as we've all seen in the borrowing space over the last year. And even to the extent that yesterday Westpac has completely pulled out of overseas foreign investment lending. ANZ pulled back their LVRs last week to 70% with maximum income they take from overseas at 50% daily. I am keeping up with policy changes.

But how fast the landscape changes.

Oh, it is and it's, that's why I find it amazing that, I mean, that's why 55% of people use mortgage brokers these days. So the fact of the matter is that, you know, for three weeks you might be looking for the best loan, but within that three weeks things could change so quickly. So you know, we're kind of doing it every day and getting across this. But one of the things that has been highlighted is APRA would like justification for people, Australian Prudential Regulatory Authority. So you know, they, they kind of look over the financial industries and ASIC looks over companies and businesses, et cetera. So APRA has come up and said, we think that people have their own home, they should be paying off their home and they should be, you know, increasing their savings and they should be, you know, being responsible about this. These interest only loans against your home. Geez. You know, we're a bit worried that these people are not saving money and we could get to A point where, where we've got people with big loans and homes that haven't gone up in value and what's going to happen to the world and let us come in with the big stick and be big brother and help you all out. So these lawyers have been working with these guys, but within the next two weeks we're going to see changes in all bank applications that actually say if you are wanting an interest only loan against your home, then you can only have it if you fit into one of five loans, minimum categories. And so we're kind of working at the moment of how we're going to position our investor clients with that because let's face it, you know, as in the book, two properties, one renovation, a million bucks in the bank, five years of buying property, and then you can get back on with life while your properties go and grow. So, you know, for that five year period, you might want an interest only loan against your home. So whilst you're managing the cash flow and before your rents start going up and property becomes more positively geared rather than more negatively geared, so, you know, there's a cash flow management and responsibility, I believe, to people to be able to do that and build their portfolio within a short term period. Obviously at some stage you may want to pay off your home, but I have some very big questions about that too. Because in a 30 year loan, it's not to year 20 that the interest repayment is less than the principal repayment that you're paying every month. So, you know, on average, census tells us people move every nine years, years, even if they plan not to. So why pay off the property where you could have the cash flow in your bank and even better, an offset account. So watch this space, Claudine, because I've got a lot to say on this and I'm. I'm going to webinar it, John. I'm going to webinar it.

So webinars and stuff that annoys us from now on.

Yeah, there's opportunity, there's always an upside. Because I think there's some advantage for savvy people to actually set up their finances right so that they can see through these lender changes. So we'll be discussing that. But thanks, Claudine, for your question.

Yeah, good question. And that's it.

No questions. Okay. I think we've done pretty much most.

Of them, only half an hour over time.

Okay, well, we'll probably have to close it down. Thank you, everyone. You know, I really appreciate all of your time this evening. I appreciate you and your questions. I encourage you to get a microphone for now, next month because we'd like to chat to you and hear your pretty voices. And so thank you to Leslie and to Lorraine for chatting. And you know, I know we ramble on a bit in the beginning, but it's because, you know, people want to know what we're up to and, and we're doing things that other people aren't doing. And maybe there's something that we, we mentioned that you haven't thought of before or you haven't come across or piece of information. So, you know, drive ins, Eddie the eagle. It all has relevance for someone somewhere. So look, you know, we appreciate you. These are monthly calls. We will have one next Thursday, the last Thursday of next month being May. Just watch the space too, because I know that there's a lot of people who are really interested in our hotspotting workshops that we've got coming up in Brisbane and in Melbourne and in Sydney. So, you know, there's only 12 people that maximum that are allowed in those workshops and we've got those that, you know, that really want to dive deep. So just as an overview, in the first hour we do a dot map for that city and usually 45 minutes. So we now adopt MAP within 45 minutes for the city that we're in. We go in and as I said, I pay over $1,000 for paid reports that you have access to to really then nail down the suburbs. And then we show you how to use that location master class and their zooped up version of it and get down to the suburbs and then, you know, we, we really interrogate that information for you and then get you on a bus and we take you out and John and I inspect a property with you and show you exactly what you should be looking at. So.

Which is awesome fun.

Yeah, it is, isn't it? So we didn't have a sing along, but we, we had a lot of fun on the way.

Everything just shot off. So we did have drinks afterwards.

Oh, a lot of. I shouldn't say that anyhow, but even.

You won't be now that you're detoxing.

I know. Jeez. Anyhow, so we've got 21 May in Sydney, we've got the 28th in Melbourne, we've got June, the something or other in Bristol.

The web link to the.

Do you want to pull it across so we can have a look at it?

Yeah, yeah.

So, you know, anyhow, as I said, there's only limited spaces. We would really Encourage you to join us on especially if you're having some trouble with location. And we've done this in response, as you know, I don't get out often. So we've done this in response because people really wanted to deep dive quickly and get to the location as quick as possible.

Yeah. And I mean they're saying for years, when are you going to stop? You know, in addition to online courses, when are you going to start doing in person kind of stuff?

Well, this is it for this year.

Yeah, that's right.

I put it out there.

But I think the one, the big benefit of this is even if you like if you're time poor, if you haven't got the time at the end of the day you will work away with, with a list of suburbs, which is a big plus, isn't it? So you can either go through the whole process yourself or you can just spend a day and have a list.

And we kind of tested it in February and we had people from Canberra, people from Sydney, guy drove across from Adelaide. And so they were using that methodology and applying that to their own regions and their own areas. And I just have to, you know, there was quite a few people, I will say there who are actually in a paid mentoring of another educator at the time.

Two are they.

And that felt that they were still missing their location stuff and you know, they, they were in contact since and they're just. Yep.

If you go to that page, you'll see them talking about it.

So yeah, so it's a small group. You get to, you know, talk to us personally and John and I are there and, and you get us for a day and we will answer any question you have. And as I said, if you want a deep dive, please have a look at that opportunity. Well, there you go. That was completely unprepared, but I thought it was, it was worthwhile sharing it and anyhow, it's something we've been doing and we're going to be on the road doing it. So.

Nice messages coming in. Thanks guys.

Oh, thanks for your feedback on the webinar tonight guys. And for those who've listened to this recorded. Well, maybe those workshops are full up by now and you're kicking yourself. I don't, I'm not planning anymore for the rest of you. You haven't got in your diary, have you?

That's it.

No. Okay, good. So that's it guys. Have a great month. You know, make May magic for you. You know, people, ultimate guide around renovation. You're going to be nailing number 8, 9, 10, 11, and potentially 12 by the time we speak to you. So you'll be almost finished. And, you know, use the Facebook renovator network to ask you questions and things. Be prepared to, if you've got any questions coming up to shoot them through to us on that 1300 number that I can't remember and no one knows anyhow, that we would like you to call on 1300 triple 11.

Allow me.

And you know, talk to us. Leave us a question. 1376, triple one, nine. So. And have a chat. You know, we, we're here to help you and we really want to support our, our community and, you know, good luck, have a great month, and here's to your property success.

So, yeah.