Your Property Success Mentor Call April 26-04-2019

Hello, everyone. Well, it is April, and I trust you have had a wonderful break over the Easter period, and it is now time for our Q and A call. Thank you very much. I know we've swapped things around a little bit by going on a Friday rather than the Thursday. The last Thursday of the month is our normal time at 12:30. But without any further ado, I'm going to hand you over to John to get out of the way all the boring stuff.

Yeah. Hey, everyone. We'll just start with the disclaimer. So it's important for you to take care in applying what you learn on this webinar or training to your own personal circumstances. Everyone's situation is different. Well, we'll go to great lengths to ensure that everything we share is accurate. What you're about to hear is based on our personal experiences and opinions, and it's not intended to be specific to your circumstances. So in order for us to share this information openly in the way that we do, just need to make the following disclaimer, that we're not real estate agents, financial planners, lawyers or accountants not liable for any loss, damage, or misunderstanding caused by reliance on any of the information provided or inferred. Disclaimer done. Jane.

Yay. Well, it has been an incredible month. I know. Every time I turn around and I say to John, you know, what have we got going on? He goes, well, let's do this Thursday. I'm like, no, it's another public holiday. It's like, what, how many public holidays? But it's been. It's been a busy month. Hasn't.

Has it Has. It's been a funny week this week coming back for. I know a lot of people take the Friday off, but, yeah, it's been a funny week. Kind of had Easter and then we got a day today, and then I got a whole weekend again. So it's great.

Absolutely. Well, welcome. If this is your first call, this. These Q and A calls are basically on the last Thursday of every month. This is your opportunity to talk to John and I directly and for us to answer any of your questions. So. So they're reserved for the members of our. Your Property Success Club, Investors Choice, Mortgages, Diamond Clients. We also have in here the ultimate guide to renovation students, and of course, our mentoring students as well. Have I forgotten anyone, John?

I don't think so.

So this is your opportunity to ask us questions. We've had people send us questions to questions@yourpropertysuccess.com and we'll get into those in a moment. You can actually post a question underneath this video as we're talking and we will talk to you. You can see where the video is at the moment. There's also a link that allows you to come on screen as a guest, have your webcam up, have a chat to us. All the instructions on how to do that is there. We love to see your happy, smiling faces and to ask your questions. So, you know, please let us know if we can be of any assistance. We have had quite a few questions sent through this month and a bit of activity occurring on the Facebook page. So we'll get into that in a moment. But as for now, John, what have you been up to this month? Share, share and share away.

Well, I really should think about that before you ask. No, it doesn't seem like there's a whole lot of news to report since the last mentor call. We've been busy here. Obviously we've got mentoring clients that are actively looking for properties that we're working with. We're loving the market conditions suit people like us at the moment. So we're loving that. And I'm even putting my feelers out myself at the moment and having a look at what's about because there's some deals to snap up at the moment and I guess I'm skeptical of how long they'll last because I think once the, the news gets out or once people get genuinely afraid that the, you know, the market's on the downside of the cycle, then they tend to not put their properties onto the market. And so you get fewer, fewer, fewer opportunities, I would say, because the stock dries up a little bit. And I was speaking to an agent this week, where is he from? Ascot Vale. And he, he was saying that to me that, that Escavale in Melbourne, he was saying that their stock has dried up a fair bit and as a result agents are pretty hungry for listings. And I hadn't heard from him probably about three and a half years, which is why he's doing the ring around of basically everyone on his database trying to drum up, drum up work because their stock's starting to dry up there. So, yeah, I think limited opportunity, but a really good one where you can potentially or particularly in cases where people have either already purchased a property or there's some kind of circumstances that compel them to sell, that they for whatever reason can't just, you know, wait it out because what a lot of people will do and what tends to happen, particularly in the, you know, the blue chip suburbs, as people just hold off. They go, oh, well, we'll put off that move until, you know, next year or the year after or something like that. But there's lots of cases where people can't do that. They're not in a situation to do that. And that's where I see there's huge, huge amount of opportunity at the moment.

Yeah, it's, it's really interesting, isn't it? I mean, I get there's an opportunity to, to take advantage of the market. And, you know, the more people I've spoken to recently over the last month or so, you know, they've, they've still had this hesitancy that. Which is, oh, gosh, you know, could the market go down any further? You know, how, how bad can it get? And what if I lose money? And there's, there's still this indecision. And it's funny because I was watching a video series on money over the Easter and over the Anzac Day yesterday, and there was a part in it where Robert Kiyosaki from Rich Dad, Poor dad was interviewed and they said to him, when, when was the time that, you know, you really knew that it was time to invest. And he said it was the gfc. Everything was collapsing, everyone was in panic, everyone was wanting to sell. Everyone was in chaos. And he said, I went to the bank and borrowed $300 million and started buying property. I mean, this is the man and his wife that owns over 10,000 properties, right? These guys kind of have it, they understand it. And it really reinforced to me, you know, there's some people who are the doers and see the opportunity, and there's the others that sit back and they go, oh, you know, I'm gonna have, have to wait. An interesting thing is, you know, and we've discussed this over the last week, but, you know, you look at all of the figures around, you know, the market and what's been happening in the market since the peak of when the properties started moving. And actually I haven't, I actually have a, even have a little picture on this. Let me share this with you. But you look at what's been happening to the market since dwelling prices since their peak now in Sydney, the peak was July 2017. The peak in Melbourne was November 2017. In Perth and Darwin, it was like many, many years previous to that. But the interesting thing is we're only just seeing and like we're in April now. So, you know, we started getting an indication at the end of 2018, so 18 months almost after Sydney peaked, saying the Sydney Market, you know, is coming off, it's, it's come off, you know, 5, 6% and now, you know, depending on who you speak to. And obviously this Information is from CoreLogic. They're saying the market's down 16%. You know, you look at SQM research and they say for last year it was like 7%. And you know, CoreLogic says for last year I, the 12 months was, you know, 9%. But this is a cumulative amount since the peak of the market. And what I find really interesting here is that when we talk about investing and most of the people that we assist and we have in our community, they're 35 to 55. You speak to people who are 35 and they're like, oh, I've got the time to get things wrong. And you speak to people who are 50 or 55, they're like, I've only got 10 or 15 years to get things right.

But the reality, well, I can't afford to get it wrong because I won't have another chance is what they say.

Exactly. But and the thing is, to some degree, the people who are 50, 55 who are saying this, you know, I don't have the opportunity to get this wrong. I have to get it right. I've got, you know, one chance. They're talking about the time that they have for their borrowing capacity. So they're talking about, you know, what's the opportunity that we have for the borrowing capacity during this period of time that we can then, you know, purchase. But the reality is most people shouldn't be thinking 10 or 15 years as an investment time frame. And I know we talk about, you know, what can you do in 10, 15 years time. But you know, 50 year olds are going to be living until they're 90 or 100, they've got another 40 or 50 years left. 35, 40 year olds, you know, I've got a 50 years left. So these kind of, you know, looking at these figures here and just seeing, you know, the changes that you've got in these short period of times, you know, if you're holding these properties for a period of time, you're not looking at, you know, what's happened in the last year or what's going to happen in the next six months, you are looking big picture. And that's what I really loved around the, the comments that Robert Kiyosaki made. He was like, oh my God, it was fabulous. I borrowed $300 million and bought all these properties because he thinks the picture, you know, and even more so you know, one of the things that I love around the rich dad, poor dad and speaking to Kim on our podc, amazing was she Kim Kiyosaki, you know, was that they don't have children, they don't plan to, you know, take all their money with them because they can't. So they're actually create ongoing creating these legacies that they can, so they can donate in the future. They, they don't need to keep doing this, you know, but it's fun and they enjoy it and they see opportunity. They don't need to be teaching us, but they're always out there and you're doing, running courses and teaching people because that's their legacy and that's what they want to leave. And you, I'd like to think, you know, the people that we're talking to at the moment around this kind of fear, around the market's dropping and you know, what's happening with clearance rates and loans and blah, blah, blah, you know, these are short term problems. Let's start thinking big term and big time. And you know, for me that's the really exciting opportunities. The people I'm speaking to are going, I am now investing now for the long term future. They're the people who are really going to be making some real fundamental changes to their wealth in the long term. So it's exciting times. I'm loving it.

It is, it's exciting times. And I think if you're, if you're going through the steps and you, and you got all those safeguards in place and potentially you're buying under market now, which is much harder in a rising market. And the thing is, in any part of the cycle we hear objections, don't we? We hear reasons why I can't do it now. You know, when you're in the rising site it's because, you know, the prices are inflated and you know, price of entry, it's too hard to get in. I'm missing out on all of the properties. And you know, so at every, no matter where we are in the cycle we kind of hear reasons why not or basically every reason why not. But at a time like this, it, there really is no better time in my book because so many people are overcome by that fear. And so you, your competition really just evaporates. And if you can get those properties, they're going to sell and the competition's not there that you're going to get them and you and your holding, as you said, long term. And they made all of those fundamentals, you know, that we talk about with the capital growth and, you know, and you've got ability to add equity through the renovation and you're buying in the market, you know, you're in a really good spot. The market would have to go so far backwards to, you know, for you to lose your shirt that, you know, you, you're in pretty safe territory. It's just you've got to get over that mental hurdle that the majority of people are faces and which is really the fear of just not following the crowd. You know, it's so much easier. And why everyone buys at the top of the cycle is because, you know, we're like animals. You know, like we are animals, but we're like sheep and we, you know, follow the herd, but. And it's very hard to do the opposite to that, I think. But as Robert Kiyosaki did.

I know. I love it. Well, I'm excited to. I'm so excited with the people that we're working with at the moment who we're doing some pretty amazing things. So it's exciting. And one of the other things we did, we re released some of the information we had around the mentoring. So we have a small group of people now mentoring. We've opened that again over Easter for others that were interested because this is a real one on one kind of hands on. You know, we want to make sure that our mentoring students get the success that they hope to achieve in the next 12 months. So, you know, we're bringing people in in stages, so if you miss those, please help people contact us. John. To have a chat to see if it suits them.

Yeah, just go through to support your property success, isn't it? And then we can take it from there.

Great. Oh, send us a message and we'll have a chat. But yeah, it's, it's amazing the feedback we've had over those, that kind of conversation of people, gamblers, you know, are you a dreamer or you're a cynic or an achiever and, and talking to people and getting them through to understand what type of investor you are and how that might be holding you back. And if you've had the opportunity over the last week, you might have seen on my Facebook page also, I've had a bit of a chat about money archetypes and my personal money archetypes. And. Yes, you did. When we were in the Blue Mountains with our mentorees, you did that, that survey as well, didn't you? When we talked to Natalie, my archetype.

Was a, was a nurturer.

Yeah.

That was my, it was, it was really good and the, and I, I highly recommend it. It was the, the group, we did it on the Sunday morning of the two days and the group got so much out of it. I mean there was, it was actually for a couple of guys it was actually quite emotional that they realized that doing and these had these behaviors and thinkings around money that they'd never realized that they had. And that really was quite a freeing experience just being able to identify them, you know, and put a name on it.

Well, with the video I shot this morning actually I talked about how important it is that you understand what your archetypes are but also your partner's archetype as well. So you know, I had a really sad email this morning from one of our clients. Who is she? I self identified her husband as a gambler and said he's gone out and bought this property. We're going to have to sell the home. I feel sick about it. I can't believe that we've got into this situation, you know and it's just around not understanding each other's money, I guess default systems and how to talk to each other around it. So look, in the next week I'm going to try to pull together a webinar with Natalie, sign up for it because we'll get you that survey. You can download the survey and work out what you are, your top three and then in the webinar hopefully we'll go through and we'll get a bit of definition around what those are and try to convince her to do a course that put together an online course. It's a lot cheaper than the one I did and obviously what we pay for for our mentoring students so that you've got the opportunity to take that further if you're interested. But just do the survey and listen to the webinar we come up get it done in the next week or so because I think you'll find it really, really interesting and, and it kind some of the issues I think people have in their relationships as well with conflict. So interesting times.

Yeah, that's really good.

Let me share with you some of the other things that I have been up to as well now have had a pretty cool holiday couple of weeks so managed to head off to Fiji. There's me in Fiji hanging out. So a nice time in Fiji. Had an opportunity to rest and relax. Ten days in Fiji, nine books were read. I think I'm up to module 11 in my 12 week modules on meditation course and I did five webinars, some on property, some on marketing, some on meditation and three massages. So I have to say, had a great holiday.

Only three.

I know. My husband actually said to me, pre holiday, I bet you bought a course that you could do. Like, you know me so well. Last time I did an Instagram course and this time it's my meditation course, so lots of fun. Probably chose the wrong period of time to head there, so. But it was interesting. And also I've got. Where's my other picture? I wanted to talk, give you a little bit of an update. Also on lending this, I found this cartoon which made me laugh a bit and it says, oh, you've got good credit, you've got no debt, you've got a steady job. Hold on, what's this? And D minus on Mrs. Thorpe's third grade English assignment. And I don't know, John, that kind of sums up to me what's happening in the lending space at the moment. We're getting lenders that are going through. I was speaking to Mortgage Break the other day and I think on her, her bank statement, she put a loan in for someone and they had something about a vet bill and the credit assessor came back and said, how many dogs do they have to see how much expenses they would have associated with how many dogs. Interesting conversations. Look, lending is, you know, I think what we're going to see. The inflation figures came out this week and inflation, if you saw my little note on Facebook, I said something along the lines of broccoli is going to make your house prices go higher. The inflation figures came out very surprising at 1.3%. The RBA tried to keep it between 2 to 3%. There's a number of things that go into measuring inflation. There's essentially a basket, things like petrol prices and rent and house prices and all of these different things, including broccoli. And your veggies. And your veggies have increased in cost by 7.7. But everything else, we've had drops in opposite house prices and we've had drops in petrol. So I don't know what's going to happen. The us, apparently, my husband tells me, has decided that they're probably going to stop the leniency around the embargo for countries that import Iraq pet oil. The US now is the biggest country that does export oil, produces oil. So it would seem that Trump is actually funding a bit of their own oil strategies. But if that's the case, there's going to be embargoes against countries like India, etcetera Which could mean that the oil price does go up, which petrol prices may go up again, that's all going to affect inflation. There is something like an 80% chance that interest rates will drop in two weeks time when the RBA does meet. This may not actually reflect that the banks will drop their interest rates, but there are some really fantastic interest rates out there at the moment. We're having conversations and we're putting together a bit of a tally with our mortgage clients where we're trying to get rates reduced for our clients at the moment and I'm keeping a tally on that. So that's pretty exciting. But there's an opportunity for people to obviously speak to their lenders and see if they can reduce their rates. But there's also, I don't think we're going to see any leniency in lending anytime soon. And in actual fact, you know, I had a chat with bank west this morning about some of their products and you know, there is opportunities around different lenders doing different things and I know there's a lot of people who are really interested in the high res type strategy and one of the biggest issues that we've seen with that is that you buy a typical property with a typical residential loan and you then go and have that property retrofitted into smaller units. And when you have to have a valuer come through, the valuer will essentially say that this is a retrofitted property and hence a commercial property and hence a commercial loan. And you're probably looking at 60% LVRS. Now obviously people who are working with us who are using the Trident strategy are trying to find really good growth areas and they're using the cash flow strategy around that kind of high res. So they're combining both those strategies so they want to be able to pull out equity. So we're doing a bit of investigation with the different lenders at the moment. Interesting thing is bank west up to a loan to value ratio of 80% doesn't send out anyone to do evaluation. They're trying to cut costs so you, the value wouldn't be out there. So that's an interesting thing. And also, you know, they'll take a rental letter so you know, there's ways around, I guess, refinances, etc, especially when your property's easily retrofitted, which is important so that if the bank did have to take back the property they could sell it as a normal kind of three bedroom house rather than a, you know, six bedroom block of units that have been retributed but you know, there's interesting things out there and there's some really different lending that is going on at the moment and different bank policies. So watch this space. Lots of things are happening. Lenders are getting a bit tighter. If you do have equity in your property, please get in touch with your broker or us or your bank and try to get access to it. Because I think things will get tighter in the future and I think people should be buying property now, especially if labor does get in next month. And we will obviously have an update on that next month's Q and A session. But if they do, it does look very likely that they will remove negative gearing, which is going to have a whole different dynamic to the property market. So lots of things happening this month.

John, what's the thinking around the grandfathering? Would it be up to the election date or would it be to. I know they were talking about at least the end of 2020 and so on. Is that where the grandfathering would extend to or how do you. What have they said around that?

So at this stage they've said they will grandfather and they would look at introducing January 2020. So if they did grandfather, there isn't any indication at this stage whether it would be up to July or whether it go through December of this year. So, you know, the assumption is that grandfathering does cease when the new policy comes in place. So it looks like December this year. That's why I think there's even more urgency around people getting into property. And I know, you know, we've just done one of our. Done few services for a client as well, you know, who wanted us to select three suburbs and the streets and, you know, really pinpoint where they should be buying because there is that urgency around. Like I've got time to get it right and I just want to be in a growth area and have some direction on it. So, you know, if. If you are feeling a bit like you need some extra help, please contact us because I think there is a time frame for people to act if.

I think I know who you're talking about. They're got quite a high income, so the. For them, the negative gearing would have quite a big impact.

Significant impact. Yeah. You know, it's interesting. I've been looking at some of this data in the last week and you know, most people who have investment properties, you know, are on less than $100,000 a year. But the negative gearing, all of them or most of them have a negative gearing component of that property and you know, obviously you don't want to use negative gearing as an investment strategy, but you do want to use it as a cash flow strategy. If you've actually selected the right property in the right area, that's going to go up in value because the value is where you're going to get that end game that allows you to sell down that property or pay down that property and get the result. So we're talking about having that capital gain and the Trident strategy is all about capital growth. At the moment we're really seeing buying under the market part of the Trident Strategy being an incredible opportunity where people are fearful, others can take in and take opportunity.

Just a question, broad strokes, high level with the banks. What's the. I mean, I know a lot of the apra, not a lot, but some of the APRA changes have been removed, you know, over in the last 12 months. Yet the banks are still, you know, very tight with their lending. What's, what's their overall kind of, I guess, motivation. Are they worried that they're too exposed to Australian residential housing or how can you take it from, from a higher level given that the regulator has kind of eased off a little, but the banks have, if anything, increased their restrictions?

Well, I think the Hayne Report has really come out and you know, the Royal Commission into Banking and Financial Services, the entire intent that everyone believed was around the fact that banks had a financial planning arm and they were just recommending their own products and often they weren't putting people into the right products. And that was how we assumed most of the recommendations were going to come out around the HANG Report because there really wasn't an oversight of making sure that people were getting the right services. Unfortunately, what did come out was the fact that there was some additional obligations by the banks to actually take an extra step in making sure. And we all have note there is that responsibility of, of responsible lending that the banks had imposed on them and the brokers years ago. But they were saying a step further going, look, you know, you really need to look into people's living expenses, make sure they can afford these. So some of the things that were happening where people would be putting into wrong products with financial planning products actually went into mortgage products as well. And the banks have taken that as, you know, there's some really big oversights that have to be made sure that people can afford exactly what, you know, is required. And you know, the banking systems, you know, they're clunky. So not all of, not all of the, what would I call it benefits of technology can be put in straight, put in place straight away. So I know that there's some just talking to bankwest this morning. They're owned by CBA Bank. CBA bank has, you know, more money to put on more technology. There is a lot of conversation around using what's considered a scraping service, which means that you can just go into anyone's bank statements and scrape out things like discretionary spend. You know, spend on gym, spend on food, spend on alcohol, spend on gambling and you know, they can separate things out in seconds and say this person has more too much of a spending threshold in discretionary spending rather than saving spending. Or they've got a debt here that they haven't declared because they say they're paying off the credit card or they're paying dad's loan, helping dad out, which then becomes a liability for them even though there's no commercial agreement around it. So there's all these different things. So I think what has happened to answer in a long way, the short question is that the banks see themselves with greater responsibility. Greater responsibility, greater compliance, greater compliance is greater cost. IT center helps them more and more to be able to put all of this due diligence into making sure they're giving people the right kind of lending. And therefore they're going to argue that because of this they can't actually, you know, put, put through the interest rate reductions.

All right, so a quick follow up question then. Did you think, and hypothetical, but do you think if the Royal Commission hadn't happened that the, the lending situation will be different at this point in time just based on the normal market cycle?

Can you say that again?

So if the Royal Commission, if the compliance issues, because it seems essentially what you said, there is, they're nervous and there's a lot of compliance things that have come as a result of the Royal Commission. If the Royal Commission hadn't happened, hadn't taken place, where do you think the banks would be their lending at the moment?

Oh, I think because they had a year of, well 18 months even of really restrictive lending through investor loans and interest only loans. We saw a huge reduction in lending. The banks tried to pull that back by going to the homeowners and saying, hey, you know, here's a $2,000 rebate come to us. It just. And first home buyers, but they just the market confidence with what happening in the property market at the same time really didn't allow them to replace the investor lending with owner occupied lending. So I believe what would have happened is as soon as APRA pulled back and said, hey, you guys have done what you're going to do. Go for it. You know, we used to have one interest rate for everyone who went to a bank. Now we've got one for interest for interest only one for principal and interest one for owner occupiers, interest only one for owner occupiers principal interest one for investors, owner occupiers interest only one for investors principal industry. There's four different rates now for the one product depending on your type of product. So putting these in place costs money for the bank too. To try to put those systems in. I think they would have gone, thank God APRA said that we can go back to interest only. Lending, investing, lending. Let's go back and try to reclaim the market and the loss that we made last year by not having all of that lending. So I think if Haim hadn't come along and done what he had done, I think we would have been back into more available credit, which would have started driving the property prices up quicker. But it's interesting, I just saw a comment here on the Facebook page. Probably can share it even. Let me just see if I can share it. Show. Don't know if I can show. Yep, yeah, here we go. So this is Pam, who I spoke to just last week and she and her husband were looking at talking about funding and finance, etc. And I had said to her, you know, have a chat to my mortgage broker Lisa and see what we can do. And she was saying, you know, today, you know what, the banks that her daughter had gone to, Kerry had gone to and asked about her borrowing capacity, where it was actually wrong and she could actually borrow $200,000 more than she thought was possible. And it just goes to show you, all the different lenders have all different criteria. Just because one bank says you can't do this doesn't mean that another one won't. There's actually some flexibility. So don't assume just because you go to one of the big banks and they say no means that it's not available. This hem, which is the living expenses for people, if we went to Westpac, they are now taking a percentage of your income as your hem, which is your living expenses as your basic cost of living, but they include your income is your rent is included, where if you go to another lender like bank west, for instance, the rent's not included. So they just look at your PAYG income and your living expenses are based on that. So, you know, obviously mortgage brokers are going to have are across all of these different things. So just because you go to one bank and like in Pam's case, you know, her daughter was told she couldn't borrow anything and now she can borrow a whole lot more, gives her opportunity to set herself and her son up in the home that they want. So just be aware that, you know, lending is changing. I'd really recommend you speak to a broker because, you know, I don't know how anyone would be across all of the changes themselves unless they're doing a full time.

Sure, yeah.

Questions, John? I guess we really should get into some questions. Should we?

Yeah, let's do that. All right, so I'm going to start with a question from Darren. Darren's been pretty active. I spoke to Darren. It was during this week or last week, because it's been a funny week this week. But Darren joined the Ultimate Guide to Renovation recently. He's had quite a few questions in the Facebook group this week. He's been going through his dot map. So the question is, if I were to create a dot map in a regional area, am I best to do a variance of 0.5% between the suburbs? I don't have a lot of suburbs in the area, so very hard to determine a ripple effect. Or am I better to try another capital city?

Yeah, look, Darren, this is a really interesting question. I know that we've had lots of conversations and a lot of the members have been assisting you on this as well. And one of the things is, first of all, there's a few topics that I want to pick up here. First and foremost is that we often see when people go to invest, they're parochial with their investing, so they consider that their only investing options are where they live. So having moved to a new area, you look at that area and you're saying, hey, I'm in this area. And it'd be really convenient if I could check out the properties in this area and I could actually do my analysis here and potentially do a renovation here. And that'd be so convenient for me in the next two or three months. The reality is you are actually investing for 10, 15, 20, 30, 40 years time. So you need to kind of take that mindset of that parochial investing. You might be moving to another area into the to three years time, you know, and take that off and go, where can I use the best money possible? And I know, you know, we've. We've probably communicated 10 or 20 times around the dot map exercise. The dot map exercise is really difficult to do. In regional areas, for instance, I grew up in Dubbo, you know, North Dubbo, South Dubbo, East Dubbo, West Dubbo. The idea of the dot map is actually to create for you a pattern of the ripple effect coming out from the CBD that comes out, you know, and you can actually see where these suburbs are no longer affordable. The next lot of suburbs are. So we're trying to predict this growth characteristic. Now you can't really do that easily in regional areas. So I would suggest that, you know, and I, I know one of our mentoring students has just done one for Geelong. There's about 15 to 20 suburbs there and you know, you can get a little bit of a pattern as well. But for smaller country areas it's really, really difficult. So I would suggest if you're going to practice doing a dot map, then I would be practicing on a capital city to get the experience of what that dot map is. The other thing is find a capital city that you can actually afford. So you make this a meaningful exercise for yourself and making sure that you're actually going to get benefit from it. Remember when you're doing the dot map, you doing using that, I'm just going to show you this because there's always a lot of confusion around this and we do discuss this in the course and we discuss it regularly on the Facebook page. But if you go to your investment property magazine and you're looking here at all of the columns now, I think you said, Darren, it was Aubrey that you were looking at and you see this is the three month growth and this is the 12 month growth and this is the annual average annual growth and this is the three year growth and this is the five year growth. It is actually the average annual growth here that is the 10 year growth so terribly named.

But that's 10 year growth has been.

For many, many years. We've talked to the editors regularly. They understand our frustration. It is just how they publish it. Now one of the questions Darren came back with, you're saying, wait a Second, this is 3.4%. Doesn't Jane say that you have to have 8% growth? So I never actually say how much growth you actually need. I think we talk about, you know, the rule of 72, which is essentially, you know, if you had, if you had less than, if you had 7% growth in 10 years, 72 divided by 7 in 10 years, you double your money and you want to have the most growth possible for what you can afford. Now, on average in the last 10 years, we've got areas Like Brisbane that have had like 2.5% growth. We've got Sydney and Melbourne that have had between 5 and 6% growth. So it's around looking at where the opportunities for what you can afford and taking the money that you have and putting in the best possible area for growth that you can actually buy in. So my suggestion Darren is we talk about, I know you're in the ultimate guide to renovation. Module 2 and Module 3 is around doing the dot map, getting through and do the suburb selection, location workbook and going through and using all the criteria and finding the areas and then going through and then once you have a suburb, doing the price pin map and the price pin map and there's a question on Facebook today, John, around price pin map and where you get the information from if you have access from RP data, obviously you can use RP data to get the sales for the last three years of other three bedroom houses in a certain suburb, even you know, down to the specific size block that is the typical size block. So you can, you know, start doing the price pin but it's really important that or you can go to a really nice real estate agent and ask them to print it out for, for you.

So that's what I used to do. I used to just get, when I was interested in a pro or an agent was trying to convince me on a property, I'd say hey listen, I don't have access to RP data. Would you mind running me out two years worth of sales for the whole suburb? And it's a, well, I can just give you, you know, five to six comparable sales for the property and said no, no, I'm fine, I, I'm actually interested in seeing the whole suburb, suburb as a whole. And most, you know, I had a guy that did that for me a couple of times and another guy that did it in another suburb. So it's, it's not a great, you know, they can send you that as a PDF. It's not a great burden on them to do that for you. If you've built a relationship with them, cost nothing. They've got all the information at their fingertips. But what we used to say is for the price bin map is three years worth of sales in a slow market, two years worth of sales or even one year, you know, one to two years at a time like now, you wouldn't know which was right of those until you actually ran them out. You might find one year just doesn't give you enough data. But if you can run out two Years worth of sales. And it gives you enough so you've got a, you know, there's been a good few sales on the street in that time. Because there's no point having a price bin map if you've only got one bin in the street, you know.

Exactly, exactly. And that's what we're looking for, you know, we're looking for. And for those that are in. Let me just pull it up. Those that are in. The ultimate guide of renovation. You know, we've got all of the modules 2 and 3. Module 3 is where we get into how that price pin map works. And it's really around going, okay, so let's say you might take $50,000 increment and you're getting all of the increments and you're saying, you know, so here's my little price pin here, video but increments. And you might be saying things like, okay, between 500 and 550 is a green pin, between 550 and 600 is a yellow pin. So you start seeing the side of the street that might be preferable. And you might start seeing, you know, the end of the suburb or the golden triangle where, you know, everyone wants to, to live. This is kind of giving you more clarity around what's happening in the actual street. And to just show you how easy this could be, let's just call up, why don't I go to Kingsford? Always go to Kingsford, don't I? There's my default. Kingsford in New South Wales doesn't exist. Which is kind of a worry in itself. Kingsford. Thinking, thanking. So, you know, you possibly go to. Now, once again, if you want access to RP data, unlike other services, we don't make you sign up for a year. You can sign up for a month at a time, $150. But let's just say that you're going to houses and you're looking at three bedroom houses and you're wanting to have the, the sale date so you could come back here and you could just go, I want all the dates from 2017, April to 2019 April. And we just refine that. So all the information comes up. And basically once we have that refined, whilst it's thinking away here, think, think, think. We go into the sales history, the properties that are within that period. Archer do seems to be playing a game with us. The properties that come up with the sale, the sale information during that time, you can go through, you can select all of the properties and once you've selected these properties or all of these properties, properties, all you then need to do glitch in the system here. All you need to do is add that to your watch list or download it. And so once you go through a download, you then have the list. So that just took me, you know, whatever that was, 15 seconds to do. That's how real estate agent to do that. If they know how to do the other thing.

I'll just say with that, I, I, when I run that list out, I, I'm not really too worried about how many bedrooms they've got or anything like that because I'm wanting to see that spread of values in the street. And if I, if I want to dig deeper into it, if I, if, if a street comes of interest and I'm going, oh, there's a good spread of values, then I'll look into those pins and just see what they were, see if they are a two better. Is that why it was so cheap? And you know, so it gives you. Because otherwise if you put too much criteria on up front, you can end up with very few pins and it doesn't tell you anything, you know, so.

Let'S see if I can get that to go one more time. Okay, so we've got 209 properties that have sold that are houses and you just have to select all and then go to add it to my watch list or export it on the CSV and you can just choose everything you want to take and export that list. And then all the, a sudden, you know, you have that list that has all of those properties on it and you can then you've got the address and you can go through and start pinning which is essentially what this is, using that list there and start pinning that information. So that's how you would do that. So it just makes it a lot easier. So for Darren's question, you know, when we're looking at that kind of the difference between the first of all, there's the dot map. And we all talked about how the dot map works. One of the important things that you need to do when you're actually doing the dot map. So just show you what this looks like. So you can see all the information here that's coming through. But when you're doing the dot map and you're actually going through and you're dotting the area, it's important that you have a look at where is it, have a look at a number of suburbs in the area. So let's just say, you know, we're in houses in New South Wales here and we're looking in Sydney. So this is a 3.4% ash breeze in Sydney, 9.3, Ashfield is 8.7, Ashfield 9.1, Avalon Beach 6.3, 7.7. So we're getting a feeling here that if we're in Sydney, 6.1, Balmain 8. So I'm getting a feeling here that Sydney over that period of time has done, you know, somewhere between 6 and 9. So I might start my legend let's say at 2 to 3%, then 3 to 4%, 4 to 5%, 5 to 6%. Whereas if we had this same thing coming up for Western Australia and Perth, we're probably going to have, you know, minus 1, minus 2, you know, 1%, 2%, 3% and you might actually make your increments, you know, minus 1 to minus half percent, minus half to zero percent, zero to half percent, half percent to 1%. So it's really important that you change your legend for your dot map as well around the areas that you're looking.

Yeah, look at those numbers first. Otherwise it's a pain in the butt to pull all the, the dots off and change your legend.

Yeah. So yeah, I hope I've helped Darren there with his question. Yep.

So the big definition is Darren, just in case you're not up to module three, the Price Bin map is in module three. That's for suburb due diligence and the when you get, when you, after you've selected your shortlist of suburbs, the dot map is for suburb selection and obviously to identify the ripple effect. Cool. All right, I've got a question here from Laura Jane. I wish to check the numbers from the magazine to the numbers that I'm getting in the suburb selector software. It's making me slightly confused why the numbers are not matching. When I did the dot map for the Gold Coast, I looked at the back page of your investment magazine Average annual growth column. Bagheera Waters was 4.2% for 10 year average growth. Runaway Bay was 2.3%. In contrast the suburbs software states Bergera Waters at 2.88 and Runaway Bay at 4.75. So quite a. So about 2%. Either way there difference. Could someone please explain to me why the discrepancy?

It is confusing. I understand Laura and you know, I probably refer you to the podcast. Oh actually the webinar that we did with Louis Christopher. So we actually went through with Louis Christopher from SQM Research. You know, why does the data look different between different data providers? And you know, one of the things is that they all collect their information differently. I know, you know, when we used to recommend Residex over other data providers, Residex used to only compare, compare established properties that had resold rather than looking at a whole suburb and putting all the new developments in there as well and clouding, you know, clouding the kind of numbers. So what I would suggest is there is definitely different ways that the numbers are calculated. The RP data, Australian property monitors, even domain and real estate.com and obviously Australia sqm Research are all pointing out their data and they all calculated differently. I know that RP data did run into a few problems last year with some of their data that was being published and I think the RBA was using their data and then decided not to use their data and then they changed the way they did their data. So the thing is, what I suggest is that you stick with the same data source and refer to the same data source. So it doesn't really matter if it's 4.5% in RP data and 2.5% in SQM research. What you're doing is you're actually looking at what's happening. Let's say you choose the SQM research data. What's happening with the 2.5 in the past and in the future while you're tracking it or when you're doing a dot map, for instance, you're doing the dot map with, with the data from the one source. So we recommend you do the data for the dot map from the your investment property magazine. That data comes from RP data and that allows you to do your dot map in one period of time. When you do another dot map in another period of time, you use the same data. SQM research, you know, we obviously buy their data, you know, many thousands of dollars. We put it into our suburb selector software so you can user we know that you can't pull out the data on every single suburb really easily out of that. And, and it's not meant for that. So we don't suggest that you use SQM research for the dot map. But when you're doing your suburb due diligence, you know, you're doing the dot map, you're coming up with suburbs and the differentials, the differential between, you know, one suburb and the other, regardless of the data source, they're all going to be moving at the same amount. So it doesn't matter if one's 4%, one's 2% and that's how this 2% is moving against the other suburbs with the same amount, same type of data. So I know it's confusing. I know when you look at one information in isolation and you compare it to the other, it looks like it doesn't make sense. My suggestion is stick with the same source of data for the specific use.net RP data, SQM Research, suburb due diligence and that will, that will help you clear up. Don't try to understand all the different ways that the researchers come up with their data because it is significantly confusing and I've spent years trying to work it out. However, the reason that we've gone with SQM research with the data that we purchased from them for this instance and it probably would have been a whole lot cheaper and easier if we went with RP data because we do have their data source is that the SQM research data we are getting monthly and up to date data. Whereas if you're looking at some of the RP data information it's two to three months old. So I hope that helps Laura clear up the information.

Fantastic. Got another one here. Also about capital growth. It's from Chandika and sorry if I've murdered the pronunciation of your name. Hi Jane, thank you for the valuable information. Now I think this is in regard to the mentor series that we had over replayed over Easter and I'm pretty sure that Chandika has booked a call with you too Jane, from memory. So I think you're going to speaking to him pretty soon. But he's. What's that?

This afternoon maybe.

Oh, fabulous. All right, so as per your portfolio killer. So just to explain, the portfolio killer was under this video series we gave people a calculator. The calculator allowed you to put your properties in and you put the time when you purchase the property, how much you purchased it for and what the valuation is. Just using a web tool, free web tool, you know what the valuation is on your property today. And then the idea was once you put all of your properties in there, down the bottom, there was an average growth that occurred. And so the question is, as per your portfolio killer, I did the analysis on two existing properties and the results are as follows. The first one is in Marbury Heights in South Australia in the suburb analysis it is mentioned that the average five year growth is 7%. The second property is in Condor act, average growth is 4%. Doesn't say what average growth over what time period. After referring to the calc sheet, both are 1%. So I think he's talking about the bottom number which is the average. I'm confused now Please help me understand the situation. I've. I've got a guess it might, might be going wrong there. Jane.

Yeah, you're on.

One is the. I'm confused as where he's getting the five year growth figure from all together. Unless he's just saying he bought it five years ago. I assume that's because, I mean you put your, when you purchased it and you put your buyer price in.

Yeah.

So how much for. And then. So the date that you put or the year that you purchased it and then it's telling you. Okay, let's calculate that by the number of years you had it and this is the growth that it's had. But I wonder if there's something else going on there. Whether he's. Is the question about comparing it to other growth that he's seen listed somewhere like a five year growth? A little bit confused as to.

Yeah, I don't know if we can actually answer that, John, without really getting some more clarity. I'm not sure if you're there. You there if he's there. No, he emailed the question in, didn't he? What I might do is I might take that up with him when I have a chat a bit later and do it specifically.

But it's. Yeah, it's an interesting, very interesting exercise and lots of people came back with different results. And sometimes it's one property that's bringing down the whole lot too. If you're looking at the average capital growth across the portfolio, not a lot of people ever stop to do that. You know, look at the, the growth across the portfolio, which is a great exercise.

Yeah, absolutely. Yeah. No, let me get back to him personally on that because I think it's probably a. Something that's not going to add a lot of value to everyone.

Okay, so this is another one from Laura. Hi everyone. Does anyone use Price Finder? As I'm trying to decide which software is better to identify block size and dimensions with a view to identifying potential to create another lot as the property that I'm interested in is in a median medium density zone. Any thoughts on the matter? So this was posted on the Facebook group.

Yeah, someone actually came back in the Facebook group and put a link in on a comparison that someone had done regarding the different data sources. So I think that's a really good resource for you to have a look at. Look, I would suggest that you just try. A lot of these sites have trial periods. Just try them and see which one suits you. I know there's a lot of data in RP data and it doesn't suit everyone. I know feedback from Price Finder is that people find it really easy to use. There was investor research as well. Someone's just posted on our page. I love Price Finder. That's Lorraine. She loves Price Finder. Lorraine's one of our amazing students, is out there flipping properties on the Central coast and, you know, absolutely active and, and using all of these tools all the time. So, you know, there are a number of tools that really comes down to which one suits you. And look, I know I've been on. I think it's investor research where you put in something like opportunity or should I put down Renovators Delight. And thousands of properties come up around the country and you get really exciting. It's 2am and you're going through all these properties. In the end you're like, wait a second, I've come up with these three suburbs I have to look at. I don't want to look at thousands of properties around the country. So I think you can get distracted as well. So, you know, just get in there and use, use the trial periods with some of these to get as much, you know, feeling for what suits you. But there isn't. I wouldn't. Yeah. I haven't got experience in Price Finder to be able to give you my personal theory on it. Lorraine there, I'm sure would be happy to have a chat to you about it if you want to.

Yeah, normally I haven't used it either. Question here from Ellie, who says. Looking for some advice. I'm interested in the price pin map exercise, looking at pricing disparity and where the best place is to get three years worth of data or sales history. Can you get history based on the type of property? So that was. I know we covered that before, but the thing about the type of property is I actually jumped the gun there. I reckon it's better to. And correct me if you do it differently, Jane, but I like getting all the house data and I don't care what you know, whether it's brick or weatherboard or whether it's got one bedroom or four bedrooms, because I like to drill down into it and work out where that spread of values is coming from.

Yeah. And look, I would definitely, as I just showed you in the RP data, choose houses. Don't choose everything. Units, houses, townhouses, et cetera. So definitely choose the type of property that you're looking for.

Yep. And that's it for our mailing questions, Jane, unless you can see any in Facebook there.

Yep, I've got a few in Facebook, so. And I'm so glad that Miriam has come back with this question, which is, hi, Jen and John, did you find out how frequently your Property plus calculator is updated and when it was last updated? So, just to give you a little bit of a background and heads up about what Miriam's speaking about and Miriam, the reason I say I'm so glad you asked me this question is that I saw your question come through on our support page and I went through and chased Residex down and I had them come back with some information for me and I then could not find for the life of me your name. So I've been waiting for you to come back and ask. But for those of you who want to know what we're talking about, let me just show you. So, on the Investors Choice Mortgages page, you know, I've got a couple of calculators. We have been through the calculator in the past that shows you how many properties you need to get to your ideal goal. What I also have in here is a little calculator that you know, and these interest rate calculators, to be honest, you know, they're like the standard calculators you see on the websites, most banks and, and they don't give you a real accurate point of view about what you can really afford. But let's just say that you've got two kids and you've got a general income about this amount and you've got living expenses, et cetera. You've got these loans and they tell you how much you can afford. Go to a broker, find out what you can actually afford. But this is where it's kind of cool. And this is what Miriam's talking about. How much can you borrow and how much can you afford? And let's just say that you have $200,000 to throw into that loan as well. So you've got a property purchase price of $700,000. And let's just say you want to buy in Queensland and you're interested in buying in Brisbane and just to buy houses. So what it does is it goes through and it works out, you know, what the median house price is for these areas, what the growth's been over 12 months and what the growth has been over 10 years. Now this information comes from Residex. And so the question that I had from Miriam a while ago was, hey, how often is this data updated and is Residex still doing it? So I went through and here's the email I received. Thank you for contacting CoreLogic, please be advised the statistics displayed in the calculator are updated monthly. Thank you so very much. To the point. And I said, great, is it the CoreLogic data that's now being used? What's the, the data? And they said, no, we are still using Residex data. So the end result of that, Miriam, as a question for you is yes, it is still coming through. The information is still Residex data. They are still collating the information. I just find it is a kind of like a handy little guide that I have for my mortgage clients to work out, you know, very quickly, you know, what opportunities that they could afford to buy in when they were trying to, you know, look at things. So without going to the back of magazines and getting some good growth information as well. So it's a cool little tool and yeah, I hope that you've been able to use it well. So there you go. That's Miriam's question.

Very good. I just thought of something I wanted to, just to mention to Darren and firstly, congratulations, you're taking action and asking lots of questions. I want to obviously encourage that, but I also just wanted to make sure that you knew about. In the Facebook group there's a search function on the left hand side, it's called Search this group. And if you've got a question about the dot map or the price pin map, you'll find there's often quite a few threads that already exist in there where you can get some really good information. And that's true of all of the other subjects. So you can type in, you know, spray painting and it'll bring up lots of threads around that too. So it's a really good tool for you to use particularly as you're rolling out and going through the exercises.

So I just demonstrated that on the page, John. But the other thing I wanted to point to you, if you can see here in the top left hand section, there's a link here, it's called learning. And what I do here is I've gone through and I've created a number of units. So all of the questions and posts that have really been around dot mapping I have put here in this one section so you can actually go through and you know, you can have a look at someone's dot map, for instance, from July, Sydney, July, you know, 2017, you know, someone put their dot map up there going, oh my gosh, everything's red. And this is like the conversation we've had around making sure that your legends. Okay, so you know, why do we use 2% increments. And you know how to change legends for Perth. So go to the learning sections as well. There's a section there on dot maps. There's a section there on the suburbs. Like the software people who like staging their property. I put all the monthly calls in here so you can find them easily. Any reports and resources that people have, which is really kind of cool as well. We've also got in here, you know, property case studies. So people were sharing some of their case studies studies and the numbers around what they've done. Handy information, termites, blah blah, abbreviations, feedback on the ultimate guide to renovation and some renovation tips. So there's, you know, we're trying to make things as easy as possible for you. So there's a huge amount of stuff in there around dot maps and you know where to get your map, why you should use your investment property magazine. Ten year growth is listed as annual growth. You know, we've been over this a few times because I know it is so confusing but yeah, that's, that's kind of where you do. So, you know, obviously we can, you know, support you as much as possible with your questions through the Facebook page. There's so many members in there who have done so many dot maps in the past. I think I spoke to someone. We had someone who turned up to our workshop. He did like five. Didn't we, John?

Yeah, yeah.

She thought she had to do them all overnight.

The other people that showed up and hadn't done any dot maps in a year and a half to shame.

I know, Exactly. So the. And the dot. I mean, I know we've got a couple of the mentoring students that are on here as well, obviously. Mentoring students. Send me through your dot map and your numbers. A couple of you are at this stage at the moment where you're getting into that extra level of detail and yeah, obviously I'm here to help you with that. So send those through and we'll have a chat to you about the 2% and 1% differentials I just received. Sharon. So we're working through the Sydney one together. So yeah, some pretty exciting stuff there. So obviously ultimate guide renovation, your property success club people, please put your questions in here if you have them. Are you still be confused. But that learning center should really help you out. And there's so many people here who have done dot maps that, you know, we're really excited about working with you and helping you out if you have any questions because it's a really great indication of what's happening in the market and how to pick up on some of the areas that are going to have growth potential in the future. So now is the time to buy, don't forget. Let's see if I've got some more questions here. I want to keep people over their lunch hour. No, I think we've answered all the questions that have come through so far. Yep, yep, Property plus data. Thanks Miriam. I'm glad Lorraine just said where was the most updated information. So that's why we're using the SQM research information that is in the suburb selector software. So you know, if you recall the suburb selector software, module 2 and module 3 in the ultimate Guide of Renovation or if you're in the Location Masterpiece class course, you know, obviously that's just around being able to go through and having a look at, you know, where the opportunities are for you to be able to purchase properties within, you know, the price point that you can afford gives you the data that allows you to then go through. And this is where the SQM data comes through. I'll just show you quickly so you can have a look. So I've just gone through and said 15km from CBD Melbourne, $650,000. So you know, I've chosen one suburb and the surrounding suburbs come up so I can compare, you know, what their 10 year growth has been like in surrounding suburbs and and you know, if there any potential there for almost like doing a little dot map and then looking at some of the things that we take you through, you know, percentage of renters, public housing, what's been the change in the days on market in the last 12 months and three months, how many have sold per year, what the stock change has been. So 27%, you know, more properties on the market at the moment and then we get through into you know more of the details with the demographics of you know what the typical type of property is. Three bedroom house, you know, demographics and the Census data in 2016, look, you know, for this for instance, 30 sold per year, there's not that many coming on the market but it's only, you know, there's only 500 houses and 300 semis. So it's a very small suburb but it gives you an idea, you know, vacancy rate. All of this information comes through and obviously in the location masterclass course and in the ultimate guided renovation, this location masterclass workbook is where you take that to the next level and get into whole more information. So just making sure that you're aware of where that data is coming from and that's the most up to, to date data that we're using from the SQM research, the Suburb Selection tool.

Yep. Hot off the press.

Hot off the press every month. So it's. What is it? 26 of the month. So it would have just come out at the beginning of this week as well. So you've got the lightest and greatest data. So I think John, just in wrapping up some of the things that people should be aware of and stuff that's going on, I've seen a really interesting report that's come out from Terry Ryder around the Perth market and some indications in that market might be rebounding a little bit. So if people are interested in what's happening in Perth and potentially some long term growth. You know obviously we looked at the, the price reduction since its last peak and prices are down 36% or so. So you know there's been some significant issues that have happened over there. I don't know if there's enough of a mining boom to generate the growth that was there previously. But interesting report that's out this week, two weeks time we're going to be expecting to see the RBA potentially consider seriously interest rate reductions based on the inflation numbers that we've come through and the slow growth. However, it is always a very brave RBA the week before an election that changes interest rates. Especially when the government is probably going to be talking about the fact that they have been governing the economy so very well. So March 18, May 18 we have the elections. Everyone vote bold and vote well. And you know there's going to be some significant changes either way around the property market and mortgage broking and banking and lending that will come out post that election. So I think there's going to be some really interesting commentary that you can be watching in the next few weeks as well. And yeah, we're looking forward to in welcoming some more of our mentoring students into the mentoring program and moving ahead with that as well. So the next week I think John, if we can convince Natalie to do a webinar with me, we will also do a webinar around those money archetypes and give people the opportunity to just download the survey for free and go through it and we'll go over some of those money archetypes so people have a better understanding of their money. So some pretty exciting things coming up in the next month.

Yeah, yeah, I'm really looking forward to that. That's going to be awesome. Natalie's awesome.

Now I know, I know people need to get to lunch. But, you know, as always, we're here to help you out and answer your questions. Please, you know, post to support YourPropertySuccess.com if you need any support questions at your PropertySuccess.com for questions for these Q&As, which are monthly, usually 12:30 on the last Thursday day of the month. And, you know, we're here to assist and help. There's a lot of people within the Facebook group with a lot of experience, and, you know, we're there to answer your questions. So you never feel alone and don't feel like, you know, you're hitting a roadblock and you can't move forward. So unless you've got anything else to add, John.

Nope.

I'm done. Okay. Well, as always, guys, here is to your property success. Have a good month.

See ya.