Your Property Success Mentor Call - April 30-04-2015

Hello and welcome to the April Call. Hello everyone. I'm so looking forward to hearing from you all tonight and I hope you've got your questions ready. We have a lot coming up. I have some brand new tools to show you. And for those of you who are in the Ultimate Guide to Renovation you've got, you've had an exciting week with your information that you've had so far. So we're looking forward to hearing from you and what you've been doing with the information you've been been getting. And I've been working on something now for a couple of months. So I want to show you a little calculator I've been working on. This looks a whole lot simpler than it has been, so I hope you're getting yourself comfortable. You've grabbed a cup of tea for those that are listening to the recording. You know, I encourage you to send some questions in next time. And for those of you live, we're really excited about talking to you and hearing from you. So these calls are exclusively for my mentor clients, the students of the Ultimate Guide to Renovation and my Investors Choice Mortgages diamond clients. So really excited to talk to you guys. And look, if it's your first time on the call, a very, very warm, warm welcome to you. Don't be shy, please just say hello. No question is a silly question at all. And often what we find is someone else has been thinking about the same question. So please, you know, make sure that if you have any queries, just put your hand up and we'll, we'll get to your question soon. Now these calls generally take place on the last Thursday of every month at 8pm so you've got lots to look forward to the rest of the year. And of course you will receive email reminders a week out, a day out, an hour out just to make sure that you don't miss out. And as always, I have the co creator of the Ultimate Guide to Renovation with me tonight. Hello, John.

Hey, Jane. Hey everyone.

John, you have had a busy, busy month.

Yes. Yep. We've got, the development's been happening so digging big holes in the ground and concreting. Actually, I've brought my show and tell today. I'm going to, and I pull some pictures up for you later. But so that's all good. We didn't strike any rock, which I was pretty happy about. And, and yeah, just doing some other stuff with the course and getting the, the final bits and pieces with the spreadsheets. We, we decided we'd take on another one We've added Newcastle to the list.

I know that the first lot took three months so I can't believe that you've, you know, mid course decided to do that.

Yes. And someone asked me today, are you going to do one for units? And I thought oh you.

No, not at the stage.

I was about to go and start that and I thought no, hang on, I'll wait, I'll wait for that one.

Yeah, we have to pace ourselves. So a lot of people this week would have also received the survey that we sent out to see where they want us to spend our time and efforts.

Yeah, that was interesting because we've been thinking about, you know, maybe some kind of monthly program or content or something like that. So we thought we'd put out a survey and just ask people what they wanted. So we got lots of responses. And any standouts for you?

I think it was really interesting. I mean we went through some of the comments today and there's hundreds of comments and we're trying to choose some beta testers, weren't we, who are going to get three months of free access to, to our content that we were thinking of putting in. But I think the thing for me is that, you know I read as you know I read all the magazines and you kind of get a little bit familiar with the titles they come up with, you know, the top 10 cash flow positive suburbs or the ways to make money with it, you know, or saving on your tax or whatever.

No money down.

Yeah, no money down. How to invest on low incomes which in actual fact I. I was in your investment property and Australian Investment property this month with the same question but they both had the COVID story of how to invest with low incomes and, and I had to, had to tell API I'd already just told you your investment properties some of the tips so I had to save some extras. So there was a bit of differ the articles but you know, the topics keep coming up and I think we ended up coming up with about 25 different topics that we thought people might be interested in.

Yeah, it's interesting a lot around location.

People wanting to know where to buy.

Yeah.

And affordable suburbs, how to buy, the negotiation stuff.

Yeah, I was surprised so many people were interested in negotiation. So that was interesting.

Which is great because module 6 for the ultimate guide to Renovation. People come out midnight tonight and they get all of that.

That's right. Yeah. I was just going to say that.

All of it's in the course which is fabulous. I know we last course the students who went through module 6 just love some of those auction techniques that we shared.

Yes. Yeah. And you know, module five is not too shabby as well.

Hey, wait till we get to have a weird chat about that. But yeah, so busy month in the survey as well.

Yep, yep. And what about you? What have you been up to?

Yeah, busy month. I mean, you know, the property market is booming and everyone wants to. Seem to want to comment on it. So there's been. I've been doing a lot of media and did some blogs for domain.com which is interesting. Which is. Yeah, kind of. Yeah, it's interesting to see my email inbox. All these property things all of a sudden have come through.

That bubble thing really tends to ebb and flow, doesn't it? The bubble commentary just comes in like waves or sets of waves.

I feel like I'm the only person talking during the GFC about proper to the masses and then all of a sudden there's like 100 people in my inbox talking about property and selling off the plan or doing something. So. Yeah, so obviously a lot of interest there. Money magazine comes out this month and I did the COVID story there was looking at how you would spend $5,000. So they had, you know, in property shares and other things so that they'll be interesting to see how property stacks up. And I'm just preparing to speak at the Australian Shareholders association on Monday as the sole property voice on a. So either they're going to throw tomatoes at me or they're going to be happy. But I've been doing some research on that and looking at the BRW Rich list and I know I did some research about five or six years ago on it and I thought I should update my data because there was about a quarter of the people on the rich list made their money in property, but over 80% keep their money in property. And so I thought, oh, if I'm going to hit the Australian Shareholders Association, I should probably have these. This up to date. And so I went back and tried to find the data and it's funny getting, searching for that kind of information because everyone's come out quoting me from six years ago and no one's got the new data. So I've got some new data from the 2014. Yeah, BIW Top Hundred. So some interesting things. People like you've made a lot of money, like gentlemen in Toll holdings, for instance, who sold out of that and have gone directly into selling, buying developments and investing in conveyancing, online conveyancing companies and things. So a lot of around the market. So that's been really exciting.

What else for your goals, your whole goals thing.

Oh, I've been working very, very hard. Yeah. On. Yeah, I think we. Last month we kind of had had some thinking about how can we improve things again. And we're looking at module one, the goals, and creating a bit of a. An update to that, aren't we? So, yeah, we've both been doing a lot of research on goal setting and, and understanding what you can do and how you could do it.

Yeah. I went back and read a. I think it was a Brian Tracy book that I went back and read as well in preparation for putting that back together. But it's a really important thing and it's sometimes a hard sell because people want to get straight into the good stuff. But it's kind of underpins everything really, doesn't it? Let's see. One comment there. Linda's saying she's got no sound. Can anyone else just comment if they're having problems hearing us? Please can everyone hear us? Just say yes if you can hear us. No problems. Yep. Okay. Sorry, Linda.

Linda. I don't know, we might have to type in Linda to check her audio or something. Good. I'm glad everyone else can hear us. Well, I hate when I talk to myself. We're sitting here with our microphones having a nice little chat to each other. So. Yeah, so lots of really interesting things. I've been reading some Residex reports, been reading some market reports and just trying to get a feel for what's happening in the market. Some really interesting data through the March and March Residex numbers on median prices. And there's such a discrepancy between the median prices in Queensland and Brisbane and Sydney at the moment. And I know when we saw this between Melbourne and Sydney a few years ago, my husband was saying we should be buying in Melbourne again, you know, check out the huge difference. And I know there's still unemployment, a lot of unemployment in. In Queensland. I think it's higher than Sydney by about 0.5%, but still not the confidence. And I had a chat to a couple of buyers, agents too, in Brisbane to see what was happening up there, and they've definitely seen the market moving. In actual fact, I had a talk to our good friend Karen Young from Everyday Property podcast and Zest, and she put in nine offers or something last week and none of them were accepted. And she went to one open home and put in an offer and there was 18 offers on the table. She said the market is really hot in Brisbane, which is, well, I guess what we've been talking about for the last 18 months. I know Investors Choice Mortgages we get to see probably six to eight months ahead of when it gets reported in the paper where people are buying. So we've been seeing that. And I'm talking about Investors Choice Mortgages. I just celebrated 10 years in business. So April 1, it's auspicious day for starting business.

Yep. When we made it, I was invited to the party which consisted of some scones and morning tea and it was exactly, exactly 15 minutes.

I know we only have 15 minutes before between meetings but everyone had a good little party.

Yeah, yeah, it's a good, good, great milestone.

Yeah, I'm really, I'm really, really proud. You know you don't take a lot of time to, to step back and you know, pat yourself on the back sometimes for the hard work you put in. And I remember when I was, who.

Was the first client? Do you remember the first one?

Yeah, Tanya Martin, a very, very dear friend of mine. Still a client today. And yeah, I remember sitting down in somewhere funny, she was flying out overseas and I think we're in a hotel somewhere like midnight and I was there doing loans for her and yeah, great, great success story, wonderful person. And yeah, definitely remember first client. I think everyone remembers their first client.

Investor or homeowner investor. Okay.

Yeah. And, and I also remember having said to a friend of mine that I was going to leave mining engineering and go and join start my own company. Commission only. No, no income coming in. And I was going to make a go at it because I really wanted to talk to people about how to buy property and he, he was devastated. He's like, you know, the first female to work underground in New South Wales legally. You've done all these firsts to run open cut mines and you're giving it up, you're going to the dark side. You can't do that. You can't become like a used car salesman. So I've got to say I'm so happy with the thousands of people that I've been able to help. So very big and exciting month for us and gosh, yeah.

And I think it's one of the things that you've, you are advantage for want of a better word. But just that you're seeing this day in, day out with people with multiple people buying in different states around Australia. So it's hard to have a job where you have your finger more on the pulse I think than the job you've got.

Well, it's really exciting because I get to speak to, as you said, people from every state. In actual fact, I had a call from Qatar this week, expat buying here and a call from Dubai and a call from London. So new clients and so, you know, expats looking at buying over here and in actual fact we've seen a lot of New Zealanders buying my book and learning how to buy in Australia. So if you think about it. Well, yeah, there's a couple of course. Welcome to your Kiwis. I know you're up late. In actual fact I have to make sure I'm able to leave tonight to go and put my mother in law on the plane at midnight. She's heading back to Wellington.

But she's a Kiwi.

Yeah, she's a Kiwi, husband's a Kiwi, just became Australian citizen. Just didn't give up the All Blacks, that was the condition. But look, the Australian dollar and the New Zealand dollar are a parody for the first time ever. And you know, the growth over here has been quite substantial. Although, you know, I read the New Zealand property magazines and I know Auckland's had 6% growth but overall, you know, Australia is outperforms a lot of the time and I know a lot of Kiwis looking and investing over here. So looking at, working with the property investors group in New Zealand and trying to help educate them on how to buy over here. So you know, it's, it's been good, great month and yes. But we've got a lot of coming up tonight. I hope you guys got some questions.

You haven't done your housekeeping yet, have you?

Oh no, but what else? Oh, I've got this, I've got this list of exciting things I want to cover. Can I just mention these?

Go ahead.

I've got. Well, I want to do a quick chat about module four and Module five and Ultimate Guided Renovations has come out in the last couple of weeks and we've had a lot of people dot mapping going. Dottie.

Yes.

Finding properties, inspection checklists and a lot of conversations on that. I really want to cover off the Quick Quote calculator which, you know, you and I both know put 20 years of intellectual property into that and I think some people may not know the amazing gold mine in their hands with that. So yeah, really keen to show you that. Hopefully you've got questions otherwise we're going to have to, you know, pull out, pull out all of our other exciting things that we've got lined up here to chat to you about. But look, as John said keeps me on the straight narrow, quick housekeeping for all of you guys. If you are on the computer and experiencing problems hearing us. So Linda, you can't hear this direction because you can't hear us, but maybe hang up and use the telephone instead. There will be a telephone number that's found in the sidebar under the Audio options dropdown menu. So have a look there and you can call from a landline, mobile or Skype. If you are on a PC, it's going to look like this. So when you have questions, all you need to do is raise your hand. So this is a question. If you can have a microphone and you're able to chat to me directly, raise your hand. If you're not mic'd up and you can't talk to me directly, then put a question into the question box. So but just remind you, clicking on the hand button will notify me that you have a question. Have a microphone, I will unmute your line and then we'll chat. And it's so much better to chat, isn't it John, rather than just me. Guess what your typing is. If you're anything like my typing, the spelling mistakes when you try and type in a hurry anyhow, doesn't work. But anyhow you're going to get a message when I do unmute your line to say that you're unmuted at any time, please ask questions by writing them in the box as well if you like to, or if your microphone's not working and you know as a group, once again, there's no silly questions. I encourage you to make the effort, have a chat. These mentor calls typically go for an hour and a half. We will finish 9:30 so I can make that Kiwi flight. I just asked for the sake of the group that you know, limit yourself for a question. One question at the start, maybe a quick follow up and we'll come back to you've got further questions. And you know, we answer questions about anything here, don't we John? Modules in courses, mortgage rates, how to find information on the net, I don't know. We've covered. What did we do recently? We looked at someone's property that wasn't renting and we went through the copy of that.

That's right.

So we're here for anything. So once again we're not a tech support call. So if you are experiencing any problem, the videos that don't download or something like that, I'm not the right person to speak to. We did speak to a couple of people recently we found that if they had a Gmail account, that there's a new promotions folder and a lot of our emails are going into there. So.

So there's tabs across the top of the. Of your Gmail and there's. I think the third tab along is called promotion. So you might find our emails are ending up in there.

Yeah. So anyhow, we'll get people onto fixing your problem. And yeah, we've got. We're doing a little bit of support this month, but not a lot, which is great. So I would love to dive into your questions first of all, guys, and hear from you. So, you know, I want to. There's no hands up either, John. Can they remain quiet? I can see that we've got a lot of people on this call, so put your hand up if you've got a question, any question at all. Let's see if we've got any hands. Come on, don't be shy. Hello, can you hear us? Let's have a look. Hello? Alrighty. We have no questions. Well, we've got one hand up. Okay, let's go find that hand, John.

Ah, there we go.

Oh, in actual fact, it's a written question. I also have from. It's Melanie, isn't it? Yeah, yeah, Melanie. We'll unmute your line, see if you've got a microphone. Hey, Melanie.

Hello.

Hey, Melanie.

Don't know if you can hear me.

Yes, loud and clear.

Okay, good. So it's the same. I've seen through the question with the email as well. But I wanted to ask, just on the. On the spreadsheet, that Masterclass in module 2, the sales count, according to just your opinion, what is enough sales activity in a certain suburb that you are comfortable to, you know, to buy there and to invest in that suburb?

Yep. Well, actually, thank you for sending your question through via email because we actually brought up the Excel spreadsheet so we can show you. And it's a really good question. I'll bring up that Excel spreadsheet so you can have a look. So what you're referring to is the fact that what we talk about in the module is the sales count. So we might just populate that, John, with a. From sheet one. So this is where we put our parameters in to the master class spreadsheet. And we might choose a median price. We'll choose a certain amount below and below. The thing about the sales count is that we don't want to be wasting our time, Melanie, where there might be five to ten sales per quarter. And it really is relative also to the size of the. The population in the area. So what you'll see in the last tab, the sheet three, when we get there, is that it actually populates with what the amount of properties are or houses are in that suburb. So we get to have a feeling for what the percentage is. So in sheet two, we'll just throw one across here into sheet two, John. So we can see here the suburb count. We've got the sales data here. So we've got sales volume per month at 44. And we've also got in that the turnover. So we've got about 10% turnover, the yearly turnover. If we take that through to sheet three. So a little bit of feedback from your line there, Melanie. Oh, guys, it's okay. And we take that through to sheet three, John, that what we see is we've also got at the end here, the total dwelling. So under column x, we've got 3,269 dwellings. And we learned that the number of sales per quarter was 80%. So in actual fact, what they're telling us, and sales per month is 44. So in this instance, you know, when we're talking about, you know, is it worthwhile putting my time and effort into an area that might only have, per month, five sales? And, you know, and you go along the rest of this spreadsheet and you'd say, say the percentage of renters would, you know, we. We really want to have over 30%. But if there's a very high percentage, maybe, you know, 40, 40, 50% of owner occupiers, for instance, you might be actually up against owner occupiers to buying those five houses per month. So when we're talking about sales per month, this is kind of like a little bit of a mental check of is it worth my time to go and put all this time and effort into this area? So this masterclass spreadsheet, what it does is it obviously filters from parameters. We've been able to populate, pre. Populate this for Melbourne. We've gone through sheet one, and we said we want to find median house prices over $900,000. And I think it was 40% below, wasn't it, John? Yep, and 20% above. And we've then selected those suburbs. And what we have in sheet two is those suburbs have come through that we've selected with the surrounding suburbs, because we know from that the dot mapping and the ripple effect that we're really interested in also what's happening in those surrounding suburbs.

So which is a good place to compare kind of sales volume there per month as well like to its neighbors. So you can tell pretty quickly what's. What's kind of average. Average size of the suburb and also.

Average sales and how they, I mean as you say, as the, you know, you might see there's a real, a lot of sales in, in a couple of particular suburbs which might be one another indicator of, you know, the next suburb that you're concentrating about to become the hotspot.

What's something that I find pops up quite regularly is you'll find a suburb will pop up on the dot map as having a couple of increments lower growth. So a different color by say two things. And it's often when you pull it into the spreadsheet, it has a low sales volume and yeah, so it's one of the things that tends to pop up quite a bit. So whatever, it skews the data in different ways.

And one of the other things I think that kind of correlates to this too is the days on the market.

Yep.

And, and so, you know, you can see there, what do we Got? South Kingsville, 247 days. Brooklyn, 223 days in the market. These are slight. This is. Properties go on the market and they sit there for nearly a year compared to maybe Sunshine West. We got down there 73 days in Yarraville, you know, 51 days. And we think of an average marketing campaign six weeks and then the property sells. You know, these are going on the market and selling quite quickly. And the sales volume is 44. So within a month there's well 10 properties a week selling. So you're out there, you're looking. There's a lot of properties to look at. For the 10 properties sell a week, there's probably four to five extras that are on the market. So another 40 or 50 on the market that we're selling the following weeks, et cetera. So there's a lot of properties there to look at.

And the tutorials, you were using it too when you're going through the Residex predictions report and the renovators report. So you weren't taking stuff across to your list if it had like five sales.

No, no. So this is how you know, we wouldn't move it to the next assessment, as John said on that T column, if it, if it had five sales, because it's just not worth your time. So does that kind of answer what you're after there, Melanie?

Yes, thank you very much. Makes sense.

Yeah. Good. I think you had another question too that we I had on my list which was do you want to ask it?

Yes, yes. If I remember it, I think it is. Let's say for instance, you go to a or you buy a property in a suburb where the median price is for instance $650,000 and you get a really rundown house, a real bargain on $400,000. You get house for that. And then you're kind of guideline is that for a cosmetic renovation you would spend about 10 to 15% of the value that you bought it for to do that renovation. But in this instance to get it up to that level, you would then spend more, I would suppose.

Yeah, it's a good question because obviously if you're in a median price point of 650, you want to be buying a lot below that. And your ideal is exactly the scenario that you've come up with, which is a really rundown property. This is when you're going to bring up the quick quote calculator when you go through the property and you're going to have a look at how much the renovation centre costs to get up to the standard of the similar $650,000 properties that you've seen and then work backwards. So you know, your $650,000 medium price, you know, in the quick quote calculator we go through and you'll look at the property and go, well, okay, how much is it to paint it and sand the floors and you know, replace the kitchen and bathroom and you know, all of those things. And let's say you come up with $50,000 or you know, it's really run down $60,000, obviously that is more than 10% of your potential purchase price of 400. But if you work your way back and then factor in your profit margin, you know, maybe a 15% of the spend of that, of the renovation cost, then what you can do is work back down to what that that price point can be. So I think, you know, everyone always asks for a rule of thumb and we say, you know, cosmetic renovation, about 10%. You and I know that if you're doing a refresh or you know, a repair job, it could be 1 to 5%. And if it is in a really high class suburb and you've got, you know, a property that's really run down and you're going to have to spend a lot more to bring it up to the standard that it's going to have to look like to be just a little bit better than every other $650,000. Property so that it rents or sells faster. Use the rules of thumb as a guideline. But if you're buying it at $400,000, I wouldn't be making a hard and fast rule that you can only spend $40,000 to bring it up to 650. Because unless you're really good at negotiating and you've found a real gem and someone who's desperate to sell and all of those good things that you're going to Learn in module 6, you're probably looking at something that is quite run down and does require a bit extra work to bring it up to the standard. Just make sure you're not sacrificing your profit. Did you have any thoughts on that, John?

No, I think the key thing is I've actually been getting some mentoring on the development side of things and a guy named Dave who can be pretty abrupt, but he just goes, mate, there's three numbers. Your buy price, your sell price and your build cost. And basically that's the way it goes. So if you think of your sell price of the end value and the.

Profit is somewhere in between, I'd be going four numbers there.

No, in terms of your feasibility. Yeah. So if you, if you take your, your end value and then you know what the cost is, so you work out what it's going to cost you to do the renovation on, what he's talking about is development, then that dictates what you've got to buy it for. Obviously you're taking your expenses of your holding costs and what profit you want there. But yeah, so if you, if you know what your renovation is going to cost and you know your end value, then that's, you're in pretty good territory there. Pretty safe territory there.

Yeah. So, yeah, Melanie, I hope that that helps you, but essentially, you know, don't, don't be hard and fast on those. Rule of thumb, sometimes, if you do find that real diamond in the rough, you might have to spend a little extra money. And sometimes you're going to find through negotiation, you're going to get, you know, a really good buy price and your profit just gets bigger. So, yeah, I hope that helps out. Thank you very much. And I know that you, you asked about the Residex reports, the top 100, etc. If you actually call Residex and mention my name and that you're one of our diamond or Tugda or your property success mentor students, they'll actually give you 10% off those large reports that are part of the Residex. So obviously, as a diamond investors Choice mortgages client, you get those the property reports and the individual suburb reports with the predictions of the growth in them. But for top 100 prediction reports, best rent reports, the Residex market report, all of those reports ring the number for Residex and I can give that to you. 029-409-9033 Ask for Connie. It used to be Barbara Edwards but today's her last day. So ask for Connie. Connie knows. And we've also negotiated for you a bit of further of a discount if you are going to subscribe to the annual state market report which used to be called the annual Residex report. They retail at $300. You get those reports quarterly and if you do subscribe to the annual report in September, you also get an annual supplement that actually gives some live data of what's happening in the market now with the past quarterly growth, etc. That comes through. If you buy a state market report then for the annual subscription you can then buy a Resi spread which is an Excel spreadsheet that has the 10 year and 20 year past growth, the median price and a lot of other information in it. I could even bring it up and show you what's in it if you're interested. But so there is that information that's available. That Resi spread is only usually available to you if you buy the annual report and they're usually $120 each at that time. But I'll just show my screen here so you can see it. So this is what a reserve spread report looks like. So you've got the suburbs, the dwelling count, the sales last quarter, the sales last year, the median price last year as well the rent capital growth last year and the last 20 years and the rental yield last year and the last 20 years and the median income. So this gives you an idea of especially for flipping the household income in the area. And the household income also helps helps with some of the growth and people moving and buying and buying an area. So this is what the Resi spread looks like. This means that you have all that data that we always want to have from the back of the magazines, usually as an Excel spreadsheet so you can sort by it, et cetera. So for those who aren't in the Ultimate Guide to Renovation and don't have access to the location Masterclass spreadsheet, you know, this might be something for you. So usually if you buy the annual report for $300, you have the opportunity to buy the resi spread for 120. What we've negotiated for you is that you can actually buy that resi spread for $100 and the market report is 220. So instead of $420, you can have the whole lot for $220. So that's. I know I put that in a Renovan network thing, but I just want to make sure that everyone has the opportunity to see that. And we did have a question also that I asked Barbara about how often does the top renovator 100 report and the suburb renovator reports get updated and the answer is monthly. So the information is new. So that's all good. Excellent.

Okay. Oh, there were some hands but they took them down.

Interesting.

Okay.

Okay.

All right, we've got a question from Sally who says make sure we're on the right screen. Sally says, do you know whether there are any plans for Victoria to allow granny flats in the future like New South Wales?

I haven't seen anything. I know there's been some changes in Western Australia recently where you don't have to be related to the person living in the granny flat and there's some dual occupancy in Queensland as well. I haven't seen anything in Victoria. I know there's been a lot of changes. You've been party of seeing this, haven't you, John, with the development and the councils fighting the state government. But I haven't seen anything regarding dual lock opportunities.

No, not that I've seen. In Melbourne there was a big change from the state government with the whole push for the 2050 plan and the rest of it and basically their. Their push is to have a whole. To earmark a whole bunch of areas for higher density dwellings and. But the councils are kind of pulling in the opposite direction and they're saying no, not in my suburb. So they've kind of had their first round on that and they're still kind of warring on that. But I haven't seen anything about granny folks.

No, nor have I. So. Yeah, not at this stage. Sorry. Sally, Lilla has asked us to elaborate on your earlier comment please, about the opportunities that present when there are big discrepancies between the median prices. Look, I think it's between the states, that is. Yeah, yeah. I might just show my screen again. John, this is the copied of the Residex march results. And you know what we're looking at here is. Can I show you. Which I think I am now. Great. There you go. What you can see here is when there's big discrepancies like Sydney's 929,000 and Brisbane's median house price is 477 and we've got Melbourne here at 672. When it comes becomes a question of affordability. People are willing to move. So there used to be a huge amount of internal immigration between New South Wales and Queensland and that kind of slackened off a bit. And you know, we've seen, as I said, we've seen some unemployment levels being higher in Queensland, but when we're looking at the median price being almost half of what is happening in Sydney as.

To Brisbane and pretty good incentive.

Yeah. And yeah, the infrastructure spend that they've had up there and a lot of the, you know, the, the roads and the tunnels etc, you know, people can live 10 to 15ks out and get to the city quite easily as well. So from a lifestyle choice, I guess what I'm saying, Lilla, is that there's an opportunity to see that there's going to be some type of immigration movement kind of swap over where people. And that kind of then throws the unemployment out of whack as well because people start moving up there and spending the money. So, well, let me sell my $750,000 place in Sydney and go and buy a nice place for 550,000, put 200 grand in the bank and set up again with the family and have a bit of wealth behind me. So what I'm trying to say is that when you kind of look at the dynamics of what happens in the market when there's such large discrepancies, you start looking at the fact that there's also large opportunity there. So, you know, that's, that's the kind of play that I would say that, you know, I would watch for when, when actually seeing these discrepancies and what we saw, you know, the last time there was a big change between. I've just pulled up units there, so you can look at units as well. But what we saw when there was a great big difference between Melbourne and Sydney was all of a sudden Melbourne, Melbourne started growing. And you know, the Sydney and Melbourne price median prices were within $50,000 of each other. And now if you have a look at them, you know, we've got Melbourne here at 672 and Sydney at 929. And I think it's kind of interesting because there was a, a bit of a, a quietening period of in the market and, and Melbourne seemed to kind of, you know, start quietening down. So, you know, we do have that cyclic market. We do have, you know, the Sydney moves, Melbourne moves, Brisbane Moves Darwin and Perth do their own thing. LA comes along a lot slower. Act is more a function of what's happening in government and you know, liberal or labor governments, you know, either stacking a lot of extra employees or sacking them. And then there's little Tassie who kind of like lumps along and. Which is interesting. I've seen quite a. I've asked to speak at a conference at Tassie today. You know, there's a lot of interest down there and it's affordable and cheap and you know, Hobart 374,000, you know, hasn't necessarily had the growth that the other states have had. But you know, once again it's an attractive kind of option. So, you know, I wouldn't be looking at the discrepancy between Sydney and Hobart necessarily because I don't believe that the economy has a lot of the employment opportunities that people need to help them, you know, make the move and then have the income to be able to support themselves when they're there. But you know, Brisbane does and Melbourne does and so that's the kind of things that I would be looking at. So I hope that explains a little bit more what you're after there.

Still waiting for some. Hands up. Put your hand up.

No one wants. They just want to see your before and after pictures of the development, I think.

All right, that's all I need.

I don't know, someone typed in the box.

Here we go.

I'm going to share my screen so people can see it.

Make sure I'm on the screen too. Maybe a tick.

So John has purchased this development and what's it going to be in the end?

Two townhouses, two side by side townhouses. So this is it here and this is my partner Eileen, up the end there and what you can see up the right hand side there, this is the very first kind of earthworks they did. And they drilled bore piers all the way up. So there's going to be a basement where you can see this kind of rubble in front of you and a big basement. There's basically two side by side townhouses. One of them's got a basement and a lift, one of them hasn't. And so the first thing they did was drill these big ball piers down over 4 meters in the ground. And that's to stop the next door neighbor's yard from kind of caving in on the basement. And then they pulled this capping beam on the top of it. And then once they've done that, they can then start kind of Digging it out. So.

So then they did dig it out.

And they did dig it out and.

Now you've got a basement.

See if I can drive this thing. I'll go that way. There you go. So that's the big digging out which is always a bit of a worry because you never quite know what's under there. So luckily we didn't hit any rock at all. So you can. You can kind of see there on the. On the far side there. That's all the piers that they've put down there. They've got clay all over them. It was a very sandy kind of clay and it was quite easy to dig in the end. So they got it out and although there was one scare we had three. Three trucks had to come back to site and. And dump their. What happened was there was a. They'd gone through a pipe and. Which was asbestos.

Nice.

And they took it out to. To the dumping ground which was reasonably close about 15km from site and which is hard in Melbourne because it's. You've got to travel. Dumping soils are pain. Real pain. Anyway they got there and they. And they sift. They randomly sift the loads and they found these couple of bits of asbestos wouldn't take the other three trucks turned the trucks around, had to come back and dump their load on site. Actually one of the guys drove. Drove his truck home and, and used the soil himself. But. So anyway we got. Got around that and. And sorted it all out. But yeah, so there was no rock which was good. And so that's all the. The kind of sump drains and everything. The pits that you can see there and then that's it. So they've built the. The walls up there. So all of the other sides of the basement don't have those big bore piers which are big 450mil round piers that go. Right.

They can't see your hands.

I'm doing it anyway.

It's contagious. I speak with my hands all the time at these microphones knowing no one can see it.

That's right. And yeah. And then they just. So those blocks that you can see along the right hand side there are all hollow. So they fill those with concrete and Rio bars and, and pour those with concrete and then they backfill with some scoria back into the. The walls and they've got little weep holes underneath there as well. So basically.

Yeah, that's coming along.

It's coming along. So that's the stage it's at. There's a couple more there.

So last month that you were turning the first dirt this month. We've got a basement.

Yeah. So now they'll put the big steel beams across there and, and start and then she comes out of the ground. So that's the, the good part. Once you get over all the groundworks and. Yeah, there's. This one's got a lift. You can see where that kind of crate is on the.

Oh, that's the lift.

That's the lift. The bottom left wall there.

You always need a lift in your townhouse. Shouldn't.

Yeah. Well, this is where this is.

We're aiming at the, the demographic that your target market is.

Yeah, this is older downsizes. So the, the suburbs. Canterbury, it's a good suburb in Melbourne and they're coming from a really high priced house and downsizing and it's not necessarily the kind of last time there'll be a mix. According to the. What we've found from our research, there's. There could be just an older downsizer with a kid that's now at college or you know, university maybe in and out of home still. So there's four upstairs bedrooms. Or it could be the, the downsizer. That's just, that's it. It's the last home and, and they want low maintenance garden gardens and a lift and, and that kind of thing. So it'll be kind of contemporary light is what we like to say. So contemporary but not too, not too contemporary that it's scary for. Although old people are pretty trendy these days.

They are. Oh my God. I don't. I shared a story with you earlier. I just, I. My 92 year old, 93 year old grandmother and mother and aunt surprised me this week with doing something completely out of character.

Well, you can't leave it there. Come on.

Getting a tattoo. My gosh. I just, I'm still, still coming to terms with it. But that, that's good. In memory of my aunt who passed away from cancer early in the, in the month. But yep, they all trotted off apparently. I don't know, I think Nan might be the, the oldest first time tattooist at 93 Tattoo EE. I don't know what you call them. So yeah, interesting. But yes, they are. Can be. They can definitely be trendy.

Yeah. So that's that. So it's due to finish in November and yeah, it's all good.

Well, we'll keep up to date with it.

Lorraine's got her hand up.

Oh, it's nice to hear from Lorraine again. She sent us a lot of questions. Hey Lorraine, how are you going? No. I hope you have a microphone. Hi, Lorraine. Hello. How are you?

Hey.

Good. Hello. We gotcha. Hello. I was. Good. I was just wondering about spray painting walls and ceiling inside when you're doing a reno. Have either of you done that?

Yeah, I've done it quite a bit. I really like it. And there's a really good thread on the renovator network and the Facebook group. If you put. Put spray. Well, put it spray in the search and I'm sure it'll bring it up. And one of the guys actually detailed how he set up. Actually bought a spray gun and. And the kind of nozzle and the whole thing. But I, I. In the past, I've just hired them from, you know, coats higher or wherever. Just nail a sprayer. And yeah, I was. I've actually said on one of the other calls that the. One of the jobs I did, I actually sprayed the. The inside and the outside and the roof in three days. So we'd spray that. We put a coat on the inside.

It would take me three days to do a room.

Yeah. Day of taping up. Yeah, Day of taping up prior. So yeah, four days. But yeah. And you just. And you would do it the whole house a lot sooner than that if you didn't have to wait for it to dry.

Yeah, exactly. On a hot day. Yeah.

It uses a lot of paint, but.

A lot of paint is. Yeah. And messy. So as John said, you have to have to tape up pretty well. I know that we did one to a property in. In New Zealand and probably didn't tape as well. We should have. So there's a lot of cleanup as well.

But I even do it now. That was a rental property. Now I just painted all the one color. Just a white. Not whisper. White's normally what I use. But I've also used it in. I'm in a period property with a. It's got Victorian ceilings and big cove cornice. And I find it really easy to paint those ceilings as well. So if you're doing a cornice, it's way easier to spray it than get in there with a brush and. And paint it that way. And it's good for feeling roses and stuff.

Yep. Can you do two different colors? Can you do like a wall color and then a ceiling color, or does it always have to be the same?

That's what we did in this house. So we just sprayed the ceiling and we didn't care about the overspray on the walls because we then just went and cut in with the wall color and and where we went, it's a lot faster.

You cut in with like a paintbrush.

Yeah. And just painted the walls. But even most. Most painters will use a roller. It's anyway what. That's what people don't realize. Yeah. Most of the time they'll spray the first coat on and then they'll have the second painter or apprentice or whoever running through with the roller. And it's more just to give that. The finish.

The texture.

Yeah, the texture. Yeah. So when the sun hits it.

It.

And then. And then they normally just spray the. The remaining coats. Two or two or three coats. Some guys do just two coats.

Someone on a call recently told us that they spray the first. No, sorry. They roll the first and then spray on top. So. But just getting that texture.

Yeah, that's right.

So it's not that flat. Dead spray.

Well, they go through it pretty quick with the roller. With the guy spraying in front. I'm not sure what the advantage would be of rolling. Yeah. If you got the sprayer out anyway. But. But yeah, it's great for ceilings. Great. If you can paint everything the same color. You can paint exterior walls too. I use it on render, so it's great for render because you can really get around fast with that render. With a big. Normally you would use a big long nap woolen roller for a render. Doing the hand actions again, Jade.

Yeah.

But it takes ages to paint a rendered wall, particularly if it's cement because it sucks up the paint like nothing else. So spray is really good for that. Yeah. Use a lot of paint. You've got to buy the big, big tins. The big 20 liter tins.

I know someone was telling me. I'm just trying to remember. They did. They did a picket fence that didn't really work because they went through. Funny thing about picket fence. I learned something else the other day that in New Zealand, they put the picket fences a little bit. The spacing further apart because they find the tag is. Don't get enough of a.

The letter.

The border. Yeah. The background to actually tag over it. So those properties with the picket fences with a lot of extra spacing don't get tagged.

Oh, okay.

There you go. Things you learn about New Zealand.

Yeah.

It's a rough place. No, it's not. Okay. But yeah, I hope that helps. It does. You've got some painting planned, Lorraine? Yeah.

Jump in.

Not yet. Not yet. I just wanted to know. I read about it and I thought, oh, I just want to know, can you paint a ceiling white and then a color on the Walls. I just didn't know how you do it. Start with the ceiling first, like with everything we say, start at the top and go down.

It's good. I mean a lot of all the commercial jobs are done this way. Our development that I just showed will be done that way. And what they actually do, even though we use high gloss on all the timber work, is they'll spray an undercoat on first. And it's, it's quite a thick undercoat that they spray on all the timber work and they don't care about the overlap again onto the wall and then they spray their undercoat on the wall and go through and then they'll come back and do the, the actual architraves and the skirting and everything by hand. But because it's got that initial spray finish on it, they, it's kind of got that little dipple kind of finish for one of a better word. And high gloss enamel. When you use it, it just kind of sinks into whatever, whatever the surface is underneath it. So it's bad for showing up imperfections. But if you've got a nice uniform, sprayed finish, then it looks really, really good.

Yeah, it looks good.

You're thinking of imperfections in your painting.

Oh, I'm just giggling. I had spoke to my landlord last week and asked him to do some touch ups in my office and their painter and I had to let the painter in on a Sunday and painter came in, I came in on the Monday and checked it out and he painted this wall and left the hooks in and painted around them so when the light you can see around. So like, oh, commercial rental offices, you know, what do you do? Yep. Okay, that's good. Thank you. Now Robert's got an interesting question here. So Robert says if you're doing a buy Renault hold strategy and needing to be fairly vigorous. Yeah, vigorous. Would you. Vigorous. So I was hoping that he was going to qualify what vigorous meant. Would you prefer to buy a $550,000 house or two houses at $350,000? And then he further qualifies by saying assume the same expected returns and yields. And then even further qualifies by saying, let's say the $550,000 house could be at an 80% loan to value ratio where the two 350s would be at, at 85% loan to value ratio. Oh wow. Robert, good question. Okay, so normally if we started with your question and we didn't qualify with the return and yields, I would say just having looked through a lot of numbers, although sometimes and let's just say outer suburbs versus inner suburbs and price points vary within a capital city, although a lot of the outer suburbs do often have high growth. So let's say 8% compared to 6% in the city. 8% of 350 is normally less than 6% of 550. So you further qualify by saying they've all got the same growth. So let's say the 550 property has 10% growth and the 350 properties have 10% growth. So you've got $700,000 worth of property going up 10% compared to $550,000 going up to 10%. Or obviously 2 at 350 would be much better in that sense. And it's, you know, we use past growth as indicative of what can happen in the future. And then, you know, with our dot maps and ripple effects and surrounding suburb analysis, we try to anticipate what can happen in the future and potentially buy Residex reports or suburb reports that show you the predicted growth. But I would normally say that it is often hard to find a 350 and a 550 price point with similar yields and growth. But if you could, and bearing in mind that you're buying the 350s at 85% loan to value ratio and potentially using up the same cash out of your pocket to do the two purchases, if you're getting the same result, having $700,000 worth of portfolio working to your favor compared to 550 would be much better in my opinion. So yeah, I would. If everything else being equal and all the dynamics are there and there's the population demand and the demographic wants, you know, rental properties and all the, all the analysis that we would go through to make sure that you're minimizing the risk from your investment, all things being equal, 2 times 350 at 85% loan to value ratio versus 1 times 550, I'd be going for the bigger portfolio. And if you weren't, if all things weren't equal, then I would be looking for the property that's going to deliver me the best return for what I need to get me to my goals in the timeframe that I want. So that helps. Aggressive. Vigorous means regressive. Vigorous means aggressive. Okay, so you want the most return as fast as possible, 85% or even 90%. Suck up the mortgage insurance. And actually I've been negotiating for some clients recently who medical. There's medico policies and there's solicitor policies and lawyer policies and people who work with the Mining industry and, and some of the larger lenders are offering 90% no mortgage insurance for people as often. There's qualifiers. You might need to earn over $150,000, etc.

But this was amazing to me that different industry or different professions are regarded differently by the banks.

I didn't know that they are. So. So, yeah, so even there's lenders like Citibank who would do 85%, no LMI, so no mortgage insurance. So, you know, so yeah, I would keep my money in my pocket if I could and go for the best possible property I could afford.

Great. Got a question from Chris here. G', day, Chris.

I've got a Robert, it's got a follow up. Would you buy at 80% LVR Renault, then refinance at 90 or go straight to the 90? I would possibly. If you had cash on hand, I would possibly start with the 80%. But if you didn't have cash on hand, obviously the 90% purchase is going to get you the cash to do the renovation. So you're not at the mercy of the banks getting construction loans, et cetera, or having to prove what you're spending your money on. So I'd possibly go straight to the 90. Chris. Chris was a big. I ran into Chris the other day.

He's just around the corner. Yeah.

Okay. So Chris says, what is your opinion on how investors who have investment properties in regional cities with heavy reliance on mining activities, for example Mackay Gladstone, deal with a current economic downturn, for example, difficulty in securing tenants, rental reduction, drop in asset value. Yeah, Chris, this is, this is a really, a really tough one. And I know you and I have had some conversations about this before where, you know, during the good years it seemed like nothing could go wrong in the mining areas. And I have a lot of clients who have purchased in mining areas and you know, I know of someone recently where we, we had a chat and the, the loan is worth more than the, the property, which, which, you know, we've kind of seen it happening in the US but haven't so much seen happening in Australia. And you know, rents have gone from another client who did a construction and rent anticipated at $2,000 a week and they're trying to get 900 at the moment. So there's been some, some significant changes. And I did some brainstorming with someone recently who's got a property in Mackay and I was saying there has to be. So not Mackay, sorry, in. Gosh, no, it's not Middle Mount. My brain just stopped in Maribah and, and Said there has to be so many investors in Marimba. There has to be some opportunity for the investors to try to recoup their money in creating some tourism kind of mecca or some employment or. And I'm thinking what's happened in a lot of the commercial areas in the city, John, you know the, the pop up shops, people kind of have the pop up shops and actually I did some brainstorming with a client a few years ago when they had a commercial retail property in Noosa and nothing, no one had rented for two years. And it was like, hey, what about pop up shops? So we kind of like brainstormed some ideas of who could go in a pop up shop in Noosa. But yeah, I was trying thinking like Mirimba, how could you attract it? And I was speaking to someone recently and they took their kids to go on a dinosaur dig in the middle of near Winton in Queensland. I was like, if anyone's been to Miramar, it feels like you could be doing dinosaur digs there. I was like, maybe the investors should come get together and you know, create some kind of tourism thing or try to generate some need. But you know, seriously Chris, I think it's a significant issue, and this is the problem about these single industry areas is that when you do have a property that is you have these high rental returns and these high opportunities and buy costs and getting into the areas you really need to somehow mitigated. And a lot of people did that at the time in some of these, you know, the Port Headlands and the Marimbas and you know, the mining towns by having two to three year leases in place. And you know, those leases are all coming up now. And so even having that longevity of lease hasn't necessarily been really worked. So you know, you know, I was trying to think of things like innovative things like having the properties furnished or you know, having something that was, you know, simple things like Foxtel included or whatever. But you know, the fact of the matter is when there's a huge vacancies, people have been made redundant. And a lot of the, you know, having been in the mining area or industry for so long, having spoken to people going, geez, you know, we're just going to sell our house to these investors because we're going to make more money selling our house and commuting or renting than out else. You know, the people who are the owner occupiers and, and those that grew up in the area and are considered locals. And you know, when I was in Mudgi, they told Me, you had to have two grandparents in the graveyard to be local. So that kind of local rather than I came for the job 10 years ago and now the job's not here. Those people want to stick around. You know a lot of them have already sold up and taken the opportunity when they could when the investors came to town. So it is really difficult. I don't have a simple solution other than maybe planting some dinosaur bones, I don't know. But you know I just, Yeah, I, I have to say it's something that has concerned me and worried me and, and I've had conversations with clients over the last 10 years about taking the opportunity and, and I know many that have and are in that same kind of boat. So yeah, I'm not. I don't have an answer. I think this is the first time. I really mean stump but I don't have an answer.

I'm sorry but you are always careful to tell people you know not to go into mining towns willy nilly.

Well not. Don't get. Yeah, exactly. Don't go into any area that has one economy, you know and maybe it's the local abattoir or maybe it's the local Ford factory or whatever, you know, one economy and a blip on the economic horizon can actually destroy that. So that's why we're looking at multi economies and those dynamics that are really going to risk minimize you and it's great having hindsight but the reality is that you know, a lot of people can't afford to get rid of the property they have because they're going to be paying back money to the bank. So. And they don't have that money. So you know, it is a significant sitting invention and it has been something that's unfortunately affected a lot of new investors over the last few years.

Yep. Joanna's got a question. We're looking at purchasing a property with our superannuation as a buy and hold investment. Do you have any insights you can share about this strategy?

Yeah, Joanna, this is great. You know obviously there's. The David Murray report has indicated that there might be some changes to the superannuation rulings that prohibit people from buying property within the Super Fund. So we've seen a bit of a flurry in investors choice mortgages and inquiries around self managed super fund lending. You know I think the thing to remember is as you've suggested, it is a buy and hold strategy, this development in the Super Fund legislation to enable you to buy property and you know, buy property, it's not your home. So as an investment arm's length kind of thing has allowed a lot of people to look at putting property which you know as an asset class is, you know, the biggest asset class in Australia and where people traditionally hold their wealth. So it's an investment people are comfortable with. So this as a strategy is buy and hold it is full of longevity. It's not a flipping strategy, it's not a, you know, there's rules and regulations around borrowing to renovate or improve the property. Which caught out a few people in Brisbane after the floods because you know, they weren't allowed to actually borrow money to improve a property and the improvements are actually just for fixing up flood damage. So there had been some, some changes to legislation and you find the self managed super fund legislation does change quite regularly and you need to be aware of that. But at the moment, you know, the thing about buying a self managed super fund, it is about longevity. So it's about growth, it's about what you want for the long term for this property. So it's not a, you know, we want to get in there and renovate and subdivided and do all of these different strategies. It's. I had someone inquire recently about doing a self managed super fund and building a granny flat and subdividing and selling off the block at the back. That kind of multiple investor strategy is really difficult and you're going to have to, you know, be very wary of being able to do that. But a simple buy and hold potentially this property as your home for the future downsizer or as a property that you have in, when you get to your pension phase that you know you've got some, some benefits or some tax benefits around that as well is a good thing. But yeah, it's 80% loan to value ratio if you have a corporate trustee, if you have a personal trustee, some lenders like St. George will have a 70% loan to value ratio. So the really fabulous thing from a lending perspective is that the self managed super fund servicing does not take in account any of your personal debt. So you might be completely maxed out and not be able to borrow anything anywhere else with any of the other lenders. But under self managed super fund, as long as you don't make additional monthly contributions, which means that the lender then has to go and look at all of your personal situation and see if you can afford to make those additional monthly contributions. But if you are just having the 9.5% that's going in from the government, which over the next few years is obviously going to be bumped up to up around 12%. You know, if they're just going to look at the rental return, they're going to look at the funds that are left in your super fund. So you know you're going to be using 20% of the funds in your super fund and as a deposit and some stamp duty money. So using up some of the funds, the remaining funds they usually deem is what they term it as deem at 2.5% which means that you'll get a return at 2.5% which unfortunately is inflation. But you know, lenders are conservative and the 9.5% that your employer puts in, they look at those three income sources and if that services the debt of the 80% loan to value ratio, more often than not they're not going to look at your personal circumstances, how many credit cards you have and your home loans and investment lines. So yes, I don't know. Is there anything else Joanna, I can ask you about my insights on the strategy but a lot of people who have maxed out. I did an article for Money magazine last year actually on self managed super fund lending and borrowing for property and as long as there's arm's length unless it's a commercial deal, but as long as it's residential property and it fits into your long term plans, I, I think a lot of people who buy in super funds property also relinquish a little bit of the responsibility of doing the due diligence and research because they're like hey, it's going to be 20, 25 years, market goes up. You know, you can really optimize your wealth position in that period of time by using, you know, the techniques that we use especially in location Masterclass and going through and finding the right area and targeting the area and looking at predicted growth and population demands and infrastructure structure and, and you know, percentage of renters because you know, you want the cash flow as well. So you know, don't, don't let your research drop just because it's a 20 year plan. Keep your, keep your, your due diligence up.

So has there been an increase of people looking to invest with self managed super since the government started talking about.

We've had a lot more inquiries. Yeah, people get a bit worried that if they don't get it now, they.

Won'T get in, don't get in. And is it likely to happen? Can you explain what they were saying and what's behind it?

Well, basically there was a financial report that came out that looked at the Entire looked at tax positioning and negative gearing and self managed super fund and how basically the government can save some money somewhere I think. And some of the recommendations came out, haven't have been tabled for discussion. And one of those was, you know, in March there was going to be some additional commentary and people could put in their discussion points regarding self managed super fund and residential property investment. I haven't seen the outcomes of those things that have been submitted and there hasn't definitely been nothing that's come out that said that it's going to stop. But there, there is some fear that potentially people buying in the self managed super fund have could have been to blame for punching up the Australian property market. And as we know there's so many more dynamics around that. People are, you know, a lot of people don't realize that when the interest rates come down they're often set at their monthly repayments, are set at the original monthly repayments. So there's a lot of forced saving going on and people aren't getting those cash flow benefits. You kind of, you have to ring up your lender and say hey, you know, I'm still paying my monthly repayment at 7% rather than 4.5%. So you know, there's a lot of people who've got a lot of wealth accumulated and you know, there's been a, there's been, you know, the interest rates come down, there's a lot of buyer confidence back up there. We've seen in the last month a little lessening of inquiries because of a bit of a fear of employment. So we've had a couple people who've been made redundant and that we've been talking to, which is the first time I've seen that in many years. So that unemployment fear seems to still be rankling. So.

And what's the general feeling about what they were talking about with negative gearing? Is anyone taking that seriously?

Oh, there's some real, there's big arguments either way, you know and you know, it was tried once and the investors kind of said well we'll be leaving the market. There's a lot less people claiming negative gearing at the moment because of the interest rates being so low as well. So you know, well, as a, as a. Not less people but less amount being claimed. But yeah, it's, it's an interesting, interesting situation. I think Patricia's got a follow up from Lisa there. Is there a minimum amount to enter into a self managed super fund? Yeah, you say $100,000 there, Lisa. Different lenders actually have different requirements. And your question is really around is it worthwhile setting up a self managed super fund and a bear trust and all of the, you know, costs that go with it And I've seen numbers that say somewhere around 180,000, you know, the costs make it worth it. Once you have about 180,000 in your or 150 and above in your self managed super fund or in your super.

Which a lot of people would have.

A lot of people, a lot of people don't. And I know I spoke to one lady actually I had a client who wrote an ebook on doing buying an $80,000 property with their $90,000 or something that they had in their super fund. So I know people have done it with a whole lot less in the super fund. Some lenders though, just be aware, require you to have a residual in your super fund afterwards. Some have a minimum loan amount that you can make as well. So different lenders have different things. The main lenders that are really good at self managed super funds, St. George came straight onto the market, straight up, they have an offset account, Amp is another and as you can imagine they've got ten tens of thousands of financial planners out there. So they have products that are really suit the market, have an offset account. The rumor is Macquarie bank may get an offset account against their self managed super fund product but you know, we're still waiting for that. And lenders like, I don't know, Westpac, you have to go through business banking and you know, but yeah, the bigger lenders, St George and AMP and Macquarie have been doing it for a while and doing it well.

Oh, Patricia, a question about real estate agents.

Oh, Patricia's got a hand. Hey, how you going? Great, thank you. Thanks for taking my question. I've just got a question about real estate agents and I'm just, I can't tell when they're being honest when they make stuff up. I know it's probably a real hard question but when they say something like there's someone else interested or we've had other offers or we've received an offer for the this amount and the vendor wasn't thrilled, are they making that up?

Are they allowed to make that up?

John and I giggling here because we have the same pain as you, John. I think there's good real estate agents, there's bad ones actually.

Yeah, Come on Tracy, I see you.

Got your hand up. Tracy Edwards has a, has a person in the family who's a super real estate agent. Look, the thing is that you Just have to remember who the real estate agent is working for and they're working for the vendor and they're trying to getting the vendor the best possible price. I mean they can definitely get themselves into hot water by saying that we've got multiple offers here. If you don't put your offer down today, you're going to miss out and you go look, I'm going to walk. And they're going to have to go back to the vendor, go well we lost that offer and there's no other backup offer. So you know, there is. The real estate agents that have the experience, have you know, been in the market for a long period of time know that they often the people they're selling to one day are going to be the people that or buy off them one day. People that they're going to be selling for, you know, in a few years time. So they know that reputation is important. And all I can say is, you know, try to and as a buyer it's difficult. You're not going to go and research every real estate agent. But if you've target selected your suburbs and you've got two to three suburbs and you're getting to know them intimately, you're going to be running into these agents time and time again. And I know I was looking back in 2006 at buying an arncliffe in Sydney and it used to drive me crazy that if this real estate agent con, if his name was on the property I would never turn up because he was under quoting by about $200,000. And I just felt like I needed a shower after I left his presence because he had had that type of vile. I knew he was lying. No matter what he said, he was lying. And, and you get to know these agents but you know a really good experienced agent who is from an agency that has a reputation and knows that you, you are going to be talking to them as if look, I'm an investor, I'm in the market, I'm going to be buying. If you have a property that you know meets this criteria, please contact me. In a hot market, they're not going to call you. In a slow market, they'll be on the phone to you every week. But you know, a professional agent is someone who follows up and gives you the full story. I'm not going to lie and say that they don't sometimes allow a little bit of extra leeway in, in, in what they say is going to happen because the reality is they're working for the vendor and they want to get the best price for the vendor. And you know, if someone says to me, I've got other offers on the table or you better put in an offer. Now I often say, you know, come back to me when you, when you do have an offer on the table and you know there's someone else interested. Well, tell me when you got an offer. Don't, don't take anything to the vendor without having a chat to me first.

Yeah, some of it can be when, when they say oh, we've had an offer or you, sometimes when you dig deeper you find out that yeah, they had an offer but that was, you know, three weeks ago and that vent and that, that buyer's gone away or something like that. So it's, you got to be aware of the context so they can kind of the little white lies sometimes. But having said that, I, I think the real estate agents are kind of one of the most important kind of relationships you can kind of foster. And I've got a whole phone full of agents numbers that I. Yeah, well.

In actual fact you're looking at a opportunity at the moment. An age an agent, a seller felt a sale fell through from 18 months ago and they came to you with.

The deal and said yeah, yep, it was, it was one that we had wind of for ages and then they had a overseas investor and they wanted to put cash into deal and all this and anyway it was more than we could could pay. And then the agent rang me and said hey, it's fallen through. Are you still interested in me? And we bought it. So yeah, you kind of, when they're on your side, you don't mind as much the, some of the sneaky tactics but when, when they're. Yeah, when you're buying it's not so nice.

Yeah. So all I can say Patricia, is ask lots of questions. I don't know, it feels like a lie detector sometimes. You state your name, what color is the sky and see where, see where their eyes go and how they act and see if they're telling the truth for subsequent follow up questions. But you know, as Tracy Evans has just put in the chat here and you'll see her on the Renovator network. Her, her husband we fondly know as the Machine because he's a, is an award winning real estate agent in the hills in Sydney district. But you know, she says even they can't tell sometimes when the agents are lying to them when they're looking at property. So you know, we're all in the same boat. And sometimes when you let Emotion get in the way. The comments of agents saying, you know, you have to make an offer today, you have to do it, there's other people in the market. Or if you put a four in front of it, you're going to get it. You put a 401 and they go, not, not good enough. You know, you get a feel for how legitimate the agent is. And if they know you're around and you're looking to buy and they, they kind of like losing you as a potential client, then, you know, yeah, there's a couple of.

I mean, there's a couple. I mean, the negotiation module is really good about that stuff, you know, about not getting caught out by. They'll always try and get you to put the first number on the table. You have no idea where the vendor is. The vendor could be 50,000 above that or 50,000 below that. You don't. No idea. But as soon as you put your number on the table, you've revealed your cards and, and they've, they've got lots of, lots of ways of doing that, which is, like I say, when you're selling and you, and you're having that meeting at the end of each open and you're talking through the different people that walk through the open and you know how, how likely they are to buy, you kind of want to know that stuff.

And talking about emotion, you know, I'm going to put a time date thing here, but the, the last block went to market last month. Yeah, last night. And just listening to some of the buyers, agents and their comments where, you know, they were ready to go and bid and the market just got so crazy and it was so full of emotion that they, they didn't even put offers on the table for clients that they were bidding for. So emotion can dictate the day as well. I did read something interesting today that Channel 9 Watercress Productions actually paid $5.7 million for that site. That was the latest subject of the block. And if we totaled up all of the reserves, that would have come to 5.6 million. So in the words of. Words of Greville, who I know quite well, he said it wasn't around making a profit out of there. They make their money out of advertising.

For the blog, so I'd say they won't be going.

We've had chats to quite a few people off the block, haven't we? And yeah, still, you'd be pretty happy.

If you're one of those contestants.

I know. Especially if you've got those poor couple, got Nothing. Last time $10,000, maybe $800,000 or something's time. So, yeah, it's a game. It's a game show. All right, where are we? Can I show you my special little spreadsheet yet? Yeah, can I just. Just because I spent like two and a half months working on this.

All right, coming over. Hang on.

And. And I'm so very proud. And it's about to go live and we've got a quietening of questions, so let me show you. Okay, so guys, this is something that I have been working on. I've had two incredible mathematicians working with me and I have to say, the three of us have sat down and done formula after formula and back calculation after back calculation. So here's the thing, and we kind of alluded to the fact earlier that we've got in the goals module of Ultimate Guided Renovation, your property success system, you know, the starter investor courses, you know, we all talk about the importance of goals and trying to understand what your passive income is that you want in the future and work that back to the portfolio you need and the difficulty in achieving this. And those of you who have been to the ultimate property. What is it? The. The Ultimate Property calculator website and purchase the ultimate property calculator of, of Patrick and mention my name, you get a $50 back. So the $129 calculator is $79. He's got. Oh my gosh, it's an 8 meg spreadsheet. I know someone who's on this call and I have been going through this recently. It's, you know, 15 sheets the calculations. Insane. And the problem is around this whole calculation is that when you're looking at. We can see this screen. Everyone can see this screen, I gather.

Yep, yep.

When we're actually looking at what your future portfolio is and trying to calculate it back to today, you have to start with a today point to understand what the capital gains tax implications are going to be. So what I wanted to do is create something very simple that I could have conversations with people in my discovery calls and investors choice mortgages and try to assist people in how they can look at the portfolio that they need. So here's my simple little calculator around desired income that you want the time frame to achieve the income put in inflation annual return. So if you put money in the bank, how much are you going to get back? So 5% here, expected capital growth for your portfolio, 7%, your tax rate at time of the portfolio coming to fruition in 10 years time. Make an estimate 30% selling costs. So 2.5% of your portfolio value. So it's assuming that you're selling your whole portfolio and then your initial loan to value ratio. So two properties, one renovation, million dollars in the bank. We talked about $50,000 passive income in 15 years. Oh, can look at my screen here makes it with a, I think a 7.24 20 year average growth and calculate. So you know what we were looking at here was the fact that you've got for a $50,000 total income in today's dollars in 15 years based on inflation is actually $72,000. So that means that to get $72,000 you need $1.4 million in the bank. And if you've got a 5% return, $1.4 million in the bank pre tax is going to give you the equivalent in today's dollars of $50,000. So what's that look like as a portfolio? Well you would need a portfolio of $2.5 million in 15 years that when you sell it, pay your capital gains tax at your tax rate of 30%, your selling cost of two and a half, you're going to achieve your current portfolio would need to be today, in the next couple of years, $900,000. So and what this allows us to do, and if we look put in here as per my book, two properties, one renovation, million dollars in the bank. You know, if you had the average property value at $470,000 which is what we saw earlier for Australia, then you know you need two properties now worth $470,000 in the next year or two to get that portfolio that if growing at 7.24% over the next 15 years. And all of these things being equal is going to allow you to work out what your portfolio has to be. So I know this looks simple but guys, months worth mathematical programming and I'm really excited about this. So you know, this is something that we want to work into. As I said, the goals module that we have so people can actually be very clear about what their future, future income is and how that translates into what the portfolio needs to be now and then working out within the borrowing capacity that they have and what they can do to achieve that in the next few years.

It's great. It gives you a real roadmap, doesn't it?

Yeah. So really excited about this. This is something we're doing. And for those people, in the Ultimate Guide to Renovation, obviously you've just been through module five. So module five was the renovation costings and the Loan approval module. So you know, you've been through a lot of these, these videos, et cetera and looking at, you know, pre approval and lender terminology and you know, what you earn, et cetera. So if you're in the Ultimate Guide to Renovation, what I would love to do is I offer you a complimentary half an hour call discovery call to run through with you just your goals and any of the finance structuring questions that you have. Maybe there is some mortgage questions that we could answer for you and maybe even help you with the move Investors Choice Mortgages. But if you want to contact the office 18464810 and speak to Christy, she'll get some details and yeah, love to offer that to you and run through this calculator with you, the super calculator, which is what I'm calling it at the moment, but property portfolio plan. So yeah, it's really proud of this and just finalizing making it pretty. Yeah, John, John's design. I looking over this is coming up with so many ideas of how we can improve it. But I'm the numbers person who want to make sure that the numbers.

I just want to make it look pretty.

So yeah, guys, we're really excited about this and thanks, Chase. Chase thinks it looks pretty and yeah, so that's what we've got going on at the moment. And what else did I want to show you?

We can bring up the costing calculator.

Can we do that?

Yep, the quick quote calculator. Let's have a look.

Switch back to this one that I've got or.

Oh yeah, go ahead.

So this is the spreadsheet that you only have a certain amount. Size.

No, I think it's. Well, it's just showing your screen there, so you might have to change your size.

So basically what we've got here is the quick quote calculator. As we said, about 20 years worth of data has gone into this that allows you to go through and quickly come up with the property price. Don't know if we want to. Which tabs do you reckon we should jump through?

Well, paintings always exciting, isn't it?

Yeah, we like painting. So let's say you jump into painting.

Which one of you is this? The cosmetic one or the social media?

Yeah, so we go and paint, as you can see along the bottom, all of the different information comes up.

Can you make the screen any smaller? Oh, there we go.

Yeah, yeah. How about that?

Yeah, that's better.

We move it over a little bit so we can start at the real Top level. Do you want to take us to it, John?

Yeah. So if at the very simplest way to use this would just be to get a quote off the painter. So the painter comes back and he says, okay, it's, it's 16,000 to 60. How much?

6,500. Yeah, that'll do to paint your house.

Yeah, yeah. And that's the. And if you went back to the, the front sheet now that would have updated on your. At the very front. Yeah. Your project progress.

We go down to painting and there we have painting there.

Yep. And so, yeah, basically that keeps a track of. You've got to also got an actual cost, so your projected costs and what it actually costs so that it will let you know whether you're going over. So if the quote came in and it was over and you had it in as you, you. Oh, you actually put it in the actual column. Start with. If you put it in the quoted price and then it came back, you know, over, it would show up in the back in the front page as well. So that's the very simplest way to use it. But then you kind of go down and the next, the next section there is by the meter or per, per hour or. Sorry, this is per hour. I'm struggling to get across there. Yeah. So if you know the like, for instance, I work with a bunch of trades and I'm just familiar with their hourly rate and I'll kind of ring up and say, you know, how long will it take you to lay a, you know, floorboards in two rooms? And they'll say, oh, about six hours. And that's, you know, so I could put the hours straight in there. And we've also got the spec drop down there. So it's not so relevant to the hour section. It's more relevant to when we get into the actual price of materials and so on. So you might say that the painter is going to take six hours and he's 60 bucks an hour and just leave the spec as is and it should go through. Actually, no, you're going to need to select a spec, aren't you? So. Yeah, there you go. And. Yeah, and that continues. And again that would go through to the, the bottom. Now obviously you wouldn't have the quoted thing and the painter's alley rate in there, although you may do if, if it was an extra or something like that. And then further down you get to the.

You can really start drilling down which is the.

Yeah. And the other thing is you can add to this too. So you can add rows and put. Put in your own materials. So this has kind of just been built up from once a job's done is I've just left the materials in there, basically. And over time, you know, I've had more and more jobs and more and more products that I've used. And I'm always trying to just create rules of thumb. So square meter rates and stuff like that. So for instance, that's the square meter rate that I've kind of used as a guide price for painting plus material. So if I took my floor plan and I said, you know, it's 100 square meters or 40 square meters in fact, then that's just a rule of thumb of what the painting will cost me. Now that'll change. That might not be, you know, you can't rely on that verbatim to work out what your quote's going to be. But you can adjust these as you go through.

And this has kind of been built up over years of doing this, you know, guide price is around $49. If you're paying retail, you're probably paying 60. And, and this is like, if you've done two or three renovations yourself, then you know that the guy price for yourself in a regional area might be a bit more expensive. So it might be 60. And you know, you're getting 60 is an average price, but you know, retail is 10% higher or whatever. So this just gives you, I guess, a go. And we can get down to so.

Much detail even there, just the filler and bog and all of that kind of stuff. And as I say, it's stuff that you can easily update if it does get a little bit dated. But most of that stuff will be pretty good.

One of my favorite things is builders book.

Yep. And then, yeah, if you want to be conservative, you can go down and go through the whole spreadsheet and put everything on retail. And yeah, you'd have a really conservative kind of budget at the end of it. Or you can, you can put it on bargain and search around and try and get the good stuff.

So, guys, this quick quote calculator, you know, don't underestimate. There's years of work and intellectual property and knowledge that's been built up in this and even just landscaping. Got some ideas in there of what some of the plants are that we recommend and how much they are. If you're going to go and do some landscaping. So you can use this. And we talked earlier about building up that 650 median price and going back and how much the cost you can go through there and build up everything. You need to work out what the cost is going to be. And this is for people who don't know necessarily, you know, what, what the costs are. So yeah, we've really worked this, this.

Through and it's quite. And it's really fast.

You did it for your development?

Yeah, and I went through it in a morning basically and just went bang bang. And it was pretty, pretty close in the end when we did the final costings.

So good news. So yeah, that's a quick quote calculator. So is available. Is the calculator available to everyone? Says Viv. Viv. Yes.

Go to module 55 to the download.

Section and bonus section in Ultimate Guide to Renovation if you're in the Ultimate Guide of Renovation that is available to you. So any more questions? John? 9:30, got to get to play.

Let's have a look. See, I'll just swap back. Yeah.

Let'S have a look. So guys, you've got any questions, please let us know. I can't see anyone with. Oh, we've got some hands up now. What have we got?

There we go. Got Jean.

Oh, Viv, the new goal calculator's not yet. I'm still working on it. Making it pretty. Jane, let's have a chat to Jane. Jane, hi, can you hear us? Hey, Jane. Hey, can you hear me?

Gotcha loud and clear.

Hi, Jane. Hi, John. Look, I just wanted to ask about regional areas. What's sort of the minimum population that you'd sort of look at at buying in a regional area? Oh look, that's a really good question. You know, often if you don't know the answer to these kind of things, you look at what the lenders look at as risky and you know, a lot of the lenders will say that if there's less than 10,000 people or 20,000 people in an area, you know that they have concerns about buying in those or lending money to you in the regional areas until you're really quick and easy way to find out what the lenders think is what the mortgage insurers classify areas as. So if you go through. Excuse me, if you go through to the QBE or to Genworth and Genworth and QBE are the two mortgage insurers. If you actually go through to them their website. So genworth.comau you can actually have a look at the online tools and you can put in postcodes. I don't know if you want to share my screen. I can just jump on here quickly, John. But you can look at postcodes and so here's genworth.comau it's about to pop up and you can go over here and have a look at the security location guide and you can download it or you can actually put in. 28102830 is Dubbo 285850 Apple Tree Flat, just outside of Mudgie. Let's have a look at that. So yes, investor and it'll give you some information about what they can borrow to. So it's saying, you know, if you're going to buy up to borrow up to 80%, 80 to 90%, then the most that you could buy is a $450,000 property. So they're saying how much they would lend against. So if you're buying a $700,000 property and needing mortgage insurance in Appletree Flat, there's going to be some issues. There's some lenders that don't actually have. So from a mortgage broking point of view, there's lenders that don't have issues with suburbs, different postcodes and CBA is one of the ones that come to us very quickly if you need mortgage insurance, a lot of them at an 80% loan to value ratio don't have as many restrictions. But the real question for you is not can I get the money and will someone let me borrow? There is, is why won't they? So, you know, we talked a little bit earlier with Chris about buying in mining towns and the issues that are coming up there. If there is actually a single industry, like I know at one stage I was helping my cousin buy in Scone Scone and another in Meriwether and they were kind of desperate to buy a house because it was only two that came up last year for sale, you know, so in these small little towns just in country New South Wales, so not in Scone, obviously there's more than two, but in Meriwether I think it was, but you know, these tiny little towns, Ralston, et cetera, although there might be some flow on effect from the mines in Mudgee or whatever, you have to bear in mind that they've got these small populations and they're predominantly rural areas that have got this kind of surge in demand based on the mines and are the mines still going to be there. So just try not to be single industry focused and if as we looked at that location spreadsheet earlier, location Masterclass spreadsheet, you can see, you know, the turnover per year. So you know, have a look at that as well. So hopefully that Helps you.

Okay, a couple more. We better squeeze them in. Leanne. Say, Leanne. Hello.

Hey, Leanne. Oh, squeaky voice. Leanne. I think we might have our microphone. Leanne. We might get you to type your question in. Can you change the price guide to suit what you want? Oh, in the quick quote calculator. Absolutely, absolutely. You can build up your own information. If you've done many renovations, you've got your own information. You can definitely change the price guide. And Patricia again. Hey, Patricia, maybe have you got another question? Patricia? Maybe she's. No, I'm all happy, thank you. Still thinking about real estate agents.

No problem.

Oh, hang on. Sorry. Can you hear me? Yes, I'm fine. I don't have any questions. I'm really enjoying this. Thank you. Oh, my pleasure.

No worries.

Well, thank you guys. I think we might come to a close. We've. Gosh, we've covered some good things tonight, haven't we?

Yep.

Mining towns and how you buy $350,000 properties with $550,000 properties. And show just some of our new resources. Module 6, Ultimate Guide to renovation Students. You're going to get that tonight. Negotiation and auction. Get in there and have a look at some of those auction techniques. I know that there's been always been a lot of commentary around that. A lot of fun too, seeing the. The pretty lady technique.

Yes, the crazy lady.

Crazy pretty lady. I have to think of the person who we.

Everyone thinks is you.

No, I'm not crazy. I might have crazy family members getting tattoos, but not me. Yeah, not there's anything wrong with tattoos, but anyhow, guys, I hope you have a really great month. Please, for if you're in the ultimate guide to renovation, jump in the Renovator network. There's some incredible conversations going on. People buying properties, people putting offers on properties, people renovating properties. You know, some. A lot of support and questions. And you know those who would like to take me up on the offer for that a half hour discovery call, please ring Investors Choice Mortgages will organize a time to do that and run you through that fabulous portfolio planner and have a chat about finance things. If I can help you. I'd love to. And yeah, all in all, some big things. Money magazine grab that where I go about talking about property. And yeah, good luck with the development for the rest of the month.

Thank you.

And we'll talk again next month. So, yeah, essentially. Once again, guys, it's been fabulous in speaking with you. I really appreciate that. Those who've sent some questions, we'll be sending you out a reminder for next month. Last Thursday of the month, 8pm we'll be having another call. If you've got any questions and you can't make the call live or you're listening to this recorded and you wish you were on it live and you just couldn't get there, you know, please send us through some questions. We'll probably start the phone line again so we can hear people.

Yeah, I think we should do that and see if more than more people than Lorraine ring.

Yeah, Lorraine was great. She was always on that phone line. And if you can't make the call, maybe send us an email like Melanie will grab your question and maybe do some research beforehand.

Last Thursday each month, put it in.

8:00Pm okay, guys, have a fabulous month and we'll look forward to speaking to you soon.

So, yeah.