Your Property Success Mentor Call - August 25-08-2016

We need to do for now, Jane, so I'll hand over to you.

Hello everyone and welcome to the call for August 2016. Oh my goodness. I don't know where you are tonight. I can see a lot of you jumping online, but we are freezing down here in Melbourne, aren't we, John? Yeah, we've had a blast. I had a call from a friend yesterday saying I'm in Port Douglas. Why don't you come up? Yeah, be nice with 27 degrees. Look, we have lots of exciting things to share with you tonight as always and we look forward to hearing from you. So it's been really busy around here. We've got some great things that we've been up to and we really look forward to telling you about it. And we've got a bit of show and tell, which is even more exciting. And what else? Just settle in, get ready for a chat. You know, make sure you've got your microphone there. We've got a lot of people who are on the call. I can see some familiar names and I can see some names of people who've been doing some pretty interesting things recently too. So I'd love to hear about that from you. These calls are exclusively for my mentoring students, the students of the Ultimate Guide to Renovation and of course my Investors Choice Mortgages diamond clients. And if this is the first time on the call for you, a very warm welcome. Please don't be shy, please say hello. These calls generally take place on the last Thursday of every month. This one caught up on us a.

Little bit earlier than normal.

So yeah, so, you know, usually starts at 8pm and we try to finish by 9:30. Reality as we go until the end, we answer everyone's questions. So about 10 o', clock, but we want to make sure you don't miss out. And for some reason if you can't make the call, then you can actually send us a message on 130076 Triple 19. That's 1376-119. We'll record that message and we'll play it and I will answer it or John will. And as always, John, yes, in the chair next to me, the co creator of the Ultimate Guide to Renovation all round. Good guy. Hello, John.

Hello, Jane.

Big month.

It has been a big month, hasn't it? And where's the bloody year gone?

It's, you know, I can't believe it's Friday tomorrow, let alone the fact that August has just finished. So we've been doing some crazy planning in our office in the last few days and all of A sudden, we realize that the next lot of Ultimate Guide renovation course is going to come up very soon, too.

Not too far away. Yep.

Now, I did allude to the fact that we've got some show and tell. Just out of interest, guys, with all those of you that are on at the moment, is there any of you that are interested in developing or have developed or have in your mind an idea that development might just be a bit of a twist on a property strategy that you're interested in? Because if. If you do, please type in the chat box. We want to hear if anyone's interested. Otherwise, we might just have to cut your show and tell you.

Just skip my show and tell you.

Oh.

Which would be dangerous, wouldn't it? After you showed me today, I was so excited. Oh, okay. So at least. Well, Lisa's interested, so why don't we talk to Lisa? Oh, here we go. There's some others as well. Okay, John, tell us all about Camberwell.

Well, I think I should really should go back and listen to the calls just to actually see what I've actually said in the past. But I think last episode, I think.

It went something like. It's going to finish next month.

Yeah, it's going to finish next month. I said it should be on sale by the time we're on the next call. Sure enough, it's on sale by it.

So, yeah, round of applause.

So Camberwell has finished. That was the second one to start, and that started, I think, eight or nine months after the first development that.

You went into with your business partner.

Yeah. And it's finished ahead. So you want to see some pics? All right, let me have a look here.

Now, I know I've been calling you over the last couple of weeks, and you've. You've said, I'm busy at the site with the designer doing staging. So you actually took this to a whole new level and actually went through from the beginning working with a decorator and making sure that PowerPoints are in the right place and had a good flow for kitchen and all of these things down to now, actually staging the property to suit the target market.

Yeah, that's right. So we did all the normal exercises that we do in the Ultimate Guide to Renovation, worked out who the demographic is. So for this particular property, it's not. It could have got a potential downsizer, even though the downsizers aren't the predominant people in this area. But it could have if it had a slightly different configuration. But we bought with permits, and we knew that. And we knew that there was a large enough market for the buyer that will go in there, which is typically a buyer with older kids, for instance, in college or approaching college. They don't require the downstairs bedroom, which we haven't got. There's no downstairs bedroom in this, which is a requirement for a lot of downsizers. So they're a slightly younger downsizer. And the interesting thing is the agent was saying it's most likely there's a trend in this area, which is Camberwell, of people to come from outer suburbs in and even rural suburbs in which is apparently a bit of a. A city change trend going on. So people.

No tree change.

Yeah. So they're out in the trees, they're at Yarra Glen or they're, you know.

Medical facilities and the schools for the kids.

Yeah. And go out and you know, enjoy the footy and. Yeah, yeah. Catch a show and all that kind of stuff. So they're coming from out from in. So that was the most likely. So we went through and did a likelihood and we thought that was about 40% and. And all the way down the list to. Actually we had the. Because the eastern suburbs have got a lot of buyers from Asia, often first, second generation Australians. But we did the, the breakdown of that and we thought they might be around the kind of 10, 15% max. Because there's a couple of things about this property that probably not perfectly suited to that, you know, along the lines of party wall and. And the feng shui's. You know, there's no venture whatsoever. So the, the energy just goes in the front door and out the back door. Jane.

And I hate it when you have no feng shui.

Yes, that's right. And the numbers aren't perfect but. But yeah, we had. There was probably a good five or six groups through on Saturday that were Asians. So it seems to be interest across the. The board there. So 25 groups through in total. But I thought what might be an interesting exercise is I got the. Because you remember I showed you the artist impressions.

Yes, yes. So how close was the artist to the truth?

There you go. That's the artist.

We're just missing the Maserati.

Is it?

Yeah, I think so. Opposite angle.

Oh my goodness. Okay, show me the reality.

There you go. That's the reality.

See, that's good. You know, when you kind of see the artist's impression, you shoot those off the plans and you're thinking, really, you know what I love about these. The fact that it's actually, you know, there's Even there's reflections in the glass. And we've even got, you know, paintings on the wall. Nothing's been left to fancy.

Yeah, that's right. I think it might look slightly better though, doesn't it?

I think so. I really like that. The. What do you call it, the rock facade.

Yep.

I think that looks fabulous. Very much. Very common in New Zealand. I've seen those probably now Wanaka, et cetera, that have that fabulous, that wood in the rock. Yeah.

Nice.

Okay, so show us inside.

Okay, so here's the. There you go.

This is the real one. This is not the artist.

That's not the artist impression.

Now what were you telling me about these floorboards? This is interesting because there's someone in our renovator network who was actually questioning what color floorboards to go with recently. In the last week too.

Yeah. So this is an engineered oak. So what that means is the engineer boards are machined. They're actually put on like a. A plywood backing. So if you imagine you'd normally have a normal floorboard would be, let's say, 19 mil thick. And then your, your using his hands again, guys. And then the tongue and the end. Sometimes it's end match, which means there's another tongue on the end. And then the. And the groove on the other board is machined into the solid piece of. Let's say it's oak. Solid piece of timber. In this case, what happens is you've got a 6 mil piece of solid timber which sits on top of a piece of plywood. And the plywood's got the tongue on it. So if that makes sense.

Okay, so actually it's a sharp edge mesh.

Yeah, that's right. So the plywood's got the tongue and the groove and the solid stuff's glued to, you know, very strongly glued together. And that's called an engineered flooring. And what it means is you get nice straight runs and they actually it's pre finished. So with oak, typically it's finished in matte, which is what this is. And so we've got oak in both the places, which is common for this demographic in this area. But this one is because this is a more modern, contemporary townhouse. It's more of a gray color, not that you can tell much from there. And the other one is more of an antiquey type color, like a weathered color.

So stained or natural?

They're all stained. Yeah, but just in different. So they stain them as they do the boards. Yeah, so. And they say you can sand these and restain them down the track. But yeah, you. You buy them with the stain on them, which is a bit of a pain because you've got to cover everything, really. And you. You know, your heart's always in your mouth, but people bring stuff in and out.

Yeah, yeah.

So on. So there's a few scratches, which inevitably happens, but.

Yep. And a nice window there looking out onto a design feature.

Yeah. So you might have. I don't know if that was that design feature I've been using in a while, which is just one. What is it? 140 by 140 treated pine finished or sawn. So not rough sawn. And yeah, go and point to it with the mouse. Oh, you're talking about that one. I thought you were talking. I thought you're talking about this one here.

I'm thinking that doesn't look like.

No, no, that's just. That's just a bit of actually, that's actually. It's not even iron. It. It's made to look like iron, but it's made out of some kind of weatherproof masonite. So it's. Yeah. Through the window splash. That's a window splashback, by the way. So, yeah, it's just a little design feature there. I wanted to put some bamboo running up behind that. But the stage. Yeah, the stager was against it. He thought we should leave it there. I thought it needed a little bit soft. Bit of softening, but the stager talked me out of it. You know, can we leave it as a. As a feature?

Okay. I just can't wait to get to this wok kitchen, because in actual fact, this kitchen is bigger than my kitchen. But the kitchen that's off. This kitchen is actually bigger than my entire kitchen, too.

That's right. Well, before we do that, do you want to see the. Do you want to see the artist?

Okay.

There you go. I think it looks better in both cases.

Oh.

All right. Real deal.

I don't know, guys, voting here, which one looks best, real deal or artist impression? I like the fact you got that fixed furniture there, too. For the. Anyone voting here? Come on. I'm gonna have to pull a poll.

It is. The one thing I am pleased about is the. Both the artist impression and the real photography ended up from very similar angles.

Yeah.

So it means that we got the artist impression pretty well. Right. Anyway, as far as a good shot goes. So. Yep, that's the artist impression. And there you are. Oh, no, sorry.

That's a reality kitchen. And that's a kitchen again.

Yeah, that's back to the real thing. Double side by side millet ovens there. And that's another technique that we use. They're just a base model oven but when you stick them side by side it looks nice and fancy even though it's not. Yeah, you could get one single oven that'd be worth you know, four times that configuration. There you go.

The wok kitchen. The wok kitchen for those people who need an extra kitchen to hide the actual cooking in whilst you're having a dinner party.

Yes.

This is the theory that's got more cupboards than my real kitchen. Yeah, it's amazing. Fabulous.

Same, same.

I guess that's where the caterers could actually prepare the meal for.

Yeah, yeah, yeah. Somewhere.

Somewhere where the staff can be your.

Butler to hang out. Yeah.

Excellent. Oh and I gotta say I did love this almost a sea grass wallpaper and the actual, you know, wine kind of.

This is called a buffet.

Buffet.

Yeah. There you go.

Back to the 70s.

Yep.

All we need is a bit of chocolate fondue and we're done. I guess it's the target market really, isn't it?

Yeah, it is, it is, it is. It's a little bit of furniture. I mean you saw there back in the lounge room there's a bit of. I'll get the real deal. This is all built in furniture as well. So we've done a little bit of that here just to. To set it off.

You always, I mean you for. People always have a lot of things and they're always looking for storage. It's one of the things that people after. I imagine that was some of the feedback you got from the open house.

Yeah. So there's plenty of storage and. And just that people don't want to do anything. They want it all there so they can just move in and they're paying for the convenience in buying new. So yep. The advice was to go with this, this built in stuff. So it was the interior designer we came up with that in this very room. Actually we sat over there and drew it out with the. The interior designer and myself. And what else we got. Oh yeah. So there you go. That's a close up of lounge room. There you go. So that's the feature I was talking about before. That's the 140 by 140 cypress pine that's just stained dark in a dark walnut and quite cheap. Probably about maybe $450 worth of timber. And it just makes for a nice architectural feature. So I've used that a couple of times now. You might have even seen that Ultimate Guide to Renovation students.

And a nice great big door that's once again, that large door isn't.

Yeah. The stacker. Yeah. Rather than the bi folds.

So the commercial stacker, that's cheaper. For those who've seen module nine. Yeah. In Ultimate Guide Renovation box on the back. Yeah.

The same technique, which is not unlike what we're doing there. That's a parapet wall. So it's a. Basically a box on the back using a stacker. And same thing we talk about in Module 9 is the. It's a treated pine deck with Mabu. The Moobuh I was gonna get right this time.

Moobu.

Yep. By Ecodex Quantum it's called. It's the by far the best stain. All the rest of them are just rubbish. You can't get any. Anything like Merbu, but that stuff is really, really good. So, yeah, all of the same techniques that we used in the Ultimate Guide to Renovation just transferred straight onto the development.

So we're talking about this today with Todd, my husband, and he said, what did you learn from the development that you didn't learn from the renovation? And essentially, other than the feasibility and the numbers, but behind the crunching the development, you essentially said you used all the same design elements and design features and project managed the same way. So, yeah, not a lot difference. Which gives hope for us renovators who haven't developed Te Lisa?

Yes, it was the case actually, that after we started, I mean, there was the initial learning curve and just the fear of taking it on, but obviously we paid for mentoring, so that took some of that away.

So your mentor's been with you the whole 18 months?

Yeah, yeah. We get a monthly call with him and he gets 20% of the profit as well.

Are you going to declare that? Yes.

I don't know. I'll find out. But yeah, he's been good. I mean, it was that initial, particularly when we're looking at properties, it was nice to have someone just to, you know, say, what do you think? What do you think? What do you think? And run. Run through the numbers.

Kind of having that second set of eyes from an experienced person and having not developed before, I can imagine just having that confidence of having said, look, I've done so many of these. I'm. I'm in the game, I know the market. And just one or I know when I started mortgage broking 12 years ago, I had a mentor and I spoke to him again yesterday about, you know, a particular deal and, you know, I used to speak to him all the time. And now I speak to him maybe once every four or five months, you know, and it's. It's always just having that second set of eyes or that backup of having someone who's done it before.

Yep. It's. Yep. It's worth. God, I mean, even if it's just that one little thing that you get. Yep. It's.

It's not what you look for half the time, is it? It's just those tiny little tips or maybe just something over the contract that you think, oh, gosh, I could have been completely done over on that.

Yeah. And he's very strong on that side too. Dave, our mentor is. He's a former accountant, so he's. Although you wouldn't guess it. You'd think he was a former builder. He's rough as guts, but if Dave will never hear this, so I can say that. So. So that's. That's. That's the formal lounge right at the front. So that's. That was an area too small to have a bedroom and put a. And we tried all sorts of ways to reconfigure so we could try and appeal to the. A little bit of a broader market, but we just couldn't do it. So we took it on. Yeah. Yeah. To get that bedroom downstairs. But we took it anyway knowing that we'd. It's all right. Next door's already sold. So we're.

And next door sold for. So you built the two of them.

One sold off the plan for 1864.

1.864 million. Okay.

So this one's got to get around 1.9 to get the same based on.

Holding face for the extra time and the agents, commissions, etc.

Yep. So the selling fees.

Holding.

Holding costs, all that kind of stuff. So you go. That's the master bedroom. So it's that you often see this. The wall in front of the.

Yeah. See this wardrobe and bathroom and thing. It's nice, isn't it?

Yeah. Pretty common technique. We. We ripped all these off just by going through those display homes and all that kind of stuff. These techniques.

I don't think we call it ripped off. I think we inspired. Yeah.

It was a chance.

Inspiration from different. Different sources.

Yeah.

At least you're acknowledging we are. Right.

Yeah. That's it. That's it. Riding on the shoulders of giants. But. Oh, even the. The interior designer works for a lot of these big crowds as. As well. So she's right up. But yeah, it's all about painting the dream. But it's the nice dark cupboards and wardrobe and so on. And you can walk in through the back there. There's a mirror on the right hand side which you can barely see. And she is. She is a just instant luxury.

I reckon she's Sheer curtains. Yeah.

Sheer curtains. Yep. Which is that there very. I mean not for every. You know you wouldn't do it in. In Merle Bark or the. The. The module 8 renovation case study. You wouldn't use them because they're not appropriate there. But if you. For a way to soften up a room and. And add a luxurious feel you can always put the.

The blind behind it.

Yeah. Yeah you can but it you know in this, in this case there's no practicality to. To anything. It's all aesthetic. So. Yeah. Yeah. That's a little kind of entrance way. Yep.

Oh nice bathroom.

That's the bathroom. Does look make the bath look really small but I can assure you it is not small. It's about 1700 so standard size. But again all the same stuff as we did in the same technique using.

That full glass frame rather than a window.

Yeah. And the mirror up to the ceiling and wall hung vanity. Yep. So the same techniques as a module.

This is the artist's impression next.

It is.

Oh. So I think.

I think in all cases the artist impression is actually better than the real deal.

No, I don't think so. I don't think the other one.

Okay.

I do have to say I do like the idea in baths of having the spout in the middle. So not some one person doesn't have to get the hot water on their back. But as you said it's aesthetics.

Yep.

That is just a practical point of view.

Yeah. Well there you go. You've got the spout in the middle.

Okay. I'll take the artist one on the spout. The rest I like. And finally what have we got here? Oh yeah, that's a. Stairs. A retreat.

Yep. So we made. We set that up. It's got a bit of a double door on it. So it's set up as both a. A bedroom and a retreat so that you can. Yeah. It was actually mainly because of council. They didn't want us to have a retreat there for some reason. This. This is the lottery you can get with these planners. Is she. She really wanted to make it a three bedroom house so Sorry. A. She didn't want to retreat upstairs for some reason she wanted it to be four bedrooms so we kind of made it both. So we staged as a retreat. But it can be. It's got double doors, so it could close and become a bedroom.

So this goes to auction on 10th September, 2016. For those who might be listening to this user head.

Yep.

And we've got a special little something you were saying this afternoon.

Yeah.

That.

Well, I thought it might be a good idea for those on the mentor calls and students of the Ultimate Guide to Renovation, if you'd like to come along. We thought we might have a bit of a day of it.

Bit of an open day. Our own.

Yeah. Do you remember when we said that was.

Well, I think we said the Sunday, the 4th, didn't we?

Oh, did we?

Okay, good.

Between 2 and 3.

Yeah, there we go.

And I don't know if anyone's interested in coming along. John will quite happily share all the numbers, supplies, fixtures and fittings. Walk you through.

Yep.

Yeah, I mean, we're here to help and those who are thinking about developing. So this is in Melbourne and Camberwell, if you're interested. We're not going to give out the. The address, but we would like to, I guess, get some indication of people are interested. So we might send something. Put something up on Facebook and.

Yeah.

And in the Renovator network and. And if anyone else is listening who'd like to come along, we'd love to show you through. Well, I'm glad to see through. Hopefully Sunday.

Well, for nothing else, you get to see all the. All of the stuff in the videos in the Ultimate Guide to Renovation. Oh, Shelly's saying it's Father's Day. Well, how didn't you know that? Jane, you.

I do know that.

Okay.

All right, Shelly, it won't be that day, so we'll see. I've already been been worded up. They have to go to some new pancake place down in South Melbourne.

Oh, do you? Yeah. Okay. Okay. All right, so we'll rethink that one.

Well, we will. We will. Thanks. We'll get back to you. Yeah, maybe we'll do it the Saturday afternoon. Yeah, that sounds like.

Yeah, Saturday afternoon.

Yeah. Well, you know, we've at least been.

Which would be the third.

Yeah, it's probably some other day.

We just make it up as we go.

That's us.

Yep. Oh, good.

And what else? Anything else. That's pretty much it.

No, that's pretty.

That's your list of what did I do this month?

If this is enough. It's not enough.

What have I done this month? I guess is the big question that you're going to ask me.

Yes.

Okay. Well, thanks for asking no, no problem. I was working my way out, I gotta say. I mean, as we shared with you last month, guys, we had a bit of a difficult month and you know, we've been regrouping and refocusing and, you know, putting our attention onto what we can do to deliver to you guys and continue to be of service. And our. Your Property Success podcast and itunes was ramping up the charts or getting some great feedback. Everyone was loving it and fabulous, but unfortunately we. We had to take a little bit of a hiatus while we recovered all these other things that we were doing. And episode five went up last night, which we're really excited about.

Let me. I can even show you. Hang on. So if I go like this.

My very fancy. Let me see. Yeah, there we go. Your Property Success podcast. So we have, oh, 19 ratings for five out of five. We would love you to rate and review us. I was talking to Ben Kingsley from Powell. He tells me he's got 179 reviews. Hey, you've been going for 18 months. We've just started a couple of new ones today. Yeah, fabulous. But we would love for you guys to listen to this. Look, every time I speak to someone, they tell me about something from another one of the episodes that they love. And you know, Jan Summers was incredible, just listening to the case study for Russell and getting into details and walking through the property. But Peter Kalisos joins us in episode five, which is really fabulous. The property professor, because he. We go into a lot of more detail on that poppy options. And he's a developer. He's out there doing it daily and he's really, really good guy. So.

Great. Yeah, really interesting, isn't he? He says hand on heart that he reckons buy and hold investing is the best investing going around, but he just likes playing with all this other stuff. So he's got options to hold. I think the. I really want to. I'm tempted to do his course, actually his development course in Adelaide because. Yeah, I'd love to hear how he's doing the. All of the details of his development to hold strategy and the scenario analysis and all that kind of stuff, you know.

P. Such a good guy to jump on a plan and come over and like teach you one on one. Maybe we. We should get him on the third come over, take us through. Maybe we should. We should hit him up for that because he just. Well, he loves our community and loves hanging with us. So.

Yeah, it's such a.

Such a. He's a top guy too. So there you go. So there's all the other podcasts that we should probably listening to.

And John Edwards. John Edwards was very popular.

John was fabulous too. Absolutely. Well, we love them all and we've got more coming up next month.

Yeah, so Bernard Saltz, number six, fabulous on the way.

So we'll be chatting to him and all about census and demographics.

Demographics, demography.

So yeah, API speak up that look, I've actually participated in a few really interesting things. I hope everyone grabbed the shootout webinar last Thursday night. That was insanely fun. Peter Kalisis, Effie from Money magazine and Ben from Empower. The three of us had been asked to very, very funny put a position forward. I was listening to you editing at one stage and all I could hear was you laughing.

You can hear it in the webinar. You can hear me cackling away in the background.

So yeah, it was. Look, guys, if you haven't, if you haven't got it, we'll put a link in later to it. But it's the shootout and it was really a lot of fun. And Effy, as I said it was a fabulous, fabulous, I guess topic about how much it costs to have a property. I got down to 30 bucks a week. Pete had 150 bucks a week and Ben had 250. Everyone had to stand by their man and defend to the death their strategy.

And Effie was excellent the way she got you there to then argue against your case. I know, and it was really good.

I voted against mine, but I did get a lot of feedback. Yeah, they thought I'd won even though I had gone against my own case.

I just tell you what you want to hear.

I know, but anyhow, it was good and so, yeah, so we had, we had a lot of fun and so that was good. And yesterday I actually jumped on the phone they. Someone had written into Money magazine and Young couple and they had an investment property and they're moving, he's flying fly out of Perth and they want to know whether they should sell the property and is the loan all wrong and should they buy in Port Hedland because he's based up there and Bub two's on the way and they have two under two and mum's gonna need a bit of support and anyhow, so I got jumped on the phone with them amazingly beautiful people and had a great little chat to them and you know, for people who are, you know, 28, 29, 30 and just starting out with an investment property and wondering what, what they were doing, I was going through screen by screen to analyze the current property and say does it justify to stay in your portfolio? And what was kind of nice too, they wanted to have the $100,000 passive income in 30 years time. And we put that into the investors choice portfolio calculator and it sounded like so much money you're going to have $5.6 million of property. But. But in 30 years because it was 160,000 based on inflation that they had to achieve. But we bought that back down to now and it was an $800,000 portfolio and they already had 450, you know, so it's like one more property in the bank. Get on with life, have fun, raise the kids. Have those two properties grow for you. Yeah. So it's really nice. And we played around with it and said what could do in 20 years and what can you do if you had a bit better growth or worse growth?

It's not often people come along and ask for a 30 year plan. That wasn't it. Most people saying 10 years or 15.

Exactly. Or what can I do next year?

Yeah.

Which is interesting because actually there's someone on one of the other things that we did last month and we did a bit of a roll call in your property success club and in the renovator network. So the two communities that we love the most and we went through and said, hey look, we want to know that we're on track here and we want to show that we're doing okay. And I know there's, you know, we always get this feedback that you know, you can sell someone a course and just forget about it. But as you know, we hold hands and we're here to support and we really want to have people succeed. So we thought, well, how do we measure this? So we just wanted to have one win a week for our community. So maybe a big or small it could be, you know, we've helped saved you some money. There was an aha moment that from a personal development point of view that you went, hey, you know this, this is something that I've learned. We maybe you purchased a property, maybe you've renovated a property. So we started measuring this. So if you go to the your property success Facebook page and I'm still surprised, there's seven and a half thousand people that are friends. I must have missed somehow or other lots of people joined up. But you know what's really nice here is first of all we had Eugene on this call and we went through and had a look at a property for Eugene a few months ago.

Now yeah, that's right.

And there was one of those funny nights and no one turned up. And Eugene said, I put in an offer on a property and I'm really having buyer's remorse. And it turned out it was justified. And we spent an hour doing his property review.

That's right.

He's then just bought a property when we had our call last month and then we had Lorraine. Now if we can, I don't know if we can jump to the your property success mentor page. Can we do that easily or not? Or your club, Sorry, network. Yeah. Because Lorraine actually shared some photos of her renovation that she finished. So, you know, we're all out, out for celebrating everyone. And she did really, really well. So she shared some photos before and after. Now what I found particularly interesting, the network and Renovator network, I think it was.

Sorry, Renovator network, Yep.

What was particularly interesting as. As part of the ultimate guide to renovation, one of the bonuses you get is that Renault save card and you. She actually used the reno save. I'm gonna bring my microphone around so I can. She actually used the Renosave card to get some virtual staging. And this is actually a virtually staged. For $90. Viv from Renosave actually gave her three photos of a staged room.

Oh, cool.

Yeah. So there you go, virtual staging. Here it is, before and afters. So we have, we love what you're doing there, Lorraine, and we love sharing in that success that you had. Who else do we have here? John. Now this is the interesting one. John came to see me. John was actually at one of our hotspotting workshops in Sydney, wanted to learn how to buy property and had a day. Great guy. Came down to Melbourne, wanted to have a couple hours of mentoring with me. Two hour planning session on what to buy to build his portfolio to purchase properties in a five year prime frame so that he could then sell and get to his goal. And his goal was to have a tree change down the Southern Highlands. And I went through all the numbers with him and went through everything and in actual fact he could achieve the tree change now. So he bypassed the pain and worry and maybe concern of that short term buy and hold and sell, a strategy that he had. And he successfully bought the dream home last week.

Wonderful.

So another celebration. We're just so happy. And then Ali, Ali, who was on our call last month, who was still searching down Geelong backwards and forwards and she's done all the. She's all paid off, all that time and effort and she's now found the property, had A bit of a buyer's remorse. And as part of an Investor's Choice Mortgages client, I did a deal review for her and we got on and we went through all the analysis on the different screens on different websites to find out was, was it what she was after against her buying criteria and success. So that was really good.

Yep.

And what else do we have? Oh, we have. Oh, I've got a lovely testimonial today. I often answer people's questions on Facebook or they text me or, you know, it's on LinkedIn. And this guy over the years has been, you know, just asking questions and Steven has a couple of units development coming up for sale and he wanted to know how he could position them.

Well, he's even listed your skills and specialties.

I don't even know. I don't even know how he knows it. But anyhow, he's not a client, he's not a student. He's just someone who follows me social media and you know, as you know, I answer questions when people have questions and gave him, gave him some, some ideas on what he can do to actually really position these properties good for sale. And yeah, he's like, can I write you a testimonial? So he's made. He said I made a difference in his life, which is nice.

Yeah.

And I think the last one, which I didn't put in here. Oh, actually if I refresh, it probably would because I only put it in tonight. But I spoke to four of our Investors Choice clients. We went back and we had a bit of a chat to their existing lenders last week. And as you can see just there at the bottom, $15,000 in per annum in savings on interest rates. Oh, yeah, I got pretty pissed that RBA put on some interest rate cuts. Are you laissez pissed?

Well, you are on our show.

Yeah, I just said it twice and.

You just ruined your reputation.

Apparently my letters say crap. I didn't realize that was a bad word either. That's why we've got an explicit rating on our podcast.

I've removed that.

Oh, have you? Oh, gosh. Now I'm have to really worry about these words. But anyhow, long story short, I reckon that the bank should be able to pass on these rates. I went back for four of the current clients I'm working on to their existing lenders and based on a bit of our, I guess, pull power, did a bit of negotiating and we saved $15,000 per annum. So 10 years, that's 150 grand of money. That the banks aren't going to get and our community is. So I'm on a bit of a mission at the moment and I've got a few appointments a week to spare. So I'm actively.

What's the hashtag?

Oh, savings made. That's it.

Okay.

So you know we were saying we want to make a difference to someone's life. So making a difference, okay, or savings. So we're trying to help people out, celebrate success. So it's all about celebrating. And I'm really, really excited about the fact that, you know, in, we've, we've outperformed our one a week basically of making difference. So please, please continue to share your stories and your information. As you know, you know the Renovator network. Well we discussed pretty much everything on there and you know, we're there to assist. It's back, someone's seen it again. So you know, there's a lot on there and lots of information so you know, get in there and be part of it. And you know there's, there's so much that's, that's going on there and some really good people. So that was about it. What else can I tell you? That's it. Oh, I did. I've been working actively for Bookweek tomorrow.

Ah, hang on now, did you find my Bookweek teacher?

I gotta say, I've got an eight year old son who has had aspirations of being fantastic Mr. Fox from Roald Dahl. And you know, as any good mum, you try to help your child achieve what they're after to achieve. So we went searching to four dress up shops over the last Saturday. And I have to say, as long as there is not a rain out tomorrow, which is highly possible because it has been three of the last four years that he's been at school, we have the fantastic Mr. Fox. But on the way we did discover another mask that I thought was particularly interesting.

All right, we're gonna have to do.

It this way because it's the Donald Trump mask. Like hello. Apparently all of a sudden there's Donald Trump masks. And my son said to me, there is that book, you know, that I've seen with him, that man's face in the bookshelf. And there's one called how to Make Money or How to Make Money out of Real Estate that's in my bookshelf. So he's written a book. I could go like him to bookweek. I'm like, no, I don't think we want to have you knocked around. But there's a fantastic Mr. Fox. So I think I nailed that. So mother of the week. He did have two minute noodles for one meal this week. So, you know, I think it balances out. Now you're back on track anyhow. All good. So that's it for my week. I've rambled on now for our half an hour of review and reflection. So it's on to you guys now on what you've been up to. And yep, once again, we have lots of people here. We're waiting to get some questions. So, John, shall we go to some questions? But before we do, just a bit of housekeeping as always. Look, when you do have a question, I'm thinking we're going to have to update my photo. Yeah, I think I feel I look way too young. I'm feeling a lot older than that at the moment.

It was only last week.

Yeah, exactly. Look, if you do have some questions, please put your hand up. We do take preference to people who do have a microphone because it's really easy. If we can unmute your line and just have a chat to you and we can get to the bottom of things. And I'm here with my computer ready to go just in case I need to do some analysis for you. But you know, it's, it's one of those things. It's more engaging if we get to have a chat. No questions, silly. For those of you who've joined us for the first time, you know, I encourage you to put up your hand, even just tell us what you're up to because, you know, you never know, we might track you down the pace and put you on our hall of fame, which would be great. And look, just for the sake of the group, one question, maybe a quick follow up question. If you've got more questions, raise your hand. Again, we make sure that no one misses out. And if you do, we always get onto it in the future, don't we? Yep. So we haven't missed a question as yet. So don't think so. That's it. All right. Tech support. Oh yeah, if we have any needs for tech support, probably can't help you here. That's the answer to that. So send an email to supportourpropertysuccess.com and Diana will get to the bottom of it and help you out. And what else do we got going on here? I guess we'll just wait and see if anyone puts their hand up because we'd like to have a chat to you. Otherwise I could keep rambling and tell you about a few extra interesting Things that I've been doing, too.

What do you reckon that means?

Lisa wants to know more about the pancake place. I might see you there Sunday morning, Lisa. Apparently there's an incredible pancake place near South Melbourne markets that makes pancakes from sour dough and the yeast. Has been going for 16 years.

Wow.

We're on a quest for the best pancake. It was Richmond Hill, the Larder. Maggie Beer's place in Richmond. Yep. On. Is it Swan Street? What's that? Main street in Richmond?

Yes. Swan street or Bridge Road?

Bridge Road. Bridge Road. But they've just changed it to a Nutella pancake. Not that good. So bequest, you know, important things in my life.

Yeah, I reckon. All right, here we go. Now we do have a question. I'm just going to paste it into here so our aging eyes can actually see what it says. All right?

Okay. From Lee. Lee. Does Lee have a microphone? He says. Or she says, Heather. Oh, Heather. There you go.

Don't be calling Heather Lee.

Sorry, Heather, I'm thinking of selling an investment property I purchased in 2009. Okay. Seven years ago, in order to bankroll a larger property with option to subdivide and develop. Is it worth moving back in order to avoid capital gains tax? If so, how long do I need to stay there? Okay, Heather, we've got. We'll see if we can unmute you and have a little chat about this. Hey, Heather. Hey, Heather. No microphone. Okay. So, Heather, the important thing, we're not accountants, obviously. You did read that disclaimer, didn't you, at the beginning?

No, I didn't. But we can say it now. We're not accountants.

We're not accountants. So speak to your accountant. But one of the things about. I guess there's a little misleading about this capital gains tax exemption for your own home is that there's a number of things you need to be aware of. I think it's called the six year rule, which is essentially that you can claim one property as your home every six years, but obviously you haven't been living in that property for a period of time. And what they do, let's just say that you lived in there from 2000 to 2009, and then it's been rented out from 2009 to 2016. What they'll do is they'll look at the entire period in the capital gain of when you've purchased the property and when you sell the property, but more importantly, when you moved out and when it changed ownership, and it's when you move back in as well, you need to have a valuation done and it's kind of hard retrospectively to get the valuation done. You can get what's called indices from Residex that allow you or help you to back calculate what the growth has been in an area. But what they do is they essentially take a percentage of the time. So let's say, you know, three out of 10 years, you live there as a home, so you can actually only claim that percentage of the time as the capital gains tax exemption free period. So, as I said, I'm not an accountant. Speak to your accountant. But if you're going to move back in there for a month or for a year, it'll only be for a year as a percentage of that time that you've owned the property, that you'll have that capital gains tax period exemption free. So definitely speak to your accountant about it, especially because it's one of those things that I do speak to a lot of people who have made the assumption that as soon as they move back in, the property's their home and they can claim a capital gains tax. But my understanding is that's not necessarily the case. So check on that before you make any plans. If it comes down to a borrowing capacity point of view and they have to sell to have the borrowing capacity to bankroll or the funds to bankroll, then possibly a sale. Maybe there's an opportunity for you to borrow equity against the property to purchase the next property. Or potentially it's also a possibility that you go in with a JV person like John did for his business partner for development. So there might be some other options. But I would start with looking at what the property was purchased for in 2009, what the valuation of that property would be now. And then some predicted growth of what's going to happen in the next year or two, if that's what you need to do before you sell the property and then realise that it's only that period of time that you live in there, that percentage of the total time that you can have that exemption.

Yep. Caval gainstacks. Not like New Zealand. Be all right, wouldn't it?

I know, but it's so cold in New Zealand.

Yeah. Got lots of rugby on TV though. Laura's got a hand up. Let's try. Laura.

Hey, Laura, can you hear me? Yes, hello.

Good.

Fabulous. How are you tonight?

I'm fantastic. How are you guys? You good?

Yep. It's nice to know that people are out there and willing to talk to us. So it gets very depressing when we say Hello. And there's no one on the microphone, so.

Thank you, that's all good. Look, I'd love to pick your brain about a property. I have 8k south of Brisbane already and I've had this property since 2011 and it's had good capital growth. I suppose I'm looking to do a strategic cosmetic Renault on the place, but I physically cannot do it myself as I live interstate, I've got two young children. I love busy working, professional. How do you find a good project manager? And I've spoken to my property manager. I'm not so enthusiastic about. I'm not so keen about using them for many reasons. My question is really, how do you find a good project manager?

Yeah, it's difficult actually. I just completed an article for Australian Property Investor magazine on this topic and the thing is, have you renovated before, Laura?

I have not, no.

It's difficult.

Got a dad and two brothers that.

Are builders though handy, pack them in the car and head up. And what kind of works are you thinking about doing to the property?

Yeah, look, it's a 1980s ugly thing and nothing's been done on the property since the 1980s. So it really needs, it needs a good beautifying inside and out. So definitely new light fittings, kitchen, bathroom, flooring. I was thinking of rendering, painting the roof and painting the driveway and a few things. So pretty much, very much a cosmetic inside and out.

Now tell me just the basis of this renovation. Is it just going straight back to fundamentals? Is there scope for you make a profit or increase equity for at least $2 for every dollar that you spend? Is that pricing disparity there if you do do the renovation rather than the fact that it is old and dated and just needs a renovation?

Yeah. So I haven't done your ultimate guide to renovation course yet, which I'm hanging out to do. I bought the place, but. So I suppose I bought the place for 450 and it's now valued at 610. That was last year.

Yeah.

And that's unrenovated. And I've just, just by looking on realestate.com I see similar renovated properties are selling for around the high 600 to low 7 hundreds.

Okay. And this, this reno itself is going to cost what, four, what have you, what have you put in? 40.

I was going to, yeah, I was going to go buy roughly the less than 10%. So I was going to say 45 to 50K.

Yeah, yeah, I would say that. And you're going to have to. I'd say that would be just thinking about what? That. What's the suburb you're in.

Mount Crabbat East.

Yep.

Okay.

Wow, John, that came up on our maps, on our dot map when we were doing that. There you go.

I bought it five years ago, so I'm really happy.

Fabulous. Well, you're probably going to have to add maybe at least a 10% margin on top of that for a project management cost as well, because I think just hearing what you're planning on doing and that kind of price point, you know, you're probably not going to get out of it a lot less than, you know, 45 to 50,000. But having said that, it sounds like there is that pricing disparity there. You know, if it's worth around 610 now and you spend 50 on it, then we'd like to get it up to around that 710 mark. So if you think that there's comparable sales at that level. Fabulous. And the rent would go up as well, I imagine. Yes.

I went through with the property manager recently and with the renovations I suggested they said roughly an extra 50 to $60 rent a week.

Okay, good. So you're pushing that up as well and getting some equity. All right, so here's the thing. One of the. As I shared in last month's. Did you get last month's API magazine? I do.

I subscribe to it, but I haven't read it yet.

Okay, go to that fascinating article on me. No, I said actually profiling a remote renovation that I did. This is the exact topic so last year in Sydney and I share some thoughts on how to do that. But one of the things that I did do was use the agent to at least, even if I wasn't happy with them managing the works, just getting them to get access to getting the three trades in and out so that you could start getting some quotes done. So they're able to do that. A lot of rental management groups. And I know, I was speaking to my rental manager here down in Melbourne the other day. They actually have an older rental manager and she just loves managing people's projects, renovation projects, and she's, you know, it's just someone within the rental management team that does that for free. So it's just an extra thing that they do for landlords. So if you kind of have some doubts about your rental agent, maybe it's a good time to find a new rental agent anyhow. But there might be someone who actually can assist with that renovation. The other thing is a lot of the rental agents Also have teams that they recommend or project managers that they recommend or trades that they recommend. Now, some of the rental managers are a bit lazy and once you get on their books as the trade, you know, to help out around the place, they don't.

You're in for life.

Yeah, you're in for life and they don't really check up on you. So, you know, if you. If they do make recommendations, I would then go and ask for a reference from the last landlord that they know that they did the work for so that you know they're happy with the work. You should be doing the reference checks anyhow. But just from a project management point of view. But the other thing is that, I mean, I know we had one of our students here was doing some project management of renovations for a little while and she's west.

Pam.

Pam's. She's up in Brisbane. I don't think she's quite doing it quite at the moment, but she's been inundated. Was inundated with a lot of Renault. She might even be able to get us. Is Pam on? Pam's usually on. She might even be able to share some of her contacts etc with you. But another thing that you could do is just. It's really kind of difficult but if you've got a good builder and there's a recommendation of a builder or you and I often go through the local newspaper and just grab it online like the Southern Courier or whatever it is and find the trades that are in the back there that usually service that area. I would usually use one of those trades and then two recommendations or two referrals as my three trades that I would go out and get quotes. Often if you do get a builder to actually, you know, manage the entire project, they bringing in their team. So they've got a bit of, you know, a percentage of management fee, 10% or so of the cost of the renovation. But they've also taken a bit of a cut on those hourly rates and, you know, adding in a bit of variances as well. So there is that. That could be a worry. But we've also got a really good friend of ours, Jane Ells Bennett.

Yep. Who can do all the planning side of things for you.

Yeah. So she's from. I want to say hot spotting, but. Hotspace.

Hotspace. Yeah.

Hotspace.com and she's a. She's a kind of a renovation strategist.

Because if you didn't want. If you think about it, in. In kind of bits, there's the design side of the things that you want to put into it, which obviously you need to have a hand in based on what you're renovating up to. So going through and looking at the comparable properties in the area and making sure that you, you know, because you don't want to do too much either, but you want to make sure that you're getting up to that. What did you say? Seven round? Seven, ten Mark.

Yeah.

So there's that kind of design side of it where someone like a Jane Eyes Bennett would be really good. But then the actual organizing of the trades, once you know what's going in there isn't that hard. Doesn't really require a builder for a cosmetic renovation. So that's why a property manager would be the ideal person. And often they don't charge you.

So I mean, just, you know, I used with the ultimate guide of renovation, that Renault save card. I used that last year to get, I think it was like eleven hundred dollars off my kitchen electrical appliances that I just selected online. I went to Bunnings and selected the tiles. I went to Carpet Court and selected the carpet. I selected the Caesar stone, you know, from a local kitchen supplier and the, the, what do you call it, Door color and handles. So I did all of that from Melbourne and just had it delivered to the property in Sydney for a kitchen or a bathroom, et cetera. A lot of the trades, if you find a good trade and they're used to working with good trades, you can ask them for referrals as well. So for instance, if you speak to your property manager and say, look, I want to do this renovation. Have you got trades or have you got people you recommend that? And I want to do a reference check against, with your other landlords of how they've performed, but I want to be able to check on them and I want to be able to get the quotes, etc. And then I think if you've got one that everyone says this guy, everyone just raves about them. And you speak to that trade and you say, hey, do you have other trade of your center that you're happy to work with? You know, we're looking at doing this for renovation. I need someone to be doing the tiling as well and whatever carpet and stuff. You know, they don't need to talk to each other, floorboards either. It's just a timing thing. So. And that's the reason I said, have you renovated before? Obviously you can have a chat to your dad and your brothers, but that sequencing of events is really important. Like you don't Want to, you know, got a few days free next week, so let's get the floorboards sanded and then all of a sudden everyone else goes walking in over it to put the kitchen in the week after. So you know, we usually start from the top down. So you know, if you think about painting the ceiling so the water, so the paint can, if you have a bad painter fall onto the floor and then fix up the kitchen, fix up the bathroom, make sure if you're doing any landscaping, you know, they're kind of not the same people who are walking through the house. After you've done the floors as well, then do the tiling of the floors or do the carpet or the floorboards. So that's how I would try to run it in understanding who does what when and project managing it. You can project, manage remotely. You know, I'm a bit, I had a lot of difficulty in being hands off and so, you know, I was getting the guys at the end of every day to take some snaps for me of where things were up to and if things were running behind, I just made sure that they contacted the next trade and let them know that, you know, the floor's not going to be ready till 11 o', clock, don't bother turning up at 7:30. So you know, I kind of was managing that a little bit remotely as well and obviously with two young kids and being busy you can't do that. But I would definitely say be very specific on the specifications of the work that you want done and have be quoted against that because that's what variations we managed against and with the, with the builder or with the trade. So you know, I want six down lights and get the electrician to in this room to quote on that so that you're getting like for like quotes as well and obviously, you know, check their credentials. You don't need a builder to put a kitchen in or, or a bathroom in. There is some strange new renovation requirement in Brisbane you have to be aware of though.

Yeah, it's often over the price once you go above a certain, you know, $10,000, $12,000, that kind of thing requires a permit. I don't know how that's placed, but personally I've ignored it.

But you haven't renovated in Brisbane either.

No, I haven't renovated in Brisbane.

But speak to your agent about it.

I think too. Once you get one, once you can get one good tradesman, you can often. That'll often unlock the rest for you.

Yeah.

The other one I was going to suggest is Grey army, which I think is in Brisbane too, which are older tradies because often you can get a guy who's, you know, might be a former carpenter or just someone who's a handyman who can do a few different things. And that can be a good thing too for this type of thing where, where it's not a huge job. And sometimes it's actually hard to get trades to quote on these smaller jobs, particularly if they're busy.

Yeah.

And they're all good value, aren't they? They're great Army.

Yeah, they are. I use one in Melbourne. He's. He's fantastic. Can do all sorts of things.

He does everything for you, doesn't he?

Yep. Hangs doors and does a little bit of painting here, a bit of decking here and.

So I hope that helps. Few ideas. Yeah, that's excellent. I mean I can see the value.

In doing it myself as in being on the ground more. But it's just not possible at this stage in your life.

But make sure that you turn up before you sign off. And paying everything as well. Even though you can renovate remotely, I still suggest that you go and check on the work before it's all signed off. And just simple things that tiling you're going to have to clean down the tiles because they never do. It always leaves a bit of a scum, doesn't it? The, the grout. Brand new carpets are always fluffed up and you need to have a, you know, a vacuum, a good vacuum and.

Which the agents always. That's a good thing about a decent rental agent will have a cleaner that goes in and cleansing between tenants. Yeah, yeah, sorry, I had another one there but it's lost. I've lost it now. Go ahead.

Actually, I saw the other day there was a service. There's a service for getting your bond back for tenants. We will clean the house to the center that you can get your bond back guaranteed. So you know, they're probably used to doing things a bit outside the norm. But. Yeah, just that those last minute checks and there's always something that kind of has been left off. I know in that little reno I did last year that I did two actually. In the first one I did, we did a whole bathroom and they put in a new ceiling but we never included in the. The quote that the ceiling had to be painted. So I turned up to do a final sign off and there was no paint on the ceiling. So I spent six hours that night painting the ceiling.

Yep.

Waiting for coats to dry before I had to go and do a course the next day. So, you know, I just suggest that you do do that final sign off yourself stuff.

Yeah, that, that was the other thing I was going to mention because that Jane El's Bennett with the hot space thing, she actually gives you all of like down to the type of tap and she gives you a complete list of everything. So you could literally take that list and hand it to a, you know.

A handyman or she doesn't, she doesn't do the project management. She's more.

No, she wouldn't.

She would know people who would actually based in Brisbane.

Yeah, great.

Yep.

Yeah.

All right, I'll hunt her down. He sounds good.

Okay, what I'll do is I'll just put your email address into the chat here and I'll send you her details. I'll do an introduction, a warm introduction.

Yeah.

Thank you so much.

That's right.

Thank you. Okay, thanks Laura.

See you, Laura. Yeah, I mean that's good. I can see when you time poor things like that make a huge difference because it's better that you, you pay a little bit for someone to do it rather than, you know, do it poorly yourself or, or, or not do it at all.

Right, exactly. The only thing that you know is painful in those kind of like last minute cleanups of of course you've flown up there and you don't have the vacuum cleaner.

Yeah. Or a bucket.

You gotta go chat. Or a ladder. You know what I did once? I was living in Sydney and came down to do a quick check on the property and clean up of a property which I thought was gonna be quick. Quick. Todd and I flew down for the weekend and it was obvious that this place had not been cleaned to a standard that anyone would live in. There was being tenanted on the Monday we had didn't have time to put cleaners in. And I went up to the local hardware store and said, look, I need a ladder, but I only need it for three hours. And I had to get to the top of these lights and change out all these light bulbs. And I said, can I just hire it off you? Because I don't want it at the end. Oh, can I sell it back to you? Anything. And this guy's not like, you know, completely outside the box. No, you can't do that. I'm like, look, I seriously, I only need for three hours. I'll wear like socks. It's like, nah, can't do it. Mind you, at the same time this guy turned up and said, oh, you know, where's your Ladders, mate. And I said, okay, if you buy a ladder, I'll hire it off you for three hours. So he got a ladder of 50% and I was very happy.

Ah, that's a good idea.

Yeah, there you go.

That's good. Oh, Peter's got some questions here. I see you've got a couple, Peter. So I'm going to unmute your line and.

Hey, Pete. Oh, hi.

Oh, you're not Peter.

You don't sound. You don't sound like a Peter. I've got a sister, Peter, who doesn't spell it with er.

Yeah, I'm Sandy. Peter's sitting next to me. But I guess I'm going to be the one that actually does the talking.

Welcome, Sandy.

So I see you're off to Ballarat tomorrow. What's going on?

We are. We've been looking at that area to see whether we might start doing some minor. Our first go at doing a buy, flip and sell so that we can get a little bit of equity going. We've got equity in our property, but we want to start having a couple of. Got a cash flow, one that's making money for us, but we want to do the next one and just get some of the equity to pay off that one so that we eventually can retire in about five to six years, hopefully. So we want to go and look at something where we can do a small renovation just to get our toe in the water and not end up losing too much money and hopefully make even, you know, maybe $20,000 or something just so that we can make. Get some. Feel confident about doing what we're doing. So we were looking at an area locally, a bit more locally than Brisbane because that's the other area. I know, but we're living in Melbourne now, so it was interesting listening to you doing those remote renovations things. And fortunately we know a good builder up there, but at the moment we're not sure what area to buy up there. We have to have a bit more of a look. So I guess we just wanted to know what you guys thought about Ballarat as far as a place to go and look at and. Or whether we have to get it at a good price and make our profit up front.

Good questions. I think I'm getting feedback on their microphone, so I better persist. But one of the things that we, you know, I'm just trying to find some information right at this very moment, which I can't. One of the things that I would say to you. So you've got an investment property that's A cash flow property.

We do. We have a commercial property in Adelaide, in Whalla, in South Australia.

Okay, great. Oh, I've been to Wialla, probably one of the few people who have. Okay, I think the. Okay, this is where I'm going with this with a flip strategy. All of the information that we have seen, and you probably heard John Edwards on the podcast on the recently, you know, we talk about the flipping strategy and it is a really attractive strategy and a lot of people want to do it and mainly because there is is that attractive nature of being able to generate fast cash. And it burns my ears whenever I hear someone say I want to give it a go. And I know I'll probably lose money on the first one or maybe make a little bit of money because I reckon if you got the formula right, you shouldn't ever plan to lose money. It should always be a money generator. The problem that we've kind of discussed over the last few years with John Edwards ex Residex is that to have the pricing disparity between the unrenovated and the renovated properties and enough of that to be able to justify a renovation and cover the costs of a flip, you need the. If you assume the purchase price is about 100%, then for a cosmetic renovation to buy, renovate and sell and make a profit and cover your capital gains tax, et cetera, you're around about 140% and and at the lower end of the market, which invariably what we're talking about in Ballarat is as the median price, it's a lot harder to find that pricing disparity of between 400 and $550,000. By being able to do that by a $40,000 or 10% cost renovation, it's a lot harder in that price point than up in the higher price points because it's not that unusual to get from a 650 to an $800,000 in the same suburb property. So first and foremost, when you hit Ballarat tomorrow, what you're looking for is that pricing disparity in the same areas and the same type of property to be able to justify the flip potential. So look at the property worth the 400 and see if by doing a $40,000 renovation, you can get it up to that 550 price point. If there's nothing selling at 550 and the renovated properties are selling at 400,000 dol. Four hundred and eighty, the profit's not there. And you know, rather than you have give it a go and lose a bit of money and time in the market that, you know, the hard truth comes out beforehand. Does that make sense?

That doesn't make sense. So are we better off then looking somewhere in the Melbourne region where we. Because we can buy something at that, around the 650 and have the money to be able to renovate it? Probably, probably using the equity in their own place that we've got. We just went and refinanced it so that we could get some access to.

It.

Would be better off looking at. To find that price disparity in sort of say like I haven't looked yet, but footscray and places like that where you can still buy those properties.

Sure. I think the thing is, look, I met with a buyer's agent today who's very big on research behind their buying criteria and they're coming out with a product with some reports in next two or three weeks. And I was really pushing him on this and saying, what's in these reports? What are people going to get from these reports? And he said, for instance, if they buy this $20 report on Ballarat, it will either say buy, hold or trade. And I said, so what's Ballarat? He said, it's a trade. And I said, so what's a trade mean? He says a trade is it's only got legs if you can buy at the bottom of the market and sell at the top. And I said is it at the bottom of the market? He said, no. Okay, so don't buy in Ballarat based on what Dave says. Okay, good. Well, that's good advice.

We don't really need to go up there tomorrow. Maybe we should be looking somewhere else.

Only one source of data.

That's only one source of data. But here's the thing, right? So I would you need to verify all this information yourself. So, I mean, I've seen a lot of people, people purchasing and you know, we did a couple of webinars and some data reports with Jacob from Ripe House and you know, we're trying to find that some pricing disparity. So there's some areas in Geelong that came up as well. So, you know, and, and that I think I Ali was one of our purchases just bought down there last week. And, and you know, privacy. I'm not going to tell you what she you purchase for, but it is kind of within that price range that you're possibly looking at that may have the ability to flip. The thing is with flipping where you find most of the. Correct me if I'm wrong, John, you've been a flipper value is in that strategic structural renovation where you're really adding that big wow factor. And once again, it's even more important to have that pricing disparity there. But, but they're even harder to find.

Yeah, it's creating that higher and better use. And if you can do that by adding a bedroom or adding an open plan or if there's some other way to create the higher very use, like for instance, it can, you know, have a granny flat or splitter or potentially a subdivision or that, that kind of thing will also create a higher and better use. But yeah, it is a little bit of an irony of flipping that. It's inherently risky because you, it depends entirely on that difference in price between the unrenovated and the renovated price. And that disparity between those two is most apparent at the higher end of the market. So you almost, to be safer, you need to be renovating up towards, you need to be buying up towards a million to get that disparity. But the irony of that is if you're starting out at that level on your first flip, that's pretty risky business, you know.

So that's pretty scary.

That's right.

That's right. Yeah. So it is. So it is, it is a bit of a, yeah, it's a bit of a double edged sword that way with the flipping. But yeah, it tends to work better with, it tends to be an easier equation with a structural renovation because typically you're adding one or two bedrooms to it.

It.

So you can instantly look at comparable sales with, you know, four bedrooms compared to you buying a two or three. And you can see, okay, well we're jumping that bracket. So instantly we've got equity that's added there. We've forced the equity up. And if we look at those three and four bedroom properties and the renovated properties, we can see that, yeah, there's a good gap there. There's you know, 250, 300, $350,000 difference between what I'm buying for and what I would be selling for at that, that higher level. But the other thing you need to be careful not to do is cook the books and look at the best houses on the street and make those your comparable properties also because you can, what John Edwards talks about is, you know, if you looked at a house and you looked at a street and you consider, you know, from 1 to 10, one's the absolute dump of the street and 10 is the mansion that's completely over capitalized with a pool and it's five stories and that kind of thing. Then at that kind of 7 or 8 mark, or at the 70 or 80% mark, that's. That's where you should be aiming to resell. So you'd be buying at the 30 or 40% mark, and you'd be reselling at the 70, 80% mark kind of thing. So you're still in relatively safe territory there when you're looking at your comparable sales, if that helps.

All right. Yeah, it does a lot, I guess. We literally only joined probably a week ago, so we haven't had a real chance to read anything yet. So that's where we should backtrack.

Sandy, you're not. You're not part of the Ultimate Guide to renovation at this point.

No, we haven't. I just asked my. I just asked Pete to look it.

Up and find out.

Okay, no worries. No, the reason I asked there is. I mean, there's obviously a lot of material on this in the. In the course, but one of the things that we go through in detail and one of the advantages if you can make a flipping strategy work is you will become a suburb expert. Because the way we recommend and the process that we set out for it is really getting to know, well, starting really broadly looking at the suburbs that have got that disparity between the unrenovated and the renovated, and then getting down to the suburb level, spending a couple of months and getting to know that. That every single inch of that suburb going through all of the opens for inspections and just doing that process once will make you. You'll learn stuff that you'll never have to learn again, you know, because you. It's such a good education in property investing, but. Yeah, it is. As. As Jane said, there's a lot of people that take the flipping on the. Well, probably are flippant about flipping. So they. They don't do this. I have.

I have chapter 13. My book is why Flips Flop.

That's right. So I think if you're willing to take the time and be the suburb expert, there's no. There's no real mystery to it. It's. It's just a numbers game. If you can find that disparity and you buy at the right price and you can see that you're not cooking the books for the resale, it'll work. So there's no kind of magic trick to it, but it's just that most people aren't willing to do the research and they just jump in and they're, you know, more interested in picking the tiles and that kind of thing. And they get burnt.

Yep.

Okay, so is your suggestion then we should go back and start looking. I think one of the first videos is meant to be the dot map and go back over that and relearn and try and pick a suburb. It'd be good to pick a suburb because I've just resolved like I'm not. I've just finished work. My last day was yesterday. Oh, great. So now I've got time to become a suburb expert, I guess. But it had been. It'd be easier if it was a suburb expert near where we live.

Wouldn't that be nice?

Yeah, but within 30 or 40 k's, you don't have to be going miles all the time. Because if you're saying you've got to go to open houses and all those things, it does need to be something that's reasonably accessible to you. All right, so perhaps with your advice, maybe go back and look at the dot map and work out how we can look at what's going on in our local. Even in Melbourne, I guess in the outer suburbs I'm thinking of is more likely.

We did a hotspotting workshop in May. Now, is this data? Is this data? John, I'm going to ask you permission here. Is this data old enough for us to share now without compromising the people who are out there searching?

I think so, yeah.

Okay, well, share the screen. I'm going to show you some of the things that we pulled up.

I think I'm going to have to make you organize a first or a panelist first. So let me just do that.

So one of the things that we did this year is we ran four hotspotting workshops one day, hot spotting workshops. So people kind of said, we've learned the dot map, we know the reports.

Okay, now I'm going to bring it.

Across and we want to be able to. And I'm just gonna make my screen here. We show my screen. So we want to be able to get down to some suburbs straight away. So what we do in the hotspotting workshop is essentially in the first 40 minutes we did the dot map, which most people take a weekend or weeks to do. So we actually. Well, we start with the criteria. So. So we took the median price for Melbourne and we wanted to have a certain number of sales because we don't want to choose a suburb that there's only two sales a month because we don't want to be up against a lot of people. We wanted to be within 20Ks of CBD. And we wanted to have the rental yield that is at least the same or better than the median for that city. And we wanted to have 30% renters. So we created a really strict criteria around this. So what we did is we grabbed the 10 to 12 people in the group, we got dotting and we actually then looked at the dots that were there was a 2% increment in capital growth. So we came up with some suburbs then and then 1% increment.

It's in past capital growth, in past.

10 year capital growth. So we actually came up with these suburbs that potentially has some ripple effect, but we didn't stop it at the dot match. What we then did is we went and bought for the group a number of reports. So the predictions, reports from Residex I think so usually $250. So we purchased that and we came up with a number of the suburbs that met this very strict criteria. So, you know, less than that, median price, etc. So we had those and we had some growth for them that Residex had anticipated. In the next eight years they'll have 8% growth, for instance, for Mickelho. We then went and bought the Renovators report from Residex and that's another $250. We ended up buying like $1,000 worth of reports for this. And we went through and we then, and you know, obviously shared this with the people in the, in the course we went through and we had a look at the suburbs that came up in those as well. And what we were looking for there is what the Renovator report does, is kind of fast tracks for you, that analysis on the pricing disparity. So when I had been spending, speaking to John Edwards a few years ago and said, you've got all this information, we want to know in a street if there's enough differential to have a renovation done. He created this report just based on that. So he came up with those suburbs that had that pricing disparity. So we took that, we then had a look at a Ripe House report and we looked at Terry Ryder's hotspotting report so areas that he chose as well and we finally generated a list. Now the reason I'm not worried about people stealing this is because we did the same thing, as you can see down here in February in Melbourne and we came up with a completely different list. So we know that within a couple of months in a fast moving market that this changes completely. But this gives you an idea, you know, there was some suburbs that are coming up on the dot maps. There was some coming up on the renovator reports. There was some coming up on the hotspotting reports. And we went through and we did our analysis and you know, finally collated.

And all of these have been put through the filter of our criteria to.

So this is all through the.

These 30% renters and what else? At least 3% rental yield and lots, lots of stuff like that.

So I guess the thing is, and we, we actually. The module two in. What did I do there? Module two in the Ultimate Guide, Ultimate Guide to Renovation. That also we went through that and we have a spreadsheet there that we go and get information every month for people, don't we?

Yes.

And once we do that, we actually come back and we. I'm just trying to see if I can find the dot map that we.

Have, that spreadsheet also just to let you know if you, you know, the Ultimate Guide, you Just to answer your question too, Laura, it's in October.

October.

October. The Ultimate Guide to Renovation is going to be realized.

We're really bad at dates. Father's Day, etc. We realized we're in the middle of school holidays when we thought September.

Yeah. So just for your information, the Ultimate Guide to Renovation is just under two and a half thousand dollars. But we are coming out with a component of that. And the same thing that we use in the workshops is called our Location Masterclass spreadsheet. And we're in the midst of making that into an app. Well, it's actually been made into an app. We're just testing it and getting all the bugs out of it at the moment. So we're looking at releasing that as a, as a product later in the year, before the end of the year. And so that'll potentially be something that people would use straight from your Property Success Club. And it'll be a cheaper route. So you could go from your property Success club, buy that location Masterclass, which will be a course plus the software and do that, which would be a, you know, if you weren't interested in renovation, you just wanted to learn how to find a good place to invest, that'd be a cheaper way of doing it.

But we, we recently also did a top renovation Suburbs with Jacob Field Report.

Yes.

And revealed the top five. And we went through that formula of, you know, what, what would make a good target suburb and that criteria, those, you know, the distance from the cbd, the pricing disparity, the vacancy rates, you know, in demand property. So you want to be buying the three bedroom House in the area where the three bedroom houses are the most prominent property, not the two bedroom townhouses because it's a bit cheaper and you like the area and that ripple effect. So that capital growth from surrounding suburbs and the number of sales. So we want to make sure that there's a percentage of renters as well. So that was kind of like what we applied there. One of the other things which is interesting to note was that I recently spoke to Luke from Microburbs and I said, people are so frustrated because it tells us that, you know, in Sydney the median house price is a million. But within 10ks can you find something worth a million dollars? So he actually went through, there's pictures. Hello. See, we could replace that picture or the other. I look younger, I look too young. The other way.

If we change your picture though, you're gonna have to have a real picture of me too.

I know. There you go. Okay. No change pictures. So basically what I did is I asked him, I challenged him and said, can you find out for me using all that data that you have, what is actually the median price within 10ks, 20ks, 30ks and 40ks in these capital cities? Cities, because they're telling us it's a million dollars in Sydney and I don't reckon anyone can find anything within 20k. It's a million dollars. And if you look here, within 10ks Sydney CBD, the median house price is close to 1.7. Within 20ks, it's closer to 1.3. And it's not till you get to 30ks out that we're looking to a million dollar houses. This is. And I'll just pull it up so you can have a look. Units are similar, but this is. So this is what that Sydney price point looks like. This is what Melbourne looks like. So Melbourne, you know, we're talking about median prices are really around that million dollar house price. Footscray is, you know, I'm still seeing people, I've had a couple of clients buying Footscray in the last month and they're buying around that 8, 900 mark mark as well. So that prices have gone up there a lot further than might be reported with some older data. But you know, this median price around 700,000 is closer to the 15Ks out in Melbourne. So all those people who are from Brisbane, you know, we're up around that $700,000, 710ks out. And that's what we found when we did the hotspotting workshop.

Yeah, it was great. We had a huge list In Brisbane of suburbs we were just.

Yeah, we're getting four or five or six in in most states and Brisbane was like we're up to 20. We're like wow. Hot spot spoiled for choice Perth. So speaking to buyer's agents again, they're just starting to look at Perth which is interesting. So once again that price point. Adelaide and Canberra just so everyone can see all these numbers.

Peter would be. You just skip straight.

I know Peter Kelly says he loves Adelaide. Okay, there's Adelaide. Affordable. Still got some legs to it. Darwin, 7% vacancy rate I heard today. So interesting. And little old Hobart still doing 380 within 10Ks. So this is a really interesting article. Microburbs.com site too. Yeah, great site. We love it. But you can get a lot of information about, you know, the areas that you're looking for at Microburbs. Really handy. But I would suggest that I wouldn't be rushing out Sandy and looking at purchasing.

Put that in the chat. The Microburbs just for Peter there.

Oh yeah, sure.

It's actually Sandy.

I don't know if I'll put it in your chat. You have to share it with everyone else. But yeah, I think that. I think I'd be go to Ballarat, follow your nose and just do the questions and look at what the renovated and the unrenovated properties are going for. Just do an estimate of what you think maybe the renovation will cost and double that and see $2 for every $1. Just as a rule of thumb. Are you going to be able to add enough value if you're thinking about doing that flip Strategy? Is it 140%? Is there property selling at 140% of what you're looking at purchase price. That will try to cover your capital gains tax and costs associated with buying property and selling the property.

Okay, thanks for that. That was awesome.

What was the question again?

Yeah, ramble Jane off again. I hope that helps. But have a watch out at least even for the free video series which is insanely in value we had one of our office managers said I want to learn more about these courses. We made it go through the youe Property Success Club free video series. And she said, you're giving too much away. I kept writing notes down for what I can do. She said, what's in the course? Exactly. If you're giving this away. So we are very big on. We know that some people don't want to be us with us for the whole journey and that's fine. We want to make sure that there's a lot of content. So make sure you don't miss those videos. Especially the drone. Drone shot of me being in the first video. I think it's beautiful. Thanks a lot for your time, guys.

See you, Sandy.

Bye, Sandy. Thank you.

Yeah, you can't. I think it almost should be compulsory or either the workshop or the ultimate guide to renovation for people flipping.

Oh, absolutely. I just. The number of times as a mortgage broker, I speak to people and say, you know, they go, we started 10 years ago and this went wrong. I said, what happened? It's like we lost money because we tried to flip. We bought a mining town or, you know, and it's just spoke to a client, long term client yesterday. It's like I would have been out of this job if I had stuck to residential property. I went to commercial and it hasn't been tenanted in five years, you know.

Oh, wow.

And he's like, it's just been heart wrenching. He's like, I was supposed to be retired by now, so. Yeah, I know.

I think the good thing about that workshop too is we've got all hands on deck. So we get. Get through a mountain of work which you probably wouldn't do yourself. Even though we know how to do it. How often would you actually go and do that full process, you know, even both of us wouldn't do it, you know, too hard. But if you get a whole room full of people. Yep, it's great. Good experience. Good. Let's have a look at some hands. Not much, not much going on. Might have to wrap up.

Says, can you share the Brisbane hotspots? I can't because it was only last month.

Yeah.

So there's people still that paid the money to do the course that are actively buying in those hotspots. So with, with all due respect to them, I can't, unfortunately. Sorry.

Pierce says, what area? Where's your gray army is your grammy. It's north, so I think he's in Pascal. Oh, gonna. Looks like Father Christmas and still no. Oh, here we go. Try Lee.

I think we spoke.

Yeah. Oh, you there, Lee?

Hey, Lee. I tried to talk to Lee earlier.

Yeah. Hand went back up. All right.

I think this is Lee's question.

Yeah.

Do you want to read it and I'll pretend to answer it?

I'll give it a go. It sounds awfully like the other one though, doesn't it?

This is what I'm thinking. That was Laura.

Yeah.

Lee says I'm time poor with a two year old rather than two young Children and my partner and I work odd hours. We are happy to use a buyer's agent to purchase our next investment property. And we're wondering, where do you draw the line from doing your own research to accepting the buyer's agent?

Oh, it is different.

Yeah, good question. We have one investment property that we bought through a buyer's agent pre your property success that was solely on their advice and is essentially buy and hold. But we want our next one with renovation potential to accelerate growth. Fabulous. Oh, Lee, good question. Okay. We are big supporters of buyer's agents and there's a reason around that, is that often we find people waiting 612 months doing the research, you know, getting cold feet, worrying buyer's remorse, worries about, you know, have I got it wrong second guessing their research? And we find that buyer's agents, you know, if you've, if you've got someone and you're very clear on your buying criteria, you could have a Property settled within five to six weeks. However, they do cost between 10, $12,000 each. And I know there's some buyer's agents who are even buying $90,000 properties charging that amount of money, which is insane, but it's generally around about $10,000 that you'd have to consider. And one of the things that you have to be clear on is that you have to be clear on your buying criteria. So when you ask about the fact that how much do you hand over to them? It's a really great question because, you know, I've had clients have had bad buyer's agents experiences. Had clients and many clients have good buyer's agents experience. And you know, going to say that doing the workshop and, and going through and coming up with your core suburbs and then applying, you know, the fact that you want to buy in these areas and going to a buyer's agent, some buyer's agents listen, some buyer's agents willing to work with you with your buying criteria. Some buyer's agents are very comfortable in the very small area that they just work in. So for instance, Chris Gray, I used to be on his Sky TV show. He only buys in eastern suburbs. That's it. New south sales, Sydney, eastern suburbs, goes nowhere else and not interested in anywhere else. And you know, so going to him and saying, I'd like a property in Newtown is never going to work. So you have to be, I guess, clear on the buyer's agent that you use as well. But the other thing is, I think to some degree you have to be confident about your research and the criteria that you have and you probably have selected a number of suburbs that are on your watch list now. But they're on the ground every single day and they're talking to real estate agents and they're seeing price movements and they're negotiating. And a lot of what I believe buyer's agents bring to the table is the fact that they're actually negotiating for a lot of unseen silent market off market purchases. So they estimate 60 to 70% of the properties that they actually purchase, agents have come to them and said, look, someone's interested. They don't want to have people tramping through their house all weekend. They want to, they want their neighbors looking in. They just want a quiet sale. They want to test the market and see if people are interested. And a lot of the time they do bring that extra intellectual property that might say to you, look, you know, the $600,000 price point that we thought that we were going to get in Sunshine is no longer available in Sunshine. We have to go to North Sunshine to get that now. But they need to justify to you why they substantiating that move in suburbs. So we're going to this area because look, the demographics are same. There's still over 30% renters. They still have access to the infrastructure that you are attracted to the western ring road that you're attracted to in this other suburb. There's still some great streets that have the federation type houses that you can renovate up to value. Here's the unrenovated price point, here's the renovated price point. Here's, here's the comparable prices that we're looking at now. They should be able to justify to you based on all of that information why a suburbs change is promoted. What was the word I'm looking at suburb change that they're trying to make you to make. Because if your price point is $500,000 and you're out of that price point, they're not going to be able to find you the property. You'll be frustrated, they'll be frustrated. And you don't want to have a buyer's agent who's just going to, you know, you're next on the list. And he's the next on the property list for me. And I think without the research and the buying criteria that you get from your property success lead, you're going to be that person who says I've got $500,000 to spend, can you find me something? And they will. But if you go to them with that list of criteria, this is what I'M looking for. I want the renovation potential. However, I have to have the comparable sales that are 100 for buy and hold 130% of the value of the property. Flip cosmetic 140%, 180% if it's a strategic renovation with a structural component to it.

And then they'll just present you the properties that you're interested in, even down to the street level. Get out the map, get out a highlighter pen. Say, I want to buy in these streets and these streets and these streets. And yeah, I think you'll find out even at the kind of interview stage with them, whether they're. Because the ones that aren't up for that, that aren't used to working for investors will run a mile when they see that kind of level of expectation.

Well, that's with investors Choice diamond clients. I've, you know, recommend a number of buyer's agents that I've negotiated, you know, thousand dollars or so off their, their fees. And I was speaking to one last week and I said, you know, a lot of our clients are investors. They will test you. They will, they will push you for research and rightly so, you should be able to answer this. And they said, we just don't fit that market. We don't do that level of research. We work with homeowners. It's an emotional buyer.

The house buyers, they just basically, they track down the house.

We buy houses.

Yeah, house buyers and that sort. So they don't really know much. And I think there's a line there between. You can't abdicate that responsibility. You're the only one that really knows your criteria. Back the front. Now you can get the. Which doesn't take that long to do. I mean, to get educated on that stuff. You know, you can do it in a couple of weeks and narrow down to your criteria and then once that. But once that's done, you, you set, you can give that to the agent.

So your criteria, you know, go to your broker or your bank and find your borrowing capacity, you know, understand how much cash it's going to take to, to renovate. And remember, you don't have to renovate straight away. Understand, you know, our criteria is around. We want more than 30% renters, we want more than, you know, 100 sales a year. We want more than the median yield. We want less than a 3% vacancy. You know, we want indications that surrounding suburbs have had growth. We want indications that people have wanted to live in this suburb in the past.

And, you know, the demographic searches, strategy so if it's a buy and hold that, you've got the percentage of renters there and it's close enough to the amenities and transport and all those, all that kind of stuff.

So, you know, your buying criteria can be quite, quite specific and understanding that gives you a better set of specifications. Have that conversation and work out the buyer's agent for you. Incidentally, this buyer's agent agent I was talking to, they love first home buyers and they have like a half price cost for first home buyers that we've passed on to our clients. But just, you know, they know their niche. So, you know, if they're trying to be all things to all people. Doesn't work.

No, I had one just recently actually, a friend of mine that bought an investment property and I said, oh, so what was your criteria? And he said, oh, it was 650 grand. And the buyer's agent in the state, the buyer's agent was looking in these suburbs which are, you know, some in the western suburbs, some out the far eastern suburbs. And just that was the criteria. The, the, the price, you know, and that's what. But the buyer's agent just did what he wanted, like.

And your friend never thought about talking to you.

This is it. It's hard to be a prophet in your own land, isn't it?

You know, I, a friend of Todd's, exact same thing. We said, look, I, you know, they said over dinner party one night, we're looking at buying a property. I said, oh, I kind of do that, you know, and they're like, oh, yeah, yeah, read your stuff. And they rang up, they came over the next Saturday with champagne and said, we bought one. I said, what'd you buy? And I went this. Wow, that's fabulous. And then three months later, it turns out townhouses are going up all around it and everything went wrong. And you know, I was like, no, no, we're here to help. We give this stuff away for free half the time. Like you're making, you know, just tell me what you want, we'll do it for you. So, yeah, what's the thing? It's hard to be a prophet in.

Your own, in your own land. Yeah.

Yeah. Well, let's say there's another one about that. The one eyed man is in the.

Land of the blind. The one eyed man is king.

Yeah, well, we probably go there. But Lee, I hope that helps you because being time poor, especially with odd hours, especially with a partner, just be really clear, you know, you've used a buyer's agent before. You Kind of understand the process. Just be clear on what your criteria is. Depend on your own research to set that first criteria with them, but work with them in their knowledge and their on the ground experience to actually see if you need to be moving suburbs or moving areas, or if you are unrealistic in the areas that you're after. But get them to justify that too. I hope that helps. That's good.

All right, Arch's got a question. Investing with the strategy of using equity generated by the rising value of the property portfolio and repeating it by the use of extra equity created to buy the next house seems not to work anymore due to APRA's restrictions, coupled with the lack of wage growth and zero rental increase. I'm in a situation where I've generated equity with my LVR moving down from 90% to 60%. Now the service serviceability is an issue. What are some of the new ways of growing one's property portfolio?

Arch, I feel your pain. As you know, we've looked at this. This is actually a really pertinent question for so many people. And I know it's just, I mean, as a mortgage broker, you can imagine the, the pain that we've been through in, in the last year and the, you know, the horrible conversations we've had to have with clients about the fact that yes, you did have a $900,000 buying purchasing ability in February 2015, but now in July 2015 it's $400,000. And that long term portfolio plan has gone out the window. And I think we have to be really creative about what we do, Arch. And there is the opportunity obviously for potentially unleveraged joint ventures, etc. One of the things that John and I have been actively looking at, because obviously we have a lot of people that we know in our community that are affected by this, is actually looking at, hear it here first, looking at some type of crowdfunding assistance. So, you know, maybe, you know, if we come up with a property together or recommend a property or there's a property that comes from somewhere or other and we put it on a crowdfunding platform and everyone with as little as $2,500 and a financial planners sign off can invest in that property. So, you know, over the years we've been actively working with clients in building their portfolios in Investors Choice and you know, they've released $100 $250,000 in equity to be able to go and buy the next property. And what has happened is that we've found that that equity is not going to get them anywhere now. So a lot of them are turning as a second strategy to maybe buying in the self managed super fund. So continuing to buy property because the banks service you completely different. They just want to make sure that within the fund it can be paid for. As a self employed person, unfortunately they do look at your ability to make those 9.5% payments but as a PAYG person they don't, they don't go and verify your own personal credit cards, et cetera. So you usually have have more borrowing capacity but they have changed. ASIC and APRA have changed the banking requirements also in self managed super funds. So now 70% you can get an 80% interest only loan but most banks have come back to 70% interest only and they required you not to use all the cash in your super fund. So they require you to leave an asset value in cash of 10% of the value of the fund. So if you buy a $400,000 property you need at least $40,000 in cash and you need to work on at least 20% deposit or maybe 30% deposit depending on the lender. There's a couple of self managed super fund lending structures that I like the best and the lenders that I usually go to are those with offset accounts, A and P&ST George and Macquarie is trying to smarten up their product at the moment with an offset account but you know you're going to pay more in rate, in interest rates, etc. So there's a couple of thoughts maybe jv ing with people if your money is trapped in your property unfortunately and you can't get it out to get the equity to either go JV or go say a crowdfunding thing. So 2017 we'll be looking at some helping people out with that but we've just basically at the moment doing some due diligence on the different platforms that are out there. But and one of the platforms we're talking to is about to try to buy one of the new block units on the block that comes up. So you know there's going to be and I heard of another system today called Bricsx and you know that's going to launch in the next two weeks and that's an interesting thing as well. But if you are have got property and it's gone up in value to release that equity it may have to come down to a sale unfortunately. Yes, please, says Arch. I don't know what he's answering to. Did I ask a question? Why does that help Arch? I know it's upsetting.

Do you think, can you foresee a time when these APRA restrictions will go away again?

No, no. Look, I don't necessarily disagree with them, to be honest. As a mortgage broker, it just has created so much pain in. And we're getting policy changes daily at the moment. So you know, we've had, had just this week there's been two or three policy changes coming in and you know, Heritage has come up with this new guarantee policy today and you know, just keeping it. I don't know how people would get their own loans anymore. Over 60 or 58% of loans were written by mortgage brokers. And a good broker spends a lot of time just keeping up to date with policy changes. And banks are trying actively to get owner occupier cash in. So you know, they're doing rebates and $250,000 frequent flyer points and you know, there's everything happening at the moment. But at the end of the day.

That lower LVR is just something that investors for the foreseeable future. That's the new landscape.

No, the problem is, is that they're assessing existing debts at principal and interest over 25 years usually. So the, if you've got a 30 year loan and 5 years interest only, they'll take it over 25 years and they'll assess it at anywhere between 7 and 7.4%. So most lenders are accessing at 7.4%. Strange things. Some lenders have stopped putting negative gearing into their calculators. Others, you know, they're not taking 80% of commission and bonus anymore. They're taking 50% of commission and bonuses. So, you know, get your broker to work for you guys because there are. Yeah, just because one bank says no, you can't borrow something, you might have a commission or a bonus scenario and other lenders are saying yes. So we still have a couple lenders up our sleeves that are taking existing debts at actual rates or buffering it by 30% which is getting people a little bit more borrowing capacity. Then right now, you know, my priority is just getting cash out for people. So they, you know, they do have that sitting there. As rates come down. You'd like to think that the banks have bring their servicing rate down. Not all of them do. A lot of them are just at that benchmark at 7.2 or 7.4%. And so I don't see that changing. You know, the fact is interest rates are really low and people have built up so much equity in the property and all of A sudden investing looks easy and a lot of people had been buying property. And so those, you know, the APRA concern was there was over 10% growth of investor loans, you know, 20, 13, 14, et cetera. So people were buying these investment properties. And I was just reading the report from RP Data yesterday. You know, over 60% of those investment properties are units as well. So they've got the exposure to that off the plan or the new unit kind of dilemma. And in addition to that, if you think, you know, today, interest rates, you know, 4% interest rate, the long term, 20 year interest rate, 7.5%. So at some stage we're going to get back to the long term rate. Maybe not fast in this economy, but you know, five plus years that could happen. And if that does happen, then, you know, you've got all these people whose five year interest only loan comes up at a time when the interest rates are seven and a half percent. They can't afford the principal and interest repayment on maybe the 4%, but they can't afford it on the 7.5%. So they had to sell their property. So all of a sudden there's all of these properties for sale that people are going to be flogging off, which is then going to demoralize the market and people are going to, you know, there will be that, that bust problem. So they've kind of, you know, preempted that by creating some rigor around lending assessments. And just talking to this buyer's agent today, he was saying that one of their biggest concerns looking in the national market was the. What did he say? He said it was the amount of defaults of loans.

Okay.

And I said, you know, I just haven't seen that. I've had one default of one of my clients. I rang them recently and said, I look at, I saw that you didn't make your repayment. Is there a problem? And he just changed over his direct debit and he forgot the dates and so it was all fixed, but I haven't seen that. And this buyer's agent saying, you're one of the few who actually substantiates everyone's things. There's brokers out there putting in old pay slips at things that people couldn't afford the loans and they are falling over. And we're having now to have the conversations about your living expenses down to, you know, how much you're spending on all of these little items, which is, you know, almost invasive. But you have to make sure that people can eat as well as Live as well as have a property. So, you know, it's responsibility, it's been put on. So it's a pain.

Let's call it a 10.

Okay, I rambled again. All right, Claudine, she says, hi, guys. Great call. Thank you. You. Tonight, I've done my dot map for Sydney. I'm having trouble finding areas that aren't booming with crazy prices, and I haven't found any with the right price differential between renovated and unrenovated properties. In fact, in many areas, these seems to be a premium for unrenovated properties. Am I chasing a pipe dream in the current Sydney market? I don't know. Claudine wants to have a chat to us. But Claudine, you know, you really are at the top, top of the Sydney market. And what you're seeing in those unrenovated properties, selling at a premium is something that. And I saw around 2002, 2003, and it was always like, people wanted to put their own stamp on the properties and they thought they were going to make money and they just disregarded the fact the property next door that was already renovated was selling cheaper or for the same price. And often, potentially, there's an opportunity to pick up that renovated property and save yourself the time and the cost and the worries of renovating. But I think what we are seeing is there are crazy prices in Sydney and it is getting to a concerning point. I mean, we saw that data from Microburbs earlier where, you know, within. There's nothing at less than a million dollars. You know, within. Claudine's got a screaming baby in the background. Oh, my goodness. You poor thing. But, yeah, it is a. It is a worry. And, you know, your dot map possibly has pulled up a lot of areas of interest. I mean, I know when we did that dot map exercise, John, we actually pulled up. We actually extended it out to quite a way out to 30km from. From my recollections.

Yeah.

Because we know that Parramatta is also cbd and we were looking at that as well.

Well, and just because of the price. I mean, you saw it there with a median. It was 30Ks before.

Yeah, exactly. Exactly. So, you know, that was. That was kind of concerning. Some of the areas that were coming up, though, in the renovated report, I'm going to read you some, just to give you a little heads up that were coming up with that pricing differential were areas like Quakers Hill, Guildford, West Hoxton, Hinchinbrook, Bonny Rigg Heights. I think Bonny Rig Heights is one that we actually went through and did a bit more analysis on but you know we were actually going out at one stage to 40Ks to get, get to those areas that had that disparity as well. So you know, I think, you know we were looking at those Fairfield lease and Guildfords but they're still very expensive. So it's, it might come down to the fact that it is the top of the market there and things are going a little crazy. I am reading some reports to say the market is going to slow and potentially come to a 1 to 2% growth in the next few years. Someone today said it could go back 5%. I mean if it's gone up 20% back 5% it's not going to upset anyone really. But the fact of the matter is.

They'Re making that prediction two years ago really strongly and you thought geez, enough people are making that that it's going to come true.

Yeah.

And we've just kept on going and.

It is if we still got growth going on there. And you're just reading the latest reports in the last couple of days. So you know, I think that my long term, you know, philosophy is that you look over the 20 years and Melbourne's outperformed Sydney over 7.5 compared to 7.2% growth and is more affordable and is supposed to have the population in the next 2050 to be the biggest population in Australia and they're spending money on infrastructure and is still, you know. Well Sandy, they're talking again about that, that fast rail between Ballarat but you know there's all those, those kind of things that are happening as well. So you know, I think if you are finding those prices crazy then and people are overbidding then it might be time to wait. You know I don't, I can't say the prices going up that much more actually I can't see the growth continuing. Where the growth is, prices will continue to go up because they, the growth will come back but it might come back 1 to 2% which means that properties are still going up in value. Right. So you know, it's not like the properties are going to go backwards in value anytime soon I don't believe but we have, you know, we're touching high units unemployment, we don't have the mining industry infrastructure or costs, there's concerns over deficits, et cetera. So yeah, we have all those things and obviously RBA is worried about stimulating the economy so they're putting rates down to try to do that. Unfortunately the banks haven't passed it on to make everything easier for us. So I think there's enough things to be concerned about to go if things are feeling a little crazy and you don't feel that you, you can actually achieve the strategy you want. A, it might be time to go somewhere else and have a look somewhere else, or B, it might be time to sit back and just regroup and have a look at what your strategy is. Those pricing disparities, you know, they, I know they do exist, but they do exist in the higher end of the market. So, you know, you might be outside your borrowing capacity. So does that help?

Help?

Claudine, I don't think it's a pipe dream, but I, I, I do think you have to be really wary about where you're buying. And we try not to pick the market. We try to say, buy the best property you can in the, in the. In what? When you can afford it, but sometimes you have to move on to another market.

Yep.

That was it.

There you go.

Thanks.

No. Hands up, Jane. So. And no more questions.

Okay. Well, now tell me, anyone interested in coming along, having a look at John's development? Any, well, Melbourne people or so maybe on the third afternoon of the third that could have been. Okay, so there's a couple of people interested if, if you are interested in coming along, just put your email please into the chat and we'll promote things on the Renovator network and the your property success club, private Facebook pages as well. And apparently some people can do it if it's on a Saturday. Lucky it's not fast.

Yeah, well, wait until your dad hears about that.

I know. Big trouble. Anyhow, I'm sending off the Wilbur Smith book tomorrow, so I should be good. God knows how long our Australian post takes, but anyhow. Okay, guys, well, look, once again, it has been a blast. We kind of let the cat out of the bag a bit, didn't we? But those who are in the Renovator Network, The Ultimate Guide of Renovation. Watch your emails in the next week because I think we're probably going to do a renovation hot spotting workshop maybe in Sydney, I think. Yeah, in September.

That's, that's been the, the greatest feedback we've got that we want, they want another one in Sydney, but we're thinking of doing a more slightly more renovation centric1.1, which would be interesting.

So watch that. And the Ultimate Guide to renovation might even, like I said, a lot of people are really interested and we've just moved it back a month. Maybe we'll have to do an early bird Special or something. Give some of our closer community people.

Yeah, if you're really. Particularly if you're looking at buying. If you. I mean we. The idea is we do it twice a year so we can all go through it together. But if, if you know in the case of Sandy before, which is looking right at the moment or anyone else who's looking and really need the information right now, we can make exceptions. So just give us an email.

Don't tell anyone. Yeah, just our close community here. Hundreds of people listening. Okay. So, yeah, so that's the things that we came up. So today we realized we were promoting once again in our September Ultimate Guide to Renovation in the middle of school holidays. So hence we're going to move it back a month. So just a little bit. Yeah. Keep it to yourselves. Maybe. Maybe early access for those who really need it. And for those in the Ultimate Guide to Renovation where we'll be looking at maybe around the 20th or so of September, a hot spotting workshop, renovation centric one for a small group of people in Sydney. Back to Coogee, I reckon.

Yeah, Coogee's great.

But we'll just test and see where people are interested in buying because it might be a Sydney Brisbane Melbourne or we might just general do one for a couple of different cities.

Couple of people said Sydney in the chat.

So perfect. And yeah, so that's about it from us. Big month ahead. Please listen, rate and review our podcast. We're back on track. Peter Kalizos is fabulous. Bernard Salt will be up in about two weeks. He's fabulous too.

Yeah. Really encourage you to listen to the latest one with Peter. That's. I really love that. I've listened to it twice now.

I find myself listening to it as I walk towards work and giggling along or going, oh, that's such a good point.

Gee, I'm funny.

She says, no, I don't.

But anyhow, he was, he was really good though. He's got a lot of. Yeah. Such a broad range that he just like. He's got his finger in a lot of pies, hasn't he? So it was actually a great guest because he could talk to a lot of things.

Well, you had trouble getting it down from an hour and 15, didn't it? I listened at time and a half for everyone.

Yeah.

Because I, I just want to get through things. Things as fast as possible as you can do on itunes.

Yeah, lady just typed in. She really enjoyed it too.

Oh, good. Excellent. Okay, guys.

Well.

Sal, it's gonna be. He's gonna miss our inspection well, we might have to let.

Oh.

She'S gonna be in Melbourne for the 4th or 10th. Maybe we can do a special inspection of your development for others during the week. Okay, guys. Well, lovely chatting to you once again. As you know, I should probably be reading something here. As you know, there's a number you should be ringing 137619. If you can't make the call, you know, and we really are here to help. So we know that everyone can't get on this call full time live. We also know that a lot of people go back and listen to three years worth of calls before they actually feel ready to ask a question. We're friendly. Everyone's friendly here. You can be anonymous if you want. After we read your name out, we can forget it. And we're. We're genuinely here to assist you on your journey. So please post your successes in and share them with us and jump onto the youe Property Success Facebook page because, you know, our measure of success is your success. And we want to celebrate that with you rather than be someone who's just rambling on and selling stuff. So it's great talking to you and to everyone here is to your property success.

See ya.