Your Property Success Mentor Call May 30-05-2019

Hi everyone, it is Jane Slagsmith here and welcome to the May 2019 question and answer monthly call. Well, it is a cold all day here in Melbourne and as always, I have John Hubbard with me by my side. John, I'm going to throw to you and let you go into that very exciting disclaimer.

Yeah, yeah, thanks for that. Yeah. So we just need to discuss. Hello everybody. We need to start with a disclaimer though. So in order for us to share this information openly in the way that we do, just need to make the disclaimer that we're not real estate agents, financial planners, lawyers or accountants and are not liable for any loss, damage or misunderstanding caused by reliance on any of the information provided or inferred over to you, Jane.

Thanks, John. Well, it has been a big, big month here and I have to say, you know, they say, John, that a week in politics is very long. A week in real EST feels even longer at the moment because we have the election. Sorry.

So they've been pretty intertwined recently.

I know, I know. Well, I don't think anyone actually predicted that the Liberal Party would retain government. And in actual fact, from what I understand, the bookies actually started paying out the day before the elections to those who had actually backed the labor government. So there are millions of dollars behind and just goes to show you can never, never know what's going to happen. And having been brought up on a racehorse stud, the dark horse is one of those that always comes from behind and takes over and surprises us all, which Scombo has done.

Yeah, there you go. So why don't we start there, Jane? Why don't you just let us know what we've just avoided in terms of penalties for property investors.

Yeah. So I think the really interesting thing around the, the election, and I am by no means a political person who follows politics, unlike my husband who has studied it for many years and is an avid follower and fills me in every now and then things that are of interest. But you know, I think the thing that was really missed around this election is that people really looked to their hip pocket and some of the policies that the Labor Party were putting in place specifically around how they were going to treat pensioners and you know, sorry, those with the superannuation and how they're going to look at franking credits and double taxing the those who have retired and you know, arguably had worked very hard all their life to get to a position where they could almost become self funded retirees and that was really going to hit their hip pocket. There's also the potential of the negative gearing being changed to only being new properties. And we know that, you know, Keating brought that in many years ago, it didn't really work and they reversed it. But that has significant consequences. And, you know, we did the numbers on this and it was looking like a typical family on a typical household. So it cost about $12,000 a year. Now, if you're investing for 10 years, you know, that's around about $120,000 that it's going to cost you. There's, there was arguments around the fact that, yes, if you got in quick before January and you grandfathered, which means that those costs were going to not apply to you, you were going to have the current negative gearing policies applied to you, that it wouldn't affect you. And the fact of the matter is that's not correct because at some stage you have to sell and you're obviously selling to potentially another investor who is now not going to see the attractiveness of the property that you have because they can't apply negative gearing to a homeowner. So, you know, there was a lot of implications there. Once again, an immediate hip pocket type of implication. But the bigger concern and the bigger cost would have been that substantial change to the capital gains tax, which in actual fact was going to 50% cut the capital gains tax benefit that you would get, which means that when you sell a property, rather than taking only 50% of the capital gains, if you've owned that property for over 12 months against your current income at your current tax rate, they were going to take only 25%, allow you to reduce it by only 25%. Now, over 10 years, if you had that typical property that we just talked about for that family who once had got the negative gearing of that $120,000 affecting them, it's over $500,000 of that capital gains tax change was going to be. So we're talking significant changes. And I think that's potentially where the policies of the labor government came a bit unstuck. You know, they really concentrated on climate change. And obviously climate change is very important and something that we need to put some effort into and understand further. But it's not touching people today in the hip pocket. So, John, that's. That was my take from it. I think that the sentiment of the average Australian was read wrong. And I'm so glad to see that those policies didn't come into play. And as a mortgage broker myself, I'm really glad that, you know, the Rates have just come out this month. 59% of all Australians use mortgage brokers for their home loans for competitiveness. You know, range someone else to do all the legwork, to do the evaluations for them, to find, you know, the most appropriate lending for them and help them put their lending together. You know, that was going to decimate the mortgage broking industry. Labor had actually put in their changes on how compensation would have worked. And I know for the mortgage brokers and that I spoke to most of them are going to leave the industry. So that would have just absolutely once again affected the average Australian in trying to get, you know, the most commercially viable product for them and setting them up for the future. So I've got to say, hand on heart, I'm glad that what happened, happened.

Some, some pretty bad outcomes policy wise, really, wasn't it? And what I really find, I guess annoying about that is you end up targeting people who are trying to live independently of the state, they're trying to better themselves and you end up penalizing the people you should be really incentivizing. And yeah, I agree with the climate change. It's criminal what both sides have done, dragging the chain on climate change. Both sides of politics have been totally ineffective. But I guess the, the introducing bad policies that target people that are trying to get ahead. It's not an either or argument, you.

Know, I know and I mean you just look at, I mean obviously it was funny because I was sitting down with my husband and my 11 year old son last night and he has to do a topic for his history project. He's in year six and he wants to do, he wanted to do the Cold War. And his history teacher said the Cold War had nothing to do, Australia had nothing to do with the Cold War. And so we kind of begged to differ on that, that point. But what we were saying is when my husband and I were young, we were really worried about the Cold War. That was a big deal. You know, will Russia and America bomb each other? I remember I was at boarding school in Sydney. The USS Missouri came into the harbor and kids were lined up around the corner to the phone to ring their parents to say goodbye. You know, if this bomb goes off, we're all dead. And I'm glad you're living in the country because out in Dubbo you'll probably survive the radiation. That was a real fear for us. And now we have kids, you know, marching around climate change and the reality is, you know, if we do reduce our emissions, we're 1% of the emissions. There's three major powers that will not sign on to any climate change changes and until they do, you know, we can't make a big deal. And unfortunately, I think putting an entire platform around climate change and that long, long term effect just didn't pull out. So I'm glad, you know, a lot of people who don't vote for Liberals started voting for Liberals and I don't think they will again. But I'm glad in this election that that result came about and I think that we'll probably say a fiercer and more relevant Labor Party come out of it and more aligned to what the Australians need for the future. So that's my thoughts. But I'm really glad that things didn't change and we don't have those big changes coming to play 2020. But John, there are going to be big changes anyhow out there.

Are they?

Yes. We have been doing lots of research about the next six months and what we think is going to happen in the market in the next six months. And I have to say there are pretty exciting times ahead for those people who are willing and able and have the confidence to act.

Yeah, I think it's, it's, it's, there's a, already a degree of confidence coming back, I think, which, which is exciting and signs on and I think you can talk to this better than, than I, but signs on the horizon that interest rates, some changes might be happening there, some loosening up with the lending. So I think all of those things and some experts coming out making some more commentary around the market and the recovery. So I think while we've avoided the rush to the, you know, to the property rush that we expected ahead of negative gearing changes, this, this, that window of opportunity that we've got right at the moment with the discounted properties still might not be open for very long, you know, and often when you hear that things are picked up again, it's, it's too late because we know that there's that huge lag between hearing that information and actually the market recovering as it was on the way down. You know, when you think of the, the downturn started all the way back in July 2017 in Sydney.

Absolutely. And you know, I know that we've got quite a few people watching this live and there's going to be more people watching this subsequently. If you actually have any questions, this is your time to type those questions into the box or go to the link above where you're on this call at the moment and please, you know, sign in there and you can come on live and be on the webcam. You know, these calls are for our Ultimate Guide to Renovation Student and staff, our Investors Choice Mortgages clients, our location Masterclass students, and all of those people who are part of your property success club. So we are here every month and we are going to answer your questions that you have and pick up on some of the questions that have been in the Facebook page over the last month as well. So, John, I might just take that conversation a little bit further regarding what we have seen and what we anticipate to see in the next six months.

Months.

So, you know, we've been doing quite a lot of analysis on the market at the moment and where the market actually sits. And, you know, we did start seeing in July 2017, the Sydney market started to decline. Now, if you think about it, you probably saw in the media around January 2019, a big. All the media that came out about that saying the market is declining. So that's around 18 months later. We are now about two years into the Sydney market decline and around about 18 months into the Melbourne market decline. Now, on average over the last 30 years, these declines do last between 18 months and three years. So we are actually potentially halfway or even three quarters the way through that market decline. Now, if we think about this in terms of opportunity, that would mean that as the market is going down and you have less and less competition, then this would be the time to buy. No one can predict the bottom of the market. But let me tell you this. The RBA governor never comes out and indicates their hand on how they are going to vote regarding the interest rates. Interest rate has been on the same rate for the last number of years. And the governor, RBA came out last week and said there will be a cut to the interest rates at least one. Yesterday, Bill Evans from Westpac, who arguably is the most successful predictor of interest rates, has now increased his predictions of not two cuts this year, but three cuts this year. So we're talking about three interest rate cuts. Now, by itself, that might not seem like a big deal because we know the banks rarely actually pass on all of the cuts. If they do, and after the Royal Commission that came into banking and finance results from the Hayne Report that came out earlier this year, we know the banks have been caught up in a significant amount of penalties, millions of dollars of penalties and fines for, let's just say, dereliction in duties and the amount of changes that would have to go into place to compensate, to bring them up to what The Hane report recommendations are could cost them a lot of money. So arguably they could complain that they have all these costs on their board and hence they can't pass on the rates. But having said that, I reviewing some mortgage rates yesterday for clients. We have got homeowner principal and interest 80% loans at the moment around about 3.4%. And one of the lenders came out this morning with a two year fixed around about 3.4%, about 3.7% for investors. So there's some insanely small rates that are being released at the moment ahead of that RBA cut next week. Now the most exciting thing we know about what happens post the rate cuts normally to property prices is in within five to six months we start to see the market start increasing. Now once again reading a report yesterday, this time from Dr. Oliver from AMP, he actually suggested that it would be three months before the rates start, the property prices start going up. So here we have rates going down, borrowing capacity, potentially going down, your borrowing capacity, sorry, going up because the rates are going down. We also have the bottoming of the market. So we're kind of going through that process at the moment. Last weekend clearance rates started increasing in Sydney and Melbourne. So more people are going to auction at the moment and putting their hand up, more competition. So we're seeing some really positive indicators there. But throw into the mix APRA coming out and saying, well we think we've been a little bit too harsh and telling that the banks should actually use a borrowing capacity servicing rate when servicing how much debt you should take at 7% because there's 3.5% interest rates out there at the moment. They've actually indicated that they're going to reduce that as well. So that's, that's under review at the moment in the next six weeks. So all of these things are going to increase people's borrowing capacity. I know people have been spending sitting on their hands waiting to do something. I strongly urge you, do not try to kick the bottom of the market because it is well and truly within sight and the market will start returning. So with a Trident strategy, John, we talk about regularly the Trident strategy. We talk about those three prongs. The first one is discounting. So finding a property that is below the market value. This is when the market's starting to go down. There's the buy time. Buy time is around about now. Let's start looking at this buy time and buying at a discount. The next part is buying in a capital growth area. Now you guys, you've got Location Masterclass, you have the suburbs lecture software. You have the best information at your fingers to be able to determine where to buy to have growth. So you can take it on that entire journey up that growth cycle. And then we have renovation and renovations and a push up your rent and get you some quicker equity so they can go and do it again. So, John, perfect time to buy it is hashtag buy time.

I think the, the beauty of the titan strategy too is, I mean now the discounted, you know, buying below the market really comes into its own because you can just use all of those strategies that we typically use anyway. You know, multiple offers, you know, ways to filter the properties, having a negotiation plan, diminishing returns, all those things that we've been talking about for years and years. But now it's a buyer's market, so it's the ideal time to be using that stuff. The beauty of the other two prongs of the strategy, of course, is if you can do both of those things, let's take the renovation to add equity. So you can for instance, buy a property below the median and then add another 10 or 20% in value to that property via renovation. You know, $2 for every minimum, for every $1 you spend on the renovation added, then you've got quite a big buffer. Even if you're worried about that market continuing to go down, there's some predictions it might still keep on going by another 10, you know, 9, 8%. A few different opinions there. But if you're buying below, you've got that buffer automatically. If you've, if you've added equity again through the renovation, you've got that extra 10 or 20% buffer that you've, you've added. So you're in a really good place. And if you've bought in a, in a high capital growth area, when the market does return and we, those suburbs, based on their capacity to outperform all of the other suburbs at the same price point because they've got more ticks and more boxes along all those drivers that we talk about, then it's, it's happy days. You know, these, this is just golden opportunities for people to get a free kick, really. And I think there's people out there that are at the other end of their portfolio that going, ah, why didn't I, why didn't I get a downturn in my portfolio kind of time.

You know, actually I was responding to some of our support questions last night on our support platform and there was a gentleman on that and he said Jane, I love you. I'm 72 and I've bought like 15 properties over the last 35 years and got rid of them through some of them through divorce, blah, blah. He said, I send my three sons all of your material because I'm trying to get them into the market and now is the time. I'm like, yes, finally. So hopefully they take your advice. Well, I guess that's. That leads us into another point, John, is that we, you know, we're here to service you guys as our community and give you the best possible information. We're not selling any properties. So you know, us telling you to buy doesn't mean go and buy our house and land developments that we've got, you know, hanging out the back of the, the Gold coast or middle of Timbuktu. So that's not in our interest. But in the last week, you know, I've started doing some daily Facebook lives on the youe Property Success page. So go to the main page, not this private Facebook group and talking about some of these issues and things that are coming up because I really think this is the time to buy. If I can tell as many people as possible, I will be shouting it from the rooftops about it. But one of the things that I talked about in one of these talks earlier this week, John, was Hobart and the Hobart market. So that might be interesting for some of the people if we just go into a little bit more depth on that.

Yeah, for sure. Yeah.

So if you didn't see the video, I was in Hobart last week. I had a wonderful week away with my husband, 10th wedding anniversary, which is very exciting. Don't do the maths and why I have an 11 year old son, but there you go. And on that video, I guess one of the things that I shared was the fact that there is a significant issue happening down in Hobart at the moment and that is around homelessness and around the fact that people can't get rental accommodation. So there's some really heartbreaking stories that came out. Now as an investor, you put your investor hat on. There's been a lot of people from Sydney and Melbourne from an affordability point of view, go and buy in Hobart in the last number of years and we have seen over a 35% increase in property prices in the last five years. Just as a heads up, the rule of 72, if you want to double your money or double the value of your property in 10 years, you need at least a 7% growth. So 72 divided by 10 years, 7.2% growth. So if we look at a five year growth, we're looking, you know, we're actually looking at like at least 50% that we would want in that market to be able to double that value. So it's not really on track for that. But in the last couple of years it's had some really good growth. Now what has happened is a lot of these investors have gone down to buying Hobart and they've converted from a cash flow point of view these properties into an Airbnb property. And because of that, it has taken so many of those properties off the market. And because those properties are now off the market, typical renters have got less properties to rent. So their rent has gone up. So there was someone who had taken their landlord to court who had put their rent up substantially in the in January and they won the court case because the, the landlord had put their rent up too much, according to the judge. But there is as 10 to 15 people, you know, signing up and putting applications in properties and it's just heartbreaking. Some of the stories, John, that I read about, like families coming over with a deposit from Perth to, you know, get to know the market. Their rent is 500 bucks a week. The average income in Tasmania is 65. Household income is $65,000. So if you take out a little bit of tax, you take out, you know, 500 bucks a week for accommodation, another, you know, 25 grand a year, you know, there's not a lot to live on for a family, you know, four. So there's a lot of expenses there over. There's 500,000 people who live in Tasmania, over 220,000 residences and 92 of those res businesses have claimed assistance for their energy bills. So there's a lot of people doing it really tough down there. Does that make it an economy you want to invest in? That's the question that I posed. From a point of view, there's some really good growth that has been experienced, but I don't think we're probably going to see that in the long term continue. But if you're buying in Hobart or you have bought in Hobart for cash flow as part of the cash flow component of your portfolio, and you have your growth properties elsewhere, then it might be an area that you invest in or hold in. So some really interesting analysis and some things that I saw down there in Hobart. But once again it puts the question up. Where you buy is so very important. And buying for the long term, John, not just buying for the here and now.

Yeah, it's really Interesting, isn't it, that in that case Airbnb has had such a huge impact that short term renting had a huge impact. And you imagine that the market will find its balance or detente over time and it's pretty hard to predict, I guess what that'll be in 10 or 15 years down the track. But I guess it does show you that in a small market like Hobart, for instance, that one thing can tip the scales quite a lot. Even as we saw in Tasmania's economy back five years ago when they had a government that was very proactive and economy really started coming along, you know.

Absolutely. And look, the Tasmanian budget came out on Tuesday and it was the first time the, the government has gone into debt in many, many years. $1.1 billion in debt, infrastructure to try to get more jobs. So you know, they're really trying to do something. But it's an island and it's a bit difficult having a mother coming from this island. I see feel I can speak about being half Tasmanian almost with some authority. But it does bear in mind it's really important where you buy. And we've seen the predictions around the property market reduction that people felt from peak to trough was going to be about 15%. With the government change, well, the non change of government, the APRA changes and the rate reduction, it's expected now to be 12% and at the moment it's at 10%. So there's a real, you know, we're right down at this bottom of this bell curve at the moment. But the other thing is there are suburbs in Sydney, Melbourne and Canberra that are doing over 20% and have done in the last year. So you know, this is why it's so important to understand where you buy. Which brings me to someone who has within our community just bought John. So I'm going to share my screen here and show you. So we have obviously lots of people who are in our community at the moment. So you know the, the your property success club and Jamie has just bought in the last week. So congratulations to Jamie. You have got a star going on our wall. But she followed the entire location masterclass process and we had a bit of a strategy call as part of the investors choice mortgages process and yep, looked at the ripple effect and looked at what was happening and she's just purchased a four bedroom, two bathroom property which does deserve apparently a little bit of renovation. So this is really, really exciting. Congratulations to, to Jamie. It's great to see so many people who are actually, you know, getting in there and going through the process. So once again, guys, you know, get in there and check out what is going on and have a look at what people are doing. There's a lot of really great questions and sharing that is happening within the club at the moment. Some really interesting articles as well. You know, there was some questions here by Lars regarding, you know, what software to purchase, you know, the kind of price finder or RP data. A lot of really interesting conversation around that. What I did share, John, was this fantastic software that Kristin actually shared with us, one of our mentoring students. The other day we were on our mentoring call with our mentoring students and we were talking about some opportunities people were looking at and how to determine what was happening. Now this is for. Well, we looked in Sydney and Melbourne, but in Melbourne in particular, this software was pretty exciting, which we're kind of interested in because it allowed you to see the zoning that was actually happening within a suburb. But it also showed you that the properties that were on the market as well within that suburb. So, you know, it gave us the opportunity to look at, as you can see, the bit of information about what's actually happening in the suburbs. So you could go in and say, look, I'm just interested in looking at, you know, houses on the market. And you could then go through and have a look at the, the type of where'd my site find a thing go cancel where I was working here yesterday. You could go in and have a look at the orientation and the land size, etc. And it would actually also give you a lot of information around what these, these details were. So let me just see if I can find that.

I'll just. Can I tell you about some of the benefits of that using those overlays and the way I used to use them is for instance in places like Brunswick or Essendon in Melbourne, which are old suburbs, you know, when I say old kind of turn of the century suburbs and a lot of the, a lot of the most expensive areas overlay with heritage and also over. So you can overlay heritage and income and let's say eight times out of 10 they, they overlay, if that makes sense. So the heritage areas are also the areas with really high household income and also a high medium median price per bedroom, let's say, for the suburb. So it was a really good way of just identifying pockets within the suburbs that were well sought after. So then when you went down to street level and started looking at the disparity between the houses, you had another kind of layer of demand that you were baking in there. And the thing is about some of those heritage overlays because it might sound counterintuitive that for a renovation strategy you might look for heritage overlays, but it doesn't always mean that you can't. There's different gradings of heritage overlays. So for the most part they just had a protection on the facade which you would want to keep anyway. That's the attraction of a heritage period property. And behind the facade you can do whatever, whatever you like, basically. So it didn't really restrict you in any way from the building. Certainly would restrict you if you're doing a development, but from a renovation point of view, didn't restrict you. And they were great sought after streets.

Yeah, well, look, I mean you can just see here, what we did is we looked in the listings and we said show us houses. And if you go for a price range, if you want or number of bedrooms. So we've got two houses in this area, three here, four over here. But then under, you know, the due diligence, the planning zones we can see this is orange. So this is industrial here, you know, this one here's mixed use. This is just general pink, general residences. And then you can zoom in and actually see, you know, where these properties are. So here's the properties here that are on market and you can see exactly what the zoning is. So guys, these are fantastic. We're pretty excited about this. And the other thing is that you can put in here the planning overlays and pull up the heritage overlays if you need to. So as John said, you can go in and work out where these heritage overlays might be that could affect your investment. And by knowing where those are, obviously this house here got a heritage overlay. This one here has, this is, here has, this is. This hasn't, this hasn't, this hasn't. So it gives you a lot of information. Really cool. As I said, when we checked this out for the Sydney market, it didn't actually have the properties on the market at the moment. But hey, if you know a property you're looking for really, really, really cool software, we've got, oh my gosh, four or five pieces of recent software that we'll be sharing with our mentoring students at our weekend and the Gold coast next weekend, which we'll talk tell you about later. But some pretty exciting stuff coming up. John.

Yeah, actually some of you will probably already know that we've got a webinar coming up tonight in on GoToWebinar. Now if you haven't received an email for that. What I might just do is pop that in chat. So you got it, register for that. But that's also got some new tools because we've been scouting out a bunch of new tools both for free tools and paid tools. And some of the free tools are pretty spectacular, aren't they? Like you can get a whole lot done with some of the free tools and yeah, some of the paid tools just make things a little bit faster.

Absolutely. So make sure that you know, you, you get into that webinar, I might just have it going on. So yeah, go to that link. That link is actually. So that's for tonight, the 30th, 8pm the link is under the comments and if you go there and you're watching this after that time, I'm sorry, there won't be anything there. But you know, so yeah, make sure you go and sign up for that because there's some really cool information. And having said that, this. What day is it? Sunday, John. We're going to be at a meetup also in, in Melbourne. So rarely do we get out there and do things. But we are coming up. So I'm just going to show you if you have a look here under your property success club, you know we have lots of information about events and things that we have coming up and when we have events here they are. So the information. Oh, it's not coming up there. I know where it is. The information is coming up on our your property success page. So go into the your property success page, check out the events and also I just wanted to make sure that you guys also had looked at where this learning tab is as well. So if you go to this learning tab, what I try to do is take all of the topics as they come up and put them under topic guidelines. So we've got some questions about dot maps. You actually be able to go there and see a lot of information. Why do we use 2% increments and how do you use dot maps? And flipping and someone's posted a picture of their Gold coast dot map for instance. Here's some questions around the suburb selector software staging. Now here's our monthly Q and A call. So as you can see, we've been doing this now for whole a whole year on Facebook and for those of you in the club and ultimate guide to renovations etc, you will see them in different on your home pages. So you know, we've got over four or five years, John, of these calls. There you go. Look at that.

My Hair is coming up to six years, Jack.

That's May 2018. You can see hair has changed in length a little bit. There you go. That's us aging over the last year. So make sure you go into this learning section, guys. This is really where you can actually, if you want to drill down into some specific information, some really great posts here and some reports, etc. People's case studies of what they're doing, their flips and their purchases, some handy information, the feedback on our modules and some renovation tips. So getting there. Don't, you know, don't let this resource go to waste, especially if you're new. Welcome. I know we had some people join us last week and make sure that you get in and have a look at some of that information and you know, please, please say hi. One of the things that we did run just recently, John, was a question about where people were from and we had quite a few people. I think we've got. Oh, if I go down. Hope no one gets. Has a bit of a fit here. But I think we've got mostly people from Sydney. I was checking it out over the last week and I think we've got a few people also from New Zealand who've joined us. But here we go. We've got. Where did my little pole go here somewhere, guys. I'll find it whilst we're talking. But yeah, there's quite a few people there from regional areas as well. So, you know, make sure that if you are in the location masterclass that you are checking out the regional information and how we recommend that you use the location masterclass to be able to do that as well. So I can't seem to find our little poll at the moment, but it is there. I think it's.

If you're from New Zealand, I believe you.

They're from New Zealand.

Hello to all the Kiwis. Don't mention the rugby.

Don't mention the rugby. Okay, so Here we go. 96 people have said they're from Sydney, 87 from Melbourne, close, 55 from Brisbane and regional areas. So we've got 49 regions and then a lot of people actually have added in their own regions, which is great to see as well. So, you know, get in there and say hi to people and you know, introduce yourself because we would, we would love for you to get in and yeah, be part of the community and say hi. So John, I'm looking. We don't have any questions.

No, no questions. Well, I thought I might just get in there. That. Not this weekend. Next weekend is actually our next mentor event for our mentor group which this time is on the Gold Coast. And one of our, one of the group is actually in the, I believe it's a property council of Queensland and she's got a lot of great connections that we found out and found us this amazing hotel. So we've got a conference room overlooking the, the, the beach, the water and it's going to be spectacular as was the last one in the Blue Mountains. And I was talking to some of the, the guys yesterday and who, who were reflecting on, you know, what we did on, in the, in the workshop. At the previous workshop which was kind of, we tried to cover a bunch of different areas, part of which was working on the money archetypes, which I'm sure you can elaborate on, Jane, but around the relationship you have with money, we had very practical deep dives into the suburb selection process and then we spent some time on the bus and went out and had a look at some properties and concentrated on the property selection process. And this time we'll be concentrating more around the negotiation plan and buying those properties at a discount because it's particularly relevant in this kind of window of opportunity we've got at the moment. But yeah, so that's interesting. If you haven't been or haven't heard anything about the mentoring program, you can go to james sacksmith.com apply if it's something you're interested in, we can have a chat and see if it's for you. But yeah, I'm really looking forward to, if it's anything like last time, Jane, it's going to be really, really great time with all that group in the, in the one place again.

Well, and I think the other thing is I'm just going to put that into the page there, John. But you know, we were, we were really conscious of the fact that we wanted to spend some extra time doubling down on helping people personally in getting to their goals and their plans for the next 12 months. And we opened up the mentoring at the beginning of the year and led a small group of people in and this is once again just another small group to join that group that we will be opening up for the next couple of days. But I'm so excited to see those first 10 people and being on the path to what they want to achieve. Even remember last week we went through and had a look and did a whole deal review on one of the properties, one that one of the mentors had come up and came up with a strategy on actually how to negotiate and held his hand there. So we've got people taking effective action and really getting into the market. And that's primarily where my focus is going to be in the next few months, is getting the next group of people who are joining us to get to their goals in the next 12 months and purchase or re establish what their portfolio is supposed to be delivering for them. Because a lot of people in the mentoring have already got properties. Some of them have been disappointing. So we've been going through and doing portfolio reviews and giving a really lot of detail around that. But yeah, so many, so many lovely people. I can't wait to go and spend the weekend with them again. And we had such a great time last time and Gold coast, so we'll be getting into some sun too. John quite welcome.

He's freezing in Melbourne at the moment. Yeah, that'll be very good. It's interesting. There's such a diversity of, I guess, people, backgrounds, stages of investing. Just in the three conversations that I had yesterday, each one of them was on at different points and they were making the, the same observation of the rest of the group. You know, it's quite a diverse group that way and people need help with different parts. We've got people who are on their very last property who, it's, it's about, you know, getting that last purchase. Right, and reconfiguring in some cases what they've got. And you've been doing some stuff with finance with them and, and reconfiguring their loans and all that kind of stuff as well. You've got other people that are buying their very first or a couple of guys that are at the other end and buying their first investment property and yeah, and they've just realized the value. One of the, one of the things we're discussing yesterday when I was talking to, to Daryl is one of the, the guys in the group. He, he, I actually just asked him the question, how did you like? It's, it's obviously a lot of money. Like, it's, it's. Oh, it's not, not a lot of money, significant amount of money to pay for mentoring. How did you, you know, justify that decision in your head? And he said, well, the, I, I'm classic DIY guy. I, I refuse to pay for trades. I do everything myself, which I can relate to and try and save money at every point. He said, but last year I, I bought in Melbourne and I used a buyer's agent and that was 15 grand. Now, the mentoring program, if you paid up front's around 16 grand but he paid 15 grand for a buyer's agent. He gave it a really solid criteria and you know, in a couple of weeks it was all done and it kind of just switched the light bulb on for him was hey, it's probably, sometimes it's worth paying for professional services to, to get ahead now I think obviously you need to be in a position where you can do that. It's easier to say than do for some people but for people who are in a position that are struggling I guess to get over that mental hurdle of the sticker shock of paying, you know, for, for mentoring, whether it's from us or someone else or paying for a buyer's agent. I just think it can, it can be something you arrive at late in life or something that you get earlier in life and I think it's, it's to your benefit if you can arrive there sooner rather than you're going to.

Pay for it one way or other, aren't you?

That's right.

So pay from the time it takes you to find out and learn all this stuff self and make your mistakes yourself. And that's what I think at the moment. You know we've got six months or so where the market is going to be rebound in and people are going to be making money. They're going to be making two to three times as much as from the discounted properties as the investment in the mentoring is. So I'm just, yeah, it's a no brainer to me and as you know, you know we pay our mentor a lot more than that and.

He'S worth every, every cent of it and same same deal when I did the development. But he was expensive, he was five, he was ten grand a month. Ten grand a month. So. And had a larger than we're, we're charging people but you know he was so just so much value to, to us because Andy had a cut of the profit. He had another 20 odd percent of the profit. I can't remember it's 20, 25.

But yeah he had in the deal that you're doing because he's helping you go through it.

Well and that's the thing and the we knew we need, there needed to be an information transfer. We needed to get up to speed because it was our first development and that's exactly what occurred and all the other kind of peripheral benefits of you know, getting using his finance people and you know using his professional kind of Rolodex too. But at the end of it, you know I could Go and do a develop tomorrow with that, with that knowledge that he'd taken, you know, the best part of 25 years to build up and was transferred to me in a short amount of time. Now, I'm not saying I know everything he knows, but I know the, the kind of 80, 20, the, the, the key bits to get the job done because it's that, that thing is you don't need to be an expert, you just know what to do.

Exactly. Well, anyhow, we've got it enough. But yeah, we're really looking forward to the Gold Coast. We had a fantastic time. Blue Mountains and I think September we're due to be doing our third mentoring weekend in Melbourne. So we'll be looking for somewhere fancy around here as well. So, yeah, really exciting, I guess, month ahead for us. And as I mentioned, which I'll just share with you now, this Saturday we are going to be at. Where is it, John? It is at the Pasco Vale, isn't it? Pasco Vale Hotel.

Yeah, that sounds right.

Between 11 and 1:30 there will be light rain, but I'm going to be giving a presentation there. I think the door is $27 to get in and the reason we're doing this, as you know, I don't do a lot of presentations or talks, but this, all the money here that Rowan is raising through the meetup that he's pulled together is from the Melbourne Property Network is going to support a very worthy charity being the Royal Children's Hospital. And in particular he's raising money for the kids with Hodgkin lymphoma. So that's why we will be there. Guns bells on, ready to chat and have lunch with everyone afterwards. So if you can make it, I hope to see you there. Make sure you book a ticket, go to your Property Success webpage, click the link.

I'm just going to pop it in chat now. I've got the event. Have you put it in there already? Jane, the eventbrite. I'll just pop it in chat.

Perfect. So, yeah, like guys, if you don't have any more questions or any questions whatsoever, we. We're going to get an early mark today but you know, some really exciting things have happened in the last month and I really think that, you know, if you're in a position to buy, there's an opportunity that is just so great that get everything in order. I personally have been looking at. The Liberals and Labor actually backed it as well. Proposal for the first home loan deposit scheme that comes into play in January and we're looking through investors Choice Mortgages how we can support first home buyers or rentvestors who are going to buy their first home and live in it for a while and then rent it out to get into the market. So if you've got kids who you're interested in talking about how they can optimise that, just be aware that the bank banks are looking at their savings statements for three to six months so they need to get that all cleared up. But I'll be putting some more information out about that in about a month's time so be aware that there's some good changes ahead as well. So RBI cut we're expecting this Tuesday when they meet for the June meeting. There's predictions of two more cuts ahead and we think within the next six weeks we're going to be able to see change in the way that the bank service debt as well. So your borrowing capacity in the next eight weeks should go up quite considerably with all of those things in play. So the market will be responding soon and it's your choice whether you take that by the horns and get into it.

Thank goodness. At last.

I know we've been waiting, waiting. So anyhow guys, if you don't have any questions, let me just check John, that we have no questions on the page. Nothing's popped up as yet. So if you have questions, all the comments there are from John.

And I.

Hopefully you can join us tonight on the call for the mentoring. And you know, it's something obviously that I feel really strongly about and John and I are completely committed to getting those people across the line and taking opportunity in the next couple of months. So without further ado, John, any more words from you?

No, nothing left for me. I think we're all good. Oh we've got Miriam's just jumped in at the last minute there. I'll read it out for you. Jane, what sort of rates are you currently getting with clients with interest only only which have an offset account?

So are these rates for investors, Miriam, or are they for owner occupiers? Just if you could just type that in. Are we able to help you out potentially? Let's see what she says. Waiting for the question. So just to answer your questions, what we saw at the beginning of the last year or mid last year was when the lenders started to differentiate and try to meet the APRA requirements of asking them to have only a certain amount of interest only loans and then a certain amount of investment loans. They then started making things really hard for investors and made a things Hard for interest only lending as well. So what we saw in the market at that time was some real differentiations between interest rates for homeowners and interest rates for investors. So to answer your questions for both, she says. So to answer your questions I'm going to give you a really quick little summary. You're going to see my secret mortgage broking page here. But this, this is kind of what a lot of lenders are offering at the moment. And as you can see here, you know these are the kind of like the standard variable rates. Standard variable rates are, you know, really, really hard to decipher as to what they would be for interest only and principal and interest. One of the things that we're seeing is people who have had a number of properties and have a number of say difficulty for instance to actually get loans who are going to some of the third tier lenders, they are actually looking at getting a higher interest rate. So they're happy to pay, let's just say 4.7% so that they can actually get into the market. But other people who are actually looking for the have got buying their first investment property, they're actually getting into the market a whole lot less. As you can see here, we've got 10,000 loan products that we look at when we look at this. And all I've said in here is I want a full dollar, a full full doc investment loan, interest only and a variable rate. And you know, this is the kind of information that comes up. You know we've got everything from these 4% here to some specialty lending down to, And we've got some, we've got some fixed loans. So this one's, these ones aren't fixed. The fixed loans are coming through a whole lot less than this. So when they're actually looking at some of these lender rates, although they're quoting these higher rates, when we actually go in and start looking at what the interest only loans are, they're not at, this is like a non resident loan. So you're from overseas. These ones here are once again non resident loans. So you know there's a whole lot of difference. So these 5% are obviously not what we're after for the typical lender or person. And if we're looking for principal and interest and owner occupied at an 80% loan to value ratio, we'll see that we starting to get a whole lot smaller or cheaper rates coming up. We're starting to see these threes coming in 3.8. And if we start looking at you know, 3.6s for instance at AFM, 3.6s here at all wide. So there's a lot of differentiation. The real important thing is when we start looking at these rates, it's not really about the rate, Miriam, it's around what your long term strategy is. So for instance, if we went to me bank and we got you a 3.79% rate, they may not have the ability for you to then go and pull out equity after you've done your renovation because you're right at the max of their servicing. So you really need to be quite strategic about how you actually look at your lenders. And it really shouldn't come down to what is the cheapest rate or what kind of rates that you can get, but it should actually come down to, you know, what's going to allow you to achieve what you want to do. So as you can see, you know, there's, there's quite a few lenders here that have got two fixed rates that are around about these three percents as well. 3.5%, 3.7, and as I said, there was a 3.3 that came through this morning. So lots of, lots of different things to consider, Miriam, but oh, lag on the screen. So there's a lot of different things to consider. But what I suggest is that, you know, we went back for one of our clients last week and saved her seven and a half thousand dollars a year. And early in the year we saved someone $1,200 a month, so over $12,000 a year in negotiating better rates for them. And so, you know, there is an opportunity to have a conversation with your lenders. But when we're actually assessing someone from a mortgage point of view, it doesn't necessarily come down to rate, it comes down to your strategy. So for instance, we could possibly get, you know, really great loan for you or rate for you with bank west, but they're not going to allow you to build a consultant, a granny flat on the back of that property. If you have less than, you know, 80% loan to value ratio or greater than 80% lender value ratio. So you really want to make sure you're with the lender that allows you to do your strategy. Because if you get caught out with one lender and you can't then refinance, you've hit that ceiling, then you may not be able to buy again. So maybe a 5, 6, $7,000 extra in rates per year could save you in the long term to be able to buy another property that could go up by 15, 20, 30, $40,000 a year. So just be aware that it always, it doesn't all come down to rate. So that would be my thought on that, John.

Great. All right, I reckon that's us, Jane. No more comments for us. So hopefully those of you in Melbourne will hopefully see you on Sunday. Yeah, put that link into chat there. And, yeah, we're all good. And the rest of the mentoring guys will see you the following Saturday.

I can't wait. And, yep, Miriam, go back to your bank.

And.

Ask them if they can match one of the cheaper rates that you can find that has a similar type of product information and see what they can do for you, because it's a whole lot easier to hold onto a client than trying to get a new one. So they'll be, they'll be quite receptive, hopefully, for you. So all the best with that. And as John said, we'll see some of you this weekend, we'll talk to some of you tonight. And for the mentoring students, we can't wait to catch up with you in the Gold coast on the weekend following. So as always, John, here's to your property success and we look forward to chatting to you next month.

See you later.