Your Property Success Mentor Call - November 26-11-2015

Person making the call tonight. So 1376119 as I said, welcome to the call. This is so exciting. November 2015, we're on the Homewood run and yeah we're really excited to take some of your questions. Now if you do have questions, remember you can ask us any question anytime. If you can't get on the call live questions YourPropertySuccess.com or ring the 1 300-76119 line last Thursday of every except for Christmas Eve. And so put in your diary 17th December for next month. So as always I have beside me my trusty person, John.

I like that.

John Hubbard, what have you been up to?

Oh it's the Christmas madness. Even though it's you know, still a way off but that whole rush that leading up to Christmas it's particularly popular in the building game to go mad around this time. So so we've got the development ongoing.

And so for those who are new to the call.

Yep.

John is the co creator of Ultimate Guide to Renovation and he has moved on to developments this year.

Yes. Stuck my toe in the water there. And so we've got of we've got two townhouses which are side by side and one of them's to lock up and one of them's probably a couple of weeks off which we're struggling to make it by Christmas all up months months behind and and over budget. So we've managed to kick two goals there and but you know to be expected or some of it's probably most of it's to be expected.

What's the time blowouts?

I reckon we're going to be probably four months behind by the, by the end of it. And what was the over over about 13 months.

And what has been the cause main courses of the time?

It's it it almost started from the get go with hitting pipes so we got delayed by a month almost from the get go and that's kind of. We never recovered from that and then there's just been incremental time added on after that. So yeah it just comes with the territory. It's not too bad. I mean luckily the market's been very good. We we still on our initial numbers are still fine anyway because we had contingencies in there. But yeah the market's grown in that time as well. So the delay actually has probably done us a few favors. Yeah.

Covers those variances.

Yeah, that's right.

And of course there's always variances, isn't there?

There is, there is. And that's why you have a contingency there and, and stuff always goes wrong, you know.

Well, I'd like to think that if you can plan ahead with our renovations, you don't have to, you can anticipate these things and hence why you've got contingencies and, and, and things. But yeah, you're a braver person than I, I, I've never been down the development path. I'll keep for the renovating and trying to work out those problems.

Yeah, it's certainly, there's a bit of adrenaline and yeah, that it's certainly a higher risk path. But yeah, it's been interesting. Like it's, it's, as we've said before on the calls, a lot of it's pretty similar to the renovation. You know, it's the, it's picking a target market and renovating to their tastes and not to your own tastes and spending the money where it counts. And, and yeah, now we're getting to the kind of sharper end of the job. So that really does come into focus when you're making decisions over, over stuff as the budget gets tighter and you know, you have to fight to keep those items in. Like for instance, spending, you know, $500 on a plant, for instance, like a tree or something.

That'd be a good plant though.

Yeah, yeah, that's right. It doesn't to some people, they go, oh, that's madness. But it really having those mature trees there and particularly on the facade does make a hell of a difference to how the place presents, you know, and you've really got to spend that money. Even though it almost feels counterintuitive. You have to stick to guns and spend your money in the, in the areas where it counts.

And you've been meeting with the agents, are they ready to market or.

Yeah, actually.

How does that work?

Meeting with the agents. We actually haven't, this, this one, we actually haven't signed an agent up yet. We've got a couple that have been, got their nose in the door. And the other development that we've got running at the same time, we're just taking that to market now, off plan. So pretty, pretty late in the day, but there's some interest there. And there was a call whether we go now or whether we hold off to January. The consensus was that we go now and so we've got all the artist impressions and all that kind of stuff done for it and it's a complete off plan sale and bit of interest already, so we'll see how it goes.

Great.

All going well. We might get a sale before Christmas, otherwise we'll bring it back in February.

Great. Gosh, beta breath. I gotta say, I speak to John, what, nearly every day. See you a couple of times a week. And I never get to catch up on what's happening on development. Other on these calls.

Yeah, that's right.

Run past each other and about other things. How is everything?

Good. Yes, well. And what have you been doing?

Well, obviously I was away last month and it turns out I had chickenpox whilst I was away. So the top 100 mortgage brokers in Australia were escorted to LA and we went to Disney Institute for a customer service course, which was fabulous. And I felt a bit ill beforehand and got some tests done. They told me it was inkling. When I came back they said you had chickenpox. So maybe I got rid of all my competition. They could all have chickenpox. So apologies to anyone who hasn't have it and on the course with me. So, yeah, so that took a bit of recovery, but backed it up with my son's eighth birthday. Big Lego birthday theme and a Lego building place which was lots of fun, full of lots of eight year old boys. And I had my own birthday, turned the big 45.

Oh, yeah. I like the way you tell everyone how old you are.

Yeah. Wow. When you look as young as I do, they go, really? I thought you're 52.

So you're just fishing for compliments?

No, not at all. Not at all. I'd say it as an achievement, mind you. My. One of my grandmothers is 92 at the moment and the other one passed away at 96, so I'm not even at middle age.

Yep.

So I'm good. I'm good.

Yeah.

And we've been pretty busy in getting a new employee. Also we've been looking for someone to assist us with all these big plans that we have and getting a lot of our message out there and a lot of the help with the technical things as well. So that's been pretty exciting. It's been a big process we've been through.

Yes, it's been huge and it's going to be great. It's going to be so good having some extra muscle on board to pump out the education and the courses and improvements and all that kind of stuff. So I'm really, really excited about that.

So that's. And that's. Well, anyone there's got a small business or, you know, looking at hiring. We took on a whole new process called Top grading. Top grading, which is a, I've got to say, having, you know, 18 years corporate and then 10 years running my own company. I've never, never been through such a rigorous process in my life.

I know you wouldn't want to go through it yourself.

I know, I know. So, yes, we've got some amazing people who we're talking to. So yeah, hopefully 2016, we're planning bigger and better things to deliver more to you Gu and get our message out there everyday. Australians can create wealth through low risk ways of buying residential property. So that's pretty exciting. What else?

Residex. We had a chat with Residex.

Yeah, look, the guys from Residex, they love us and we love them and it's a mutual relationship of loving and finally just convince them to step up to the technology world and give us a discount for our clients. So usually I did negotiate a 10% discount off renovator reports and reports that you can get. Obviously Diamond Investors Choice clients, you can get your own Residex reports or tell us what you want and we can get you the suburban property reports. But if you wanted to step it up and get the renovator reports or the market facts reports, then you really, you used to have to ring up and speak to someone and say, mention my name and wink three times and they get 10% off. And now we have a discount code, so we'll be sharing that with you. And so check out the Facebook page. People who don't have access to the Facebook page, we'll work out a way to get that too, or don't have a Facebook access. And some we do have people who are inclined not to be on Facebook. And I have to say, look guys, you know, we respect that and we have had people who don't want their lives on Facebook, which as you can imagine, but they've created a private profile so no one can track them and they jump in under an alias into our group.

And you can tell them because their surname is Reno, typically.

Exactly. So, you know, don't think that you have to be out there and tell everyone what you ate for breakfast. You know, we. There's a lot of great conversation that goes on the page. In actual fact, I put up a really funny video today as well. So we have a bit of fun commentary on the Sydney property auction market. Yeah, so, yeah, so you know, have a, have a look at that. That's a bit of fun. And so, yeah, Residex have stepped up, we're trying to get access to their prediction numbers and people pay hundreds of thousands of dollars for that. And that's their intellectual property. And we're working out what we can do to get access to the 5 and 8 year prediction. As you know in our location masterclass bonus the module two and Ultimate Guide to Renovation. And module three.

Yep.

And module three and course three in your property success system we discuss some of this and yeah they, you know it's kind of like the final criteria that we look at which is, you know, what's the, the growth. But it has a huge weighting and it's not easy to get and you usually have to buy the suburb report.

So it'll be great to be able to incorporate some of that data or more of that data into the, into the, into the suburb selection process. Yeah, that'll be really, really valuable. And it just reminded me of course we had the dot map event last week with Medine forget.

Yeah, so we had the dot map meetup. I'm going to call it Medine Simmons, the inventor of the dot map and she has been doing them for 11 years. I think we worked out.

Yep.

And she was kind enough to come along. I think we had, we planned for 25 people and 45 turned up. So we squished on in and had a lot of fun.

And she few of you here tonight. Yeah.

And look, it's one of those. We had such amazing feedback and some personal emails and afterwards that John and I sat down today and said gee, maybe we should have some more meetups and actually do this and actually say hello to people face to face. Because I know you're probably sick of seeing my face and I haven't seen yours. So yeah, we, we might just, I don't know, guys in the chat line. Anyone interested in catching up next year face to face? We might have to put a bit of an event on maybe pulling some of our friends as well information and, and have a talk. Maybe some case studies.

Yeah, and any, you know, if that's what you're after and you know it's a good time of year to be thinking about this kind of thing about what we can do next year. You know, if you've got suggestions there, put them in an email. Supportourproperty success.

Gotta say the chat box is not going crazy. John. Maybe we don't do this.

No, maybe they can't hear us.

Okay, can anyone hear me? Hey, would we do it in Portland Quarry? Gosh, we have a few people in Port Macquarie. In actual fact I'll be up there in January. Maybe we can say hello.

Are your parents hanging around there?

They don't know. Yeah, they're retired there from Dubbo and Noosa is nice. Yeah. So maybe we should just do a.

We'll just go to nice places.

Yeah.

Hamilton Island, Fiji. Anyone want to come for a meet up? Could almost be tax deductible, couldn't it? Talk to Darren Anyhow, so. Yeah. So Residex. I think I might have to produce some videos for them, John in Contra or something or other. But you might be sign up for the Residex newsletter. You might see some more of us. And of course, if you read the your property success toolbox this month. So go to YourPropertySuccess.com, across to Resources and down to Toolbox, another newsletter from me where I review the property magazines and reports you should read and link you up with great apps and websites. Had a bit of fun with the apps actually this month. In actual fact, I ran a. I'm running still a competition. Effie Zahus, the editor of Money magazine, has just written her first book about $20 adventure for a child. Gets $20 off their grandparent and the adventure that they have. So running competition. If you guys can think of a $20 adventure that would sound inspiring or would make me laugh, I've got a few of those books to give away. So email me jane@yourpropertysuccess.com with your thoughts and by the 31st I'll come up with a. With a winner. And of course I appeared on the front page of Money magazine.

Yeah.

So that, that was pretty exciting.

Yeah.

And the article was around how to find a property that would cost less than $50 a week. And subsequent had a chat with Money and they wanted a bit of a. More of an explanation. So we created a video and that went out this Wednesday to their list and I've posted that up for you guys to listen to.

Do you want to do a quick rundown of how you arrived at your suburbs?

Yeah. So basically I was given the task of finding a property that was affordable, that was less, that would cost someone less than $50 a week. So I went. I basically, as you know, I started with research, as I always do, and I contacted our good friend Jacob from Ripe and asked him for his sweet spot Spot report, which Talked about the 10 suburbs in Australia that he'd worked up with Terry Rider from Hotspotting that they thought had opportunity and infrastructure and demand and growth in the future. So I looked at all of those 10 suburbs and then I went and purchased the suburb prediction reports from Residex and looked at what the potential growth over the next five and eight years were. One suburb came up with 9% in the next five years and 9% in the next eight years. So that was pretty exciting. And I then looked at purchase prices. I wanted below $350,000.

Yep.

I wanted some good yield over 5%. And then I thought, you know what I teach, I know they said less.

Than $50, so that's pretty exciting. 9%. Were these ones 9%?

Oh yeah, one of them was 9, one was 4 or 5%. But the thing was that, so my, my only task was actually to find something was going to cost less than 50 bucks.

Yep.

And in theory it could be a Property that in 10 years time would have cost you 50 bucks a week. So 5 grand a year for 10 years, 50 grand still worth around $50,000 in 10 years time. And you know, as experts do, we can say no one's going to go back over 10 years time and have a look at how I lied. But I wanted to add some more value. So I found the growth predictions as well. And then I got a little bit tighter. So in the sweet spot report from Ripe House, what Jacob's actually done is he's found the actual sweet spots within suburbs that drive the growth of the rest of the suburbs. So there's a number of streets and one of the suburbs I looked at was Morayfield In Queensland, about 32 K's out north of Brisbane. And the other was North Aubrey. And it was funny, I spoke to someone from North Albury just before this article went to print and, and I was telling her the streets that Jacob had pulled up and she said they were the absolute, you know, the blue chip streets and yes, you could understand how they would be, you know, worth 10 to 20% higher or you know, be worth more in the suburb and drive the growth suburb. I then went and purchased the renovator reports for North Aubrey and Morayfield because I wanted to overlay the, the pricing disparity between the renovated and unrenovated properties on those actual streets within those suburbs. So I got down to about 11 streets in, in North Albury and gosh, I think I was at 31 Streets in Morrowfield. Morrowfield's median price around 336. So you know, we talk about some of the best streets being a bit more than that. So I was up to the 350 mark and north Aubrey was, was a lot lower than that. So I applied, I could, I could actually get down to street level and then I jumped into the street level, into Ripe House and had a look at the street level and thought, oh, here's some houses that are on the market at the moment. And I thought that's probably a bit too much. We can't give people the actual houses. So. Yeah. So, you know, it's amazing.

That's great.

With the data that you can get.

What you can do and just comparing one set of data to another set of data. Yeah, and that's, that's the bit that the humans do. Yeah. Because you can get the data, but the data itself, there's only one tool.

Exactly. And then it's. And you know, over five and a half percent yields and I mean, if you think about it, rule of 72, 72 divided by nine, you know, you're looking around doubling your value of your property in eight years time. So. And you know, if you could lock in say a 5% interest rate at 4.5%, then, you know, and the yield's 5.7%, it pretty much is covering its cost. So that came down to $36 a week and North Aubrey came down to $16 a week. So, yeah, really exciting. What else is going on? There's been a lot of commentary about the market in Sydney coming off. In actual fact, this video talks about that, that I put up on Facebook, the funny one, but you know, it's, it's interesting and I still have a lot of investors, choice mortgages, clients buying in Sydney. And you know, every state's different and the psychology of every state is very different. But there's one fundamental kind of psychology. And we think about the Australian property market. 70% of all the properties that are sold are sold to homeowners and sold from homeowners to homeowners. And so that really is the majority of our market. And if you can think about, you know, the growth that we've seen in Sydney, you know, over 20% in a lot of the suburbs in Sydney in the last year. You know, there's houses that have made more than the income earners in the house in the last year, you know, over $200,000. So there has been the opportunity and I guess the realization by many people that their house is worth a lot of money and they're sitting on money. And it's funny, you know, I was talking to a new client today and things that you just, you know, over the last 15 years of learning around property that you kind of forget and you just assume everyone knows. And, and he was surprised that he could access equity from his property to buy something he thought he had to sell. And I then transported myself back to 15 years ago when I thought the exact same thing. And yesterday I had talked to a discovery call with a new Perspective client and we talked about something similar. And he was sure that he had to spend the next 10 years paying off his first investment property on principal interest before he can buy the second one, rather than having two properties, the market moving at once. And so, you know, there's just some of those fundamental things that we talk about and assume it reinforces to me. So if you have any of those questions and you think they're silly, they're not silly. We all had them when we started. So make sure you ask. I see no hands up. So I'm going to just keep talking. But the thing about Sydney and the psychology is people approached agents, you know, June, July and said, we want to sell our property. They took a while to engage an agent, they've got an agent and they've gone through, through a six week marketing campaign. You know, we have had a drop in clearance rates in Sydney and in Melbourne, Brisbane, but we've had a drop in the rates, but we've had an increase in the number of properties up for auction each week. And I think, gosh, I think In Melbourne there's 1750 this weekend. You know, so it's incredible activity that's actually happening behind the numbers which say clearance rates are dropping and although there may not be due to the APRA changes and affordability, et cetera, there may not be the investor driven demand. There's still a homeowner driven demand. And I think in the next six weeks, those people who have committed from June mentally that they're going to have the house sold by Christmas and be somewhere else, are now sitting there going, yes, we've got to sell, we've got to sell. And they're hearing that the clearance rates are lower and they're starting to think about offers before auction and they're worried that when they read in the media reports that things are coming off that they may have missed the boat. So I think in actual, you know, Warren Buffett take opportunity when, you know, be, be fearful when people are greedy and greedy when people are fearful. I think we're about to enter a period when some very clever, astute investors are going to be able to snap up some really great, great properties. So interesting. And what else can I tell you? The. So the market, I think the market in Sydney, we've got a period of time where there's Going to be obviously cooling off. We're not going to do another 20%.

But no, it doesn't say that forever, does it?

No. And there's still some question whether RBA will move rates from the 2% cash rate next Tuesday. But you know, they don't meet in January so I think they might do a wait and hold. I think there's been enough activity that's been pulled off out of the market for them to be happy.

The other thing I've seen in the past, like I remember in 2010 it kind of came off of Melbourne in March and you had a period there where it just really fluctuated the clearance rates. So you would get some bad news, a week of bad news in the media about, you know, property market and the clearance rate to drop and then you'd say, and then the next news stories would be about, oh no, it's not all doom and gloom and the clearance rate's up and then the next weekend it'd go back up again and you could actually see, because I was going to all the auctions and doing some due diligence and that's. And you'd see the size of the crowds or it'd pass in or you'd get a period there where everything passed in but it turned out that everything was selling afterwards. So the market wasn't really. It was just a level of consumer confidence. They just weren't sure. But the market never really came off too much.

I saw two articles today. The bubble has burst and the bubble won't burst.

Yeah.

So you choose which one you want to read really.

Yeah, that's right.

And how you want to go choose your own.

So.

Yeah, and I think, look, you know, I've been looking at the long term stats and information and look at the Residex long term stats. In the last 10 years Melbourne's outperformed Sydney and even with the recent growth and Melbourne probably has some more legs to it than Sydney has. Definitely median house prices are a lot lower than they are in Sydney. And as long as you stay clear of the inner city off the plan, brand new development units and you know, you're looking at the quality, quality stock, then you know, you might be able to pick up something great in Melbourne. And you know, 2050, the population reports indicate that Melbourne's going to be the biggest capital city in Australia. So there's going to be people to live here.

Yep. A lot of flat land to expand into in Melbourne.

So yeah, really interesting. So I think I've talked enough and we'll pass over to you guys, but just some quick housekeeping. So if you're on your computer and you're experiencing any problems. Now, I have seen a few people put in the chat that they can hear me and then I can see another one saying, I can't hear you. So hopefully you can hear us. Let us know if you're having any problems. But we can't really help you out online. So if you don't hear us, maybe there is a problem with your Internet and maybe you need to call in on the telephone number which can be found in the sidebar under the audio options drop down menu. And you can call that number from a landline or mobile phone or even Skype. Now, if you're on the PC, it looks like this. So when you have a question, all you need to do is raise your hand by pressing the little hand icon bar in the side menu. It's kind of small and hard to see, but click on the hand button and it will tell me that you have a question and then I'll unmute your line. So when I do unmute your line to take your question, you'll get an automated message to say, hey, you've been unmuted and you know that you're on now. You can ask questions by writing questions also in the question box at the bottom of the control panel and the chat. And I'll try to get to these if time prevails. But you know, I did give priority to the spoken questions and that's because it's a whole lot easier for me to understand them fully and get back to you and talk through it with you and a lot more engaging, I think. So there's, as I said, there's no such thing as a silly question. We have lots of you on here tonight and a lot of first timers as well. So I really, you know, we're here to answer anything. If you've been onto the portal and you've listened to the past calls, you know that we pretty much cover anything if we don't know it. We'll find out for you. But, you know, please make sure you got your microphone hooked up because we really want to talk to you. And lastly, this is not a tech support call, so you are having problems with videos downloading or, you know, I'm really not the right person to fix this for you. So just, you know, email the team@supportyourpropertysuccess.com and we will do everything humanly possible to help you out. Now, where are we at the moment. Well, the ultimate guide to renovation. People have just had module nine, which is very exciting. The box on the back.

Yep. Structural renovation. Yep.

And structural renovation is very, you know, one of the things that John developed. The box back technique.

Do you want me to hand over or you. No, no.

Box the back technique. Stealing some commercial renovating. What was commercial construction.

Methods? Yeah, it's. And yep. So it actually doing the developments, it's using the same stuff. So it's pretty standard in the developments but the using big posi struts to span stick a box on the back of the house. So it's really low cost way of adding, adding a room to the back of the house and then you can. The existing rooms in the house you can turn into bedrooms or you know, second lounge rooms which I did with my last one. And yeah, it's all about just that, that idea of creating a higher and better use really.

So.

Which is another way of buying in the market.

Exactly. Which is what we like. So. And you'll just get Access to module 10, common renovation mistakes and tips and tricks, which is a great, great little module. And we cover lots and lots of things in there because sometimes there's things that just don't fit in into places.

And yeah, it's one of the smaller modules but it's one of the modules that gets the most feedback because it's. There's just some really good little nuggets in there.

It's funny, I was interviewed yesterday by Australian Property Investor magazine and they were after some comments for a renovation special coming up and you know, the bang at the back, the bang at the back, the bang for your buck and some of the fundamental things, it just comes back to the basics and how to, how to make money in renovation. And I like this module because it covers that off and two more modules to go. So you guys who are in the Ultimate Guide to Renovation will be fully finished by the time we speak on the 17th of December.

Yep.

It's exciting. And yeah, so look happy to dive straight into questions and I'm hoping, Margaret, I know you had some problem last time with your, your microphone, but I've got all of your emails and photos here and so I think it might be easier hopefully that your microphone works so that you could ask your question directly. So let's see if we can unmute Margaret and have a word. Yeah. Hello, Margaret, how are you? Yes, I think we hear her. Hello, Margaret.

I'm not confident.

Well, lucky she emailed a question in.

Yeah, well, I think Margaret's got another one. Oh, no, that's a different Margaret.

Okay, so we've got. Yep. And another backup one from Margaret as well. Okay, so Margaret, you're obviously in the chat box. Is it okay if I read out this information? Because it's. There's a lot of it. Let's have a look. Yep. Is Margaret going to chat in? Yes.

In the meantime, do you want to take a question from Maggie? Maggie written one in, too. Okay. Can you please take us through how to find the right area in a suburb and then the streets to determine the right property to buy? I'm still unsure how to really hone in on the specific property. Thank you. That's Maggie.

Okay, Maggie. So, Maggie, now are you in the ultimate guide of renovation? Just let me know because if you. It's around what your strategy is. So the thing that you need to start with is what is your strategy? Is it development or if it's what she said?

Maggie's just followed up with, can we have some examples on how you assess whether a property allows another room or with a twist.

Okay, so renovation question. So, Maggie, if your strategy is renovation, then what you're looking for is you have to find the suburb to start with. So you're looking for suburbs with the pricing disparity that is going to allow you to make money. So if a renovated Property is worth 450 and an unrenovated property is worth 420, and you need to spend $20,000 to bring your unrenovated up to a renovated property, there's no profit in it. So pricing disparities, the difference in price between renovated and unrenovated to not only allow you to cover your cost of the renovation, but to make money. So we want to make it, you know, at least a dollar for every dollar that you spend, $2 for every dollar you spend. And as I shared with you last month, the quick little renovation I did on a little townhouse in Newtown in Sydney, $3 for every dollar that I spent. So, you know, we want to be able to first of all find and target the suburbs that have the pricing disparity. And I'll just go up to the rest of her question. Sorry. And you know, when you get to that suburb, getting down to the street level, there's specific streets. So the. Pardon me, the renovator report gives you specific streets that have that pricing disparity. So how they do this is they have the data of all the houses in Australia and all the resold houses in Australia. So they don't look at new properties and they're looking at, you know, for the difference of growth between when one property sold and when it has been resold and what the growth differences over the timeframe and they can apply that to other houses of the same size and age in the street. So, so in a street what they do is they split up all the number of houses from a category of 1 to 10. So if there's 100 houses in the street, there's 10 houses in each category. So what they'll say is category one is worth 300,000 and category 10 is worth $400,000. And there'd be a split between or category one's worth 400,000 and category 10 is worth a million dollars. Now as renovators we don't difficult and there's less properties at the bottom of the market. So you know, often what we're doing is we're buying properties that are rated around that 3, 4 mark price wise in comparison to similar properties in the rest of the street. And we want to renovate it just above the market so ours looks, you know, so it's typical for the market. That's the type of property and the price range that most people are looking at. But we want to make ours a little bit better. So people want to buy or rent sixes and sevens. I'd go sixes and sevens. So start at threes and fours and sixes and sevens. And the really good thing about the renovator report is what they do is they break down every street in a suburb and they not only tell you actually when you buy it, what streets, what properties are on the market at the moment and recent sales and predicted growth, etc. So you get a lot of detail but you also get information on the range in the street. So you can actually then start targeting the streets. Now there are expensive reports around about $200. So you're not going to, you know, on a, on a whim go and buy a few. You really want to do the rest of your analysis first. So you've seen previously the type of analysis that we have done. I might just take the screen for a second, John, and just give you a whereabouts Maggie, what state are you in?

Well, Maggie's actually got her hand up so should we try and talk to her? Yeah, let's have a go. You hear us, Maggie?

Yes, I can hear you. Can you hear me? Yeah, fabulous. I'm in New South Wales. And tell me where, what areas have you been looking in? Anything specifically? I've been looking at Queensland, but I haven't sort of found anything. By the time you get there, the price, prices have gone up or something's happened and only the not very good quality ones are left behind. Because if I follow the dot map, it's about three or four months behind. Because when you're using Australian Property Magazine, that's what it is, it's about three or four months behind. So that's the hard thing. I sort of didn't understand how I'm going to try and reconcile that so that I can actually get to where I want to go rather than working on delayed all steps. Okay, so let me just show you the kind of information that we might try to pull out.

Do you want to just comment around when you're using 10 year growth? Like, it's a question that comes up quite often with people worried about the delay that the data takes to get to publish, you know, the published data takes to come out. When you're dealing with figures like 10 year growth as opposed to 3 year growth or even 3 month growth, how big a difference do you think that makes to 10 year growth?

It's funny, I had this conversation with Residex today and was saying how often do they update that 10 year growth or their predicted growth figures for like 3 and 8 years and they do the future growth every quarter. But going backwards, you know, obviously there's sometimes some spikes within in quarters or months or whatever. But the reason that we use the 10 year growth is that kind of normalizes over the period of time. So it normalizes or equalizes or spreads out those exceptions. So the highs and lows of say the GFC or the 2000 meltdown or whatever, it was normalized over those 10 years so you get a bigger picture. And in actual fact, I had a conversation with John Edwards, who was the founder of Residex many years ago, and I might just bring up one of the reports I've just been reading today, the Residex report that came out, the Market facts report on Victoria. And when I was talking to him about, you know, looking long term, you know, we can't afford to go and buy prediction reports on all of these different suburbs. How can we apply the, what's the best number to look at going backwards to then apply to the long term? And he's very, very much convinced that it was looking over the last 20 years, 20 years. And I said, well, why don't you put 20 years in your reports? So here we are, we got 20 years in a report. So there you go, you ask for it, you get it. So when you get the standard market facts report that you can buy, that used to be called the Residex report and I subscribe to them annually, then you get these kind of figures. So that's why normally in your quarterly reports you've got the yearly and then they're reporting the 20 years. And why, Maggie, we try to go for the longer period, just out of interest when, if you do subscribe to the market facts reports for a year, you also get as a bonus in September the supplement report. And what they do is they actually break it down the 10, 5, 4, 3, 2, 2 and one year as well. So you can actually see what's been happening over that period of time. And I was talking to Barbara Edwards last month about this and she's from Residex. From Residex. And she's an absolute advocate of this supplement because she believes that gives the fuller picture what's happening in the near term, but in reference to what has happened over the last 20 years. So the reason Maggie, that we use that longer term growth is that it allows us to normalize to some extent what is happening in the market. And if you could get longer growth, you would. But unfortunately the free information you get from the magazines is 10 years and that's as long as we get. And that's why we're using the dot map.

Yeah, so that three month period, a lot of people have concerns around that, but it's actually not that big a deal at all when you're talking about 10 year and 20 year growth.

And if you go to module two in the ultimate Guide to Renovation, we've updated, done a recent update too of that information that's in there and we've dumped it into still working model at the moment, but we've dumped it into this kind of web based working model. So just looking at, you know, if I just take two of these areas, Let me take one more down here, something else interesting. So we talk about, you know, with that ripple effect and especially the dot mapping that we want to have a look at the neighboring suburbs. So what we've automated here is essentially, and that's that module two, you can have that in Excel spreadsheet. But what we've done is we've automated here the information of the neighbouring suburbs. So let's just choose that. We decide that we choose one of these and one of these just so I can get you through to the rest information. And we take these three further and this is where we pull up, you know, what's the median for the area, how far is it out of town? You know what has been the growth over the last 1, 3, 5, 10 years is what's the price data, how many Sales per month? 5Sales per month is not a lot. So you might go gosh, I'm going to spend all my time and effort. I'm a bit worried about being in an area that only has five sales a month compared to 11 or 20 or the likes. And then we pull up more data over here around the suburb data. So the days on the market, the, the stock turnover, this is a really interesting data that we get from Ripe House actually which is the difference in prices between the two, three and four bedroom. So you know, if it was going to cost you $5,000 to put in a wall and create a four bedroom out of a three bedroom then you know you potentially you've got a $58,000 profit there or added value. Whereas you know if it's going to cost you $20,000 to convert a three bedroom to a four bedroom it's not really going to work in that suburb. So you know we look at rental yields. So this is all the data, this is all the data that we would be pulling up to get information about that suburb. And it was only after you get to that level that you then turn around and you know, did the census information the percentage of renters and you know, look a bit of crime as well and average weekly income and average weekly income as a percentage of you know, the combined state income as well. So you can get comparable of how, you know, how they're positioned helps. But if you can see here, you know we've got just can't see it. Let me just move that. Where did we go? I was looking at the wrong screen. The percentage of renters you can see here, one sub has got 43% and the other one's got 27%. So you know often what we do is we talk about having.

Come back.

No, I was just checking that people could see my screen so you can see what I'm looking at here Maggie. Right, so you're not going to get down to the point of choosing the streets until you've chosen the right suburb. So once you have the right suburb then it might be the time that you'd go and buy, you know, use the Ripe House and have a look at those streets and that, you know, mark all the things that you want, you know, you the percentage of renters, the percentage houses versus units where they are closer to the transport with that overlay of looking at the geography of the area geography, what do you call it? Topography of the area geography. You're going through that type of analysis and then if you wanted to you could then go and buy say the renovator report and see which streets had the pricing disparity and overlay that. So your question is how do you get from the streets down to, sorry the suburb down to the streets. Choose the suburb first that fits your strategy. Get down to the street level which you can either use something like Ripe House or renovator reports etc. And then start looking at the properties themselves. So obviously they have to be ripe for renovation and in that street you want to take them from a 3, 4 price range up to a 6, 7. So you've got to make sure that, you know, validate that how much work would be involved. And those guys in the ultimate guide of Renovation you have access to that quick quote calculator in module five that you know, we've put 20 plus years of intellectual property into costings that will take you through how much that will. How much estimate would be for the budget to do some of that work.

So yeah, I just had a comment around the. All those bits and pieces like had an interesting. Because when you. Something that I always have to remind myself of when I'm going through and looking at that data. I'll look at one piece of data and I'll go oh, that doesn't look very good. And you tend to then have a negative view of the suburb or whatever. But you really do have to step back and take it into as a. As a whole. Like I heard we went to a seminar I think was last week with and being Kingsley was talking there and one of the things he mentioned was about the crime rating. Now that's. That's always been something that put me off when I saw that a medium or higher crime rating. But he was making the comment that it's quite common across particularly more wealthy suburbs that they have high crime ratings because they have their cars broken into and it's not necessarily where the criminals live. Yeah, that's right. Yeah. Yeah. So it's not such a great indicator of particularly, you know, retarding gross or whatever.

Absolutely. So yeah, Maggie, I hope that helps give you some more direction. Yes, thank you. So I have to go and write pals and try and work that out as well. Yeah, and start. Get onto the module 2 and get onto that spreadsheet and get that analysis out. And I've just demonstrated really quickly how to pull that information out. But I'm not with your course, just with the club. Okay, so in the club you've got the dot map in module one, and in number two you've got number three, you've got the census data and you've got the websites that I use. So the websites that I use are the ones that you can start populating that information. So you know, we're talking about, you know, the distance from the cbd, the turnover of stock, pretty much a lot of those columns that you'll see in the back of the magazines. And then using the websites, I give you the vacancy rates and the crime information and walkability scores. You can put all of those in there. So that's really handy. And if you're interested, I think Ripe House is putting together a pretty compelling offer for our people to make it a bit more affordable as well. So we get. Have we got that? Yeah, perfect, perfect, perfect. So excellent. So, yes, there you go. That's how you can do it. Thank you. All the best. Bye bye. Thank you.

Bye. Margaret has got her hand up.

Let's have a. Margaret has gone and bought a headset just for tonight. And now what's happened? She can't talk to us, so she's on the phone. So let's see if we can chat to Margaret. Hello, Margaret, I'm really here. Can you hear me?

Yes.

Oh my gosh.

Welcome.

It's well worth it.

Oh my God, what a journey that's been just to communicate. Anyway, we're here, we're talking.

We are now. You sent a very, very lengthy piece rather than me reading it. Do you want to? Well, you could read it or you can, you can, you can fill us in and tell us how we can help.

Yeah. So I'm living in the Gold Coast. We moved here from Coffee Harbor. I'm really interested in moving in an investing journey. But we needed a house to live in. So I purchased a house in a suburb called Benoa. Vanoa is fairly well sought after. It's five minutes or so from Surfers paradise. For a three bedroom house is probably the most typical type of house in the area. The rental yields are about 4.7%. The house prices have grown by 19.96% in the last three years and the annual growth in the area is around 22%. It's got very low vacancy rates, very highly sought after, great schools in the area.

You convinced me I want to buy.

Done the research, didn't you?

So I looked at a lot of suburbs and it just happens to Be in the cafeteria for my daughter's school. So it made sense to me. So when I found this house, it wasn't actually on the market. So I'd sort of gotten to know some of the real estate agents locally and one of them rang me up and told me about it. So I went to have a look and it's an older, I think you may be able to see some of the photographs. It is an older house. It's the original house sort of in the original, sort of, I guess, development area and it's at the bottom of a hill. But the suburb itself is, you know, very highly sought after. So I got the house and purchase price was 507. And yeah, so I'm trying to work out the issues with it where it is a strata title. So the guys who owned it before just. Yeah, they just built a house next door. Quite a modern three plus. But the house that I'm on is definitely the better half of the deal because it's got a really big garden.

We're looking at the photos now.

Oh yeah, I can see it. Yep. So it's got a really big garden. One of the. So the upstairs section is really the living area and downstairs what they've done is they've put in two rooms. It's in other photos they put in two rooms, a new bathroom. The issue of course is that it's two centers below the council right to the left. Very, very, very livable. And that's just one room. I've got a bed in there now and so very bright in the morning and what have you so beautifully newly tiled everything. So my plan is to either convert that into a little one bedroom unit so you can see you just walk in from the garage area. So to either put an internal circuit. There's no internal staircase, you see, you've got to go out this door here to go up the side steps.

It's like we rehearsed this, isn't it, Margaret?

You're very in sync. I like this.

That's great. That's the bathroom upstairs. So the main bathrooms. The bathrooms have down and dusted, they're fine. The issue is that there's three bedrooms upstairs, all decent size, but there's no en suite and I know that that's something that for resale it's kind of important. We can sneak an ensuite in there. That's the sort of main corridor going down to the bedroom. So it's freshly painted, lovely wooden floors, a modest little kitchen. So I'm thinking about knocking down and putting a really nice kitchen in. Nothing too fancy, but opening it all up from the. And I'm trying to work out in terms of calculating, I don't want to go over the top, I want to knock that wall down there, you can see where the picture is, and just open that out. I wanted to extend the front to have it as a wider area and just get an internal staircase in so that you can go internally and have the main door downstairs. You walk in, you have an extra bedroom down there as well. So either to make it into a granny flat so I can get an income, I would be able to get $250 a week easy in this area and we just live there for the next five years while the kids are still at school. Or should I just rent it out, buy something else and rent it out as a five bedroom, in which case I probably get 600. The median house price for three bedrooms is around 600 in that area. This particular street is probably the lower five streets in the area, but you know, it's still in the area.

Okay, so I pulled the Residex suburb report for the area and stolen some of my thunder, you know, get to confirm that yes, 13% was what they had last year in capital growth. It was interesting that. Was it 505 or 550? You said you bought it.

I bought it for 507.

507. So you know, the median value is around 760. So. So as you said, it's at the smaller end of the market. But we can actually see here on this report graphically shows us so that rental yield once again are up around that 5% mark. And sometimes the rental yields go down when the prices go up, obviously and they haven't caught up yet. So that never really concerns me when I see this, especially when I've seen what I've just seen above, which is the price has gone up over the last year. So if we go down and have a look at this, this is kind of shows us what the average, you know, the prices are. So most of the properties that have sold in the last 12 months have sold between that 6 to 800 mark, hence, you know that around that 760 median. But there has been 40 below and you know, 40 or odd above. So, you know, it would seem to me that although you've bought below the market for the suburb, you've been able to buy in a suburb that's going up in value and potentially been able to find something that has a capacity for you to add value to it and Even convert it into one of those six to $800,000 properties. I guess your question is, and what you've done strategically here we have a look at the growth, the suburb prediction compared to Brisbane. So we're talking about if you have a 7% growth, your property doubles in value every 10 years. So we're talking about it's going to be a while, 20, 18 years or so for the property to double in value. However, that's not uncommon for a lot of those areas that I've seen around the Gold coast and in Brisbane. So that's not shocking. As I said 30k's north of there of Brisbane, Morrowfield was looking at 9% and that's quite the exception. So your question. So what you've done strategically is quite clever in the sense that you've looked at your home as an investment and I think more and more with the APRA and ASIC regulations that we've seen the borrowing capacity of people being reduced quite considerably. The that what you've done in buying a home and potentially doing it up and selling it and not paying capital gains tax is a really a good opportunity for people who are limited now by borrowing capacities. So good job in seeing that. What I didn't really pick up is that you've got the opportunity to convert the downstairs into a non council approved second residence. Is that right?

Yeah. Student accommodation or something? Yeah, we could call it a visitor's retreat.

And down there at the moment it's all tiled. You've got a bed. I saw a wardrobe. There's a bathroom or what's down there.

Yeah, there's a beautifully renovated, brand new bathroom with a shower. There's a picture in there somewhere of it. It's got a mirror with.

Yeah.

Mosaic around it. Where is it? Oh, there must have been another bunch of photos I sent you. Yeah, that's it.

So, so and, but no, no kitchenette.

No, but one of the big, the double, the mirrored wardrobes are really very big. So I thought maybe of just knocking a wall through and having. Having in that room that you're looking at through there now to the right of that, where the plumbing is, to put the kitchenette in there and then knock the wall through. And the other, the other photograph, the one with the, with the gym equipment in it. Yeah, knocking that through and. Yeah, that room and bringing the bedroom up here, the bed up to where this desk is and just see where that window is just by making that into a doorway. So it's an entrance. That's a very big Room that's like seven meters or something.

And the view of that was if you stay there and then you rent out downstairs.

Yeah.

And get a cash flow from the property.

Hmm. I guess. And how many bedrooms are upstairs at the moment?

There's only three upstairs and there's no en suite. So I thought where the cars are parked right now, if I put a carport out the front and then made an extra living space like a bedroom space where the cars are, then I could use one of the bedrooms up here to make a big parents retreat with an ensuite and a walk in wardrobe.

Okay. So I think that with the kind of comments that you're making about knocking out the window and putting in the door and I've just lost myself. Wait a second.

Okay.

Okay, sorry, I'm just trying to zoom up 4216. You're going to have to get council approval for that and I don't know how you could justify. You might have trouble getting council approval where they know that you are not making the minimum heights restrictions that you need to add in as kind of second residence downstairs. So there might be some concerns around that I think could be a bit of a problem. And just want to see if you can see my screen here. I'm just. I think I've hit the wrong button. Can you see that sensor stats that I've just pulled up?

No, I don't think so. Oh, there we go.

Okay. Beautiful. So I'm just. The only reason I've pulled this up. I just want to get a feeling for.

I've just got a comment on the pushing the door through. It would require. Depending if there's any kind of overlay there. It would. It would require a permit to put a. To make an external change for the most part. But yeah, yeah. It might be separate though from any. If you're kind of using the dwelling as a habitable room even though it's legally not allowed to be one, there's not much policing of that that goes on unless it comes time to sell the property.

Yep. Yeah. So. So what Sean's saying is it might be possible and even a call to the town planners and asking them regarding. Oh, I think we've lost you, Mark.

I can hear you.

I've got it. Town planners and just ask.

Kind of funny.

There's quite a bit of echo on the line.

Yeah, I'll just. Ah, okay. I know what it is. Yep, there we go.

Okay, so we've got double microphones going on here. Feedback on feedback. So there might Be opportunities. Ring the town planner and have a discussion about, you know, the fact that you've wanting to put a door in and how they would assess that without bringing up the fact that you could put a bed down there and take the bed out if they want to come visit.

Utility space.

Yeah, yeah, exactly. The gift. Because I just. The concerns I have, I've got a friend who's done something similar and the people they bought the property off actually did raise the property. So it was legal. I think it cost like $100,000 to do that.

I love doing that in Queensland. I love it.

Dual income happens all the time. And one of the things that was a problem for them was they did have the internal staircase and they didn't want to have. They wanted to have the privacy from the people downstair. So it's interesting that you're talking about putting in an internal staircase and also doing that conversion because I'd almost say you probably don't want to do that. The internal staircase would only be if you decided not to do anything downstairs.

Yeah, good point.

So just keep that in mind. I mean, the reason I've just brought up the census data here is just get a feel for what the kind of number of bedrooms are typical and that two bedrooms property is typical. And so at the moment you've got three bedrooms.

Yeah, three bedrooms.

And you know the idea, and you said potentially we could put another bedroom downstairs, make it five bedrooms.

Yeah, A rumpus room or a second living space for the kids. Really.

Yeah. Because, you know, it seems to me that, you know, the four bedrooms aren't typical for the market. So if you're being strategic here in saying I want to renovate this to create a profit and sell it, then I think that what you've done is you've been quite strategic in buying below the median price. And it's not clever buying the worst street in the area, buying the worst house in the area, but having a property that you have the opportunity to do something to. You've got the unusual garden size at the front, but you've got a big block and you've got a good area, as you say, that people want to live in and good catchment. So you've got all those fundamentals of being in a really good area. You've had the good growth that hasn't necessarily been typical of what we've seen in Queensland. So I think potentially going to a bigger sized property and creating something, something, you know, the, the four or five bedroom could potentially not be, you know, would Be a problem if you. So if you're looking at renovating, then the. And renovating and selling, then what you talked about going upstairs. You know, I think what you can see in our structural renovation that we did in the ultimate guide to Renovation, you know, just by doing simple things like getting rid of the 70s kind of arch and modernizing or, you know, maybe that's a structural wall and you can't pull it out. And you know, there's nothing really wrong with that kitchen, but it actually looked pretty good.

That's. Yeah. Paint and floorboards just does so much, you know.

And so I almost wonder if. Yeah. If you're going, if you're doing this to sell, you know, what value can you add? Well, you know, light, bright paint, floorboards, modernize. The garden area seemed quite stark to me. There might be some opportunities.

Yeah, I just started planting some stuff and yeah, the privacy is not there. But I wondered about doing like just covering the brick veneer with a cladding, you know, that sort of cheap clip on cladding and then doing a cement sana cement render at the bottom and just. Yeah, bring. Bringing it up. I don't know what you think about that.

The way I think about anything like that is what level it's. If I'm. If it's going to sell or even if you're just going to keep it and you're getting evaluation at the end. I think of it the same way. Is that what, what are the other houses on this. What's the range in the street, in.

Other words, across the road.

Yeah, I never want to be going up. I don't never want to try and make a house the best house in the street because then you're into high risk territory of moving it there and getting your price. So if you're thinking about sixes and sevens, what are the sixes and sevens in the street?

I don't think sixes and sevens. No, not here. The two houses up sold for 589.

No, sorry, I wasn't. Sorry. What I was talking about is the. Sorry. Not as in hundreds of thousands, as in if you're buying at three and fours, as in a scale of one to 10 in over a range of a street. So not in. In dollar terms. Yeah.

Okay.

You're buying in threes and fours, which it sounds like is what you've done here. And then you're trying to sell at sixs and sevens rather than at nines and tens, which is tempting. And a lot of people try and make it the best house in the street. But the safer area is in that six and seven. So if you had a look and on the properties are at that 60, 60, 70% mark on the street street, how much they're worth and what has been done to those properties, what they look like, you know, what the. What are they rendered out the front? You know, they have.

They got garages, a bit of rendering and painted roofs. Yeah, just basic.

Yeah. And then it's a matter of working backwards from there and said, right, if. If we did those things, let's say if we did all of those things, how much would it cost? What's the property worth at the moment? And is there any money left after you do that renovation kind of thing? So if you start with that end value and then work backwards, what's the renovation going to cost? And that will kind of tell you that exercise will tell you if there's actually money in it to do that work.

All right, okay. Bits and pieces that you wouldn't spend any more than 1.5% on the facade of the house and stuff like that. Are there formulas that you have about how much you would and wouldn't spend on particular areas of the reno?

There's basic rules of thumb around cosmetic renovations. Spending 10% of the property. I tend to think that they can be more trouble than they're worth. A lot of those formulas, The best way is to start with the end value and work backwards. And it's not as easy because you then going to have to work out what it's going to cost you to do those things. So if you're looking at those properties that are in the 70% mark of the streets and not the highest price properties that have sold in the street, but the ones that are up towards the top and then looking what features they have and comparing that to the features you've got, and then you've kind of got to go away and do the pricing, you know, do the costing on that and work out how much it'll cost. That's really the most reliable way to do it. The other point I would just make there is. And one of the easiest ways to do that is if you can get a friendly agent where you can get a past sales for the last couple of years of the neighborhood, and you're particularly interested in your street and the streets surrounding your street, and that'll give you all the past sales. And an exercise that we do is called the price pin map. I'm not sure if you're familiar with that. It's a price pin Map we call it. And it takes you, you know, it might take you a couple of nights to do it. And it's a nice thing to do with a glass of wine in your hand. You know, at least take you a couple of hours. But if you, the exercise is that you take, you've got a report of the last two years worth of sales data and you can get, if you ask your agent and I used to get agents to do this for me quite often and you get them to print it out in street order. So rather than price order, get them to print it out in street order. And then you go through on your, you get a map of the suburb and in particular your, your area, let's, let's say a 500 meter radius in, in your area. And then you go through and you choose a color pin for each price range. So you might, you know, start it at 300,000 and go up to 700,000 and three hundreds of yellow pin, you know, four hundreds of red pin and so on up, up, up the 400,000 increments. And if it's a, if you're lowering the market, say if you're in an area that was 2 or 300,000, you might actually break that down to $50,000 increments rather than $100,000 increments. And then you just literally go around and the price of each property, you go and stick a pin round about where that property is on the street. So number 24, you know, and you go around and you pin and it'll take you a couple of hours, you might even take a couple of nights. But at the end of that you've got all the colored pins on the map which shows you where the high price properties are and what they've sold for over the last couple of years. And if it's a really hot market like you might, it seems like you've had a bit of growth there. You might consider using two years data rather than three years. And if you're in a really slow market, you'd use three years to do this. But then you know, you can see where all the trends are. And often you'll see that, that a lot of the high prices you're getting on one side of the street or at one end of the street or there's little clumps where you're getting high prices. But you might find, for instance, and this has happened to me, where I was there wasn't. There was, there was a splattering of high prices and the rest of it were Grouped pretty, pretty closely together kind of thing. And then that, that'll really take a.

Lot of feel just from. Yeah, just from having lived here for a couple of months now. I'm already getting a feel, you know, you know so much more once you've moved in, don't you? Yeah, yeah. Okay.

Yeah. But having that data takes a lot of the risk. Yeah.

Well, I'm just also having a look here at RP Data Professional. And as John said, you know, this is what you're a real estate agent. I think we're about to offer our students some access to this too, aren't we, John? But this is what the real estate agents will pull up for you. So if we're looking at, you know, other three, let's say four bedroom, three and four bedroom places, there's 2000 houses and 1200 of those are three to four bedroom. What's the size of your land? I know that you said that it had subdivided. Do you know what the size is?

It's about, I think it's 560 or something like that.

So we want to do like with like. So we're looking at there's 190 properties in the area that are, you know, less. Less than $600,000. 600,600 square meters. So. And you know, we've got some. And there's also some sale data here that you, you know, we've got coming up. But you know, I'd almost go down here and have a look at these. And if you do have access to RP Data Professional, there's a really great iPad app that actually helps you have a look at these images. These.

Where you can walk around and thumbnails. Point your phone at the house and it'll tell you what it's worth.

But it shows the thumbnails as well. Because I guess what my feeling is about your house is that it seems to me that there's been actually quite a bit of work and renovation done to it. Like I would. I don't find the bathrooms look great. I think the kitchen. Yeah, the kitchen could be updated. Those floorboards look fine. Maybe squaring off something as simple as that archway. But if I look outside the property, to me that is where there's. Yeah, I think there's some buyer objection there if you're looking at reselling the property. So, you know, I'm just pulling up here, 11 recent sales in the area just to see.

When you say buyer objection, you mean the actual feel of the look of the outside.

Yeah.

So we talk about one of, one of the bang for the bucks is street appeal. And you know, just, just looking at this without being mean because obviously this is where you're living.

Oh, no, no, no. Listen, I have no attachment to it. Honestly, I'm trying to be as, as. What's the word?

Objective as possible.

They keep going too impressed by my. I could have bought something much fancier somewhere else, but it wasn't in a growth area and they were going, mom.

What are you doing? Well, I mean even just looking at, at the fencing next door, you know, something as simple as that. And I noticed one of the photos, you know, you've got some decking and the decking's just going to nothing. You've got that.

If I kind of open that, I just extended the deck, put a lovely. Just some really nice privacy. Privacy stuff on the fence. Yeah, I was thinking of putting that clad and just cement around to the bottom and really bring it up. Paint the room.

I don't even know if it needs the cement. Rent. Just looking at some of those photos of this or looking at some of the surrounding properties, you'd really have to assess. I'd talk to a real estate agent and say, I'm thinking, thinking of selling and I'm going to spend 20 grand on this. What did you think?

Where would you spend it? Okay, yeah, I've actually got two coming tomorrow.

Look, I just, I think the looking at the inside photos and I know sometimes as renovators and investors we kind of look at these things and say I've got to rip out and do things. And one of the things, sometimes the best thing you can do is not replace but maybe just repair or just rejuvenate some of the stuff. But to me, that fencing there and the stark big yard and the old kind of stairs up to that patio, to me that ages it. And I don't know, John, what do you feel about the outside versus what's. What the inside looks like there?

I would be just going on the other houses in the street. So if I'm seeing houses that all look like that and they're still at sixes and sevens and I'd leave it like that and it might be as easy as just spray painting the facade or. But yeah, I mean, obviously aesthetically it doesn't. The front fence doesn't look great and you'd assume the other. There's other houses in the street that don't have that got better fences than that. So that would be my guide.

Yeah. So don't try to be Just don't waste your money if you don't need to would be my thoughts. And because you're still in two minds of should we, you know, live here and rent out the bottom or should we renovate it and sell it? You know, you need to do the numbers of what each of those options are going to cost and what's going to return to you. Because one of the things about doing what you could do to keep some cash flow and having that second income downstairs is that if you have done the costing of that conversion then potentially there is an objection to that when you go to sell it. Because we did see that the two bedroom houses in census were the primary type of properties. So you've almost created the four bedroom exception to the area. And if you've done that, if you can't, when you go to sell it, turn it back to what's typical for the area.

I know what you mean.

Yeah, yeah. So just, just run the numbers on each of them. But see, real estate agents are going to give you an idea and say what do you think? Where, where can I make the most money? They obviously want to get the sale and potentially tell them that you're going to buy in the same area too because they'll get a buying commission so they'll be really working for you and, and asking them, you know what, where you can spend the money. Because I just. There's nothing too wrong with what you got.

Yeah. Knowing that they will have a bias towards selling.

Yeah, exactly. But you know, if you were going to sell, where would you spend the money? And here's some things that you considered and walk up and down the street and be objective as John said and have a look what the rest of the street looks like because you know, you might just have by the virtue of bought with a 13% growth in the last year and you know, buying one of the still affordable properties in the area that's not, that's already had.

A lot of the work done for it.

Yeah, maybe there's not a lot of spent expenditure you need to make and you know, you just have to get your kids to suck it in and live there.

The thing is the market never knows. The market doesn't really care what you spend on a renovation. So you can, you can spend very little and have it look good and, and wherever it sits in that market within the street will be, it would be a good thing but you could, you could probably spend a lot of money and still end up at the same point.

Exactly, exactly.

Okay, look, thank You. That's fantastic advice. I really. It's really clarified a lot of things for me. Thank you so much.

Oh, no worries.

Pleasure. Pleasure. I'm so glad that you persisted and got the headphones and stayed on the phone. Oh, my God.

I was screaming in here.

Oh, my God.

Thank you very much.

Okay, pleasure. See you. Bye. Bye, mate.

Bye now.

Okay, a few hands up. I can see Ross here. I don't think we've even spoken to Ross all the time we've known him.

Let's have a. No, let's have a chance chat. I'm going to give you back my.

You there, Ross? Ross, can you hear us?

Yeah.

Oh, we hear you. Don't try and hide now.

As Bridget's now saying. What have you done? Ross?

You put our hand up.

My hand is up.

We can hear you.

Can you hear me? Yep, loud and clear. How's things? Yeah, good.

Guys, how you going?

Yeah, good.

Don't know what happened there. It blanked a second. Sorry.

Can you hear me? Yep, we gotcha.

Oh, you're good.

Good.

Okay, cool. It just keeps dropping out at my end.

Sorry.

How you guys going?

Really, really good.

I've got some questions for you. I'll try and make it fast.

No, no, plenty of time.

Okay.

So you're talking about the box on the back idea a bit earlier and. And one of the things that comes to mind is when you're sort of looking at properties and at the moment Jane knows that we're pretty much pushing the deadline on one that we're looking at this weekend to buy. How do I go about finding out whether or not council will actually allow us to do that? More importantly, on this particular one, I've had my builder look at it and we're doing the numbers on it and we're actually thinking that the numbers add up to be a better option to go double story.

Really?

Rather than the box on the back.

Double story. New build or over the existing?

No, over the existing. But we're going to probably have to take it back to frame anyway because the place is a complete dump. It's going to need re stumping, re plumbing. The roof is buggered, but it's in a pretty much gold. It's the worst house in the best street, put it that way. So what we're trying to do is work out if we go down this path, how do I find out if the council will even let us do what we're thinking?

Pre apps, pre application meetings is what I use and abuse. You can literally, if you Want to be a pest like I do, line up pre apps day after day after day after day and, and they'll. Most councils will do that. So you. Before you even submit. And we do them right up to the. I've done this in multiple properties before. I've bought just a, you know, pre application meetings and gone in with, you know, drawings on a piece of paper and said, here's what I want to do. And yeah, and you just keep on working at it. And the other. Another good tip actually, when you get. If you do buy it and decide to make some plans and submit them to council for planning approval, assuming that it needs planning approval, another good way of doing that is doing that through the pre application process as well. So starting off with really rough drawings, organising a pre application meeting which are normally free, getting feedback and then going away and doing that a couple more times and then even I normally would submit my plans at the pre application meeting too.

Right, okay. Okay. So is there a chance that I could walk into council and basically make a sort of a rough. Get somebody to give me a rough idea of whether or not what I'm suggesting would even be possible without going down the whole path of drawing? Rough drawing. Could I show them the property and say, this is what I want to do, this is where it is. What's your thoughts? Would they give you an answer or they just take your photo off, get planned?

No, no, no, no. I draw things in front of them often. I say, oh, if that doesn't work, well, how about this? And here's my pencil and wrote rubber. So yeah, no, normally actually in most cases, and you know, probably dealt with half a dozen different councils over the years in most cases I found them to be really helpful at that stage. It's when you go, if, when you do something or try and I guess buck the system where they, they can really close up shop on you. But if, if you include them in the process and you go in there and say, hey, well obviously I don't want to do anything that's, you know, out of bounds or whatever. Can you, can you help me understand the ropes? Most of the time they'll, they'll help you.

Okay, and how much weight does precedent count or does it vary from council to council? Because in the same street there is now admittedly there's not many, but you know, there's a street of, I don't know, call it 150 houses up and down, but in that 50 houses there are three that are double story already.

Yep. It helps it's certainly not the be all and end all. We've had cases where there's plenty of precedent or not plenty, probably not the one, but there's, there's clear precedent and because of the, the length of time between when they were built and what we're proposing is, you know, there's a couple of years, even three or four years apart though they'll decide that that's.

Things have changed.

Yeah, things have changed. Particularly if there's been any rezoning happen. And that's probably the first place I would check because you're in, you're in Melbourne, right, Ross? Yes, because there's been some pretty major shake ups to the council rezoning in 2014. So I mean this is again what you'll find out when you go into council to have a, have a yarn. But yeah, that, that would be because they consider a few things. One is the, the just the general overlay of the street and then they have some rules around, you know, the footprint of the building so how many square meters it can be on the block and, and stuff like that. And, and then there's setback. So typically if you wanted to, as you know, we do as developers trying to use as much as the block as we possibly can and bring the house forward to the street, they'll look at the houses on either side of you and they'll want you to be the median of those two houses. Typically. Yeah. So that's one of the measures most councils tend to use.

Okay, that's good to know.

I would go in there and yeah, pre apps are normally free. What council do you know?

Is it Maribyrnong?

Maribyrdong. Okay. Yep. Yeah, I haven't, I don't know if.

You'Re able to get it done before auction day on Saturday.

Normally there's nearly always a planner on duty.

Oh good.

Yeah, there's nearly, yeah, nearly always a planner on duty that you can just discuss things at the desk. That'd be first port of call. But if it's something that you need to. Because normally there's, you know, you might have to wait for a little bit and there might be some more people waiting behind you. But if there's something more serious I would try and get a pre op. But normally they're pretty good. Unless they're a council that's absolutely been smashed with changes and you know, lots, lots of people queuing up for some particular reason that they're normally pretty good. You get there early in the morning before at 9 o' clock and you normally get some time.

Yeah. Okay. And on that, on a similar point, you mentioned before one of your developments that you hit pipes which then slowed you down a lot.

Yep.

How do you. Is there a way of knowing that that's, that they're there?

Yeah, there's supposed to be, there's. There's a crowd called Dole. Before you dig.

Before you dig.

Yeah, yeah. So they, they in theory go out and get all the service providers. So the, the electrical, the, the, you know, whether it's Melbourne mortar or the, the water, the sewer, all of those people then have to send you a report and tell you what's under the ground down on that block. Now, what they tell you is under the ground and what's under the ground could be two completely different things. Most, most of the time it's reasonably accurate, but you just never know. Sometimes you've got a house behind you, which happened in our case, that's running their stormwater straight through your block because it's been an empty block for 20 years. Or, or when the place was built, they ran it up the side of the house because they had an agreement with the owner. Or there's lots of, there's lots of stuff like that that can happen. But yeah, before you dig is, you know, you're going to be, you know, if you, if you're going to, your odds are reasonably good that there's not going to be anything bad down there.

So on that example, bit of a side question here, but on that example, you said that you had the stormwater of the other property going through yours because of vacant property block for so long, and then you hit pipes. I'm assuming it's theirs. Yeah, they've run it through a fault because they've done that.

I mean, it was a previous owner. Yeah. In the, in that case, fault doesn't really help you much, unfortunately. So, in fact, that was, that was gas. It wasn't suicide. It was even worse. So we had to repair the gas and then we had to work out a way of getting the provider because we really could. Couldn't touch it. We had to get the provider to, to try and find a solution to get that back. And in the end we were lucky because there's a street on the, it was a property behind us that's actually was a previous subdivision of the block that we bought. So it was quite a large block. And they divided it and put a, a corner of it and sold it off, you know, 25 years ago. And then we bought the rest of it, you know, three years ago and, or two and a half years ago and, and they didn't have. They wanted to put gas on the back street so they ended up taking the opportunity to run gas on the back street. And it didn't, didn't actually cost as much to fix. There was just a bit of a.

It was kind of handy too, wasn't it? Because the guy out the back actually worked for the gas company.

Yes, that's right.

Yeah.

Yeah. Which is a help.

So it wasn't the six week wait that you thought you were going to have.

Yeah, yeah. But I mean they're good questions because those service, service things can be a real nightmare. And you want to know the first thing we always look at when we're looking at a block is where's the sewer and where's the stormwater? Because there's an old saying that stuff doesn't float uphill.

Yeah, exactly. All right, I'll change tactics very quickly. This one's maybe a bit more for you, Jane. I don't know. Maybe. I don't know.

I shouldn't say that.

Sorry, John.

No, you're right.

Where obviously as you know, part of the ultimate guide and module, the last few modules which deal with auctions and etc, etc, I believe the last couple modules and of course they haven't come up. So have you got or can you give us any quick hints on how to do, how to go through an auction properly?

Well, I have to give you special access. I think the main thing about going to auction is that you need to be very, very clear about what your price point is. And I think emotion, regardless of the fact that as investors, you know, you, you do all this research and all these numbers and you go and do all these things and then. And seriously get onto that Facebook page and have a look at that funny video regarding Sydney auctions. Because it's on so many levels, it's, you know, jump up by $3 million in one fell swoop, you know, so many levels. It's, it's right. People do still get emotional and if you don't feel that you can, can, you know, keep to your numbers then, then, you know, get someone else to bid for you. But you know, I've been reading a lot about this, you know, FOMO scenario recently, which is the fear of missing out and you really have to, to kind of sit down and go, okay, my number is $400,000 and I'm not going to go over that. And you know, having grown up a racehorse stud and Going to spending many of Easters at Inglis's horse sales. You never kind of end up on a round number. So when you are choosing a number, you know, make it the 402, 500 or whatever it is but you know, not just right on the nail. And you know, there are so many negotiation techniques and some people, people want to jump in fast with a killer bid and some people want to wait until right at the end and there's others that try the intimidation, stare back at the crowd and stand beside the auctioneer. And we talk about the funny lady technique.

Crazy lady, that's Medine.

You met Medine at the dot map. Medine had this weird technique where she'd almost bid against herself and act really silly and people were, people would feel so sorry for, they just stopped bidding because they wouldn't know what she was going to do next. But you know, to be, actually, to be honest and I've bought half of my properties at auction and half, you know, through, through negotiation either afterwards or, or beforehand. But I just, I'm just not into playing the games. I know my numbers and you know you're gonna, I put the best number out there that, that I can do and, and let someone else open the bid. Ask if the property's on the market. If you have any questions, ask, don't feel pressured into making a quick decision. If you need to take a moment, take a moment because if they think they've got an extra bidder in there, they're going to give you the moment. As soon as you put your finger up, you're going to have one of their helpers beside you and encouraging you. I downloaded an app the other day that actually you could put in, in the offers and which one was the last one was your one because it does get really nerve wracking and I've seen people bid against themselves or get confused thinking they're putting up by $10,000. They've gone up by $100,000 because the numbers over a million get all confusing when you're tongue tied and your mouth is dry. So look, I just want to play the game. Ross and Bridget, I know you guys have done so much research and, and put in a lot of effort around what you've been looking for. I don't think you need any fancy techniques. I think you just know your number and stick to it. I just want to make a comment about what your builder said about going up would be cheaper than going out at the back. Obviously laying slabs and construction costs are quite expensive compared to using the existing kind of and going out up existing structure frame. But you know the box at the back, you know the, the hundred thousand dollar ninety, one hundred thousand to create that and I don't know, thirty thousand or however much you want to add to fit it out is a lot cheaper than the $250,000 or $300,000 that I see often. A lot of my clients are getting quoted for construction costs. So just when you're thinking about. I just, I just didn't want that. Let slide the fact that your builder had said this because you know, maybe if you take the plans from, from module 9 along and show them some of those techniques and obviously the roof line has to marry in and we've gone into a lot of detail on that in the Ultimate Guide of Renovation. But you know, it's, it may not be.

So I should correct that comment. It's actually $50,000 more to go up than it is to go out. But the difference being is the discussion with the builder and I and the builder is also a developer. For much time he's basically said where you are and the location you're looking at. He goes probably the most valuable thing you've got is the ground. He goes I wouldn't suggest taking up all the ground space with the property because we'll have no backyard left basically if we go out is very quite a small block. So he said the option is take up the backyard and have no backyard or go up 50 grand and add an extra bedroom to it and you probably get a better outcome. So we're still tossing up with those numbers but I should stand corrected.

It's not cheap.

Grand more but it's probably going to provide us a better.

Value and once again walk the streets and have a look at what's acceptable. Is the, do you need the extra bedroom to make it typical for the area? The census data and are people happy to have that beautiful spaced out kitchen, butler's pantry, lounge room and a smaller backyard than an extra bedroom upstairs?

Yeah, that's a good point. I mean maybe that's something we should need to look at is do people really want that bigger backyard? Because if we do it one way we get a 4 by 5 metre backyard. If we do it another way we get a 5 by 7 meter backyard. So one backyard is double the size of the other basically.

Yeah.

Which might. Yeah. Which having a look at the other properties in the, in the area and what you're renovating up to will help you kind of make that decision.

And if you're buying to sell, then you want to see what other people are selling, you know, what. What they're buying. So even if you're buying to hold, then, you know, or to rent out, then completely different. So the research on what the others are doing in the street.

Ross, I'll give you my 5 cents worth on the auctions too. From the agent's point of view or the auctioneer's point of view, they want to run the auction as fast as they can and keep the bidding up and keep it in people in an emotional state where they're really bidding and they'll go up past their. They'll get into the competition and go up past their reserve. So the golden rule is obviously have a reserve and stick to it. And I, I also use Jane's technique of never having a round number. So having a number that's a little bit squishy. Yeah, that's right. So everyone will hopefully top out, you know, two grand and, you know, $20 and 50 cents less than you or something stupid like that. And then the other thing that I do is give. Knowing that the auctioneer wants to run it that way is the main tactic I do. And the main tactic I hear other developers doing. I know Medine's big on this, and it's kind of what the idea of the crazy lady technique is, is just taking, trying to take the heat out. So whether that's just bidding in smaller increments or just taking a long time to bid and just. Is it on the market and just dragging it on is. Is just stopping that kind of frenzy that, that you see going on now. At the end of the day, if someone's willing to outbid you, they'll outbid you, you know, but, but hopefully that might, it might be one of those kind of percentage plays that takes someone who would have gone over the reserve and gives them a chance to reflect a bit and chat with the, you know, the hubby or the wife and, and pull back a little bit or pretend you've got.

You're on the phone.

Yeah. And you often see. And the other thing is when you see people conversing and stuff like that, have, have your plan and, and stick to it and, and just be confident. So if you start starting to get towards the reserve and then you're chatting nervously and all that kind of stuff, then people can smell blood in the water and then they'll be willing to go that extra 10 because they might knock you out. So they might try to knock out bid then to try and try not. Which is what I do is if I see people doing the same thing, so I might be 20 grand off my reserve, and then I'll see people kind of. And then I'll just put in the.

Checkbook going, can we get an extra five grand?

My next bit, I'll just stick in the 20 grand, you know, because I'm sticking below my reserve. And I think, well, that'll blow them out of the water altogether kind of thing.

And to be fair to Todd and I have always been separate when we've bidded at auction, so we don't have those little nervous conversations at the moment going, why are they pulling out? Why did they stop? Oh, my gosh. Should we go up for another five? What do you think? You know, one person bids and the other person stands back with the champagne waiting.

Yeah. Yep.

Well, here's a question for you. And I don't know if this is legal, so hopefully I don't get in trouble, but are you allowed to bid against yourself? So if Bridget won, let's say, hypothetically, Bridget stood on one side of the auction and I stood on the other. And we had a plan that every time somebody else she bidded, Bridget went, a thousand. And then we'd wait, and then I'd do the next thousand. And then two of us bidding against each other in very small increments.

People do it. There's probably. There's. It's probably a bit of a gray area, and you probably could get caught out.

I don't think I'm going to make a comment on it.

Yeah, you probably could do it. You see a lot of funny stuff. You know, I go to a lot of auctions, so you do see a lot of funny stuff. But the other thing I would say is stand up. Stand up the front. And so you can see if anything, apart from anything, at least you can see who's bidding against you. Because not much of it goes on these days. But it used to be the case that, you know, they'd be taking bids from the trees and all sorts of things. But if you can stand out the front with the auctioneer and look back at the crowd, at least you can eyeball who you're bidding against and see that, you know, see where they are.

I gotta love. Once again, back to the English's horse sales for the thoroughbreds in Ranwick. And I remember my dad being up there and this bidding was going like mad. Bid here, bid here, bid here. And my father came down, I said, oh, my God, I can't Believe he got that much money. There's like $5,000 something. It seemed like a fortune. And I said, there's so many people interested. He said there was one bid and he came in at $5,000. I was like, oh, my God, that's like 30 before. So, yeah, you never know if they're where the bids are coming from sometimes.

Yeah, they have all sorts of tricks. They. They do. And when you. The tricks are good when you're selling and when you're buying, they're horrible, you know.

Okay, thank you so much and all the best for Saturday, guys. And let us know how you go.

Thank you.

We will. You'll know about it.

We will.

Cheers, Ross.

Good luck.

Now let's have a chat to Ray. In actual fact, Ray, just above. Ross, Ray, hopefully you've got a microphone there because I know I sent you an email this afternoon going, welcome. I saw you joined up very recently and make sure you're on the call tonight. So can you hear us, Ray?

Yes, I can.

Hey, how are you going to.

Not too bad, not too bad.

Now, is this property that you've put in the chat, one that you've actually purchased?

Yes, I bought it. You said. Oh, you may. I live here, actually.

Right, Fantastic.

Congratulations. Well, I've got the photos here. Can I show everyone?

Yeah, yeah, that's fine.

So what are your questions?

My question, I plan to actually do renovation after one year and then rent, make it as an investment property, withdraw equity to buy my second one. I would like to get some idea from you that how do I actually do the renovation on this one? Gotta say, I repaint the green thing. I paint it to a white color.

I'm so glad because I had a quick look at this. I thought, I know these Queenslanders are big on color, but I'm sure. So hoping that this is not Ray's attempt at the color scheme. So I'm glad to hear you painted the green. And what about the orange? I think I saw some interesting orange there in the kitchen as well.

I painted too.

Good job. Paint covers a lot. And I gotta tell you, I had a purple feature wall and it took about five coats to paint it. So I imagine you were painting a bit to get that covered.

Exactly.

So I couldn't actually see a floor plan here, but have you. So it seems to me that it's quite. Is the back of the fence quite up against the back of the house? Like, is there a lot of backyard?

The land is 762 square meters. The backyard is actually quite small. But the front yard is really big. If you go through the pictures a bit further, you will see the front.

Yard at the back.

This is the front. So it's quite a lot of mowing to do.

Yeah, get that right on mower.

Yes. And what my plan is actually get rid of those palm trees to make it like a big family and just grasses. So this one part of my plan, but other than that, I don't know, maybe do a bit of render on the front. I still have no idea how do I do renovation on this front.

Okay, you did buy it with the plan to renovate it or you bought it because the opportunity was there or what was behind the buying decision?

The buying decision is actually I want to buy one to actually live in there. And then also it was actually the main median price for this area. 650. I got it for about 500 and it was a divorce situation and they fell through the auction for once. And then there's another offer fell through because of financial issue. And then I think I bought it for a reasonable price and it's a good location. Close to train. I walk about five minutes to train station and also bus station and then close to a lot of shopping center as well.

I reckon you could probably sell your palm to Margaret. She's looking to, you know, put some plants in. Yes, just. Just tell me. I recently got rid of a palm that was in the back of my building and unfortunately it was not as easy as accessible to you. And it ended up costing me $6,000 to do it. Is it. Just tell me. This area seems to me to be an area that potentially would have palms. Why are you thinking about getting rid of the palm?

I think because the thing is in the front is facing the property, facing south and it's weakest in terms of sun. So the palm block. A lot of sunlight.

Okay, gotcha.

And it just one of the idea. It's not necessary for me to do it. But the most important thing is the interior part.

Okay, so you bought this because you wanted to live there. You want to live here for a year and then renovate it within the year while you're living there and then rent it out. Access the equity. So you've bought it 500 and the median is more than that. You have got a three bedroom property from. It's three bedrooms. So three, three bedrooms, four bedrooms is the typical. But three bedrooms, 39% is quite, quite, you know, acceptable. It's not like It's. It's the one bedroom or two bedroom down here. At 6% most of the properties in the area, 84% are houses and you know, you, it sounds like it's in the rented area of the streets. So close proximity to the infrastructure and the public transport that renters will want. So you've probably got it in the right the street areas where the renters would be. So Ray, in your property success club in module 2 or 3 month 2 or 3, you'll have access to that census tutorial where we actually take you through and show you what streets, how to tell what streets the renters are in. But you know there's 20. Well what do I, I think I saw it before. 28% of people are renting in the area. So there is a rental demand which is really good. As for. And I just, I quickly put it into RP data whilst we were chatting to Ross and just to see, you know, other three bedroom houses in the area and what they're selling at. And it seemed to me, you know, I was just trying to validate that yes, yours is below the market of what most of the others are like and because I was looking at that fence thinking oh, I wonder if there's something there about that fence. But it seems kind of typical fence line and I couldn't see a lot of. Just looking at this pretty deep properties. Yeah, I couldn't see a lot of palms. But I see now what you were saying about the fact that the light getting in the house and something as sometimes as simple as getting rid of the palm, you know, can almost save you on, on repainting some of those, those darker rooms as well. So it could be, you know, get some quotes on that. The house itself. I don't know what you think John, but I. Other than the, the color scheme, it's quite a simple kitchen. But you know that, that kind of tiled look and the, the clean lines that you've got there. It's got modern lighting. I think I saw one light here that I thought, gee, that really dates it. Just some simple lighting.

Yes, I actually change it to a modern light.

Oh good.

I think you've already nailed the big picture stuff. So you've bought below what the market is. You've bought what seems to be a good sized property in the area. You've got the maximized front area. I think you know, things about what renters want in the area is that they potentially, you know, want that. The, it seems to me like it's the typical. Let me just confirm this because I'm about to make a gross generalization That I could validate that families. Families want to live there. So family households are 73%. So. So have you got family yourself there or you.

No, no.

So just think about what potentially the families might want. So there might be some things that you can do for, you know, pets. Sometimes, you know, it's really hard for people with pets to actually rent. So you can actually get a bit of a higher rent, which means that sometimes that you have to just fix up the fence or even separate the back from the front so they can keep their pet away from the bite and the mailman. But there's some simple things like that that you might consider. But I've got to be honest with you, I can't see a floor plan here to actually be able to see if there's something innovative that we can do. But is there anything on the floor plan itself?

They don't have a floor floor plan. I checked with the agent and owner that they. They don't actually have a floor plan.

Yep. And look at this. Rarely found large vehicle, caravan or boat access on the side. And there's two pet doors. So there we go. We do know people like pets in the area and close to school catchments. Sorry.

The previous owner has five. Four dogs. Four, five dogs.

Oh, my God. No wonder they got divorced. You'd be competing with people on the bed all the time. Right. I stayed with a friend in Queensland actually last week John and I were up at a course at Sanctuary Cove and she had friendly dogs and cats. I ended up sleeping with the night. So I can imagine there's not enough room for the partner.

Look, it sounds like you're on the right track.

The painting and I don't see anything here that I would. You know, obviously these are the pre things that, you know. The flooring looks great. The kitchen itself for the $500,000 mark price. The only thing you might consider is just going and having a look at other properties on the market at the moment and just seeing what standard of kitchen that they have. Because there might be some opportunities there to just to make that a little bit more modern.

Maybe change handles, maybe paint the color. The other thing is that if those tiles is a little bit hard, the floor tiles a little bit hard to tell from the pictures. And again, it would come down to. Yes, the other properties are like in.

The area's not good. That's right. That's right.

Because they can be sprayed as well. You can get a. That's the kind of thing I would get a resurfacer to Come in and do. Which might cost you a couple of thousand dollars, which may or may not be a good way to spend your money. Depending on again, if it's adding value to the property, if there's a capacity to add value to the property in the first place, and if it's bringing it up to the norm of those other houses in the area that you're trying to renovate. Up to.

Yeah. So I'd be doing the numbers first before I'd go and spend the money. Very similar to the conversations we've had earlier in the night. Just because you want to renovate doesn't mean that you need to sometimes. Great having you on board too.

Yeah. Thank you so much.

Okay. All the best.

See you. Right.

Thank you.

See ya.

Bye.

Oh, I think we have one last question here. Someone who's. Oh, Sally.

She snuck in.

Sally's put a hand up. Let's see if we've got Sally. Hello, Sally. Sally, looking good for Sally. Well, I see there's a typed in question. Sally, do you want to type something in there? And we might just see if Lisa has got her microphone on. So Lisa's got typed a question in here. It says, I inspected a property today which is a 70s build brick home. It seems to have good bones, but it's in need of a reno. I want to get a building inspection, but it's going to auction, so probably I won't. At the front of the house, it has a concrete patio type thing. And in the center of the concrete is crack and sunken in one area. Just a construction question, John. What should be. What could be. What should be under the patio and should I be concerned? The doors, windows don't seem to be an issue. And no significant cracks in the wall.

Okay, so it's at the front of the house, I assume.

Lisa, can you hear us? I'm unmuted. Okay.

Yeah. Okay, so it's a cracked patio and it's the. I'm assuming it's like the entrance to the front door.

No. Mike, do you want to put the address in? I might be able to pull it up. We can. Might be able to have a little bit more of a look, but. Yeah. Go, Jon.

Yeah. So if it's the way I'm picturing it, you kind of go up the stairs and there's a patio that leads up to the front door. Maybe a portico entrance or something like that. And it's cracked. We'll see if we can bring it up. I'm guessing hard to know from if it's Just some minor cracking it. You can just put some compound over it and level it out and it'll be fine. If it's, if it's structural, it can be a couple of ways. It's normally a suspended slab that's over there. So if it's cracked, it could be a pain to like. And structurally unsound. It could be a real pain and expensive to repair and fix. If it's at kind of lower level and at ground level and it's, you know, overfill, so they've got some kind of base down and they've concreted onto a hard surface rather than it being suspended in the air, then that's probably a little bit easier to fix. And it might be the case of sometimes you can just box up and concrete straight over the top of it. You know, bring, bring, bring it up 100 mil or something like that, depending on, you know, where your doorstep is in. In relation to the, to the concrete and that kind of stuff. Or it might just be a case of putting a screed over the top of it and tiling it or paving it.

Okay, I've got some photos. I'm just trying to bring it up without bringing up the address. So we don't. We don't expose the. Your vicious plan.

So it looks like it's a ground level by the looks of things.

Okay, here we go. It does say that it sold in October.

Shall I bring it across here?

I'm back on. I'm just. I hid my screen. Yes.

There you go.

Okay, so here it is. Little cutie.

Yep. Okay, so that's at ground level. Yeah. What I tend to do, depending on what you, you know, the other houses look like on the street. Sounding like a broken record tonight, is often with a driveway like that, I'll go straight over it with road base and crushed rock. If it, if it's not. If there's not.

Dig up the concrete.

Yeah. Rather than dig up the concrete and put a new concrete driveway. I mean, if it's. If there's plenty of capacity to do that and everyone else has got a fancy exposed aggregate driveway, then yep, sure, I'll do that. But if it's a case of fixing up the driveway doesn't really add any value to it, then I'll leave the concrete down, go over it with road base. Go, you know, do the. Put a flat plate compactor over it, which looks like a lawnmower with a plate on the bottom of it so it compacts down all of the road base. And then you've actually got a really good base, solid base with the concrete underneath and then go over it with some kind of screenings that look good. Like in Melbourne we use a thing called Lilydale topping, but there's, you know, the Tuscan kind of stone look or a few different finishes depending on where you live. So that's an easy way I would treat the driveway if there's cracking in that entrance area in that patio. Depending on how bad it was. The cheapest way to fix it would probably be some self leveling compound or putting a screed over it, which is just a sand and cement that a tiler is could do or even a potentially a renderer could do and screed it off so it's flat. And then paint it would be a really simple way of doing it. Self leveling compound and some paving paint would be the cheapest way of doing it. I'm assuming that the typical houses in this area are not unlike this. Perhaps a little bit better rather than, you know, super mansions or anything like that. Pescaba. Okay. Yeah, yeah, so I reckon that would probably check out.

Seems like it's ripe for renovation too, doesn't it?

Yeah, yeah.

Always tell by the, the orange and by the lounges and then the big garden out in the back with the veggies in it.

Well, it's not unlike the, the cosmetic renovation case study in the ultimate renovation. Is it the same era?

So yeah. Does that answer your question, Lisa? And there's, there's lots of option here. It does say that it's sold, so I'm not sure if in October if it's back on the market maybe. Yep, for some reason. So. Yes, well, hope that helped. Yes, thank you. She says great. Can only hope that we can help here. Okay, so. Well, I think John, you know, once again our hour and a half has moved to two hours and.

Oh, we'll just keep on going.

Yeah, well, no one's, no one's left, which is fabulous. Look guys, I don't know if we've got. Charles has got his hand up, but he's on the phone. Let's see if we can unmute him.

Yeah, not looking good, Charlith.

No, we can't unmute you and Hayden's got his hand up. Let's see if we can have a quick chat to Hayden. Hey Hayden, have you got a mic?

Yes, I do. How you going?

Hey, Good. And yourself?

Yeah, well, thanks. My question is in regard to looking to purchase a property interstate and when, at what stage would you sort of go and actually physically look at the property. Like, I guess the due diligence is all the same to begin with, finding the subject, all that stuff, but then I'm finding it difficult to get my head around when you actually go and look at the property. Like if you're having to fly somewhere, how often are you having to fly and how much, I suppose how much faith can you put in all the online stuff and building a pest inspections and all the stuff that you can probably do from home. How much faith can you put in it and actually can you buy it without even looking at it?

Look, I'm not an advocate of buying sight unseen and I know that some people say that they've bought many a property sight unseen and nine times out of ten there's no problem. You've been through my education, I'm very low risk. It's not something I would do, but it's a really good question of when to do it if you're doing the research yourself. Once again, it all comes back to your, your goals and what you want to achieve in the time frame you want to achieve it. The strategy that you want. Understanding the strategy and then understanding your buying criteria from the strategy, which might be, I want to buy a property that I can renovate, convert from a two bedroom to a three bedroom buy and hold with a predicted growth of 6%, less than $450,000 with a rental return of 5.5% and a yield of, sorry, a vacant of less than 3% and a yield of 5%. So very strict on your buying criteria and so doing as you say, 80, 90% of the research online to come up with your suburbs and come up with the areas that are fit for what you're after can be done predominantly. I would rather spend $1,000. You know, Pearson buildings inspections can be expensive, 5, 6, $700. I'd rather spend that money on flying up and having a look at the property rather than doing the pest and building inspection first. Only because that you could spend a lot on pest and building inspections that could come back and say okay, and then you finally go up and have a look at it and go, oh, I didn't realize that, you know, it's next to the 38 room boarding house. So you know, there's reasons why I would have a look first just to make sure it is fit for market that, you know, there is, the roof is in place and the photos haven't been created for the marketing campaign, which we've seen some pretty innovative things. In actual fact, I Saw a bed that had had its legs cut down to make sure that the floor looked like it was straight and amazing stuff. And so, you know, I'm all for inspection because although I like to think the best of everyone, it doesn't always happen. But having said that, you know, what state are you looking at buying in? Hayden?

Maybe New South Wales. May actually possibly looking at North Albury after you talk about it today.

Yeah, yeah.

But it just sort of got my mind thinking, oh, maybe I can look at other areas.

Yeah. Because one of the things, one of the things I was going to say is that potentially what you could do is actually speak to a buyer's agent in the area and rather than engage a buyer's agent, on average $10,000 to do their full service and find you the property and negotiate, they can actually inspect and negotiate on your behalf for smaller amounts than that. You might even say to a buyer's agent, I need someone eyes on ground. And, you know, will it cost $2,000 for you to have a look at three properties for me and negotiate, you know, the one that, you know, give me a heads up on what's happening. So you don't want to get real estate agents because they're obviously wanting to sell to you, but if, and I'm not sure if there's buyer's agents in.

North Aubrey, but you'd reckon there would be.

Yeah, there probably is. But, and as I said, I know that the streets that I targeted in North Albury were very. Tightly held according to one of the locals. So, you know, I wouldn't want you to spend all your time looking for something that only has five sales a month kind of thing. So make sure you do that research. But, you know, the interesting thing about what you're saying is that I would, I would get boots on the ground and I would tee up a few properties to have a look at at a time and, but you know, know that if you can't do that, get, get an expert involved.

Yeah. Even if it's just that initial thing where you look and you, you work out what the stock is in the area and where the good. And you're actually able to, to compare on the ground what you've found in your research. Just so, just to confirm your research and then even if you're not able to secure the property while you're there and then you've got a buyer's agent or someone else working for you after you left, at least you've got that, you've had that, you know, contact and being able to verify things.

I've flown to Mount Isa to have a look at things, not that I've ever bought there. But sometimes you come down to your two to three suburbs that you're going to get to know intimately. Even an adventure weekend that you could go on to investigate those suburbs and go and speak to the real estate agents, spend some time with them, speak to the rental agents, what are people wanting to rent, speak to the pharmacist, speak to, you know, John Edwards says he speaks to the news agents and I think Jacob Fields told us that he rings the chemists and has a chat to them. So, you know, and even those relationships, the town planners, the local council give them a call and say, you know, there's a lot of development going on and have a look at the council website because they often have like 10, 15 year plans of how they're going to spend money. They don't tell you all about it. There's on the website somewhere but you can actually see that there might be some gentrification going or where you know, they're proposing a new road or you know, so there's, there's a lot that you can do and do by phone as well and then do. I would do almost one fact finder trip and then get a feel for, you know, and even on realestate.com I know, you know, I did an online kind of investigation a few years ago. We chose the area of Granville in Sydney and just going through real estate or domain.com and reading the ads for the properties, it's like on the right side of the street in the Golden Triangle. So you start building up a bit of a feel for the fact that there's some areas a little bit better than others as well. So you know, and that kind of language allows you to kind of get the feel for it and then, you know, you might even, might even then ask a local about, you know, well, to me what. Tell me about the Golden Triangle. Oh, you know, it's the catchment area for the school or it's the bit on the hill or the bit that can see the sea or you know, it's understand what is driving some of those better areas than the others as well.

Okay, great.

Now that's helpful. Thanks.

Okay, all the best, Hayden.

All right, we've had. Fahad has patiently been waiting. He had a question in here. Do you recommend us to pay for real, real investor?

I think it is real investor membership long term or just on a month to month basis. Can we get much more Benefit from it. Oh, Farhad, I. Gosh. I had access to Investor 5, six years ago and it's very similar to the Ripe House software that I use now in the sense that you can interrogate. Interrogate areas. It has from my memory it has some great functionality where you can click in. You know the kind of terms that I mentioned are granny, flat or potential or detonate or you know the things that you know that agents put in targeting specific type of buyers, water views but dual income so you can target very cleverly and come up with areas. But I've got to be honest, a lot of my mortgage clients have had access over the years and they spend, you know, I think it's like Pinterest. You get on and three hours later you realize you've lost the kids, haven't eaten and you've lost half your life. And it's because you get to the point where you actually open it up to all Australia and open up all the properties that are in the areas greater than 10,000 population with a dual income and you know you've got 70 to go through and so. So that's why it's really important that you understand your goals and your buying criteria first and then you go into any of these software. I couldn't say what is better, monthly or long term. As I said we've got a bit of an offer, that generous offer from.

Ripe House which you can do at any day. If you just call up and let Jacob know who you're from he will.

Look after you and I think it's like half the normal monthly. Is it 97 down to 49 or something? I don't know.

It's a big amount off.

I can't remember what number is now. So many numbers in our heads but have a call and have a. And he's. I know that he personally gets involved and talks to people through. Yeah, he's a really good guy through support using it. So get in and have a try. You know, maybe it's just have a go of both of them on one month each and see which one one does the value for you. The reality is that if you're ready to buy and do your research, I find that within two to three months of research you're really ready to understand where you're going to buy. You've often been through. I know my clients, I speak to, I give them some education as well before they get a mortgage so that their three month pre approval process is not doing all the research and learning. They're actually Ready to look. So know often you're looking for say the three, two to three months and then you've got, you know, two to three months of actually negotiating and you know, feet on streets looking at properties. So you know, you may only need it for six months as well. So it depends how many properties you want to buy, I guess. But yeah, so just be, yeah, just be really ready. Oh good, thanks. I'm glad that helped. Could have just came rambling. Okay, well, 10 past 10. It's way out of time again, we think we'll have nothing to talk about, don't we John? And then somehow or other it's 10 o' clock and we're all tired. But anyhow, thank you very, very much guys. It is time to wrap up. I really appreciate your questions and please, as you know the 1300 number, make sure that you give us a call so that you can, you know, we, we can take your message. We love hearing your voices. 137619 or questionsourpropertysuccess.com and if you can't be on it live, I know we have a lot of people here on it live, but I know that there's so many more people who listen to the recordings and you might be listening to this three, six months in advance because I know that as soon as I get access to these kind of courses and calls, I go back and listen to them all.

And if you are listening in advance, can you tell us what the property.

Market'S doing and come back and tell us next week? So next time, just a heads up. Heads up. We won't be doing a, a call on Christmas Eve. I think I'm gonna be at Christmas in the Domain carols. So we will be. Is that Christmas Eve? I don't know. I'm going.

No, it's Sydney. No, they're not here. No, here is.

What are they called?

My music box.

Yeah, I'll be there. Wave. I'm in charge of food, so I'm in KFC. But anyhow, the, the 17th, so 8pm 17th December, we'll be having our next call. So don't book any Christmas parties for that in the evening and, and yeah, I'm so glad that so many of you here. Thank you so much for your questions and as you can see, you know, we take anything on and we're really happy to help you guys on your way to your property success. So all the best.

See ya.