Your Property Success Mentor Call September 26-09-2019

Hello everyone, it is Jane Slacksmith here and welcome to the your Property Success club. Q and a call for September 2019. Now, as always, I am joined by the co creator of the ultimate guide to renovation, John Hubbard. Hi John, how are you going?

I'm very well, thanks, Jane. Hello, everybody.

Well, it has been a big couple of months for us here, but without getting into all of that detail right now, I'm going to throw over to John and let him go ahead and discuss that incredible disclaimer that we have to put up first.

What a great way to start a program. So yeah, as always, it's important for you to take care and applying what you learn on this training to your personal circumstances. Everyone's situation is different. While we go to great lengths to ensure that everything we share is accurate, what you're about to hear is based on our personal experiences and opinions and not intended to be specific circumstances. So for an order for us to share this information openly in the way that we do, we just need to disclaimer that we not real estate agents, financial planners, lawyers or accountants. Everything all right over there, Jane?

Yeah, I just made for any loss.

Or damage, misunderstanding caused by reliance on any of the information provided or inferred. I heard crash.

Yeah, that would have been my me dropping my phone onto the keyboard. So, you know, completely professional here and all under control. Now I'm gonna. This is what happens when I have to try to control both screens as well. Everyone, I would love to hear who's here. Now I see that we've got Alford and Tarek actually who have clicked on the guest link up above where we are going live now in the your property success Facebook club page. So you only need to click on that link if you have a question that you'd like to ask us and if you want to come on live and show your wonderful face and so we can get to the bottom of your question and answer it in depth if that is what you would like. Otherwise you can chat your. You put your questions down below, otherwise.

You'Re gonna be on camera.

Otherwise you'll be on camera and we if you are driving, please pull over before you ask a question. So we have run into that problem before. If you are here and you can hear us, just let us know that you were coming through live and well and say I'm here or it is where you're from. Where are you joining us from today? Might be Sydney, Newcastle, Perth, Adelaide, Hobart. Love to hear from where you are and so please put some comments in there. So that we know that we are coming through and you can hear us. So, John, it has been a huge couple of months, right?

Oh, it's just been epic, hasn't it? I mean, there's a couple of months and there's been a couple of months. But I mean, I know, I mean your obviously health stuff and being away from work and all of that and I'm sure you're going to go into that and share that with people. So obviously that's been a huge life event. And then straight into the back of our only couple of weeks recovery and then into the mentoring event in Melbourne, which is terrific and exceptional group of people, a couple of new people join. So I'm keen to share with people about that and what we did and some of the learnings and some of the things. One of the interesting things about those mental weekends is people share with each other and bring a lot of value to the table. So I'm keen to let that kind of trickle down into the club and get people across some of that material too. But, yeah, absolutely. Huge, huge couple of months.

Huge couple of months. Well, I've got a couple of questions coming through here. Hi, Jade, I'm live on the call. How do I ask a question? If you want to come on screen and show us your face? In about 15 to 20 minutes after John, I finished sharing some of these things, please do click on the link above. You can see it's called app be live TV 2243 guest. So click on that link and you'll come on and we'll see your video. I see Tarek and Alfred. They're waiting patiently in the staging area at the moment. And I also have.

If you want.

To, you can ask a question by just typing it in. And we do have people who actually send their questions, questions in so I can monitor this. I can see that we are live. See, John, we are live and we've got a couple of people send us some love.

Is that the same phone I heard hit the keyboard a moment ago?

There you go. So we can jump in and do that. So, as John alluded to, I have had a very busy couple of months as well, and I know that a lot of you are not really aware what goes on behind the scenes here. And it's been something that I haven't shared with anyone other than my mentoring students. But essentially, as John said, you know, there's sometimes in life that you have to stop back, step back and have a look at what you're doing and how you're Doing it. And I had the opportunity to do that around Easter this year. So, as Julie, one of my mentoring students, said to me, you know, God tickles you on the chin when he wants your attention and he punches you in the shoulder when you're not paying attention, and then he gives you a really big whack when you've missed all of the other signs. Well, I got a pretty big whack around Easter when I was diagnosed with a brain tumor in my pituitary gland. And turns out they're pretty rare. And I had very minimal. What would you call it? Characteristics of what or symptoms. Symptoms, yeah, symptoms of what a normal, you know, Cushing's disease, pituitary gland, brain tumor would be like. But I put on 15 kilos last year, as you may have been able to tell through my videos, and another five kilos this year, and I knew something was wrong. And diets and exercise and all of the vegans and ketos, and I even went carnivore for four weeks. Didn't work. Even consider giving up alcohol. I did reduce it anyhow, five weeks alcohol free today. But I knew something was wrong and kept pressing the doctors. And I came back with very, very high cortisol to indicate that I was someone who did have some indications of Cushing's disease. Came back from Fiji, told to go in and see my doctor who said, jane, you have a brain tumour. We're going to have to deal with this. Now, I had the opportunity at that time to sit back and consider, what am I doing? And a very, very dear friend of mine had been through health issue earlier in the year and decided to pack up everything and her boyfriend and they took off overseas for a year. Hanging out overseas, and that just wasn't me. And I thought, no. And it makes you think, you know, you got one week, one year, 10 years, 15 years, 20 years, 30, 40 years left on this earth. What do you want to do, what do you want to contribute and what do you want to share? And what's the legacy you want to leave? And in actual fact, I was doing exactly what I wanted to do, which was share my knowledge and assist everyday Australians in getting over their niggly or wealth problems by investing well in residential property so that they can grow their wealth, put that away so that they can live to their full potential and get on with life and live it with passion. So it gave me a opportunity over Easter to sit back and see what I wanted to do, and that is that I exactly want to do what I'm doing now. I know if I spend any more time with my 12 year old son and my husband, I'd probably drive them crazy. If I spend any more time at home, I'd probably drive myself crazy. So the last four weeks has been a bit of a go slow for me. And last week just easing it back into it and under the advice of the ear, nose and throat surgeon and the neurosurgeon who last week told me that a few years ago I would have had my head shaved and stable throughout my entire cranium and they would do that if I would take this a bit more seriously. I am taking it a bit more seriously and stopping work at 3 o' clock in the afternoon so I can have my nano nap, which I've never had in my life before. So John, it has been an interesting experience. One in 500,000 people get it. So it's only about 30, 40 people in Australia who have this. They do maybe, you know, 10 operations a year. I did have a bit of a hitch which made me one in a million. So, you know, I'm glad to hear that I am one in a million. But I think it really gave me an opportunity to sit back and see why I'm doing what I'm doing and it allowed me to further commit to helping people and get them on the road to create wealth. So whilst I was sitting in hospital for a couple of weeks, I managed to create a couple of whole new campaigns to help people to be aware of what they can do with wealth through residential property. So I'm really excited about even showing you some of those a bit later on. So it has been an interesting time and obviously, you know, my commitment was making sure that we could keep the support that we give to our mentoring students. We are in contact with most of them at least weekly and we did that and we've just finished up with a two and a half day mentoring weekend in Melbourne as one of the three weekends we have a year with our mentoring students on their 12 month journey to creating the wealth that they want to desire. So it's been a, it was a great weekend.

Wasn't was a terrific weekend. It was beautiful setting. So we're in the Mantra Hotel which is just on south bank, sitting right behind the spire of the Art center in Melbourne. So most people would recognize the Art center spire in Melbourne and overlooking the Yarra and out to the MCG and everything. And so it was beautiful setting and it was great. Everyone, as we do with these weekends, they're included in the mentor group. And people can come to all three or one or none, but people tend to come to all of them and fly in from different parts of Australia and descend on one venue. And it's a great time. It's a good social catch up. It's probably the social highlight of my year now, Jane, I have to say.

I know I was saying to my husband, it's like getting together with, you know, a bunch of friends. We're all interested in property and a lot of the mentoring students are investors in solitude so they don't have someone else to talk to. So it's just so nice to hang out with like minded people.

It is terrific. Yeah, it is really good. And the first week we actually do a Friday session for guys that have joined in between, you know, workshops. So bring them up to speed and, and just to make sure that the guys in the group don't have to do the same stuff repeated. But the guys that are joining the group have the chance to get up to speed and learn some of those more advanced things that become the common vernacular of the language. And most of that is around the stuff that you would have already learned if you're part of your property success club with, you know, the ultimate guide or location masterclasses. Just when you're in that close setting, one on one, you, you get to move, move the, move the envelope a bit in terms of how advanced you can get with some of that stuff, which would just be very hard to get over in a, in an online training environment. So yeah, that's it. So most people arrive down on the Friday and we had a great sessions. And I'm sure you're keen to share some of that content.

Absolutely.

Started off with the recap in and around negotiating and buyers avatars and the suburb selection process and the suburb due diligence process on the Friday and then launched into some more advanced stuff on the Saturday and then a special guest on the Sunday. So what of that lot would you like to pick out, Jay? Where would you like to.

Well, first of all, I guess the thing is that let's just have a chat about the money archetypes because we've had a, a few, by the way.

Jane.

Yeah, I know I'm, I'm hiding, I'm hiding at the moment just so I can pull up some of the information. Okay, so let me just share my screen with you. But yeah, so let me just share my screen and let's have a look at this. So you should be able to see this now. Let me make it even bigger, easier. Which one shall we use? I'll just make it solo. Okay. So this is the eight sacred money type archetypes. And we did this in our weekend with the mentoring students, John, in March in the Blue Mountains. And it was really, really interesting to be able to have a conversation around, you know, what are the characteristics of the archetypes? But more importantly, what are the characteristics of the archetypes that are you and your partner? Because. And the really interesting thing is that you. Each single archetype is like a member of a board of directors. We all have all of these to some extent sitting in our brain every time we go to make a money decision. So, you know, without, you know, going through everything here, it's really interesting to actually look at, you know, the. The different archetypes and looking at, you know, what are the gifts associated with each. But then there's always a challenge that associated with the others. And by understanding, understanding this and understanding, you know, what archetype you are and how that actually works allows you to have the conversations with people. And I know, John, you know, you and I have talked about this previously when, when we did it in. In the Blue Mountains and when I had done it, you know, with my team earlier in the year with Natalie, when she was over from Columbia, who runs this, she's ex World Bank. It was just a really interesting exercise to find how you can start categorizing people and you see how they start spending money. So that was a really interesting thing that we went over and then we then pushed on and we just had.

A little bit just context there. It's the whole thing and the process that Natalie has developed, it's around the relationship that you have with money and essentially defining that what category you fall into and then about all of the ways that someone with your profile, that those things tend to play out in the way that you. Your relationship with money plays out just to give.

Maybe. I know that we did a webinar with Natalie. Maybe we should dig it up and share that and send. Send you through everyone the.

We'll put the link into club afterwards.

Yeah, perfect. So what? Yeah. If you're interested, just let us know and just go money and we'll put something in there. If you're not interested, we won't go and dig it up for you. But it's really interesting profile you do for yourself. And then understanding. Getting her to explain what that means.

Yeah.

And then, John, we went on to. When we were in the Gold coast in June, we did an incredible exercise using, I guess, some of the marketing techniques that we've learned over the years and putting that down to understanding the needs analysis of the vendor when putting a offer into them. And that was really well received too. Again.

That was great. And we build on that with our guests on Sunday. But it's the idea that. And this is really critical for renovations too, and I first learned it as a beginner in video production that in that land it's called the target audience. So it's the idea that you don't put a video out which has got, for instance, if it's about a retirement village, that it's got heavy metal music under it. No, the editor's favorite music, Heavy metal music. It's about having stuff that's appropriate for the target audience. So it's basically applying that. There's an exercise that we go through to identify what that target audience wants before you go out and put the video out to them. And so there's a similar thought process that you can go through when you're putting together an offer for a vendor. So a vendor is just someone who's selling a house. They have wants and needs and fears and pains and desires about selling their house and moving on to the next property. It might be that their biggest concern to them is, you know, the money that it's going to cost to clean, clean up all this stuff in the yard with, you know, wire and grass tangled through it, or it might be rubbish under the house, or it might be that they're worried about their settlement times of the new house versus the house that they're selling. So there's all sorts of things that are motivating that vendor other than just price. So there's the terms and there's the price. And what we're always trying to do is discover what those motivations are so we can present an offer where we're not just negotiating price alone, but we're also negotiating around terms at the same time. And then we can take both off the table in the to and fro that goes on in those negotiations. So we go through and we did a scenario. One of the guys, they were putting in an offer. And look, this wasn't. It wasn't the most shiny, happy example. In this case, it was the deceased estate and it was the son who was selling the property. But we went through and we explored what his motivations would be be and how we could craft an offer that would be attractive to him. And we use a multiple offer system. So we put. Put in for instance, the, the lowest amount, which would be the least amount we would pay with extreme, extremely palatable terms to him, which might be, you know, a deposit released and all the stuff to be cleared out and a short settlement. All that, whatever the circumstances for him were, would be advantageous to him. And at the other end we would have, you know, maybe at the asking price or our highest offer, but the terms would be really advantageous to us. So if we're renovating, it might be that we get immediate access, start the renovation or we get a really long settlement, maybe 12 months even, or things along those lines that really, really help us to get in there and get a return on investment at their price.

So, you know, we get our terms, they get their price. So.

And that's kind of in between as well.

Yeah, the multiple offer technique has been something that we've taught for a long period of time. You know, obviously, you know, ultimate guide to renovation. You have access to some of the thoughts on that, but it's really nice to put it in place. But also look at that vendor analysis. So, and then John, on Saturday we had now just put janeslakesmith.com if you are interested in mentoring. And you know, we do have a number of places left, it is a small group of people, but if you are interested at all, please just go have a look at what's included in that. And we're very particular in who we let into the group because these are people we're going to be hanging out with for 12 months. And as John said, the highlights, spending weekends with you as well. We had the.

It's not, it's, it's not for everyone. You need to be in a position to use the knowledge and which is why we, we actually have a, a milestone there where if people aren't. Now the only thing I'll say about that, I just tried that. Jane, you've got to put the WWW in front of it. Otherwise it doesn't work. That link just for everybody.

Www.janeslagsmith in front of it now.

That's the one. Yep. But if you just hit the please notify me, it will put you on the waiting list and then we can get in touch with you and let you know. Now, I was just going to say there that it's horses for courses. There's people. If you think about the services that we offer, obviously as part of the club, you're doing the education route, which we always recommend. Investing yourself first. And that's kind of the DIY solution, the mentoring weekend that we've just had. We call that the done with you solution. Which means you're still doing the work except you have the benefit of a second set of eyes. And to be able to really piggyback on 20 years worth of experience and my experience in my area, what that's worth too, Jane, and really get questions answered in real time. Still doing the work yourself. So it still requires a time commitment and energy. Commitment. And then if you just want the result, if you subscribe to the methodology and just go do it for me, we can do that for you too. Obviously there's a charge.

We have a suburb selection service and a property selection service.

Suburb selection service, yeah. So it's horses, horses for courses and not everyone's suited. And one of the. I think the best thing about that group is everyone's so on track or so committed to action and they're taking action that that energy rubs off. You know, there's a certain energy about that is such a positive experience to be around. And that's what I really like about the Metro.

Yeah, it's fantastic. It's a great group of people and really empowering and helping each other. You know, we just had, well, Sharon, we gave her her Tiffany key ring. She's just exchanging a property in Sydney and she's flying up from Melbourne. Yeah, flying up from Melbourne to Sydney and to do an inspection and one of the mentor said, let me pick you up and we could go on the inspection together. So that's, that's how, you know, close the group.

Emailing that to you, Jane, just in the off chance that you might be able to pull it up on screen.

Oh, let me see what I can do. And I mean just to give you another, I guess a little bit of information about what we're doing here as well. I'm just going to share my screen with you one more time. I'm going to turn that off now like my crawler. So let me share this screen over here. One of the things that we decided we do with our mentoring students, every single month, we Go through the 15,655 suburbs in Australia and we apply, as you all know, the criteria that we apply and teach you how to do in the Ultimate Guide to Renovation and Location Masterclass, which is module 2 and 3 of the ultimate Guide to Renovation. So we go through and let me just share that with you. So we go through with the suburb selector software, obviously putting your price points and it allows you to go through and have a look at suburbs that are in your Criteria we then teach you how to assess that suburb against things. So look at. So the suburbs Lecture software once again goes through and brings up similar suburbs in the area we would go through. Say we choose this suburb, we go through and we then apply our criteria. So some of our criteria is less than a 3% vacancy rate. As you know, percentage of rent is over 30%. We want to know from a risk point of view what the typical type of property is. So we understand, you know, what we're looking at here is the typical properties, a house, three bedroom house. We're not mum, dad and kids are quite typical as well. We've got over 60 sold a year. So I'm not going to waste my time there. So this gives you, I guess some of the filters. So just to give you a context to this, when we actually do this, we find that of those 15,655 suburbs within Australia, 8,650 are actually major regionals and capital cities. If I run the filter of between 500,000 and 1.1 million and I run the filter of less than 3% vacancy rate and I run the filter of more than 60 sales because we want to be able to buy in this more like I don't want to waste my time. And we run the field of more than, let's say 30% renters, I end up with 128 suburbs out of the eight and a half thousand. So you know the steps, the methodology that we go through. I start with the dot map. So what I wanted to do with our mentoring students, we give them the 128 suburbs. We then weekly give them all the properties that come on the market with the typical block size, the three bedroom house, 600 to 800 square meters that are on the market within those suburbs. So they have that all done for them. But what I did whilst I was in hospital and being a little bit bored, I developed the digital dot map for them. So once again, so we've got the digital dot maps that have done for the mentoring students as well, just to make things a bit easier. And this allows me also very quickly when I'm doing my dual reviews from investors choice mortgages or deal reviews, the mentoring students send me through to have a look at, to look at things. So just giving you a quick little example here, we've got greens here, so 5 to 5.9% growth and these are pushing onto these suburbs here, which are 4 to 4.49%. So that's a 1% differential. Now this is the 10 year capital growth. And we've taken this from the August September SQM research that we got on the 21st of August. So what you're looking for is like the 2%. So once again, our legends are like the traffic lights. We're going from reds down to green. And you know, so we're looking at where there's a big differential. So for instance here, you know, we've got a differential here of Kingsville, 9.1% and we've got Brooklyn over here at 3 to 3.9%. So that would go on my greater than 2% list. So obviously we've done this for all the suburbs or all the areas. Sunshine coast down to the Gold Coast, New South Wales, Central coast out to Maitland. So I did a deal review for a client the other day looking out Maitland. So we've done all of the dot maps. And what this allows us to do is it allows us to essentially take all the information very, very quickly, come up with a list of 2% and 1% suburbs, then come up with the other list. And we've actually done something even better for the mentoring students, which actually is just pulling all that together and making sure that they've got the right list to start with. So that's kind of how we try to shortcut things. But a really exciting development with the digital dot maps and being able to use that with our students. So something else that we've developed as you know, we just keep trying to make sure that we can keep adding value. So lots of fun. John, it has been good.

Yep, it has been great. Now I might just grab Tarek's question, if that's all right.

No, I've got Tarek. I've actually got Tarek here. Let me see if I can pull him up on screen and to see if he wants to ask his question. I don't see see Tarek, your video, but I did earlier. So can you hear me?

I can show. Yes, I can.

Perfect. Will, we don't see your pretty face. Oh, yes we do. There we go. What's your question?

So when you spoke about putting an offer, you mentioned that we start the we put the first offer with the least price I'm interested to pay. How about what's your view of putting my first offer lower than that? So the negotiation can leads me to getting my offer accepted at my list price.

Good question. John, do you want to take that one?

Yeah, yeah, yeah. I love this area. This is my favorite game of all because this is the bit and we're saying this on the weekend that I've done lots of renovations and blood, sweat, lived in the dust and all the rest of it. And it's hard yaka. As much as I love renovations and you might come out of it with 40 grand, 60 grand, 100 grand at the other end of it, there's a much easier way to get that and that's in negotiations when you just have to use your words and you get, you know, sometimes 10, 30, 40, 50 grand just from using words. So I'm happy to try and use every trick in the book here without being deceptive. So what I'm always trying to do is start with a negotiation plan. And sometimes that means that you're buying it below market value. Most of the time that's what we're trying to do. In other situations when I was in doing property development, it was really getting it at the price that worked for me, which in a moving market might be that you're buying it at market value. So that's always where I start as my endpoint, right? This is what it's worth to me and where it's good value for me. And then I dial backwards from there. And where my starting point is, as in my first offer is all the way back here. So yes is the answer to your question. The idea is that you do start less than your, than your price. In terms of the way we do that, we typically do a plan which is called diminishing concessions. So the idea is if you started, let's say 20,000 below what what their price was or what your the price where you're going to your cut off is, you might bridge that gap in terms of the plan that $20,000 by going 10 initially and then five would be an exped and then two and then one and that's called diminishing concession. So it has the appearance you're coming towards the end of your negotiation. In reality where that indies is completely arbitrary. It's where you've planned in the first place. And so when you're doing that really what you're doing is you're kind of ignoring the offers that are coming back on the other side. That's just playing out and you're not reacting to those because you've got a plan if set in place at the start which is leading up to your end price. And at the end of the day if, if that's not, you know, it's that if that's too little for them, they'll walk away and that that's the end of it. But Essentially, that's how, that's how you, you plan to get to that end price for you. Does that make sense, Terry?

Yep. Absolutely. That means that I have to, if, if the vendor insists on going up and selling above my cutoff price, then I walk away.

Exactly. That's one of the most important things about negotiations is you are willing to walk away and that you, and you're okay with it. If you walk away, then you don't look back, you just go, no, that's fine. There's plenty more fish in the sea. And part of that being fine with that is sitting a realistic end price in the first place, which is one of the things that Scott talked about, who is our guest speaker, expert speaker on negotiations on Sunday. It's, it's having that conversation with yourself of saying, well, if I miss that by five grand or six grand or even ten grand, am I going to be kicking myself in the next month when I'm still looking around for a property? So. So it's been really clear where that value lies for you and asking yourself that question and making that your endpoint.

Just a couple of things I want to add that John just alluded to the fact that we had a negotiation master class at the mentoring on the weekend. So we bring experts in obviously to talk. Now I'm just going to share my screen once again, but this is the person that we bought in and this was Scott from hello House. Now, Scott has been with a real estate agent for over 20 years. 13 years. He ran Bill Property as the. What do you call it, head franchisee director and had been training real estate agents day in and day out on how to negotiate and how to get a win for the vendor and manipulate the person who trying to buy the property. So check out and I'll put hello House in the notes a bit later for you. But he takes a 15% cut of the value that he's added. Now this, the thing that I found really, really interesting with this as a model and I've never seen this before and hence why, you know, I was really excited to work with Scott. I, one of our mentoring students had a property that she's really keen on buying. It was a deceased estate. They wanted 980. Her top price was around 915. Scott got it for her for 908. So he negotiated from 980 down to 908, but because her top price was 915, he got 15% of the savings between 915 and 908. So this type of technique and having a negotiator on your side I think is just a fabulous opportunity because we might negotiate once every nine, 10 years when we buy a house. We're not used to it. I've never paid full price at jb. Hi Fi. I'm proud to say because I negotiate. But when it comes to negotiating and house prices, a whole different kettle of fish. So getting maybe a professional house negotiator, and that's obviously some of the skills the buyer's agents have. But if you found a property, then bringing someone in. So I'll put Scott Steven up and.

You want to see if you're actually up to it. I'll give you the practice technique. Go into your next time you buy a coffee, go in and when they say it'll be $4.50, say I'll give you 4.20. And then haggle with them until you get to your walk away price. If that's not working for you, you might want to just hire Scott.

Exactly. So that was one thing. And the other thing I just wanted to add as well Tarek was is that you can have a look at discounting. So what I often do is look at the discounting of what now do you have, are you, have you got access to RP data?

No, not yet.

Okay, so when you get access to RP data, let me share that with you so you can have a look at that as well. When you have access to RP data, let's just say do you want to give me a suburb and the suburb you're interested in?

Seven hills.

Okay. And let's have a look at seven hills. New South Wales.

Yep.

Yep. Do you know what the typical type of Property is at 73 bedroom house. Okay, great. All right. So since we've gone nbn, everything's got a whole lot slower. Okay, let me show you. So three bedroom house. Now you can use SQM research as well to find out what the data typical size block is. So I'd suggest that you do that. You go into property, you go into sold records, manipulate this around a little bit further and seven hills, 2147. Just make sure it comes up here. Seven hills. So the typical block size I would say is 450 to 800. If someone said to me, Jane, do a deal review for me, I'm going to buy this block and I'm going to subdivide it, I'd be in seven hills. I'd look at this and go there's not a lot of evidence of subdivision. You're really out there. But in some areas when you have a look at that's why there's so much more properties down here. And this typical curve is very, very typical. So when you split the block in half, the price per square meter goes up. So 300, $3,000 a square meter on 200 square meters compared to $1,000 square meter. So this gives you an idea as well. So let's say the typical block size 5 to 800. So once again, if you want to access to RP data, rather than having to pay the $150 a month for a year through us, we do it month on. So you just have to ring up the wonderful Diana customer delight person and she will turn it off for you. So you only have to use it for when you need it. Now there's 2081 properties in the market that are three bedroom houses between 5 and 800 square meters. But we have a look at this market compare tab over here, what it does. And sales history gives us the recent history. And on the market this starts showing us of the, you know, last six months or so properties that have been sold to their first ad said they'll be it's on the market for 750. And the last ad said 699. And it's. So the difference between the first and last ad is minus 6.8%. So I often go through here, you know, this is 700,000 on the market actually sold for 668. I try to find out here, Tarek, what the discount is. He's a four and a half one three and a half. So if I know that a lot of these and I just average it out. So what you can do there is you can choose all of these, you can download it to Excel, essentially. Essentially. And you can come up with, you know, the median of the discount difference. So if I see that the typical type of property here is in this area is actually discounted by selling for 5% below the market, might start 8% below the market as my first offer. Yeah. So they kind of give you some targeted information. Does that make sense?

Yeah, makes sense.

No problem. Cool. All right, well, if you haven't got another question, we'll move on to Alfred. She's waiting there patiently. Okay, all good. Speak soon. Bye. Okay, Alfred, I know that you've been sitting there patiently. Let's have a chat. Hey, Alfred, how you going? Oh, microphone's not working there, Alfred. I know you. Oh, because I put you on mute. Hi, can you hear me? Put yourself on Mute. Hello? Hey Alfred. Oh I hearing click, click noises.

I think he's got his question there in the chat. Anyway.

Okay, let's check. I've got a question for you Jane. I know you've been, I'm on the call. I have a question Alfred, you might need. Oh hi, how you going? How can we help?

Can you hear me?

Well yes, yes, I've got you, I've got you definitely.

Right, okay. Right. So yeah, thanks for, thanks for the opportunity and I did miss the first bit of the session. So sorry to hear about the. Did you have a like a health, health issue or something? So sorry to hear about that.

Oh yeah, a brain tumor removed five weeks ago yesterday.

Right.

Oh good.

All good. That's good, that's good to hear. I've got a couple of questions really. So the first one is a bit I think digital map. What a fantastic idea. How did you do that?

Oh my gosh. Can I tell you, it took a lot of effort. So I buy the data from SQM research every month to be able to do the suburb selector software. And essentially I had to create latitude and longitude for every single suburb in Australia that I wanted to dot. And being the hands on person that I am, I was quite involved in that process. And then use Google Maps to do it.

Right.

So all of the dots are on Google. I've done it all on Google Maps. Right.

Is that a hard thing to do if you have Google Maps?

It's been something that we've tried to do over the last seven years and we've had a number of our students who've actually done it and using different techniques, being very it literates. Yeah. But to be honest with you Alfred, my very best advice for you is to do the first one yourself because it does give you an intimate knowledge of the area and you have that kind of, I don't know what you call it, John.

It's my short term memory hand eye experience.

Yeah. And just like, oh, I didn't realize that peno was so close to the airport and gee would I really go that far and did this? You know, so those kind of here's the freeway. Isn't that interesting that as you go so what we see often in Queensland. Let me just share this with you. For instance when we look at Brisbane and you know, and this goes for Sydney as well, you know, you've got the Brisbane CBD and what we're looking at is this ripple effect as it goes out and it goes out but often what you see and you know, remember we're looking at. And I've changed the legends. You have to change the legends because obviously Brisbane is not growing as fast as Sydney and Melbourne. So I've had to go half percentages, etc. But what you often see is you've got these reds and these yellows and these oranges and then they start getting a little bit darker because they're like a million dollar properties. But you start finding that as they, as the. It's like wheels of a wagon that you see the major freeways. So for instance here we've got all these yellows and oranges coming down this freeway. So because of the, the freeway actually allows people to get into town faster, we find the suburbs that are just on the on ramps and off ramps of the freeways start having a lot of growth. Where we've got the suburbs that may even be a little bit closer to the cbd, for instance, don't have that as much growth as the ones that have actually almost, you know, led the way down here. And that's what gives us a beautiful opportunity. When we see these freeways like these ones, we've got all these yellows and oranges, we're like, oh, what's the suburb in the middle that hasn't quite moved yet? You know. So there's also some opportunities to do some analysis there as well. So yep, digital map definitely is a exciting thing. But I really encourage you to do the first one.

Yeah.

So map world and get those quarter inch transparent dots.

I've actually we last year, Jane, when we signed up to the course, we actually done the map for Melbourne, a physical dot map. So it was quite a, quite an enlightening experience for us. But for our second IP because we are looking at multiple, multiple sort of states and just trying to work out what is the best suburb or best place to sort of take into account the opportunity cost and things like that. And because we are looking at a couple of regions in regional Victoria as well as in regional Queensland, I was thinking rather than doing it in a physical dot map, the digital map would be probably a bit quicker is what I was thinking. So, yeah, so digital dot map is definitely an idea what I think I'm probably going to investigate a bit more. I think that's my first question.

The second question is really that the 20 or 30 hours that you spend on doing that, it will probably be the same as maybe the three hours that you'd spend on doing two. But just be very aware of those differences, be very aware of the differences in the Legends. So we tell people to do that anyhow, but we often find that they don't.

Yeah, you spend a lot of time.

So Western Australia, I'm down to minus five, you know, I think it's up to 3% or something.

So the second question I had for Jane and you as well, John, is we are looking at a house in. In. In regional area in Victoria and it's not. It's close to thousand. I've got this question on the Facebook group. Anyway, the block is about thousand square meters. It's got quite an old miners cottage at the front of the house, the land. We haven't still gone and visited the place yet, but the land space looks like we can fit in one or two townhouses at the back. So my strategy was we'll renovate the house at the front and as and when we had the financing and all that sorted out, we can probably look at putting townhouses at the back is what I was thinking. But I came, came to know fairly recently that the house at the front, because of its, you know, heritage area and things like, it's got a heritage overlay on it. So I spoke to the council and what the council are saying is you can't demo the house, but there are a bit of a couple of outbuildings if you like, like a garage and a shed that the council is happy for us to demo without any permission. There is a site skilly in which they probably would require us to put in a application for and the internal of the house renovations. There isn't any specifications or conditions that the council is putting in, but apparently for the external of the house they want it to be, you know, retaining the heritage in a character and things like that. So I haven't put in an offer because I haven't done a development before and because of the heritage overlay as well, I'm just thinking is it worth the heartache or just. Just want. Want your opinion in terms of is it worth the problem solving and if there is enough profit at the end of it or is it too sort of too risky because we haven't done anything like this before, both in terms of the heritage sense as well as in terms of future development potential as well. So just to want to do your.

Opinion, that's the question, John. Do you want me to do an overview and you can do deep dive into development?

Sure.

So first of all, Alfred, I think if you know what you're looking for with Laser focus, the deal of the century does come along every single week. So by Finding something with a little bit of a problem and then a second problem and a third problem. To me, it's almost how much is the return on investment, on the time and effort that you have to be involved. And my very first property did have a heritage overlay on it, and we spent six months just trying to get the color scheme for the front of the building painting, you know, agreed to by the North Melbourne Council with their heritage consultant, who turned up once a week to say no, and then we had to wait a week to put our next application in for them. Say no again. We're like, we're putting heritage colors in. Accept them. So to answer your question, you know, when. If there's. There's money in the deal and it's worth your time and effort, great. If you haven't got the experience and you're learning how to do development at the same time time as doing. Learning how to do renovation as well as all of these other things, it sounds to me like almost a step too far. So. But only you know what the money looks like at the other end. And the other thing is that, you know, we do have a lot of students that do this kind of twist strategy that renovate the front of the property, take the equity out that then can help do the subdivision at the back and maybe sell it off or do the initial stages of planning before they get through to council and get a construction loan for the back of the property. So it's a great strategy and it's one that you can optimise the renovation techniques that you're learning to then throw into the subdivision, which I have no experience about, hence I'm going to throw that one to John. But to me, if you're finding these great areas on typical size block, you know, I would. I would suggest that in some. Some of the kind of Ballarat, Bendigo areas, if you're talking those areas, Heritage is pretty much everywhere around cbd. So you might just have to find that now. I have a really good tool, John, don't I? To let me share my screen again. So I've got this cool, cool tool. Let me just. Where is it? No, I don't have it. I can't find it quickly. Dang it. Let me find it while we're talking. But, John, you talk and I'll find the tool.

Yeah, sure. I guess. Broad strokes. I'll stay out wide. Not get too nitty gritty just yet. But the broad strokes. What's great about development is you take a piece of land which we all Know, it's the land that appreciates, not the dwellings. And you multiply its use by. By having. By changing it from one dwelling into multiple dwellings, and that basically forces up the value into another bracket. And typically, what the game is with developing is you take one piece of land and you try and split it in as many ways. If you get. The game is always, you know, can we get four on? Can we get five on? Can we get. So that's typically the game because each time you can bump, you know, you're bumping it up into the next bracket. By doing that, you're forcing the value or forcing the equity. So that's the game that you're playing. Where that works and plays out best is when you have a land value or that you don't have, you have limited supply of land and a high land value. So if you just take that to its extreme, say, okay, well, where does that work best? Tends to work in dense urban areas where the land value is very high. Because then what you're doing is you're. You're multiplying that already high land value, if that makes sense. Does that make sense to you?

Yeah, absolutely. So if I apply. So if I apply that, that lens or this thing, because it's regional, Victoria, I'm guessing there isn't limited supply of land because it's not as dense as Melbourne or Sydney, and the land value is also not relatively higher as the capital cities. So am I barking at the wrong tree?

Or rather, perhaps if you were, it'll come down to the numbers. Look there. And it's not to say people don't make money from development in regional areas, because they definitely do. And it comes down to the feasibility eventually anyway, regardless of the number stack up. They stack up. But I guess very specific strategy, and it requires a specific set of knowledge and a specific set of skills. And when you get good at it, you're able to do these feasibilities quite quickly because it's all just about crunching the numbers. But before that, way before that, when you write out why, you know, with a blank piece of paper, you're saying, okay, for my budget, what are the areas that have the best capacity to carry out this strategy? And so when you're looking at that, you're looking at, okay, well, what's the, what's the resale price of the townhouses in your case? What's the land value? Is there precedent in those areas? So you want to make sure that there's good precedent. And what Jane's about to show you here is a really good tool that shows precedent, but also shows you demand in that suburb. So this is where you're at the suburb selection stage, where you're deciding where you get the best bang for buck with the money that you have to use for this. So it might be a good jumping off place for you there. Jane.

Yeah, this is a new tool that's just come new to us. Land checker.com now in Victoria, it actually also lists the properties for sale. I know in Sydney it doesn't have the properties for sale, but this is insane. Is it Ballarat or Bendigo? Or do you want to share where you're looking, Alfred?

Yeah, sure, it's Bendigo, Jane.

Okay, so let me just throw Bendigo in here. Zoom out, zoom in. Now, what I really love about this is it gives us an idea of what planning information is around. So let's just say these numbers that you're looking at here are actually properties on the market at the moment. So we can see that's an apartment, for instance. So we turn off the apartments. We're not interested in these things. You might be interested in townhouses, just to see what the market's like for townhouses, houses at the moment. So that could be something you're looking at. But what I put. And you might be looking for particular bedrooms, orientation, all these wonderful things. But this is a free site. This is what I love. This is the planning zones. So you can actually look in here and see, you know, for instance, let's just get rid of some of these ones. So this one here was a comprehensive something or other. And you've got these planning overlays that you can put on, defined where heritage is. For instance, if I turn off all of these overlays and I put the heritage overlay on, or even I know that I've got some clients who buy in Bendigo and Ballarat. And there's some environmental issues with soil. So you really have a big soil issue for developers. Make sure that you understand that. Or did the research speak to council? But this here tells us where all the heritage overlays are. So this is insanely handy, I find, because it gives us an idea of if you're looking in an area, what you need to be aware of. So this is a really handy tool as well. And I love this. This is planning permits, so you can actually see what people have done. So for instance, you might go in here and you go, why was this one rejected? So you can get down here to the planning information. And this was a part demolition of a dwelling for the A three story extension to an existing dwelling with a swimming pool, et cetera. This one got canned completely. Whereas you might look at the ones that have been approved. This is just roof materials but it might give you an idea of what they've done, what kind of appetite the council has or in what particular areas or what the neighbours are like to be able to get the plans that you want to have done done. And this is insane. I hope you're jumping up and down and giving like high fives here, but this is like amazing. And then when you kind of overlay that as well with the, you know, the properties on the market that you're looking at, you can actually see, you know, here's some, here's some properties that are on the market at the moment. You know, has there been developments or is there something that's pending close by that you need to be aware of? So this, and this tells you all the information about, you know, any zone issues that it could have. So this is an insanely amazing tool that I hope you guys, you know, kind of just like given high fives for. Thanks, Jen. So check it out. It's really, really cool.

Sure, John, if you don't mind, just a couple of follow on questions from what you just mentioned. So you mentioned land value. Did you mean land value for the whole block of land as it stands or the land value after subdivision?

Yeah, so most. An agent that works with developers will often quote this to you as well, you know, so if you take a block of land in a suburb and let's say you've got a group of streets that are all on a set per square meters or similar size blocks and then if you look at the sales of the houses that are not being bought for the actual dwelling itself, let's say it's a rundown house or it's a knockdown or it's a, or it's a development site, then basically you take the sale price and you divide it by the square meters and that gives you a price per square meter which gives you that land value. Right. And so developers will know that land value figure for each pocket of each suburb that they're interested in. And this is where I was just going with that specialized skill set. And it's developments, it's great in some ways that it's very clear how you force the equity and as opposed to renovation in some ways where it can be a little bit airy fairy between the pricing disparity, between an unrenovated property and a renovated property in the same street, particularly if you haven't got too many comparable sales. Whereas at least development does give you a clear delineation where you're knocking it up, you're putting another dwelling on where renovation could do that too if you're adding another bedroom. But often if you're turning a three bedroom unrenovated house to a three bedroom renovated house, it can be a little bit hard to know for sure that you're actually knocking it up into another bracket, into another price bracket and where development does give you that kind of certainty. But the, the problem with it is it's a really advanced strategy and the lower you are in the market, meaning if you're buying in the twos and threes, the margin is smaller.

Right.

And if you're doing it for the first time, the, the, the risk you run of getting it wrong is, is higher. Particularly if you're doing really very high. And we've seen, I mean I've talked to hundreds, literally hundreds of people over the last seven years who have done versions of developments, you know, splitters and battle Xbox and all that kind of stuff and not made any money and dropped a year or two of their time doing it. And they actually just would have been off to be better off doing the job map and doing a simple one hold strategy, but nowhere near as shiny. And you're selling an outcome that's 10 or 15 years down the track. So it is very popular. But where it tends to really make its money is when you get into the higher bracket but with it comes higher risk and that you've got demand for that space, you know, land is at a premium. So therefore townhouses become popular and there's a, and you've got good precedent and there's a good healthy market to buy them. And typically the economics of it work to get commercial finance for a development. They, they do what's they call total development costs. So TDC. So they'll. Commercial finance typically works at about 20% of TDC. So if you took, if you had a million dollar TDC, which means that you had a $500,000 buy price of that land for instance, and then the remaining costs including your interest added up to another $500,000. So it's a million dollars total development cost, they would then say okay, we want to see that there's at least a 20% percent profit in that so that you're going to make $200,000 before we give you finance. So if we can't see a 20% now that's their rule. In reality, they tend to come down to about 15. And in reality, most developers have put in the books and the actual profit they're going to make is around 10%. So even at a high level, when you're at a million dollar total development cost, the margin isn't that great, you know what I mean? So, so the higher you go, the better those larger chunk of money that you get out of that. So high risk, high reward. And my, my recommendation would be if you're doing it your first time, and this is what I did, you know, do it with someone who knows what they're doing. So partner with someone who knows what they're doing. It's going to cost you an arm and a leg first time around, but you get a chance to learn the ropes and it gives you a safety net. So for instance, I, I paid our mentor, we paid our mentor was just me, it was myself, the business partner, Scott, 10,000amonth and he took 25% of the profit. 20, 25. 25% of the profit. And we were happy with that with the first couple of developments, just because we knew.

And that was for over a year, wasn't it John, that you paid him the 10,000amonth?

Exactly, yep. Commitment. And, and you know, it was pocket change to him really, because he was doing other developments. But he kind of like the, the idea of passing on the knowledge and working with us and just having a little side project which really didn't cost him any more than, you know, catching up with us. We had a phone call each week and we catch up every second week. But a lot of the time it was just having the peace of mind and having him there when we needed him. So we call him up and say, what do we do here? And you know, five seconds, we're sorted kind of thing. So that's the path I would go down. If you, if you were going and if you're going in that road, I would say you, you would be doing that exclusively and really with the view of getting, becoming a real expert at that. My opinion, and you know, I know people prove me wrong all the time and people make money and you know, the wind can be blowing in your direction as well. But in my opinion, it's a specialized area and it's high risk, high reward and for the majority of people that do, doesn't tend to pan out the way that they think.

Yeah, yeah, perfect.

Thanks John. Just one last question. Sorry for hogging all the time. Just one last Question, just for one question, really. So is there. You talked about feasibility and the numbers stacking up before you do anything. Is there a quick, sort of a back of a fat package, sort of a quick feasibility thing that we can do development wise? It stacks up. Is there a template or a formula that we can use at all?

Not really. It's easier for renovations, but even with renovations it's not. Yeah, there's no quick way really.

I mean, you use the quick quote calculator for your development cost, didn't you, John?

I. I did, but we still got quotes in because you're dealing with such big numbers. You get it under contract subject to due diligence. And so we, we did some initial numbers, but we still got quotes even before we put the offering. And yeah, the answer is that you've. There's no substitute for the work and there's no substitute for experience so that the. There's so many costs that can go wrong in a development, it's amplified compared to a renovation. It's. Particularly when you've got a property already on the block that adds complication. It's hard enough when you've just got to clear land. There's things that can go wrong, particularly with your services that can flow out your cost if you're going down with your hit rock and all of that. So you need to do dual samples and blah, blah, blah. So back at the envelopes, there's, there's formulas around there. I think there's. Ultimately what you need to do is similar to what we do with the renovations is you work out the resale price of each of the. Let's say you've got two or three on the block. Okay, what are they going to sell for? Then you. Minus the. All of your costs, all of your holding costs in that time, and I would add an extra few months minimum, particularly if you've got approvals and stuff to go through. They're notorious for blowing out, you know, years at a time, those approval processes. You only have to get one difficult planner and your life just becomes a nightmare. And yeah, they have a huge amount of power with very little accountability. And so once you worked out those, those, the resale and all of your costs, including your build costs, then essentially what's left is your profit and your buy price. So if you say that right, you might work out your profit as a percentage or you might say, right, I don't want to take on anything unless there's a hundred take on this much risk unless there's at least $100,000 profit. And if you think subtract that from all with your cost, that leaves you with what you've got to buy that landfall to make it work. So that's probably one of the easiest ways you can do it. And you can use the quick quote calculator, it's very handy for all of that. But when it comes into, you know, building houses out of brick and all of that kind of stuff and concrete slabs, then you're going to get need to get quotes to make that happen. Sure.

Thanks, John.

Thank you.

No problem. Okay. Now John, we have some questions as well that have been sent through to us. Now Tarek, I noticed that you're still there and I've got a question of yours on my spreadsheet that you sent through, which was investsmart.com, which you refer to in module two is not a real estate website, it's an investment fund. Where do I get this data? So frustrating, Derek. It keeps changing. Now I don't know if you can see this. If not, jump over to Facebook Live because I can see you're still here in my studio. So feel free to jump over there because it might be easier. But when you go to investsmart.com you are going to come up with this. And they keep changing it. So this is why we hate making recommendations, which is because they keep changing it. But as you can see here, it used to say property up here and we used to look at it. So then what I did is buying and planning a property. So you just have to kind of look around to where the information is. So then they start on this whole property portfolio here and how you get your property portfolio and all of these things. To be honest, the only way that I can get around this is I just have, I just put in the property, which used to be the old link, which gets me to the page that I used to be able to use. So it looks like this Investment tools is the link here. So it might be under Intelligent Investment Research. Investment Portfolio. So as you say, it is a moving feast because every time someone decides to change things changes. But I'm just not sure how they get up to that. No. So the only way that I do it is I type in property here and that's where it comes up. So hopefully that helps. Then you can type in your postcode and do some analysis here. And this gives you a little bit of the information. Now remember, try to work out where you're getting the data from. So if you're using for instance sqm research or CoreLogic from the back of the magazine for your dot map and then you hear that the median price Here is from highcharts.com which is all completely different. Just be aware that where the information is coming at the time. So this is that discounting rate here that I mentioned before. As you can see here, you know median house price 767676 with the long term trend. So just be aware you know what's happening. That's a huge, huge drop bit of demographics and information there. So this information is coming from Australian property monitors. So it's not coming from SQM Research, it's not coming from RP data. So if you're looking at that and when we're in the Facebook page we obviously have under the units where we've got a lot of questions there where people have one of the around the dot map and the data and why is the, why is the median here different to the median there? This is why I suggest that you get one lot of data and stick to it. So I hope that makes sense. Does that help you? Okay, no problem. Okay. So John, a couple of the questions that we have here. Karen. Oh first of all we have a hello, how are you going? Marina hi Facebook user. We can't see your face anymore or your name. Hi everyone. Nice to see people making some comments. Give us some love, some love hearts and some likes and we know that you're there. We know most people watch this on replay. Anyhow Karen, John's asked a question around land tax. So she says let me share this screen so you can see what she's talking about here. Hi Jane, no doubt investors would like to know about land tax rates that investors are paying in each state. As I gather each state is different and the answer is yes. There may be ways to minimize taxes or states that are the best or better to invest in. See the article about a proposed bill that's happening in South Australia that's going to kill the market here. You no doubt know a lot more about this than many and obviously huge land tax bills will kill an investment and it needs factoring into any purchase. Love to hear your comments about any big name commentators or commenting on this and even telling the government their thoughts of impact on the market. I think it will make less rental properties available. Thanks Karen. So this is a interesting bill that has been put through through the South Australian government. It just goes to show John that often where we are and what we do is very much dictated to by legislation. You change the Legislation and threaten to get rid of negative gearing or you change legislation around not being able to do improvements in the self managed super fund or legislation around Airbnb and the number of nights that you can rent your property out for and how much a difference this really makes. Now what's really interesting about this South Australian article, and I've got another one here, I think it's probably a little bit more relevant in an explanation is that they've essentially said in South Australia we've got this land tax threshold. And this is one of the things my husband and I did. And when I'm doing discussions with first time buyers in my investors choice milk debriefs and strategy sessions, we talk about maybe if you can afford to buy properties in individual names first, then you can have less of an exposure to an overall land tax by buying individually first or buying through trusts or then buying in joint names. So it's basically until legislation changes, you never know what you're doing. But what the South Australians have said is that we reckon we're losing a huge amount of money. I think they say here that There was like 4,300 individuals and 2,600 companies that are now going to have to pay more tax compared to the 47,800 individuals and 7,900 companies which pay less in land tax. So they're actually saying that there was about 22,000 property investors in South Australia, which was 16,000 individuals who own multiple properties. So what happens with your land tax is you get over a certain threshold. Every state is different. And when you get over a certain threshold of land value, not total property value, land value, they actually will charge you a certain land tax. Now I know our property investments in New South Wales, we've got extensive investments, is an extra like $15,000 a year that we have to pay in land tax, which obviously minimizes the rental return that you're getting from a property. You just have to be aware about that. And that's why another reason I think being geographically agnostic is fantastic, because it allows you to go, well, I can expose my risk across different states. Now having said all of that, what does that mean? Well, there is also a lot of conversations that are going on that says that the states are going to get together and the land tax will become a federal thing and therefore under federal government, it doesn't matter what state you own your property in, you're going to have to pay tax on accumulative of all the land you owe. So Karen, I don't Know if I'm across this more than anyone else. If you have considered concerns and you would like to have someone lobby on your behalf, then obviously pipa, the Property Investors association of Australia, are a group that is a fabulous organization. I have personal. Is it pipa, Property Investment Association. Property. Pipa, Property Investment Association Australia. So it's the property professionals and they advocate. So they did a lot of lobbying around the negative gearing. Our dear friend I had dinner with last night, Professor Peter Kalisis is the president of IT and he is obviously looking at what people's concerns are and making sure that, you know, they can get out there and lobby on what their biggest concerns are. So if you have issues, join the organization and get in there. So I'm just kind of trying to find a link to it right now so I can show you. And where are we? Property Investment Professionals of Australia? These are the guys that will represent you. So it doesn't cost a lot to become a member of things like 5 or $10. I think as a business I pay 100 bucks a year or something but it definitely, you know, make sure that the people who are members have signed on to the ethics and are a part of the group. So just be aware of, you know, what they're doing and some of the things that they're doing. But really great group to become a member of and it's easy to do and, and blah, blah, blah individuals. I think it's not going to cost you hardly anything 5 bucks so jump in and do that. Yes, it is an issue that's coming up and best be aware that in South Australia they are doing that but they are going to lower the tax rates down from 3.7 at the top to 2.4 as well. So Karen, I hope that answers your question. Anything there to John, you want to add?

No, not really. Not Online tax.

Question from lynn. Hi, I'm 56 and what does Lynn have to say?

I'm 45.

I'm 48, I'm 56 and I don't expect that I'd be able to borrow enough money to allow me to be able to purchase and renovate. At present I have equity in my own villa and own a villa and work full time and have some cash saved. However, when I went to a mortgage broker, they said I can only borrow $260,000 but I want to sell my villa and purchase something bigger. The borrowed money is to be put towards purchasing another property for renovations if required. If I were to go ahead with the home loan, I'm guessing an investment loan would be refused or if accepted it would be enough to purchase a property to renovate. Anyway, just want to know your thoughts. So from what I'm gathering here Lynn, you've got a home, you've got a loan, you've got some savings. The most that you can borrow at the moment is $260,000. But you have two goals and one is to buy a new home which is bigger with land which I'm assuming could cost more. And if that does that income, that loan amount that you currently have, if you say go from a $300,000 loan to a $350,000 loan, that 50,000 essentially is going to come off the 260 that you have capacity to use towards your investment property loan that you've been assessed at so around 210. So just understand if your broker says, you know, based on 260 you've got, based on your current situation, you've got a borrow capacity of 260,000 and you have other plans then whatever your plans are and what that cost of that new properties could actually affect this current property. Also you bring up an interesting point being 56 and Susie's got a very similar question going obviously due to my situation. My question is on behalf of the more mature generation, how do we achieve our goals when the banks won't lend us money? Are the banks likely to loosen their criteria? So if you have a look on the Investors Choice Facebook page today I posted two financial review articles, one from today and one from yesterday and the one from today is essentially saying that Josh Freiberg, the treasurer and supported comments yesterday at the Australian Financial Review Property Summit and they were reinforced on Tuesday by our Prime Minister Scott Morrison that they are calling on the banks not to hurt everyday Australians by putting in place stringent, more stringent lending criteria that's even necessary and the market is definitely working in a rate reduction in October. So all of those things come back to can an older person get lending. And Lynn, you know I think what we're going to see is these interest and Suzy interest rates are going to come down. Your borrowing capacity in theory will go up because of that. But I think the lenders are getting a lot of pressure on themselves on from other areas to yes, make sure, sure that there is a due diligence to make sure people can be assessed who have the loan now and in the future with the buffer in case rates go up. But I think we might see lending come off a little bit. And the key is I know that when we're writing mortgages for older Australians, there is always a whole description. We write copious notes for the assessor to say that the we know that the person is 56 or 60 and there are 30 year loans, but we're making a 20 year loan and the property as an investment will be paid down over that period of time or the property as an investment will be sold to pay off the home loan. So you have to make notes to justify what people are doing. But if you walk in off the street, obviously older, and say, can I have a loan? And without having all of those notes around, it can become a little bit more difficult. But it has become more difficult and we've even had assessors come back and say, this person's 45. Why should we give him a 30 year loan? 45 isn't old, is it, John?

Sure isn't. You'd hope we've at least got 30 years left, wouldn't you?

I reckon I've just bought myself another 50. Just be so, you know. Another question we've got from Sam and Madeline. Oh, lovely way if she spells it. My partner and I are looking to expand our portfolio after my first investment property purchase in 2017. My partner is interested in purchasing her first investment in our hometown of Newcastle. And I'm hoping to look at purchasing a home that offers options to future opportunities such as renovation, subdivision, potential development. Wow. So many things in Newcastle beyond. Because we think Newcastle offers strong capital growth, we currently don't have an investment property strategy, but I'm interested in learning how to get one so I can secure a comfortable future. Please give me advice on my questions. It'd be greatly appreciated, Sam and Madeline. Oh, okay. So this is really exciting. I think you pick up on a couple of interesting things here, guys, and that is that you do need to have a strategy. So we talked about renovation, subdivision. You know, there's so many things, capital growth, they're all different strategies and arguably they can all get you to your goals. It just is a different time frame for each of them potentially. So being very strategic about where you buy is great. We've just had a question about land tax. Having multiple properties in the one state and having no geographic differentiation can also be a factor that you might want to consider. So multiple properties in one state, lots of land in one state, lots of land tax. Potentially you'll get over the threshold quickly. We on the weekend spent a bit of time with our mentors who were. Who had been purchasing around the Newcastle area as well, or were Going to purchase and even using granny flat strategy. So we had a whole presentation on two of our mentoring students who have just recently completed granny flats as well.

Interesting pattern of growth there. I remember too, that was Jeff. It was a nice even patent growth that we're seeing on the dot map scene.

Yeah. And it's interesting with the dot maps also. Bugger it. I'm going to show you. Am I allowed to say bugger it? I think so. Okay, I just said it twice. All right. So the interesting thing about Newcastle because I just did this for one of the investors choice clients as well, looking about where to buy when we look at the dot map is that it's difficult in some of these regional areas to get that ripple effect potential with the dot map because you're coming out from the cbd. So arguably people want to be close to the CBD because this is where they work. But what we also know is that Newcastle is commutable from Sydney. So people are actually commuting from Sydney. But then we throw into the lifestyle effect, which is we know, and John and I have done this many times in workshops that along the waterways, the waterways actually have more of a demand because of that lifestyle of, you know, sea change as well. So what you have is that you have this ripple effect from here. You have a ripple effect coming up from the, from Sydney. You also have this waterway effect where people can't afford. Can't afford, you know, the suburb on the waterway or on the beach, they go to the next one hour. So Newcastle I find quite difficult in looking at the, the dot map because there are so many factors at play. So, you know, it's really around things like, you know, being on the train line, for instance, or being close to the. On ramps and off ramps or being close to the water where people want to live. Actually doing some full suburb assessments on where the renters want to live because if that's your market, so that's something to pay attention to. But the other thing to pay attention to, Madeline, Sam, is that, you know, if you're buying it as a home and you're thinking as a strategy, that kind of plays into effect too. I'm going to share this screen now.

My.

How can I share this? Let me think. One of the things that I, I have been working on in the last month has been a first house buyer strategy. So what I found with interviewing a lot of our mentoring students and interviewing, sorry, mentoring applicants and looking at a lot of people's financials, if they just made the first decision of buying their first home better. And strategically it could mean the fact that their $450,000 property is worth 900,000 rather than 500,000. They get equity sooner so they could buy an investment property sooner, or they buy their first home as an investment property, suck it up and live in the area that they don't necessarily want to live in the next six months to 12 months, but be able to stash that away for the future and really bring the retirement early. So the fact that you've got a strategy around using your home as well and then maybe living in it and renovating it, or living in it and adding value to it is great. So don't forget the trident strategy. Buy below the market, buy an area with growth potential and then add value. So add value through renovation or maybe granny flats, etc. But this is what's the framework for the first home buyers that I'm really keen to share with in the next couple of months. And that's in particular around optimizing the concessions that are available to first home buyers so that need less money than they think. And the first of first 2020 we've got the first home buyers deposit scheme backed by the government, means you don't have to pay mortgage insurance. So for 5, $600,000 property, $30,000 deposit in Victoria, for instance, no stamp duty and no mortgage insurance, just have to pay maybe $2,000 for your pest and building and legal fees. So you know, we're really looking at getting people around, getting their first home, treating as an investment and living in it for the period of time to get all the benefits they can move on, get out, get back to your tribe and your vibe, stash that away. And it's really important that you know you have that plan and vision. I think this is what you're missing at the moment. Sam and Madeline the plan and vision, what you need to do. Go set up yourself with your budget, your credit checks, make sure that you've got the mortgage broker is got you pre approved or has explained to you what you need to do to improve your borrowing capacity. Then move on to where to buy. And you know how much we love to understand where to buy and why, why subset some suburbs are better than the others. So that you've got the right property in the right area where there's a rental demand, slam it, go and get the negotiation done, go get the legal completed, go get the inspections done, supersize that this is around about while you're living in there doing the renovation and then Stash it away and move on. So why not bring your retirement wealth sooner by actually allowing you to lock away that investment property, property that your parents have been waiting to their 40s and 50s to secure. So, you know, bring your retirement early is all around that first home buyer scenario. I have got a page for that if you're interested. Go and check out firsthousebuyer.com if you've got someone or someone within your family who is potentially or you work with potentially able to consider, consider buying their first home and making it an investment property. And even if you don't plan on moving out in a year or two or three. I know I spent a lot of time with the nurses at the hospital in the last couple of weeks talking to them about being strategic about looking at the suburbs they can invest in. So this is all around about being very strategic about where you buy. So Madeline and Sam, I hope that answers your question. Few little other pictures that I have here, John, here's picture of Sharon and I with that Tiffany's key ring that we love. Yay. So Sharon's just.

Yeah. Background the.

Absolutely. And you know, once again if you are interested in having a chat to us about potentially joining the mentoring we are John's interviewing at the moment for applicants. The JaneSlaysmith.com put that www as you can see down the bottom of the screen now in front of it. We would love to help your dreams come true as well.

And yeah, take from there.

Well, good.

Well, I think John, that's all the questions that we have for the month and we've. I'm just going to check Facebook now. I don't think we have any more and that's about it. So I don't know if, if you've got anything else to say but it's been a huge month for, for us and glad we be able to answer all the questions for everyone who's here and had some questions as you know you can send them through to questions@your propertysuccess.com and we will put them on the list for next month. These calls at 12:30 the last Thursday of every month. We're in the Facebook page all the time and you can ask any questions there. There's a wonderful community, over a thousand people who are there so supportive if we can help you and be of service in any other way. You know, those of you who have access to the your property Success Club modules or the location Masterclass modules or the ultimate guide to Renovation modules, you know you can ask questions in there but make sure you pop over into the unit section of the Facebook page as well and check out all of the previously asked questions. So there you go. Oh wow. It's a nice little feedback from John. Awesome session. Yay. Thank you. But we're here to make sure that we can help you as you know you can do it yourself. You can do it with us through the mentoring. We can do it for you with our property selection or suburb selection service where we do all the research for you. So know that we're here to help in any way that you would like and really appreciate all the get wells and best wishes that have been sent to me for through a interesting period of time and also John has been going through some interesting times as well. So appreciate you and all your support and as always John, what do we say?

Yes, your property success.

All the best guys speak soon.