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Episode 305 | Chalk & Cheese: The Difference Between The Art & Science of Investing

We bang on about the “Art” and the “Science” of property investing a fair bit. But have you ever stopped to wonder what this actually means? Like, what’s the difference between “Art” and “Science” anyway? And how does this apply to picking an investment-grade asset?

Well, step right up folks, ‘cos we’re about to unpack all this in today’s episode!

‘Cos first things first… Art and Science are like “Chalk & Cheese”… completely different things!

So, when you’re looking at them through the lens of a property investor, you have to be mindful to the subtleties of each… and you need to know firsthand how they both complement each other and, most importantly, how they come together to ensure your overall success.

We can assure you… you can’t have one without the other. And just like Yin and Yang, there’s a balance you need to strike to get the art and science of asset selection right!

Tune in to today’s Q&A to get the difference between the art and science of investing… and the answers to a whole heap of listener questions about where and what to buy.

 

 

Question about How To Work Out If You Have A Good Asset Or Not from Alex Herbert

Hey guys, uh, just a quick, thank you for your podcast. I’ve only discovered it four months ago and you know, it’s been really good listening through everything and it’s, yeah, it’s definitely has a bit of a culture feel to it and I really enjoy it. So, thanks. Thanks for the effort you guys put into that. Um, quick background on me, I’m 31 years old. I have six properties. Uh, one is a PPR, which I live in and then there are others, our investments at this stage. Um, so basically my sort of worry, or the question I would like to know a bit more information on, is, um, I put all my eggs in one basket using a property advisor and walked through all the process and building this portfolio. Um, and all of the things you guys talk about, he’s implemented, uh, in my portfolio as well. So there’s, there’s a lot of things there that I have in place that you guys do say that’s, you know, the, the golden rules. Um, the biggest thing though, that does sort of get the, the alarm bells ringing a little bit, or makes me want to find out a bit more if I’ve made the right moves is I do have a few of them, which are new developments, new houses where had the land and are built on the land. Um, and I just want to know once you do have some assets in place, how do you know that they are the good assets to hold or whether you’re wasting opportunity by holding onto them? 

 

Question about Capital Growth Considerations from Kieran

Hi, Bryce. And Ben, you guys made a comment the other week in one of your podcasts that medium to high density apartment investors investor stock type assets that are likely to be most affected, by COVID over the next 12 to 24 months as investors get scared and that the mantra is up for those types of assets. My wife and I currently looking at a two bedroom for the units with a little courtyard and garage, but I guess we’re wondering whether the performance or the growth of those is less in the short term and is likely to be dampened perhaps somewhat of prices of apartments do drop or at least stunted in their growth. Is that likely to flow over into the next closest asset class being most of those two-bedroom units? Would we be better off potentially stretching a little bit further to get into at least a three-bedroom Villa unit, but perhaps a little bit more living space, a little bit more land and courtyard? Is that likely to be perhaps less impacted in its growth?

 

Question about Strategies For Buying from Soph

Hi, Bryce. Hi, Ben. Love the podcast. Thanks very much for your time. Um, I’m just wondering if you can give a bit of an overview of some of the strategies of buying when you sort of mentioned some of the strategies here and there, but I was wondering if there was a list or something that we can sort of, um, go through and look at those. Thanks very much.

 

Question about Tips To Go From One Investment To Two from Daksha

Hi, I’m Bryce and Ben. Looking for some property investment advice, I already have my primary principal home and also have one investment property. I don’t know where to go from here onwards. Um, I do have equity on my principal home and my investment property. Uh, I mortgage insurance, so it’s independent. Um, yep. Looking forward to, to getting some advice on how to go for the second investment or how can I do my financial planning so that I’m ready? Um, thank you.

 

Question about Buying As An Owner-Occupier from Frez

Hi Bryce and Ben. My name is Frez. I’m asking this question. I am from Melbourne and I’m hopefully a soon to be first home buyer. Um, my question to you guys was would I be crazy to purchase a home as an owner-occupier, so a home that I’m going to be living in when the address has left and to the right of me, I filled with two or three units. The address in front of me is a, you know, a compound with four townhouses. And it’s pretty much the same story up and down the street or up and down any street within that suburb. So the suburb I’m talking about is an area called Laverton in the Western suburbs of Melbourne, traditionally an industrial area, but I think recently with Williamstown landing popping up, Truganina popping up in tiny, further down the road was all these house and land packages.  It seems elaborate and has been all the more, uh, appealing, um, purely because it’s established homes, much bigger blocks, and they’ve actually got public transportation, which these other areas like two train stations, closer access to the freeway and an actual bus network, but driving through a few weeks ago prior to the restrictions I noticed everybody was tearing down these houses and the amount of construction for unit after unit townhouse after townhouse. Should I avoid buying in this area as an owner occupier? Um, yeah, I just wanted to know what your thoughts on it were. Thank you for the podcast. Thank you for the content. You guys have been an absolute godsend since I discovered you considering the stage I’m at right now. Thanks for everything.

 

 

 

 

 

Episode 304 | Picking One Over The Other: Top Tips To Help Property Investors Make The Best Judgement Call

What do you do if you’re picking between two properties? Or two locations? Or even two investment strategies?! 

Well, step right up… ‘cos we’re about to give you the top tips to make the best judgement call when property investors are weighing up multiple options! 

Here’s the deal… in today’s Q& A, some of our folks are currently caught between a “rock and a hard place”, while others have narrowed down their asset selection to TWO choices… but are now snagged on which property will outperform the best over the long term! 

And on the other end of the line, some folks haven’t even honed in on the property yet… ‘cos they’ve received conflicting advice on which suburb to buy in… and now they’re left confused and afraid to make the wrong choice 

We even have one listener who’s at a loss with what investment strategy to pick – so much so he’s know fighting an internal debate with himself! 

So. How do you pick one property (or location, or strategy) OVER another??  

What things do you need to consider  

In no particular order, we’ll be unpacking, How To 

  • Pick The Better Asset 
  • Invest Without Regret 
  • Automate Your Finances 
  • Sleep Soundly Knowing You Made The Right Judgement Call! 

 Listen now to get the top tips to help property investors who have decision fatigue or just what the answer to this question, “Which Option is Better??” 

 

 

Free Stuff Mentioned 

 

The Questions 

Question About “Investing Without Regret” from Trevor 

I’m 47, work full time and am single. I have 3 investment properties — the first one bought in 1999 in Darwin (Millner), which went up dramatically and just as dramatically decreased in value and in rent. It has a high strata of $1500 per quarter. I do have another house in Brisbane in Waterford West, bought in 2008. It’d be worth now what I paid for it. I bought a house in Adelaide in 2010 – 3 bedroom. So they’re all not the best properties. All are rented except for Darwin’s decline in rent they all went quite well. My accountant says it’s costing me $% k per year to hold these properties. I don’t feel like I’ve done anything with them, and I’ve done this for quite a while now (since ’99) and don’t want to look back in 10 years and think gee whizz, I wish I bought something different. At times I wish I took the money out and bought something else. Now, if I was to sell, the properties are worth $3 with a mortgage of $3.50.Any suggestions for people who get into these scenarios? Going forward what would you recommend? 

 

Question About “How To AutomatYour Finances From Kylie 

Hi guys, my name’s Kylie — love the podcast. I’ve just ordered your book and I’m sure your answers are in it. While I wait for the book, I want to get better at my finances. I’m pretty good at budgeting and money management in my business, but I don’t really keep track of things personally. I’ve downloaded your Money SMARTS system to try and rectify this.  

I am in a good position — my company pays for the vast majority of my expenses like rent, electricity, vehicles, fuel and that sort of thing. And I pay myself a small wage for personal items and to keep saving for more properties, which I currently had 3. And I want to add to thatMy question is — which bank account, either the payments of Primary Account should I pay my wage into? And I don’t have a credit card. I currently have my mortgage offset account with savings in it and an everyday account with a debit card that pays for everything, which I gather will become my living and lifestyle account? I’m just unsure of how to set it all up. And would just appreciate any help. Thanks! 

  

Question About “Picking Between Two Properties” From Carrie 

I have a question about the best type of asset I should invest in. I’m looking to buy my first property, which I’ll live in initially. I have a budget of $750K. I’ve been looking at 70s and 80s free standing villa units in small blocks of 12 – 6 in Melbourne’s east. This puts me in middle ring suburbs around 20km from the city, with a land size of 350sqm. It’s a good balance between decent land mass without being out in the sticks. Alternatively, I could by a 2bdrm appt in an older, low density block — the type with only 2 or 3 stories closer to the CBD.  

Are either of these good investments? And which of the two is better? Or is there anything else I should look into? Love your work guys, keep bringing out those podcasts! Thank you 

 

Question About “The Internal Debate” From Mark 

Hi Ben and Bryce, Mark here from Sydney. First of all, I want to really thank you for the effort that you put in every week for making these podcasts available. I luckily stumbled on your podcast about 6 days ago as I was looking to get some information on Australian properties and I must say that the information you provide on your podcast has been nothing short of gold… so thank you! The thing that I’d like to know is I’ve working really hard for the last 5 years since graduating and have saved up a 20% deposit to purchase my first property and am on my way to building my property portfolio, which has always been something I have wanted to do. However, I have gotten into a debate with myself and I always seem to get conflicting opinions or ideas on this online.  was hoping you could clarify this for me because I do value both of your opinions.  

My question is, “Does it make more financial sense to own your own home or does it make more sense that you’re a rentvestor? 

So, own your own home or accumulate properties whilst renting? If you can clarify that for me, I will be forever appreciative. Thanks again guys, look forward to catching up on all your podcasts and really looking forward to meeting yoy guys – hoping to attend one or all of your webinars. Thank you. 

 

Question About “Which Suburb is Better?” From Jack 

Hi there guys, first up I just want to stay that I’ve just tuned into your podcast and I’m absolutely loving it! I’m going to be buying a couple of your books too they seem to have a lot of great reviews and, yeah, I’m really excited to read them. Fellas, I’m looking at starting my property investment journey this time next year – Dec 2020.  

Now, I’m following a couple of investors – one guy’s currently investing up in Brisbane. And this other guy I follow as well stays purely local, mainly Melbourne. He’s explained to me about the growth corridors – how they’re not really growth corridors – Packenham, Windenvale, Tarneit. I’ve gone and hand a look and they don’t average as much as I thought they would. Nice places, but yeah. I can’t afford to invest in Melbourne itself and the different to the two is – the one up on Brisbane is getting people starting up in Brisbane around the $500k mark – and the other guy who invests only in Victoria, says start out somewhere like Bendigo or Ballarat. He doesn’t think Geelong’s got good growth. Yeah, I’m hesitant to go Bendigo and Ballarat as they are in land, but I’m hesitant that my judgement’s being clouded. I’ve always grown up in coastal places – always lived near the coast and love the coast. If you guys could give me your opinion that would be fantastic. 

 

 

 

 

 

Episode 301 | How to Lose Half a Million Dollars & The Secret to Lifestyle Design

Don’t want to lose half a million bucks? Well then, make sure you don’t do this… 

In today’s episode, we’re diving deep on The Secret To Lifestyle Design – that’s means What To Do & What NOT To Do when building out your Property Portfolio Plan. 

Like we always say… “Plan to become what you plan to become.” 

So, if you’re an aspiring or existing property investorwhat does it mean to plan your property portfolio? And why go to the lengths to plan out your future anyway?  

Well, with “the end in mind”, your goal is a heck of a lot clearer! 

But there’s something wildly more important than this 

 Listen now to get the secret to creating the life you want (“lifestyle design”)… and how to reverse-engineer your dream goal to suit your current lifestyle! 

 

Free Stuff 

Don’t have an account yet? Create your free access below and we’ll also send you an e-copy of the instruction manual which is also our best-seller book, Make Money Simple Again. Just fill in the form below and we’ll email it to you right away.

 

 

The Questions 

Question from Angus: 

Would love some commentary about The Barefoot Investors email yesterday: 

 Hi ,“Get out now.” That’s the advice the CEO of NAB has given to homeowners who are struggling to make their repayments. 

Yes, in his quarterly trading update last week, NAB’s new-ish chief, Ross McEwan, warned: 

“There will be some circumstances where people are better off selling out early and taking some equity out of their homes, or keeping some equity, before it disappears.” 

While most of the media didn’t give his words much attention, there are two good reasons that you and I should: 

First, because in all the years I’ve been doing this column I’ve never heard a bank boss speak so candidly. 

Bank bosses are basically politicians: they get parachuted into the top job, stay there for five years, and rocket out with $40 million. Their main job is to stick to the script: “keep lending”. (And we’ve all witnessed how bad things go when bank bosses go off script, like getting into wealth management.) 

So why is NAB’s CEO sticking his neck out? 

Well, that brings me to my second point: he obviously doesn’t like what he sees on the horizon. 

And know this: McEwan isn’t peering into a cloudy crystal ball. Over the years NAB has invested billions into tracking its customers’ every financial move. In fact, all the banks have incredibly detailed customer analytics that tell them what people are doing — or not doing — with their money, in real time. 

Now, according to the banking regulator, APRA, roughly 1 in 10 mortgages in Australia are paused. 

Which gets me thinking … 

On one side, how long can the banks cop 10% of their customers not paying? 

On the other, when will customers who are really struggling finally bite the bullet? 

It’s a grim situation. 

My hunch is that the banks are betting that the overwhelming majority of their customers will get through this. Yet they also know a small number of their customers won’t, and so they (well at least Ross McEwan) are turning up the heat on them. 

My advice? 

Please don’t misquote me: I am not saying you should sell your home. 

What I am saying is don’t be a frog … if you were in hot water before COVID hit, don’t just sit there bubbling away. 

We’re still early on in this crisis, and you have more options than you think. And if you want someone independent (and free!) to walk beside you and carefully lay out your options, call the National Debt Helpline on 1800 007 007 and speak to a financial counsellor (like me) immediately. 

The last word goes to McEwan: 

“We’ve seen in other crises around the world, when people try to hold on they end up walking away with nothing.” 

Don’t say you haven’t been warned 

 

Question about Vendor Finance from Simon: 

 How do you set up Vendor Finance? What is the process? Do you need the full amount in cash or can you use funding from elsewhere, like a venture capitalist maybe, or even a bank under certain circumstances? Does a third-party company look after everything for a fee or is it more of a hands-on personal approach that is needed? How do you evaluate the risk vs reward with the process? What happens when the buyer refinances down the track? I’m thinking for some people in certain industries to get approval for borrowing will be very difficult for some time, this may open up opportunities within the vendor finance area? Some people may see this as praying on others misfortune while others, like me, may see it as offering a lifeline to those who need it. 

Could fragmentation of properties and vendor finance offer an attractive way in for less money for anyone struggling to get into property? Is this also a way you could offer Vendor finance if you only had for example 50% equity?? 

 

Question about What Property To Buy from Scott: 

To buy established or a new investment property, Bryce. I am in Sydney and considering buying in Melbourne as I feel the market there is way undervalued compared to Sydney, given the expected population numbers expected to surpass Sydney’s over the next few years. Thanks mate. 

 

Question about Our Biggest Investment Mistakes from Quy: 

Love your work gents! What are your biggest investment mistakes which had delayed you from reaching your passive income goals quicker. 

 

 

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Don’t have an account yet? Create your free access below and we’ll also send you an e-copy of the instruction manual which is also our best-seller book, Make Money Simple Again. Just fill in the form below and we’ll email it to you right away.

 

 

 

 

Episode 241 | 12 Steps To A Profitable Property Development – Chat with Peter Koulizos

Raise your hand if you’re curious to hear the profitable, 12-Step Process to Property Development…?

Now, keep it there if you’re already a developer, or you’re keen to give property development a crack yourself or, hey, maybe you just wanna build on your property investment knowledge before you lock yourself into anything?

Righto then folks, if your hand’s UP, then this episode was tailor-made for you!!

‘cos today we’ve dragged the big boss back into the studio — Mr Peter Koulizos!! And he’s about to unpack some of his best stuff on property development!

For those who haven’t yet been privy to the Property Professor’s gold on gentrification (EP 30 and EP 47) or the Five Golden Rules of Property Investment (EP 030) or his most recent episode on negative gearing (EP 204)…  it might come clear to you now that our good mate Peter Koulizos — Chair of Property Investors Council of Australia (PIPA), property developer, specialist in property valuation and economics (with a teaching degree, a Graduate Diploma in Property and a Masters of Business – Property) —  is a SERIAL Coucher and one of Australia’s leading property investment experts whose opinion we greatly admire J

Sure, he’s got all the qualifications and skillset, but he’s also got invaluable, in-the-trench experience, ESPECIALLY when it comes to property developing… and not just a little bit, mind you folks… a WHOLE LOT of it!

So… let’s just pick the Property Professor’s brain, yeah?

He was in town, so we’ve dragged him back in to the studio!

Resources mentioned…

The TOP FIVE Highlights…

  1. The Framework to Figure Out if Developing is (or absolutely isn’t) For You
  2. The 12 Steps To a Profitable Property Development (and what to look out for during each step!)
  3. The Gross Profit You Should Aim to Get BEFORE Embarking on A Development Project (incl. the “worst case scenario” profit)
  4. The Difference Between Planning Approval And Building Rules Approval
  5. The Lenders That Have An Appetite for Financing Developments Right Now

Get Noteworthy Answers On…

Quote of The Day

“You don’t want to go from Zero to Hero.

You don’t want to know nothing about property straight to property development!”

– Peter Koulizos

 

 

 

 

Episode 230 | From Residential to Commercial Investing: How this guy quit his Day Job at 28 – Chat with Scott O’Neill

Folks, if you’ve sussed out the title, you’ll know that today we’re visiting a space we don’t normally explore — and that’s investing in COMMERCIAL property!

If you’re a regular listener, you’ve definitely cottoned on to the fact that we obviously have an agenda towards residential investing (we figure everyone needs somewhere to live)…  BUT our bias doesn’t necessarily mean that you can’t reach success by other means of investing.

And walking proof of this is Scott O’Neill, Founder and Director of Rethink Investing who is an experienced and active investor who was able to RETIRE FROM HIS DAY JOB AT 28! Yep, VERY impressive. And he did it by investing in both residential property AND commercial property — mostly including well-selected unit blocks and small business that’ll likely be around for years to come.

With a portfolio of 28 properties (yep, the same number as the age he threw in the towel as an engineer), Scott’s passion and commitment has paid off in spades — he and his wife were able to take a 6 month sabbatical from working life and do nothing but travel Europe until, as it so happened, they grew bored of it and decided to teach others how to reach the same success instead!

So today we’re traversing Scott’s journey from residential to commercial property and picking up some pebbles of gold for you along the way:-)

Before we kick off what you’ll learn, here’s the bonus resources we mentioned in today’s show:

And here’s what you’ll learn:

SPECIFIC TO COMMERCIAL INVESTING…

  • When did he make the switch to commercial real estate?
  • How are commercial and residential investing different?
  • What do you look at to get a good tenant?
  • What’s positive about investing in commercial property?
  • Can you still get capital growth?
  • What’s the typical price point to get into commercial investing?
  • What are the current LVRs on commercial real estate?
  • What yield does he aim to get?
  • How long can it take you to pay off a commercial property?
  • What are the fees to get advice in this area?
  • What commercial properties DOESN’T  he like investing in?
  • What size commercial properties can start to see more vacancy rates?
  • What happens if digital business keep increasing?

THE WHOLE STORY…

  • What started Neil’s interest in investing?
  • How old was he when he bought his first property?
  • Were there many property investment mistakes along the way?
  • How could he sustain this many properties from a cash flow perspective?
  • THE BIGGIE… Would Scott have been able to achieve all this in the current environment?
  • How do Strata-titled properties work?
  • What was fueling his confidence?
  • How did he get funding to invest in so many unit blocks?
  • How much do these sub-divisions normally cost?
  • Where did he invest?
  • Why was it crucial he remained a Rentvestor for so long?
  • Did he have to sell any of his properties to buy his family home?
  • What did he learn about when to get preapproval on his PPOR?

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