Latest / Contributing to Your Life / The Journey from 1 Property to 25 | Ep. 08

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The Journey from 1 Property to 25 | Ep. 08 · Contributing to Your Life

• 0:00
  SPEAKER_01: So, very important to me is giving back.
• 0:02
  SPEAKER_01: Whether that's my time, my knowledge, financially, whatever I can do, I try and give back.
• 0:07
  SPEAKER_01: I lost my mum to cancer.
• 0:08
  SPEAKER_01: I was 10.
• 0:09
  SPEAKER_01: She was 37.
• 0:10
  SPEAKER_01: She died after a three-year battle with breast cancer.
• 0:13
  SPEAKER_01: So from that, I've always wanted to help people.
• 0:16
  SPEAKER_01: Even if I can help one person, not go through what I went through, then that's a win for me.
• 0:22
  SPEAKER_03: Mike Malloy arrived in Australia with two suitcases and a dream.
• 0:27
  SPEAKER_03: He went on to build a portfolio of 25 investment properties.
• 0:30
  SPEAKER_03: But what makes this conversation different isn't the numbers.
• 0:33
  SPEAKER_03: It's why he did it and what he does with everything he's learned now.
• 0:37
  SPEAKER_01: There's a lot of nervousness in the market at the moment, but there's still opportunity.
• 0:42
  SPEAKER_01: There's still value out there.
• 0:43
  SPEAKER_01: There's still an opportunity, obviously within your own limitations.
• 0:47
  SPEAKER_02: Today, Mike opens up about the real journey.
• 0:50
  SPEAKER_02: The rats in the kitchen cabinets, the tenant who built a swimming pool in his garage, losing his mum to cancer at 10, and how that loss quietly shaped everything.
• 0:59
  SPEAKER_02: Investing, coaching kids on weekends, and his decision to become a broker so he could help other people do what took him 15 years to figure out.
• 1:08
  SPEAKER_03: If you've ever wondered what a real property journey actually looks like, not just the highlight reel, the actual thing, this episode is it.
• 1:16
  SPEAKER_01: I met Munsrol as my accountant.
• 1:18
  SPEAKER_01: As you know, he's quite a savvy property investor himself.
• 1:20
  SPEAKER_01: Also, Ross Lacane, when he became my broker, he was investing as well.
• 1:25
  SPEAKER_01: And I kind of had a triangle of trust.
• 1:27
  SPEAKER_01: So with the broker, with the accountant, with the buyer's agent.
• 1:30
  SPEAKER_01: And that has just been invaluable to me.
• 1:33
  SPEAKER_01: Meeting the professionals is key.
• 1:36
  SPEAKER_00: Before we get into the episode, please be aware that the discussions in this podcast are for informational purposes only and should not be considered financial or legal advice.
• 1:44
  SPEAKER_00: It does not take into consideration your personal circumstances.
• 1:48
  SPEAKER_00: Consult a qualified professional first before making any investment decisions.
• 1:55
  SPEAKER_02: We're really excited.
• 1:56
  SPEAKER_02: Frank, they say what's worse than having two brokers in one room.
• 2:00
  SPEAKER_03: Three brokers, three.
• 2:02
  SPEAKER_02: So we thought we'd bring in another broker because there wasn't enough of us today.
• 2:06
  SPEAKER_02: And we're really excited today to bring in uh Mr.
• 2:09
  SPEAKER_02: Michael Malloy, uh, resident broker slash runner, KHI partners.
• 2:14
  SPEAKER_02: Mike, thanks for coming in today.
• 2:16
  SPEAKER_02: Thank you.
• 2:17
  SPEAKER_02: Thank you for having me.
• 2:18
  SPEAKER_02: Thank you for making the journey across.
• 2:19
  SPEAKER_02: And today we want to unpack, Mike, I guess, your journey, your personal property portfolio building journey, all the way uh yeah, back when you started to where you are now.
• 2:30
  SPEAKER_02: But I guess before we get into that, the listeners probably want to know who you are.
• 2:34
  SPEAKER_02: So tell us a little bit about who you are.
• 2:36
  SPEAKER_01: Um so yeah, so I'm Mike in the finance solutions team within KHI.
• 2:43
  SPEAKER_01: Um I've unofficially been part of the KHI family for 15 years.
• 2:49
  SPEAKER_01: I think this is the 15th year that Munzeral has done my tax return.
• 2:54
  SPEAKER_01: So he's been my accountant since then.
• 2:56
  SPEAKER_01: Um I was fortunate enough to join the group about 18 months ago um and haven't looked back since.
• 3:03
  SPEAKER_01: So it's been really good.
• 3:05
  SPEAKER_03: That's quite a long interview process.
• 3:06
  SPEAKER_01: It was, it was and believe, it was two-way, and we were both happy in the end.
• 3:12
  SPEAKER_01: So that was good.
• 3:14
  SPEAKER_02: And before that, Mike, just a high level, what were you doing before Hamid's Melchizedek?
• 3:19
  SPEAKER_01: Yeah, so grew up in the UK, as you can probably tell, hopefully, we don't need subtitles for this episode, but uh we'll we'll see.
• 3:27
  SPEAKER_01: Um moved to Australia in 2005.
• 3:30
  SPEAKER_01: Um, background predominantly in IT.
• 3:33
  SPEAKER_01: Um, so I've worked at Big Four Banks, um with their apps, with their online banking, managing large teams.
• 3:41
  SPEAKER_01: Um, and actually the path that's led me here was I started investing about 15 years ago.
• 3:48
  SPEAKER_01: Um, and that's where I met Munzerall, uh, my wife and I, Kate.
• 3:51
  SPEAKER_01: We bought our first investment property, um, and we've just kind of gone from there.
• 3:56
  SPEAKER_03: So good, Mike.
• 3:57
  SPEAKER_03: Well, what I actually hear though, Mike, is you say you started investing 15 years ago, but I think your property um journey started back when you were in the UK, right?
• 4:05
  SPEAKER_01: Correct, correct.
• 4:06
  SPEAKER_01: So um always had an interest in property.
• 4:09
  SPEAKER_01: So Kate and I met in 2000.
• 4:12
  SPEAKER_01: So we've been together over 25 years now, which is quite scary.
• 4:17
  SPEAKER_01: Um still got all your hair.
• 4:19
  SPEAKER_01: Just about, just about.
• 4:21
  SPEAKER_01: Um, and then when we'd been together about two years, we both moved out of our respective parents' place.
• 4:27
  SPEAKER_01: We bought a property in our hometown.
• 4:29
  SPEAKER_01: So grew up in a very work into middle class part of uh Manchester, so about eight miles outside Manchester, UK uses miles.
• 4:39
  SPEAKER_01: Um and we purchased it, it was a three-story, three-bedroom end terrace house.
• 4:46
  SPEAKER_01: So it was an 1870s Victorian terrace.
• 4:48
  SPEAKER_01: We purchased it for£76,000 at the time, so that was about 2002.
• 4:54
  SPEAKER_01: Um, painted it, and then about 18 months later, we were moving to Australia um and we sold it for 121,000.
• 5:02
  SPEAKER_01: And the proceeds from that was our money to start our new lives in Australia.
• 5:08
  SPEAKER_01: So rocked up in 2005 with two suitcases, quickly burnt through all that money and had to quickly get jobs.
• 5:16
  SPEAKER_01: So when we when we first arrived, I've got my uncle was a 10-pound pom in the 60s, so he moved over on the boat three months coming from the UK.
• 5:25
  SPEAKER_01: Um, we went to see my uncle and we drove to Cairns.
• 5:28
  SPEAKER_01: And when we got to Cairns, we didn't have much money left.
• 5:32
  SPEAKER_01: So we was like, oh, let's let's go back to Sydney, get jobs.
• 5:36
  SPEAKER_01: Um, I actually wanted to be a bridge climb lead.
• 5:39
  SPEAKER_01: Um, and it was in 2002, you still looked in the Sydney Morning Herald for jobs.
• 5:45
  SPEAKER_01: Um, Seek and those kind of websites weren't as popular.
• 5:49
  SPEAKER_01: Um, but yeah, applied for a range of different jobs, but then basically ended up doing the same job I was doing in the UK, which was IT project management.
• 5:58
  SPEAKER_02: Awesome, awesome.
• 5:59
  SPEAKER_02: And tell us tell us where the property journey began and and what I guess and sparked that engagement in property because a lot of people, you know, they don't want to do property, but something obviously pushed you in that direction and tell us where it all began.
• 6:12
  SPEAKER_01: Yeah, so I was always always very interested in obviously making a bit of money in the UK.
• 6:16
  SPEAKER_01: I saw what property can do.
• 6:19
  SPEAKER_01: Um, but I was actually working at a bank at the time, and I was having a one-on-one with someone in my team.
• 6:25
  SPEAKER_01: And at the time I remember I was reading Smart Property Investor magazine, having a look at investing, um, and I was sat having this one-on-one with the person in my team and how was your weekend?
• 6:36
  SPEAKER_01: And he was like, Oh, it was really good.
• 6:37
  SPEAKER_01: I was like, Oh, what did you do?
• 6:39
  SPEAKER_01: And he says, I bought an investment property.
• 6:41
  SPEAKER_01: I was like, Oh, that's really interesting.
• 6:43
  SPEAKER_01: Like I'm reading this and doing this.
• 6:45
  SPEAKER_01: He's like, Yeah, I've bought 10 in 10 months.
• 6:48
  SPEAKER_01: I was like, What?
• 6:48
  SPEAKER_01: How have you done that?
• 6:50
  SPEAKER_01: And he's like, Well, what I do, and I go, I'm working with a buyer's agent and an accountant and the bank we were working for at the time.
• 6:58
  SPEAKER_01: And he says, I buy a property, Southwest Sydney, Western Sydney was the focus at the time.
• 7:04
  SPEAKER_01: And before it settles, I go to the bank and I say, It's I think it's worth this.
• 7:10
  SPEAKER_01: I extract my equity and I go again.
• 7:12
  SPEAKER_01: Um, and he'd done that very, very successfully.
• 7:15
  SPEAKER_01: So it's like, oh, I wouldn't mind giving that a go.
• 7:18
  SPEAKER_01: Um, and that's when I met Munzeral.
• 7:20
  SPEAKER_01: So Munsrill was the accountant, um, we used a buyer's agent.
• 7:25
  SPEAKER_01: I used the bank that I worked for at the time as much as I could.
• 7:29
  SPEAKER_01: And then I met Ross LeKain, who's now part of our group as well.
• 7:33
  SPEAKER_01: Um, and that's what we did.
• 7:35
  SPEAKER_01: And Kate and I built a portfolio, firstly in our own names, um, then family trust, then self-managed super.
• 7:42
  SPEAKER_01: Um, and yeah, it's gone well.
• 7:44
  SPEAKER_03: Yeah, the good old pre-royal commission days are over.
• 7:47
  SPEAKER_03: Correct.
• 7:47
  SPEAKER_03: Things borrowing was a lot easier.
• 7:49
  SPEAKER_01: Yeah, 97% loans.
• 7:51
  SPEAKER_01: And yeah, valuations were just dictated by what the client said they were worth.
• 7:57
  SPEAKER_02: So tell us about that first property, because I think we all see it.
• 8:01
  SPEAKER_02: The clients trying to get their first property, whether it's a home, first investment is the hardest.
• 8:05
  SPEAKER_02: Yeah.
• 8:05
  SPEAKER_02: So talk us through that and yeah, okay.
• 8:08
  SPEAKER_01: Yeah, absolutely.
• 8:09
  SPEAKER_01: So we I was we were living in Cremon, we were renting a property at the time.
• 8:14
  SPEAKER_01: So I was looking at reading Smart Property Investor, looking at properties in Neutral Bay, Cremone, Mossman, um, thinking those were the areas you should invest in.
• 8:23
  SPEAKER_01: Um, but then as I started to have more conversations with buyers' agents, accountants, savvy investors, um, our first purchase was in Lumia in Southwest Sydney.
• 8:34
  SPEAKER_01: Never heard of Lumia, didn't know how to spell it.
• 8:38
  SPEAKER_01: Um, and it was a two-bedroom townhouse for 215,000.
• 8:42
  SPEAKER_01: Um, the tenant had been in since the early 1990s, the guy was a builder.
• 8:48
  SPEAKER_01: Um, never hear, uh, even now we've still got that property.
• 8:52
  SPEAKER_01: We don't hear from them.
• 8:53
  SPEAKER_01: They repair things, we keep the rent fair, they're like the perfect tenant.
• 8:57
  SPEAKER_01: Um, and just as we'd committed to buy that, I went to my lender at the bank and he said, What's happening in Lumia?
• 9:04
  SPEAKER_01: I said, Oh, I don't know.
• 9:05
  SPEAKER_01: Like, I've never, I don't know anything about Lumia, but I'm learning a bit and I'm buying this property.
• 9:10
  SPEAKER_01: He said, You're the tenth person that's come to me this week and asked about getting a property in Lumia.
• 9:17
  SPEAKER_01: And I think using that knowledge of the buyer's agent getting in at the right time has definitely helped us build our portfolio.
• 9:25
  SPEAKER_01: And they had that springboard.
• 9:26
  SPEAKER_01: So that was the first one on Lumia.
• 9:28
  SPEAKER_01: Talk us what happened next.
• 9:29
  SPEAKER_01: Um, it moved quite quickly.
• 9:31
  SPEAKER_01: Like, so we bought, I think a few months later, using the the tactics that my friend advised, and obviously now working with an accountant and a buyer's agent.
• 9:41
  SPEAKER_01: Um, we bought a few more.
• 9:43
  SPEAKER_01: Um, we went as much as we could in our own names.
• 9:46
  SPEAKER_01: Um, and then yeah, and then started to look within a family trust.
• 9:50
  SPEAKER_01: And yeah, so very similar style properties.
• 9:53
  SPEAKER_01: So some were capital gains, some were cash flow, just to balance a portfolio a bit, obviously to improve the borrowing capacity.
• 10:02
  SPEAKER_01: Yeah, so I think those first few purchases really gave me a good understanding of structures and and portfolios and how to optimize lending, but also optimize risk as well.
• 10:14
  SPEAKER_01: Um, so I've not, I never, when building the portfolio, I didn't want to be awake at night worrying about how I was gonna pay the loans, how I was what interest rates were gonna do.
• 10:24
  SPEAKER_01: And I stick to that today.
• 10:26
  SPEAKER_01: Like I don't want to not be able to put food on the table for my family because I'm stressing about interest rates.
• 10:31
  SPEAKER_01: So we were kind of Kate and I at the time.
• 10:34
  SPEAKER_01: So Kate is very heavy, she works in QA, she's quite heavy in compliance and risk.
• 10:40
  SPEAKER_01: I wanted to go faster, faster, faster.
• 10:42
  SPEAKER_01: So we nicknamed each other Bankrupt and Told You So.
• 10:46
  SPEAKER_01: Um, and that, but that was a good balance.
• 10:48
  SPEAKER_01: So as we were buying, like I'd go, I want to buy this one, and Kate would go, Yeah, but what about this and the area?
• 10:53
  SPEAKER_01: And she do do the due diligence.
• 10:56
  SPEAKER_01: Good team, which really helped us build and pretty much everything we do today, we work through that process as well.
• 11:02
  SPEAKER_03: All that from a Monday morning how's your weekend conversation with your friend, right?
• 11:06
  SPEAKER_03: So you'll feel like it has different conversations than most people.
• 11:08
  SPEAKER_03: What did you do on the weekend board investment property?
• 11:10
  SPEAKER_03: Last week I started Bike's investment journey.
• 11:14
  SPEAKER_03: Yeah, absolutely.
• 11:15
  SPEAKER_03: Yeah, so like has it always been like a buy and hold strategy, or have you ever like manufactured growth in any of your properties sold down and got gone again?
• 11:23
  SPEAKER_01: Or yeah, it's very much dependent.
• 11:25
  SPEAKER_01: And again, using the experts, so using accountant, using buyer's agent, we've sold a few over time.
• 11:31
  SPEAKER_01: Um, and that's particularly where properties have been at the top of the market.
• 11:35
  SPEAKER_01: Um, I remember we bought one in Geelong just outside Victoria.
• 11:39
  SPEAKER_01: I think from memory, we paid about 200k for it.
• 11:43
  SPEAKER_01: And just over 12 months later, it was worth 350.
• 11:46
  SPEAKER_01: And I got a call from the buyer's agent, and he was like, It's at the top of the market.
• 11:51
  SPEAKER_01: If you're gonna sell it, sell it now, otherwise, you'll wait for 10 years.
• 11:56
  SPEAKER_01: Um, so I actually took that equity and we put it into two more.
• 11:59
  SPEAKER_01: Um, so that was a good move.
• 12:02
  SPEAKER_01: Um, over time, some properties have had some issues that we don't want to have the ongoing maintenance for years and years.
• 12:09
  SPEAKER_01: Um, so we've sold those as well.
• 12:12
  SPEAKER_01: Um, just trying to simplify life as well.
• 12:14
  SPEAKER_01: Like there's a lot of work in managing properties.
• 12:17
  SPEAKER_01: Um so yeah, but it's worked well for us.
• 12:20
  SPEAKER_02: And at the peak, Mike, how many properties were there in total?
• 12:24
  SPEAKER_01: So uh we had 25.
• 12:29
  SPEAKER_02: Um amazing.
• 12:30
  SPEAKER_02: And and I think the reason I asked that is you know, 92% uh of Australians have, you know, one or two investment properties.
• 12:39
  SPEAKER_02: So you've clearly pushed through that barrier.
• 12:41
  SPEAKER_02: But I think it's not easy to push through that barrier.
• 12:44
  SPEAKER_02: There's probably times I imagine that you hit ceilings maybe in borrowing capacity, things like that.
• 12:49
  SPEAKER_02: So, what were the key factors to go from one to two to twenty-five during that time?
• 12:54
  SPEAKER_01: Yeah, so I think it it's a mix.
• 12:56
  SPEAKER_01: I think we went through obviously borrowing.
• 13:00
  SPEAKER_01: I was working for a bank, borrowing what we could with that particular bank.
• 13:05
  SPEAKER_01: Um, and then once we'd cashed out with the bank, due to number of properties, due to borrowing capacity, um, we got introduced to Ross, who was a mortgage broker.
• 13:16
  SPEAKER_01: Obviously, a lot more access to different lenders, so 20 plus lenders, um, different options and different every bank treats different people differently.
• 13:27
  SPEAKER_01: So some like self-employed, some don't, some like first-home buyers, some don't, etc.
• 13:32
  SPEAKER_01: So that really helped us maximize our borrowing capacity.
• 13:36
  SPEAKER_01: When we reached a limit in Australia, um at the time, the Australian versus US dollar was dollar for dollar.
• 13:45
  SPEAKER_01: Um, so we started purchasing properties randomly in Kansas in the US, um using a a US Australian buyers agency.
• 13:56
  SPEAKER_01: Um, but yeah, that didn't work out too well.
• 14:00
  SPEAKER_01: It's a different ball game in the US just because of lending structures and management agents and just not easily being able to get to the properties if something happens.
• 14:12
  SPEAKER_01: Like our Australian portfolio furthest is I think just outside Brisbane.
• 14:17
  SPEAKER_01: If we need to get there, we can.
• 14:20
  SPEAKER_01: Um, but we have really good managing agents as well that we trust, which is something that isn't always easy.
• 14:26
  SPEAKER_01: We've we've built that over time as well.
• 14:28
  SPEAKER_02: And I think, you know, with a lot of the investors, you know, that we all see currently is that they might be impatient to the market, you're right, or impatient in terms of waiting to see that growth.
• 14:38
  SPEAKER_02: You were in the market for quite a significant time.
• 14:41
  SPEAKER_02: I imagine it wasn't always just capital growth, capital growth, capital growth.
• 14:44
  SPEAKER_02: It took time.
• 14:45
  SPEAKER_02: Yeah, so in your journey, when was that pill of a moment?
• 14:48
  SPEAKER_02: Was it like, oh, in the five-year mark, we really started to see some gains, or was it the compounding effect of continuing to accumulate?
• 14:55
  SPEAKER_01: Yeah, I think I think we kind of reached a limit when we were comfortable with our portfolio in terms of value and and what's our end goal?
• 15:05
  SPEAKER_01: So I think for us, our end goal is a comfortable retirement, having our own occupied property paid down, um, and being able to do things in life that we want to.
• 15:15
  SPEAKER_01: So travel and support our son with a good school and give him opportunities as well.
• 15:21
  SPEAKER_01: Um, so I think that was that was the point for us.
• 15:26
  SPEAKER_01: Um, and also when I moved, so about three years ago, I moved from working as a P A Y G as an employee to being a mortgage broker and being self-employed.
• 15:37
  SPEAKER_01: So that initially at least has an impact on your borrowing capacity.
• 15:41
  SPEAKER_01: So that was kind of a natural pause and reset for us.
• 15:45
  SPEAKER_02: And you know, I think throughout this journey, 25 properties, I think it's there's probably been some tough times, I imagine.
• 15:53
  SPEAKER_02: Uh, that's a lot of tenants to manage.
• 15:55
  SPEAKER_02: Uh, there's a lot of things going on.
• 15:58
  SPEAKER_02: Property managers, there might be things happening.
• 16:00
  SPEAKER_02: Tell us, tell us some of the horror stories, tell us the things that have happened with with that journey.
• 16:06
  SPEAKER_01: There's a few that immediately spring to mind.
• 16:09
  SPEAKER_01: So the second property we bought was in in Kempsey, in um so about three hours north of Sydney.
• 16:15
  SPEAKER_01: So it was a it was 100k to purchase the property.
• 16:19
  SPEAKER_01: It was rented at the time for$200 a week, so it was pretty much cash flow positive from day one.
• 16:25
  SPEAKER_01: We got the Pest and Building report, um, and it said that all the kitchen cabinets had been screwed shut because rats were coming in.
• 16:34
  SPEAKER_01: Um and they'd had so many rats, they'd screwed in every kitchen cabinet.
• 16:38
  SPEAKER_01: Wow.
• 16:39
  SPEAKER_01: Um the tenants did.
• 16:41
  SPEAKER_01: The yeah, I don't know who did it, but it was just on their pest and building, but I presume it was a tenant.
• 16:46
  SPEAKER_01: Um so they were no longer cabinets, they were just they were just yeah, fixed wall.
• 16:52
  SPEAKER_01: Yeah.
• 16:52
  SPEAKER_01: Um but we still bought the property, and and today I think it I think our remaining loan on there is maybe 60k, and we rent it for 350 a week.
• 17:02
  SPEAKER_01: So yeah, it's positively geared.
• 17:04
  SPEAKER_01: Did you redo the kitchen?
• 17:05
  SPEAKER_01: We've got a working kitchen now, like we got rid of the rats, and um, we had another one up in Logan in Queensland, where the water bills were really high.
• 17:16
  SPEAKER_01: And it was a typical Queenslander house, it had a double garage underneath.
• 17:21
  SPEAKER_01: Um, and we kept getting the water usage was like$500 a quarter, or um, but it was high for the property, and so we had Queensland water out.
• 17:31
  SPEAKER_01: It was there was no leaks.
• 17:33
  SPEAKER_01: We confirmed we had them out multiple times, we had a plumber out, couldn't find anything.
• 17:37
  SPEAKER_01: Um, then when the tenant left, we realized that they'd filled the whole double garage with a swimming pool.
• 17:45
  SPEAKER_01: So they were filling the swimming pool.
• 17:48
  SPEAKER_01: Yeah, it gets hot in Queensland, so we at least we found out where the water usage was coming from.
• 17:55
  SPEAKER_01: Um we've had, yeah, we've had some amazing tenants, though, like the one I mentioned in Lumia.
• 18:01
  SPEAKER_01: Um, we bought a property off a lady who wanted some money for retirement, um, and we became her landlord.
• 18:08
  SPEAKER_01: Like she just used the sale of the property so she could have holidays, and it was still her property.
• 18:13
  SPEAKER_01: So we never heard from her.
• 18:15
  SPEAKER_01: Like there was she paid rent on time, didn't ask for anything to be fixed because it was still her house.
• 18:20
  SPEAKER_01: Um but I think having good property managers is key.
• 18:26
  SPEAKER_01: Um, in the US, um, I remember one particular property, I think we made about$1,200 on it in a particular month, but then the managing agent paid$1,200 exactly conveniently to have the whole house jet washed without asking me.
• 18:43
  SPEAKER_01: So um when I said the US was difficult, we have a number of those examples.
• 18:48
  SPEAKER_01: And um, so we got out of the US quite quickly.
• 18:52
  SPEAKER_03: Yeah, so what I'm hearing from there, and I think some of those stories will help um our listeners really manage their own expectations, what it is to actually invest in property, right?
• 19:01
  SPEAKER_03: Because not every property, not every tenant's gonna be a 10.
• 19:03
  SPEAKER_03: Yeah, there's gonna be these things where these things happen.
• 19:06
  SPEAKER_03: And um, can you just talk to like at that time?
• 19:08
  SPEAKER_03: Like, was that really emotional for you and your and your wife, or how did you manage that?
• 19:12
  SPEAKER_01: Um yes and no.
• 19:14
  SPEAKER_01: So I think I'd I we've always had good insurance in place.
• 19:19
  SPEAKER_01: Um, and like I say, I don't want to be up at night worrying if a tenant's not gonna pay rent or they're not or they're gonna trash the place and leave.
• 19:26
  SPEAKER_01: Um, so I think having good insurance is always key, having a good property manager.
• 19:32
  SPEAKER_01: So we've we've let property managers go if they're not inspecting the properties, if they're not keeping on top of rent and things like that, um, and then just uh building it slowly and just making sure um everything is good before looking again.
• 19:47
  SPEAKER_01: And one thing as well is when buying investment properties, you've got to kind of it won't necessarily necessarily be somewhere that you live.
• 19:58
  SPEAKER_01: So you've got to take the emotion out of it.
• 20:00
  SPEAKER_01: Um I remember Kate and I went to, I won't mention the suburb, but we went to a particular suburb in Western Sydney, pulled up to have a look at the property.
• 20:09
  SPEAKER_01: Um, there were about 15 shopping trolleys, there were smash windows, there was smash bottles.
• 20:15
  SPEAKER_01: We were waiting for the agent, sat in our car with the with the doors locked and the windows up.
• 20:20
  SPEAKER_01: Um and Kate was like, I hate this.
• 20:24
  SPEAKER_01: I don't want to see another property.
• 20:26
  SPEAKER_01: So she from that day, so that was about 2015, she hasn't seen another property that we've bought.
• 20:32
  SPEAKER_01: Um, it's on a spreadsheet, it's an investment, we've got the safety measures in place.
• 20:37
  SPEAKER_01: We calculate if the interest rates go up, what that means for us.
• 20:41
  SPEAKER_03: Um right, so you still went ahead with that property.
• 20:44
  SPEAKER_01: Yeah, yeah, we've still got that on today as well.
• 20:46
  SPEAKER_03: Yeah, and and look, I mean, not exact numbers, Mike, but how did that perform just to help people understand the perception to results?
• 20:52
  SPEAKER_01: Yeah, I think we bought that in 2015.
• 20:54
  SPEAKER_01: I actually had it valued this week uh and bought it in 2015 for 179,500.
• 21:01
  SPEAKER_01: Um it's currently rented for 450 with a value of 550.
• 21:07
  SPEAKER_04: Nice.
• 21:07
  SPEAKER_01: So that was 11 years ago, so it's more than doubled.
• 21:10
  SPEAKER_01: Um, again, it's cash flow positive.
• 21:13
  SPEAKER_03: So yeah, so I think that's a really good example of like a very objective view, right?
• 21:17
  SPEAKER_03: Because right, some people would go then look at it like, no, that's not for me.
• 21:20
  SPEAKER_03: But uh you just looked at the numbers, the facts, and it's worked out well for you.
• 21:24
  SPEAKER_03: Yeah, that's right.
• 21:25
  SPEAKER_01: And just just because you wouldn't necessarily live there.
• 21:28
  SPEAKER_01: Um, because like I said, we were looking in Neutral Bay, Cremon, Mossman.
• 21:33
  SPEAKER_01: To be honest, we probably would have bought a unit pre-GFC, interest rates went up, we probably would have lost it during GFC and never invested again.
• 21:42
  SPEAKER_01: Yeah.
• 21:43
  SPEAKER_01: Um so yeah, doing it a bit different and having that chance meeting with the person in my team has changed our direction massively.
• 21:51
  SPEAKER_03: So on on that property that um Kate said she doesn't want to look at any more properties, right?
• 21:56
  SPEAKER_03: So there must have been some other factors about that that drove you to actually proceed.
• 22:00
  SPEAKER_03: With that.
• 22:00
  SPEAKER_03: So do you want to talk to what they were?
• 22:02
  SPEAKER_01: Yeah, so uh that particular one.
• 22:05
  SPEAKER_01: So the buyer's agent we were using um bought the whole block or committed to buy the whole block at the same time.
• 22:12
  SPEAKER_01: So there were 12 people buying units within a 12-unit block.
• 22:16
  SPEAKER_01: So that meant we could control the strata, we could get a good strata manager in, right?
• 22:22
  SPEAKER_01: We could make some changes.
• 22:23
  SPEAKER_01: So my my unit was a ground floor, it had an option to section off the garden, but you'd need um approval from strata.
• 22:33
  SPEAKER_01: But because we were part of the strata, everyone was the same mindset.
• 22:37
  SPEAKER_04: Yep.
• 22:38
  SPEAKER_01: So we got it through.
• 22:39
  SPEAKER_01: We added the garden, we added the value.
• 22:41
  SPEAKER_01: Um, so the the stats were still there, it was still a good property.
• 22:46
  SPEAKER_01: Oh, great.
• 22:47
  SPEAKER_02: And you know, to have that mindset, because 25 properties, again, there's a lot of headaches.
• 22:53
  SPEAKER_02: Who who gave you that mindset?
• 22:54
  SPEAKER_02: Or were you getting advice from professionals to say, Mike, it's okay, you're gonna get a water tank that's blow, you're gonna have someone put a pool in your in your garden.
• 23:02
  SPEAKER_02: Uh, you know, what who gave you that mindset?
• 23:04
  SPEAKER_02: Is it something that you and Kate always had, or something that you trained yourself to understand this is part of investing?
• 23:10
  SPEAKER_01: Yeah, I think so I had obviously the friend that I spoke to initially.
• 23:14
  SPEAKER_01: So he he was going through, he was uh maybe six to twelve months ahead of me.
• 23:19
  SPEAKER_01: Um, but then yeah, I think meeting the professionals is key.
• 23:23
  SPEAKER_01: So, like I said, at that point I met Munzerall as my accountant.
• 23:26
  SPEAKER_01: So he he reviews every property every year.
• 23:29
  SPEAKER_01: He still does.
• 23:30
  SPEAKER_01: Like we get on a phone call, we go through each property, the rent issues.
• 23:34
  SPEAKER_01: Um, as you know, he's quite a savvy property investor himself.
• 23:39
  SPEAKER_01: Um, also Ross Lacain, when he became my broker, he was investing as well.
• 23:45
  SPEAKER_01: And then the buyer's agent.
• 23:47
  SPEAKER_01: So the buyer's agent was also a very savvy property investor, and I kind of had a triangle of trust.
• 23:53
  SPEAKER_01: So with the broker, with the accountant, with the buyer's agent, we'd have every 12 months we'd catch up, we'd have a spreadsheet on a big screen, we'd go through the properties, buy, sell, hold, do this, different entity.
• 24:07
  SPEAKER_01: And that has just been invaluable to me and still is.
• 24:11
  SPEAKER_02: And I I think that advice is is is very key in building a property portfolio.
• 24:16
  SPEAKER_02: Yeah.
• 24:17
  SPEAKER_02: Tell us how important was it in your journey uh in building your property portfolio?
• 24:23
  SPEAKER_01: Oh, it was it was key.
• 24:25
  SPEAKER_01: Like we wouldn't have done it without meeting those people.
• 24:28
  SPEAKER_01: Like I wouldn't have, I would have been reading magazines, and I'm very much now of the opinion that once it's in a magazine, it's too late anyway.
• 24:37
  SPEAKER_01: Um, like we've bought properties like in Logan in Queensland, for example.
• 24:42
  SPEAKER_01: We found the properties six months later.
• 24:44
  SPEAKER_01: The Logan Council announced that they were doing massive infrastructure upgrades to roads, and that's when you need to be in the market kind of six months before.
• 24:54
  SPEAKER_01: Um, and just having that structure, um, having knowing what you can maximise in your tax returns, maximizing your your profit from your properties as well has been absolutely key.
• 25:06
  SPEAKER_03: Yeah, and how how was the the transition?
• 25:09
  SPEAKER_03: Oh, because I guess you know, now that you're a broker, um, you're probably one corner of that triangle of trust that you mentioned, right?
• 25:15
  SPEAKER_04: Yeah.
• 25:15
  SPEAKER_03: Um so I guess it would have been quite handy to have that real-world practical experience and not just have theoretical experience on on property investment.
• 25:24
  SPEAKER_01: Yeah, absolutely.
• 25:25
  SPEAKER_01: So yeah, I went from banking, working mainly in digital to had large teams, so up to 250 people.
• 25:34
  SPEAKER_01: Um, and just randomly.
• 25:37
  SPEAKER_01: So the same person that got me into property investor now owns a brokerage.
• 25:42
  SPEAKER_01: Uh, I remember one day vividly I'd had not a great day in the office.
• 25:47
  SPEAKER_01: We just had a regular catch-up, and he's like, Oh, you should become a mortgage broker.
• 25:52
  SPEAKER_01: And at the time we were doing a knockdown rebuild, we were renting.
• 25:57
  SPEAKER_01: Um I think it was just before, no, it was just after COVID.
• 26:03
  SPEAKER_01: So our knockdown rebuild was going really slow because a lot of the trades had to go back internationally.
• 26:08
  SPEAKER_01: And um, so probably the worst possible time that you could quit your nice salary and and start a new job.
• 26:16
  SPEAKER_01: Um, but I did it anyway.
• 26:17
  SPEAKER_01: So I joined that brokerage for a couple of years, um, learned a lot through them and the way that they did things, um, really struggled at times with Mike, the bank employee, is now Mike the broker.
• 26:31
  SPEAKER_01: Um, but to your point, Frank, I've built relationships with people based on my experience.
• 26:37
  SPEAKER_01: Um, so I have a mix of first-home buyers through to professional investors, um, and I enjoy working with them every day.
• 26:46
  SPEAKER_02: So I think you've seen the journey, like you said, you've rented own own home, build property portfolio.
• 26:52
  SPEAKER_02: What was that journey like?
• 26:54
  SPEAKER_02: Did you rent for a long time?
• 26:55
  SPEAKER_02: Were you rentvesting or you always owned your own home?
• 26:57
  SPEAKER_02: Because it's the biggest argument at the moment now with our clients is do we rent vest or do we buy our own home?
• 27:02
  SPEAKER_01: Yeah, so we so we arrived 2005, we rented till 2007.
• 27:11
  SPEAKER_01: Um, and then we were like, right, we've got to buy somewhere.
• 27:14
  SPEAKER_01: Um, and we were in Cremon, renting in Cremone at the time, and I remember just searching on real estate for the cheapest house within 10Ks of Cremon.
• 27:26
  SPEAKER_01: Um, and we found this house in Seaforth, so one of the northern beaches, 2008.
• 27:32
  SPEAKER_01: Um, it was 697,000 for a three-bedroom house.
• 27:37
  SPEAKER_01: And we're like, okay, let's go and see it.
• 27:39
  SPEAKER_01: It wasn't the ideal house, it was just it was on quite a busy road.
• 27:42
  SPEAKER_01: It was a 1950s brick villa, but it did us really well.
• 27:47
  SPEAKER_01: So that was a house that we knocked down and rebuilt eventually, um, took our money out of it, and now we've moved to probably our forever owner-occupied.
• 27:56
  SPEAKER_01: Um, but from having that home, so we actually got a 50k um loan from Kate's mum and dad.
• 28:04
  SPEAKER_01: Um, so they didn't have or don't have a lot of money, but they they generally gave us 50k, um, which we we've paid them back, but we still pay them back now as well, um, just for what they did for us.
• 28:19
  SPEAKER_01: We used some equity out of that home, and that was our deposit to start the investment journey.
• 28:24
  SPEAKER_02: Yeah, I think that's important.
• 28:25
  SPEAKER_02: You know, we all see it, you know, sometimes oceanally uh it might be the right reason to to go into your home.
• 28:32
  SPEAKER_02: Uh, and you know, also rent vesting as well.
• 28:34
  SPEAKER_04: Yeah.
• 28:35
  SPEAKER_02: You're now in your dream home.
• 28:37
  SPEAKER_02: You've said you've sold properties in the past.
• 28:39
  SPEAKER_02: Where are you currently with your your property portfolio?
• 28:42
  SPEAKER_02: Where's where's your header?
• 28:44
  SPEAKER_02: Because I think what we see is the accumulation phase, the consolidation phase, you know, then moving towards retirement.
• 28:50
  SPEAKER_02: Like, where do you currently sit with that property portfolio?
• 28:53
  SPEAKER_01: I'd say definitely consolidation.
• 28:56
  SPEAKER_01: Um, so a lot of the properties, as I mentioned, were kind of 200k properties in Southwest Sydney.
• 29:04
  SPEAKER_01: And I think a lot of those have kind of done done well for us, but they've done the time.
• 29:10
  SPEAKER_01: Um, so we're looking at consolidating and perhaps investing more in commercial through our family trust or a bit more blue chip.
• 29:19
  SPEAKER_01: Um, so I'd like somewhere that the family and I can go at weekend and just get away from Sydney, um, maybe somewhere at Central Coast.
• 29:27
  SPEAKER_01: Um, just a bit more lifestyle than than the investment vehicles we've used before.
• 29:33
  SPEAKER_02: And and so I think that's what we see probably with our clients is they move from accumulation, then consolidation, you know, kind of where you are at the moment.
• 29:42
  SPEAKER_02: Was there certain times in your portfolio that you moved to cash flow?
• 29:46
  SPEAKER_02: Uh maybe that was potentially adding granny flats or selling down assets to, you know, redeploy.
• 29:51
  SPEAKER_02: Uh tell us a little bit about it.
• 29:53
  SPEAKER_01: Yeah, so we've done that a couple of times, um, with granny flats in particular.
• 29:57
  SPEAKER_01: So the the house we had with the free swimming pool, um, we put a granny flat on that one.
• 30:03
  SPEAKER_01: So I think we we paid 300k for it in 2017, put a granny flat on.
• 30:09
  SPEAKER_01: Didn't put a pool on it to us?
• 30:10
  SPEAKER_01: No, we didn't know.
• 30:11
  SPEAKER_01: We kept the no, we didn't keep the pull.
• 30:13
  SPEAKER_01: Um so 300k, we paid 120 to put a granny flat.
• 30:18
  SPEAKER_01: Granny flat's a bit more expensive now.
• 30:20
  SPEAKER_01: Um, but that's currently, I got that valued this week as well.
• 30:24
  SPEAKER_01: That's valued at a million dollars.
• 30:26
  SPEAKER_01: Um, and the rent is a thousand dollars a week from the house and granny flat.
• 30:30
  SPEAKER_01: Um, and they really help in terms of of cash flow.
• 30:34
  SPEAKER_01: Um, most properties, I think there was only a couple in the tax return now that are negatively geared, but that's just because we've had we've done some renovations or we've we've had a troublesome client because we still get the troublesome tenants and um, but we manage it and it kind of balances itself out.
• 30:54
  SPEAKER_03: Yeah, so you mentioned that you're kind of thinking of moving towards commercial, right?
• 30:58
  SPEAKER_03: So, what are you, I guess, hoping to achieve?
• 31:00
  SPEAKER_03: Because I know people go to commercial with different reasons, but what are you hoping to achieve by bringing that into your portfolio?
• 31:05
  SPEAKER_01: Yeah, so I think it uh to boost the cash flow further.
• 31:09
  SPEAKER_01: Um, so definitely won't be investing in an office.
• 31:14
  SPEAKER_01: Um, too many offices vacant at the moment.
• 31:17
  SPEAKER_01: Um, but how uh looking at the moment, perhaps like warehousing um things like that, just I think part of it is because because I am a bit of a property nerd, I like doing different things.
• 31:29
  SPEAKER_01: Um, so to learn the process is like when I did my first commercial loan, that's different to a residential loan.
• 31:36
  SPEAKER_01: Um, buying my first commercial property will be different to buying a residential.
• 31:40
  SPEAKER_01: So I I kind of selfishly want to go through that process.
• 31:43
  SPEAKER_03: Yeah, there's worse hobbies to have, Mike.
• 31:45
  SPEAKER_03: So yeah, exactly.
• 31:47
  SPEAKER_01: So um, but yeah, just to just to solidify the the cash flow towards retirement.
• 31:53
  SPEAKER_02: And holding your portfolio, you know, for that long time, what's the key?
• 31:57
  SPEAKER_02: Because right now in this market, most properties are negatively geared.
• 32:01
  SPEAKER_02: What would you say is important in terms of holding that portfolio uh, you know, through the tough times as well?
• 32:07
  SPEAKER_02: Because those GFCs, those things happening, you know, 15-year cycle, you've probably seen a lot of you know different things.
• 32:13
  SPEAKER_01: Yeah, definitely.
• 32:14
  SPEAKER_01: And even our first property when we bought Seaforth, I remember keeping paying the rate lock on the fixed rate.
• 32:22
  SPEAKER_01: Um, and the fixed rate at the time was 8.3%.
• 32:25
  SPEAKER_01: And we kept paying the$200 fix.
• 32:28
  SPEAKER_01: And then literally the day that settled, we had half of the loan was fixed, the rate started coming down, and they went down for the next 10 years.
• 32:37
  SPEAKER_01: Oh, well.
• 32:38
  SPEAKER_01: Um, so we learned a lesson from that.
• 32:41
  SPEAKER_01: Um just just being cautious.
• 32:44
  SPEAKER_01: I like I said before, like I don't want to be up at night stressing that I can't feed the family, particularly when you go self-employed and you you lose that you lose that salary and bonus and that comfort.
• 32:57
  SPEAKER_01: A lot of people, and I see this with a lot of clients, they had fixed rates in at 1.99.
• 33:02
  SPEAKER_01: All of a sudden, after three years, they're coming off at six percent.
• 33:06
  SPEAKER_01: We we were impacted by that as well.
• 33:09
  SPEAKER_01: Um, but we kind of we prepared for it, didn't quite prepare for six percent.
• 33:15
  SPEAKER_01: Um, but we had equity we could use to fund those loans while everything settled down.
• 33:19
  SPEAKER_01: So it was, I think just preparation, like everything.
• 33:22
  SPEAKER_01: I'm a spreadsheet nerd, everything's on a spreadsheet, historical data, um, just putting those protections in.
• 33:29
  SPEAKER_02: And should you we in terms of you know looking at your properties, would you monitor them once a month?
• 33:34
  SPEAKER_02: What was the process?
• 33:36
  SPEAKER_01: Um, I used to actually monitor when we first started, it was daily.
• 33:42
  SPEAKER_01: Um I had a little daily routine and I'd I'd check properties and and now because I've got more experience, it's it's generally then you're busy being a broker.
• 33:53
  SPEAKER_01: Yeah, busy looking after everyone else's portfolios.
• 33:57
  SPEAKER_01: Um it's more probably monthly.
• 34:00
  SPEAKER_01: So I I check every rental statement coming in.
• 34:03
  SPEAKER_01: Um there's always things on rental statements you get charged for, and I think a lot of people, if you don't check your rental statements, you'll get caught out.
• 34:11
  SPEAKER_01: Yeah.
• 34:11
  SPEAKER_01: Um I had one last month, one of the agents put a$200 bill on, and I asked them what it was for, it was for a different unit.
• 34:20
  SPEAKER_01: Oh, and it was$200 I could have lost.
• 34:22
  SPEAKER_02: Or even in the US again.
• 34:24
  SPEAKER_01: Exactly.
• 34:26
  SPEAKER_01: Um, so yeah, so checking those, I do do an annual review, like I said, with Munzeral, and we go through and sell this and what's our goals and things like that, um, which is really good.
• 34:38
  SPEAKER_03: Yeah, so talk about checking.
• 34:39
  SPEAKER_03: Uh the obvious one there you caught was you know not being charged for the wrong thing.
• 34:43
  SPEAKER_03: Yeah.
• 34:44
  SPEAKER_03: But when when you do check your portfolio, what are you really looking at?
• 34:47
  SPEAKER_03: What are you trying to see?
• 34:49
  SPEAKER_01: Yeah, just um all our agents are quite good now, but historically we used to get agents that'll charge us for repairs without asking.
• 34:59
  SPEAKER_01: Like so, normally we set a limit with an agent that if it's over$200, please give us a call, we'll talk through it, get a second quote.
• 35:08
  SPEAKER_01: Um, we used to get agents where they'd put say$1,500 and they'd be like, What's that for?
• 35:13
  SPEAKER_01: And it's like, oh, we changed the hot water system.
• 35:15
  SPEAKER_01: It's like, yeah, but you didn't tell me.
• 35:17
  SPEAKER_01: Um, so I'm checking for that, um, checking for cash flow, checking that the rents are at market.
• 35:25
  SPEAKER_01: Um, so I'm very flexible with rents.
• 35:27
  SPEAKER_01: If we've got a good tenant that's been in for a long time, like the one in Lumia, I won't push them beyond market rent.
• 35:34
  SPEAKER_01: I I'll keep it a bit below um what's fair for them, what they can afford.
• 35:39
  SPEAKER_01: Um, but equally mindful that interest rates are rising, costs are rising.
• 35:44
  SPEAKER_01: So it's it's a two-way street.
• 35:46
  SPEAKER_03: Yep, yep.
• 35:47
  SPEAKER_03: Find that balance between kind of making sure the property's still performing, but then also looking after loyalty, I guess, for the track.
• 35:54
  SPEAKER_03: Yeah.
• 35:54
  SPEAKER_02: So yeah.
• 35:54
  SPEAKER_02: Because yeah, I I think what you said there is really key because you need to treat a property portfolio like a business.
• 36:00
  SPEAKER_02: Right.
• 36:01
  SPEAKER_02: 100%.
• 36:01
  SPEAKER_02: If you're not watching it, exactly what is there?
• 36:04
  SPEAKER_02: Small things,$200 a year, but if that's across 20 properties, that might be a thousand dollars that you're losing every single month.
• 36:10
  SPEAKER_02: Yeah.
• 36:10
  SPEAKER_02: Our rents at market, you know, all these little things.
• 36:13
  SPEAKER_02: Uh it's just like your own business.
• 36:14
  SPEAKER_02: You wouldn't not look at it, not look at a bank account.
• 36:17
  SPEAKER_02: You need to check it, you need to check your profit and loss.
• 36:19
  SPEAKER_02: And I think that's where people maybe you know make a mistake in terms of their property portfolio.
• 36:25
  SPEAKER_02: You deal with clients now building portfolios.
• 36:28
  SPEAKER_02: Yeah.
• 36:28
  SPEAKER_02: What's the biggest thing that you see as the mistakes in terms of what they're doing?
• 36:32
  SPEAKER_02: Is it a mindset thing?
• 36:33
  SPEAKER_02: Is it something else?
• 36:34
  SPEAKER_01: I think there's two sides of it.
• 36:35
  SPEAKER_01: I think the first side is, and you mentioned it before, is rent vesting, is thinking investing is too hard.
• 36:43
  SPEAKER_01: Um, particularly with the budget changes, with the interest rates, there's a lot of nervousness in the market at the moment, but there's still opportunity.
• 36:53
  SPEAKER_01: So I'm seeing a lot of clients now, those that are still wanting to invest, getting great deals on property purchases.
• 37:00
  SPEAKER_01: I had a client this morning, they put an offer in for a property on the Central Coast um about a month or so ago.
• 37:07
  SPEAKER_01: It got rejected.
• 37:09
  SPEAKER_01: They've just done the deal on the property 250k less this morning.
• 37:14
  SPEAKER_01: So that's a good, there's still value out there.
• 37:17
  SPEAKER_01: There's still an opportunity, obviously within your own limitations as well.
• 37:23
  SPEAKER_01: Um, and then the other side of it is I've got my favourite client, he's addicted to buying properties.
• 37:29
  SPEAKER_01: So he'll call me a weekend, he signed the contract, we don't have finance in place, and then he leaves it to me to find a way.
• 37:36
  SPEAKER_01: Absolutely.
• 37:37
  SPEAKER_01: So it's like we do we do touch wood, touch wood, we do find a way, um, which is good and bad.
• 37:44
  SPEAKER_01: Like uh he's a great client, and I've but I do talk to him sometimes and said, Look, I think you've got an addiction to buying property.
• 37:51
  SPEAKER_01: And I was like, I think I do, but I'm gonna stop after this one, and then Saturday properties are going.
• 37:57
  SPEAKER_01: Saturday, I'll be running and he'll call me and I'll be like, Oh, hi.
• 38:00
  SPEAKER_01: And he's like, Oh, I've just bought a property.
• 38:01
  SPEAKER_01: So, and then okay, here we go again.
• 38:04
  SPEAKER_01: So, but I like that.
• 38:05
  SPEAKER_01: Like, it I think one of the biggest things when I moved into broken was using my brain again.
• 38:11
  SPEAKER_01: Like I had large teams at the bank, yeah.
• 38:14
  SPEAKER_01: Um, but I wasn't using my brain like I am today.
• 38:17
  SPEAKER_01: Like every client's different, it's constant problem solving, right?
• 38:20
  SPEAKER_01: Yeah, every lender's different, every assessor at the bank is different.
• 38:25
  SPEAKER_01: So, but I love that.
• 38:26
  SPEAKER_01: Like, I love finding a way.
• 38:28
  SPEAKER_03: Yeah.
• 38:28
  SPEAKER_03: Now, just just to kind of um uh talk about that theme of you know treating your investment property portfolio like a business.
• 38:35
  SPEAKER_03: Um, I think sometimes when people are holding property because it's such a large ticket item, they can they can be you know a victim to what I would call as sunken cost bias.
• 38:45
  SPEAKER_03: Has there ever been a property in your portfolio that you've been holding and you've had to really lean on your objectivity to maybe sell it down because it just wasn't performing, you couldn't see it going anyway.
• 38:56
  SPEAKER_01: Yeah, I think I had one, I had one up in Queensland, I can't remember the suburb.
• 39:02
  SPEAKER_01: Um, and I thought it was a really good property.
• 39:06
  SPEAKER_01: Um, and when I bought it, it was split into two.
• 39:10
  SPEAKER_01: And when we bought it, it was like, oh, it's gonna get it's gonna be a duplex, it's gonna be double the rent.
• 39:15
  SPEAKER_01: And and when I bought it, it was like, oh, this is gonna be great, it's gonna be cash flow gold.
• 39:20
  SPEAKER_01: But then when I took it over, it was actually split into two illegally.
• 39:25
  SPEAKER_01: Um so we did do due diligence, but obviously not enough on that particular one.
• 39:32
  SPEAKER_01: Um, so when we looked at the cost of splitting it into two, we tried renting it out, but it was a funny layout, so it wouldn't suit a standard kind of husband, wife, and two kids because it was six rooms and it was a strange layout.
• 39:48
  SPEAKER_01: Um and then it also had roofing issues that cost quite a lot of money.
• 39:54
  SPEAKER_01: We couldn't claim insurance because they were existing, and um, it was like, look, we're never we're never gonna get this to work.
• 40:01
  SPEAKER_01: Um, so we sold that.
• 40:02
  SPEAKER_01: I think we made a loss on that one.
• 40:04
  SPEAKER_01: Um, but that's part of the journey.
• 40:06
  SPEAKER_01: Um, and that's and from everything you learn as well.
• 40:09
  SPEAKER_03: Yeah, I've recently also had to walk away from a property who's like beautifully renovated, amazingly renovated, tenant ready.
• 40:17
  SPEAKER_03: None of it was counsellor approved.
• 40:22
  SPEAKER_02: Yeah.
• 40:23
  SPEAKER_02: Because Mark, I think the journey you've done is is very the traditional journey of property investing that works.
• 40:30
  SPEAKER_02: Yeah.
• 40:30
  SPEAKER_02: In that time, because I see a lot of clients, and you guys probably see it as well.
• 40:34
  SPEAKER_02: I want to be a developer, you know, I want to do this, and they've you know currently got no properties, you know.
• 40:39
  SPEAKER_02: What stopped you from going down that shiny object?
• 40:43
  SPEAKER_02: Because I imagine it would have been there as an option.
• 40:46
  SPEAKER_01: I think because because Kate and I both work full-time, um, plus I've got two other businesses as well, like two other, well, one now, I've just sold one.
• 40:56
  SPEAKER_01: Um, other side businesses.
• 40:58
  SPEAKER_01: I think partially a risk play, not wanting to risk everything just to kind of slowly build and and work towards retirement.
• 41:09
  SPEAKER_01: Um, and then the second part is probably just not having the time.
• 41:13
  SPEAKER_01: Um at one stage, I was looking at setting up a granny flat company in Queensland um because it was a massive opportunity, particularly around Logan.
• 41:24
  SPEAKER_01: Um, so I spoke to a few people, um, but I just really struggled to get trades you could trust.
• 41:31
  SPEAKER_01: The red tape in the councils was horrible.
• 41:34
  SPEAKER_01: Um, there was all it was just hard.
• 41:38
  SPEAKER_01: Like it was just too hard.
• 41:39
  SPEAKER_01: And like I say, with everything else that was going on, it was just I tried and then and backed off from it.
• 41:45
  SPEAKER_03: So the answer to your question was luck.
• 41:50
  SPEAKER_03: Yeah, incredibly told you so.
• 41:53
  SPEAKER_02: Being busy is key.
• 41:54
  SPEAKER_02: Yeah, yeah.
• 41:55
  SPEAKER_02: And I think Mike, that's you know, really inspiring to where you are because I think a lot of our clients they're they're trying to get there, right?
• 42:02
  SPEAKER_02: We see it every single day.
• 42:03
  SPEAKER_02: I want to do a portfolio, build a portfolio.
• 42:05
  SPEAKER_02: Uh now, outside of that, you also do a lot of other things, you know, uh for the community, for charities.
• 42:13
  SPEAKER_02: Can you explain to other people what else you do besides being a property nerd?
• 42:17
  SPEAKER_01: Yeah, um, yeah, I am a nerd.
• 42:19
  SPEAKER_01: Um yeah, so one of like my biggest focus in life is my family.
• 42:24
  SPEAKER_01: So working full-time, having businesses.
• 42:27
  SPEAKER_01: Um, our son didn't like before or after school care.
• 42:31
  SPEAKER_01: So even when I was at the bank and and Kate was working full-time, we made a commitment that we'd work flexibly to um so he didn't have to go in before or after school care, and he still hasn't.
• 42:42
  SPEAKER_01: I think he went in once and he still reminds us about it.
• 42:45
  SPEAKER_01: So um, and also like I just made a choice that I want to uh coach his um soccer and cricket teams, which I have done since under sixes.
• 42:55
  SPEAKER_01: Now they're kind of 12 and 13.
• 42:57
  SPEAKER_01: So last night I had 15 12-year-old boys on my own, um just incoming testosterone.
• 43:06
  SPEAKER_01: Um, but I still love it, like, and I still love spending that time and and helping um guide the boys sometimes to wins um and just see them grow, like some of the kids we've had in the same team since under six, and see them grow into young men has been is very good.
• 43:25
  SPEAKER_01: Plus, as a failed soccer player and cricketer, I get to live my dreams through through my son.
• 43:32
  SPEAKER_03: Interesting enough, both those sports were invented, we amide.
• 43:35
  SPEAKER_01: Yeah, no comment.
• 43:37
  SPEAKER_01: Um, and then yeah, my separate midlife crisis is running.
• 43:41
  SPEAKER_01: Um so very important to me is giving back.
• 43:45
  SPEAKER_01: So whether that's my time, my knowledge, financially, whatever I can do, I try and give back.
• 43:51
  SPEAKER_01: Um, I lost my mum to cancer.
• 43:53
  SPEAKER_01: I was 10, she was 37.
• 43:55
  SPEAKER_01: Um, she died after a three year battle with breast cancer.
• 44:00
  SPEAKER_01: Um, so from that, I've always wanted to help people.
• 44:04
  SPEAKER_01: Even if I can help one person not go through what I went through, then that's a win for me.
• 44:11
  SPEAKER_01: So I've done some crazy runs.
• 44:13
  SPEAKER_01: So I've run Sydney Marathon dressed as a giant star for Starlight Foundation.
• 44:20
  SPEAKER_03: Yeah, let alone like, I mean, most people can't run a marathon.
• 44:23
  SPEAKER_03: This guy does it in these the most you gotta do it for like yeah, plus it is far from aerodynamic.
• 44:29
  SPEAKER_01: People get really annoyed when you overtake them and you're you're a giant star.
• 44:35
  SPEAKER_01: Um, I remember that day, like it was so we raised money for Starlight Foundation, but the biggest takeaway from me, like it was windy, it was hot.
• 44:43
  SPEAKER_01: I think it got to about 37 degrees inside the suit.
• 44:46
  SPEAKER_01: Like you can't see anything, it's heavy, it's on your shoulders.
• 44:50
  SPEAKER_01: And I was running down Macquarie Street and I was struggling, but I was nearly near the end, and this guy taps me on the shoulder and I can't see him, I can only see forward.
• 44:59
  SPEAKER_01: He's like, excuse me.
• 45:00
  SPEAKER_01: I was like, Oh, it's hi.
• 45:02
  SPEAKER_01: And he went, I just want to say thank you for what you're doing.
• 45:05
  SPEAKER_01: He says, I had cancer as a kid, um, and Starlight helped him more than the treatment did.
• 45:11
  SPEAKER_03: So for me, I was like, and must have given you a big wind, right?
• 45:15
  SPEAKER_03: Just like that.
• 45:15
  SPEAKER_01: And then yeah, and I was flying down Macquarie Street, partially because it was a headwind, um, a tailwind, sorry.
• 45:23
  SPEAKER_01: Um, but yeah, I was going down Macquarie Street after that at like sub five minute Ks and in a star suit.
• 45:32
  SPEAKER_01: Um so it was really good.
• 45:34
  SPEAKER_01: Um, City to Surf this year.
• 45:36
  SPEAKER_01: Um, I'm joining a team of Woodies.
• 45:39
  SPEAKER_01: Um so I did that last year, Woody from Toy Story.
• 45:43
  SPEAKER_01: We dressed up, I think we had about 25, we've got over 30 confirmed this year, um, to raise funds and awareness for childhood dementia, um, which is a it's a a disease that not a lot of people know about.
• 45:56
  SPEAKER_01: They they don't think kids can get dementia.
• 45:58
  SPEAKER_01: Um, so we're doing that, looking forward to that.
• 46:01
  SPEAKER_01: That's a great day.
• 46:02
  SPEAKER_03: The banter must be amazing that day.
• 46:04
  SPEAKER_01: Oh, especially when you see uh especially when you see another Woody that's not running with you, um, it gets quite interesting.
• 46:11
  SPEAKER_01: So we have a bit of a dance along the way and yeah, raise some funds and some awareness.
• 46:16
  SPEAKER_01: Um, and I just enjoy giving back.
• 46:18
  SPEAKER_01: I've I've been my son Joe, I've been Santa for his school, Santa Chase, two years.
• 46:26
  SPEAKER_01: He's left that school, so I don't need to do that anymore because getting chased by 300 kids down a golf course is um quite scary.
• 46:35
  SPEAKER_01: Um, but yeah, I just I enjoy giving back.
• 46:38
  SPEAKER_02: And what kind of message are you trying to leave for your son?
• 46:43
  SPEAKER_02: You've built a property portfolio.
• 46:46
  SPEAKER_02: What what kind of keeps you going and what legacy are you trying to leave?
• 46:50
  SPEAKER_01: Yeah, I think I think work hard.
• 46:52
  SPEAKER_01: I think work hard, get yourself out there.
• 46:56
  SPEAKER_01: So I when I was I got my first job at 14.
• 47:00
  SPEAKER_01: Um at 17 I had four jobs while I was at studying at college.
• 47:05
  SPEAKER_01: Um so I was a pool lifeguard, I cleaned fridges, uh, I worked in a bar and I worked in a retail store.
• 47:12
  SPEAKER_01: 14.
• 47:13
  SPEAKER_01: No, that was a that was a 17 when I was at college.
• 47:17
  SPEAKER_01: Um and then yeah, so I did that.
• 47:20
  SPEAKER_01: I've always liked being in the community, always quite business-minded as well, and I'd quite like that for Joe as well.
• 47:27
  SPEAKER_01: Um, I'd also like to teach him that things don't just come to you.
• 47:32
  SPEAKER_01: Like, there's no way Kate and I would just give him our property portfolio and go, there you go, you don't ever have to work.
• 47:40
  SPEAKER_01: Um he's got a really good work ethic, he does his homework, he's he's does he do your homework as well, Mike?
• 47:47
  SPEAKER_01: He's uh but yeah, but he will, and we try and teach him about investing and and like he's got a Spriggy card and he's got a little share account and he works out how to invest and things like that.
• 48:01
  SPEAKER_01: Um he he's obsessed with fishing at the moment, um, so he wants to set up a little fishing store um and then buy from Teemu Amazon and then resell to online.
• 48:13
  SPEAKER_01: So he's got a good brain.
• 48:15
  SPEAKER_01: Um, but yeah, I just I think the legacy I'd leave to is I gave as much as I could.
• 48:21
  SPEAKER_01: I I gave back, I helped people along the way, like, and I spent a lot of time with my family and created memories.
• 48:29
  SPEAKER_01: I think that'd be it for me.
• 48:31
  SPEAKER_03: Yeah, I think anyone should be happy with that.
• 48:34
  SPEAKER_02: Yeah, yeah, Mike.
• 48:35
  SPEAKER_02: And I think that's really important, you know, that we share, you know, because I think we're all in the finance game here, but we're doing it for bigger reasons.
• 48:42
  SPEAKER_02: And I think when you have bigger reasons and why or why you're trying to build a property portfolio, uh, you know, because we can get caught up in that, but what's the end goal?
• 48:50
  SPEAKER_02: Passive income, more time with family.
• 48:53
  SPEAKER_02: That's as brokers, what we're trying to get our clients to.
• 48:56
  SPEAKER_02: Yeah.
• 48:56
  SPEAKER_02: Uh and I think you're a living example of where our clients want to be, and the experience of building that property portfolio is just it's so priceless, you know, in terms of the clientele that you work with because you know exactly what they're going through.
• 49:11
  SPEAKER_02: Yeah.
• 49:11
  SPEAKER_02: So I think today uh it's been, you know, very inspirational.
• 49:16
  SPEAKER_02: You've showed us that it can be possible.
• 49:18
  SPEAKER_02: Uh, and you know, for our listeners out there, that you know, it's it's just sticking the path, having good advice around you, uh, and you can get there as well.
• 49:27
  SPEAKER_02: So yeah, Mike, thank you.
• 49:30
  SPEAKER_02: Thank you very much.
• 49:30
  SPEAKER_02: Thank you, Mike.
• 49:31
  SPEAKER_02: We're looking forward to seeing you in that starlight outfit again, as well as the woody outfit.
• 49:36
  SPEAKER_02: One day, man.
• 49:37
  SPEAKER_02: Yeah, Aaron said he'd run with you.
• 49:38
  SPEAKER_02: So yeah.
• 49:39
  SPEAKER_04: Oh, good.
• 49:40
  SPEAKER_02: Happy to drive next to you.
• 49:42
  SPEAKER_02: But uh no, we appreciate everything you do and everything you do for KHI as well.
• 49:45
  SPEAKER_01: So thanks for kind of thank you.
• 49:46
  SPEAKER_01: Thanks, Mike.
• 49:47
  SPEAKER_01: Thank you.