How To Get Unstuck In Growing Your Property Portfolio
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How To Get Unstuck In Growing Your Property Portfolio


For a lot of people, at one point or another,
they get stuck in their property investment journey. It might be that they have a deposit
but they feel like they can’t move forward to buy their first property or maybe you’ve
bought 1, 2, or 3 properties and for some reason, you can’t move forward to the next
property. Well, today, I have with me Ben Everingham who’s my buyer’s agent of choice.
And we’re here to talk about some different ways that you can get unstuck in your property
investment career. Ryan: Hey, Ben. Thanks for coming on today. Ben: Hey Ryan, thanks a lot for having me. Ryan: Before we get into the tips, I was wondering
if you could tell us about a situation in your own life where you got stuck in terms
of your property development and what was something you did to move forward? Ben: I might share 2 stories because I’ve
just had 2 come to mind. To put it in context, I spent the last 6 years of my investment
journey being stuck and then I had this magic month for 1 year where I was able to do what
I wanted to do. Now, I’m pretty much stuck again so I feel everybody’s pain on this video. The first story is an example how being stuck
cost me a fortune. About 3 years ago, just before the Southeast Queensland market started
to really move, I found this property that was for sale. It was a mortgagee in possession.
I could have bought it. It was 3 houses away from the beach for $375,000, which is significantly
cheaper than you can buy it for, obviously, now. So I went to my bank because I had, like
everybody else, a number of properties with one bank and sort of trusts my bank manager
as long as they kept giving me loans. This was before I learned about structuring correctly
and moving properties away from the same bank. She said, “Yes, yes, yes.” I put my offer
in and then, on the day of finance, which she just said, “Unfortunately, no.” and I
lost this property and somebody else picked it up. 2 weeks later, I met my mortgage broker
who I now use who’s an absolute gun, he’d been stuck a number of times himself as well.
He said that I could borrow twice as much as that property was worth. That property
actually just re-sold 6 months ago for $660,000 and they hadn’t done a thing to it. So that
was a hard pill to swallow and that made me realize the power of your advisers in your
network. Another time that I became stuck, it wasn’t
so much financially, it was mentally. Again, I found this amazing property couple of roofs
from the beach on the Sunshine Coast. It was on a huge, huge block of land that I could
have actually put a secondary dwelling in the backyard. I picked it up for $323,000,
which was a great price. And then, I started to listen to everybody around me saying it
was such a rubbishy property and it was going to take so much work, which would have been
$50,000 at the time. I let that property go again. On the day of settlement, I used a
pull out of jail free card to walk away from it again. I just drove past the property the
other day. It’s been knocked over 2 4-bedroom, 2-bathroom, 2-garage houses on this 800 sqm
block. Both of them have just re-sold for $750,000 each. There’s some real world pain
for you. Ryan: Yeah. So there’s probably like half
a mil profit or something in that, at least. Ben: Absolutely, at least. In 18 months. Ryan: Okay. You’ve had a few experiences with
getting stuck. So, hopefully, we can help people who are stuck themselves get out of
it. We’re going the same order of your story in terms of if you feel like you’re stuck
financially and you can’t get servicing for one reason or another. We’ll talk about some
things you can do there, just like Ben’s first story. And then we’ll talk about if you’re
mentally stuck and for one reason or another, you’re not moving forward as you should, then
we’ll talk about some strategies for that. Let’s look at financially first because a
lot of people get financially stuck. Especially they hear about the new APRA rules that have
come in or they hear about the government potentially removing the negative gearing
benefits. You know, all of this sort of stuff. And then, they feel like, okay, financially,
I can’t move forward because for one reason or another. What are some steps people can
take if they feel like they’re boxed in financially and they can’t move forward? Ben: You get your most creative and I think
I’ve learnt the most lessons from being stuck. As long as people are giving you money, you
can take it or you have the option to take it. It’s when you become stuck that you actually
begin to learn the ins and outs of the banking system and what they’re looking for. I think
the number one thing for me, personally, was when I found my mortgage broker. I’d always
used bank mangers or your sort of second tier lenders type thing where they drive around
to your house and they’d come and see you for a personal visit and it was amazing because
you didn’t have to really do anything. Until it wasn’t amazing because you couldn’t get
money anymore. I found a guy, he says he owns 25 properties,
but I’m sure it’s closer to 50 properties. He’s just that sort of low-key guy. He’s my
broker and he’s gone through that pain himself. He’s so black and white in terms of the lending
criteria, but he’ll always be able to help you get to that point where – okay, if you
can get money, here it is. If you can’t here’s the steps that you need to initiate to get
access to that money. It might be earning some more money. It might be waiting for a
tax return. It might be saving an extra $10,000, but he will not just tell you what you need
to do. He’ll actually give you the support that you need to go and achieve it. Ryan: What a lot of people do is they’ll go
to the bank that they had their credit card with or have that everyday banking with or
their home with or their first property with. And they’ll say, “Can I get another loan?
I want to buy another property.” and the bank may say, “Well, no. You can’t afford another
loan.” but little do these people know that there’s 20 to 30 other lenders out there who
may be willing to give you money and may assess your criteria differently. Because, obviously,
every bank, every lender is going to assess things a little bit differently. As me and
Ben would both probably say, we recommend that you go and see a good mortgage broker
who can really assess your situation across multiple lenders. Like Ben was saying, find
a mortgage broker who gives it to you in black and white and says, yes or no, you can get
a loan. And if you can’t get a loan, here’s the next steps. Because often, you go to the
bank and they’ll say you can’t get a loan and you’re like, “Okay, see you later.” Really, you want a mortgage broker. Mine’s
on the same thing. He’s like, you can’t get a loan, but here’s the next steps and here’s
what we need to see in order for you to get a loan. To have those next steps in place,
then you’re kind of unstuck in a way, because you know what you need to do to move forward.
So, definitely, going and getting a mortgage broker – a good one – would be probably a
first step for anyone who’s in that situation. Ben: Definitely. The rule of thumb with the
banks is, “No doesn’t mean no.” It just means that it might be you have to be slightly re-packaged
to become a “yes” or you may just have to go another lender who’s criteria is a little
bit different this month because they can write more investor loans because they haven’t
written any in a few months. It’s crazy; one day you’d get a loan from CBA. The next day,
you’ll get it from NAB. The next day, you’ll go back to CBA and they won’t give it to you.
There’s no science to it, it’s literally sometimes it’s just about what their criteria is for
that week in terms of their loan writing. Ryan: Well, that’s the thing. We’ve both worked
in decent-sized companies and when you’re under the gun and you haven’t hit your sales
targets for the month, sometimes things loosen up. Yeah, definitely seeing a mortgage broker
and seeing what you can get across a line would be a good idea. Something, I guess, to speak to your mortgage
broker about would be to really look at your entire portfolio as well and to see if there’s
any re-financing opportunities there or any opportunity to pull equity out of one property
to invest in another. Because sometimes, I think people get too shortsighted and say,
“Well, here’s the properties that I own, here’s the loans that I have at the moment. Can I
get a new separate loan to purchase another property?” and then they say, “No.” they can’t.
But if you were to assess the values of all the properties you do own, then you may free
up enough money to go ahead and buy it. So that would be something to see a mortgage
broker about as well. I guess something else people could do would
be to add value to their property, which we talked about in the last episode. Ben: I’m big on adding value to property,
as you know, because whether the market’s going backwards, it’s sliding sideways or
it’s going up, there’s almost always something that you can do to the right sort of property
to add some value. It’s a super simple way. A cosmetic renovation, as a rule of thumb,
for $1 you put in, you should be able to get $2 out if you do it right. If you put in $10,000
and you can get $20,000 out, that might just be enough combined with your $20,000 that
you’ve got saved to get you over the line and into your next property. It can be as
simple as that. Or it might be something more major. You know, where you invest $2, but
you get $5 or $6 back out and then, you’re good to move on a couple of properties or
another property again. Ryan: Yeah. So for some people who might be
stuck financially and can’t move forward, you might actually need to go back to your
existing properties and to say, “Okay, what can I do to these existing properties to add
value to them?” and obviously, you want to add more value than it’s going to cost. As
Ben was saying, it could be a small cosmetic renovation, which you should never underestimate
the value of, or it could be something more major in terms of extending the house or doing
that sort of stuff. If we’ve tapped out all of those different
options, you know, we’ve looked at re-financing, we’ve seen a mortgage broker, we’ve added
value to our properties and we’re still stuck, what do you think are our other options? Ben: There’s probably 2 options that I can
think of. I’ve seen a lot of clients recently tap into equity in their, for example, parents’
property. That seems to be one way that people are moving forward. I definitely don’t endorse
it, but pretty much cross securitizing one property or refinancing a parent’s property
to access equity against the new property that you’re moving forward with and then at
some point, obviously, you’ve got an agreement with your parents that you’ll re-pay that
property or when there’s enough value in your own property, you go an re-finance both loans
again and pull the 2 properties away from each other. That’s one option, which is fairly
simple and a lot of first time buyers are using that one particularly at the moment
with the APRA changes. Another one would be finding a wealthy joint
venture partner who might be prepared to finance the deal. It means that you’ve obviously got
to go find something that makes enough business sense for them to even consider that. Ryan: Yup. I think we should probably give
people a word of warning with joint ventures. I tried to do this on my first property and
it ended up falling through and just didn’t work out and I think there’s a lot of first
time investors who go out there and say, “Well, I don’t have the money, but I’ve got some
time. How about I just get someone with money and go and buy a property with them?” but
I think it’s not as simple as we would like it to be. You’ve done a joint venture. What
do you think first time investors or people who are stuck, what kind of skills do you
need to pull off a joint venture. Ben: Before I did my first joint venture,
I’d already bought 9 other properties and I’d built, I’d subdivided, I’d built granny
flats, I’d renovated. So, I had quite a few skills. Even then, going into the joint venture
partnership, I was a little bit green and probably gave somethings to that joint venture
partnership because I was so eager that I wouldn’t give away now knowing what I now
know. You’ve got to be careful because anybody with money is sophisticated with money. There’s
a reason, particularly if they’re self-made, that they still have savings, they still have
equity. The thing that I always think about is – and this is the first thing a joint venture
or people approach me for joint venture, I would be thinking is why don’t I just go and
do it myself? The only reason they’re not going to go do it themselves is because they’re
time poor. That’s the perfect joint venture partner. Someone that’s cashed up that want
to see 20% return on their money in the next 12 months that doesn’t have time to do it
themselves. A lot of people that bring deals to joint
venture partners don’t do their research properly. They don’t do a proper feasibility and so,
as soon as somebody with any sort of property intelligence looks at the deal, they see straight
through it and the $100,000 profit that somebody that’s a bit green or was estimating actually
looks like $15,000 on paper and that’s a big mistake most people make. They’re not going
to laugh you out the door, but they’re definitely going to have a laugh about it when they’re
having a beer with their mates later that night. Ryan: A lot of the books make it easier than
it actually is. They say to do a joint venture if you’ve got lots of time but no money, find
someone with money but no time. But really, you need skills and you need value that you
can add to the table more than just your time. Because what if your time is only worth $20
an hour or something like that? But if you’ve got super experience like Ben and you’ve been
through multiple different properties and you know what you’re looking for and how you
can draw the most value out of a deal, then obviously, that becomes more valuable. So
don’t just think, “Because I’ve got time, I can do a join venture.” You also need to
have some experience and you need to know what you’re doing. Ben: To put that into perspective, in terms
of the way that the roles are broken up. Like I found a subdivision project in a builder
developed, a friend of mine was good enough to help me bring it to market. I found him
the deal. I negotiated the purchase price. I managed the renovation of the existing property.
I worked with his town planners to get it through council. I worked with his building
team to actually get the property built and I sold it for no commission. So, there’s a
lot of different steps different steps that need to be lined up. And there’s a lot of
skills that need to be built to actually be able to do all that stuff as well. It wasn’t
a simply walk in, “Hey, you give me some money. You teach me all the way through the process
and at the end, we’ll split the profit.” It just doesn’t work like that in the real world. Ryan: Yup. So you can do it by all means,
but just be wary that it’s not as easy as you might think. Something else that you can do that both me
and Ben did when we had jobs is to generate some extra income on the side. That could
be looking for other employment, because you may need to change jobs to earn more money.
It could be earning commissions from a job. I used to have a job and then I ended up getting
extra commissions on top because I was adding so much value to the business that I could
negotiate that. Or you could do something like me and Ben did, was to start a business
on the side and generate some income on the side. I started an online Internet marketing
service on the side. I did client work, I ran my own websites on the side while I was
working full time, earning over 6 figures. I was earning some extra money on the side
as well. Did you start your buyer’s agency while you’re
still at work? Ben: Yeah. I started the blog and the buyer’s
agency while I was still at work and similar to yourself, lots of long nights and lots
of weekends. But it got to a point where I was making as much money in my buyer’s agency
for 6 hours work per week as I was making my salary. So it came a point I think again
after another conversation with you where you help me get the big picture and I walked
away from work. Ryan: Yeah. There was a guy who used to mow
our lawns back when I live in Sydney and he worked at the oil refinery and then in the
afternoons or on the weekend, he would mow people’s lawns. He actually got to the point
as well where he was making more money mowing people’s lawns than he was making in his job
at the oil refinery as well. So he had basically doubled his income. Obviously, he was doing
a lot of work. He was big, burly guy. I don’t think I could have done that much hard labor,
but, yeah, he did really well for himself. So it doesn’t have to be as difficult as starting
a buyer’s agency or some online business. It could just be mowing people’s lawns. My
dad’s doing handyman work on the side, which he gets paid for. He paints people’s houses
and stuff like that. There’s so many different things you can do on the side to explore that
can help you in terms of the amount of money you have saved and stuff like that. There’s also one last thing I want to talk
about financially and then we’ll get on to the mental stuff. I did an interview with
a guy called Nathan Sawtell, I think. You can check it out, go to onproperty.com.au/290.
He actually had a relationship with his bank. I think he was in the investment-banking sector
and so he had 2 relationships with 2 different banks and he ended up purchasing something
like 27 properties or something like that using this as his finance structure. So he
would have a professional manager working with him to finance deals and that’s something
that I haven’t heard before. I don’t know a lot about it, but you can go and watch that
video to hear what he had to say about it and you can talk to your banks about that
as well. That’s something that I haven’t seen anyone do before, something that I haven’t
seen a mortgage broker recommend, but something that he was doing quite successfully. I think
it was about halfway through that video that we start talking about that. I guess that kind of covers in terms of if
you’re stuck financially, but I think the majority of people are actually going to be
mentally stuck for one reason or another. It’s not going to be finances that’s holding
them back. It’s going to be they don’t know which way to go for. They don’t have a strategy.
They’re overwhelmed. They’re scared. There’s so many different things that hold people
back. We broke it down before. We talked about 5 major things that we see holding people
back. The first one was information overload or sometimes I like to call it “shiny object
syndrome” where you’re just like, “Oooh! Look at that shiny object!” Go over there and then
you’re like, “Oooh! Look at that one.” and you’re just kind of going left and right and
you never really set on anything or you’re just doing so much research on so many different
areas, you just can’t make sense of all the information. So there’s multiple different
ways people get information overload. What have you seen with some of your client,
Ben, in terms of information overload? Ben: Yeah, definitely. I think for some of
my clients, they’re more than capable financially. They earn a decent income or a decent combined
income or have equity in a property, they’re just stuck. They start reading the major magazines
and then they start going to a couple of training evens and then they start listening to the
sort of things that we’re talking about today. The thing is, unfortunately, everyone’s got
a completely different opinion, or fortunately. That means when you start listening to 5 or
6 different channels and everybody’s telling you something different, a sophisticated investor
is going to take bits and pieces that work for them from all of those different channels.
Where somebody that’s just starting out is going to potentially look at those things
as gospel and must-haves, which definitely isn’t the case. I don’t know anyone that started
in property that new everything. I don’t know anybody that’s finished with even hundreds
of properties that knows anywhere close to everything. There’s always more to learn. Ryan: Yup. I think a lot of people, especially
the teachers out there who sell their courses and stuff like that, they often say, “This
is the way to invest in property and get rich.” Yes, that is one way to invest in property,
but there’s so many different ways to do it. You can do capital growth, you can do development,
you can do positive cash flow, you can do unit blocks, you can do so many different
things – renovations. There’s so many different ways to achieve the same goal. I think you’re
right. A lot of people, when they’re newer to the game, they’ll follow someone that say,
“Well, renovation is the way to go. That’s the way to do it.” and then they’ll watch
something on subdivision and they’ll be like, “Actually, subdivision’s the way to go.” And
then they get to a point where they’re like, “Well, I don’t know how to move forward.” Something else that we said was a big thing
that held people back, which I guess ties in with information overload, was just a lack
of strategy for people. Do you want to explain that a bit more so people can try and work
out, “Is that me?” Ben: Yeah. I’m a massive culprit of what you
called the shiny object syndrome. I’m like, “Oh my God!” The world is a candy store and
I’m a kid in it and I want it all. But the reality is, that worked for me until I got
to property 4. And then, I hit a servicing limit. And all of a sudden, these properties
that I thought were the right ones and the structures that I thought were the right ones
maybe weren’t the right ones anymore. It’s like how do you avoid those things before
they creep up on you? The first thing in terms of developing that bigger picture is looking
at your current situation and possibly talking to a broker and then, after you’ve done that,
looking at really where you want to be long-term and it’s simply, here’s you pegging the sand
out here and here’s where you are right now. What are the small little incremental steps
that you can take to actually achieve that goal? The first one might be go find out how
much you can borrow. If you can borrow $400,000, look for opportunities within all those different
ways that you can build wealth through property that fit. Look at one step at a time, look
at how I can get the best possible purchase now and how that purchase might impact my
future. But never buy a property knowing that that purchase is going to stop you moving
forward to your long-term goal. Ryan: I think when it comes to shiny object
syndrome, when it comes to information overload, not having a strategy is the number 1 enemy
because then, you are drawn by so many different things. But as soon as you have a strategy
in you’re like, “Yup, I’ve decided I’m going to invest in this way.” Then you start doing
what Ben talked about that more sophisticated investors do, is you still listen to the same
stuff, but you draw little bits out here and there and you don’t take it as gospel. And
you’re like, “Okay. What can I learn from this person that’s going to help me with my
strategy?” I guess some tips that I could give when it
comes to finding a strategy is that first, you’ve obviously got to set a goal and something
that you want to work towards. I think me and Ben are on the same page in terms of income
replacement is always a great place to start if you don’t know what goal to set. Obviously,
we all want to be billionaires, but none of us want to work as hard or take as much risk
as someone like Richard Branson or Steve Jobs or those sorts of people. So billionaire,
probably not the best goal to have, but just to replace your current income, I think is
a great first goal that you can work towards. And then once you’ve achieved that, obviously,
go for the billionaire status, definitely. Ben: If you know how to replace $100,000 a
year in income and you can do that in 10 years, you can probably replace $1 Million at some
point in the future, but you’re not going to be able to hit $1 Million without taking
that first step, for sure. Ryan: Yup. As well, knowing who you are and
what sort of things you like to do is really important when it comes to strategy. The best
example I can give of this is you hear about investing using options in property, which
is a whole other discussion in itself. But if you want to invest in options, because
it’s not readily done in Australia, there’s a lot of sales calls. There’s a lot of talking
to agents. A lot of talking to property owners. A lot of trying to sell people on this. And
for someone who doesn’t like cold calling, someone who doesn’t like doing sales calls
or being in awkward situations, that’s probably not going to suit you that well. Maybe buying
a house and renovating it where you can just keep to yourself, that might be a better strategy
for you. So I think you need to assess who are you as a person, what sort of things are
you good at, what do you enjoy? Because if it’s something that you really don’t enjoy,
you’re not going to do it. So when setting your strategy, I think, definitely assess
who you are as a person as well. Ben: That’s an awesome point and I fully agree
with that. I wish I could have heard that a long time ago because I love building properties.
I love dual income properties and I really enjoy subdividing and renovating as well.
They’re the things that I tend to focus on and it can become a little bit boring once
you’ve done a few of those deals. Human nature is find something new to learn, but the successful
people just rinse and repeat the same thing over and over and over again until they’re
where they want to be. I think by finding what it is that drives you, what makes you
excited. I talked to so many investors and they come to me saying they want to do a subdivision
and I say, “That’s fantastic. Have you got the money?” “Yup. We’ve got the money.” “Have you got the time?” And they said, “No, we can’t invest more than
an hour and a half of our time per week into that sort of project.” I’m like, “Well, that’s awesome. But are you
prepared to pay someone $70,000 to manage it for you? Because that’s what it’s honestly
going to cost you.” They might have been thinking about that for
6 months and obsessing with it and looking for all these deals. When in reality, they’re
asking the wrong questions upfront. Ryan: Yup. Because they don’t have the time.
I think another mistake people make that we talked about before was that people put too
much pressure on the next investment that they’re going to make. They basically feel
like they’re betting their entire life on this property deal going right and they get
so nervous about things going wrong that they just feel stuck. What do you think are some mental strategies
people can use to take the pressure off of it? Just chill out, you know? Because they
don’t make chill pills yet. Ben: I thought they called that “surfing”
and isn’t that what we both love to do? Ryan: Yeah, well, surfing or Valium, maybe. Ben: What’s happening at your house late at
night? But seriously, that’s a really hard question to answer because it’s easy with
retrospect and the experience that I’ve had to look back and go, “This is how you do it.
This is how you get over it.” because at the end of the day, each purchase is important,
but it’s only important if it’s getting you in the direction of your dream and your goal
and property is only the vehicle to achieve that. I was one of those people who obsessed
about it. Like spend all of my time outside of work – that was when I was working – looking
for that next deal and trying to find it and when I lost one, getting really emotional,
attached to it and all that sort of stuff. I don’t know if I could have overcome that
without experience personally, but there’s other people that are much better at seeing
the bigger picture and just realizing that it is only a property. It’s a purchase. If
it makes sense, if you do the right research, if you’ve got the right strategy and if you’re
confident in slowing down to speed up. A lot of people, again, rush out, buy the first
thing they find and then they realize that it’s the wrong thing. Where, if you had taken
that extra couple of months to do the right research and the right research, not jumping
around realestate.com around 15 different suburbs in 5 different states, but really
getting to know one place really well and knowing that when that cheap property comes
up that fits your strategy, jumping on it. That is an amazing way. You know you can sleep
well at night having made that sort of decision. Ryan: I think you’re right. It’s going to
be different for everyone. Some people are better at seeing the bigger picture than others.
One thing that has helped for me, especially with my online business as well as with property,
is knowing my goal being X amount of dollars per year in terms of passive income. And knowing
that I will achieve it at some point and not giving up. So knowing that I’m going to give
this a go, but if it doesn’t work, that doesn’t mean it’s the end of the world. It just means
that I’m going to try something else. Next time, I’m going to learn from that experience
and move forward. So if your goal is to replace your income
through property or whatever your goal may be, realize that the next property that you’re
purchasing is a step towards that. It may be a good purchase that moves you towards
that, but even if it’s not, well, you still got that goal and you’re still going to achieve
it. It might take you just a little bit longer. Don’t put the whole weight of your entire
life on this one property purchase and if it doesn’t work out you’re screwed, you’ll
never be financially free because if you’ve got that dream, if you’ve got the passion,
then you can achieve it. It just might take more time. I guess I found solace in that,
in knowing that I will achieve this and it just might take me longer than I would like,
but I’m not going to give up. That’s given me a lot more confidence in myself. Ben: Can we dig into that a little bit? Because
I think that you brought up some really interesting stuff. Like in terms of my personal journey,
same as yours. We’ve had deep conversations about this stuff. About 3 years ago, I actually
went to a psychologist because – for 1 session, is all it took. I went for one session and
she helped me figure it out; what my problem was. I went into this session and I just didn’t
understand why I wasn’t happy. I replaced my income through investing basically; I had
a great job for my age. I’d done all the stuff, had beautiful kids, trips, house. All the
stuff that I wanted to achieve and I still wasn’t happy. She said, “What’s your goal?” And I said, “The only thing I can think of
right now is being a multi-millionaire.” It was such a stupid response, but it was the
first thing that came to my head. And she said, “Okay, I’m going to do an exercise
with you.” She said, “Stand in this side of the room.” and I stood there. And then, she said, “Here’s your goal on this
side of the room, which is becoming a millionaire.” and she’s like, “Go back here” she said, “When
did you set that goal?” And I said, “I set it when I was 18 years
of age travelling Europe with my friends and seeing all of these wealthy people living
the life and I wanted it.” And she’s like, “What did those people actually
have when you set that goal and who were you?” And I said, “They had time and they had friends
and they had the lifestyle.” She’s like, “Why do you need a million dollars
for any of that stuff? You’ve already got that stuff.” And then, she made me walk across the room
and go, “Where are you now?” And I said, “Well, I’m pretty close to where
I wanted to be.” And she said, “The person that set those goals
for you isn’t the person that you currently are.” Now, I’m going off tangent here a little bit. Ryan: No, no. This is good. Ben: But this, to me, was super interesting
to go, well, what you might really want and where you might end up might be completely
different. Same with Ryan, I constantly set my goals at the start of the year and then,
at the start of each month so that I know where those incremental steps are and at some
point in the future, you’ve got your lofty goal out here. When you’re a bit younger,
you put a lot of pressure on yourself to achieve that, but in reality, whether you achieve
it at 25 or 35 or 45, you still achieve the same thing. For most of us, talking to so
many investors every month, it’s not millions and millions of dollars, it’s actually time
to do the things that you want to do and not being so financially dependent on something
that may or may not give you happiness everyday. Ryan: Yeah. I think this totally happened
for me. Like 5 years ago or a bit over 5 years now, I wrote this cocky post. It was titled
“Why I Will Be Financially Free in 5 Years”. It’s over at ryanmclean.net, if anyone wants
to go and read it. I’ve actually talked about why I’m so awesome and I’m going to be financially
free. At the end, I talk about I know my “Why”. I’m just trying to look at it now. I wanted
to have as much free time as I want to spend with my family and so I can have a platform
of which to speak into people’s lives. The whole reason I wanted to be financially free,
the whole reason I wanted to be a millionaire. I was always down the get-rich-quick train
when I was younger and wanting to be super wealthy and stuff like that. But then, my
whole “Why” was summed up in one sentence that I wrote 5 years ago. When the 5 years
hit, I assessed it and I’m like, “I’ve achieved everything I set out to achieve, but I’m not
financially free.” I have as much free time as I want to spend
with my family. Because I work from home so I get a lot of free time to spend with my
family. We home school my daughter now so I spend time doing that in the mornings. I
still want to work. I don’t want to not work because I would just get too bored. And then,
I have a platform to speak to people’s lives through On Property and through the other
websites that I have. Ben: That’s really cool. That’s awesome. Ryan: I liked what you were saying. How it
was the person who set the goals all those years ago isn’t the person you are today.
And so, looking at yourself and saying, “Well, what do I want to achieve now as a person?”
rather than, “What did I want to achieve when I was 17 or 18 or whenever I set a big goal
for myself.” is so valuable because we’ve all changed so much since back then. I used
to want to be super rich and now, I’m a vegan who home schools my children and I work from
home. Things change. And that’s the thing. I think
understanding what you really want as well, versus what you think you want. You thought
you wanted to be a millionaire, but what was that actually going to get you? Ben: The thing is, to relate it back to property,
the properties that I bought because, again, when I was buying properties at 23 is completely
different to how I buy properties now. The properties that I bought, and this is why
people get hung up, every single month, Clients of mine on what properties they should purchase
if they’re trying to do it on their own. Some of those decisions that you make now are going
to look so different. Because if you find out from buying 10 properties over a 10-year
period all of a sudden, you have confidence to go out and build and make $100,000 that
day or you have confidence to go and do a subdivision. Or you have confidence to apply
all these more advanced things that when you bought those first properties, you could have
never known you’d be able to do. It’s realizing that some of those properties, especially
those foundation ones, all they need to be is good capital growth, great cash flow, opportunities
to manufacture growth over the lifetime of that property. You’ll probably going to be
able to buy better stuff in the future at a better price, but to take that step and
to just have faith that if you follow those 3 things, it’s always going to be a great
asset to have in your portfolio long term, anyway. Ryan: Yeah. I think, thinking along those
lines, mitigating risk – if you’ve got this fear and you put all this pressure on a property.
Rather than putting the pressure on to say, this has to be the best property in the world,
why not just look at it and try and mitigate your risk as much as possible so at least
it’s not going to be a complete and utter failure. So, do your research, make sure you’re
not buying in a dodgy area and you’re not betting your entire worth on it. Making sure
that it’s cash flow neutral or cash flow positive so if your situation does change in life,
at least you’ve got that covered. If you lose your job, you’re not going to have to sell
the property as well. There are ways that you can mitigate your risk and like Ben was
saying, it’s not going to be your best property purchase ever. Because you’re going to learn
every step of the way and get better each time. I guess, one thing you can do is try and mitigate
your risk as much as possible. Learn as much as possible from the experience and then,
try and buy better next time. Take the pressure off. It’s not the only property you’re ever
going to buy. Ben: I’ve been speaking to this one guy for
the last 2.5 years and he’s an awesome young guy in Melbourne. And every time I talk to
him, he has another idea about property. The first idea about property, which I supported,
was buy in Sydney. This was 2.5 years ago and he didn’t buy in Sydney, unfortunately.
And then, the next concept that he had was I’m going to buy in Brisbane. He hasn’t, to
date, bought in Brisbane, either. He still hasn’t bought a property, but in that time,
he’s gone from property to shares to gold to trading currency to starting a business
back to being an employee. And in that time, I’ve got other clients who have literally
made $1 million in capital gains on 3 properties over that period because for people that got
into Brisbane early, they’ve already made 15%. For people that were in Sydney early,
some of those people have made 45%, 65%. You know, it’s just get started, if you know what
I mean. There’s always going to be something greener,
but as long as your fundamentals are right, you’re still going to be in a better position
acting now than in 3 years time. As long as we don’t have a major global depression, which
the worse ones of all time have knocked property prices back by 20%, 30% and then they recover
within a 10-year period anyway. So it just might mean that your rent’s going to cover
your property for a period of time. Ryan: Yeah. We’ve covered that pretty well,
in terms of being mentally stuck and some things that you can do. In terms of de-risking
the situation. In terms of getting in the right mindset of what you actually want. In
terms of miminizing your information overload by setting yourself a strategy and then only
looking at properties that fit in with that strategy. I’m sure we could go on for ages
and ages and if we get lots of responses from people saying they want us to talk about this
mental stuff more, then we can go through that. But I think this is going to give a
lot of people some ideas of how they can move forward. So you talked about your mate who hasn’t done
anything for 2.5 years. Do you have any stories of clients who were stuck and who ended up
coming to you and have gotten unstuck and achieved something? Ben: Yeah. I’ve actually never worked with
a client that hasn’t been stuck. They’re either financially stuck and they reach out to me
because I can introduce them to someone like I’ve found myself to get over that financial
hurdle. That might be through the strategies you mentioned before – better mortgage broker,
refinancing, getting a little bit creative in terms of adding value to existing portfolio
and moving forward that way. And then you’ve got the other people that have analyzed the
market for the last 3 years or 12 months or 6 months and freaked themselves out because
they build all this pressure around making a decision which really isn’t there. And so, I would deal with a heap of those
people every single week. Then, there’s the other people that are just super busy and
time poor that they’re earning good wages but are busy. They’ve got families or they’ve
got relationships or they just want to enjoy things outside of property investing. So,
each day those people come through and it’s just about identifying where you are, where
you want to be and then we just help them bridge that gap. Ryan: Yup. Do you have any specific examples,
obviously, without giving away details of someone that you can think of that was stuck
that you helped move forward? Ben: Yeah. I can think of a really good guy.
Actually like I’ve become friends with like I have with you, with a lot of our clients.
Like we catch up for a couple of annual dinners a year and sort of create a bit of a community.
This one guy, he wouldn’t mind me saying, Steve. He came to me just before December
last year and he’d been wanting to buy for a while. He’s married. He’s 30, working in
the construction industry and he’s really good at what he does, but he doesn’t love
what he does, either. And he’d been looking around at businesses and shares and property
for a long time. He had gotten himself so caught up with information that he couldn’t
move forward. So we had a conversation and gave him a strategy just before I got married,
actually. And then, he went away for a month and just thought about it and then ended up
coming back to us and said, “Okay, I’m ready for some help.” and so, he became a client.
He actually just finished settling his first investment property, which was a completely
renovated 4-bedroom, 1-bathroom house within 12K’s of Brisbane CBD, which we picked up
for him for a ridiculous price. I think it was $370,000 in this suburb and he has got
that property now rented out for $410 a week. He’s so excited. Because he’s a builder, he’s
gone around to this property and he’s already adding value to it. I know, because we bought
well for him and because this suburb’s increased in value by 7% already since we picked it
up for him, that he’s going to be able to re-finance in 6 months’ time and move forward
without saving a single cent of his own money again. And he’s a single income family with
a couple of kids and one of his kids has got some issues. Like that stuff, I get goosebumps
because that’s the reason that I want to do this stuff. When you just know that that property
is the right one for him long term. And there’s room in the backyard for a granny flat. There’s
room in the floor plan to add another bathroom. Things that he can do using his natural skill
set over time. He’ll just ring me up just stoked because now he’s moving forward in
the direction of his dream, which is the same as all of ours – get away from full time work
within the next 5-10 year period. It’s not that he doesn’t want to work, he
just wants to be able to have a choice in the matter of becoming a contractor 3 days
a week or moving into a new profession. Ryan: Yeah. I think that’s a big thing. We
want to have the choice. It’s not that we want to stop working, it’s that we want to
have a choice as to the work we do or whether we work. That’s an awesome story. We’ll finish
it up there. If you guys are stuck, then Ben – we are working
closely with Pumped on Property and Ben is offering On Property listeners a chance to
have a free strategy session with him. So if that’s something you’re interested in,
if you’re stuck, you haven’t moved forward, whether it be financial, whether it be mental
and you feel like, “You know what? I could really use some help to set a strategy and
someone to come along side me and help move me forward.” then, Ben may be a good fit for
you. If you want to sit down with him, talk through
your situation, see if he can help you get unstuck and set a strategy, you can get one
of those free strategy sessions. Just go to onproperty.com.au/session and you can request
a free strategy session over there. Thanks so much to Ben for offering those. And just so you know, if you do let him know
that you come from On Property, I do get a referral fee for that. I always like to be
transparent there. But I highly recommend Ben. Me and him are good mates. We’ve worked
together for a long time and he’s my most trusted person in the entire industry, I would
have to say. Go ahead, check it out, onproperty.com.au/session
if that’s something that you’re interested in. Otherwise, take the tips that we talked
about today. Go and see a mortgage broker. Maybe refinance your properties or maybe set
a strategy yourself. Stop getting shiny object syndrome. Set a strategy yourself, de-risk
the situation and then move forward. We wish you the absolute best in your property
investment career and until next time, stay positive.

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