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2 Properties 1 Renovation and $1,000,000 in the Bank
Today I was lucky enough to interview Jane Slack-Smith who is an industry heavyweight and renovation expert.
We talk about the research and due diligence investors should do before buying a property to renovate as well as Jane’s strategy for buying 2 properties, doing 1 renovation and ending up with $1,000,000 in the bank.
I love how Jane makes financial freedom so achievable for the average Australian.
If you ever thought financial freedom was ‘too hard’ or out of your reach you MUST listen to this episode.
Ryan: Hi guys, Ryan here from onproperty.com.au, your daily dose of property education and inspiration. Today, I’m really excited to have with me Jane Slack Smith from the Ultimate Guide To Renovation. Now, Jane has been in the industry for a long time. From her website I found out that she started her property portfolio thirteen years ago. She’s been teaching renovation for over eight years. If you guys read any of the Investor Magazines she’s always in them. She knows a great deal about renovation. So today I am here to pick her brain and to learn more about investing in property and renovating property. Thanks for coming today Jane.
Jane: Hi, thanks a lot Ryan.
Ryan: Basically, give us a bit of your story in case people don’t know who you. I’m guessing most people will know who you are if they have read the magazines and stuff but in case they don’t, who are you and what’s your story?
Jane: Look, guess I’m pretty typical to most people in the industry who are telling people about property investing because I really was reluctant to start investing and it was my husband who said, you know we really should be doing something with our money and I was a mining engineer at the time. So I spent fifteen years in the mining industry as an explosive expert and every single day I was kind of like assessing risks. So I was looking at risks and looking at ways to minimize risk because obviously if you get it wrong you kind of loose a hand So it was about doing it right. I remember sitting in New Zealand, reading “Rich Dad Poor Dad” and it said, “Do you work for your money or does your money work for you?” And I thought crap, you know I’m going to work every day, I’m working hard, I’m earning this money, I come home, I spend it and a bit more, I should be doing something with it . So I was I was really anti the white picket fence kind of mentality because I thought I was living in mining towns and I thought that the only property you bought was really your home and I didn’t want to have a home in a mining town because I saw myself moving on from that.
I started doing the Stock Exchange course and I thought if I could trade shares this would be really great and so I paper traded for about six months and I was going backwards and I finally do as every good engineer does, always Excel spreadsheets and I mapped out what this company was doing and they changed the board or they do something and all of a sudden all my analysis had gone out the window. So I got really frustrated. Then I met my husband Todd and he was from New Zealand and he was an entrepreneur from a very young age and he had a lawn mowing business and different things and he had met this guy. He was like 24 and he said can you come and mow my lawn and he did the job and the guy said well I’ve got six other properties could you mow those too? I was like how did you get all these properties and he said the first one is the hardest, once you get the first one you create some equity so you can buy again. So he kind of had something in his mind that property helped you make money and his dad is always cutting the family around from home to home and doing up the home and buying a bigger home.
And so we got thinking about it and that’s when we kind of jumped in, in 2000 and went to all the free two-hour seminars because we didn’t have any money to spend on all the fancy ones and I read all these books. And it got to the point for me that after about the fifth or sixth seminar and book, I kind of stopped listening to the content because I mean we’re honestly not much new in property. Every now and then someone goes and buys overseas or wraps something but there is not much new. I was really listening to the stories that people were sharing and these were, I lost everything and then I bought it back again. And I wanted to know how they lost it, so I actually started going to seminars to learn about the mistakes people made because I thought if I can minimize my risks (I am quite a good explosives engineer) and understand all the risks and all the mistakes someone else made, and document them all then I put in a plan to not make that happen to me, then I’m in a much better place to start investing and that’s how I do it.
Ryan: Very interesting. I wouldn’t say there are a lot of people that would go to those seminars and look just for the mistakes people make so they can minimize their risks. Most of them are looking to get-rich-quick or something like that. So what were some of those mistakes that people made can highlight a couple?
Jane: Oh absolutely. Buying in the wrong location, not doing the research, listening to some fancy sales person who was really good at selling and you know that’s the mistake people are still making. Subsequently my journey moved on. I bought a lot of properties. I wanted to help other people do it. I couldn’t get insurance protection to talk to people about helping them with properties back in 2005 so the only way I could do it was with financial planners as it was not allowed to talk about property back then. Only in the last year I have been allowed to and that was to become a mortgage broker to talk to people about property. So I started a mortgage broking business and so the context of that comment is that I was talking to a lady yesterday who said, oh my gosh you know we just bought these properties six months ago in Queensland’s in Addis Ababa. The sales guy was so good he promised us everything and now we find it’s going backwards, the town stopped, the train stopped going there, there is no one who wants to rent or buy, we have just lost all our money. And they were convinced put in a self-managed super fun.
So the mistakes people were making way back then when I started researching fifteen years ago people are making today so buying in the wrong location, not doing the research, having their own, I guess structure or entity a lot of people are going to the joint ventures with their friends, you know have a couple glasses of red wine and it sounds like a good idea that we all get together and buy a block of units and do them up or there is a builder and I’m going to JV with him and all these entities. I have been running links now for 10 years and I could count on 3 fingers I think, 3 JVs that I have seen that have been successful. So for me, it’s like learn the mistakes that other people have and don’t do it. So no JVs, do your research, know where you are buying, don’t try to be fancy, time the market. I spoke to this lady back in 2006 who told me that Sydney was way too expensive and she was going to wait until the property prices came down because there was going to be a crash and I saw her this year in 2014 and she is still waiting for the crash. She said, the $450,000 homes I was looking at they are now $750,000, what am I going to do? It’s like, what’s your money done in the bank?
Ryan: Let’s touch on that because I think what you said is so important like. Like firstly do your own research is so important that people actually go out and do it, but you’re talking about timing the market and a lot of people out there want to find the right area that’s at the right point in time that’s going to go up and truthfully they are very difficult to find even if you have access to all the data. So what are some things that people can do? Let’s say that they are interested in purchasing a property or they are interested in renovating a property. What are some of the things they can do to research an area so they don’t end up like someone who bought out the back [inaudible 7:31] and got done for all their money.
Jane: Exactly. I’ll take you through an example of a client and they just wanted a 30-minute discovery session with me to just talk about the next step and they were 57-58, they have a home in a good area in Sydney, the home is going up in value, they paid, they didn’t want to deductible debt down and they were saying we’ve got this great big home that we don’t really need and we’ve got a lot of land and we know if we buy or sell we are going to have some costs so we are thinking of adding a granny flat on and there has been these three great granny flat salesmen who are going to come out and show us how we can do it and its’ all going to be easy and/or we can knock it all over and put a duplex on. And they said we know our area, we know it really really well so we know this works for us.
And so really quickly I pulled up soon some quick information. So first of all I went to investsmart.com.au and I went to the property section and I put in the area and I came up and said, well let me just test how well you do know the area. What is the percentage renters in the area? And they said, ah that would be a few. I was like, well it’s 20%. And what is the percentage of people who rent units like the 66 sq. meter granny flat you are going to put on the back of your house? And I said 7%. So we have now got this whole population is this area and we are down to 7% but potentially would be happy to rent in the your back yard. I asked, tell me the age of demographic of the area and they were like, oh, you know 40 and I said well the average age is like 52. So how many average people at 52 want to rent a unit in your back yard? They were like, well you know, the population in the area, it is more Indians and Chinese all the time and they always have their grandparents in the back yard so it will work. I said well let’s just have a look at the demographics here. The average is 52% Australians and there is 9% Chinese and 4% Indians. So now you’ve got 20% down to 7% in a unit down to this kind of percentage, we’re talking about of the population of 20,000 in the suburbs, we are talking about maybe like 70 people who would potentially want to rent your units and all near your house. They said okay so maybe we don’t know the area. So it is just some simple questions about the demographic – does it suits the market?
There are 14,000 suburbs in Australia and knowing very very clearly your goal. If your goal is to have a passive income of $50,000 in 15 years time then I know because I’ve done the numbers, that is two investment properties at the average Australian house price will get you there but within the next 5 years with one renovation. I know that. I have taken Australian bureau statistic numbers and average numbers and I have done those calculations. So all you need are two places. So if you know your goal – I need two properties that are going out by 7% per annum with a 4½% rental yield and I can afford $450,000, then 14,000 suburbs come down to maybe 1,000 suburbs. And if you say I also want to renovate so therefore it has to be within my area it might come down to 60 suburbs and then of that 60 suburbs you go but what’s the median price of these? well, I can’t afford half of them so there are 30 suburbs. So you are getting narrower and narrower based on your goals, the property investing strategy you have. And then the buying criteria which is how much you can afford, is your strategy around putting a granny flat or developing or renovating. Therefore you have to find a property that suits those needs. It may be on a corner or it may be over 450 square meters or may be an old discount property that you can renovate or why not make a big family room.
So you need to be really clear on those things before you even start looking at a property. So I think that’s one of the big mistakes that people make is that they kind of think I know my area and they don’t know what the infrastructure plans are. I mean of my height of investment in properties every single one is next to a university and a hospital because I’m so low risk I just want to make sure that there is constant employment and constant rental market if everything goes wrong.
Ryan: That was so interesting what you said because I think so many people get it wrong and what people do is say okay well I want to make some money so what’s the best area to invest in and so I am going to go out and read the magazines and find the hot spots or get the advice from whoever but what you said is, I guess some would consider a backwards approach but it’s an approach that I really like which is set your financial goals first and then work out what fits within those financial goals then work out like how do you want to invest and then work out what sort of area’s fit in with your investment goals and with the way you want to invest. You are therefore really narrowing down your target market and you are then doing your research in there. I think that’s a great way for people to fix that sense of overwhelmed that we have. Because we all think that the Australian property market is so big what about buying in the wrong area, how am I going to know where to buy. If you know what your investment goals are and how you want to invest, you can narrow it down significantly and that I guess is your smaller parcel to work with.
Let’s talk about the two properties and one renovation strategy because that one I’ve never heard before. I hear a lot of people talking about all buy 10 properties in 10 years and that’s how you become financially free. I think a lot of people would be really excited about the fact that we can become financially free just off two properties. So can you talk about that more. Are you talking about at a house and an investment property or two investment properties?
Jane: One of the things that have really driven me and the reason that I kind of went from explosives engineering to mortgage broking and property education was I looked at my parents and I looked at the retirement income that they were going to retire on. They had sacrificed having a home so that they could send us to good schools to have a good education so they were dependent on the retirement, what is it called… government….
Ryan: Pension retention.
Jane: And that’s less than like $35,000 so I needed this. I had to do that. A lot of people comment that’s the end for them. The greatest Australian crime I reckon is working for forty hours a week for forty years to end up on less than forty grand a year. That’s just bad, it’s not fair. So I thought, how can I make this really simple? I’ve built really fast and we were on good incomes, really fast a portfolio so we didn’t have to do up anything again. And we haven’t bought anything for years because we don’t need to and I’m not one of those talking this is, like get out there and buy all the time. If you get it right, in my mind it is okay.
I’m going to share with your Ryan because this is my kind of secret mantra that goes on for me. This is seen in FirstCom where First goes down to the mailbox and he said Bubba said he’d look after my investments and he invested in a free Company and they sent me a letter….
Ryan: Yes, I remember this one.
Jane: And he opened up this letter and it’s got apple on in it and it said, you don’t need to worry about money anymore. I’m like that’s good. And that is want to create for people. So my theory is if you buy the right properties in the right area, with the right finance structure within a short period of time, forget about it, it’s life and in 15 years you put a million bucks in the bank.
So how I worked that out was when I was writing the book Your Property Success With Renovation – Two Properties One Renovation $1M in the Bank, back in 2012. I grabbed the census ticket, so the average man was on a $74,000 and the average female was on $59,000 and the median house price was $444,000 and the median home loan was at $380,000. We had a credit card of about $5,000 and we had like $500 for a car loan. This was kind of like typical mom/dad/kid’s life you know. And so what I did was I said, well what can I afford on those incomes? So if we took our home to a 90% land devaluation, took out the funds to cover a purchase price and the cost of purchase of round about $65,000, then took out the money to do that or for a 5% deposit. Took out the money and I bought one investment property. You want one investment property. What’s the average? 444. And I bought in an area that was going up in value so the long-term 100 yield growth is about 7% and talking to John Edwards from Residex he believes that characteristically what we are going to see after racing takes a place that you know characteristically what we are going to see in the future years is what the long-term growth over the last twenty years has been which is round about that.
So you take a 7% growth in the third year you have created enough equity in that investment property. Therefore it goes from about 444 to about 540 to pull that money out and do a renovation. So my cosmetic renovations I proclaim should take about 10% of the value. So it’s been about $55,000. Cosmetic we are doing, kitchen, bathroom, floor boards, lights, painting, landscaping and adding value. For every dollar you spend you should be getting a dollar back. If you spend $55,000 you should get $110,000 on the value of that. And then leave it, don’t take the equity straight away, just leave it and put the rent up because I’m really very very stern on the fact that you shouldn’t compromise on cash flow or growth, you should have both.
You therefore definitely need cash flow to be able to hold a portfolio but you also need growth to grow it and then get out. There is no point having 10 properties making 10 bucks a week if they still worth $500,000 in 10 years time. Once you sell them you got nothing. So you need growth and you need cash flow. So end of your fifth year take the equity of the first property and buy a new investment property. By that time obviously based on 7% house prices have gone up as well so you are buying in with a 10% deposit that you’ve taken out of the first investment property. And that’s it. Stop, get on with life. This is a 5-year kind of plan. And then 10 years later – growth. You bought in the right areas; you’ve done all the research. It’s not like hope in a prayer; let’s hope that this one pulls off. It’s about getting the right property in the right area and doing that research and in 10 years time – after that 5 years initial building your portfolio if you go and sell your portfolio down and you pay the capital gains tax which a lot of property educators kind of conveniently forget and pay the selling costs then there’s $1M left over that you put in the bank and at 5% returns that’s $50,000 a year.
This doesn’t mean you have to give up your job. It could mean that you do it part time. It could mean that you can follow a passion. It could mean that you have a holiday every year and you support the kids’ wedding and pay for the kids’ education. It’s about having freedom of choice and if you go to my website www.yourpropertysuccess.com.au there is a little picture of exactly how that looks. One property in Year 1; one property in Year 3; so renovation in Year 3; one property in year 5. Forget about it, then open up the letter that says, hey you don’t have to worry about money anymore. For me, it’s not about fantasy, chasing granny flats or developments or any hassle of the plan or buying in the US, it’s just about me eating potatoes, typical properties that people want.
Ryan: Yes. I like that strategy because it is a fact that’s basically anyone could do that. Anyone in their mind can think okay two properties that’s manageable. When you reach a significant level and purchase 130 properties it is like, oh, oh, I’m just having a heart attack. But two properties purchased over the space of five years, doing one renovation is definitely achievable for most Australians. I like that strategy.
Let’s go more into renovations because I know that’s what you specialize in. What are some important things that people should look for in a property, like that first property that they are buying that they are looking to renovate? What are we specifically looking for, is anything different to what we’ve been looking for otherwise? Does that make sense?
Jane: Yes. Well actually it’s funny because last night I was invited to The Block as a special guest of one of the sponsors so it was about fifty of us there and we got to go look through the entire block and it’s finished. They are finished three weeks ago but I think they’ve got three more weeks of remedial. It was interesting and I was actually talking to the participants and looking at the rooms and it’s on a really busy street with the train rumbling out the front and if it wasn’t The Block and it wasn’t being marketed on the camera company, channel 69 was actually going to be footing the bill further it’ not somewhere where you would buy. I think the thing around renovating is that there are a couple of mistakes that people make. You have to have the right property to renovate.
My type of property investing strategy that I’ve developed could be the tried-on strategy because I’m kind of really low risked. As far as I’m concerned I don’t want to have one way to make money – renovation in the market. I want to have three ways. Therefore if Plan A really stuck up and I got it all wrong I’ve got B and C to fall back on.
My tried-on strategy is buy below the market and that’s about intimately getting to know the market or buying of someone who doesn’t know the market or [inaudible 22:02]. With the Australian property market it is really hard to buy below the market. But it was really hard in 2006; it was really hard in 2001 and I did it on both of those occasions and interested sellers. So one wouldn’t even open up the rooms in these houses to let people have a look through. It was two of the rooms, four bedrooms would be rented to students and they all had locks on the doors and so the students wouldn’t open the doors to show what was in the bedrooms so you kind of had a little bit of a flip notion prayer to pray to make their rooms were okay, but we had the building inspection done on the rest of the rooms.
I think the thing is that you are buying below the market, adding value in the medium term through renovation and then long-term being in the growth area. So you have got three ways to make money. It was interesting, I had one of my students, Neil, [inaudible 22:54] renovation in March and we pushed him back. Successfully he had renovated I think eleven properties and I pushed him back and say go and have a look, now you know, having down the course, having to assess the property if you actually made money. He went back and he went through all the analysis and said six didn’t even make money I covered it up by capital growth, which is good in one way if you are really stuff up, you kind of still look like a champion but I reckon you should have three ways to make money.
The that people get kind of missed in renovation is that think of renovation as a strategy after they buy the property so they’re not looking at the property with the twist and the opportunities. I think that the absolute best way to add value through renovation is changing a floor plan and potentially adding a bedroom to increase rental yield. For instance, I assisted my sister in finding an ideal square major two bedroom unit but it could be easily converted into three bedroom unit she bought with a 95% loan devaluation [inaudible 23:57].
Ryan: Sorry, I didn’t mean to interrupt you because that that is really interesting. I think you right. Purchasing properties that you can change in some way that’s going to add significant value but how would the average person go about finding a property that they can add an extra bedroom on to it or improve the floor plan in some way? I think a lot of people starting out wouldn’t even know what to look for. Are we looking at square meters, show do you analyze it and work it out?
Jane: It has to be livable. It’s not like putting a $2,000 plaster wood board down the middle of a big bedroom and making it two bedrooms with single beds in it. It has to be fit for the market. So that is what’s really important that you that you know what the comparable styles are. We knew that 80-square made a unit, it could be a two or three bedroom units. This is therefore about you inspecting the area, going out having a look on Saturdays at other two or three bedroom units or other three to four bedroom houses. Understand what the demographic for that area wants and requires and the ideal finishes, but also the idea of size of bedrooms, size of living areas. You don’t want to be like sacrificing a second living area if every other three bedroom house has a second living area so you don’t want to be creating the fourth bedroom if everyone only wants three bedrooms.
Ryan: Yes. It’s about knowing your area, isn’t it? So if you are in the inner city then people will probably be happy with a smaller patio, three-bedroom with one living room and one bathroom whereas people are in the country or out in Caple Town or something like that, if they got three bedrooms, they are expecting two living rooms and on its way a second bathroom – all this sort of stuff.
Jane: Yes. One of the things people miss is for every 10 properties that I inspect in a suburb to get a feel for the ones I can buy, the ones that I’m renovating up the quality of. I also then go and look at a rental property on the market. I’m listening to what the renters want. It might be, it doesn’t have a car port or there is no security or i wonder if I can get Wi-Fi here. I don’t know what but I’m listening to what the tenants are after but I’m seeing what my competition is. I think people missed that. Especially as investors if your end goal is to rent this property out then find out what the renters want and what your competition is. So intimately researching and knowing the area I wouldn’t be whacking a fifth bedroom into a huge four-bedroom area that is predominantly 60-70% unoccupied and that’s what the house is, four-bedroom with two living areas. I wouldn’t be making a five-bedroom rental. Really knowing the area is so important in part of renovating and finding the right place to renovate.
Ryan: I think some people will listen to this and say okay well I need to find a place where I can add a bedroom but that’s not what we are trying to say at all. I think what we are trying to say is know your area so well that you know what renters want and what buyers want; and then find the property that could be that but isn’t that right now. So maybe that is an extra bedroom but maybe it’s adding a living room or maybe it’s an en suite or bathroom or dining area or something. It’s about knowing the area more people in the area want, find something that isn’t that but could be that. Is that right?
Jane: Exactly. And it’s a more advanced to add on a bedroom but in some areas it might be taking a major amount making a living area or it might be creating the deck in Queensland. We bought a unit that was just ugly and we painted it and once I pulled all the furniture it was bright and lovely and we are walking through these open homes people are going oh my God who wouldn’t buy this, it smells, it was like it smells, I cant get rid of smells. So it’s about seeing the opportunity and that’s with the property but in the suburb you need to know what streets to buy in. You can actually find out where the predominant occupants lives and the predominant renters live in a suburb so that there is, I did spend like, oh my gosh three months and about 18 emails and conversations with census guys saying I know you used to be able to do this in the 2006 census information, teach me how to do it in 2011 so I can teach my students. You can create a map that shows you exactly what streets the renters are going to live in.
And then it’s about looking at pricing disparity. If the difference between an un-renovated or a renovated house or unit is not a lot. Is there a profit in it for you? Move away from that suburb, no questions asked. If the disparity is great, if there is a gain to be $150,000 or $200,000 disparity and it is going to cost you $50,000 to do the renovation then fabulous. This disparity is there for you to create some money for yourself. If there is an $80,000 differentiation and it is going to cost you $50,000, why would you spend your time on it? You need to be creating a dollar for every dollar you spend so you need to be having $100,000 in value. And if the comparable properties are going only $80,000 there is no value there. So you need to be able to do that.
When I say there is no value there, the value would turns up and say how much is this property worth because I want to be able to pull equity out from the bank so I want to be able to build my portfolio. If the value would turns up and say three comparable sales, which is what the bank needs, three comparable sales, save there is only $80,000 more then that’s what the bank is going to lend you again. So you haven’t actually created a dollar for every dollar you have spent.
Ryan: The average person out there that doesn’t have access to software and stuff like that, how are they going to work out whether there is that disparity in an area or not?
Jane: It’s kind of lay work to some degree. For my students, I’ve the spreadsheets, the columns show: what’s un-renovated; what’s renovate; what’s partially renovated per square meters. You have got per square meter so all you need to do is create your own spreadsheet. Let’s say I’m looking at Red Hill in Newcastle and so you’ve got your inspections properties’ names in one column; you’ve got the predicted price and what they sold for into two other columns afterwards, so you are building up your own database. You are then looking at things like, say you are going to be doing your other research vacancy rates, days on the market, discounting, etc. You potentially will be able to find out information on the difference between two bedroom and three bedroom houses or units so you want to get down to that level and then you put on the size of the property so 800 square meters, 450 square meters or whatever the property size is and what the property went for and if it is renovated or un-renovated. So you can start building up, you on read about it she can suck going up you know how much the cost the manger square renovated this is something about it as well and 15 is renovated missus I’m renovated in your building up, the cost per meter square, this is renovated, this is un-renovated as well then you are building up your own information. You don’t have to go and depend on the experts. You don’t have to go and do all the research or buy the fancy software systems. I know theirs is – investor real estate?
Ryan: Real Estate Investor.
Jane: And Ripehouse. I love Ripehouse. I use that quite a lot. I think it is really great. There are more opportunities. If you go to my website www.investorschoice.com.au you I’ve actually got on that front page a calculator that is a borrowing capacity calculator that vaccines into if you say I’m looking in the Blue Mountains a house it would take your purchase price from your borrowing capacity and actually come up with all the surrounding suburbs and the past 12 months and the last 10-year growth of all the surrounding suburbs and the suburbs that you are looking at and if you click on one of the suburbs it will take you to a map and show you the houses on the on the market at the moment.
Ryan: Awesome. I will tell that to a lot of people.
Jane: I’m so excited. It is taking a long time to develop but there is a lot of free stuff out there. I am all about educating people so they can do it themselves and if you can’t like honestly I’d look at the amount of time and effort that I put into buying property and I know when you are here and I am kind of over the hill in property buying wise you look back and say gosh if I could have shortcut that I could have been even further ahead. I was dogmatic and I didn’t have the money to employ painters so I was doing to painting, all my waking hours I was painting. It took three months to paint a three story six-bedroom house. When we had a painter to come in and paint the exact same property next door it took him five days. So I kind of look back now and thought some of the things that I thought I was saving money on I really wasn’t and one of the things was time.
It might take you six months to find a property. If you are in Sydney at the moment six months, it could be $100,000 in a new…
Ryan: I wouldn’t say that. Six months could cost you 50 or 100 grand.
Jane: [inaudible 33:47] spent $10,000, went by his agent and said here my goal, here is my property investing strategy, here is my buying criteria, do not come to me with a property that is not fitting one of these three things. Be specific and tell them what you want and for 10 grand they will go and get it for you and usually within six weeks. So yeah I definitely say there is opportunity if you have some of that cash available and I understand if you don’t own investment properties that’s not tax-deductible but if you do it is, why not speak to you accountant? There is information out there that you can get and as I said there is www.investsmart.com.au domain, real estate. I use all of those. I try to help people see the free stuff so that you don’t have to go and pay for these fancy enhancer tools.
I have clients come to me and they would say I am looking at a block of four units in Moray and I am looking at this Joka occupancy in Tumba. I was like, are you a real estate investor by some chance and putting in wee criteria. They are coming up with these wee areas that the banks might not go into, areas with less than 20,000 population with a 90% lend. They are coming up with such specific kind of like I’m chasing cash flow and only cash flow. I know the banks might lend against that if they want so you kind of have to balance that as well.
Ryan: I think this has been really good. I came into this interview thinking we will go and we’ll talk about different renovation strategies and stuff like that but I think what we have talked about is all the stuff to do before the renovation strategies which is probably more valuable to a lot of people anyway because I think that’s where people get that massive sense of overwhelm is where do I look, where do I buy. I think you talking about minimizing or the areas you’re looking at by looking at what you actually want to achieve and what property investment strategy you want to use is super helpful.
Going back to when you were talking about looking for those areas with disparity I think it’s important for people to know that there’s no fancy software out there that’s going say well this suburb has a disparity of $200,000 and this suburb has a disparity of $50,000. You need to minimize those suburbs and you need to do the leg work yourself to because there’s no software out there that I know of that says this property sells for this much and it was renovated to this standard and that account for this. It is never going to be accurate, computers aren’t that smart. So to find that disparity and to find a property that that means that doesn’t have what the area wants but that you can create is going to be super valuable for anyone looking to renovate.
I know that you run a course called The Ultimate Guide To Renovation. If anyone wants to check that out go to www.onproperty.com.au/reno which is my affiliate link for that. Can you tell people now about that course and why that has been so valuable to so many people?
Jane: We only release it twice a year, March and October and it’s only opened for four days during that time. So once people are in they are in. I am a bit different to other educators, well maybe not. L
Ryan: No, you are. I like your education style because you are not like, here is the strategy I used, this will always work for you or you should buy this property. You very conservative for people, you’re very helpful to people who are in the industry.
Jane: I think The Ultimate Guide to Renovation, I’m so proud of, it was two years in making, like we actually go through and do an entire cosmetic renovation on a house and then a whole structural renovation on a house and case study it and show step by step what to do. So people who want the renovation stuff are well and truly looked after. The first six of the twelve modules is about finding a property, defining the strategies, the risk assessment tools. I have actually negotiated a three-months free access to Ripehouse which has almost got down to the pricing disparity and renovation and stuff. I think if anyone’s going to crack, it is going to be Ryan. I had someone told me last week that they have just saved $2,500 off their renovation, sort of a discount trade tax. We got all that kind of extra stuff.
The course itself is a video based course, the reason I said we are a little bit different is because I want it not to be some five, six, ten thousand dollar course that people went off to on a weekend, they would be happier to stay home with the kids and then you would have to come back and convince them that it’s the right thing. It is something that the whole family has access to. It’s online, you have access to the courses forever, you have twelve Q & A course. We actually have a private Facebook page and what’s happening on that page is extraordinary. People putting up plans of houses and they’re expecting anyone coming in and saying, this is how you change the floor plan. So if you got new people who don’t know what to do, it is the place to put that information – “Hey, these are my success stories or in the middle plastering ensure you use this type of cement or this type of cement.” I saw one this morning, this lady is doing a deck and she was asking which kind of deck cover to put on and then the next one someone was just negotiating a property and was using one of the checklists or the tools I have on putting in a litter buffer and she was saying how do I mend this and everyone was coming in and box up and just I had when I mean this in a bonus coming in and telling her things.
The cost itself is unique because we take you by the hand and we really want people success. I honestly want people to see that was two properties that can put a million bucks in the bank and forget about money. Being committed to just letting people in for four days a year, twice a year, it just means that we we’re all focused on doing that.
The Ultimate Guide To Renovation will be launching the beginning of October so people can preregister through your link.. I will be doing a webinar on the 25th of September 8 o’clock at night so that people can register through your link as well which basically I go through that call – how can two properties get you a million bucks in the bank and a bit more about what I did. But I think property investing should be hard and Warren Buffett said if investing is exciting you are doing it wrong. It is more about me eating potatoes. Just get it right once. Find out the mistakes that other people make. Learn from experts who have doen it before. Shortcut all the mistakes. Just get it setup and forget about it. That’s what it’s all about.
Ryan: Yes, awesome. But I think you understated your course because I have seen on the video that is inside and you do go into all the stuff we talked about today but in intense detail and step by step, exactly how to do it, what tools to use or stuff like that and then obviously in the video you go through exactly how to renovate and things to look for. But I like the idea of the Facebook group. I think that’s cool. Because renovating is so property to property so people can ask specific questions about the properties they’re looking at.
If you guys want to get more information about that or you can sign up for the free webinar on the 25th of September or you can sign up for that once this goes live. Just go to www.onproperty.com.au/reno and you can’t sign up for that and learn more information. Is there anything else we should let people know before we close this out?
Jane: No. I really appreciate talking to you and your people and if we can spread the message that it doesn’t take much to get it right as long as you do the research and find the right property, then our job here is done, Ryan.
Ryan: Yes. I think we made it achievable for people. They can say two properties, one renovation, it doesn’t have to be 130 properties in 3½ years. It can be something achievable.
Thank you so much. I appreciate your time and good luck with the webinars and everything like that.
Jane: Thank you. Okay, all the best to all your people.
Ryan: Thank you.