How A Successful Property Investor Finds Investments

Successful property investors tend to invest differently to new property investors. They have different strategies, look at different things and invest in ways that lower their risk and increase their chance of return. Here are some tips from a successful property investor Ben Everingham

Book a free property strategy session – https://onproperty.com.au/session/

0:00 – Introduction
1:25 – Ben’s property that he purchased this year
3:24 – Investing is a day to day part of life
6:19 – Each investment fits into an overarching strategy
10:02 – Not rushing into investments and having strong guidelines for what to invest in
11:26 – Having a strong due diligence list
15:17 – 2 big difference between Ben’s first investment and his investment this year
19:04 – Having a quality team of advisors
20:25 – Having a framework to filter potential properties quite quickly
22:21 – The biggest takeaways from this episode
25:55 – Having a clear strategy and clear outcome in mind
27:28 – Investing for cash flow and getting long term capital growth as a bonus

Book a free property strategy session – https://onproperty.com.au/session/

Transcription

Successful property investors invest differently to new property investors. They have different strategies, they look at different things, they invest in different ways, which tends to lower their risk and increase their chance of getting higher returns. So today I want to interview Ben Everingham who is a buyer’s agent over at pumped on property but also a successful property investor himself. And he’s recently just purchased a property this year even though he planned it not to purchase one. And I’ve seen your growth band over the years of the way you look at property, the way you decide to invest in property. And I obviously have insight in the to the types of properties that you’re now purchasing. So I thought it would be exciting to get you on today and talk about how you invest now and compare that to how you used to invest when you were and you are an investor and some things that people can learn from that. So how’s it going?

Awesome man. And got my party shared on today. I’m excited you are. That’s a very flamboyant shirt happening. This is like you’re on the sunshine coast where it’s all sunny and delicious weather up there. I’m down in Sydney. It is sunny today, but it’s still got a bit of a chill in the air, which I’m like, yeah, I’m assuming in the pool this morning. And um, with the kids and having a, a good dance this morning with the kids as well. It was, is walking around behind me with a jumper on. She’s like, you guys are insane, but it’s, it is still nice out here. It’s the last of the good time of the year. Yeah. There’s no swimming in the pool down. It’s phrasing to swim in the pool.

Okay. So let’s have a talk about, let’s start with the property that you purchased this year. So obviously you were planning on not buying any property this year at all.

Yeah, so I was planning, it wasn’t because I didn’t really want to buy property this year, um, because there was anything wrong with this year. It was more, I’d rapidly cumulated some properties in the last two or three years in as you know, come off the back of a lot of business staff, a lot of personal stuff, having three young children, um, and a lot of investing stuff. And I was kind of like, this year I’m just going to take a step back, no new projects. And then my wife and I were, we’re booking a place to stay for like Valentine’s Day on Airbnb and the like, man, this place is like really, really busy on the sunshine coast. And we were like, what are they doing? And sort of started to have a little bit of a look at it and um, then laces lack, well let’s jump on real estate dot Cummins. You know, just see if there’s any houses that are comparable around. And then we found this piece of land, which was effectively below my, what I thought was market value. Um, so has this huge, um, 900 square meter block close to the beach. Nice big frontage. And I, you know, didn’t think too much of it. Went for a drive down there to check it out and then decided pretty much on the spot that that was going to be our next investment property.

So what I want to talk through is about, there’s a couple of things in the, there’s one that as a successful,

you kind of have a habit now or you kind of have a lifestyle where you discuss and look at investments just for fun cause why not? Um, but then also I want to talk about why this particular property and then how that fits into, I guess your overarching strategy and how that compares to your strategy when you were younger investing for the first time. So let’s start by talking about just the fact that investment is a part of life for you because I think this is something that really does separate successful investors to new investors. And that’s just that investment. Something you and your wife talk about, you and your friends talk about, you and I talk about all the time. It’s just part of life each such a day to day part in my life. And it has, it has honestly been for the last 10 years, like Ironman to going to parties.

Like with my wife’s friends when I was sort of like 24, 25 and we’d be going for like a day drinking session. Like they’d be like a lot of her friends’ Day jade and stuff back then and everyone will be just getting smashed. And I’d be sitting at the side of the pool week like Rich Dad, poor dad or a property investment book or I’d be on my laptop. Like I just, I found a passion for investing because at that time in my life I hadn’t found a passion for my career. Um, I’m lucky enough from the ad that I’ve been able to find something that I enjoy doing for work as well. But it, that time I was literally just thinking, how the hell can I get out of work as quickly as I possibly can and are found property investing. And I love finding deals below market value.

Like I love renovating properties. I love building them. I love feeling them. I love getting passive income. I love the capital growth that I’ve received. I like, you know, buying a property and I know I’m making, you know, a year’s worth of salary and the David, I buy it and you know, over time what was sort of started off as a passion and an interest has become kind of like just as you said, like a day to day part of living. Like I talk about my projects with you, with my team and my brother and my sister. I talk about them with Lisa and I’ve always got this idea in the back of my mind that if the right opportunity comes past my way, you know, I’ll use my 200 point due diligence lists, which we can talk about in a moment and I’ll figure out if that makes sense.

And if it does, I’m, I’m always open to buying the right type of property. And so I think, yeah, I think having it as a part of your life is so key and so important for people because when you’re talking about it consistently with friends and family and the people that are in your life, new ideas come up, things come to the surface. But investing is so normal for you. You’re not trying to get rich quick that you’re able to kind of absorb these ideas, mull them over in your mind and fit them into what you want to achieve. And I feel as a successful investor, you don’t get distracted by shiny objects syndrome. So you’re not like, oh there’s this new investment. I’m going to go ahead

and jump on that. But it’s a normal part of life. It’s a normal part of conversations. And then you kind of absorb the information, you let it percolate in your mind over time, and then if it fits into your goals and your strategy, you can find that are ways to work that in or to pursue that. But you’re not jumping around from place to place. So let’s talk about how this property fits into your overarching strategy of, and what you’re trying to achieve.

So I’m trying to achieve longterm financial freedom through property is its own thing. Um, effectively, like my long goal would be a couple of times $1,000 per year income, whether I get out of bed or I go to work or I don’t, um, for the rest of my life just through property. So that’s my sort of 10 to 15 year ago from today. And you know, maybe I’ll go further than that navy, I won’t quite achieve it, but, um, I’m on my way to doing that. And what happened is I saw you saw, you know, the Sydney market place coming to its peak around abouts 2016, 17. Um, and I also realized that my investment strategy had changed a little bit and I’ll talk about that more in a moment. But what I’ve done in the last two years is I’ve sold all of my properties in New South Wales out at the top of the market.

And then I’ve sold a couple of the properties that don’t directly align with my current investment strategy. So I effectively sold four properties in two years. And obviously that race and capital, which enabled me to pay off some debt on my own home. And I’ve been sort of sitting here saving money and now that the opportune time has come back into the marketplace for me, which is I like to buy when other people are scared effectively. Um, you know, the reason this particular property on the sunshine coast is because I knew I’d sold those four properties. I knew had I had dead money sitting there in the bank and I knew how I wanted extra cash flow in the future. So even though this is a, a house or a piece of land, what I’m doing is building a home and a granny flat and then I’m going to rent them both out and you know, hopefully get somewhere between a six and a 10% rental return depending on the way that I’d rent them out.

Um, which is, you know, once I can own that property in the future and to give me a passive income of 70 to $120,000 a year type thing. Yeah. So the strategy for that property was like, I know I need cashflow. I know I’ve got just money sitting there that isn’t a Bafo that isn’t, you know, sitting against the home loan that is just being wasted right now. And I’m, you know, I bought this property a hundred grand cheaper than the guy that sold it to me, bought it for a year ago. So I knew that there was an opportunity there as well.

Yeah. And so you a assessing this based off cashflow and this obviously was a unique opportunity that not everyone would know how to implement the strategy that you’re implementing. You’ve done a lot of building in the past, so you obviously have a skillset around that. You the strategy and goal of cashflow and you wanted to do that in longterm stable investments. Did you consider other investments as well, like buying existing properties as well? Were you actively looking in the market to try and find something? Would you just kind of stumble upon it and you realize this bits into my overarching goal so I’ll pull the trigger.

Yeah. So I wasn’t thinking about buying another property as you know, like I just finished renovating mine home. I just finished completing a subdivision project and building a jewel down in Brisbane. Um, so you’ve already seeing all those properties,

so you’ve already got some cashflow projects that you have that you were just consolidating and just paying off.

Yeah, like I’ve already, you know, effectively got a portfolio that in 15 years time will give me that 200 k. The difference is the rents haven’t increased enough yet to get to that point. And I haven’t paid off enough debt to actually realize that cashflow, but I’ve got a foundation sitting there but could lead me to that now that these new properties been added, which feels really, really exciting.

Yeah. So your approach was I feel quite patient in the fact that you had a strategy to pay off debt this year and to I guess build up a strong base as well so that you can invest in opportunities when they come up, but also you had a very clear strategy in mind and the only reason you invest in this was you know you, you kind of stumbled across the opportunity in a way because of the holiday that you had with your wife and then you discussed it and then had a look around and it kind of came up. That may have not came up and you may have not have invested but I feel like you had a very clear strategy and it fit into that which is why you pulled the trigger

tomato, tomato by absolutely anything. I have to take the timing box which is effectively buying when other people aren’t. I have to get a property in a good enough area with long term growth potential. It has to have exceptional cashflow for me to even consider it. I have to make a bit on the way in. And then on top of that, it has to be a big piece of land, either walking distance of the beach or close to the Cva Day. So it ticked a lot of these boxes. And while I say I just stumbled across it, it’s only because 99.9% of properties in Australia make absolutely no sense to me that cause in my filter and I’m so clear about my plan and strategy, I was easily able to identify that property in two hours of research and know what it could potentially do for me.

So let’s talk then about your due diligence list and how you, I guess running properties through your filter now. And then let’s talk about what did you do when you bought that first property down in Sydney when you were 20 something? Um, so I remember

a friend of mine’s uncle is a, is a really successful business person in Hong Kong and he was fine of like an informal mentor for me when I bought my first unit in Miranda in Sydney. Um, 2011 when I just finished uni, that was my first purchase and I sent him through this like 30 page report on my thoughts around that particular suburb, the market, the property, the potential. And I look at that report now and I’m like, I thought it was like so detailed and I was looking at all of the wrong stuff. He just sent me the same now back thing. Like I don’t know much about this market then, but it’s nice to save it your detailed orientated, which is pretty much in going like fuck off. They’re like, I’ve got better stuff to do.

But I thought I’d done all this due diligence because I, I am diligent. Like when I’m getting involved in something, I immerse myself in it. It’s not like I did my toe. It’s like I’m, if I’m thinking property like I’m all in. Um, and so, you know, I need no due diligence back then. Like I wasn’t looking at rental vacancy rates, I wasn’t looking at average incomes. I wasn’t looking at the stage of the cycle. I wasn’t even looking at like body corporate phase on that unit. You know what I mean? Like I had no team of advisors around me to support me, no mentor or Sounding Board to sanity check my decisions. I was just a great young guy thinking that people buy a property and people that buy property end up rich cause had read rich dad taught that. I have no idea what I was doing man.

But now the very first thing that I do is I have rules, right? So the first rule is I buy at the right time of the global cycle and the national cycle and I buy when everyone else is sitting back and doing nothing. Like if you want to buy a well that’s the number one key. And if you want to make medium term gains, that’s also the number one key. I knew that I would only ever invest in either metro markets being Sydney, Melbourne, Brisbane or the sunshine coast or gold coast surrounding it there. The five markets in Australia that I’ll a specialize in over the next 50 years. Um, I knew that the sunshine coast, because we’ve been buying it for clients for years, has like more infrastructure than anywhere else in Australia coming, you know that the next seven to 10 years, I know that property prices here is still cheaper than the last year of.

See I know that demand like population is expected to grow by 30%. So I had context around it being a good area. Um, and then I started to work through my checklist. So first thing was was the property on a main road? No, it wasn’t. Was the frontage big enough to build Julie Income? Was it in a flood zone? You know, was there any housing commission in the street? What was the cluster of PR? Was their premium properties in that area of that particular suburb? Was it walking distance to the water? Then I got into the sales history data like you know, and looked@everysalinthelasttwotothreeyearsonrealestate.com sold section so that I could benchmark this property against others. Then I started to look at rent returns, you know, called the town planner called the council talk to, to solicit our, like it’s quite a, you know, there’s quite a bit to do there, but because it’s all just so normal now, it really only takes me a couple of hours and then I sent it through to my sister and I’m like, pretend this is a property for a client. And then she overlaid the hundred extra things that we do to make sure that it ticks all those little boxes, like those micro boxes as well.

Yup. And so I think that’s, there’s two big things there that’s very different from the Miranda property to this property. So new investor versus successful investor. Now one is the overarching strategy of the property and the purpose for buying the property. You have a purpose in buying it and you can, if I say anything wrong, just go ahead and correct me here. Yeah.

Nah Man. You know my situation.

Yeah, that’s the thing. And that’s how I feel like I can speak liberally here because we have talked about this in detail off camera, but when you purchased the one in Miranda, like you didn’t look at body corporate fees, you didn’t understand the cashflow of that property or how that fit into your plan. You had no ultimate end goal for that property either or no real forecast of how much that property would grow or how you would make money in it. That Miranda one that was along with the body corporate fees went up like crazy as well. It wasn’t it.

Yeah, they went up from like 1000 bucks a quarter to 5,000 a quarter because the sinking fund had no money in it, which I didn’t realize.

Yeah, and so obviously there was a whole bunch of things there that got overlooked because you didn’t have that overarching strategy where this new property, you do have a strategy of how it’s going to affect your cash flow and how it’s going to affect your portfolio and your situation long term. So like you’ve got long term and then you’ve also got reasonable projections for how much you’re making on entry into this based on market value based on what the build costs going to be and what the finished result is going to be. Um, so you have all of that sort of overarching big strategy stuff in place. And then also the smallest stuff that you’ve learnt along the way as well. I can see helping you so clearly like the fact that you built that property in Cayogle out in like Northwestern New South Wales and you’d build a premium property that was the most expensive one in the market or one of the most expensive ones in the market. I can see that now you’re looking at, okay, where does this property fit into the market, into the street? Is it going to be the most premium one or not? And how does that fit your risk profile and so many other smaller things that you’ve just learnt along the way where you’re like, okay, what are the vacancy rates in the area? What is my cashflow going to be? So many little things that now you’re able to check and double check it.

Like, um, you know, as you said, like I looked at another property that was under 600 square meter block down the street. It had just been built. Uh, it was just a normal four bedroom, two bathroom, two car garage home to the average person. It would probably look premium. To me, it’s just like a standard invest to build. Um, and I, I knew that that sold for $957,000. Um, you know, I’m creating a home plastic granny flat with 300 extra square meters of land in the same street, um, in a better position in the street on a higher side of the street for literally $100,000 less than are creating that product for. And I was kind of like, I knew, you know, straight away that there was a comparable there that I could use as leverage to, you know, easily redraw a hundred, 150 grand of equity, Otto von completion as well if I, if I wanted to do that.

Yeah. So there’s so many aspects of that because obviously that’s going to play into whether or not you can get equity out of the property, which you can then use to continue investing in growing your portfolio, but also a lot of the little things that you look at a really focused around lowering your risk. So seeing that another property in the street has sold for more than the total base cost of what you’re creating a better property for must feel lower risk to you. Then you know, investing in something that’s going to be the very top end of the market that

nothing’s ever sold experience as well. Like one thing we didn’t talk about dairy is just the quality of the team of advisors I have now. So it was literally an email to my mortgage broker saying, hey, this is the plan. Can you get me finance? I talked to my accountant and I’m like, based on our land tax position, what’s the best way to structure this from an asset protection perspective? Knowing that I want to own the property outright in the future, what’s the best way from a tax perspective to structure it for longterm distributions? You know, how should that see it, talk to the solicitor and get all of the searches done because I knew that the person was bleeding on it. Um, in terms of like selling it to me at that price point, I was able to control the settlement process. So instead of a standard 30 day, it ended up being about 65, 70 days.

It was really long clauses in there to protect me, to be able to do proper due diligence. You know, like the hardest part of it was pulling together the building project because it obviously requires a lot of creative energy. But you know, again, my wife’s an interior designer and a building designer, so she’s able to like sleep in there and we can just, you know, play to our strengths, if you know what I mean. Yup. Um, it was just a good project man. And when you know what you’re looking for, even though you might not be looking at looking at it, like almost every property that I bought I haven’t been looking for in the last four years. They’ve sort of just showing themselves in the marketplace and I try and take advantage of that condition.

Yeah and I think you’ve got a framework that allows you to filter those properties so when they do come up, because something that you’ll probably not so aware of is that I’m sure there’s a bunch of opportunities that come up that you look at and disregard quite quickly, but ah, for sure. But you wouldn’t really remember them because they just didn’t take enough of your boxes when it comes to your strategy and your due that they just got discarded. Whereas it sounds like, oh this is just, you know, a needle in a haystack that came up and you got really lucky. But there would have been a lot of needles in that haystack that came up. They just didn’t fit your criteria that you just dismissed quite quickly. And so it allows,

is it business? We inspect 2000 properties a year every year. And I’m, I’m constantly looking and you know, maybe once a year I’d buy a property and you know, that’s, that’s like a needle in a pile of needles life. You know what I mean? Like that, because had gone the entire Australian market, then we’ve reduced it down to southeast Queensland and we reviewed every suburb from the Gold Coast, the North Brisbane to the sunshine coast and Brisbane. And then we’ve further refined like 700 suburbs up here to six or seven. And then I’ve been looking at these suburbs for five years, every single day. It’s like, it’s so specific, but that’s what it takes to become, you know, if you just want average returns just by average property, but if you want above average rent returns, you know, above average longterm capital gains, then there’s some rules that successful investors follow and you don’t have to recreate them. You can just follow them. You know what I mean? Yup.

And so this has been a really interesting discussion and I hope that you listening today have got a lot out of this. Obviously it’s not as structured as some of the other episodes that we’ve done where we can give exact tips, but we’re kind of drawing this information out of Ben through osmosis because he kind of does this himself. But I guess the biggest things that I got out of that is, well I just, the amount of effort that goes into you purchasing a property now that you, it’s such a part of your life that you may not really notice that you’re putting in this effort and obviously you have a buyers agency business, so you’ve got an unfair advantage there because you’re doing this all day every day. But when new investors go into the market, they might look at a couple of markets for a couple of months and then go ahead and invest. Whereas you’re talking about looking at markets and assessing markets and looking at sales history in those markets for years on end and the nuance that you would understand about different suburbs and things like that allows you to make more sophisticated decisions as an investor.

Can I just quickly grab some bro like interrupt you. I just want to grab something from that even. I think we just add a tiny bit of light at the end of this session.

Sure. You go grab it and I’ll keep talking.

Hi. Sorry. I just, you say it.

And then the other thing that I think that I saw out of that was just the fact that he has those due diligence points as well. So he knows what he wants to get out of a strategy. He knows what the property needs to look like. He knows what boxes and needs to tick. Hey Ben, I’m just saying you have that due diligence checklists. You have boxes that you need investments to take before you’ll invest in them and if they don’t take enough of those, then you just won’t invest in them. And so I think that’s a really big aspect of how you invest now versus what you used to do. What, what have you got for us?

This artist printed out this yesterday like where we’re training a new staff member at the moment and like this is like, it is not logical. Like it’s not just stuff that every investor would understand, but it’s like this is the title of the page. Things we researched before we book an inspection and it’s like the blocked has to be be given 400 can’t be on a main road, can’t have a train line, can’t have power lines or electricity substations within a hundred meters, can’t be next to a close to a cemetery industrial estate, commercial or retail state. There James need to be 2.8 by three internal floor plans need to be either 85 square meters property next door opposite can’t be housing commission. The street can’t have more than 5% housing commission position in the suburb has to be middle to premium. Property valuation has to be 5% below listing price.

I’m like, that’s just like one out of literally three pages of stuff that they’re just thinks we don’t buy, let alone like what we look forward in my buying and it’s all things that I’ve fucked up on personal properties that have now created this list. And it’s like, you know, people go like, why can’t I just buy a property on my own? It’s like you fully can, like I did. You will. People do. It’s just like that there’s a difference between the same apples, you know what I mean? Yeah. And, and so I just, I’m excited for people that they’re learning this stuff, but it just takes time to like, this isn’t all going to come overnight for Ya.

Yeah. And people need to take the time to learn this stuff. And we’ve got so many episodes where we talk about all of this sort of stuff so you can go back through the archives and what some of that stuff. There’s a lot of great content there where we talk about what to look out in suburbs, what to look at when looking for properties. But yeah, that checklist for you as an investor now make it such a stark difference to when you purchased that Miranda property as well. And then I guess the last thing, the last like big rock, um, and very significant thing is just the fact that you have a clear strategy and a clear outcome in mind and you’re investing in property knowing how it’s likely to impact that strategy. So obviously you’re never going to know exactly how that property is going to turn out.

There’s unforeseen circumstances. Sometimes you might have a granny flat that gets burned down because, because you have a horror story like Ben did. So obviously there’s things that you can’t foresee, but you can project different scenarios and say, okay, here’s how it’s most likely to affect my portfolio and how it’s going to move me towards my goals of financial freedom and financial security in the future. And I think having that clear strategy in mind just means know why you’re investing in something. And so when other people say, oh, well now’s not a good time to buy, or the market, the market might still drop a little bit. You can be like, yeah, I know that, but I’ve done all of my figures. I know how this is going to impact my portfolio and my longterm financial future. And so you can make a decision based off that rather than what the media saying or sentiment or what someone else says. So I think there’s some really key things that people should take away from that. And I think if you don’t have a strategy, you should go ahead and get one because I think having a clear strategy is so key to assessing a property as a sophisticated investor or like and as a new investor as well, you want to buy the right first property that is going to match up with your strategy and your goals.

Fish or like, you know, suddenly this taken a lot of the pressure off is Sunday you’ve actually been teaching me and that is from a strategic perspective. I just, I don’t know, I just know that it’s a property cycle. I know it, sometimes it’s AARP, it’s flattened, it’s down. I’m not even investing anymore for longterm capital growth. Like, I, I just know based on the history that I’m going to get that and I’m so comfortable with that. I know some years I’m gonna lose 20% some years I’m going to make 20%. Most of the time I’m going to do nothing. My strategy now is so much more orientated to old cashflow so that I can replace my income and have choices in my life. And that’s taken all of the pressure off the short term ups and downs or when to buy, when to sell. Um, just because like this property is purely for cashflow. Like if I can get a hundred grand a year out of this property for the next 10 years, I can own it outright. And if I can own it outright for the rest of my life after that, it’s just an income stream for life. You know what I mean?

And that’s awesome. And so that completes today’s episode. If you’re there and you’re thinking, okay, I want to invest, but I need to get clear on my strategy or I need to learn about some of these due diligence points so that I can invest wisely. Then Ben and Simon and the team over at pumped on property do offer free strategy sessions, so they’ll get on the phone with you, they’ll talk about where you’re at, where you want to be, what’s your risk profile, and then they can help you design a property investment strategy that’s going to suit you. So go to on property.com.edu forward slash session and you can book a free strategy session with them over there. Get killed, clear on your goals, get clear on where you want to go so you can take the next steps. And then obviously you can choose to work with pumped on property and hire them as a buyers agency if you want. Or you can take that strategy and go and implement it yourself, which we know a lot of people have done. So check that out. Go to on property.com forward slash session take some of the tips and things that you’ve learned in this episode to not make some of the new big mistakes that Ben made when he first invested and to invest as a more sophisticated investor and hopefully become successful yourself. We wish you the absolute best in your property journey and until next time, stay positive.

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