From ‘exchanging’ to ‘settlement’: How this property investor acquired five 'connected properties' at once
1 minute read

From ‘exchanging’ to ‘settlement’: How this property investor acquired five 'connected properties' at once

From ‘exchanging’ to ‘settlement’: How this property investor acquired five 'connected properties' at once

by Bianca Dabu | October 20, 2017 | 1 minute read

Smart Property Investment’s Phil Tarrant has recently added a block of units with five “connected properties” to his already impressive 12-property portfolio, which consists of houses, units, and townhouses located in Western Sydney, Southwest Sydney, Penrith, Melbourne, Wollongong, and Brisbane.

Properties, property investor, property investment, investing, property portfolio, Western Sydney, Southwest Sydney, Penrith, Melbourne, Wollongong, Brisbane
October 20, 2017

The new asset is five different properties on their own titles and was already "exchanged”, according to Phil, “Now, we’re just nearing [a] settlement.”

While the terms “exchanging” and “settlement” might be familiar to seasoned property investors, they might strike as unfamiliar to those who are just beginning to explore the business of creating wealth through property.

According to buyer’s agent Steve Waters, “exchanging” refers to the initial signing of contracts between the seller and the buyer.

He explained: “You control the property—yet in a cooling off period—depending on what state you're in, of course, then you exchange unconditionally. That's when your finance is approved and [when] the solicitors approve the contracts and what have you.”


“That means when you are locked and loaded, so to speak ... you are [awaiting] settlement. Settlement is when you actually take ownership of the property,” the buyer’s agent added.

Once you take ownership of the property, either the investor or the bank gets the title, depending on the clauses stated in the contracts. From the moment the assets are settled, the property investor becomes responsible for, basically, everything—from paying the mortgage to maintenance and repairs.

“Settlement is when you pop the champagne corks, and say, ‘Yes, I'm the owner of a new property,’” Phil said.

The process

Both Phil and Steve agree that the process to arrive at the settlement of five properties is pretty much “a big nightmare”.

The property investor sought the help of his financial team to help him navigate his way through, particularly his mortgage broker, who assisted him in giving out “nearly 100 pieces of signatures” on loan documentation and other agreements on paper.

According to him: “It pretty much covered a boardroom table, right? It's mad. I can't remember how many. It's nearly 100 pieces of signatures and stuff that needed signing for this. It's not for the fainthearted if you're new to investing.”

Phil invested in a trust, a structure considered complicated by many property investors.

“It is a complicated structure that you are investing in. There are multiple documents that you've got to provide … [and] on top of that, you've got five titles, so [there are] five different loans [and such],” Steve explained further.

Aside from the whole chain of signing contracts, Phil and his team also went through pest and building inspections “on unconditional finance” and other financing agreements. While there seem to be a little too much “moving parts” in this new investment, it has been an enjoyable learning experience for the property investor and the professionals he surrounds himself with.

Phil shared: “The finance has been fun as well … We actually spread it across three different lenders—two loans with one lender, two loans with another lender, and one loan with one lender, who we already had a pre-approval with.”

“This been a deliberate strategy to do that ... There's a lot of moving parts here.

“I've had a lot of people batting in my favour. I've had accountants involved and mortgage brokers involved, and [buyer’s agents] working with the conveyances to make this deal happen. It's nice to actually get here and say, ‘We've got these assets.’”

Tune in to Phil Tarrant’s portfolio update on The Smart Property Investment Show to know more about the benefits of buying in bulk, how it benefits his portfolio, and the opportunities it will bring as a hub for economic growth and development.

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