podcast

The reluctant property investor: How necessity drove an 18-property portfolio

By Staff Reporter
Mark Frew

If you think you have to love investing to be a great property investor, think again. In this episode of The Smart Property Investment Show, TAFE teacher Mark Frew reveals the drive behind his impressive 18-property portfolio.

Host Phil Tarrant and Mark discuss property management, how to keep your investment portfolio organised and how property investment can buffer you during career uncertainty.

All this and much, much more on this episode of The Smart Property Investment Show.

Tune in now!

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Listen to other instalments of The Smart Property Investment Show:
Episode 89: Renovating as a couple: two young investors share their story
Episode 88: Everything you want to know about the short-term rental market revealed
Episode 87: BONUS EPISODE: Former Olympian shares his property development know-how
Episode 86: How a former Olympian found new sport in property development: Ed Fernon's success story
Episode 85: Q&A session with Paul Glossop – more questions answered!
Episode 84: 'How I overcame dodgy builders to manufacture $100k in equity in less than a month'
Episode 83: BONUS EPISODE: Top Aussie broker’s tips for surviving changes to mortgage lending
Episode 82: The investment strategy that could allow this 32-year-old to retire TODAY
Episode 81: BONUS EPISODE: Secrets of the Perth market uncovered: invest now or wait?
Episode 80: Q&A session: SPI answers all your burning questions

Full transcript

Phil Tarrant: Good day everyone, welcome to the Smart Property Investment Show. That's Phil Tarrant here, I'm the editor of Smart Property Investment, and more so, your host of the podcast, thanks for tuning in. It's good to have you here. I've got a new regular co-host, pretty much. He's back.

Tim Neary: Thank you, mate. Yeah.

Phil Tarrant: Tim Neary. How you going mate?

Tim Neary: Good mate. Thank you for having me back again, obviously I didn't do a too bad a job the last time.

Phil Tarrant: I thought you need some practice so I thought I'd invite you back.

Tim Neary: That's another way of putting it!

Phil Tarrant: Just for our listeners, I've worked with Tim for quite some time, he's one of my colleagues here. Tim heads up editorial of a brand of ours called Real Estate Business which is for residential real estate agents, and property managers and that sort of stuff, so, Tim has a very good knowledge of that part of the market, and the way agents think, so he's always good to ... get him on and for him to lend his experience, so thanks Tim!

Tim Neary: Thanks Phil, thanks for having me back.

Phil Tarrant: I've got another guy here, I property investor, which is good. We like them. Mark Frew. Mark, how are you going mate?

Mark Frew: Good thanks mate.

Phil Tarrant: So, Mark's been involved with Smart Property Investment before, many many years ago.

Mark Frew: Oh, not many.

Phil Tarrant: No?

Mark Frew: About six.

Phil Tarrant: About six years ago? Back in the day when you had ... How many properties?

Mark Frew: That's over five I think.

Phil Tarrant: Okay five properties. And today?

Mark Frew: I've got 18.

Phil Tarrant: 18 properties in your portfolio?

Mark Frew: Yep.

Phil Tarrant: So, you probably represent the point something percent of property investors with that many properties?

Mark Frew: Yes. That's true.

Phil Tarrant: How do you feel about that? Do you identify yourself as being a property investor? Or are you a bloke just getting through life, and you just own 18 properties?

Mark Frew: It's a funny thing you should say that, yeah! It's funny because I don't identify myself as a property investor as the primary person that I am. I am a teacher, so I think of myself as an academic. Probably investing is just this thing that I do on the side, even though I've got this huge portfolio of 18 properties, so yeah, it's kind of like a secondary thing. In fact, I listen to a lot of your podcasts and listen to people come up here and they say they've been so enthralled in doing property and a love ... you know, they love it ... they consume property investing day by day. To me, I am not really an enthusiastic property investor, I do it because I like the benefit I can get out of it, okay, and see what's going to happen in the future. But I know, because of what benefit I am going to get, I see the importance of doing it, and being serious about it. You have to do it like a business, so I do keep abreast with what's going on in the market, what's going on with my properties, but I'd probably do as minimum as possible, which is still a lot ...

Phil Tarrant: Yeah.

Mark Frew: -in a week, so yes.

Phil Tarrant: But you said you were a teacher?

Mark Frew: Yeah.

Phil Tarrant: What do you teach?

Mark Frew: I'm a TAFE teacher, I teach English as a second language.

Phil Tarrant: Okay, all right, look out here, he's an English expert. Don't pick me up in on my ...

Mark Frew: Oh right sorry, yeah!

Phil Tarrant: -my sentence constructions, and ... I don't know the difference between an adjective, a pronoun, a ... you know. I know I do it, but I don't know what they're called, so.

Mark Frew: Yeah.

Phil Tarrant: Which I think is a really dying art, personally. My job is words, right? Whether I'm talking it or I'm writing it, and I'm pretty good with writing, so is Tim. My sentence construction is excellent, but I have no idea what I'm doing. I don't know the terms and stuff. So, by day ... a teacher. By night?

Mark Frew: I would probably do investing, and that's the problem, because it does consume a lot of my time, as much as I don't like doing it. When I say "don't like" it's not that I hate it, it's just it's something that I have to do, but it's not something that I want to do. But I see the value of it. So you know I go to work, because I've worked the night shifts because it's very hard to get TAFE teachers who want to do nights, so I don't mind doing the night shifts. I might finish at nine o' clock, and then get home and I'm on emailing for the next hour or so fixing things, and that means I am kind of active, because not only am I looking after properties, I'm on all the EC, I'm in all the EC, member of all my properties, all the stratas. So every strata I'm an active EC member and always doing something, always answering all the questions, going to all the meetings. Even if I have to go up to Queensland or down Melbourne, I'm always traveling around ...

Phil Tarrant: That's good ...

Mark Frew: -so I'm really into it.

Phil Tarrant: Yeah, so, one of the reasons why I wanted you on the show today is I wanted to talk about this two lives that you lead, right. You have your professional life, but then 18 properties is going to require a certain level of management, and you could easily not think about that and just park them and leave them do what they want to do, but you're probably not going to grow your portfolio. But the fact that you're hands-on, it means that the continued connectivity with your portfolio, which is going to involve your thinking all the time and help keep the pedal down for you to continue to grow. I'm quite interested in the fact that ... I know that teachers like nurses, police people don't get paid as much as what they should do for what they do and what they give back to society ...

Mark Frew: Yes yes, I totally agree.

Phil Tarrant: -and I'm not going to ask you how much money you make, but, teachers’ salaries are average.

Mark Frew: Yes.

Phil Tarrant: They're okay, but they're average. You're not going to get mega wealthy being a teacher.

Mark Frew: No.

Phil Tarrant: Two questions. How have you been able to use the leverage of your job, and the salary that you earned, put you into 18 properties? And, what is the reason why you've gone about building this big, significant portfolio?

Mark Frew: It's funny because when I started I had come out of a very awful situation, moved into a unit and I had nothing. No money, and I just got a job at TAFE, and was only working a couple of hours a week. But because I was casual, I just said "Look, if you need a teacher, I'm available any time" so I was working all the time, and I was amazed, I was always called. Almost every day, I was working sometimes 12 hours a day. Every extra cent I saved, I just put away, so the other thing was I had to learn to budget, and that was one thing I have learnt. I've listened to other people on the podcast who actually say that it's very important that you budget, and it's true. You've got to be disciplined with your money, so you've got to say "Okay, do I really need that? Will that really make me happy? Or can I do without that, for example I probably won't go and buy myself a cup of coffee. I'd rather make myself a cup of coffee at home, something smaller. I won't buy food outside, so I had to be really disciplined.

That helped me build up the money. At that stage I wasn't thinking of investing because investing to me was just something that I'd do. This is an aside. How I got into it was my boss. He was a client of RPG's, he's not retired, but he was a client of RPG, and he used to come into the office, because I used to be there first thing in the morning, and he'd say "What are you doing with your money? You should invest in property." I said "Yeah yeah ... sure sure, and I hope you go away."

He did that for a whole year, and then finally I just, under the pressure, he just said "Look, just go to one of the RPG sessions, so I went to the RPG session and there was two things. He went to the RPG session and then he got me two books, 'Rich Dad Poor Dad' by Kiyosaki, and McKnight's book 'Zero to 350 properties in three and a half years', and he coached me to read them. Well, that's what clicked over. At that stage I'd saved up so much money, because I was just thinking of buying my own property, but that opened my eyes, and then I realised "oh that's how property investing goes" so that's how I got into the property investing, and I had a nest egg of close to a hundred ... Oh, I'll tell you a little story that I think is relevant.

I had about a hundred thousand, and the other thing was prior to this stage I had been a smoker, and I went and saw my doctor and my doctor said "You need to give up smoking." So I stopped smoking and I'd heard someone say "When you stop smoking, put money in the separate account, the amount that you'd paid for cigarettes, and see how it builds up." I'd forgotten about that, and so when I went to get my first property, I had about 20 something thousand dollars in that account. That was after six years of not smoking ...

Phil Tarrant: Just from giving up the lung busters. Yeah.

Mark Frew: -and I always like telling this story to encourage people to give up smoking.

Phil Tarrant: Yeah, it's a good story.

Mark Frew: Yeah, so I use that as a ... that was a deposit for my first property.

Phil Tarrant: So your smokes money was the deposit for your first property?

Mark Frew: Yeah it was! So yeah.

Tim Neary: That's a first. Good.

Mark Frew: Yeah, so I like telling that story.

Phil Tarrant: Yeah, it's a great story!

Mark Frew: So that was it. So once I'd gone to RPG and they bought me my first one, so I had about a hundred thousand dollars with that first ...

Phil Tarrant: Just for our listeners, RPG is ...

Mark Frew: Right Property ... Yeah

Phil Tarrant: Right Property Group, right. Buyers agency.

Mark Frew: Yeah sorry, I'm throwing acronyms in, so. Anyway yeah, so I bought my first property ... actually with that 100,000 dollars I bought my first five properties, and from then on I've just been using the topping up, and drawing money out of the equity of the properties to buy new properties, and it's just been going on like that.

Phil Tarrant: So for you on a teacher’s salary, the rational for you to invest in property was that you wanted to be ... a millionaire? Did you want to be comfortable, what was the idea?

Mark Frew: No. It's funny because it's actually two things now. My original plan, just because I thought it was good. It's nice to have a back up. All I cared about is that it's a nice safety net. If something goes wrong, okay, I had no reason to think anything would go wrong. But now, I don't know if you know what's going on with TAFE, we don't know where TAFE is going, so I'm starting to get worried about my job, so, about a year ago ... about two years ago we went through a process where they started reducing teaching staff, so we had about 150 English teachers, and were just down to 100, and there's rumors that they were going to do that again, so now I've different reasons to think that might be what saves me, that I'm having the properties. So that is actually what's driving me to, okay, at this stage.

Phil Tarrant: Okay. Good driving.

Mark Frew: Yeah.

Phil Tarrant: It's good to have options, though, I guess, and this is something that we talk about a lot on the show is that having a property portfolio gives you options in the future. I get asked all the time "Why am I building a big property portfolio?" And I say number one, because it's fun and I enjoy it and I'm good at it, and I like to win, I like to be good at it. But number two, it's got to give me options in the future, for me to choose what I want to do, and my intention is to work until the day I die because I enjoy working, but, if you have a portfolio that's generating you income, that gives you the option to potentially not work. That's a nice option to have, it's a good to have rather than a need to have. In your situation, it's one of the variables that if you're concerned about potential employment, the fact that you do have some fall back in that situation ...

Mark Frew: Mm-hmm (affirmative). Exactly. Exactly.

Phil Tarrant: So, have you found the financing of 18 properties to be a difficult process, based on your serviceability of those loans, and what the bank views you as an investor, or a good borrower?

Mark Frew: It's only now that I'm kind of at a block, but no, back in the past no. It was quite easy, except for the one thing that was I was with one bank, and I got to five properties and then ...

Phil Tarrant: Was that CBA?

Mark Frew: No.

Phil Tarrant: Okay.

Mark Frew: That was ANZ.

Phil Tarrant: Oh right. So you hit a million bucks and they started going "Oh... yeah..."

Mark Frew: I'll tell you exactly what happened. I bought my fifth property, and I went back to Right Property Group and I said "I'm ready for the sixth one." And I went back to ANZ, and went and spoke with the same manager that I had been with before. Anyway, he said "why do you want another property? Haven't you already got enough? You've got five properties, that's enough." And I kept thinking "But you're not my father ..." If I were to get a million properties, I can do it. So he just blocked me.

Phil Tarrant: So was that just based all on policy? Or was that just based on his personal views?

Mark Frew: I have no idea. I have no idea. All I do know is that if there is one regret I do have, If I had to start again I would go back, I would go and see a broker. I think that's just valuable, go and see your broker because what happened was I was actually banking with ANZ, that's my day to day bank. Fantastic on a day to day, everyday banking. But, when it comes to investing, they're not really ... I don't find that they're the best ones to go through with investing, so I wish I had gone through a broker right from day one, and allowed them to ...

Phil Tarrant: Do you have a broker now?

Mark Frew: Oh yeah, I've got Ross Le Quesne, who I've heard on here.

Phil Tarrant: Oh okay, Ross. He's not a bad broker.

Mark Frew: So he'd be good. So, after my fifth property I went to him and that's how I got to my 18 properties is through them

Phil Tarrant: Interesting, so, serviceability is okay. Do you sleep well in bed every night? Or do you sit there with that little property voice in your head saying "Shit, shit, shit, shit, shit"

Mark Frew: No, the only thing that worries me is more what's happening with TAFE. What's happening with my investments ... see I don't even know ... if I lost my job at TAFE, the properties would look after themselves. I'm actually a little bit positive now, but it's not positive that I can live on the salary, but it's like, if I lose my job, all I can do is on the side rumbling in the background. I don't have to touch them or selling properties or anything.

Phil Tarrant: What if say ... TAFE closes forever and you're out of a job. Your 18 properties right now, what is the total value of that total portfolio?

Mark Frew: I don't know off the ... I estimate it's around about, somewhere between four and five million.

Phil Tarrant: Okay, four and five million bucks, yeah? Okay. What's your total debt position on that?

Mark Frew: Oh I couldn't tell you. What I do know is that I'm earning a salary of 14,000 dollars a year in the positive.

Phil Tarrant: Positive, okay.

Mark Frew: -and that is if I have got all the properties with tenants in them, and the unfortunate thing is I've got two properties, and I'm getting a tenant in and one is coming out.

Phil Tarrant: But sort of your LVR position, where would it be? 60, 70%?

Mark Frew: Yeah 70 I would say.

Phil Tarrant: 70 odd percent? Okay, so, that's 70 percent, so you've got a bit of money kicking around there in terms of equity, so if you had to dump the lot and turn it to cash?

Mark Frew: I'd be fine, I know I'd be fine, that's much ...

Phil Tarrant: You can live off that money?

Mark Frew: Yeah. I can no problem. Another thing too is that I am not a big spender. I'm not into big cars, and big houses, so I'd survive because I'm not a big spender.

Phil Tarrant: So this is your survival situation that's like ... it's funny how you frame it. I speak to a lot of property investors and we get all walks of life in here, Mark. You get all young hotshots that drive around Rolls Royce’s in ten years time, or Ferraris and have jets and that's their driver, and I'm not going to say if that's good or bad. If that's what they want to achieve, great, go on, do it, find out a way to do that. Then you get a guy like yourself in the studio who is happy, you don't want the fancy cars, you don't want the fancy holidays, you're just happy doing what you're doing. You get a lot of satisfaction out of that, and property for you is a safety net?

Mark Frew: Safety net.

Phil Tarrant: -Yeah, safety net. It's a safety net for you, so that's how you've framed it, and obviously being philosophical but, the fact that that's the way that you see the world, how do you think that has shaped the way you've gone about building your property portfolio, or how you've gone about settings goals as you progress through it? Because you said beforehand that you went from 12 to 18 in like a year or something or other.

Mark Frew: Mm-hmm (affirmative), yeah.

Phil Tarrant: Why? Was that a "Hey, I'm going to do this for this reason?" Or was it just happen?

Mark Frew: No no. My plans have ... I've heard that people like to come on your show and they've got these really defined plans like what we're going to do by the end of next week. Now, that's not the way I view it. I know what my aim is, and I haven't put a time on it. I have a very vaguely, I'd say within the next five years, so I have actually got the 18 properties, and I know what I'm genuinely trying to achieve, probably within the next five years, is to be able to consolidate all those properties in such a way that I can have an income I can rely on, and then my work at TAFE is ... I go there because ...

Phil Tarrant: Because you enjoy working there.

Mark Frew: Because I like working ... yeah teaching. Because I like teaching. I know where I'm going, I know what I want to do, so I know ... at least I know for the next year this one property I'm going to build a duplex on it, and I've got a few more plans for getting a few more properties that I can put like a granny flat on, so they can increase the ...

Phil Tarrant: The yield.

Mark Frew: The yield, yes, so by sometimes within the next five years, that is if all things go well, my properties will be generating enough income so that I can survive on.

Phil Tarrant: So it's very organic plan, sort of quite fluid. It's funny, like, I remember when we had our kids. You know for all that hospital stuff, you set up a birth plan, and we went "Birth Plan? What's a birth plan?" You paint a picture exactly how you want the birth of your children to be, and some people get so passionate about it, and you know what? Most times it never works, and people get really, really disappointed about it, and I think a property plan is, not that that's similar I don't know where I'm going with this, but the fact that if you plan as much as you can exactly to the letter how you want it to go, it's probably not going to do that, you probably need some scope and flexibility to be able to ...

Mark Frew: Exactly.

Phil Tarrant: You need to know: This is what the outcome is, and I want this, but you're going to have to zigzag along the way to get there, because things change all the time. Much like a birth plan, you know, people who get obsessed by it go "Oh I want this song to be playing exactly as my child is born ..." it never happens, right. But you need to be responsive enough to change and evolve, and it sounds like you have a very responsive, fluid way in which you ...

Mark Frew: Well I've had to because where that really kicked in is the day that they announced, since I had been working at Padstow TAFE, they said we had to all reapply for our jobs, and then they'd just move us all around, and I didn't know what was going to go on, so I was like "Don't buy more properties, just hang in there and find out what's going on, where everything is going." Then they moved me to Bankstown, now I'm down Bankstown TAFE and, so things have kind of settled, and then I got back into it, so yeah I realised ... that's why I've got the general idea and I'm glad you're at the end, and I agree, the analogy of the birth thing is really good, because I'd have a general idea, I know where I'm going, but I know that I can shift if I need to. I'm not ... I think too, if you plan too tightly it can actually frustrate you if you don't reach your goal, and so if you have a general idea, so I know I'm going in the right direction, I'm still going there, and I know I'm going to get here, but I'll let life happen in between, so it's not going to affect me too much.

Tim Neary: That's real gold Phil because we hear that all the time from the top agents, as well. Talk about having this plan, but using this plan more as a guide, and having that ... being light enough on your feet to change, and to adapt to life's situations as they happen, so it's really good to hear you say that, and you were talking off air as well about, I mean you're 18 properties in but still having the wherewithal to pick up all the tips, and learn new things as you go along, so that's real gold, and we see that a lot happening with the top agents as well Phil.

Phil Tarrant: Yeah, absolutely, everything in life you've got to be quite fluid about it. Well, that's what I've always done, rolled the punches right and control what you can, don't worry too much about what you can't control. What TAFE’s going to do to you, you can't really control that after all, but you can be responsive to what happens, and you can begin to make those changes.

In terms of the management of your properties ... do you do it all yourself, or do you have property managers?

Mark Frew: No I manage all of my properties ... Oh no, sorry, I have property managers who manage the properties. What I do is I manage the managers. That was good advice from RPG, Right Property Group, they said that it's good that you've got the property managers, but it's good that you manage the managers, which is very true. Right from the word go .. the first six months, I remember the first six months having the first property and then the rental statements came in ... I couldn't read them. I had no idea what it meant, and I used to look through it and though "I don't know what this means", and then after that six months I actually rang the property manager and said "Look, can I come in and can you explain to me what the rental statement means?" She was lovely. She went through and she explained in all details, all six months, and she explained in all detail. From then on, I knew how to do ... I knew how to read all of them and I'd make sure I'd do it because you'd be amazed the number of mistakes they make.

Phil Tarrant: Yeah.

Mark Frew: It is just outrageous. When I got my third property, or fourth property, I'll never forget within the first month, they had to do some carpet cleaning. It was going to cost $160. So I got my rental statement, and I religiously, every month, at the end of every months, so it's the first Sunday after we change to the new month, I go through all my rental statements and put them on a spreadsheet. It takes me about an hour, an hour and a half to do all of this. I check all the rental statements and I'll never forget the first one. They charged me $160 dollars one month, and $106 the next month. I rang them and said "Is that a mistake?" And they went "We've made a mistake and we've realised that, we'll credit to you next month." Then they said to me "You're amazing because people don't check their statements" and I thought people must have their ...

Phil Tarrant: Do you think it was a mistake?

Mark Frew: I don't know. This is the thing. Mitch, the guy who was on here who started property investing from the fishing trip. He told me ...

Phil Tarrant: Mitchell, was that Mitchell Burgess?

Mark Frew: Yes. He told, because I met him a couple of months ago. He told me a story, he said "No they sometimes just put things on your account ..."

Phil Tarrant: He's a cynic though.

Mark Frew: Yeah.

Phil Tarrant: -Mitch. Good, great guy but he questions everything you know.

Mark Frew: Look, I have to give them the benefit of the doubt, maybe they did, maybe they didn't. But, I've checked it, and a second one was just recently. I got a statement from up in Queensland, they had council rates and it was like, $1,700. I thought "What?" So I rang them, and again they said "Oh you're amazing, you check your rates. Look, what actually happened was we actually forgot to pay the last quarterly, so we've put the two together." I was going to lose my temper and I thought "losing your temper is not going to do anything." So I just said "Okay, look, can you just make sure the next time you don't forget?" Same agent, only a couple of days ago, I got a statement, they had gone in to fix the toilet of the property. "If you didn't know we were going in to do that, please give them a call." I gave them a call and said "I don't remember you ringing me to tell me that we need to fix the toilet." And the lady was all apologetic, and again I was going to lose my temper but I thought "No, I'll just take it cool." But I just said "Look, could you please make sure that next time you let me know that you are going in to do these things."

But that's the thing. Sometimes I get the statements, so every month I go through all the statements. As I said, it takes about an hour. When I first started doing it, strangely when I had five or six properties, it used to take me about three or four hours, but I've worked out how to do it so I can do it within an hour, and one of the reasons why it took me so long is because I used to print them out, and I thought "Nah, that's a waste of time" so what I do is I've got two computers, I got my normal desktop computer, and I've got my laptop with my email open, and I go through and just put it on a spreadsheet for each month. Anything that looks untoward gets turned around to my other computer and I send an email straight away saying "Can you please explain this?"

Phil Tarrant: And so the Mark Frew system is just something that you've created yourself that works for you?

Mark Frew: Yeah and no, it's the spreadsheet is something that, again, Right Property Group suggested. They suggested two things, they suggested having a Liebig folders, and a spreadsheet. I'll tell you about the Liebig folders because what happened was the first time I saw my tax account, Munzurul I took my Liebig folders, all beautifully organized and color-coded, and I was hoping that Munzurul would say "Oh Mark Frew, you've been doing excellent work, A+"

Phil Tarrant: A+! And a smiley face!

Mark Frew: Yeah, exactly.

Phil Tarrant: That's a teacher thing.

Mark Frew: Very much a teacher. Anyway, then he said to me "What you really need to do is just to create a spreadsheet." So I thought "Okay" so that's when, it was Kate from Rock Property Group, she sent that spreadsheet over to me and it just works fantastic, so every month I do it for all my owned properties. Anyway, the next year I went back to the tax agent and said "It's going to be a bit difficult ..." I think I had eight properties by them. I said "It's going to be difficult carrying all my folders" because I don't live very far from his office, and he goes "no no no, you just send me the spreadsheet, just email me the spreadsheet. You don't have to send the folders." And I thought "I put so much work into these folders, they're beautiful."

Phil Tarrant: Having ... The thing is thought that it's a process. The way your mind works is that you say you've probably got a folder for each property, and a section for each ...

Mark Frew: Yes Yeah yeah ...

Phil Tarrant: That's just how you compartmentalize and segment your thought process, so if that works for you, that's okay.

Mark Frew: It helps you to know where things are. If you ask me "Have you paid the insurance for this property?" I probably couldn't tell you, but I could get the folders and it's there.

Phil Tarrant: But you know where it is, it's the Google of your property portfolio, right? You might not know the information, but you know where to go to get that information.

Mark Frew: Yeah. The other advantage of it too, I mean, I do it every month, so for 12 months you do it, and when it gets to the 12 months just email it to my tax consultant, and because he's got all the spreadsheets there, that makes his job easy, it makes my job and his job easy, okay. I've had to be strict, I've had to be disciplined every month to it.

People talk about ... I hear people talk all the time about being disciplined with money, but I don't hear people being disciplined with time, and you do have to put a bit of time, so I've got to put time aside. This time is for doing my property ...

Phil Tarrant: So you do that the first Sunday of every month?

Mark Frew: Mm-hmm (affirmative).

Phil Tarrant: So do you enjoy it or is it a chore?

Mark Frew: No, it's a bit of a chore but I know I have to do it. It's like a necessity, and Sunday nights, it's the night I iron my clothes, polish my shoes, prepare my lessons for the week, so it goes into "Okay, that is my Sunday preparation." So.

Phil Tarrant: Okay, makes sense. That's good. I think once you, for our listeners, only with one or two probably, you do get the rigueur of understanding, and everyone's different but understanding how you can best manage your portfolio and the tools you need to do that is essential from the absolute get go, because once you get to 18 things can come off the rails.

Mark Frew: Oh exactly.

Phil Tarrant: Pretty quickly.

Mark Frew: I'm glad I did it right from the beginning for that reason. When you have two or three, like you can trial and error too, you've got ample time to go "Oh does this work? Does this work? Does this work?" By the time you get to ten, it's going to be a bit of a monster, then 12, then 18. But I say that because I've been doing it for so long for the last six years, you just streamline it, so this works, this works better, this works better.

Phil Tarrant: Yeah, it's got to work for you. You can borrow other people's ideas and ways they do that, but it's got to be personal to yourself. There's some really good software around these days also that does this sort of stuff. I get someone to do it for me, it's the way I manage it, which works for me.

Mark Frew: Yeah, that's fine.

Phil Tarrant: It's really interesting. So, what's the future? We're going to have to start winding up pretty soon, what's the future for you mate?

Mark Frew: Future? I can now tell you what my near future is, I just know that the next plan that I have in mind which is going to ... because I really want to have a bit of a break for the end of the year, but I know the first thing I am planning on doing at the beginning of next year, I've got a plan for one of my properties to put a duplex on it, that's, when you're doing building that's really a big thing, it'll absorb a lot of my time, so that's my first step next year, so I really need to start looking at getting finances and start working out how I'm going to approach it.

Phil Tarrant: Yeah.

Mark Frew: So that's my short term. Long term I couldn't tell you right off the top of my head.

Tim Neary: I'd be really interested to know, we always talk to people about the learnings they have, the top tips. Having been in the business a little while and built up this nice portfolio, if you were talking to new investors coming on board, what would be your top tip for securing finance? Let’s start with that. What would be your top tip for securing finance.

Mark Frew: Securing finance? Be disciplined with your money. So you have to say "Okay, what really do you enjoy doing, what can you do without?" And go and see a broker.

Tim Neary: Okay, and I was going to ask you what's your top tip about a broker? What do you look for in a broker?

Mark Frew: One who ... they've got to be in property investing themselves, okay, so they have to know the game, and they themselves are successful.

Tim Neary: That's good advice mate, what about renovations?

Mark Frew: Oh I hate renovations.

Tim Neary: What have you learnt?

Phil Tarrant: Don't do them he says.

Tim Neary: What would you think that you would not do?

Mark Frew: Well I am going to answer this question this way, I hate renovations, but one thing I have learnt that is if they are a bonus, if they are worth doing, I've done a few renovations, I realise I don't have to do them, okay, just make sure I have got a good team of trades people who can do them. My idea is because I don't like doing renovations, I try to do it as little as possible ...

Tim Neary: Right.

Mark Frew: -so I say "okay, what really do I need to fix, what can I get away with?"

Tim Neary: Yeah mate, and that goes back to what you were saying earlier to get the builder to do it, but manage them.

Mark Frew: Yeah.

Tim Neary: Manage the managers? Yeah.

Mark Frew: Yeah. And if I can I'll go out and have a look, and see how things are going, because the thing is I'm not a very manual person, I'm not very good with my hands but if it's close by I'll go and have a look, some of the traders are really, really nice because you can ask "What are you doing, just so I can get my head around it" to know what they're doing.

Tim Neary: Okay, just one last question from me, just people coming in, they've got one or two properties already in their portfolio, they want to move on like you did, what would you be the thing that you would say "How to do that? What's the next step"?

Mark Frew: Oh that's a hard question to answer because it depends on where they are in their life, what their plans are, yeah ... it's a very difficult question to answer.

Tim Neary: Okay, yeah yeah yeah.

Phil Tarrant: Everyone's different.

Mark Frew: Yeah.

Phil Tarrant: We didn't actually talk about just where all your 18 properties actually were, just one quick second on portfolio diversification, where are your properties?

Mark Frew: A lot of them are here in Sydney, one in Orange, four up in Queensland, inner Logan and Ipswich area. There's two in Adelaide, and two in Victoria.

Phil Tarrant: Final question from me, what's the biggest lemon that you have in that portfolio? Is there one property that you just go "what was I thinking?"

Mark Frew: No, to be honest with you, they're all good, I can tell you which is probably the slowest moving.

Phil Tarrant: Okay, if that's what you're referring to as the lemon, yeah that's okay. Orange?

Mark Frew: Yeah, I think it's the Orange one, it's slow moving, but the thing is at the same time it's not bad. It's kind of ...

Phil Tarrant: You probably get a good yield though I would imagine at Orange?

Mark Frew: Yeah.

Phil Tarrant: And I think that's probably a really good way to finish this podcast is when you start generating up a large portfolio of 18 properties, you're going to have different properties at different stages, different levels or maturity, different rates of growth, different yields, so you need to view it holistically, about what the return you're getting from the entire portfolio, but still look at each individual property and see what role do they play in that portfolio, so your Orange property might not be going up in value as fast as other areas where you have properties, but the flip side of that is it probably delivers a good yield.

Mark Frew: Yes, yes, yes.

Phil Tarrant: A positive cash flow as well. So, every property in your portfolio has a role to play, and if you've got any that are real dogs or lemons, sometimes if you can understand the role they play, that's okay, but if they're just keeping you back, sometimes it's good to just flick them, so ...

Mark, really appreciate you coming in, also appreciate the work you're doing at TAFE, helping to educate ...

Mark Frew: Mainly migrants.

Phil Tarrant: Migrants, and new migrants, and hopefully steeling some of the values around property investment, and the great Australian dream with them. No it's good mate, it's commendable, I think, and a lot of our listeners, believe it or not are teachers. It's really good to see and hear, I remember, I think we were chatting about it the other day, I can't remember where it was but, during budget I was down in Canberra for all that sort of stuff, and I think their federal treasure was talking about, and I think it was a debate around negative gearing. They said "One in four police are property investors."

Mark Frew: Oh okay.

Phil Tarrant: And then they linked that into nurses and teachers, and this is the main investment community so, keep it up, keep it going, let’s get you back when you've added another ten and let’s talk about how you've done that.

Mark Frew: Okay cheers, no worries.

Phil Tarrant: Which is great. Tim, mate, thanks for joining me again.

Tim Neary: Thank you again Phil, always good.

Phil Tarrant: Very good, remember to check out SmartPropertyInvestment.com.au, we're going to write out some articles around Mark's story, and hopefully get some pictures of your portfolio, would be good to put up there.

Mark Frew: Yeah, sure.

Phil Tarrant: Yeah? Sweet. Remember to follow us on all the Facebook stuff, Twitter, LinkedIn. You can follow me @PhillipTarrant on twitter if you'd like. Remember to leave those five star ratings on iTunes. The more you rate the podcast the more people will listen to it and help us build the community around property investing and the way in which you can go around doing it, like Mark's story to help create wealth, overtime and for Mark it's very much a safety net, for other people it might be to drive that Ferrari, but we're all created differently however, let’s all get together and keep sharing our stories so we can all become better property investors. Tune in next week, we’ll see you then. Bye, Bye.

 

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