‘How we achieved financial security through property’ – the Property Twins reveal all

‘How we achieved financial security through property’ – the Property Twins reveal all

By Tamikah Bretzke
Sana and Mona, the Property Twins

No matter who they are, everyone wants a place to call their own.

In this episode of The Smart Property Investment Show, the Property Twins, Sana and Mona, reveal how living in low socio-economic conditions pushed them to succeed in the world of property and secure the strong financial foundation they had always dreamed of.

Tune in as they explain how buying cheaper-end properties enabled them to quickly expand their portfolio and more effectively manage their cash flow, how their love of property inspired their careers in mortgage broking, as well as how their working experience enabled them to navigate changes to mortgage lending and position their portfolio for future success.

You'll hear all of this and much, much more in this episode of The Smart Property Investment Show!


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Listen to other instalments of The Smart Property Investment Show:
Episode 106: How ice addicts potentially ruined an investment
Episode 105: New podcast: Investor reveals the opportunities for migrants in Australia
Episode 104: New podcast: Q&A session with Paul Glossop – more questions answered!
Episode 103: Special Episode: Phil and Munzurul talk steering the growth and development of portfolios by managing cash flow
Episode 102: Investor reveals how to find the perfect property manager
Episode 101: From 12 to 100 properties – how this investor will achieve his goals
Episode 100: Property investor talks research, teamwork and balance in his portfolio
Episode 99: Portfolio update: SPI opens its books to reveal all the nitty-gritty details
Episode 98: Buyer's agent forecasts what’s to come for Aussie property market
Episode 96: Tips for tackling pest and building inspections head-on

Full transcript

James: Hello and welcome to The Smart Property Investment Show. I'm stepping in for Phil Tarrant today. My name is James Mitchell, and I'm the regular host of the Elite Broker podcast on our Adviser title. Here today to talk about property, and also actually mortgage broking as well. We've got some very special guests in the studio today, Mona and Sana, the Property Twins. How are you guys doing?

Mona: Good, thank you. Hi James.

Sana: Hi James, good.

James: Awesome, well thanks for taking the time. I want to cover a few things today. I want to cover mortgage broking, and what you're doing in that space as brokers. But I want to start off by talking a little bit about property and, I guess, how you got involved with property investment in the first place, because it sounds like the mortgage brokering was a natural evolution out of your love of property. So maybe, paint me a bit of a picture about how you got involved with property?

Sana: So, James, we moved to Australia in year 2000. We were just under 15 years of age then, and moving countries is a huge personal challenge. And we were living in a low socioeconomic area of Sydney, and we just saw people around us living really good lives. And it really pushed us, and made us wonder, what if we could buy more than one house? And eventually get into our own home, because Sydney was always considered very expensive. So it was a natural thinking. The property goes up, and we should consider it.

James: Yeah. So, it was just a natural, aspirational feeling that you had, that you wanted to get to the market.

Mona: Yeah, we just wanted strong financial foundation for ourselves and our family, and that was one of the key drivers. We wanted that security, to be able to call a place our own. And that's what really drove us in initial days. The focus really, obviously, was our education at that time, we didn't have the resources or the funds.

Sana: Yep, and feel that Australia was really home, and to have our roots here.

James: That's good. It's funny because I read many reports, being a journalist working in this space about property and investment in Australia, and property investment overseas. It's funny because property fundamentally, it's a necessity in terms of shelter, you know? But obviously, it's become this traded commodity, and Australia more so than anywhere else, I think. Where did your journey, or your property investment story ... But maybe tell us about the first place you bought? And then, I guess, if you caught the investment bug, and you wanted to start growing it from there? What was the first place?

Mona: In year 2009 we had already started our corporate careers. I'd been working for two years or so, and Sana had been in her corporate role for a year and a half. I was dealing with a lot of high net worth individuals in my role, at Price Waterhouse Coopers at the time. I saw my clients, and I thought, "Well, you know, if they were doing something then I could do something as well, and I could establish myself." It was really inspiring to see.

In year 2009 we obviously knew about The First Homeowners Grant, and a lot of our friends had already started buying their first homes, but it had...

James: That was when they doubled the grant, didn't they?

Mona: They did for a short period of time.

James: For a short period of time.

Mona: That's right. At that stage we were actually just celebrating our brother's 19th birthday. And he said, "Well, if I was working full-time, then I would just go buy my first property." And that really clicked in that moment, that why not ask, "Why can't we do it at that stage?"

Sana: Yep, and the research started. We managed to buy our first property in the Parramatta region of Bella, and that was one of our first two properties. So, the second one was bought about seven or eight months later, in the Blacktown region, again of Bella. So, we focused on the lower end of the market, and cheaper properties, because the entry price was low. And the cashflow meant when we did rent the properties out, they could look after themselves.

James:  With that first one, obviously at the benefit of The First Time Owners Grant, did you have to put much of an outlay in terms of the deposit?

Mona: Yeah, well, prior to that, I personally wasn't a good saver, because I loved shopping and shoes.

James: Nothing wrong with that.

Mona: Oh, nothing wrong with that, but obviously, now looking back it's like a need it verses want question. Obviously I did buy a lot of shoes, but we didn't go travelling and all of that. So, we did have some savings.

James: So you made some sacrifices.

Mona: Yeah, that's right, and most of the savings did have to go for the property ... Properties more like it, yeah.

James: Give us an idea in terms of the timeframe. So, you bought your first property 2009.

Sana: Yep. End of 2009.

James: End of 2009. And where did you go from there, until, I guess, present day? How many properties have you got now? And are they co-owned?

Sana: There's a mix of them, and we bought 10 properties overall, and eight in Sydney, and two in Brisbane. We did sell two of our Sydney properties though, with the boom and the growth that's happening, it made sense to do so. So our first property was late 2009, November, and then we bought the second one in July. That was bought as a first home in ... I bought that one as my first home, in the Blacktown region. After that we...

Mona: Yeah, after that, obviously the market was stagnant at that stage and there wasn't much happening, whilst we were saving up funds along the way. But then we did tidy up our first two properties, so we could extract some equity. So, we just did some paint and carpet and blinds, those sorts of...

James: Cosmetic, yeah.

Mona: Cosmetic runners, yeah. To extract some equity so we could go onto our property number three and number four.

Sana: So, just in terms of numbers, the first one was around the 330K mark, and the second was around 190K, and third and fourth were again Strata properties in the same region, around Blacktown. And again, in the 200s we purchased them, and today the same properties would be worth maybe 90 to 100 per cent more than what we paid for at the time.

James: Wow, that's massive. So really focusing on that Western Sydney region?

Sana: Yeah, between Parramatta and Penrith.

James: Which really, I guess, boomed over that period?

Sana: Yeah, like most of Sydney, I would say. But our key thing was the cashflow side of things, because we did not want the properties to be impacting our lifestyle. At the same time we wanted to make sure the properties were well located, in good locations. Close to transport and the shops, and all those things. And that's formed the foundation of our property strategy, where we make sure that properties are close to the train station, or a big shopping centre. Because, that's what's going to drive the demand down the track.

Mona: Yep, especially with re-zoning, et cetera. Often people get hung-up on a pretty property, or out in the suburbia, but that's not going to get you anywhere. And it clicked in a moment when we were looking in Brisbane, and I talked to an agent. And we were almost arguing about which part of Brisbane was good. And he said, "But what do you want the property to do for you?" And in hindsight, all our properties have been within a kilometre of a train station, or a shopping mall. Because we know these areas are going to get re-zoned, not some suburbia property, or a house and land package.

Sana: But not so much for Strata properties. Strata properties won't, but the houses that we have in Sydney, so there's one out west. So, that property on a 700 metre square block, 800 metres from the station and similar distance to the West Point or West Field shopping centre. So, we expect it to be zoned, it was zoned under the old rules, under the Blacktown Council rules, where we expect it to come back at some stage. And also, a bit like our home, where we reside, it's also within a kilometre of the train station.

James: So your primary place of residence, your principal place of residence, your owner/occupier property. You've got a mortgage on that? You don't rent and have your investments elsewhere?

Mona: We like to live in our own home.

James: You like to live in your own home?

Mona: Yeah, I know rent-vesting is a big thing these days.

James: It is yeah.

Mona: But we just like that security of having our own home.

James: Of course. Which goes back to your original observation, and your original intention for getting into property in the first place, to have that security.

Mona: Definitely, yeah.

James: That's really good. So, did you use a broker throughout the whole process of your investment journey?

Sana: Not initially. You don't know what you don't know. And we didn't know any better. In hindsight, it would have been good to work with a broker for our initial couple of purchases, I think at least. Four of them we did not work with a broker.

James: So just went straight to the bank?

Sana: Yeah.

Mona: Yeah, straight to the bank and not ideal looking back, it was a costly decision.

James: Okay, that's interesting. What made you decide to go use a broker? And how did you find that broker? Did you just jump on the internet, or did you ..?

Mona: We've gone through a few. We were on the Property Charter Somersoft forums, online forums. There were a number of brokers, and a lot of investors working with brokers. So, that's where we met our brokers.

Sana: Yeah, but it also taught us what we needed to do differently, when we did this. And it wasn't even in our dreams that we will ever become mortgage brokers. Yeah, we love property so much, and the numbers side of it, that it's a natural next step.

James: So, tell me about being mortgage brokers then? Because, obviously this is my ... Call space, running the advisor and mortgage business, and our mortgage titles here. Obviously, there's been a lot of change in the broking spaces, more change on the horizon. In terms of the ... Just from the lending perspective, and the regulatory perspective, it's been ... You've gone from having a single product to having four different products now. So, obviously it's become a lot more complex. How is it been navigating that as ... People who are relatively new to the broking space, even though you are property investment. You've got your background there.

Mona: That's right. There's been a lot of change, and we are seeing that day in, day out, because a new change comes out every other week. So, navigating that for new investors is really the right lender selection, whilst the big lenders are really on par with each other in terms of serviceability side of things. But, some lenders are better suited to your owner/occupier purchases. Because they have flexibility around how you can reduce your none tax deductible debt, and maximise your tax deductible debt, which will help you move forward.

Often we find that people are focused on the interest rate side of things, but a lender may have a fantastic rate, but you need to look at the whole big picture. If you are with a lender, which may have a fantastic rate, but they may not allow you to extract equity down the track to move forward with your investing side of things. So, having that selection right up front, so that you can move in a strategic order with lenders.

Sana: And the ability to extract equity doesn't have to be for property investment purposes. It could be other personal investments, like shares, et cetera. So, that can in turn assist you in bringing down your homeowner/occupier debt. And, yeah, just being very strategic as Mona said. And not going to the lower tier lenders upfront, purely because of the way they assess you on your repayments, and leaving them to later.

And especially if you're in the Lenders Mortgage Insurance territory, if you are going to pay LMI. And if you end up going to the lender of last resorts because you want to leapfrog and make that decision quicker, we would say just reassess it, and take a step back and say, "Well, should I really be maximising my borrowing with the big lenders first?" And then moving down that route, because that could be a lot big- ... Opportunity costs in the long run. Because you can't easily refinance back, and you lose the benefit of that Lenders Mortgage Insurance.

So, you need to look at the big picture, rather than just one product, or one rate focus. Because, if it's a long-term strategy for you, then you need to take that into account.

Mona:   And also how we work is, we really look at building roadmaps for our clients upfront. So, someone may own a home about say 900,000 or 950K, let’s say. At 80 per cent loan-to-value ratio, that's about a refinance of 760K. And they may not owe too much on it if they're say, owing 300,000, and have another 460K equity to be investing. So, what we do is then, on paper, really put down, we'll go to this lender for the home. And then lender A, B, C, D, in that order, so you continue maximising what's really possible for you.

James: That's really good.

Mona: And knowing that upfront. Whilst we have no control over the lending policies or where their rates go. But, if you're making that strategic choice, you're keeping a lot of doors open for later investment.

James: I guess, with your background, and the amount of properties that you've invested in, and purchased together, and going through that journey of going to the bank first, using various brokers. You know the process, you know what I mean? And so, I guess, that must be of huge value to your clients now, because essentially you're sitting in the clients position as well as being the broker, do you know what I mean? So, other than, let’s say, brokers who haven't really had any sort of specialisation, they've just taken loans as they come. And then all of a sudden they're looking to service and investors. I can really see how that would be adding value.

Mona: Yeah, definitely. We are taking our clients on a journey. It's not about one transaction at a time, it's about the big picture. And really educating them through the process, through the decisions that they are going to be making. Whether it be principal interest repayments or interest new repayments, just talking through the pros and cons. The rates, and how it's impacting them, and what their plans are in the next six to 12 months. Because, there might be upcoming things in their life. So they might have a cashflow consideration that we need to take into account. So, definitely ... So, we do like that ... Our value add.

James: Yeah, definitely. I'm always championing brokers, we support the broker community 100%, obviously, with The Advisor. And, the things that we do here, in terms of events and professional development. Just by the way you're talking, if I wanted to start my property investment journey now, and I went into a bank branch, I don't think they'd be able to give me that same insight in terms of, "Well, you know I'll take you to bank A, B, C, D." If I walked into a major bank branch they're just not going to do that. So, it's really adds another string to your bow, in terms of what you do by having that experience.

Sana: Yeah, definitely. And, just the property investing mindset and looking at the big picture. Even, talking to clients about strategy and what's worked for us. And when you're working with someone who's been there, where you want to go. You cut down 10 years’ worth of effort, and that's the value we bring to our clients.

James: Your pretty open, and are chatty, and that sort of stuff. Do you share your own experience? In terms of mistakes that have been made? Or what you might have done differently, with your clients when you're chatting with them?

Sana: All the time, all the time.

Mona: And technology makes it easier, just jump on Skype. Really, you would need someone in person once. But, if you want to catch up people more frequently we just jump on Skype and chat property.

James: Excellent.

Mona: And be that sounding board for our clients so they can make the best decisions for themselves. It's been really rewarding to see the changes that people have had, or the decisions our clients have made over the last couple of months.

Sana: And, just to point out, whilst we're not property coaches or mentors that naturally comes to us. In the last couple of months all our clients have development sites in Brisbane, and whilst they're working with a buyer’s agent. You pretty much hand held them and said, "Look, this is what we would buy, this is what would make a good property. And this is what you should be looking for, and where you should be looking." As well.

James: Fantastic. In terms of the Property Twins, as a company, as a business, what's the future got instal? What are your plans? You seem like you've always got a strategy, whether it's ... You're working with your clients, or you're doing your own investment thing. For the business now, in terms of, as a mortgage broking business, The Property Twins.

Sana: We are being mentored by one of the top 100 brokers in the country. So, we do have a huge goal. We don't want to say it like you.

James: No, that's okay.

Sana:     Yeah, we just working in the background on it.

James: How's the mentoring relationship been?

Mona: Oh, love it.

Sana: Awesome.

Mona: We're so fortunate. We're very fortunate, our mentors based out of the Gold Coast. But we talk every day, literally, and he's there as a sounding board. Whether it be with client work.

James: Yeah, so you bounce scenarios off him, and stuff like that?

Sana: Not just scenarios, even client relationship building side of things, and tackling different situations, and difficult conversations that you need to have with clients sometimes. So, having that is invaluable.

Mona: Yep, as I mentioned, having the right people around you can cut years off your training.

James: Absolutely. I was just actually talking with my fiancée the other day, we were just walking down the street here, in North Sydney. And I was talking about the importance of having a network, a really strong network. Whether it's in your investment life, in your professional life, or in your personal life as well, you know? Some really key people who you can rely on, and who you can, like you said, use as a sounding board. And, it can provide you with that objective opinion.

Sana: Yep, definitely agree.

James: Awesome. Well I think that's all we've got time for this week. But, I managed to fill in for Phil Tarrant there. I think I did an alright job, how did it go?

Mona: Fantastic.

Sana: I think you did really well.

James: Excellent. Now thanks very much for taking the time, it's been really great to speak to you guys. And, good luck with the rest of your journey, and we'll have to get you on the Elite Broker podcast soon.

Sana: Sounds good.

Mona: Sounds awesome. Thank you.

James: I've been your host, James Mitchell, stepping in for Phil Tarrant, and we'll catch you next time.

Disclaimer: The information featured in this podcast is general in nature, and does not take into consideration your financial situation, or individual needs, and should not be relied upon. Before making any investment, insurance, tax, property or financial planning decision, you should consult a licenced professional. Who can advise whether your decision is appropriate for you. Guests appearing on this podcast may have a commercial relationship with the companies mentioned.


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‘How we achieved financial security through property’ – the Property Twins reveal all
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