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At only 28, this young investor has already achieved an impressive property portfolio in two short years. He reveals to The Smart Property Investment Show how being clear with his goals helped him on his way to financial freedom.
Taku Ekanayake spoke with host Phil Tarrant to discuss property management, how to pick a mortgage broker and why you should always keep a notebook by your bed.
All this and much, much more on this episode of The Smart Property Investment Show.
Tune in now!
Intro: Welcome to the Smart Property Investment Show with your host Phil Tarrant.
Phil Tarrant: All right everyone, it's Phil Tarrant here. I am the editor of Smart Property Investment and the host of the Smart Property Investment Show. Thanks for tuning in. We're gonna keep on our most recent drive of bringing investors onto the show rather than experts within property. I quite like it, chatting to investors. I think it's pretty cool ... it's the base of the show and why we created it, essentially. Today's guest is a guy called, and I'm gonna struggle with this but I'm gonna try and get it right, [Taku Ekineyka 00:00:38].
Taku Ekineyka: You almost got it, I think that's pretty close.
Phil Tarrant: Is it pretty good?
Taku Ekineyka: It gets butchered all the time so it's all good. (laughs)
Phil Tarrant: Taku, how you going mate?
Taku Ekineyka: Very well, thank you.
Phil Tarrant: I'm also joined today, and he's new to the Smart Property Investment Show. He's one of my colleagues here, Tim Neary, who is the editor of our real estate product called Real Estate Business, which is for sales agents and people that work within the industry. Tim, how you going mate?
Tim Neary: Good, thanks Phil. Thanks for having me on the show today.
Phil Tarrant: Yeah, this is Tim's first time on the show. Adam, who's our sound engineer guy here, I'm gonna give him a brief not to edit anything that Tim does. If he stuffs up we're gonna leave it in there so-
Tim Neary: (laughs) Thank you Phil.
Phil Tarrant: Just put you under pressure mate, it's all right.
Tim Neary: No pressure. (laughs)
Phil Tarrant: (laughs) Running on what I was saying just a little bit earlier, we've had a lot of investors in the show recently, Taku, and there's two types of people we give on the show. One is people that work within property, let's call them property experts, they might be buyer's agents or [inaudible 00:01:31] people or mortgage brokers, financial planners, accountants who provide advice around how to be a better property investor. And the other type of guest that we have is property investors, the people that are out there doing it. A lot of the feedback we've been getting is that people really enjoy ... The expert stuff's good but they really enjoy the stories of investors and I think yours is gonna be a really interesting one. As our listeners though, there is no scripting with the show whatsoever, this is just having a chat really. But before I get on here that [inaudible 00:02:01] give you some information, and it's all very brief but you can probably pick it up from Taku's voice, he's pretty young. How old are you mate?
Taku Ekineyka: 28.
Phil Tarrant: 28?
Taku Ekineyka: Yeah.
Phil Tarrant: So, on the younger side of property investing.
Taku Ekineyka: Pretty much. I feel as though I got started pretty late but it's all relative I guess.
Phil Tarrant: How many properties are in your portfolio?
Taku Ekineyka: As of Saturday, actually six now.
Phil Tarrant: Last Saturday or this coming Saturday?
Taku Ekineyka: Just this Saturday that went by. Bought at auction up in Queensland, which was pretty unplanned, but got it under the line so it was all good.
Phil Tarrant: That's pretty good. Why'd you buy another property?
Taku Ekineyka: Why did I buy another property?
Phil Tarrant: Yeah.
Taku Ekineyka: Because the money was there to be borrowed and it was a good deal, it was well below market value from all the research that I did and ... thought I'd just go for it and worked out well. There was not many bidders either, that was bidding for it so ended up getting ...
Phil Tarrant: We're recording this in November and we're getting to that time of the year when some of the energy around buying property starts to wane a little bit, where people start thinking about the silly season and buying Christmas presents and spending all their time doing that sort of stuff. In our portfolio we've picked up some really good properties running up into the December period, purely because there's less people at auctions.
Taku Ekineyka: Yeah, exactly.
Phil Tarrant: You never know your luck right? If you're on the ground and you're out there and you got a pre-approval and you're rocking up, sometimes you don't have that same pressures. Tell me about the auction that you just was the top bidder on on Saturday, what was it for and what happened?
Taku Ekineyka: It was pretty unplanned. The real estate agent called me on the Friday morning and he goes, "Look, we got a property that's coming up for auction tomorrow. A contract crashed on it last week, which was due to finance. That contract was at 345." So he goes, "If you're in a position to bid at auction tomorrow, I think you could get it in the low three's." He said there was only two other bidders at the moment that was registered, they were both interstate investors and they both hadn't viewed the property either so I knew that they were gonna be pretty risk adverse as well. The real estate agent said, "It's a deceased estate so he has to sell tomorrow."
At the time I didn't know if he was just pulling my leg because you always get real estate agents calling you last minute saying, "Do you want to bid at this auction? You might have a good chance to get it under market value." Just to drive some interest to the property of course, but it just seemed like the numbers were stacking up on it and speaking to him a little bit more and finding out a little bit more about the property, he mentioned that the property was gonna get split between four people. So I knew that, in their minds, if they were gonna sell it for let's say 50K, a little bit less, it wouldn't be too much of a big deal for them either because that 50K would've got split between four people, so 10, 12K here or there wouldn't really mean anything for them. I knew they had to sell. There wasn't any tenants in there so it was just costing them money to hold on to the property so I was like, hey if I could just register, take a bid, and then take a shot at it I might be in with a good chance.
Phil Tarrant: Everything you're telling me are ideal scenarios for property investors.
Taku Ekineyka: Yeah, the stars were lining up there.
Phil Tarrant: Yeah, that's good. What'd you get it for?
Taku Ekineyka: I ended up getting it for 300,000 and I was able to negotiate a 80 day settlement on that as well, so it takes me beyond the Christmas and holiday season so it's gonna be easier to find tenants as well and it gives me a bit more time to collect all my finances together as well.
Phil Tarrant: Did you negotiate the 80 day settlement before you registered the bid or did you try and do that after?
Taku Ekineyka: I did that during the negotiation process. It got taken offline ... When I say offline, as I said there was myself and two other bidders. The two other bidders stopped bidding and it was between myself and the [inaudible 00:05:28] now, just going back and forth. I stopped at 290 and they said there was no way they were gonna go below 300.
Phil Tarrant: So it was a live auction and it went to 290. Was it passed in at 290 and they said, "No, we're not selling it." But you were the-
Taku Ekineyka: I was the only bidder there, yeah.
Phil Tarrant: Talk me through that process where you finished at 290 and they went, "Not enough." Passes the end of auction. What happened after that?
Taku Ekineyka: After that the negotiation process started happening and the auctioneer came back to me and the real estate agent came back to me saying, "Look, there's no way they're sell at below 300, that's their absolute limit. They already have an offer on the table there after it gets passed in at 340." Or something around that nature. Then I was like, "Look, at the end of the day, you need to sell today. You can't afford to have a contract crash again. You guys need to sell, it's a deceased estate. This is a sure thing, you're definitely gonna get a sell here if I can get it for 290. Let's just sign the contract, I just want a quick and seamless sale." Then, he's like, "Unfortunately they're not gonna go below 300." So I said, "Can we do an extended settlement of 80 days and then I'll lift it up to 300?" And got it for that price.
Phil Tarrant: In terms of negotiating, you've done a lot of things right there. The first thing you negotiate on is price and then when that gets to a point where you're not gonna go any higher and they're not gonna come any lower, you start looking at the other things that you can negotiate on and one of them is settlement terms. A delay settlement's gonna take you into late January or so?
Taku Ekineyka: Exactly.
Phil Tarrant: Did you see any base?
Taku Ekineyka: Yeah.
Phil Tarrant: Did you fly out to Brisbane to do this or you did it on the phone?
Taku Ekineyka: I did it over the phone. It was sight unseen so there was a bit of risk on my end but I knew that if I could get it for cheap enough, if I could essentially get it for land value, even though there would maybe be something wrong with it or it needs cosmetic renos or something structurally wrong with it, if I can get it for cheap enough it would still stack up in terms of the dollars and all that.
Phil Tarrant: That sort of post-auction negotiation, did that happen immediately when it was passed in or did it happen in the days after?
Taku Ekineyka: Immediately, over the phone.
Phil Tarrant: So they wanted to get acknowledgement of the sale straight off the auction rather than even going into the next day.
Taku Ekineyka: That's right, there and then. They just wanted a unconditional sale closed on that day.
Phil Tarrant: How did you sign the contract and pay a deposit?
Taku Ekineyka: I had a Bidder's Authority form and it was the real estate agent that was bidding on my behalf. Kinda sounds counter-intuitive but that was the only option I had. (laughs)
Phil Tarrant: I think maybe it's one for you to chat about, Tim, with a lot of the work that you do with agents, it sounds like the agent obviously was hustling to get this thing sold so the agent needed the shifter thing ... I don't know the background of it. How long was it on the market for?
Taku Ekineyka: Apparently it was a pretty short campaign, not that long. I only just saw the property the day before because I was actually looking in a different market at the time but the agent told me it was a four week campaign.
Phil Tarrant: Do agents Tim, in this sort of scenario where they have deceased estates or mortgage in possession, all this sort of stuff, do agents like those sort of environments or are they just headaches for them?
Tim Neary: No, they seem to like those from what we can see Phil, because the agents typically connect with buyer's agents as well to look for property investors like yourself to try and find some of those properties that can move quickly below market value before they get to the market, so they'd always be on the lookout for something like that and try and connect them with property investors like yourself.
Phil Tarrant: That's a really good point Tim. As a property investor, some of the best properties that we've acquired don't even hit the market. If you're sitting there at an auction or an open house and there's a whole bunch of people looking to purchase a property, typically it's gonna go for way over where you want to spend on it. It's the properties that don't hit the market or have a different type of scenario or situation which are the real crackers and these are the ones where an agent ... And the fact that you had a personal relationship with that agent gave you an advantage. So I imagine that guy probably sat there on Saturday morning or Friday afternoon and had a list of people he knew ... Were past clients or people he's had a relationship with and just got on the phone like a good agent should do and just bang through that and pitch it out to as many people as possible. But he's gonna go to people who he knows ... A buyer's agent, as Tim said, and the buyer's agent can go, "Yeah, that sounds all right, I'm sure I can find someone to buy that." Or a more savvy or sophisticated investor like yourself who gets it, so it's not like your first purchase and you'd be shitting yourself about it, it's just process right?
Taku Ekineyka: Yeah.
Phil Tarrant: Coming down to the numbers. So what was it? Was it a house, a unit?
Taku Ekineyka: It was a house. It was in about a 400 meter square block land. It's only two blocks behind where the water is.
Phil Tarrant: Which side of it?
Taku Ekineyka: Across the peninsula, Scarborough. So it's about 40, 45 minutes north of the Brisbane CBD, right on the water. A really nice area. It's getting a lot of gentrification from Redcliffe ... A lot of the developments and things that are going on in that area. It just made sense for me at the time even though it's only yielding about, at the moment, around five, five and a half percent. I usually generally look a little bit higher than that, it just had so much fat in that deal that I couldn't say no to it.
Phil Tarrant: So essentially you were manufacturing equity in it at the point of sale in this two agent manufacture [inaudible 00:10:28]. You buy under market value or you can actually increase the value of the property by spending as little much money as possible through renovations. What's your plans with the property? What are you going to do to it?
Taku Ekineyka: My plans with the property first of all would ... Probably for the first six months, not do too much to it. I just had my builder go through it today and he said, "Look, it just needs a little bit of a paint, little bit of a touch-up, potentially a new vanity." All just cosmetic stuff. Probably cost me 46K. Just do it up so I can make it presentable, make it attractable if that's a word, to tenants and then put somebody in there. Then probably about three months after, I'll revalue it again.
Phil Tarrant: A couple of questions associated with this. You got a 80 day settlement. What happens to that property during that 80 days? Can you actively do any of that work that you need to do during that period of time so you can get a tenant in so they're in there by the time you need to start paying the mortgage? Is that part of the deal?
Taku Ekineyka: One thing that I didn't do in this deal was get early access, as you were saying. Did not get that, so I'll have to do all the works straight after it settles. That'll probably take about two weeks, so it's gonna cost me a little bit in holding costs. Not too much.
Phil Tarrant: But if you can tee it all up so you know the work that needs doing. Is there anyone in the property now? There's not is there? Or is it rented?
Taku Ekineyka: No one's in the property, it's just empty.
Phil Tarrant: Just sitting there.
Taku Ekineyka: We've got a clause in there that I'm allowed to take tenants through before it settles in my name but no work's allowed to be done on it.
Phil Tarrant: Did you get any advice through this negotiating process on outsider price, the sort of stuff that would be beneficial for you, or did you just use your experience of the properties that you purchased so far?
Taku Ekineyka: A little bit of both. I knew the longer that I could drag it out the more comfortable it was gonna be for me to gather all my finances together. Also just doing a lot of research, reading, speaking to other investors. There's more to it than just price, there's other levers that you can pull on. One being the length of the settlement as well, which you can either use to your advantage or if you make it shorter, in terms of settlement days, then maybe you could reduce the price for instance. So there's different levers, I guess, you could pull on.
Phil Tarrant: This is a opportunistic buy.
Taku Ekineyka: Very.
Phil Tarrant: And there's nothing wrong with that. But to be able to benefit from opportunity purchases you need a couple of things in order. One is money. Did you have a sitting pre-approval or you had nothing in the works or ...
Taku Ekineyka: I had a pre-approval. Not for 300,000 though. It was a little bit less. But in saying that, my servicing I can definitely get up to 300 pretty comfortably, it's now just coming up with that extra deposit.
Phil Tarrant: Is it 10% deposit or did you negotiate?
Taku Ekineyka: I'm putting a 12% deposit on this one.
Phil Tarrant: Why are you doing that?
Taku Ekineyka: I'm doing a 12% deposit so ... There's a thing called lender's mortgage insurance. I'm sure a lot of your viewers would be aware of this. If you go 20% or more in deposit then you don't have pay lender's mortgage insurance. If you go under it, you have to start paying lender's mortgage insurance, which is not to cover you but to cover the banks. It works in increments, the lender's mortgage insurance, and speaking to my broker and my mentor he let me know that 12% is kinda the L in my sweet spot, where you get the most bang for your buck when it comes to lender's mortgage insurance.
Phil Tarrant: You're putting 12% in cash, or are you borrowing at 88%
Taku Ekineyka: Borrowing at 88.
Phil Tarrant: You're borrowing at 88% so 12% is cash money you're putting into it.
Taku Ekineyka: 12% cash money, so 36,000.
Phil Tarrant: When you bought this place did you speak to your broker beforehand and say, "I think it's gonna go at 300, what do you reckon?" Did he or she say, "Yeah, you'll be okay." Was it one of those sort of [crosstalk 00:13:53]?
Taku Ekineyka: The night before, I told him, "My max is 290. I'm not gonna go any way over 290." And then he's like, "Yeah, that's cool. You can service fine for that. You could even go up a little bit over 300." So I kinda knew that in my head as well and during the time while I was on the phone to the real estate agent I was Skype texting him throughout the whole process as well, saying, "What are you thinking?" I just needed some guidance there as well so he was there in terms of virtual chat.
Phil Tarrant: That's cool. Looking at your portfolio, and we'll have a look at it in a sec, but do you have all your finance with one lender or do you have multiple lenders as the lenders that you use to fund your portfolio?
Taku Ekineyka: I have different lenders. The first one I got with ANZ and then I got four with CBA and then the next one that I am getting is with NAB. I guess the reason for that as well is each lender has different criteria when it comes to lending so it's not all just about getting the lowest rate but you gotta strategically place which loans you get at what point in time of your property investing journey. That's what I learned through my broker and that's how we strategically aligned our purchasing.
Phil Tarrant: How active is your broker in understanding your property investment goals and actually playing a role? Are they very active would you say?
Taku Ekineyka: I'd say he's pretty active. I call him a broker but he's become more of a mentor, as such. He's taken me under his wing. He's a property investor as well. He's showed me the ropes of how he got to where he got to in the time that he got to there as well. So I started just replicating his process. There's no need to reinvent the wheel, I just followed his blueprint and I'm sure he followed someone else's blueprint as well.
Phil Tarrant: How'd you find your broker?
Taku Ekineyka: Through a forum. I read his story first, about him and then I reached out to him on LinkedIn and I said, "Look, I just want to pick your brains." I didn't even know he was a broker at the time. I said, "I just want to pick your brains, I'll buy you a coffee. Can I meet up with you?" And he's like, "Yeah, no worries, would love to catch up." Then met him the next day, had a quick, well it was about an hour conversation with him. At the time it turned out that he was transitioning out of his main job, his corporate role, into the broking world and I was like, "Ah, come on. Let's go."
Phil Tarrant: It's good to be so proactive and we talk about this a lot on the show, Tim, it's about research. It's about educating yourself and you find, and it's one of the great things about property investors that property investors like talking to other property investors about what they're doing. You find there's not too many who are closed books and people are happy to share their journey and their story and hopefully instill some of the same energy that they get in property investment, but help people along the way. It's good to see that your broker was so open with you. Obviously he's making a bit of money out of you because he's arranging your mortgages, but outside of that that he's taken you under his wing and helped grow your knowledge and expertise in this space. That's cool, it's really good. Your portfolio, that's the sixth property that's in it?
Taku Ekineyka: That's the sixth one, yeah.
Phil Tarrant: So you ran through the lenders that you had, so you start off with ANZ, then you went CBA and then you went NAB. This is a quick chat through the other five properties in your portfolio. The first property that you purchased was where?
Taku Ekineyka: First one was in Breckenridge, that's about 15 to 20 k's north of the Brisbane CBD.
Phil Tarrant: And is it-
Taku Ekineyka: Three bed house on over 600 meter square block of land, it was a 3-2-2.
Phil Tarrant: What'd you pay for it?
Taku Ekineyka: 378, that one.
Phil Tarrant: And value now?
Taku Ekineyka: 12 months ago we got a bank evaluation of 420 and the market's moved a little bit so about 450.
Phil Tarrant: And you bought that in 2014.
Taku Ekineyka: Yeah, October.
Phil Tarrant: So two and a bit years ago. Property number two?
Taku Ekineyka: Was Eagleby, that's in the Logan Shire and that one was a 3-2-2 as well.
Phil Tarrant: So another house.
Taku Ekineyka: House. Bought that one for 258. Today gotta be around that 320, 310 mark.
Phil Tarrant: Call it 310 to be conservative. Property number three?
Taku Ekineyka: Property number three was in Deception Bay. That was a little beauty, that was a little bit of a renovator. That bought for 232 and we just got it back valued for 320.
Phil Tarrant: And when did you buy that?
Taku Ekineyka: I settled that one in I think it was December or January of this year. December 20-
Phil Tarrant: Of 2015?
Taku Ekineyka: 2015.
Phil Tarrant: So you made 100 grand on that, pretty much in a year.
Taku Ekineyka: Yeah, that's been a absolute [crosstalk 00:18:10].
Phil Tarrant: Deception Bay, there's a lot of people talking about that in the moment. It's not a bad little place. Property number four?
Taku Ekineyka: Four was Kallangur. I bought that for 253 and got a bank val on that for 312,000 four weeks after settlement and we did a renovation on that one as well.
Phil Tarrant: So you have 50K on what the theme was but was that after the renovation or before?
Taku Ekineyka: After the renovation we got the bank valuation.
Phil Tarrant: How much did you spend on your reno?
Taku Ekineyka: Reno-
Phil Tarrant: So it's shifted from 253 to 312?
Taku Ekineyka: 253. The Kallangur one, that was 16K reno.
Phil Tarrant: So you have manufactured 40 ought grand out of that right?
Taku Ekineyka: Yeah.
Phil Tarrant: That's good. And the fifth property?
Taku Ekineyka: The fifth property is in Adelaide. That one's in Salisbury and that was a four bedder, it was 220,000. That was also a renovation job.
Phil Tarrant: Eval after the reno?
Taku Ekineyka: We haven't done eval on it because I only settled on that four or six weeks ago.
Phil Tarrant: And the renos done there?
Taku Ekineyka: Reno's done. Rented for 330.
Phil Tarrant: I like the fact that you know your numbers. That's good, you need to.
Taku Ekineyka: Yeah, absolutely.
Phil Tarrant: I know all my numbers and you speak to a lot of investors that don't know, you gotta sit there and think about it. But the fact that you're snappy ... Number one, number two, number three, and number four bought for this, diff this, it's good. Need to know your numbers. It's a good lesson for everyone.
Taku Ekineyka: Definitely gotta know your numbers especially, it takes emotion outta the deal. You just base it on facts, numbers, and all logic.
Phil Tarrant: Total valuation of your portfolio now?
Taku Ekineyka: I think with that latest purchase, with Scarborough, it's closing in on two mil or just a tic over 2.05.
Phil Tarrant: What sort of debt have you got?
Taku Ekineyka: I've got 1.56.
Phil Tarrant: So about 500 grand right? 450, 500 grand in two years.
Taku Ekineyka: In two years, yeah.
Phil Tarrant: How much cash have you stuck in of your own?
Taku Ekineyka: I started the first one with a bit of a nest egg of around I think it was just under 70K or a little bit more and then a lot of it after that was just manufactured equity. It was done through renovations and then revaluing it, pulling out that equity, and then just recycling that equity onto the next one.
Phil Tarrant: So you put 70 into it and you haven't tipped any more of your own cash?
Taku Ekineyka: I certainly have put a little bit more, I reckon at least another 70 over the two years.
Phil Tarrant: Okay, so you're all in for about 140 with about 450 grand of equity there over two year period. That's not a bad return.
Taku Ekineyka: Absolutely not.
Phil Tarrant: You've more than doubled your money. It's a really good way to think about this. But you're a young guy right? You're not really young but you're in your twenties and you got 6 properties under your belt already. Why are you investing in property?
Taku Ekineyka: That's a good question. I always think, why do I invest in property? Because sometimes when I get so focused on the numbers, it's just ticking the next one off, ticking the next one off but I first started because I wanted financial freedom, I wanted to retire off of passive income and for me property was what made sense as a vehicle to get me to that passive income. I was reading a lot of personal development books and reading a lot of things around financial freedom and how to create wealth and with that, they generally came around three key areas, which was investing in shares and at the time, even to this day, it doesn't really resonate with me, the intangible nature of shares. Don't really understand it. Creating your own business, I would love to create my own business one day but don't really know what that is yet so that was put to the side. Then there was property. It was simple to understand, it was easy to get. You buy property, you put tenants in, money comes out and if you buy relatively close to capital cities, good amenities on a nice big block of land, over the long run it's generally gonna go up in value significantly as well.
Phil Tarrant: Is there anyone in your family or your peer group who has a bit of a property bent who you've tried to emulate or mirror at all or are you called a unique thing within your family at home?
Taku Ekineyka: My dad owns his own house and he has two investment properties, so that's probably the closest person within my family that would be doing that. Aside from that, my close group of friends don't really invest in property. I just learned it through research and connecting with the right people.
Phil Tarrant: Why is that? What makes you different than your mates?
Taku Ekineyka: I don't know. I've always had a desire to ... I'm quite ambitious, quite driven and after I saw the success of that first property and really came to fruition and it was real, then I just got addicted to it and I just got completely immersed in property investing and I knew this was the vehicle to get me to where I want to get to if I wanted to retire early.
Phil Tarrant: Sounds right, doesn't it Tim?
Tim Neary: Yeah, it does Phil.
Phil Tarrant: (laughs) Your job's doing that too right?
Tim Neary: (laughs) Absolutely.
Phil Tarrant: Sit here drinking. No, it's cool. Moving forward then, in terms of goal setting, everyone sets differently and you're still a young bloke and your goals are gonna change over time but do you have a number, i.e. a passive income that is the number you need so that you can stop having to work or having to generate income elsewhere? Is that the goal for you or is it a value of property or is it a number of properties? What are those tangible things?
Taku Ekineyka: It's a mixture of both. I have the short term goal and the long term goal. The short one first would be have equity of at least a million in this time next year, so in 12 month's time and have at least 10 properties by this time next year as well, so it's a bit of a balance of both. Then long term, by 36 I want to have a net passive income through property of one million dollars.
Phil Tarrant: Sounds all right.
Taku Ekineyka: It's just a round number, I don't exactly know how I got there, but ...
Phil Tarrant: The way that you're talking about goal setting is quite mature. I speak to a lot of property investors and they're like, "Oh, you know, I want to get like ten properties or whatever." But the way that you're framing your goals as in ... You used the terminology short term goal, long term goal. Where have you got that from?
Taku Ekineyka: That I got from reading a lot of books. I follow a guy on YouTube and on podcasts called Grant Cardone and he's just completely shifted my life 360. He's all about goal setting, he writes his goals once in the morning, once in the evening so he's always got his mind-
Phil Tarrant: You do the same?
Taku Ekineyka: -on what's important. Yeah, I do it once in the morning, once in the evening as well.
Phil Tarrant: You actually sit and write it down?
Taku Ekineyka: Yeah. It's a lot more difficult than what I first imagined, to continue that discipline but it keeps your mind on it every single day.
Phil Tarrant: Let's have a quick chat about this. Are the goals that you write down personal goals or are they financial goals?
Taku Ekineyka: These are essentially all personal goals. I have a couple of work goals where I'm currently at right now as well. I write those down from an income perspective. Don't really have too much from a family or social perspective right now, it's more financially driven.
Phil Tarrant: Nothing wrong with that.
Taku Ekineyka: Yeah, that's right. (laughs)
Phil Tarrant: Yeah, me too. (laughs) You're like a lot of the guys here but you sound a little bit more structured. How do you write that goals down? When do you do it? Is there a particular time of the day? I'm drinking a coffee, I write my goals?
Taku Ekineyka: Yeah, pen to paper, just old school. As soon as I get out of bed, write it down. Before I turn the lamp off, write it down.
Phil Tarrant: So you keep it next to your bed?
Taku Ekineyka: Keep it next to the bed, yeah. Just a little notebook.
Tim Neary: And when-
Phil Tarrant: You writing it ... Sorry Tim. And you write it in the same notebook every day?
Taku Ekineyka: Every day, yeah it's in the same notebook until I run out of pages and then on to the next one.
Tim Neary: Taku was saying off air before we started that you also work on the weekends, do something else and I hope you don't mind me saying but that you're an Uber driver as well? It just reiterates how driven you are and how important it is to you but a lot of the investors that we talk to often talk about keeping a handle on their portfolio as it starts to get bigger and bigger. You spend a lot of time writing your goals down, you spend a lot of time doing your work. Be interesting to know how you manage your portfolio and ... You're obviously a tech savvy guy, so how do you use tech to help you with that?
Taku Ekineyka: That's a really good question. In terms of how I manage my portfolio, for the day to day stuff I generally pass that off or outsource it to property managers or the people that are professionals within their space, which obviously takes the burden off me. In terms of things such as renos or anything like that comes up, I'll try to project manage it myself throughout that process but when it comes to the day to day activities it's all outsourced to property managers, solicitors, broker, and just my close group of people.
Tim Neary: So you have a professional team that you work with.
Taku Ekineyka: Absolutely.
Tim Neary: Same guys all the time. Has that built up over time?
Taku Ekineyka: Yes, I'd say it's built up over time in terms of the people that I've kept around me. For instance, for all the Brisbane purchases I've kept the same team around me but I guess once I start to invest in different areas I'll have to start increasing my circle of property professionals.
Tim Neary: What are you gonna do with a million dollars in passive income every year?
Taku Ekineyka: I'd like to spend a lot of it, but then that said I won't be able to spend a million, oh I probably could if I wanted to depending on how lavish I wanted to live.
Tim Neary: Do you want a fancy car and all that sort of stuff that's important?
Taku Ekineyka: Oh, absolutely yeah eventually. Right now I'm driving a crappy little Mazda 2 so eventually I want to get into a nice luxurious Rolls Royce or something like that but (laughs) at the end of the day I'm not gonna be able to spend everything so it's more about giving back to the community, giving back to the ones close around me. If I can set them up as well, that's gonna be something I think that I'll be able to get a lot more out of than me just spending it on materialistic things.
Phil Tarrant: That's good. It's sorta like a philanthropic type beat to it all in the future. In the moment you're just in acquisition phase there, just generating that. It's good. We're running out of time. I've really enjoyed the chat.
Taku Ekineyka: Oh, awesome. I loved the chat as well.
Phil Tarrant: It's-
Tim Neary: I'm really impressed. You have a level of maturity about you that we don't really see in 20-somethings and I guess you're a millennial right? We've been giving millennials a bit of a hard time recently on the show. I'm pro-millennial but I get a little bit frustrated with some of the gripes that they have and one of the reasons why is that we get guys like you in here. We had a really good guy the other day and another girl coming in as well who are really bucking to trend about all the trials and tribulations that the millennials are having getting in the property market. It's guys like you that say, "What problem?"
Taku Ekineyka: Yeah, exactly.
Tim Neary: You're excelling and driving forward. I imagine a lot of our listeners and a lot of younger type of listeners, 20-something's, listen to the show. You're definitely someone I would be trying to emulate because the way you're going about it, I think your risk appetite it is you're a bit younger and you're probably willing to give it a bit of a go but when I look at your equity position from an LVR perspective, you're not drowning in it right? We didn't go through it but do you sleep well at night in terms of knowing that you can meet your mortgage payments?
Taku Ekineyka: Yeah, I sleep pretty well at night, no true dramas on that front. That's because I always try to continue to keep a pretty healthy yield position as well so my overall portfolio is sitting around 6 1/2% so it gives me about a 2% buffer if interest rates are at 4%. That covers the expenses and repayments and everything of that nature as well.
Phil Tarrant: Some people would think that you're very aggressive in terms of your acquisition of properties, six over two years, and you give it another go but you're doing it not flippantly, you're not throwing mud on the wall and hoping it sticks, you actually got some structure and sophistication behind it which is a very good tip I think for our listeners. Mate, I really appreciate it. Before you go I'm gonna rattle through a couple things that I want the one tip that you've got.
Taku Ekineyka: One tip?
Phil Tarrant: Yeah, it's Taku's top tips for- (laughs)
Taku Ekineyka: (laughs)
Phil Tarrant: -for property investment. I'm gonna start. I've written down four little areas here. I'm gonna say, "What's your number one tip for goal setting?"
Taku Ekineyka: Number one tip for goal setting, have a timeline. Make it really specific as well, and write it down every day in the morning, in the night so it's at the top of your mind all the time.
Phil Tarrant: Good. Number one tip for buying investment properties.
Taku Ekineyka: Always buy something that you can add value to and buy below market value. It's easier said than done of course. You need to know the area and you need to know your numbers but you gotta make money on the way in.
Phil Tarrant: Good. Number one tip for renovating investment properties.
Taku Ekineyka: Don't overcapitalize. A lot of the areas that I'm investing in are bread and butter areas so I'm not gonna put a nice marble tabletop on my kitchen, I'm just gonna Laminex it, keep it pretty simple because it's gonna appeal to that crowd.
Phil Tarrant: Number one tip for property management.
Taku Ekineyka: They have to have good communication, both email, over the phone. Also do a couple of referrals to people that are already existing clients with the property managers.
Phil Tarrant: Finally, your number one tip for financing investment properties other than get a good broker, which it sounds like you got one.
Taku Ekineyka: Yeah. (laughs) Number one tip for financing ...
Tim Neary: 12% sweet spot. (laughs)
Taku Ekineyka: 12% sweet spot, that's certainly one. I guess in the initial stages, especially if you're on the younger side such as myself, I'd say leverage yourself a little bit more than what you're comfortable with. I don't know if that's a good tip (laughs) because at the end of the day you got a little bit more time to reduce that LVR position so leverage yourself now. I guess that's one of the beauties of property as well, is that you can leverage your money.
Phil Tarrant: Absolutely and it's one of the things that most people struggle with the concept of, to be fair, the quality of leverage and making money work for you so it's good. Really good. I think they're all really good tips. I'd be writing them down if I was listening to this and stick it somewhere and keep referring back to it but the one thing I take away from this conversation Tim, is knowledge. Your being able to build a healthy portfolio, a start of a very good portfolio because you've gone out there and educated yourself. You have invested the time into actually knowing what you need to do to be a good property investor, you haven't seen a glossy brochure for an off the plan apartment in Bondi Junction and dropped $700,000 on it.
A lot of, I think, your success as an investor is drawn from your circumstances and that is you're relatively young sort of guy, I don't know how long you've been in the job but you're working so as you're pulling in a reasonable sort of income but you're probably not able to go out there and borrow seven or eight hundred thousand dollars to invest in one property so in many ways you're a product of your own success in that it's forced you to look at the type of properties that you're buying and looking at being able to get initial equity position by buying smartly under market value. All really good mate.
Tim Neary: Yeah, really good. I mean, that top tip that you got there was to make money on the way in and that's off the back of doing the research first.
Taku Ekineyka: That's it, yeah. Absolutely.
Phil Tarrant: Thanks Taku, mate, really enjoyed it. Let us know how you're getting on.
Taku Ekineyka: Appreciate it, thank you. Absolutely.
Phil Tarrant: Keep in touch and if any of our listeners got any questions for Taku you can contact me [email protected] we'll pass them on. I'm sure you're happy to speak with other investors if they-
Taku Ekineyka: Yeah, always willing to connect with like minded people so hit me up.
Phil Tarrant: That's good, appreciate it. Any questions for me at all about the show, our portfolio, or any of our other guests please do get in touch. Remember to follow us on all of the social media stuff, Twitter, Facebook, LinkedIn. You can follow me at Twitter @PhillipTarrant if you want to do that. Please keep those reviews coming on iTunes, we do appreciate it. The more reviews that we get, the higher that we rank in rate, which means that more investors are able to find us and share in the community that we're creating here around property investments so please do that. Five starts, we really like them. But please leave some feedback as well if there's anything that we're doing that you'd like us to do that we're not doing. Remember to tune in next week. Remember, smartpropertyinvestment.com.au is where you find us. Plenty of stories there on other investors and also Taku, who we'll put up there with some information about his portfolio. Thanks again for tuning in, we'll see you next week. Bye bye.