Despite having only two properties under his belt, investor Jack Henderson lives and breathes property investment. With a total property value of $2.5 million within his grasp, this young investor has made great strides.
In this episode of The Smart Property Investment Show, host Phil is joined by investor Jack Henderson, as well as Right Property Group’s Victor Kumar and Steve Waters to discuss Jack’s journey from starting a career in construction and earthmoving, to building up a portfolio.
Jack reveals to the team how he saved his money through construction work, the sacrifices he made along the way, and what happened the first time he purchased a property.
You will also find out, the gentrification of a suburb, buying before content and what your list of priorities should be for a new property.
If you liked this episode, show your support by rating us or leaving a review on iTunes (The Smart Property Investment Show) and by following Smart Property Investment on social media: Facebook, Twitter and LinkedIn. If you have any questions about what you heard today, any topics of interest you have in mind, or if you’d like to lend your voice to the show, email [email protected] for more insights!
Suburbs mentioned in this episode:
Related articles of interest:
Five Sydney metro suburbs tipped for growth
From 12 to 100 properties – how this investor will achieve his goals
Median prices or values – which is more important?
Why “there‘s no such thing as a mistake” in property investment
Speaker 1: Welcome to the Smart Property Investing Show with your host Phil Tarrant.
Phil Tarrant: Well good day everyone, it's Phil Tarrant here, host of the Smart Property Investment Show. Thanks for joining us today. We're going to mix it up a little bit, haven't really done this beforehand so, I am a fan of running by the seat of my pants and seeing an opportunity and grabbing pretty quickly. I do it in property and I do it in business and also do it in podcasting. I've just spent about an hour in the studio with my buyers agents, the guys from Right Property Group, recording the investing insights podcast with Steve and Victor, and had a back to back podcast to record with a guy called Jack Henderson, who's a young property investor who's coming in to have a chat with us about his story.
So, I thought, you know what? I'm going to stick the two together and see how we go with this and have a look at Jack's portfolio with the eye of how I would normally approach a podcast. Just getting the story but hopefully we can blend in some knowledge from some guys that know what they're doing, well allegedly know what they're doing at the Right Property Group.
Steve: Allegedly yeah.
Phil Tarrant: Jack, has that worked for you mate? Is it okay?
Jack: Absolutely yeah.
Phil Tarrant: Thanks for coming on the show.
Jack: Thank you very much for having me.
Phil Tarrant: Now, we had a real quick chat before you come on air and, big day for you, you're changing your-
Phil Tarrant: So, what's going on?
Jack: So, moving to Newcastle.
Phil Tarrant: Okay
Jack: For a new career.
Phil Tarrant: From where?
Jack: From Sydney.
Phil Tarrant: Okay.
Jack: So, I'm in earth moving down in Sydney and then a new opportunity arose in Newcastle so I thought, why not grab it.
Steve: Go for it.
Phil Tarrant: So you drive up tonight?
Jack: No, no. So, I'm off for two weeks, sort everything out and then I start on the 16th.
Phil Tarrant: Okay, so you've got a job up there doing the same stuff?
Jack: Yeah, really same stuff, earth moving. Big company.
Phil Tarrant: So, in terms of earth moving, I quite like this. Do you actually sit there and move the earth or are you the bloke that sells opportunities for people to move the earth.
Jack: No, I'm in the machines mate and do the roads and get the pipes in the ground and everything else.
Phil Tarrant: My uncle was like a really good guy, on a batco he was actually the guy that lifted all the stuff off the Granville train disaster.
Jack: Ah okay yeah.
Phil Tarrant: Really, really good operator. He loved it so I seen a bit of it. It's cool.
Jack: It's good fun. I mean, this isn't where I want to be forever, I want to be a buyers agent.
Phil Tarrant: Okay, here we go.
Jack: So, this is just good money, for now, and once the portfolio's at a max and the banks won't lend me any more money I think I'll move into the buyers, not missing any opportunities.
Phil Tarrant: Alright, Well we've got some guys here then… don't know what they're up to. What makes a good buyers agent Steve?
Steve: Passion, being able to wing it a little bit.
Phil Tarrant: Okay, sounds like I'd be.
Steve: But by the same token, diligence and an eye for detail I suppose and people relationships at the end of the day.
Phil Tarrant: Yeah, that's good. So, you are obviously a property investor.
Jack: I am mate yes.
Phil Tarrant: Let's have a chat about your portfolio Jack.
Jack: So, brought my first at 18, finished up school just after I turned 16, saved from 16 to just before I turned 19, brought my first in Coogee, a two bedder in Coogee. And, at that stage, it was when the market was steaming ahead it was so hard. So, I got that one and then a year and a half later, so when I was 20, I brought a second in Maroubra, a two bedder there too.
Phil Tarrant: Nice.
Jack: Then, at the moment, I'm pre-approved for another one, I'm just following the property.
Phil Tarrant: So how many properties is that then?
Jack: So, I've got two and then pre-approved for a third.
Phil Tarrant: Coogee, Maroubra.
Jack: Coogee, Maroubra.
Phil Tarrant: You've done well, 2 good ones.
Jack: The next one, I was hoping to get in the east but, just the prices are moving very quickly at the moment, so I think I'm going to buy and Newcastle.
Phil Tarrant: Okay.
Jack: That seems to be a strong area and there's a lot of infrastructure and stuff going up there. Newcastle reminds me of the Asian suburbs of Sydney, I mean, I've never really been to Newcastle that much but when I went up there, I was like, seriously, Merewether, Bar Beach and places like that remind of Bondi, Coogee and then you come into Newcastle a bit more it's like Sydney Harbour, of course you haven't got that Opera House
Phil Tarrant: Without a Harbour.
Phil Tarrant: It's more beautiful isn't it?
Jack: I like it up there, I really do and they've spent a lot of money on infrastructure, you've got the light rail in going, they've just built the new university. I think that's where I'll go next yeah.
Phil Tarrant: So, two properties portfolio, what sort of valuation you reckon?
Jack: I'd say Maroubra would be over a million dollars now, I paid 875 for it, so a year and a half ago, I reckon would be about a million 50. I brought well. Coogee, I paid 720 for and I'd think that's got to worth 850, 900.
Phil Tarrant: Okay, how old are you now?
Jack: 21, just turned 21.
Phil Tarrant: That's awesome.
Phil Tarrant: Yeah well done. Why, why property. Like, was your old man or your family in this?
Jack: No, well mum and dad they did, they brought two investments throughout their life, both dud. So, they brought one in Marcoola in Queensland in a huge apartment block, had it for ten years, brought it for 350, sold it for 320 ten years later. So, that was a dud there.
Phil Tarrant: Did they buy that off the plan?
Jack: They did mate yeah.
Phil Tarrant: Okay.
Jack: Through their account.
Steve: There it is.
Jack: He had a few in the block and they'd very done it before, when they brought there was no things like this around to listen and they brought another one in Melbourne, it was in Werribee I think. That didn't do badly but it didn't do well either.
Phil Tarrant: So, when did you leave school? Year 10?
Jack: Yeah, I got kicked out in year 10.
Steve: What for?
Phil Tarrant: For what?
Jack: School wasn't for me, I'm sort of a person that wants to learn off someone that's like, off you guys, I want to learn off you because I want to be where you are, where teachers they went to university, they're just working five days a week.
Phil Tarrant: Straight out of school into school.
Jack: Not how I want to live, so I want to learn off people that are where I want to be. So, I just don't think school was for me and they just sort of said, if there's an opportunity you reckon you could leave?
Phil Tarrant: So, your dad had a construction firm right?
Jack: Yeah, my dad runs a construction company so I walked straight into a job, because I didn't have a licence or anything, so I went to work with dad every day until I got my licence.
Phil Tarrant: What did they make you do on the first day at work?
Jack: Well, I'd sort of worked with them before on weekends so I did Saturday work and some of that in school holidays, I'd go to work. So, I sort of knew all the guys and I knew basic stuff like labouring and that so, it was an easy start. There were a few jabs in the ribs as you do when you start a new job.
Phil Tarrant: Did it pay you alright though?
Jack: It did mate yeah, it paid really well and that was the thing. So, I left school into a labouring job as such, so there was nothing at the end of it, when you are an apprentice you get a certificate and you've got a trade. I was a labourer and I was going to be nothing so I sort of thought, I'm earning good money so why don't I do something with it. And, that's still the same now if you're looking-
Phil Tarrant: So, who said, save your money, don't drink it all, what's the nightclub out where you live at Wilberforce.
Jack: Ah, well we've got The Brewery
Phil Tarrant: The Brewery.
Jack: Yeah, no one really told me.
Phil Tarrant: You just sort of said-
Jack: I just sort of did it, I just sort of thought, I want to make money, I want to have all these fancy things
Phil Tarrant: So, your first property was Coogee right?
Jack: Yeah, my first property was Coogee.
Phil Tarrant: So, 800 odd grand yeah?
Phil Tarrant: 720, that's a big deposit right?
Jack: Yeah it was, but I mean, I saved it over a few years and earning good money, I was probably saving, some weeks, nearly a hundred percent of my wage. Like, I had no expenses, I live at home with mum and dad, I didn't pay board, I didn't even have a car at that time so there was no fuel and stuff like that. So I really had no bills, it was only discretionary spending, if I wanted to go out and do stuff with my mates, that's the only thing I'd spend money on.
Phil Tarrant: So, did you actually go, I'm going to save money so I'm going to buy a property?
Jack: So, I just started saving and then I'd seen it adding up and I was like, I could do something with this money and then just started getting on You Tube and reading things and I was like, you know, what can I do with my money. And, then property investing come about.
Steve: So I wasn't your folks that said, hey look, perhaps property or-
Jack: No, not really, no. I mean they encouraged it when I said I want to buy a property. It was like, oh that's great, do it. But, there was no, sort of, guy do something with your money, no.
Phil Tarrant: Victor, you guys deals with investors young and old and large and small or whatever, differentiation… Do you do a lot of work with young blokes like this who've got that drive and commitment, is there a trigger that says, boom, yes, I'm going to do it? You don't fall into property investment right?
Victor: No you don't, you don't. Often it comes to the environment, what you surround yourself with, in some cases, parents actually force their kids to start investing.
Phil Tarrant: Force them?
Victor: Yeah, so I know of several clients that we've got where their very first property was, pretty much, brought by their parents saying, you're buying here and that's what got them started. But, the flip side is also true, where, in your case Jack, you mentioned that your parents had a dud property-
Jack: Yeah two actually.
Victor: Yeah, they could have turned around and said, no, no property is not the thing, you lose money. But, the fortunate thing was that, even though they had a bad experience, or had a poor result, not necessarily a bad experience, a poor result, they were not shy of encouraging you to jump into the property market and you're here.
Jack: Yeah exactly.
Steve: I think it's amazing that the fact there was no real driver there for you, as Victor said, there was no one saying you should do this, you should do that, it was something that just came out of your gut so to speak, or a feel that you did, whether it's You Tube, Reddit, Facebook whatever it may have been. In itself, that's, what was it? 19, your first property?
Steve: 18, to go out and drop 657, 700 thousand dollars on a property in the eastern suburbs as your first property at that age, that's huge.
Jack: And that was the thing too, I had no idea where to buy at the start, I was like, oh I've got no idea what I'm doing here. That's when I come across Chris, so I started to go a lot to his-
Steve: Is that Chris Grey?
Jack: Chris Grey, yeah. So I went to a lot of his seminars and we talked a lot on Facebook, he's always very helpful and that's where he buys his, in the suburbs of Sydney, so I went, well if he's doing it and he drives a Lamborghini, he's got the boats and lots of toys. So, that's what I'll do and then I started researching and before you know it... Yeah even my parents, they knew nothing about the area, they sort of said, oh when I was talking about it, it was oh buy out here, why don't you buy in Bligh Park or why don't you buy in ...somewhere that they knew. I said, no, no.
Steve: It's huge, if I go back to that age, I was self employed, or working for the family business, saving a heap of money but, yeah property didn't even come across my-
Phil Tarrant: What did you do with all your money?
Steve: You're painting a picture there Phil. No, I just invested it back into the business and it was I did but there was such thing as Facebook and social media back then.
Phil Tarrant: You didn't have podcasts to listen to right?
Steve: No, nothing like this one anyway but there was nothing to benchmark yourself to, it wasn't exposed to you, so I've just got massive kudos for people that do it at such a young age.
Phil Tarrant: Well what do your mates think of all this today? Do they get it?
Jack: I don't know.
Phil Tarrant: They think you're a property millionaire?
Jack: Australia's got a massive thing of like tall poppy syndrome.
Phil Tarrant: Absolutely
Jack: So you know, they like it to your face but then it's like, oh look at him blah, blah, blah, whatever they go on with. A lot of them do like it and they're like, oh I want to buy a property but, they want to buy a property and go out every weekend and piss their money up against a wall sort of thing.
Steve: Yeah, no sacrifice.
Jack: Yeah, exactly right and I mean, I drink, I go out and have fun but it's very minimal. If you were to look back the last, what are we in now, October, ten months of this year, I would have been out five times in the year.
Steve: That's pretty unique for a 21 year old.
Jack: Yeah, I know but I look at it now and I think, and they say, you're missing out on a lot of things, you're going to regret all this, but I don't think that. I look in ten years time when they're trying to get into the property market and they're wife's had a baby.
Phil Tarrant: When you think about it, 20, right, you get the hold these properties for four cycles until you, essentially, retire, yeah? Four? Five?
Phil Tarrant: Yeah five, by the time you retire, you know.
Jack: Well that's the goal. The goal is not to be retired that old.
Phil Tarrant: Yeah well let's have a chat about that. So, the wire right, you've got two properties, you got a pre-approval to go again.
Jack: Yeah, so, a lot of people have a thing where they're like, I want to get 10 properties, that doesn't really matter for me, I couldn't care if I had five properties worth a million dollars each or three properties worth two million dollar each. I think it's a dollar figure for me and a lot of these people now I see, they've built these portfolios in the last sort of five years and they've got a lot of equity but the market's been so go and it hasn't been a hard thing to build a good portfolio. If you brought and held on to them, you're making good money. So, I think when it slows down now, especially with the banks on lending and people can't buy, I think now is when you're going to start to see blue chip property is going to push ahead sort of thing.
So, the end goal I don't really know, when the banks say to me, no more more money mate.
Phil Tarrant: But, if you've got like a dollar, you saying it's hard to do, but you know.
Jack: Once I get this next one, I'll have two and a half million.
Phil Tarrant: Okay, in property value?
Phil Tarrant: And how much debt would you reckon that will be?
Jack: I've got one point, I'll probably have about two million in debt so, by the time I get the next one, about two.
Phil Tarrant: So about two hundred grand in equity right?
Phil Tarrant: Which is pretty good by 22, big head start.
Jack: I want to try and get it by the end of this year, so I want to try and hit 21 with three. Three properties.
Phil Tarrant: Okay. And like in ten years time, do you have a ten year goal?
Jack: Ten year goal is I want to be in career in property, that's my massive thing, I love property, it's literally my life. I go to work every day, I think about it, I go home and I'm always researching about it. I think last year the real estate dot com, sent out a thing of how many properties you'd viewed and what you're rank was and I was up there with Nathan Birch, Nathan Birch put his on Facebook and I was up near him, I've looked at that many properties and stuff.
Phil Tarrant: Well done.
Jack: Yeah, I don't know, that's my ten year goal is to have as much as I possible can, the banks now, once I get this one, it's going to really slow down. And then I want to get into a career in property and then, who knows what can come from that.
Phil Tarrant: What is it about property that you like so much? People say this, they say, oh I like property. Like you guys like property, I like property for a different reason, I'm not emotionally attached to it, I hate looking at properties on the internet.
Jack: To think that something that you buy and let sit there and can earn more than you can in a year, is an incredible thing I think. I get to work say 60 or 70 hours a week and the property sits there and has got a tenant in it and earns more than I do. I think that's pretty incredible. And, then, over time it earns more than I do now and then in ten years time that doubles and ten again and ten again. And just the lifestyle it can bring.
Phil Tarrant: There's nothing wrong with that.
Jack: Yeah, honestly what- I'm a very materialistic person so, like, when I come across Chris Grey and see that he drives a Lamborghini, he's got the boat and stuff like that, that was like, yeah, if he can do it I can do it.
Phil Tarrant: What are you driving now?
Jack: Just a Holden SV6 UTE, so, for work, it's the go mate.
Steve: So, what's the rent on your properties?
Jack: Coogee is 690 and Maroubra is 650. I mean, Coogee is virtually neutral, it cost me like 50 dollars a week, which is like nothing.
Steve: Is that before tax?
Jack: Yeah that's before tax too.
Jack: I mean, after tax, it probably costs me nothing.
Jack: And then, Maroubra, yeah, 650 and that cost me a little bit but, just in those two years where I brought, the market had moved so fast. Like, if I'd have brought that property two years before, it would probably be worth 700, 750.
Phil Tarrant: So, you see, it's quite interesting you know. For out-of-town listeners, Coogee's near, I guess, Bondi is your closest reference point, couple of beaches down. Then, Maroubra is probably about another four or five beaches down from there. But, they're two beach side suburbs in the eastern suburbs but they're very, very different suburbs as well right?
Jack: Yeah absolutely.
Phil Tarrant: Maroubra has-
Jack: Maroubra I look at as the Mount Druitt of the eastern suburbs sort of thing.
Steve: Oh the locals are going to love that.
Jack: No, but seriously, I think… If you look at Bondi and stuff like that and you actually move further down the beaches it is, it is. And, it won't be like that forever you can see now it's starting to move.
Phil Tarrant: It's changing
Jack: It is, hundred percent.
Phil Tarrant: So, let's have a chat about that. About the gentrification of a suburb right? So, you see investment prospects in Maroubra, so you hope over time, that it goes up in value.
Phil Tarrant: There is a demand that puts upwards pressure on your rent so your yields go up.
Jack: So I've looked at it like, you know, it started off at Bondi and North Bondi and then when that got unaffordable for the average Joe, they moved down a beach and then they moved down a beach and, even now Coogee is like ridiculously priced. And, then from Coogee you can only go to South Coogee and Maroubra and that's the end. So, I think from Coogee it'll move down to Maroubra and then-
Steve: But this is the dynamic that you see in markets right across Australia as in beach side markets, it's about suburbs that surround really attractive, gentrified suburbs slowly through the change. So, it's about being one or two suburbs ahead of where this flux is going to come to.
Victor: That's right and that way you're not paying a premium and you are waiting for the change to reach your suburb. Of course, you don't want the change to be too far out, you need to actually start seeing those signs there first before you actually jump in otherwise you may be holding for long term waiting for the change to come.
Phil Tarrant: And that's a bit of an inexact science, if it's going to be sentiment, it's going to be data, it's going to be spotting that trend-
Victor: Local knowledge
Phil Tarrant: Local knowledge. And, what about the management of your properties, do you do it yourself?
Jack: No I don't, I've got a property manager. I brought my first property through Dean Power in Bondi.
Phil Tarrant: Is he one of the agents out there?
Jack: He is an agent yeah. And, we got along really well, he helped me a lot too because, you know, I'm buying my first property, I was nervous to say the least and he helped me through it a lot. We got along really well and then I just said, alright I'll give the management to you and it hasn't been vacant for a week.
Phil Tarrant: Okay.
Jack: That's never been vacant that property, as soon as someone moves out, someone moves in the next day. And, then I brought the next one and I didn't even hesitate and I just gave it straight to him.
Phil Tarrant: That's good.
Jack: And we get along that well, they've never been vacant, they get premium rents, there's never an issue, they don't even call me. If something's not worth 500 dollars to fix, it just gets fixed, I get on my balance, done.
Phil Tarrant: And, did you tell them, did you give them that authority?
Jack: I did, I just said if it's not worth me going down there and fixing it or having a look, just fix it up. They get a handyman to go and fix little things here and there.
Steve: So, let's just go back to the whole nervous first property thing, just how bad was it for you?
Steve: Signing that contract
Jack: Not so much the dollars, the dollars didn't both me at all, I was like, what's the worse that can happen? I could go broke, that didn't even cross my mind. But, the big thing, and especially with the Asian suburbs, I was an 18 year old kid walking into these places and all these agents… and I was asking questions and stuff like that, I was really nervous about because I was an 18 year old kid, look at these people in their suits and driving their Mercedes Benz's out the front and I thought, what am I? And that's honestly how they looked at me too. They were like, what are you doing here? So, I found that really tough and I looked through, I don't know, 50 or 100 properties, over six months, every weekend.
Steve: But now you've got that confidence to be able to walk into any of them?
Jack: I've got more confidence but, there's still something about them that…because the market's been so good, it's like if you don't buy it someone else will come in after you and buy it. That's the sort of way I look at it.
Steve: That's a phenomenon across the whole of Sydney and Newcastle and the Wollongong Basin.
Jack: That's what I didn't like, they didn't-
Steve: The arrogance of agents?
Jack: They didn't care about you.
Steve: Yeah, let's call it that.
Jack: There are some good agents out there.
Steve: There are some great agents yeah.
Jack: Dean, that's what I loved so much about him and made buying that property a breeze because he was so nice, like he was an old school person and we got along so well-
Phil Tarrant: So did you buy by auction or private treaty?
Jack: It was at auction but I brought before auction.
Phil Tarrant: Let's have a chat about that, how did you do it because a lot of people, maybe one for you Steve or Victor, this whole logic of buying before auction. So, they're going, now we're taking it to auction because they think they're going to get a higher price but, you've got to try and get your price close enough to where they think it will sell at auction for them to go, let's just sell it now right? So, how does that dynamic work?
Steve: I think market dictates a lot of it and so does the relationship perhaps with the seller and the buyers position as well because, at the end of the day, at an auction when the hammer drops, if you're successful bidder at the right price well, you're unconditional. It's the equivalent of New South Wales 66W, by getting it to auction it's almost like all parties are working as hard as they can together to get it to a result before the auction because, the offer that you put in would have been somewhere, if not their reserve price on the day, and for the seller it's just a matter of well, it's done and dusted here and now. As long as you can exchange and go unconditional before the day of auction.
Jack: He was very motivated, and then I sort of just said to him, well alright take this figure to her and see what she says and he come back with me and says, this figure will get the deal done and I just said, let's do it.
Phil Tarrant: So you reckon you got it for a good price?
Jack: I think, at the time, I may have overpaid, maybe 10 or 20 thousand dollars, which is nothing, in the grand scheme of things.
Phil Tarrant: It doesn't really matter now.
Jack: No, exactly right. But, yeah, if I look back on it now, I got it for a great price because now it's probably worth 150 thousand dollar more.
Phil Tarrant: But, do you think your experience, and you hear this a lot where you look at 50 properties and you get knocked back and you lose at auction and you go stuff this right?
Jack: Oh, the amount I missed, you just lose confidence so much and think this is never, ever going to happen but you just have to keep going.
Steve: So, do you think, at that first property you got to the stage of well, fomo, if you were missing out just call a deal?
Jack: A little bit, absolutely. A little bit, I was just like, oh I want to get a property-
Steve: Just get it over with.
Jack: I don't care if I-
Steve: A lot of people give up right.
Jack: Now, that was an experience, because I should have got an independent valuation before I put an offer in so I know what the property's worth and stuff like that, which is what I did for the second one and what I'll do for every property now I buy.
Phil Tarrant: This is, you know, staying the course, persistence. A lot of people just give up, no this is way too hard. So, Victor you probably see this all the time where people might slightly over-pay 10 grand to get in the market but, it's probably-
Victor: But you're in the market.
Phil Tarrant: But you're in the market right, so you're better off probably being in the market, maybe slightly over-paying but you're actually in the market rather than waiting another six months and that 10 grand might be 50 or 60 increased in equity.
Victor: Exactly, absolutely.
Phil Tarrant: Is that an okay way to look at it?
Victor: Ideally you don't want to over-pay but if it means that you are actually in the market and it is a market that the trajectory is upwards, then absolutely. Because, like I said, six months down the track you'd be paying a lot more for that particular property so, property, as everyone should understand, is a long term proposition.
Steve: That's the key though, you've got to get the trajectory of the market right because if it's in a soft market well then…
Phil Tarrant: Well if you paid 10 grand over at the top of the market, you might be stuffed like you're parents.
Jack: Yeah exactly.
Phil Tarrant: So, in 10 years time for 20 grand less right? So, all in all an okay experience the first one around?
Jack: Yeah, I think it was good, it made me happy, I’m an 18 year old, I've got a property.
Steve: If you go back, say, you sign a contract, you get your finance-
Jack: It was actually funny because I was like so rushed and the agent was rushing me a little bit because he wanted to get the deal done obviously so, I rushed home, I forget what I had to do, I had to do something, and then I rushed back and I actually gave him the contract at North Bondi RSL, so he was having a beer as well as it contracted. It was quite rushed and funny.
Phil Tarrant: But if you could go back and speak to that Jack Henderson when you were out looking for your first properties and said, mate do this differently, this first property, what would it be?
Jack: I would have got a valuation, hundred percent. But, nothing else really, I mean it's all experience.
Phil Tarrant: Yeah, no regrets?
Jack: None, no. I was 18 years old, what's the worst that could happen, that's what I kept thinking.
Phil Tarrant: Spending 18 grand on a 700 grand property at 18 that's…
Jack: What's the worst that could happen.
Phil Tarrant: Well, this is it you know, contingency planning, I always think about it, I look at my portfolio and I go, worst case scenario, what happens if this happens? What happens if half of my tenants move out tomorrow? What would I do? What would happen if interest rates went up by a percent or two percent, what would I do? You know, all these contingencies. I know you guys talk about it a lot, you need to know what your fallback position is right?
Steve: All the time. So do you think that the team, that you had around you, or the people that you could lean on, made a massive difference for you?
Jack: See, that's actually one thing I would change. To get finance I just went directly to the local bank, mum and dad knew the bank manager and I just went directly to the local ANZ and that's something I'd definitely change now. Because, going through mortgage broker and having a good relationship with that mortgage broker now makes a massive difference.
Phil Tarrant: But do you reckon because your parents knew the bank manager, like, 700 grand for an 18 year old is big dollars, big dollars right?
Jack: Yeah, yeah, well the bank manager, even was like, oh you know.
Phil Tarrant: Are you sure about this?
Jack: Yeah, yeah, but it was good because we knew her personally, I'd dealt with her for a lot of years with personal loans and their home loans and stuff like that. So, it was good in that way, but, if I could go back now, I would definitely go through a mortgage broker.
Steve: And so who are you bouncing everything off? Like, in terms of, is this a good property and did it make a difference for you?
Jack: Myself really.
Jack: Yeah, so every Saturday I'd been down here by myself, going through the opens, trying to find the parks on the streets, its a nightmare.
Phil Tarrant: So, when did you know, just say you rock up at a place and, you don't know what you don't know right?
Jack: So, I sort of had a criteria.
Phil Tarrant: Like a little checklist or something?
Jack: I didn't at the start, I just used to walk in and go oh this tiny little two bedroom apartment's worth a million dollar, that's crazy. But, then as I went through more, I got a criteria, I wish my one in Coogee had parking but it doesn't, I mean, what do you do about that? Might stunt growth in the future but, there's not much you can do about it. Yeah, square metres and stuff like that, I sort of had a criteria for that, north facing balconies and stuff like that is a place but you pay premiums for that sort of stuff. But yeah, other than that I just sort of walked through it. You know if it's good or you know if it's bad.
Phil Tarrant: Yeah, if you walk in there and it stinks, it's mouldy-
Jack: Yeah, you walk through a property and sort of know, this is a good property or it's not a good property. I did lot of research too, so if I went through a property on the Saturday, I'd have my list of what I went through and then I'd go home and I'd look real estate dot com at the past and what it sold for in the past, it sold for x amount in 1985 and then x amount in 1996 and the next amount in 2005 and I'd work out what the capital growth was over that time and stuff like that.
Phil Tarrant: How do you remember what you looked at? You're looking at houses and-
Jack: In the side door of my car I had about 40 pamphlets in there and I'd get them out when I got home and I'd look through them all.
Phil Tarrant: Scribble on them.
Phil Tarrant: It's good
Steve: Good diligence.
Phil Tarrant: What would you guys say? Is he doing well?
Steve: I think he's doing really well because he's in the market, well he's had a go, more importantly. Once again, at 18 years of age, forget the price point for a minute, just to be in at 18, without any real people holding your hand or education so to speak, I think that's such feat, it's awesome. And then to go again, which is good and now to go for the third time, up in Newcastle.
Phil Tarrant: It's about gaining experience right? You don't know what you don't know so you start and then it's nice to reflect what you would do differently on it. So, the whole way through this process you're becoming a better investor and hopefully it will propel you into a career in property.
Steve: I think that's a huge point because everything's theoretical until you actually get in on it and you'll never learn as much as when you've got money out there.
Phil Tarrant: The skin and the game.
Steve: The skin and the game and, too many people I think, tend to rely on forums and Facebook and any other bit of technology they can get on to actually use that as their bible whereas, paying strata, paying your mortgage, paying your rates, you feel it. You learn.
Phil Tarrant: What do you reckon Victor?
Victor: Yeah, I think it's fantastic. I've got a question for you Jack, though. The very first time you received rental in your account, how did that feel and what did you do?
Jack: Didn't really feel like anything to be honest because rent comes in, the mortgage goes out and you don't really see the money I guess but, I don't know, I didn't really think much of it. I sort of knew in my head, this is what I'm going to do so, nothing was a surprise, if you know what I mean? Like, I sort of knew, I'm going to buy property, I'm going to do this, I mean I didn't know when was going to happen but I thought it was going to happen so when it happened I was just like, I knew this was going to happen. So, yeah, I don't know, signing all the contracts and then when the rent started coming in and bills started going out, got a mortgage to pay every week, it just felt normal.
Phil Tarrant: Chris for a job then.
Phil Tarrant: This is what it's all about isn't it?
What's been your biggest, pardon the language, shit moment, as in, oh no what have I done?
Jack: Nothing really, I haven't really had any. I think there's going to be a big Oh shit moment when my mortgage says there's no more money, that'll annoy me because I'll be like, what do I do now? So I've sort of got a little plan for that already.
Steve: Yeah but sometimes you make more money when you do nothing.
Jack: Yeah I know but it just makes me, it'll just wreck my hopes and dreams. I'm like, I want to keep buying, want to keep doing stuff with my money.
Phil Tarrant: You know what mate, you got time on your side.
Steve: You've got plenty of time. What are you, 21?
Jack: 21 yeah.
Steve: Yeah, crazy.
Phil Tarrant: Wish I was doing this at 21.
Steve: Yeah, I know, what are you now? 52.
Jack: But even here, if I were to look back three, when I was 18 and then I've been out with buyers agents and I had lunch with them and met all these awesome people in property and doing this podcast, I'd have never thought that would happen.
Phil Tarrant: Yeah, there you go.
Steve: Good on you.
Jack: I'll probably look on in 10 years time and think, wow, you know.
Phil Tarrant: Mate, you've got to make your own luck.
Jack: Yeah exactly.
Steve: That's it.
Phil Tarrant: Good stuff. I'm going to finish on that, it was really good. Jack, thanks for coming in mate and sharing your story.
Jack: Thank you very much.
Phil Tarrant: Let's get you back in when you get this next property and see if the bank's tightened the screws on you and say no more money.
Phil Tarrant: But, Steve and Victor thanks for your insights.
Steve: No worries
Victor: It was good
Jack: Thank you very much boys.
Phil Tarrant: You guys do this sort of day in day out, chatting to visitors so I quite like the way that you see it and the way you see, different mindsets but you sort of extract information, which gives a bit of a context with the visitor. So, really good.
Hope you all enjoyed that, sort of worked I think, bit off the cuff and lucky you're a guy who talks good, talkers gooderer. I've got really good England and that. No, it's good, remember to check out the smartpropertyinvestment.com.au every day, every morning, market intelligence news make sure you're getting it. You can subscribe at smartpropertyinvestment.com.au/subscribe. We're on the social stuff if that's the way you like to get your info, just search smart property. Please keep the reviews coming in on iTunes, they're flooding in and I do appreciate, I know the team really do like the feedback as well. So, leave those five stars. Got any questions for us, if you want to come on the podcast or you would like to just have a chat, [email protected]
We'll be back again next time, until then bye-bye.
Speaker 1: 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.