Investor Grant Iverson comes into the show to talk about his journey in property investment, why he invested two years and $100,000 in educating himself about investing and the market and another two years looking for the perfect property.
Host Phil and investor and ex-hospitality worker Grant also discuss why he didn't take the jump early on, the eye opener which forced the change of his career to become a property investor as well as his ideal goals for the future.
Grant also reveals the challenges he faced along the way, including facing banks and his 12-month unemployment period and how he and his partner overcame these obstacles.
You will also find out why you should use a buyers agent, the impact of knowing the importance of growth and how to decide on a property.
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Announcer: Welcome to the Smart Property Investment Show with your host, Phil Tarrant.
Phil Tarrant: Good day everyone, it's Phil Tara here. I'm the host of the Smart Property Investment Show, the podcast for Australian property investors. If you're new to the show, well, welcome. Good to have you on board. If you are one of our regular listeners, welcome back. There's quite a community now associated with the Smart Property Investment Show. It's nice to know that we're doing good stuff and helping you or giving you some greater insights into how to invest in property more effectively and hopefully create wealth. That's what the idea is. Hopefully something for everyone whether you're new to the game and looking to buy your first property or have tens and tens and tens of properties. Hopefully everything is relevant. As I always say, keep connected with us. Let us know what you think about what we're doing and if you have any questions for us, [email protected] Happy to connect and engage and let you know what we're thinking and potentially get in on the show.
Our guest in the studio today is someone who has been on a bit of a journey I think that will sound very familiar to many of you. Obviously passionate about the idea of investing in property but often, like most people, we're information overload and they never actually get about doing it. I've got Grant Iverson in the studio and he's going to have a chat to us about his journey and where he is today and where he's going. Grant, how are you going? Thanks for coming.
Grant Iverson: Very well. Great today, thank you.
Phil Tarrant: So you're a new investor.
Grant Iverson: I've been in the game for four years, but technically a new investor, that's correct. I spent four years looking and in the last probably two months I've managed to acquire three properties.
Phil Tarrant: Four years of education?
Grant Iverson: Absolutely. I was a master of property but didn't take the jump. The old emotional factors got in the way for me.
Phil Tarrant: Let's chat about that. I think that's a really good focus for today's podcast. Why did you spend four years becoming obsessed with property, thinking about property, researching property, looking at property, and never bought anything?
Grant Iverson: Well I think the thing is, I was obsessed. I wanted to master it. I wanted to get out there and be the next big property mogul. I went and invested heavily and must have spent over literally a 100,000 dollars on my education and two years of just focusing on educating myself and becoming an expert in pretty much everything. I realised that I was just overwhelmed. After two years I went out there and I said, "Right, now it's the time to start." I took two years looking and literally every weekend, for me it was looking at property up in Newcastle. I got in the car every weekend. I went up there and fundamentals were right, but just went back home and, "This wasn't right. This wasn't right." I was obsessed with getting the right property. I just couldn't find the right property. I'm sure you've got an opinion on that, but I just couldn't make it happen. I just had to work out what's going on here. All of a sudden I changed my direction and saw the light, so to speak.
Phil Tarrant: We'll chat about that. You had finance, so that wasn't a problem.
Grant Iverson: Yep.
Phil Tarrant: No problem getting debt. I'll be interested to know what you do for a living, because the way you're wired, I reckon I could pick what profession you're in but I'm not going to say it. I imagine it's something-
Grant Iverson: You're gonna make me disclose it?
Phil Tarrant: Yeah I am. What do you do?
Grant Iverson: Look, I spent 20 years in hospitality. I took a sabbatical for 12 months and funnily enough, I…
Phil Tarrant: Hospitality, like pubs and drinking and that sort of stuff?
Grant Iverson:\ Pubs and clubs. Yeah. Pubs and clubs. I think that's where the property interest came from for me. I was working at a big pub that went through a massive renovation. It was just an eye opener of what the pub-
Phil Tarrant: So you enjoyed the process?
Grant Iverson: Loved it. Absolutely loved it. I thought, "Well, look, this is the point for me of 20 years." I'm gonna have a change of career. Went and had a sabbatical with 12 months off. Did all the right things in that time except got myself in a bad position for finance at the time because no bank wants to lend to someone who's had a sabbatical for 12 months. During that time I met my partner, who, we now work together. After the sabbatical I made the decision, she's a Naturopath, local Naturopath, and we sat down and said, "What are we going to do together?"
I had the choice of going back into hospitality or investing my time into property. She had a business that needed a point five at the time. I went along and started working with her doing kind of the back end. Marketing, promotions, the admin, all that kind of stuff. Got ourselves in a good position, got the business working quite well. Financially, we're good for moving forward. Here we are now sort of thing. It's allowed me the time to educate and get into the whole property game, but as I say, it's probably an over commitment of the education side of things.
Phil Tarrant: We talk about education a lot and you need to be educated in property in order to make an informed decision. I use a buyer's agent so, in many ways I outsource a lot of that responsibility for the investment property. I know now that you use a buyer's agent and you're paying them to do most of the heavy lifting. You need to be well-educated about knowing the process. You need to invest in your education, so it's good, but you've invested both time and it sounds like a substantial amount of money, but more importantly a lot of your emotional investment into education, which has been a hand brake more than a positive thing. Right? Is it a light bulb moment? Did you just go, "Shit. Something's not right."
Grant Iverson: It was a light bulb moment for me. I felt that I had all the boxes ticked. Finance was good. Education was well. I just felt that there was something missing. I kind of couldn't work out what it was. For me it was more the personal side of the development and the property investment. I thought, "Why can't I get this working? I'm spending so much time getting it right." I took a step back and I thought, "What am I doing well in business?" The business was doing well and I thought, "How can I take what I'm doing in business day in and day out and apply that to my property development career?"
One of the fundamental things for me was I looked at my team. I had a really good team working with us. We've got 10 staff now and we've got five practitioners. We've got some Naturopaths that work for us. I thought, "It wouldn't be right for me to be a Naturopath and then do the accounts and then do this and that." So we put on professional practitioners. Then I put on someone in reception who was great at the accounts. All of a sudden our started to flourish. I thought, "This is working, so how do I apply that into my property development?" I then thought, "Well, fundamentally, if I can get myself a good buyer's agent, get myself a good broker, get myself a good accountant, and we could all kind of have a strategy, then maybe I could transition that learning from business into the personal side of things."
It worked, at the start, but one of the biggest turning points for me was when I started getting all my professional guys talking to one another. We sat down and the accountant said, "Look, you're going to need a one-page plan. Let's just simplify this." The mortgage broker needed to talk to the buyer's agent. The buyer's agent needed to talk to the accountant. Once we got that right, the ducks just lined up.
Phil Tarrant: It was easy.
Grant Iverson: It was easy. The education for me wasn't so much about going out and having to physically do the buying and all this kind of stuff. It was having an understanding of what needs to be done and applying that through the team. Fundamentally, the education combined with the team was my kicker.
Phil Tarrant: It turned you from being and expert in everything into more so a project manager and leveraging the skills and capabilities of focused professionals to get the job done.
Grant Iverson: Spot on.
Phil Tarrant: It turned from being probably a headache to quite good fun?
Grant Iverson: Yeah.
Phil Tarrant: Fair?
Grant Iverson: Yeah.
Phil Tarrant: You want things to be enjoyable, right?
Grant Iverson: Yeah. Totally. I can tell you, back in the day of driving to Newcastle every Saturday to go to open inspections, I did that for two years and couldn't jag a deal.
Phil Tarrant: Were you missing out on deals?
Grant Iverson: Yeah. Look, it breaks my heart to see some of those deals that I broke. It just ... I go back and I'd go to the auction and I'd say, "This is my number." That was my number.
Phil Tarrant: There's nothing wrong with that.
Grant Iverson: Now, I could go, "Look, Paul, what do you think of this deal? What do you think you could go to?" "Oh, look, the market's doing this and you know, you could allow a little more if you wanted to." The accountant says, "Look, you've got a little bit more here if you've gotta go over." It just took the whole stress out of it. I was relying on these guys to guide me. I wasn't taking their absolute nth degree of to what they were suggesting. I had the education to kind of say, "Yeah, I see that."
Phil Tarrant: That's important. You've gotta challenge.
Grant Iverson: Exactly. That worked really well. Now, I'll give you an example with Paul.
Phil Tarrant: Is that Paul from Pure Properties?
Grant Iverson: Yeah. I met Paul probably six months ago and about within two months we had our first investment property. It was just so easy. We sat down. We had a great strategy session. He said, "What are you looking for? What are you after? What's your borrowing capacity? What's your mortgage broker think you can do?" We had a great chat and all of a sudden he's putting these deals in front of me. I realised that this guy spends 40, 50 hours a week out there in the field, and I was spending 10 or 15 hours a week. How can I compete with that?
Phil Tarrant: You can't compete.
Grant Iverson: Exactly.
Phil Tarrant: You can't compete. This is what I talk about a lot, why I use a buyer's agent. If you're not using a buyer's agent, you need to be as skilled as what they are in order to be finding the assets that they're finding. They do it day in, day out. That's what they do for a living. Unless you can do that, it means you're competing in the market with people like that. You can do it yourself and that's cool. A lot of people enjoy doing it. Some people are very successful by themselves but for me, I'm a busy guy. I don't want to spend my weekends looking at properties. It's the last thing I want to do. I want to spend time with my family.
Grant Iverson: Exactly.
Phil Tarrant: That's good. It's a good story then. You've moved pretty quickly. You mentioned that you were in pubs and stuff and you saw a development happening and you liked I guess the emotional creativity of developing something, but, from a goal perspective, do you want to sort of retire wealthy? Do you a number in mind that you want to have as a passive income at some point so you don't have to work? Why property, outside of you like it?
Grant Iverson: For me, it's a great bricks and mortar type investment. We've got a business and at the moment it's doing well. Touch wood it continues to go that way, but just like change here or a change in regulation or what have you, we could be faced with uncertainty. Property, given that yes there's uncertainty, it still manages to constantly perform well over time. It's a bricks and mortar type investment, plus you've got so many options. If you want to go and do a couple of splitters, you can do splitters. If you want to throw yourself in 40 hours a week, you can go and do some development, or you can go and do, you know if you just want to have some sitters that you sit on for 15 years and then sell, then retire, or trade down. For me, I want to get in more to the development side.
The strategy that we've worked out with my accountant and mortgage broker and Paul is that we're looking for product with development opportunity, not necessarily now, but two to three years time when we've got our business well-performing. I can then take a side step from the business and then we can kind of look at doing the hands-on.
Phil Tarrant: So you want property to be a career?
Grant Iverson: Correct. Yeah.
Phil Tarrant: That's cool. I guess the upside of that is that you can create yourself a nice nestegg for retirement.
Grant Iverson: Absolutely.
Phil Tarrant: You can have the fun and the challenge and the motivation and the passion in the process to capitalise on property investment. It's cool. That's pretty good.
Grant Iverson: Look, the key, going back to the team, once I got that team involved and you had that support around you just to pick up the phone and say, "Hey, what do you think of this deal?" To have someone say, "Oh, look, I think you're a bit off the mark there. Let's come back." It just takes the stress out of it. It makes it fun and that's really what I was looking for in it.
Phil Tarrant: You want it to be fun. What sort of stuff you've been buying? Three properties in six months, pretty much?
Grant Iverson: Yeah, well, three properties, really, in two and half to three months.
Phil Tarrant: You're not messing around right?
Grant Iverson: No, Paul is great. He's got a really good understanding that we're very serious about what we're doing. Yes, there was a lot of preparation time in that, but now fundamentally we've got our ducks in a row.
Phil Tarrant: For these three, did you get three different pre-approvals and three different loans? You just used cash essentially to get into these properties?
Grant Iverson: Correct.
Phil Tarrant: You haven't done any refinancing or anything like that?
Grant Iverson: No.
Phil Tarrant: Okay. So you have a bit of a war chest that you can spend on property?
Grant Iverson: Yep.
Phil Tarrant: Okay. Is that war chest all of your money, or you've still got some more to go that you can tip into property?
Grant Iverson: We took a little bit of equity out of an existing property that my partner had. We're rent vestors, we're renting and she's got an investment property, so we took a little bit of equity out of that. We did need to top out with some cash. Three years ago our accountant said, "Look, if you want to do what you've got to do, your business is so important to you. You really need to take that serious. You really need to grow this. You need to put yourself in a position where a bank will look at you and can see. Tick this box, tick this box." Really, a lot of the preparation was getting the business ready so that we could grow our property portfolio.
Phil Tarrant: It's a really important point. It’s a mantra, you make money in business, park and property. That's cool, I get that. A lot of people who are self employed, they always lament about how hard it is to get finance. One of the reasons why, as someone who is self employed, it's hard to get finance because people don't run their businesses profitably. They use them as a vehicle to try and pull as much cash out as possible. Therefore, when you're sitting in front of a lender and they go, "Well, you're not making any money Mr. X. I'm not going to therefore give you a debt." They go, "No, no, no, no. I really am making money." It's just that they go, "No. This is what the financials say."
Grant Iverson: What about the Ferrari in the driveway? Yeah.
Phil Tarrant: "This is what your financials say and therefore I'm not going to do it." If you are self employed, you've got a number of different masters. Depending on how you choose to run being self employed. If you want mortgage debt, you've gotta show profitability. You've gotta show income and you've gotta show sustainable income. So your accountant said to you, "You need to show that story. You need to get the business to tell the story."
Grant Iverson: We knew that we had to have a vehicle that we invested our time in so you could not necessarily go into that position where, "Here's your tax returns and this is as good as it gets." We had to show fundamentally good figures and everything that we do is by the book. The banks love it, it's easy-
Phil Tarrant: It's very, very important. You've gotta run it. You can't cut corners with this sort of stuff.
Grant Iverson: Exactly.
Phil Tarrant: It's good you've ... because a lot of people realise that way too late, and then might have years and years and years and years and years of losses. Losses because at some point in time they go, "Hey, I'm going to capitalise on this and sell something." It's not going to help you get debt.
Grant Iverson: Exactly.
Phil Tarrant: It's not going to help you get debt. At the end of the day you need leverage.
Grant Iverson: Exactly. Whatever it is, you cannot go into this thinking there's an easy way into it. Particularly business owners. Look, my view, and it's my personal view, is business owners I think sometimes can be the most attractive because they know the importance of growth. They're sustainable and they committed to growth themselves. You've gotta be able to show that as well. You cannot cut corners. You've gotta be able to. Look, it takes time.
Phil Tarrant: It's not overnight.
Grant Iverson: The mortgage broker said, "Look, you need to be able to have a sustainable business that we can look at and sustainable incomes." We had to grow that income. We had to work long hours and work hard for that and understand that the end goal was what we were looking for. Now we do everything strategically. Now we do everything strategically. We know what we're doing in five years' time and the excitement is gonna be along the way.
Phil Tarrant: It must be quite satisfying that you're now on the runway. You're way down and you've taken off. Is that a good thing?
Grant Iverson: Yeah, it's great.
Phil Tarrant: When you think of sort of four years of missing it.
Grant Iverson: Yeah, look, a lot of people will kick back and say, "Oh, you know, you're so lucky," but it's not. It's strategy. It's time.
Phil Tarrant: Nothing happens by accident in this game.
Grant Iverson: Exactly.
Phil Tarrant: So you said you'd dropped 100 grand in property education. Who'd you give that money to? Don't name them, but what sort of people did you give a 100,000 dollars to?
Grant Iverson: Look, it was more along the lines of I wanted to learn to renovate, so I had to renovate. I wanted to learn how to do property development, so I went to property development courses. They're the kind of things that I really wanted to, and I knew for me, it was like a university. I had a choice of going into a university course or picking the courses that I really were interested.
Phil Tarrant: So you did your own MBA?
Grant Iverson: Yeah.
Phil Tarrant: Your choice. A lot of people, you know you've got people like Tim Ferris, if you listen to his podcast, and Vaynerchuk I think his name is. Those guys talk about, yeah, I think Tim Ferris says, "I did my own MBA where I just went and educated.... Spent my money on getting educated. I didn't do a formal MBA but I went and did the stuff I knew was gonna give me the tools to be able to do what I want to do in the future." It sounds like that's what you've done.
Grant Iverson: Correct. Yeah.
Phil Tarrant: Are you happy with the investment? Has it paid off?
Grant Iverson: Absolutely.
Phil Tarrant: Okay.
Grant Iverson: I felt that there's not a course that I wouldn't say I wouldn't do again. Whether they're still around or they're not around, whatever it is. You always pick up something. If someone said to me, "What do you think would be the best way forward?" My personal opinion would be invest in your own education first.
Phil Tarrant: I will completely agree with you on that. Invest in your education. That said, you don't always have to pay for education. You're listening to the Smart Property Investment show. It's free, right? There are some other very good podcast around as well. Yeah, invest in your education. I wholeheartedly agree with you, but don't over-invest in your education so you get to a point where you're procrastinating on every single decision, which it sounds like…
Grant Iverson: I wish we'd had a conversation four years ago.
Phil Tarrant: Just do it. Just do it. When you think back now, some of the reasons, it sounds like you missed out a few auctions. That's cool. Four years ago the market in Newcastle is where you buy. I'll ask you why you were up there, but you've gotta set your rules for investing and it sounds like you're doing it. Was there any other sort of stupid reasons why you weren't buying stuff? If you think back and if you look back into your psyche and go, "The real reason why I didn't buy that was for this particular reason." Was it nerves, was it confidence, or was it purely something very tangible? What's your read on that?
Grant Iverson: I guess it's like-
Phil Tarrant: If you've gotta give yourself a hard time, you know?
Grant Iverson: Yeah. I always go back to business. I guess it's like it's a lonely process. You like to have the opportunity to discuss what you've seen. We're human. We like to get a second opinion. We have an ego, we also have an emotion. From that perspective, the ego is what kind of gets you out there and, "Yep. I'm gonna do this and that." That's great, but it has to be balanced by the emotional side as well to keep you sane. For me, a lot of the time it was more just the emotion. "Am I doing the right thing?" It was, because I as so obsessed, I was really looking for that one property that was going to set me up for the rest of my life. It really just wasn't. There's opportunity every weekend in the market. There's stuff out there that, whether I might not like it, someone else likes it and they'll do something completely different and they'll make money from that. For me it's, I like things that I can develop down the track. For someone else it might be just a buy and hold and sell and ride the market.
Phil Tarrant: Do you think you had too many parameters that you were trying to make? Is that the issue?
Grant Iverson: Yeah. Totally. Look, with a lot of the education, you kind of say, "Well, this is my strategy here." Then another course would say, "Well, this is what you want to do." Then another one would be like, "This is what you want to do." You're constantly challenging yourself being too specific. If you looked at it more holistically and said, "Well that's great. I can renovate on this and maybe down the track I can develop. Perfect." You're combining the education. You're absolutely right. What I was looking at really was just being too specific. All of a sudden it didn't match that kind of parameter, so I went over with that one and justified and reasons and said, "Well that's why that's not gonna work." It just was a whole mind-boggling kind of exercise.
Phil Tarrant: Another word you're working for there, yeah.
Grant Iverson: Yeah. Once I got those mentors, so to speak, the Pauls and the accountants, it's great to now have that conversation and be able to kind of match up with those guys and say, "Well look, you know, can we do a development? Could we do a splitter, slider, whatever it may be," and they go, "Yep, that's great." You're talking the same language. Clarity is really important in what you want.
Phil Tarrant: And also, to your point, it's less lonely as well if you've got people on your side who are advocating for you. I always say, you've gotta be careful of whose advice you listen to. You could have a team of people who are giving you poor advice. That comes back to the education. You need to be educated enough to be able to challenge the ideas. I know my buyer's agent, I give him a hard time. He puts a property in front of me, I'll go, "Okay." I will challenge him on why that property for me at this particular point at time, knowing my portfolio, what the upside benefits are, why this particular location? We go right through and I challenge him the whole way through. You need to do that. Just by using a buyer's agent doesn't mean you completely outsource sole responsibility. You're still responsible. They're there to help you, but you're still responsible.
So, what were you looking up in Newcastle? What made you think Newcastle at that point in time?
Grant Iverson:\ In the day, three or four years ago, Newcastle matched what I was looking for. It was a good price point for me. I was looking for something around that 450 to 550 kind of mark. My strategy was to renovate and sell. If that was the strategy that I had adopted out there, it was going to be a, get myself settled into Newcastle, do three or four, ride a bit of the market, and then obviously move on to something bigger. I spent so long in Newcastle when I rang Paul, my buyer's agent, and said, "Paul, I've been up in Newcastle for two years." He said, "Sorry mate. You've missed it. Newcastle, you should have been buying two years ago." He's now suggested we start looking at southeast Queensland and that's where our attention is now up in southeast Queensland.
Phil Tarrant: What have you bought then? You've got three properties. What'd you get?
Grant Iverson: Yeah. Our first property that we picked up in Queensland was a nice property in Bald Hills, set over two blocks, 1200 square metres, 22 metre frontage. Was really an opportunity for us in two years' time, three years' time, to take the existing house on the property and either slide that to the left and create a second block on the side or at the back, or alternatively demolish the house and put two free-standing houses side by side. That's got a development opportunity.
Phil Tarrant: So this is one house that straddles two blocks.
Grant Iverson: Correct.
Phil Tarrant: That's kind of a nuisance.
Grant Iverson: Yeah.
Phil Tarrant: I guess it's a good thing as well, right?
Grant Iverson: It's got the opportunity. For us sometimes it's not about, this was not a reno opportunity. It wasn't a buy and sell. The strategy was really, let's utilise the property at the moment. We've got good yield on it. It's almost neutrally geared, and in two years' time we can knock it down.
Phil Tarrant: You can do something with it.
Grant Iverson: Do something with it.
Phil Tarrant: How wide is the frontage? Sorry, did you say?
Grant Iverson: 22 metre frontage.
Phil Tarrant: Okay, so a big part of this was understanding the upside benefits of this property and that was that you could put two freestanding houses, or maybe two duplexes, I don't know. Whatever you want to do, right? That's a big point. What'd you pay for it?
Grant Iverson: We paid 560 for that. Fundamentally, that's where Paul was great. To have someone come and just say, "Look, I've found this." I said, "That's exactly what we're looking for." The phone didn't ring until he'd found something that was spot on. I said, "Paul, this is great." He said, "Look, here's all my data. The numbers came with it. All the schematics came with it. This is the plan and this is what we can do." I'm like, "Mate, this is perfect. This is just too easy."
Phil Tarrant: Okay, and it's sort of neutrally-
Grant Iverson: Neutrally geared now, yeah.
Phil Tarrant: Is that before or after tax?
Grant Iverson: Before tax.
Phil Tarrant: Okay. Good. That's the way you need to look at it. A lot of people go, "Oh after taxes." It doesn't matter after tax. All right. That's property number one. What was the second one that you picked up?
Grant Iverson: The second one was up in Kippa-Ring. Paul knew we were kind of looking for something with a development opportunity on it. He said, "Look, I've got this property. It's come on the market." It was at 475 or something along those lines. He said, "We can't really do a lot with it as-is, but there's a rezoning going through council at the moment." He said, "I'm really comfortable if we got this property, the rezoning will go through, but we can't do anything with the property." He said, "Look, I'm going to go and talk to the guys next door and see if they want to sell."
Had a chat with the next door neighbour and the property size on that one was I think about 560 or something along those lines. The one that we're looking at is about 610 or what have you. By getting the two, gave us the opportunity under the new zoning laws to potentially put on a up to 21 metres high. We could fundamentally get 30 units on that site. We made an offer to the owner of the property who was selling. He worked quite well with the neighbour as well and got everyone together and they nutted out a deal. We got the deal together and the purchase was subject to both of them going through. We had that all tied up and it was all nice and tight. We came through with the two properties side by side in a good area with rezoning. New infrastructure gone through. They've just-
Phil Tarrant: Kippa-Ring, is that sort of, is it on Anzac?
Grant Iverson: It's up near Petrie. They've got the new university out there.
Phil Tarrant: Is it on, so Kippa-Ring. Kippa-Ring is the station that terminates there I think.
Grant Iverson: Correct, so we're just on the, there you've got the shopping centre on one side and we're actually, the back of the block actually goes up to the train station.
Phil Tarrant: Oh, the train station. So you're on the west side of Anzac Boulevard ends up, right? I can't remember.
Grant Iverson: That's it, yep.
Phil Tarrant: That whole area has changed zoning recently, hasn't it?
Grant Iverson: Yeah.
Phil Tarrant: Interesting.
Grant Iverson: That's the great thing about having a buyer's agent. I know I sort of keep pushing on about it but, Paul knew before it was really kind of out there that this area is going through a change. The significant investment or the opportunity for us really is that we're getting in at block of land price, and 12 months' time when the rezoning goes through we're sitting on a development site. That I would never, even with the education that I've gone through myself, would never have been able to pick that up, in an area that's got good growth.
Phil Tarrant: I like that area around Kippa-Ring Way. It's been a lot of investors up there recently. I've looked at some stuff up there. I've missed out on a bit in that area, probably a couple of streets away from where you were. I can't remember the name of it. It was some street there. Anyway, it doesn't matter. We're all three in that rezoning are.
Grant Iverson: Well now Paul's got another one at the moment that he's-
Phil Tarrant: Of course he does. I just bought some stuff in Kalunga so I'm out for a bit. That's cool. You've got a side-by-side and another property, which is two blocks with one house on it.
Grant Iverson: Two blocks.
Phil Tarrant: That's pretty cool. The places you have in Kippa-Ring, are they sort of paying themselves at the moment?
Grant Iverson: They are. Yeah. They're slightly about neutral. We've had some repairs and maintenance. The houses are a little old, so I wouldn't say, if you looked at it, I wouldn't say that they're positive at the moment, but certainly in the position where they're paying themselves off nicely. We've got great tenants in there. It's a good area. The tenants are phenomenal. We've been very lucky, but again, you can say luck but Paul's done really well for us.
Phil Tarrant: That's really interesting to know that there are door knocks. Just knocking on the door of the bloke next door and say, "Hey, look, do you want to sell?" If you could get the next one down would you get it?
Grant Iverson: Oh, absolutely.
Phil Tarrant: Would you?
Grant Iverson: I don't know how I'd be able to. Like they say, I'll have to hold for a while.
Phil Tarrant: Is that you out for a while? Are you going to buy anything more for now, or is that-
Grant Iverson: We are out at the moment. But, again, by working on our business, and we're really lucky. We've got a business, most of our effort now goes into that business and really looking after the business to grow the business to be able to support our financial position to be able to get back into the game. That for us is ... Look, these properties will be for us, the intention is being two to three years, we'll do the development on that. We're really kind of, a little bit of land banking so to speak for us for a couple of years. Then hopefully we'll get some growth out of that. There's no guarantee.
Phil Tarrant: Will you buy something more before you start to develop on these properties, or it just depends?
Grant Iverson: It does depend. We're in a position that in an ideal world, we'd love to start continuing, or keep buying, but there's gotta come a point where we're going to need to get some equity and we'll need to do a development to continue on that.
Phil Tarrant: The manufacturer’s who make equity
Grant Iverson: Exactly.
Phil Tarrant: Do you view the business now as just a cash flow vehicle? Is that pretty much? Like, so, what is it, a naturo-
Grant Iverson: Naturopath clinic, yeah.
Phil Tarrant: So that's like, naturopathy is like nice stuff. It's not like acupuncture. It's sort of-
Grant Iverson: It's very much more about kind of a balanced, holistic kind of health.
Phil Tarrant: Okay cool. Is that a business that is an asset that you can sell at some point in time, or is this just a vehicle you can use to generate cash from to invest in property? Or is it both?
Grant Iverson: We've got a strategy that, you know, maybe five years. It wouldn't be earlier than that, but maybe five years we will sell the business, or at least have it in a position-
Phil Tarrant: So it is a sellable asset.
Grant Iverson: Correct. Yeah.
Phil Tarrant: Okay, so you can build the business up and there's upside benefits at a point in time if you try to sell it that you can get a fee for that, but until that point in time you run that business as well as you possibly can to generate cash flow to allow you to invest in property and show profitability so lenders give you money and then build your property assets on the side.
Grant Iverson: That's it. Absolutely.
Phil Tarrant: Now that's passive value property stuff, because you shouldn't need to be too involved in it as long as the rents are getting paid and you're keeping up to date with everything and the houses aren't falling apart. You don't need to invest too much time into it.
Grant Iverson: Exactly. The way we've bought, we know that we've gotta spend another two to three years building that business and really sort of putting more legs on it, making it more stable and getting growth from that business. By that time, two years down the track, I'll be in a position where we can kind of say, "Well, look, everything's going really well here. We've achieved that goal. Now we can move on into the development." My attention can then go to the development side.
Phil Tarrant: How hands on do you want to be on the development? Do you want to be the project manager, or do you want to be just the guy who pays the bills and makes sure it's okay?
Grant Iverson: If you'd asked me four years ago I'd say the project manager, but look, I don't think I'd be a good project manager. It's not my area of expertise. My area, from what I'm sort of feeling I want to invest more of my time is developing a team around me. Getting a good project manager.
Phil Tarrant: Being a leader.
Grant Iverson: Yeah. Supervising, overseeing it, but getting out of the way and letting those guys do what they want to do or what should be doing, and just kind of checking in on them.
Phil Tarrant: It sounds like you find this new point of view as quite refreshing, right?
Grant Iverson: Very much so. Yeah.
Phil Tarrant: You feel unencumbered? Are you less stressed at all?
Grant Iverson: Yeah. Look, once you know what you want and you find that happy, that groove, then things seem to flow a lot easier, for me now. With regards to the business, I would never have thought, "Here's the point five of a naturopath clinic," when I was 20 years in hospitality selling beers and burgers. Now, to me it's a joy every day to go to the clinic and to see the opportunity that we can create there and move that then over into the property. You've got very good clarity of what you can see down the track. I think the biggest change that I've had from the Newcastle days is I can physically see what I'm heading towards, and it's written down. My accountant's got a one page plan of where we want to be in two years, five years, and as long as everything just keeps flowing forward, it's a lot easier and the strategy is in place. We know that we've just got to keep ticking this box and this box and this box. We've got a direction now. Good point there, yeah.
Phil Tarrant: It's good. Direction is good. You need to know where you're going. If you don't know where you're going, you'll never get there, right
Grant Iverson: Exactly.
Phil Tarrant: It's just the way that works. That's cool Grant. It's a good story. A lot of lessons there I think, for people. Do you wish you could go back and just shake yourself four years ago and say, "Mate, come on. Sort your..." How old are you, by the way?
Grant Iverson: 47.
Phil Tarrant: Okay. You're not old, but you're not young either. You've still got plenty of time to sort this out. It's a long time to spend pretending to be a property investor. I say that nicely, right.
Grant Iverson: No, look, I totally agree with you. I mean, you can go in there and, you can go through the motions and justify that yep, by getting into the car and going to Newcastle every weekend for two years I'm doing my job, but it wasn't the right job I should have been doing. I should have been investing my time into finding that right team, putting that team together and like what you say, have your property buy come to you and say, "Look, here's the deal." Then you've got the time, rather than getting in the car and driving two hours or four hours in a day, you can sit down and say, "Well, no I don't like that," or, "The numbers just aren't right." That's what I think I was missing. I was being out there and I was going through the motions and physically present, but really not getting any value out of that time.
Phil Tarrant: I'm sure your story is resonating with a lot of people. They're probably sitting there, driving in the car right now going, "Oh, that sounds like me. Yeah, yeah." What do you say to them? How do you get yourself out of that mindset and start taking action? What would be the one step that you could do, today?
Grant Iverson: I think the number one thing for me is work at a way to get whatever the barrier or the block is blocking you. You've gotta kind of find that block. If you're not buying a property in this kind of market and you're property ready within three months, there's something not right. I don't think it should take two years for someone to realise that. It took me two years. If you're not having an investment or moving your portfolio forward, particularly now with low interest rates and those kind of things, you need to start looking and saying, "What am I doing wrong? What's within me that's holding me back?" There's other people out there doing it and doing it really well.
I think you've got to start looking and saying, "What are they doing different?" Not just standing next to them at an auction and saying, "Well yeah, I missed out on that," but, "What is it that I'm not doing that they're doing?" Whether that's lack of confidence, whether that's lack of team, whether that's lack of knowledge, you need to find that out first. Then you need to go and seek out a way to find out how to overcome that. For me, it was going and investing in a buyer's agent and sitting down with my accountant and saying, "What's going on here?" You need to listen and listen to those people.
Phil Tarrant: You've got to be pretty reflective and critical of yourself.
Grant Iverson: Correct. Yeah. We've all got an ego and it's nice to say, "Yeah, I'm out there and I'm looking at all these properties," but fundamentally, if you're not have any value in that, you're just wasting your time.
Phil Tarrant: It's an interesting point because I think a lot of people find themselves in this position at some point in life. It might be, for you, this might be a property thing, but for other people it might be a relationship thing. For some people it might be a career thing. For someone else where, they might be, I'm not going to say you're stuck in a rut, but you were in a , which wasn't a positive cycle for you even though you were investing to try and sort of move ahead, but for whatever reason you couldn't see the wood for the trees, right? The fact that you've been able to transition from that to where you are right now it's good, and I think a lot of people can learn from that.
Grant Iverson: Look, I think a turning point for me was to look at what was working in my life. For me, the business was doing quite well, and I said, "Well what can I transition from that and apply to that?"
Phil Tarrant: What can you learn from this, apply over there. You don't need to reinvent the wheel.
Grant Iverson: Exactly.
Phil Tarrant: Nice one Grant. It's good. These assets, they sound pretty good. A lot of people start looking for that sort of stuff often four, five, six properties in. The fact that you're buying these, and its benefits of a good buyer's agent, buying these assets which immediately work. You can afford them, number one. Number two, you're getting a good yield on them and they're not costing you too much to hold, but it's got that upside potential in the future to allow you to do stuff. You know what, if you choose not to develop these properties, at some point in time if you choose to sell them you'll probably sell them to someone that will develop them so it's gonna make them more attractive to the next person should that be the case. You've got lots of choices and choices in property investment is good. Brilliant Grant.
Grant Iverson: Great. Yeah, it's exciting. I mean, for someone, listeners listening now, it's really about kind of finding that thing that's stopping you. There's so many opportunities out there. What is that block that's just not getting you across the line?
Phil Tarrant: Yeah. Food for thought.
Grant Iverson: Thank you.
Phil Tarrant: Mate, appreciate it. It's good. Let's get you back in. Give us a year or so and let's see what you're up to and see if you started working on these things yet or you've bought some more or you've got this gang buster business that's doing whatever, yeah?
Grant Iverson: Yeah, that's exciting. I'd love to do that.
Phil Tarrant: A lot of plates spinning, so it's good to have plates up there and do another thing, but appreciate your time, mate, really do.
Grant Iverson: My pleasure.
Phil Tarrant: Remember to check out smartpropertyinvestment.com.au. If you're not yet receiving our daily marketing intelligence, smartpropertyinvestment.com.au/subscribe. Go and check it out. If you'd like to come on the show, we, as I mentioned beforehand when we started the podcast, irrespective of where you are on your journey, every property investor has a story like Grant and we're happy for you to come and share it with other property investors. The more we do of this and the different diversity and the people that come on the show it means that everyone can learn from it. As I mentioned beforehand, many times in the show I'm probably, got one of the most privileged positions in property investment strategy because I get to speak to people from all walks of life, whether they're investors or property experts. This is where I serve my apprenticeship, so I'm investing in my property education every single day and I'm lucky I get to do this.
Come on the show, have a chat with us and share your story. If you'd like to do so, [email protected] is the e-mail address you need to e-mail. If you've got any questions for Grant, me, happy to answer them. If you like to get your info from social media, search smart property HQ, we'll be there. Please keep those reviews coming on iTunes. We do appreciate them. Until next time, we'll see you then. Buh-bye.
Announcer: 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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