0:01 You've got over four and a half that's
0:03 billion with a B of loans under
0:05 management which is an astronomical
0:07 number. Talk to me about some of the
0:08 growing pains in terms of scaling the
0:09 Alic business.
0:11 >> We lend money to educate customers to
0:13 enable wealth creation. It's about
0:15 lending ethically and to find the right
0:16 people to do that takes a long time.
0:18 >> There's a bit of a common belief out
0:20 there that you're earning an average
0:21 income, you're going to get tapped out
0:23 at one or two properties and then you're
0:25 not able to scale. Is that BS or is that accurate?
0:25 accurate?
0:27 >> Is it BS? It's really important from a
0:29 millennial perspective to understand the
0:30 customer, understand their cash flows,
0:32 their risk profile, their comfort
0:33 levels, how they sleep. Sounds weird,
0:35 but if I gave someone my debt level
0:36 today, they wouldn't sleep very well at night.
0:36 night.
0:38 >> But deal with a lot of clients each and
0:39 every day, and it's all well and good
0:41 that the bank will allow you to borrow
0:44 $2 million, but as it stands right now,
0:45 interest rates are in the 6% range.
0:47 You're going to be negatively geared on
0:49 most properties, maybe 10, 20, $30,000
0:51 perom. You've got five or six of them.
0:52 There's two parts of it. Yes, you can go
0:54 out there and buy all the properties in
0:55 the world, but then you've got to
0:57 actually keep these things afloat. Is
0:58 that kind of one of the challenges that
1:00 you really kind of touch on with your
1:00 clients as well?
1:02 >> One of the biggest challenges right now
1:02 is that
1:04 >> what separates the clients who become
1:06 wealthy through property investing
1:09 versus those who plateau over one to two investments.
1:10 investments.
1:20 welcome to the first episode of the No
1:22 BS Property Investing Podcast, where we
1:24 talk with Australia's leading voices in
1:26 property, finance, and wealth building.
1:28 The podcast for everyday Aussies who
1:30 want real proven strategies to build
1:32 wealth through property. No hype, no
1:34 agendas, just straight talking advice
1:36 from over a thousand real world property
1:38 deals. Whether you're a rent vest, a
1:40 time poor parent, or chasing early
1:41 retirement, we give you the tools to
1:43 take action with confidence. And for our
1:45 very first episode, we're bringing out
1:47 the big guns, a true heavyweight, Mark
1:49 Davis, founder of the Australian Lending
1:51 and Investment Center, Australia's most
1:54 awarded brokerage. With over $4.5
1:56 billion of loans under management and
1:58 multiple number one broker awards to his
2:01 name and a golf handicap of two, Mark is
2:03 a master of helping clients use smart
2:04 debt to fasttrack their financial
2:07 future. So whether you're a homeowner,
2:09 investor, or just getting started, this
2:11 episode is packed with insights you
2:12 won't want to miss. All right. So Mark,
2:14 all right, talk to us about what really
2:16 inspired you to, you know, leave the
2:18 banks and and go ahead and start AL.
2:21 >> Yeah, basically I was at A&Z for 21
2:24 years and uh love my career at AZ. Had
2:25 an opportunity to roll out an investment
2:27 division for AZ, which is all around um
2:30 lending uh for wealth creation reasons.
2:32 And the GFC came in 2009 which caused a
2:35 few issues and uh and the bank wanted to
2:36 go back to more basic lending which is
2:38 understandable and at that time pretty
2:41 my hand was forced to to get out of the
2:43 bank system and set up my own division
2:46 to to go and lend money to customers to
2:48 enable wealth creation. So I suppose my
2:51 whole dream to do it for the bank came
2:53 to an end uh during that time and we got
2:55 out there and uh and rolled out the
2:56 company called the Australian lending in
2:57 investment center.
2:58 >> And how how long ago was that? When did
2:59 you actually start the business?
3:02 >> 2009. So worked at A&Z for from what
3:05 1987 uh as a young uh young person down
3:08 in Tasmania and then uh and then set up
3:11 ALS 2009 with uh my business partner
3:12 Kevin Agent.
3:13 >> Funnily enough, did you tell me if this
3:16 is a true story? Our office down in
3:18 Sandy Bay and Hobart. Is that where you
3:20 actually started off your banking career?
3:20 career?
3:22 >> I did. I did. I uh I came into Ry House
3:24 the other day and walked through the
3:25 door and sat on the desk that I sat in
3:28 in 1987 when I started on INZ as a young
3:29 uh teller. >> Yep.
3:30 >> Yep.
3:32 >> At uh in the magnet court in Sandy Bay. Yes.
3:33 Yes.
3:34 >> Yep. That's uh that's pretty surreal
3:35 actually when
3:36 >> it was. It was interesting.
3:38 >> I'm pretty sure the the guys in the
3:39 office sometimes get people still in
3:42 walking like this is not A&Z. So uh it's uh
3:43 uh
3:44 >> well I think A&Z had only just left
3:46 there a year or two earlier. So >> yeah,
3:46 >> yeah,
3:48 >> it's Yeah, it was uh quite the
3:50 experience and winding back the clock.
3:51 >> Yeah. Awesome. And then I guess you know
3:53 going back to to your business you've
3:55 got over four and a half that's billion
3:58 with a B under of loans under management
4:00 which is an astronomical number
4:02 >> but um maybe talk to me about some of
4:04 the growing pains in terms of you know
4:05 scaling the AIC business to to get to
4:07 that point where you're at today.
4:08 >> I suppose one of the biggest growing
4:10 pains is finding the right brokers and
4:13 writers out there to do what we do. So
4:15 we we lend money to educate CL customers
4:17 to enable wealth creation. Okay. And
4:19 that's really solely what we do. So we
4:20 don't we don't chase home loans. We
4:22 don't go and market home loans. It's all
4:23 all about gearing. It's about leverage.
4:25 It's about lending ethically and to find
4:27 the right people to do that and convert
4:29 them takes a long time. So that's pretty
4:30 one of the biggest scaling issues. The
4:32 other issue is the back end. Um making
4:33 sure you've got the staff that can
4:35 actually give the service the backend
4:36 service to get through the red tape in
4:39 the bank system because the banks aren't
4:40 aren't easy to work with necessarily.
4:43 They uh they're easier directly. Um they
4:44 they don't necessarily look after
4:47 brokers as well as they possibly could.
4:49 And uh so to to get the staff that can
4:51 cut through the red tape is is probably
4:52 one of the biggest issues as well.
4:53 >> Yeah. Yeah. That that makes a lot of
4:54 sense. You know, I think for any
4:56 business trying to scale, it's
4:58 >> you know, you get a lot of orders come
4:59 in, then you got to be able to actually
5:00 get the cooks in the kitchen to fulfill
5:02 the orders and then you get all the
5:03 cooks in, but then are they the right
5:04 cooks in the kitchen? And I guess that's
5:06 probably that makes a lot of sense. And
5:07 I guess for yourself, you know, you
5:09 spent a lot of time at A&Z and and much
5:12 more time now with uh running ALC. What
5:14 is I guess what has your background
5:16 experience from A&Z? How has that shaped
5:18 the way your kind of your strategy and
5:20 your client experience like what was
5:21 that gap you felt was missing in the market?
5:22 market?
5:25 >> Yeah, so I knew the investment uh gap
5:28 was out there as a employer of A&Z. So I
5:30 initially set up a business within A&Z
5:32 called the A&Z lending and investment
5:36 center ALC A IZ investment lending
5:39 center. Um and then we little bit cheeky
5:40 we set up the Australian lending and
5:41 investment center and changed the color
5:44 from blue to purple. So the gap was
5:47 always there and the banks don't really
5:49 hit that side of the wealth creation
5:50 side of lending. They believe wealth
5:52 creations through financial planning. >> Yep.
5:52 >> Yep.
5:54 >> And through private bank uh not
5:55 necessarily through lending structures
5:57 when talking to to to customers out
5:58 there who want to improve their
6:00 situation. So the gap was massive. And
6:02 then I tried to fill that gap with
6:03 person called Brian Hartz who used to
6:05 head up um the Australian division for
6:07 NZ rolled it out about to roll it out
6:09 nationally and then the timing was
6:12 pretty bad cuz the GFC came in right at
6:14 that time in 2009 and the banks struggle
6:16 to get funding. We basically at that
6:18 stage um they closed that division down
6:20 and then uh it was an opportunity for me
6:22 to walk out and and then set up our
6:24 division and and go to other banks and
6:25 get the funding from various other banks
6:27 that were very open for business immediately.
6:28 immediately.
6:30 >> Yeah. So yeah, I guess one door closes,
6:32 another one opens, and it's been I
6:33 wouldn't say always smooth sailing, I
6:35 imagine, for you. But uh you must be
6:36 pretty happy where where things are at
6:37 today. And you guys are obviously
6:38 continuing to scale.
6:40 >> Yeah, it's very we're very lucky. I was
6:42 very lucky to to work for an employer
6:44 that let me follow my dream cuz most
6:45 banks wouldn't listen to an employee,
6:48 but I'd been there for so long and we'd
6:50 been writing very big sales volumes for
6:52 the bank, so they gave me the
6:53 opportunity. So I'll be very thankful
6:56 for that. And then to go out and do it
6:58 again. Yeah. No regrets. and no looking
7:00 back. We want to change the way lending
7:02 is done in Australia. One of my goals is
7:05 to change and have all people and all
7:07 customers to understand their their net
7:10 worth, their their retirement age, their
7:12 um their current structures, their uh
7:14 their current assets they own uh and
7:15 really educate them from a lending
7:17 perspective and then get them around the
7:19 people that they need to talk to on the
7:20 things that we can't advise on. So
7:22 that's been my goal from 25 years, 30
7:24 years and uh we we'll keep pushing along.
7:25 along.
7:26 >> And uh you touched on a good point
7:27 there. So I guess for yourself, you're
7:29 saying for a lot of brokers or
7:31 brokerages out there, you you're pretty
7:33 much saying like you need a team around
7:34 you. Is that right? It's not just about
7:36 you maybe your one piece of the puzzle.
7:37 Is that what you're trying to educate
7:38 your clients on?
7:39 >> Yeah. There's certain certain things we
7:40 can't advise on. Okay. We don't want to
7:41 be a property adviser. We don't want to
7:43 be a financial planner. We've studied
7:44 planning, but we don't want to be a
7:46 planner. We want to be the best lender
7:49 from an investment strategic perspective
7:51 to enable wealth. So it's a bit of a
7:52 copout. We we lend money to enable
7:54 wealth. We don't create the wealth.
7:55 >> Yeah. The people that create the wealth
7:56 are people at Rip House who know where
7:58 to buy the assets, have all the data.
8:00 You need a set team around you and they
8:02 have to be wealth oriented. Okay? So,
8:03 anyone out there with teams that aren't
8:05 wealth oriented or an accountant who
8:07 just does a tax return or a broker who
8:10 just does a rate or a um a buyer
8:12 advocate who just buys a property.
8:14 Basically, we try and get the right
8:15 people around all our clients.
8:17 >> Yeah. And I guess so going on that a
8:19 little bit, I guess, what's the the
8:20 whole ethos about, you know, the
8:21 Australian Lending and Investment
8:23 Center? I guess what's your philosophy?
8:25 What are you trying to to bring to the
8:26 table for clients? Like what do you guys
8:27 I guess you know what do you stand for?
8:29 What do you want your you know every
8:31 every business has got their uh their
8:33 mantra or their their vision board. What
8:34 does that look like for the ALC business?
8:35 business?
8:37 >> It's a good question. Ethically lend.
8:39 Don't lend as much as you can. Um don't
8:41 look at borrowing capacities and go to a
8:42 bank and say how much can I borrow? >> Yeah.
8:43 >> Yeah.
8:45 >> To reduce non-deductible debt to loosen
8:47 the noose around the client's neck to if
8:50 you get non-deductible debt reduced uh
8:53 it it it frees up cash flow. It frees up
8:56 lifestyle. It frees up the ability to be
8:58 able to invest and holiday and retire
9:00 early and you can start making
9:03 decisions. So the whole ethos is improve
9:04 your financial position. Reduce home
9:05 loan debt, which is quite the opposite
9:08 to most most brokers or banks. Reduce
9:10 non-deductible debt, increase deductible
9:13 debt, get your money working smarter, do
9:14 it in a timely fashion, get the right
9:17 people around you, and structure to
9:18 enable wealth.
9:20 >> Yeah. and and that's really the ethos
9:22 from day one and that we continue with.
9:24 >> Yeah. And and that you you touch on a uh
9:26 a really great point there and one of my
9:29 kind of uh pet peeves because uh I'm
9:31 kind of front facing like yourself. I
9:33 deal with a lot of clients each and
9:35 every day and um it's all well and good
9:37 that the bank will allow you to borrow
9:38 $2 million,
9:40 >> but then there's the, you know, as it
9:42 stands right now, interest rates are in
9:43 the 6% range. You're going to be
9:44 negatively geared on most properties,
9:48 maybe 10, 20, $30,000 perom. you've got
9:50 five or six of them and then you're
9:51 trying to put kids through private
9:53 education, you know, you're trying to go
9:55 on the holiday or so like it's there's
9:56 two parts of it. Yes, you can go out
9:58 there and buy all the properties in the
9:59 world, but then you've got to actually
10:01 keep these things afloat. Is that kind
10:02 of one of the challenges that you really
10:04 kind of touch on with your clients as well?
10:04 well?
10:05 >> One of the biggest challenges right now
10:07 is that everyone's above the cap. Okay.
10:09 So, if your borrowing capacity was was
10:11 that before and then rates go up 18
10:13 times, your borrowing capacity comes
10:15 down 40%. So you got a big percentage of
10:17 the population are above their cap right
10:19 now. And you got to manage it back under
10:21 the cap. And how do you do that? Through
10:22 through exits, through reducing
10:25 non-deductible debt, nondeductible debt,
10:28 increasing uh income uh bonuses, all
10:28 those types of things. So there's ways
10:30 to get back under the cap or using
10:32 second and third years. So it is
10:34 definitely an issue out there or a
10:37 problem out there that um people um have
10:38 all these expenses, have these lifestyle
10:41 things, they they feel the pressure. But
10:43 to me, it's about if the banks aren't
10:46 lending and your caps come down, what
10:48 are we doing about it? We should be
10:50 discussing it. We should be uh getting
10:52 extra strategy. We should be bringing
10:53 the buyers a ripe house or someone like
10:55 that or your buyers have to talk through
10:56 the asset. So the last two years, three
10:58 years as rates have gone up 18 times.
11:00 It's gone up 16 times at equivalent to 18.25s.
11:01 18.25s.
11:03 All our conversations are about really
11:05 getting back under the cap and getting
11:07 into the control where we can actually
11:09 manage your structures again.
11:11 So, I don't know whether that's answer
11:13 your question. Does that answer your question?
11:13 question?
11:15 >> No, it does. It does. And I guess uh you
11:17 know, you you raised a good point and
11:19 what I really love about your business
11:22 is uh I think in the property space as
11:25 investors, we almost become hoarders. We
11:26 we love to collect properties and it's
11:28 just about, oh, now I've got five, I've
11:29 got to get to number six. And we feel
11:32 like if we go from five or six, we sell
11:33 one of those properties off, we've taken
11:35 a backward step.
11:36 >> But, uh, you know, that's not always the
11:38 case, right? If all of a sudden you free
11:40 up non-deductible debt and we get
11:41 clients come through the door, they
11:43 maybe want to start off by, you know,
11:46 having a passive income quote unquote of
11:49 150k, but when clients come in, if
11:50 they've got their home loan paid off and
11:52 they're able to go on, you know, reduce
11:54 it that they were only working down 3
11:55 days a week, you're able to go on more holidays,
11:57 holidays,
11:59 >> that's not what they're the 150k isn't
12:00 what they're chasing, right? What
12:02 they're chasing is choice. Do you feel
12:04 for your clients, that's the the big
12:05 one? Because obviously you've been doing
12:06 this for a long time and you've got
12:08 clients who are
12:09 >> uh you know we've worked with lots of
12:10 your clients where they're either at the
12:12 early stage or in the middle part or
12:13 we've got lots of clients also at the
12:14 back end where they're actually starting
12:16 to sell off assets and and walk into
12:18 retirement. Has that been something
12:20 maybe you can touch on the education
12:22 piece you touch on with your clients?
12:23 >> Well, a lot of people will just like you
12:25 said go for five to six and they think
12:26 they're advancing because they they're
12:28 growing their property volume. Okay. And
12:29 that might be a lot of Europeans. the
12:32 old mentality years ago, the the Greek
12:34 corner store owner would be really on
12:36 200k a year. His tax returns might not
12:38 show that, but he has six or seven
12:40 properties. He just holds for 30 years
12:42 and he's missing out in markets. Okay?
12:45 So, I'm a big believer in um not staying
12:47 in markets that are underperforming.
12:48 Classic example, and not that we're the
12:50 property adviser, but and you know this
12:52 better than I do. I mean, Tasmania is
12:54 going through a bit of a bit of a period
12:55 at the moment with with no growth in
12:57 certain certain markets. You've got
12:58 Bendigo and Bellerat had 10 years of no
13:00 growth. You had Perth 13 years of no
13:02 growth. Why would you ride through those
13:03 those markets when you could have gone
13:05 to other markets? So all I said were
13:06 buying everything in Victoria 8 years
13:08 ago. We hardly bought anything in
13:09 Victoria from an investment level in the
13:11 last eight years through our buyers
13:12 advocates because there's been better
13:14 markets in Adelaide, Bendigo,
13:18 Queensland, Perth, etc. So hoarding, as
13:20 you as you asked, I'm not a massive
13:22 believer in in in it's how many you own.
13:24 It's about what it costs to run your
13:26 portfolio. What's it cost pre-tax?
13:28 What's it cost post tax? What's my
13:30 buffer? Okay, what's my non-deductible
13:32 debt? How much pressure is on me? What
13:34 news have I got around my neck? And I
13:36 can tell you families out there now feel
13:38 that feel that noose. If you go to
13:39 Sydney, a lot of the non-deductible home
13:41 loan debts are massive. The pressure
13:43 they're under to deliver for 30 years is
13:45 insane. And I believe there are better
13:48 ways to get around that. Not necessarily
13:50 go to your big owner occupied house, go
13:51 and get your big home on debt because
13:53 the bank said you could borrow it. Who
13:55 cares what the bank says you can do?
13:57 Okay. It's about understanding all the
13:58 facets of it and then making the right
14:00 decision to own that house outright
14:01 sooner and earlier.
14:03 >> Yeah. And and are you you touching on
14:04 that now? Cuz I guess from our clients,
14:06 we see
14:07 >> particularly, you know, couples coming
14:10 in late 20s, early 30s. This this shift
14:12 of having to go out there and and buy
14:14 the million dollar property with a
14:15 million dollar loan or the best part of
14:17 it and all of a sudden their their
14:18 repayments per month are about six
14:20 grand, which is, you know, 60 70% of
14:22 their income maybe for some of them. uh
14:23 there's been a real shift where they're
14:26 happy to rent and and go down that uh
14:27 rent vesting pathway.
14:30 >> Uh I guess maybe talk to me a little bit
14:32 about in types of I guess there's also
14:34 clients out there that uh become fixated
14:36 on paying off their home loan you know
14:37 rather than going out and buying an
14:39 investment property and you know just
14:41 paying a extra couple hundred per week
14:42 and getting the debt down.
14:43 >> Yeah. It's the old style isn't it?
14:45 >> Yeah. The old the old way the parents
14:46 say the Australian dream buy your first
14:48 house and get in the market. Yeah. And
14:49 just pay it off. And that's what I was
14:51 taught by my parents. So, I opposed. You
14:52 either follow your parents or you oppose
14:56 your parents. Yeah. In most cases. So, I
14:58 uh I I don't like getting on the
15:00 treadmill. I don't want my clients on a
15:01 treadmill. I don't want them paying the
15:03 bank home loan payments of 6,000 a month
15:05 for 30 years. I think that's just an
15:06 absolute waste of money. It's there's
15:09 other ways around it. But, it's about
15:11 that's an emotional choice to go and do
15:14 that. So, it's about controlling and
15:16 making decisions around non-emotional
15:18 things and trying to get the emotion out
15:20 of the calculation. And if we can get it
15:22 out of the calculation and don't go and
15:23 buy a house in X suburb that you that
15:25 you wanted to because the bank said you
15:28 can do it. Okay? Go and rent in that
15:29 area. So I'll give you a classic
15:31 example. You go to Campwell about 12 13
15:32 years ago when we started doing this a
15:36 lot with Z or maybe 15 years ago. You
15:37 could buy a $2 million house in
15:38 Campbell. You could rent the place for
15:41 650. Okay. So we got all our customers
15:43 living in Campbell, rent vesting, paying
15:44 650, having a massive block, great for
15:46 the family near the near the um near the
15:49 school in the school zone. awesome
15:50 lifestyle and they invested elsewhere
15:52 where they can make money.
15:55 So rather than going get a 1.75 home
15:57 loan debt at rates of 10% at the time
16:00 that was costing 11,000 a month, they
16:01 could actually live in the same place
16:03 for three. So anyone out there who says
16:05 renting is dead money, that's a classic
16:07 classic example that rent money is the
16:08 best money ever.
16:09 >> Yeah. And I guess it's really taking
16:11 that leverage, right? Like you've got
16:14 some advantages as as an investor. We've
16:16 got negative gearing to tap into. where
16:17 we've got the leverage aspect in terms
16:19 of you know the bank's going to give you
16:20 back what about five six times your
16:23 income at the moment like and then also
16:24 too if you're renting or you're renting
16:27 your property out that income is coming
16:28 to help you servicing right so and
16:30 that's what's and then I guess that
16:31 touches on the next question I guess
16:33 there's a bit of a common belief out
16:35 there that you're earning an average
16:37 income you're going to get tapped out at
16:39 one or two properties and then you're
16:41 you're not able to scale is that myth or
16:42 I guess cuz you know the the theme of
16:45 the the podcast is you know no BS is
16:47 that BS BS in terms of how to do that or
16:48 or is that accurate?
16:50 >> Is it BS? It's there's a whole lot of
16:52 really to be honest. You can't
16:53 keep borrowing. Okay, the government
16:54 don't allow you to keep borrowing and
16:55 the banks don't allow you to keep
16:56 borrowing and if you can't borrow,
16:57 there's probably a reason why you
16:58 shouldn't be borrowing. Okay, but
16:59 there's a lot of people out there that
17:01 do want to keep borrowing and over go
17:03 over their cap and they're not that
17:04 experienced on investing and they get
17:06 themselves in trouble. Okay, so I'm a
17:08 big believer if the banks are saying no,
17:10 there's a pretty good reason for it.
17:11 Okay, but you can use second tiers, we
17:13 can use third tiers. We'll touch on
17:16 trust later. You can use trusts. There's
17:19 reasons for and reasons not to. But in
17:21 summary, you can't just keep buying
17:25 properties, okay? But you can buy a lot
17:28 more if you reduce non-deductible debt.
17:30 So non-deduct non-deductible debt we
17:32 call debt, bad debt. It's horrific.
17:34 It's paid from from your net income.
17:35 It's post tax money. If the government's
17:38 going to give you a 45% discount, why
17:40 wouldn't you take it? Okay, so rent
17:42 vesting's been massive for me. I was I
17:44 started investing at 21. Uh I've been
17:47 investing for whatever 34 years or
17:49 whatever. Um 34 years now and I believed
17:52 in rent investing back then. Okay. It's
17:55 becoming bigger and so moving forward
17:56 kids won't have options.
18:00 >> Yeah. So if your parents can go guarante
18:02 and you buy in a growth market, let's
18:05 turn your 20 grand into 100 grand. Okay,
18:08 let's then turn your 100k to 250k. And
18:09 the biggest hardest part of it always is
18:11 how do we get that first 250k? That's
18:14 the hard bit. The next 250 or 500's easy.
18:15 easy.
18:16 >> It's like the snowball rolling down the
18:17 mountain, right? Like once you get that
18:19 snowball rolling, it's just going to get
18:21 bigger and bigger from there. But the
18:22 hardest part is starting. And if you've
18:24 got, like you mentioned, we've seen the
18:25 bank of mom and dad getting more and
18:28 more tapped into right now. I think uh
18:29 there was an article out there the other
18:31 day that the bank of m and dad now don't
18:33 even expect to get their money back. So
18:34 that's that's the that's the the big one
18:36 as well. It's becoming a bit of a theme.
18:37 So it's just getting into the market
18:38 before it becomes
18:40 >> and just on that where's the risk to the
18:43 parents? Okay, so say a parent owns a
18:45 two parents or a parent owns a property
18:46 worth 2 million. Say they own the
18:48 majority of it. One of their kids come
18:49 in at 20 years of age, got their first
18:52 job, got 20k saved up. Okay. No one
18:54 thinks I can get on the market.
18:56 Property's too expensive in Australia.
18:58 Um I can't get anything in Melbourne or
19:00 or whichever state I'm looking at. But
19:01 you actually can. You can go to someone
19:03 like Ry House or a buyers advocate to
19:05 talk about and buy in a market around
19:08 the country for 350 450k
19:11 with 20k. Okay? Cuz banks will lend if
19:12 the parents are going to go guarantor.
19:14 The parents aren't putting cash in.
19:17 They're just guaranteeing say 120 grand
19:20 that if things went bad and the loan
19:21 went bad, you didn't talk to us, you
19:22 didn't talk to the bank, we had to sell
19:25 it, the guarantor ignored it, we sold at
19:28 a loss, and then the the guarantor could
19:30 be up for 120K. Now, in 30 years of my
19:32 lending, I've never seen it.
19:33 >> And even from us from a buyers agents
19:36 point of view, I've never seen a
19:38 client's purchase lose money. Uh
19:39 particularly when, you know, buying
19:41 costs over the last few years are up
19:43 over 50%. Right? So you if you're buying
19:46 a property 350, 400, even 500, your risk
19:49 is really low because you to build the
19:50 same thing like for like these days,
19:52 it's probably going to cost you $500,000
19:53 or more. So
19:54 >> if the data is right from you guys,
19:57 which it is nine times out of 100, okay,
20:00 and the data is right, the assets right,
20:01 and if you do get into trouble
20:05 employment wise or salary wise, then
20:07 speak to your broker and and talk
20:08 through it and take it out of the
20:10 control of the bank. never let the bank
20:12 get control of this. Okay. And then you
20:14 manage that situation and you may have
20:16 to exit. But there be various options,
20:17 but you normally work through it. But
20:19 again, I haven't seen a client get into
20:20 trouble in 30 years.
20:22 >> Yeah. And uh I mean, you touched on it
20:24 just before in terms about your
20:25 experience of property investing. We
20:27 haven't gone into that much uh so far.
20:29 Maybe give us a bit I know cuz you're
20:30 you're a highly successful property
20:32 investor yourself. maybe give us a bit
20:34 of your background or as much as you're
20:36 open to discuss with in terms of how how
20:37 you started,
20:39 >> what are your learnings been and you
20:41 know where's your portfolio at today?
20:42 >> Yeah, it's a good question. Um,
20:44 >> if you're serious about building wealth
20:46 through property, you don't just need a
20:49 loan, you need a strategy and that's
20:51 exactly what the Australian Lending and
20:53 Investment Center delivers. Australia's
20:56 most awarded brokerage. They're not just
20:58 looking at what you can borrow. They'll
21:00 build you a holistic lending plan
21:03 tailored to your long-term goals. We use
21:05 them, we trust them, and so do our
21:08 clients. So, to find out more or to book
21:10 your complimentary lending strategy
21:12 session, head to the link in the show
21:14 notes to connect with the team. Thanks
21:16 for listening. Now, back to the video.
21:18 >> Happy to share. Okay. I share with all
21:20 my customers all the time. If I'm going
21:21 to run meetings and get information from
21:23 clients, I think it's fair that you
21:25 share what you do as well. And I think
21:26 it just enforces to the customer that
21:29 that you're also doing what you're
21:31 preaching. So I started investing at 21
21:33 in Tasmania where I grew up. Okay.
21:35 Pretty average market. Didn't use
21:37 professional advocates. Uh made all the
21:39 errors which you all do. Y
21:40 >> thought I knew what I was doing. Made a
21:42 loss on a property. My first property
21:43 only property I've ever made on I've
21:44 actually made two losses out of 40 properties.
21:46 properties.
21:47 >> Um there's couple reasons we'll talk
21:49 through but made a loss on a small
21:51 property in Morain. Bought it for
21:53 63,000. Sold it for 58,000 7 years
21:55 later. got trashed by the worst people. Yeah.
21:55 Yeah.
21:57 >> Okay. And this is where most investors
21:59 will walk away and go got burnt, got
22:01 trashed, didn't work, won't do it again.
22:02 And that's the problem that most people
22:04 have. They don't get back on the horse.
22:05 >> And then bought one in Bellere, which is
22:07 right near the B oval. And then moved to
22:09 Melbourne and then started buying
22:10 investment properties. But always loved
22:13 it and wanted to do it and then buy on
22:15 average one to one and a half a year.
22:16 But you've got to show the income to
22:17 keep borrowing. So answer your question
22:19 earlier, can you just keep borrowing?
22:21 You can't. You've got to show income.
22:22 Okay? Okay. And you got to meet the the
22:23 guidelines and the requirements. There
22:25 are ways around with second and third
22:26 tiers and things like that, but you've
22:28 got to basically continue your income
22:30 growing to keep borrowing, but also I'm
22:32 a very big believer that you don't move
22:34 into your first house. So, I'm I'm a
22:36 little bit different. I waited to 45 to
22:37 move into a first house.
22:39 >> Wow. So, that's delayed gratification,
22:41 which I think for a lot of people out
22:43 there, that's uh a newly learned skill
22:45 or a skill that they need to probably
22:48 >> uh build on. Well, I figured that if I
22:49 can go and leave in a place that's
22:51 better than what I can buy, why don't I
22:52 do that and just keep investing in the
22:54 right markets. Yeah. And I probably went
22:56 out of hand, but the house I end up
22:58 buying was a place in Secur West and we
23:00 bought it for 3.4 and it was a 5.5
23:03 house. Negotiated perfectly in 2015,
23:05 2014 when GFC2 was coming on on and all
23:07 the execs you the banks were losing
23:09 their jobs. all the margin margin calls
23:11 were happening and it was quite messy
23:14 and we got a I I negotiated a $2 million
23:17 discount and then went home said to my
23:18 wife we bought a house but we can't move in.
23:20 in.
23:20 >> How did that go down?
23:23 >> Didn't go down well. Um but she
23:24 understood because all these other
23:26 properties we had were mid strategy.
23:27 Okay. So you don't sell them mid
23:30 strategy or and and some of them we just
23:32 bought. So I said we'll go and rent it.
23:35 we'll gear it and we'll also renovate it
23:37 in 2 3 4 years once the other properties
23:38 have gone through their strategy and
23:40 then you offload those assets to do the
23:41 renovation. Then you offload the assets
23:43 to own it. So I sold five to buy it. I
23:45 sold five to renovate it and then five
23:47 to own it. So I've sold 15 houses to own
23:48 that house and then happened to sell it
23:50 for 11.2 million 6 years later.
23:52 >> Just a uh just a small little profit there.
23:52 there.
23:54 >> Little 5 mil profit taxree which was
23:56 nice or close to taxree. There's a bit
23:58 of tax to be paid for the first bit of
24:01 time. It was a rental and uh yeah it was
24:03 probably pretty probably pretty probably pretty probably pretty probably pretty
24:03 pretty probably pretty probably pretty
24:04 that was probably my best performing
24:06 asset. What's interesting about it which
24:08 you like to know Julian is that I got
24:10 advised by my advocates at the time do
24:11 not buy. It was between two apartment
24:14 blocks in secure west on the water.
24:16 There was a uh what was it? Uh a
24:18 threetory one on one and a n story on
24:20 the other. And I knew I could renovate
24:21 the house in a way that it wouldn't be
24:23 affected. And we did all the
24:24 renovations, spent 3 million on the
24:26 renovation and uh did it in a way and
24:29 then sold it at the perfect time. Um
24:32 2021 June 30,
24:33 >> you you would have pretty much been
24:34 selling right at the peak of the market
24:36 cuz it didn't really do a whole lot. And
24:38 even even still today, the the $2
24:40 million plus market in Melbourne has
24:42 hasn't quite recovered. So you you
24:44 basically exit at the right exact
24:46 >> probably worth less now. Y okay. I won't
24:48 I don't know exactly, but I think it is.
24:50 But June 21, June 30, stamp duty in
24:52 Victoria pretty much went up 30% that
24:55 day and it got on the news and they um
24:57 it was it was front page on the news
24:58 that day. The last property that was
25:00 sold in Melbourne June 30 at the reduced
25:02 stamp duty and and the the purchaser
25:04 saved I know saved about 200k stamp dete
25:06 which was a so perfect timing. But
25:08 that's u my investment story is probably
25:11 the best ones that um I own quite a few
25:12 assets all around the all around the
25:14 country and starting just started a
25:16 development the other day in um there
25:18 you go. I bought I went in with a joint
25:19 venture with some friends there. Is it
25:20 Ashg Grove? >> Yep.
25:21 >> Yep.
25:23 >> Uh in Brisbane. I've only moved here
25:24 three years ago, so I don't know what
25:26 the suburbs up here still. Um and we're
25:27 just doing a development there. And we
25:29 want to get into some bigger stuff. But
25:31 but uh mainly my investment strategy is
25:34 buy, hold for 3 to six years, go through
25:36 the the market, exit, uh reduce
25:37 non-deductible debt, and just get your
25:39 money working as hard as you can in the
25:40 right markets.
25:42 >> Yeah. And uh so you've got a clear
25:43 strategy for yourself.
25:46 >> Maybe talk me through. I'm a first-time
25:48 customer coming to, you know, the Alic
25:49 business or or to sit down with you. >> Yep.
25:50 >> Yep.
25:51 >> What do you do with them? Like what does
25:52 it look like? What's the experience?
25:54 What are the questions you're asking? I
25:55 guess what what are you trying to make
25:57 sure that the client's walking away from
25:58 that meeting?
25:59 >> It's really important uh from a lending
26:01 perspect perspective to understand the
26:02 customer, understand their their cash
26:04 flows, their risk profile, their comfort
26:06 levels, how they sleep. Sounds weird,
26:08 but you customers have to sleep. And if
26:09 you've got debt, if I gave someone my
26:11 debt level today, they wouldn't sleep
26:14 very well tonight. Yeah. Okay. and I
26:16 wouldn't have slept well years ago with
26:17 that debt level. So, it's about
26:19 educating and and starting to understand
26:20 that, but understanding their their cash
26:22 flows, their assets, their retirement
26:24 age, their aspirations, their um what
26:26 they want to do. Um even their partner
26:27 to a degree is their partner in the
26:28 meeting. What's their risk profile? What
26:29 do they want to do?
26:31 >> Oh, that's a big one. I'm a huge I've,
26:33 you know, particularly for couples,
26:35 you've got I find it normally the two
26:36 two sides to the story with that one
26:38 where I've got the husband and wife
26:40 together. the husband, he wants to
26:42 become, you know, a multiple property
26:44 millionaire overnight and and the
26:45 partner's like, I just want to get this
26:47 home loan paid off or I want to upgrade
26:47 the house
26:48 >> and and I don't want to take on the
26:50 risk. It's a bit of a juggling act on
26:50 that side as well.
26:51 >> It's a bit of a problem when you're
26:53 there's two different risk profiles
26:55 there. Not a great sign for um property
26:58 growth or leveraging into into various
27:00 different assets, but you try and get
27:02 them aligned and we're all built
27:04 differently. So, we try and align them
27:06 to to a level. So the types of things we
27:08 we understand about the customer up
27:10 front. Uh I think it's really really
27:12 important to to to dig deep on that in
27:14 the first hour is really understanding
27:15 where we're going, what we're trying to
27:17 achieve, okay, and who they are. And
27:20 then again, not over lending, not
27:21 understanding that don't you don't need
27:22 to understand their maximum borrowing
27:23 capacity. You should be able to
27:25 understand from the conversations what
27:27 they think they should do. Okay. And
27:28 then the next side of it is who's around
27:32 them? Who have they got? Okay. Is that a
27:33 family? they've got a certain risk
27:34 profile because it's family experience
27:37 or family problems with maybe assets
27:39 they've lost money on. Um, do they think
27:41 they're certain way because of that? Do
27:42 they have the right accountant? Do they
27:44 have the right property person? Do they
27:46 have the right wealth people around them
27:48 to advance them? And in most cases, they
27:51 don't. Okay. So, then it's about getting
27:52 them in front of those people and then
27:54 we gather that information, bring it
27:56 back in after uh probably two weeks
27:58 after our first meeting. And then we
28:00 start to set up the lending strategy for
28:02 them subject to what they've thought
28:04 about, what they both want to do. Both.
28:06 I say both because it can't be
28:07 absolutely one.
28:09 >> Uh and then what advice they got from
28:10 the people on the things that we can't
28:11 advise on.
28:13 >> Yeah. And and then I guess touching on
28:15 that because you know I've had the
28:17 pleasure of working some of your clients
28:19 or I'll keep their name off the podcast
28:20 for privacy reasons but we know one of
28:22 them you know modest income but he's
28:24 sitting here with fourth or fifth
28:26 property into his portfolio which you
28:27 know most people listening go there's no
28:29 way doing this by myself I can get into
28:31 four properties but it's uh you know
28:32 it's a time thing making the right
28:34 choices he's got a team around him. I
28:36 guess from your experience dealing with,
28:38 you know, thousands of clients over the
28:41 years, what separates the clients who
28:42 become wealthy through property
28:45 investing versus those who plateau over
28:46 one to two investments?
28:49 >> Yeah, it's a good question. A a lot of
28:51 people get burnt like past experience
28:52 from family or what they've seen or
28:54 they've bought an asset. I spoke to
28:56 someone yesterday who you know who got
28:58 burnt on a property many years ago when
29:00 Queensland rolled out a massive amounts
29:02 of apartments. But if he had that asset
29:04 today, it would have done 170%.
29:06 170%.
29:08 Okay. But got out early. Yeah. So, what
29:11 separates it? It's a good question.
29:13 He hasn't trusted it or didn't stay in
29:14 the market long enough. And a lot of
29:16 people will just go buy one or two and
29:18 won't go any further because they've got
29:21 a a capacity of how much they think they
29:22 can borrow. They're thinking about the
29:24 number they owe, not how it runs. >> Yeah.
29:25 >> Yeah.
29:28 >> Uh or they've been burnt. All
29:29 >> Would you say repetition comes into it?
29:32 cuz I mean in terms of you know I've
29:34 I've seen you firsthand in the gym. You
29:36 you used to be there every single day
29:37 same time putting the workouts in and
29:39 now it's the the golf course or the uh
29:41 I've heard you've got a pretty setup
29:43 simulator the golf course in the office.
29:44 >> I used to
29:45 >> also about the repetitions in terms of
29:47 you know getting in front of your team
29:49 you know having a review of your
29:50 finances like
29:51 >> of course the more you go into it your
29:52 risk profile changes. >> Yeah.
29:53 >> Yeah.
29:55 >> So I see my customers risk profile
29:56 change from the first meeting to the
29:57 second meeting to the third meeting. I
30:00 had a client this morning who um what
30:02 are they 50 years of age bought a place
30:04 in Tasmania moving there in a year's
30:06 time never invested in their life uh and
30:08 now they're thinking about buying
30:11 leveraging up to 85% buying another one
30:12 sell their house in Melbourne in two
30:14 years time regearing the asset if they
30:15 decide to hold it when they get the
30:16 advice from you guys whether we should
30:18 hold it or don't hold it and they
30:20 completely changed so that's just this
30:22 morning their whole whole profile and
30:24 how they think about money and cash flow
30:26 so that that's what it is and and the
30:28 more you do the more you understand it.
30:30 Okay. So, I suppose those people that
30:32 stop after two, they don't really
30:34 understand it. Uh or they've got they've
30:36 got nervous or they've had a slightly
30:38 bad experience
30:40 and the person you and I both know had a
30:43 bad experience and his wife wasn't and I
30:46 won't mention names. His wife had a
30:48 completely different risk profile
30:49 and they're not together now.
30:51 >> Okay. But from an investment level, I
30:52 always had a challenge in regard to
30:54 getting them both aligned and they
30:55 didn't invest. So they've missed out in
30:56 the last eight or nine years of
30:58 investing in the market due to one bad
31:01 experience. So imagine what they could
31:02 have done with you look at the
31:04 Queensland market, you look at Northern
31:06 Queensland, Southern Perth, Bumbrey,
31:09 Mandra, Rockingham,
31:10 it's gone crazy.
31:12 >> Like it's ridiculous what money he could
31:15 have made if they were just open to it.
31:17 So those people just they're not
31:19 trusting their advisers and they're
31:21 probably going there more their gut feel
31:25 or they just can't get over a slightly
31:27 bad experience they had which is
31:29 normally the problem that that some
31:31 people a lot of people have.
31:33 >> Yeah. And and I guess we're definitely
31:34 going to have to get you on for another
31:35 episode Mark because we've only really
31:37 scratched the surface today in terms of
31:39 digging into all the knowledge you've
31:41 got up top from your experiences. But I
31:43 guess uh for people listening today,
31:44 what are some key takeaways if they're
31:46 you know they want to get in front of
31:48 your team or thinking about buying a
31:49 property to invest in? What are what do
31:50 they need to do to reach out to you guys?
31:51 guys?
31:52 >> Look up me or look up our Australian
31:54 Lending Investment Center. Um send an
31:55 email through. We'll get we'll get an
31:56 appointment booked in. We normally get
31:58 our our customers in within two or three
32:01 days. We look after customers. ALC is
32:03 predominately a customer for investors.
32:05 Okay. It's who people that want to make
32:06 a difference, people who want to grow
32:07 net worth, people want want to retire
32:08 earlier, people who want to be smarter
32:09 with their money, people want to be
32:12 strategic, we want those customers.
32:13 Hence why we didn't advertise on market
32:16 for a long time. So if uh any customers
32:18 out there who want those things, yeah,
32:21 just make contact with us through the
32:23 through the website or or our details.
32:24 And just to give you some heads up on
32:26 that, we don't if we we don't
32:28 necessarily have to write a loan to make
32:30 contact. Uh it might be there's nothing
32:31 we can do right now. There's nothing you
32:34 should do right now. And it's us putting
32:37 a team around that those people. Okay.
32:39 And all don't take kickbacks for that.
32:40 We don't want money. We don't want
32:42 motive. We want it to be very fair. And then
32:43 then
32:44 >> which which I'll jump in there. That is
32:46 extremely rare in the industry we work
32:49 in, might I add. So uh it goes go speaks
32:50 volumes about business.
32:51 >> Well, it's I just don't believe there
32:52 should be motive. We want to be the best
32:55 investment lender we can. We want um you
32:57 guys to be the best property adviser.
32:59 Okay. We want the next accountant we
33:00 send send our customer dude to be the
33:03 best wealth management accountant. So,
33:05 if we can run it and not get kickbacks
33:07 and no motive, customers feel more
33:09 comfortable. And even if it's just that
33:10 and we deliver that to them and there's
33:12 nothing in it for us, then we're
33:13 actually fine with that because the
33:14 customer will normally know other people
33:17 that want help and they always come back
33:19 at some stage if they uh trust the
33:21 information that we're giving them.
33:22 >> Yeah. Awesome. Well, it's been an
33:24 absolute pleasure to have you in the VIP
33:26 guest for our first episode. Looking
33:28 forward to getting you back in for the
33:29 next one where we'll go into some more
33:31 detail and we'll catch you next time.
33:32 Thanks for having me.
33:34 >> Thanks for watching. If you want to
33:37 avoid underperforming acquisitions, grab
33:39 our free Suburb performance report
33:41 below. It's packed with data we use
33:44 every day to guide our clients. [Music]
