September 15, 2025 • 46 mins
The housing crisis is hitting everyone, especially first home buyers. Empower Money is changing the game by helping Aussies buy a home with zero deposit. Founder Peter Khoury shares his journey from startup struggles to building an innovative funding model that’s making home ownership possible for more people than ever before.
Disclaimer: YBR has a partnership with Empower Money.
Check out Empower Money's website here: https://www.empowermoney.com.au/
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
Welcome to the mentor. I'm Mark Boris Coori. Welcome to
the Mentor, Mate, thank you so much having Mark. So
you're the founder of a company. For our audience, this
is called empower Money. Just give us a quick idea
about what is empower Money. They are mutage broker, they lender?
What are they?
Speaker 2 (00:25):
We're a solution, Mark, We help people buy properties with
zero deposit. Empower Money is one company is part of
a bigger ecosystem that works together to help Australiants facilitate
their dreams and to overcome what we believe is a
very bad housing crisis right now.
Speaker 1 (00:42):
So the idea behind empower Money, though, how did it
sort of arise? How did it start off? And I've
got to declare we have an interest in that. Empower
Money is one of our panel current lenders or product providers.
A little bit more complicated than a lender because you
do provide housing as well a property as part of
(01:05):
your solution. But so I have to declare that upfront.
So now that I've declared our interest and we definitely
don't have a conflict having this conversation, But how did
you sort of come up with the idea of empowered
money and the whole product suite that you have within there.
Speaker 2 (01:25):
Going back eight years ago, Mark had a rather large
financial planning company that was doing decently well then unfortunately
went close to being under so on the borderline of
bankruptcy but not quite there. We closed it off and
went from being very wealthy to being very poor very quickly.
And then the whole idea was how do we get cash?
So we started different things and running out of money
(01:48):
very quickly. I thankfully had a decent property portfolio of
my own, and the call was made to let's try
to sell them after five to six weeks of no
one coming to any open home, so I put a
up online. Why rent when you can buy a deposit?
Finance provided and I put my house back then Garyula
Avenue in North Kellyville. I had four and a half
(02:08):
thousand inquiries on day one.
Speaker 1 (02:11):
Well, how do you mean did you offer it for
sale and you get to put up the finance?
Speaker 2 (02:13):
Yeah? I was. I mean I was so poor at
that point, I was like, I don't want to even
get some cash out of it. I just needed to
get out of the finance so I didn't go under.
So I offered zero deposits. So I was going to
use my equity in that particular scenario to fund to
the Australian buyer and then the debt they'd take over that.
So there was enough equity to get eighty twenty out
of it. And that was a plan just to offload
(02:35):
some debt. And then four and a half thousand inquiries
On the twenty second of December twenty eighteen, we realized
that there really is a demand for this.
Speaker 1 (02:42):
Where'd you put where'd you put? The offer up?
Speaker 2 (02:45):
Just on my social media post. So yeah, we had
a social media account from financial planning days. We had
a decent kind of following. And then I put on
my personal section this at eleven o'clock. So we were, you.
Speaker 1 (02:56):
Know at night.
Speaker 2 (02:57):
At night my house was packed to go move into
the in laws house was going to go, you know,
whether I sold it or the bank took it. It
was on its way among other investment properties. So I
was on the eleventh hour, so to speak. And you
know why where you can buy to posit finance provide
a simple messaging four and a half thousand inquiries now
with one property, it's easy. But then we had to
(03:17):
figure out actually how to make this work. So it's
been eight years of basically fine tuning a system. You know,
first and foremost the banks weren't all to impress with
the idea of providing zero deposit, so you know, first
iteration of the company was just trying to make the
client an ideal buyer, incubating the client, making sure they're
their credit worthy so to speak. Second iteration came with
(03:41):
how do we come up with a deposit initially? So
that was about you know, firstly getting the mortgage broking
arm initially, and then getting the real estate armed to
sell the land, the construction to build it, and even
doing some partnerships with third party you know, credit fixed providers,
getting all that profit sticking into a credit license. And
for the first six years it was just taking our
(04:03):
profit juggling it into the credit license, issuing as a loan.
Our big move came last year. We had our retailer
managed fund go to market, the Stable Hands Income Fund,
where retail investors actually came to the table and said
we want to help provide Australians with deposits, and then
we went through the roof.
Speaker 1 (04:21):
So you launched a fund, yes for anybody to invest
in doesn't have to be a wholesale investigat new mums
and dads. And they put their money into that fund
and that fund pays them a return interest and then
the money from that fund gets used for what.
Speaker 2 (04:39):
To provide Australians with a deposits, So it's a capital
backed security security back to asset. So they'll get a
second mortgage on that title for the client.
Speaker 1 (04:48):
So that fund will lend ten or twenty percent to
a borrower and that borrow is going to go and
borrow the rest from the bank for his argument sake.
And then the bank gets first mortgage. Your fund sits
behind the bank, but now your fund now has a
second warage over the value of that property. Yes, and
(05:09):
the bank has firstball jo the property.
Speaker 2 (05:11):
Absolutely yes, And that went really well. So we went
through the roof on that one.
Speaker 1 (05:15):
And then which part went really well the people investing
in the fund or the fund lending to borrowers.
Speaker 2 (05:21):
Both the returns were consistent because there were people would
vetted for quite well and there was still protection for
the client. Many losses, did you no losses? I think
that the biggest move for us was that was coming through.
It was all getting taken care of. But more importantly,
we now actually had money to grow out business, because
before we were giving it all back to the punters
in the form of a loan, so we were making
(05:43):
money taking it, putting in our credit license, lending it
out and then living off the sweat of an oily rag.
And then when we now had the mis, we now
had revenue to invest back in the business and scale
it up and actually help more Australians get into property.
And we thought this was going to be a model forever.
And then, thankfully, one hundred and sixty seven rejection letters
from different warehouse and fund providers, one of the guys
(06:05):
we presented to about thirty times actually came up and
said that we want to partner with you and facilitate
a warehouse of one point three billion dollars to help
Australians into the property.
Speaker 1 (06:13):
Mind now, so you're took about complicated stuff better so
our audience doesn't understand this. So you've got this retail fund.
You've got people come into it, put money into it.
Your fund will pay them a rad return and then
your fund will land that money as a deposit and
that retail fund takes the second mortgage over the property,
and those people then go and borrow from a bank,
(06:34):
and you know, presumably the bank was happy that they
borrow the deposit, and not all banks will be happy
with them, but some banks would mind, and the banks
would be happy to lend them first mortgage. That's part
that's good. Second part you then when you mentioned that
you got money out of a warehouse, so effectively what
a warehouse is, it's a wholesale funder. Could be bank,
(06:57):
could be some financial institution have a lot of money
and then they need to make it work. So a
warehouse will come along to someone like you and say,
all right, Peter, we'll give you a give one hundred
million dollars whatever the inst trade is, be a wholesole rate,
and you can lend that money to Australians to buy house. Yes,
(07:20):
and we're happy if you lend them one hundred percent
five hundred five percent. Okay, so we're happy. We'll give
you one hundred million just on this example. Could be
a billion, could be ten billion, but we'll give you
a hundred million dollars and you can lend one hundred
million dollars to one hundred mathematics not right, but ninety
five people I have a million and fifty each I
(07:42):
think the mass right, million fifty each, which is one
hundred and five percent, and they can all go and
buy a property for a million bucks because the fifty
thousand or now it's million and five, that five thousand
gets used to pay more insurance.
Speaker 2 (07:57):
Fifty hundred fifty.
Speaker 1 (08:00):
Right, Okay. So so basically what you're this warehouse was
happy to do for you was give you is give you,
give you money, which they allowed you then to lend
it at one hundred and five percent of the value
of the property. So people don't have to have a deposit,
and in fact they don't even have to have the
more insurance, which is usually what's required. You have to
(08:21):
have a more insurance on something like that. That's for
your warehouse. Your warehouse wants the more insurance. Yes, he
will show you. They want to make sure that if
something goes wrong on that purchase and buyer defaults, I'm
paying back in the interest or the repayments one hundred
and five percent. That if you sell the house, and
(08:42):
that house sells for ninety five percent of its value,
the mortgagensurer will pay the so called warehouse what they
call the warehouse, they're just to lender. You're you're an intermediary,
they lend you the money. You're then intermediary you then
lend it to the borrower. And that's that's what the
warehouse is that I've.
Speaker 2 (08:59):
Got to go on.
Speaker 1 (09:00):
So, and did you get the money from a banking
institution or a non banking institution?
Speaker 2 (09:05):
So it's a non banking institution. I mean they're the
biggest non bank in the country.
Speaker 1 (09:10):
They work with us warehouse.
Speaker 2 (09:11):
Yeah, sorry, exactly right. Yeah, they've worked with us to
basically partner to facilitate this. I mean, the whole marketers
shift shifted, the whole media shifted. It was a naughty
word about two years ago to say we're going to
help Australians to get in with zero deposit. Now, with
what's going on, there needs to be real solutions and
we have now the support of these providers as well
(09:32):
as you know, Australia at large now is really requiring this.
Speaker 1 (09:36):
So you have sort of two forms of funding and
therefore maybe two products. So I guess is that right?
So the first product is the stuff that you get
out of the retop one where you can give, you
can lend it the deposit. Yes you're still doing that.
Speaker 2 (09:50):
Yes, that's for the ones that don't fit. I mean
our priorities obviously that the warehouse is substantially greater scale,
but there is still you know, if there's a client
that doesn't fit exactly the requirement, we can definitely help out.
Our goal is very simple, help more Australians enter the
housing market and get out of this crisis. Yeah.
Speaker 1 (10:07):
So just so people understand that part of it. And
by the way, the business called empower Money, and if
you want to Empower Money's product, you can go to
the YBr portal that you're one of our panel lenders
as a product. So but just just be clear, you've
got this sort of two parts from Power Money you
(10:29):
can have You can either be one of these people
borrows one hundred and five percent of the purchase price
of the property, which is but it has conditions attached
to it. You have to probably meet income or income tests.
You know serviceability tests where they call serviceability tests. Are
those serviceability tests are more brutal and say the banks serviceability.
Speaker 2 (10:47):
Test not at all. It's designed to be accessible to
everyday Australians. I think that the key requirement is when
you go to most serviceability, that bank makes assumptions about you.
So the first normal serviceability, they're going to say words
your genuine savings. And if they don't have the genuine
savings that the general bank is going to assume you're
horrible with money.
Speaker 1 (11:04):
And in this case you don't need genuine saying not
at all.
Speaker 2 (11:07):
Where we're basically built this product of the premise that
you don't have genuine savings. It's all fully declared zero
deposit stuff yep.
Speaker 1 (11:15):
And and but is it when you look at their
income servicing ability, in other words, their income minusor expenses,
would you say that the empower money product is tougher
than a bank product.
Speaker 2 (11:28):
Not at all? Well, no, I would say it's it's
actually more comfortable. I mean that the only real limitations
we're looking for a credit score around the seven hundred mark,
which isn't ridiculous. I mean this, credit scores go up
quite significantly more than that.
Speaker 1 (11:42):
I mean you maybe you should explain that, because when
we're talking about credit credit scores, we're talking about positive
credit scores as opposed to negative things under credit file.
So in a credit positive credit score of seven hundred
says not serve out. There's no brutal not all you
(12:02):
know people, most most people probably unless you're a dreadful credit,
in which case you're probably not going to get the loan. Yes,
you're not looking at rateful credit. What you're looking for
is good credit. But for people who just don't have
a deposit, yeah.
Speaker 2 (12:13):
And there's reasons for it. Mark, this is the thing,
you know, they've been put in this basket of people
are horrible with money. But some of our clients are
high earners, but they've just started earning high I mean,
the average Australian takes ten years to say for a deposit.
The average rent is six hundred dollars a week. If
you put that in context, they're paying thre hundred and
twenty thousand dollars for rent over the next ten years
before they even start their mortgage. In the same respect,
(12:36):
ten years ago twenty and fifteen, and the average house
price was a million and fifty now it's one point six.
So we're just looking for people who want to jump
the queue and save nine hundred thousand dollars by getting
in early. So if you've just started earning at age
twenty six, twenty seven, your hundreds, one hundred and ten,
one hundred and twenties or whatever it is, or whatever
the amount is that can now justify the affording of
(12:57):
a house instead of having to wait ten years. Let's
get you in there now if you can afford it,
Why are we waiting.
Speaker 1 (13:03):
You're and your your business empower money. You're prepared to
take the risk. You manage. Maybe it's not take the risk,
you're prepared to manage the risk.
Speaker 2 (13:12):
We do take a risk mark because we actually co
invest in the fund. So one of the things you
mentioned in the disclosure is that you know there's a
property aspect to this. And the reason why there's a
property aspect to this is two parts. One, we want
to make sure we're not contributing the housing crisis, which
is we're going to give you a loan one hundred
(13:32):
and five percent, but now you're going to go to
the actual market, go to an auction, now that you
have money, and now there's twelve more bidders in there,
and the price goes up. So a new dwelling is
paramount to our system, and it's either through us or
through a partner, but it's really a union between lenders,
the client and also builders, developers or land providers, because
(13:53):
whether it's the builder being us or third parties, each
of the builders actually contributes five percent from their money
into the fund at cost price.
Speaker 1 (14:03):
So you know, I've got to get this right now.
So you're saying, you're saying that by a borrower also
becomes a buyer obviously, but a buyer of a house
land package or just land or just or a house
that's already on land through town terrace. But which one
(14:27):
of you, either you or one of your partners or
one of your one of your subsidiaries or one of
your partner relationship people. They're not partners of relationship developers,
I guess provide to the borrower.
Speaker 2 (14:40):
Yes, and if we don't have them on panel that
you can introduce them to us. We're not tired. We
want to vet them to obviously make sure their quality
is significant because we are backing this.
Speaker 1 (14:48):
It could be someone's gonna be buying a house that's
already been built by Marster, are going to get a
bit of land with it. We're going to put a
master and home or home on it. Let's assume you're
happy with masters. You don't need to a pine on
They but let's say you're happy with marsteron quality, you'll
lend those people one hundred and five percent of their
purchase price. Yes, but what would you expect Masters to do?
(15:08):
You said, you put it, so.
Speaker 2 (15:09):
We contribute five percent. So the builder us as our
capacity as a builder, contribute five percent of masterton in
this scenario, would also contribute five percent into the loan
of the sale price of the full sell price. So
if the land and the build, if the land is
four hundred and the build is four hundred, let's say
five hundred, five hundred for ease of numbers, there's fifty
k owing it's five percent of the whole sum. Now,
(15:33):
what that does is that five percent goes into cost price,
and also our warehouse partner also provides five percent of
cost price and cost price for those who don't understand,
is BBSW banks bill swap paper. Basically even when they
announced the.
Speaker 1 (15:46):
Cash debt though, yeah, they put us alone alone.
Speaker 2 (15:49):
But at cost price. So it's like three percent funding
and that brings a whole interest rate to the client
down significantly, So we're actually investing back into the client
to use the interest rate significantly.
Speaker 1 (16:01):
So okay, so just to be clear when you say
we you're talking about your your business and how money
or whatever the name of the company subsidiary is you
you invest five percent of the purchase price or the
title purchase price or the house cost total purchase, you
put five percent of that. Let's say some million bucks,
you put fifty grand into this fund. This where the
(16:24):
warehouse is. And on the example you just use Marsden,
they would put fifty thousand dollars in as well. So
there's one hundred purchase price million bucks, there's one hundred.
So really the warehouse is only funding nine hundred thousand,
which makes it more comfortable because there are there exposures,
not one hundred and five. It is now ninety five
(16:45):
fifty much per nine and fifty thousand, which means but
on top of that they've got mortgage insurance just in
case everything for terms of shit the and that moregasurance
insures been funded as well. So really that's that's quite clever.
It means the warehouse has got less exposure than it
(17:07):
first looks like, which makes it more makes it more sensible,
because if the warehouse had one hundred percent exposure to
one hundred and five percent, they're going to charge a
crazy interest rate, which makes it means you got to
charge a grazy interest rate, which makes it non viable
for the borrower at the end of the day. So you,
you and marketing put your five percent and you also
get a return. Yes, you get an interest rate for that,
(17:30):
just like the warehouse does. And when you blend the
cost of all the money, yes, that's your return Marster's return.
The warehouse is return. You can still make a profit
in this sense, not too much, but you're making a
profit in this Yeah, there's lots.
Speaker 2 (17:45):
Of a little s mark. We were trying to branch
out and help as many Austrains as possible. Our goal
this year is to get thirteen hundred strains into their
own home. And when you look at the housing targets nationally,
we need to you know, every month or month, every
target each is basically putting forward to solve the housing crisis.
We're actually falling short each month. So what we're trying
(18:06):
to do is contribute and provide facilitate housing for Australians
who really wants it and give them the opportunities to
bypass the line and get in now.
Speaker 1 (18:16):
So these houses that you and or people that are
involved with your organization, where are they in Sydney, Melbourne's.
Speaker 2 (18:25):
So right now we are in New South Wales, Queensland.
By the end of this quarter, we expect to be
in Melbourne and potentially wa and eventually South Australia probably
by towards end of this year. Fully, it's basically where
there's dirt, Mark, so if there's an opportunity for you
to live there, we facilitate the house and land package
(18:46):
so it doesn't have to be through us. As we discussed,
Brooklyn Homes is our construction company that gets involved. Brooklyn Homes. Yeah,
so we get involved in the building where we can.
Where we don't, we use third parties out there who
are happy that. Yeah, we've met very strongly. We don't
want to be caught in a scenario where we're funding
something that doesn't build and we're using a lot of
new technologies as well. Mark, we're constantly you know, we've
(19:08):
signed a deal through Brooklyn Homes to look at you know,
over two hundred prefabbed sort of systems that gets house
built faster, better for the client, less expense, better for
in terms of quality. Sometimes because handmade comes with handmade solutions.
So we're just trying to get scale of volume out
there and again facilitate what is a really growing problem
(19:30):
right now.
Speaker 1 (19:31):
So effectively, what empowered Money is doing here is waned
any money to cover all the costs. Two, you're also
helping these individuals lock in a house or apartment or ten.
It doesn't have to be a house. It could be
(19:53):
multiple dwelling type.
Speaker 2 (19:54):
Property led by the finance.
Speaker 1 (19:55):
Whatever you can afford once and and you're not where's
your interest rates?
Speaker 2 (20:02):
Is?
Speaker 1 (20:02):
Like? Is it crazy? Will know?
Speaker 2 (20:04):
So today's day we're hoping for an interestrest decrease, so
hopefully if that comes to the table, even more competitive.
But right now we're all in at six point nine
to five for the whole one hundred and five percent.
So in context, that's in construction. So if you look
at context out in the competitive marketplace, a normal eighty
percent ELVIR is going high eights, mid eights for a
(20:24):
construction loan. So the bank sees construction is high risk.
But because of the hit us and the funder take
collectively by putting our five percent in, we've brought it
down to a really palatable rate.
Speaker 1 (20:35):
Yeah, that's that's a pretty competitive rate. Especially when you're
borrowing one hundred percent of the whole thing. What are
they going to put it? They go to find stamp,
dudio present stamp.
Speaker 2 (20:43):
So I mean there's stamps into other wise because obviously
that house prices that really fall to the stamp duty exemptions.
Places like Queensland and Melbourne, the government's a bit more
ahead in terms of providing facilitating opportunities for the clients
to get in without.
Speaker 1 (20:56):
Stamps, so first time bio etcetera.
Speaker 2 (20:58):
Well, yeah, so they're in Queensland. It's funny they get
thirty k back in the stamp treed exemption. If there
was land in Queensland would be amazing because you're actually
getting paid thirty k to buy your house for free
deposits and not only getting paid, but you're also getting
paid for the mortgage payments. With the way our system
works there and so otherwhiles it's just a stamp. But again,
the way we're doing it is because we're doing house
(21:18):
and land packages predominantly, you're only paying stamp on.
Speaker 1 (21:21):
The land on the land, not the house.
Speaker 2 (21:22):
Yeah, so you're saving a good forty fifty k there.
Speaker 1 (21:24):
Yeah, So is this available to only only owner occupier
or investors.
Speaker 2 (21:29):
So hold this space. Right now, it's own occupieres. We
are doing some some very hard negotiating work and hopefully
have some announcements relatively soon, you know, talk to you.
You're keep in touch with your local YBr broker because
they'll get the announcement first and pass it on to
you guys. But it will be an opportunity soon, we're hoping.
But right now, own occupies, we've got thirty hundred to get.
Speaker 1 (21:50):
Rid of so and our demand ridiculous, MIC.
Speaker 2 (21:53):
So it's led by demand as you said that first night.
As I said the first night, we put four and
a half thousand people on our social media host and
we've been knocking him back since we've made the move
though to do less, you know, people coming to us
because we just can't manage that workload. So we're going
to third party distribution networks, specifically YBr, for them to
manage the influx of demand, get the clients qualified, accredited,
(22:16):
and then we go do the back office work to
get them through the door. Austrains need this.
Speaker 1 (22:21):
So wouldn't you say you go to YBr for example?
There are lots of aggregators around like us with White
Bears is one example. You're you know, you've got to
be on the other people's panel, But if you're on
our panel, a YBr broken, we'll look at the product,
look at the client, and you'll will put the loan
up to the loan application up to you guys.
Speaker 2 (22:41):
That's how Also so that they'll go through to your
local broker and like a good broke we'll do they'll
explain the pros, the cons the is it suitable for you?
They'll do that, the credit assessment, can you afford it?
They'll do the checks to make sure there's no you know,
skeletons that they can't be done and not. They'll give
you guidance to make sure it's the right thing for you,
and whenever, if it's the right thing, they get it
(23:02):
to us, we get conditionally approve it and then from
there you sit down with one of our internal advisor
to sit there and actually help shape which property you
are after. I mean, there's no point getting understanding you're
probably not going to get a double bay, two story penthouse.
It's basically a stepping stone.
Speaker 1 (23:20):
Into the property market.
Speaker 2 (23:21):
Well yeah, but it could also be what you want, right,
It's not to say that you can't get what you want,
but it's led by finance. First, the whole goal is
to stop that rental trap because most people when they're
trying to say for a property, let's at the same time,
well yeah, but also it' running away from you. You're
trying to save eighty k ten years ago, now you're
trying to save two hundred k. Where does it stop.
So we're just trying to get you off because if
the market goes up and you're that you're on that ride,
(23:41):
You're it's not running away from you, you're running with it.
Speaker 1 (23:44):
So in terms of the demand that you've been getting
and or settlements like getting deals done is like which
are about like Western Sydney or so.
Speaker 2 (23:53):
Right now based on pricing, we're all over the place,
but we're getting we're doing forty right now in places
like the Hunter and Hunty. People have gone there, the
Hunter Hunter Valley train line, your Newcastaway. We've got Tarmil,
We've got Leppington, We've got box Hill, Queensland, We've got
Moray Fields, Kabulcha up near that Southeast corridor. But really,
(24:18):
again when I say we're everywhere where, everywhere, wherever the
land suits and hits. We try to get you know,
density of four or five, put them together and make
it happen. We're doing an apartment in Marylands. We're doing
you know, the sky is really the limit in terms
of where it fits. It comes down to you mark,
We do your serviceability, you service you know one point one.
(24:39):
I assume you do a bit more than that. But
let's just say one point one comes through. Together, we go, okay,
this is what you have. Where do you want You'll say,
within this area? Okay, with your price point, I can
probably get you to hear or we can get you
closer or right in there if you want to do
a townhouse or apartment. So with that finance, that starts
a discussion based on what you want, and then we
basically find that middle round or give you exactly what
(25:01):
you want if your your objectives are in line with
your affordability.
Speaker 1 (25:05):
If you were trying to pick the perfect client viewers, now,
how would you describe that person? Of those people? Like,
give me like, let's pick a couple for example.
Speaker 2 (25:14):
Yeah, I mean couple combined household income, say twenty thousand dollars,
credit score seven hundred and motivated again the property market. No,
no deposit, no deposit, I mean yeah, the.
Speaker 1 (25:25):
What purcha prise are they buying? What are they buying?
Speaker 2 (25:27):
Two hundred gets you around the million bucks mark from
the South Wales. That's cultus priced million dollars.
Speaker 1 (25:32):
So where does that get you? What does it get you?
Speaker 2 (25:33):
So, I mean we can go Campbelltowner, we can go
austral we can go apartments all over the place really,
and you know, all the way from Carlington to Chalora
to wherever.
Speaker 1 (25:44):
Are they new in you first time buyers or they.
Speaker 2 (25:46):
Do they have to be first time? Just just I
mean this scenario and occupies absolutely. And then obviously Melbourne's
a lot cheaper when we're going into Melbourney, like the
six hundred marks. So your service at you know, one fifty,
one hundred and twenty gets you there. Queensland House one
com one point sixty. Really it's more about the mindset market.
If you've got the income to service the loan, it's
(26:07):
just the willingness to fill out the application, do the
work and come in with the pretense that you're getting
into the property market, you're owning something you're no longer
you know, beholden to the landlord of things changing and
taking that first step. Most of our clients that you know,
we've now been around for eight years, so we've seen
a few cycles now. So an example of a client
(26:30):
we originally got through into a granny flat in Blacktown,
sorry not a granny flat apartment of Blacktown. Four years
later she sold it, made a significant capital gains off that,
but she was living in it, so there's no capital
gains tax. She took that profit from that house, from
that apartment, and we also topped up the loan and
got our house and land package in Warrington. And now
(26:51):
she's officially moved in and a big advocator for it.
But that was her dream. She's got three kids. Now
she's got that house and Lamd pack Well, she's actually
moved into the house. It's all completed, she's got the
backyard she wants and she doesn't need to do another
cycle because that's always where she wanted to live, close
to her work. She's a nurse Husbands and it works
(27:12):
from home, close to the kids' school. So she didn't
get the house right at Warrington. She couldn't afford it
at that time, and now she can and she's yeah,
and it was four years where the reality was we
met her and she had seven thousand dollars in the
bank account and that was where it was. So she
(27:32):
done the hard yards.
Speaker 1 (27:33):
It's pretty good case study case studies up. Do you
have a website?
Speaker 2 (27:37):
We do, absolutely cool. I think it goes We've got
to power money, dot com, dot you, and WPF Holdings,
which explains the whole ecosystem.
Speaker 1 (27:44):
If they want to go through the whole thing, they
go to WPF Holdings.
Speaker 2 (27:48):
Ye, dot com dot you but dot com do you yeah?
And empower money is.
Speaker 1 (27:53):
And do you have case studies on those pages?
Speaker 2 (27:55):
So we have testimonials being constantly written up right now.
And now that obviously we're mature. I mean again this
is a whole new iteration of our company that we
have this massive amount of scale. So when we were
doing deals a year and a half ago, we were
doing twenty to thirty deals, and then last year a
month in the year, like you know, because we're juggling
our own money, right, it's very difficult. I mean we've
(28:15):
gone from you know, two million to twenty million in
the space of six months off the mis the managed
fund that is, and now we've got about sixty in
the pipeline, so it builds that is and lending in
the space the next few months. And obviously this YBr
relationship is we believe going to be absolutely amazing to
help more astrands get in there. So our scale is
(28:37):
only going to be significantly greater. But again we have
oney three hundred two to get off, which doesn't sound
like a lot, but we can make a great, great impact.
And if we cleared that, then the next year's some
goes up by almost double. Yeah.
Speaker 1 (28:50):
So how many houses have you do you reckon you've
delivered in the last couple of years?
Speaker 2 (28:56):
Yeah, so from where to go slow start about two
hunred and eight so, which was really really hard mark.
At the starting days, there was very much a case
of one thousand handshakes just to get one deal across
the line, talking to the land development and I have
some commissions here, and then we'ld factor that into the
deal and we talked to the builder, we have some
commissions here, We talked to the client and go okay,
I need fine ten grand from somewhere, And each deal
(29:20):
was like pulling teeth and then I got easier and easier.
Now it's now it's just a lending process and an
allocation process. So our scale and speed now is getting
delivered a lot faster so to eighty and like probably
seventy in the last last year.
Speaker 1 (29:36):
So it's just the biggest constraint, Peter, is your biggest
constraint getting enough stock housing stock. I mean, you got
the demand would be sitting. There would be plenty of
demand in terms of borrowers. What about the supply side.
Speaker 2 (29:54):
It's getting better. It's state to state, different problems for
different things, right, So I mean to be very clear,
each state is doing their own version of trying to
sold their housing crisis. Some I've got more right than
the other ones.
Speaker 1 (30:05):
A little more right.
Speaker 2 (30:07):
You know, they're having a few deficiencies. So I'll give
you example case by case New South Wales. They're trying
to push for the whole apartment to fix the housing crisis.
But apartment developers right now and actually making money the house
the apartment costs of delivery is thirty percent year on
year increasing costs, but the actual housing apartment prices have
gone down. So unless you're delivering scars like the big
(30:27):
boys out there, of six to seven hundred, you're not
making money. So and then they have plenty of land
and good opportunities there, but with something with like homeowner's
warranty for example, quite limits our ability to do. So
we're looking at acquisitions partnerships to get more and more
facilitation of these bills to make it all a reality
for them, and that's something that we're trying to do.
(30:49):
We're trying to work with government, we're trying to work
with parties. Everyone's motivated to fix it. That's trying to
figure out the how Queensland is really good on the
first home bias front and really motivating them. But they've
had a focus on affordable housing, so they've brought up
all the land in Queensland and allocated them to affordable housing,
given all the contracts to mett invest. But what that
means is there's a massive land supply for every day
(31:09):
Australians trying to own a home. So we're going out
there and there's literally five to six blocks of land
and to give you one example, I just bought a
block of land myself for Moray Fiel purely because it
was on the market and sometimes takes that client a
few weeks to get across the line. We can't wait
that block of land went for four hundred and ten thousand,
and the next release is going on in September, smaller
(31:31):
block of land for five point sixty Why because the
land developers can. There's a land developer on Almo who's
basically gone and increase his prices by three hundred thousand
dollars over the last three months, purely because you can.
Land supply is so much so short that the comparables
are going through the roof.
Speaker 1 (31:47):
When you say queens and you're talking about where we.
Speaker 2 (31:49):
To Southeast Corridor, so from Sunshine Coast to Gold Coast
to Brisbane.
Speaker 1 (31:52):
From Sunshine Coast which is now so for example down to.
Speaker 2 (31:55):
So Gold Coast, Yeah, Gold Coast and Brisbane, So that
little triangle there and that's creating some some massive issues.
It's seventeen percent year on year growth in Queensland right now,
just trying to facilitate the demand. And we all know Queensland,
but there's good everywhere. But it's just the case of
the deliveries of land subdivisions in line with the fact
that all the stock's being brought up.
Speaker 1 (32:15):
So when you sell the stocks, it's been brought up
by developers.
Speaker 2 (32:18):
Queensland government's border all the government. Yeah, they really, they've
they've bought a lot of it for that affordable housing,
and that's causing a massive shortage. I mean, this is
from all the landlights we're talking to. It's all brought up.
But now the developers have gone, Okay, I've got the rest.
So if I've got the rest, I'm just going to
musk the price. So we're doing everything we can there.
Homeowner's warrant is great, everything's great there. So demand is great,
(32:42):
Supply is not.
Speaker 1 (32:42):
There hard to find. Builders are hard to find.
Speaker 2 (32:46):
Well, we're the builder there, so I mean, sorry Queens,
that's probably got the biggest ray of builders out there.
You know, the big players that are all out there.
So each state is just trying to solve it, but
they're not I don't know, I don't feel like they're
talking to actual people on the ground as to what
it really looks like, what the solutions look like, because
you know, and I don't want to discredit what they're doing,
(33:08):
that they're doing their best, but I just think, you know,
motivating the private sector to get it done will get
yield better results. And you know, we're trying our absolute best.
And again we try to work with government with policy.
We know the constraints of what we have. We're not
demanding help from them, but we want to work with
them to get this outcome. And it's not the stock,
(33:31):
it's the issue now. It's just overcoming the challenges of
the amazing amount of demand. So from going from you know,
seventy to to seven hundred to thirteen hundred next year,
it's just a lot of partnerships, a lot of deal
making and I think we can deliver it now. But
you know, it's not going to be a straight line.
And you've been in business for quite a long time.
Market it's never a straight line, no matter.
Speaker 1 (33:51):
So you're simple, but it's never simple. They goes do
introducing to go the other day and he's not in
this position, but he was. He thought he was in
his position a couple of years ago. But he's like
his financial situation has changed. But he's got good income,
always rented apartment in Sydney, never bothered, lived his life.
(34:14):
He's youngish, he's always lived his life to the best
of holidays and you know whatever. So he didn't save
any deposit. And one of the things he's now doing
is looking at going into buying in the Southern Highlands
and your sort of product would suit him perfectly because
he's got a good income and he's also now settled
down so he'd be a good borrower. He's got good income,
(34:37):
so he'd qualifying that part of stuff. He wouldn't have
any riskless. I don't think he'd have any risk associated
with him. But he's been constrained because now he's never
been out to buy. He doesn want to live an
apartment and where he's got a dog. He wants like
a house and maybe in square meters or five and
square meters whatever. He wants a house like where he
can sort of and he does, where he can sort
(34:58):
of move around a little bit. He doesn't need to
be in Sydney for work. He does his stuff remote
and if he doesn't need to be in Sydney, can
be here an hour from the mis Southern Islands hour
and a half and your product would be perfect for him.
You don't just look at one individual as being more
risky than say a couple.
Speaker 2 (35:17):
No, not at all, not at all. It's about service
in Mark and I mean we do have some post
co restrictions. Obviously we have to accrue for that.
Speaker 1 (35:25):
But you also you also need to have the property
sell to him, don't you.
Speaker 2 (35:29):
Yeah. I mean, and again, let's say, for example, you
have your own dirt. Let's say he's got a place there.
Let's say lend there land. If he says, hey, I
just want to build on it, we can do the deal. Right.
There's a thousand ways to skin the cut. We're not
too concerned about you know exactly what it is. I mean,
we're a lender, but we're a bit unconventional because we
kind of sit on the side of our client. How
do we get it done? Right?
Speaker 1 (35:50):
But you can build a house from using.
Speaker 2 (35:51):
Yeah, yeah, yeah, asolutely. Third, we can make it.
Speaker 1 (35:54):
Happen, so you don't have to be doing house land
packages down there already. You can just send your building
to him down there and build the house.
Speaker 2 (36:01):
We don't care about which part we sit in. The
only reason we have to build it or get someone
else to build it is so they can facilitate the
investment into the client to reduce it dramatically back to.
Speaker 1 (36:11):
The fund absolutely, yeah, and at the building costs at
market like just normal mine.
Speaker 2 (36:17):
Yeah. So that's so they're protected, as you know, through
the Valex system. And for those who don't know what
the VALEX system is, yeah, it's it's when you're applying
for a loan, you send it off to a valuer
to confirm that it is exactly what it's worth. So
the Valex system means there's no control by the lender
or the client as to who picks up the valuation.
So if we've got a build in there at four
(36:39):
hundred and four fifty and the land is four hundred,
the valuer takes it a random value which we have
no control of based on post code. They pick it
up and they value it according to what they believe
is a reasonable valuation.
Speaker 1 (36:50):
Yeah, not finished, but valuation build what it's.
Speaker 2 (36:53):
Going to be finished. Yeah, what it's going to be
finished as the valuation built right now. That means that
we can't the prices up. We have to give what
the price is, and we generally follow the HIA standard
of building profit margins on top as articulated by them
to make sure that we're solvent, because the building industry
wants to make sure the builder doesn't go bankrupt yet, right,
(37:16):
So when we put our pricing of the building, it
goes to the valuer and we can't cheat. The valuer
keeps us accountable and they'll say, yeah, this is a
reasonable cost to build this project on this block of land.
So there is security measures all over the place to
make sure that no one's taking advantage, not just us,
but whichever builder takes this responsibility on. And you know,
we again lots of a littles by doing twenty or
(37:38):
thirty builds, then we have the sizable profit to invest
into the warehouse as well as get some profit and
stay solved.
Speaker 1 (37:46):
Generally speaking, when you lend the money, say on that example,
someone owns a block of land and you're funding or
and building the property of the house down the Southern Islands,
for example, maybe you explain to people that you might
approve like a four hund thousand dollars loan, but you
(38:08):
don't give four thousand dollars day one. Is it based
on drawdowns?
Speaker 2 (38:11):
Yeah? Yeah, So so let's say the land is four
hundred and the builder is four hundred. So we give
the loan the empower money product funds the land and
then the builder then does you get to deposit from
that component and then we would lay the slab. For example,
the slab is the first fundamental part of the building process.
And then when that slab is laid, we put an
(38:31):
application through to Power Money to say we've done the slab,
and they will send out a valuer again a third
party to come in and say yep, there is a
slab here, right to fact check. When that slab comes in,
we get a progress claim. So let's say if the
whole build for ease of use is five hundred thousand
dollars and each progress payment is one hundred thousand, which
is never the case. Is normally less of the start
(38:53):
and more at the end. When they see the slab
comes then we get one hundred thousand dollars which pays
for all the materials, all the trades, all the costs.
And then we start doing the frame and then get
another draw down. So the actual loan is only fully
drawn down when the house is fully complete and sort
of ready to move in, which is called the occupational certificate.
Each point is checked by a valuer, but also just
(39:15):
the general quality controls are checked by the certifier on
each level to make.
Speaker 1 (39:19):
Sure certify for the builder, for the builder.
Speaker 2 (39:22):
From the council right. It's really there to protect the
client as much as the builder interacts with them, they
really represent the client to make sure that the build
quality is there, but also get all the genuine insurances
that come with that with whether it's us or anyone. Again,
this is a finance product, but I just want to
be clear it doesn't exist without the support of whether
(39:43):
it be the land developer or the builder or the
developer working with the funder to support the client. We
are all actually investing back into the client to give
them opportunity. If you go to anywhere else, if you
go to a using your example, a Masterton, they're making
the same profit of us go to the land. They're
still going the same land commission. That money that we
get for facilitating your end to end service goes back
(40:07):
in to facilitate the opportunity, whereas if you go with them,
they're just getting the money and everyone's happy.
Speaker 1 (40:12):
Yeah yeah, So where to from here for empower money
and all your subsidies.
Speaker 2 (40:19):
The goal is very simple in one line, helping more
Australians to get more properties, well get their property get
out of the rental trap. So our goal is deliver
thirteen hundred this year next year to take it to
two thousand the year after three thy three hundred. Our
first milestone is just to really embed that partnership with
(40:41):
YB to make sure that you know, everyone understands that
we're going to a few of your conferences. We're doing
that the training out there. You guys have been great
and kind of engaging and supporting us to make sure
our message is out there. So it's just about delivering more,
helping more. The short fall, I think is one point
two million houses of the next fell years, So we
(41:02):
know we're not going to facilitate all of that, but
we will give the blueprint to support those who need
it most, the opportunities. If they can afford it, we
can prove it. Then they can have their own home
right and they don't have to forever be worried that
the landlord changes their mind and wants to knock it down,
and they don't have to be concerned about hanging pictures
on their wall. And we want to give them the
(41:23):
opportunity to hand down that asset to their children, because
if they've got a hard time now, you can only
imagine what the children going to have twenty thirty years
down the track when there's no one to support them
with that.
Speaker 1 (41:33):
And as the promise invited you down to the round
Table conference this month.
Speaker 2 (41:38):
I would love to have thee marks and maybe I've
put a few good words.
Speaker 1 (41:42):
For me, that's for sure, because they didn't invite me either.
But this is the sort of stuff that they're trying
to work out, like how can people afford it by
property And I'm not talking about affordability. I'm talking about
how can people get in onto the loan game, like
borrow enough money where they don't have a deposit, and
how can they also supply enough housing for those people.
(42:03):
I mean, they're both those things big issues in this
country at the moment. In fact, three egg extentially big.
They're huge risk to our stand of living in Australia.
Because you mentioned earlier. But if you're on the rental
thing and you're there for the next twenty years, you
could end up being there for the rest of your life.
(42:23):
Your stand of living is reduced. And you know, if
one thing governments need to be concerned about, one thing
the governments must deliver at least in this country, is
the maintenance of our stand of living over the last
one hundred years. Where it's got to we don't want
to see a contraction in that we don't want to
see they go backwards. And it is going backwards. It
has been going backwards for years and they've got to
(42:47):
put a full stop on that. And one way to
do it is what you're doing is make housing or
borrowing more accessible. It's not making it more affordable, it's
just make it more accessible. In other words, I can
borrow the money one hundred percent of the money, one
hundred and five percent of the money to buy that property.
And this this this company in power money through as subsidiary,
(43:10):
is going to help me find that property as well.
It might not be as you said, might not be
in the middle of Ersconville or in the middle of
CBD or wherever, but it's for people who are looking
at Generally speaking, most people can't who want to buy
don't want to live there anyway. They want to buy
in where or wherever it is you're talking.
Speaker 2 (43:25):
About where their parents aren't.
Speaker 1 (43:28):
Cooper Rule or some playout, some place up in Brisbane
and equivalent down in Victoria. Yeah, close to where their
families are, or close where they went to school, close
where grew up Labington and in South Wales, Sydney great
area actually, and so your approach covers both off the
empower money dot com dot You and your holding company's
name is again.
Speaker 2 (43:49):
WPF Holdings, White Picket Fence Holdings.
Speaker 1 (43:51):
Is it white picket fence or as a WPF white
picket fence so they tie in white picket fence.
Speaker 2 (43:57):
I think it's WPF Holdings for that, But we'll give
you the dresses to probably put on the link below link.
Speaker 1 (44:02):
So but right now you got to empower money dot
com dot and you can start your journey.
Speaker 2 (44:08):
Absolutely. I mean, I think that the strongest suit. I
don't know you're you're plugging me, but I'm going to go.
It's probably why were yellow brick roads. Yeah, they're the
best place to deal with the scale and volume generally
speaking at our green with them is even the guys
who come to us, But we're kind of sending off
to you guys anyway, and you guys have got the
manpower and the spread to be able to deal with
(44:29):
the volume. And I'm confident it's going to basically come
very high volumes that they're getting out there. But I
just want to make one point what you said with
the rental crisis and dropping it's the housing christ but
it's also the renting crisis because people can't actually even
get rent. Yeah, so I mean that's if they can
get rent, they'll be stuck for twenty years. But our
numbers are showing that they probably won't even be able
(44:50):
to get rent soon. We're looking at a scenario where
people are going to be co renting families, co renting
with families, or you know, worst case, a state of
home holmelessness or more affordable housing and government funded housing.
It's not looking pretty. So, yes, this solves for the
people who want to buy the house and forego all that,
(45:11):
but it solves for those who are really staring down
the barrel of you know, eviction because their landlord's moving
in or knocking down and doing duplex and they just
can't simply find a place. And the amount of course
we get like we want to buy a property right now,
I've got three months, and then we're basically scurrying to
get them into a scenario where they have shelter. And
(45:31):
these are people on two fifty three hundred K income.
Speaker 1 (45:33):
Yeah, people who are stressful.
Speaker 2 (45:35):
The exactly right, incredible what's going on at the moment.
Speaker 1 (45:39):
Well, Peter Corey, founder of empower money dot Com, do you,
and as you said earlier, you can. Your product is
available through the Wyburt branches. But I thank you very
much for coming in today. I think it's a I
know we had to go through a little bit of
process to break it down because it's reasonably complicated. Not that,
by the way, the consumer really needs to know those complications,
(45:59):
but none less, I'm some people will be interested in it.
But the bottom line is, gatt a broker, go to
your website and just you guys are doing all the
work for them, will wipe out do all the work
for it. But it does work. I know it works
because our guys are selling it right now. So thanks
so much for coming today, Peter.
Speaker 2 (46:13):
Thanks so much for having me Mark. Thank you.
Welcome to the mentor. I'm Mark Boris Coori. Welcome to
the Mentor, Mate, thank you so much having Mark. So
you're the founder of a company. For our audience, this
is called empower Money. Just give us a quick idea
about what is empower Money. They are mutage broker, they lender?
What are they?
Speaker 2 (00:25):
We're a solution, Mark, We help people buy properties with
zero deposit. Empower Money is one company is part of
a bigger ecosystem that works together to help Australiants facilitate
their dreams and to overcome what we believe is a
very bad housing crisis right now.
Speaker 1 (00:42):
So the idea behind empower Money, though, how did it
sort of arise? How did it start off? And I've
got to declare we have an interest in that. Empower
Money is one of our panel current lenders or product providers.
A little bit more complicated than a lender because you
do provide housing as well a property as part of
(01:05):
your solution. But so I have to declare that upfront.
So now that I've declared our interest and we definitely
don't have a conflict having this conversation, But how did
you sort of come up with the idea of empowered
money and the whole product suite that you have within there.
Speaker 2 (01:25):
Going back eight years ago, Mark had a rather large
financial planning company that was doing decently well then unfortunately
went close to being under so on the borderline of
bankruptcy but not quite there. We closed it off and
went from being very wealthy to being very poor very quickly.
And then the whole idea was how do we get cash?
So we started different things and running out of money
(01:48):
very quickly. I thankfully had a decent property portfolio of
my own, and the call was made to let's try
to sell them after five to six weeks of no
one coming to any open home, so I put a
up online. Why rent when you can buy a deposit?
Finance provided and I put my house back then Garyula
Avenue in North Kellyville. I had four and a half
(02:08):
thousand inquiries on day one.
Speaker 1 (02:11):
Well, how do you mean did you offer it for
sale and you get to put up the finance?
Speaker 2 (02:13):
Yeah? I was. I mean I was so poor at
that point, I was like, I don't want to even
get some cash out of it. I just needed to
get out of the finance so I didn't go under.
So I offered zero deposits. So I was going to
use my equity in that particular scenario to fund to
the Australian buyer and then the debt they'd take over that.
So there was enough equity to get eighty twenty out
of it. And that was a plan just to offload
(02:35):
some debt. And then four and a half thousand inquiries
On the twenty second of December twenty eighteen, we realized
that there really is a demand for this.
Speaker 1 (02:42):
Where'd you put where'd you put? The offer up?
Speaker 2 (02:45):
Just on my social media post. So yeah, we had
a social media account from financial planning days. We had
a decent kind of following. And then I put on
my personal section this at eleven o'clock. So we were, you.
Speaker 1 (02:56):
Know at night.
Speaker 2 (02:57):
At night my house was packed to go move into
the in laws house was going to go, you know,
whether I sold it or the bank took it. It
was on its way among other investment properties. So I
was on the eleventh hour, so to speak. And you
know why where you can buy to posit finance provide
a simple messaging four and a half thousand inquiries now
with one property, it's easy. But then we had to
(03:17):
figure out actually how to make this work. So it's
been eight years of basically fine tuning a system. You know,
first and foremost the banks weren't all to impress with
the idea of providing zero deposit, so you know, first
iteration of the company was just trying to make the
client an ideal buyer, incubating the client, making sure they're
their credit worthy so to speak. Second iteration came with
(03:41):
how do we come up with a deposit initially? So
that was about you know, firstly getting the mortgage broking
arm initially, and then getting the real estate armed to
sell the land, the construction to build it, and even
doing some partnerships with third party you know, credit fixed providers,
getting all that profit sticking into a credit license. And
for the first six years it was just taking our
(04:03):
profit juggling it into the credit license, issuing as a loan.
Our big move came last year. We had our retailer
managed fund go to market, the Stable Hands Income Fund,
where retail investors actually came to the table and said
we want to help provide Australians with deposits, and then
we went through the roof.
Speaker 1 (04:21):
So you launched a fund, yes for anybody to invest
in doesn't have to be a wholesale investigat new mums
and dads. And they put their money into that fund
and that fund pays them a return interest and then
the money from that fund gets used for what.
Speaker 2 (04:39):
To provide Australians with a deposits, So it's a capital
backed security security back to asset. So they'll get a
second mortgage on that title for the client.
Speaker 1 (04:48):
So that fund will lend ten or twenty percent to
a borrower and that borrow is going to go and
borrow the rest from the bank for his argument sake.
And then the bank gets first mortgage. Your fund sits
behind the bank, but now your fund now has a
second warage over the value of that property. Yes, and
(05:09):
the bank has firstball jo the property.
Speaker 2 (05:11):
Absolutely yes, And that went really well. So we went
through the roof on that one.
Speaker 1 (05:15):
And then which part went really well the people investing
in the fund or the fund lending to borrowers.
Speaker 2 (05:21):
Both the returns were consistent because there were people would
vetted for quite well and there was still protection for
the client. Many losses, did you no losses? I think
that the biggest move for us was that was coming through.
It was all getting taken care of. But more importantly,
we now actually had money to grow out business, because
before we were giving it all back to the punters
in the form of a loan, so we were making
(05:43):
money taking it, putting in our credit license, lending it
out and then living off the sweat of an oily rag.
And then when we now had the mis, we now
had revenue to invest back in the business and scale
it up and actually help more Australians get into property.
And we thought this was going to be a model forever.
And then, thankfully, one hundred and sixty seven rejection letters
from different warehouse and fund providers, one of the guys
(06:05):
we presented to about thirty times actually came up and
said that we want to partner with you and facilitate
a warehouse of one point three billion dollars to help
Australians into the property.
Speaker 1 (06:13):
Mind now, so you're took about complicated stuff better so
our audience doesn't understand this. So you've got this retail fund.
You've got people come into it, put money into it.
Your fund will pay them a rad return and then
your fund will land that money as a deposit and
that retail fund takes the second mortgage over the property,
and those people then go and borrow from a bank,
(06:34):
and you know, presumably the bank was happy that they
borrow the deposit, and not all banks will be happy
with them, but some banks would mind, and the banks
would be happy to lend them first mortgage. That's part
that's good. Second part you then when you mentioned that
you got money out of a warehouse, so effectively what
a warehouse is, it's a wholesale funder. Could be bank,
(06:57):
could be some financial institution have a lot of money
and then they need to make it work. So a
warehouse will come along to someone like you and say,
all right, Peter, we'll give you a give one hundred
million dollars whatever the inst trade is, be a wholesole rate,
and you can lend that money to Australians to buy house. Yes,
(07:20):
and we're happy if you lend them one hundred percent
five hundred five percent. Okay, so we're happy. We'll give
you one hundred million just on this example. Could be
a billion, could be ten billion, but we'll give you
a hundred million dollars and you can lend one hundred
million dollars to one hundred mathematics not right, but ninety
five people I have a million and fifty each I
(07:42):
think the mass right, million fifty each, which is one
hundred and five percent, and they can all go and
buy a property for a million bucks because the fifty
thousand or now it's million and five, that five thousand
gets used to pay more insurance.
Speaker 2 (07:57):
Fifty hundred fifty.
Speaker 1 (08:00):
Right, Okay. So so basically what you're this warehouse was
happy to do for you was give you is give you,
give you money, which they allowed you then to lend
it at one hundred and five percent of the value
of the property. So people don't have to have a deposit,
and in fact they don't even have to have the
more insurance, which is usually what's required. You have to
(08:21):
have a more insurance on something like that. That's for
your warehouse. Your warehouse wants the more insurance. Yes, he
will show you. They want to make sure that if
something goes wrong on that purchase and buyer defaults, I'm
paying back in the interest or the repayments one hundred
and five percent. That if you sell the house, and
(08:42):
that house sells for ninety five percent of its value,
the mortgagensurer will pay the so called warehouse what they
call the warehouse, they're just to lender. You're you're an intermediary,
they lend you the money. You're then intermediary you then
lend it to the borrower. And that's that's what the
warehouse is that I've.
Speaker 2 (08:59):
Got to go on.
Speaker 1 (09:00):
So, and did you get the money from a banking
institution or a non banking institution?
Speaker 2 (09:05):
So it's a non banking institution. I mean they're the
biggest non bank in the country.
Speaker 1 (09:10):
They work with us warehouse.
Speaker 2 (09:11):
Yeah, sorry, exactly right. Yeah, they've worked with us to
basically partner to facilitate this. I mean, the whole marketers
shift shifted, the whole media shifted. It was a naughty
word about two years ago to say we're going to
help Australians to get in with zero deposit. Now, with
what's going on, there needs to be real solutions and
we have now the support of these providers as well
(09:32):
as you know, Australia at large now is really requiring this.
Speaker 1 (09:36):
So you have sort of two forms of funding and
therefore maybe two products. So I guess is that right?
So the first product is the stuff that you get
out of the retop one where you can give, you
can lend it the deposit. Yes you're still doing that.
Speaker 2 (09:50):
Yes, that's for the ones that don't fit. I mean
our priorities obviously that the warehouse is substantially greater scale,
but there is still you know, if there's a client
that doesn't fit exactly the requirement, we can definitely help out.
Our goal is very simple, help more Australians enter the
housing market and get out of this crisis. Yeah.
Speaker 1 (10:07):
So just so people understand that part of it. And
by the way, the business called empower Money, and if
you want to Empower Money's product, you can go to
the YBr portal that you're one of our panel lenders
as a product. So but just just be clear, you've
got this sort of two parts from Power Money you
(10:29):
can have You can either be one of these people
borrows one hundred and five percent of the purchase price
of the property, which is but it has conditions attached
to it. You have to probably meet income or income tests.
You know serviceability tests where they call serviceability tests. Are
those serviceability tests are more brutal and say the banks serviceability.
Speaker 2 (10:47):
Test not at all. It's designed to be accessible to
everyday Australians. I think that the key requirement is when
you go to most serviceability, that bank makes assumptions about you.
So the first normal serviceability, they're going to say words
your genuine savings. And if they don't have the genuine
savings that the general bank is going to assume you're
horrible with money.
Speaker 1 (11:04):
And in this case you don't need genuine saying not
at all.
Speaker 2 (11:07):
Where we're basically built this product of the premise that
you don't have genuine savings. It's all fully declared zero
deposit stuff yep.
Speaker 1 (11:15):
And and but is it when you look at their
income servicing ability, in other words, their income minusor expenses,
would you say that the empower money product is tougher
than a bank product.
Speaker 2 (11:28):
Not at all? Well, no, I would say it's it's
actually more comfortable. I mean that the only real limitations
we're looking for a credit score around the seven hundred mark,
which isn't ridiculous. I mean this, credit scores go up
quite significantly more than that.
Speaker 1 (11:42):
I mean you maybe you should explain that, because when
we're talking about credit credit scores, we're talking about positive
credit scores as opposed to negative things under credit file.
So in a credit positive credit score of seven hundred
says not serve out. There's no brutal not all you
(12:02):
know people, most most people probably unless you're a dreadful credit,
in which case you're probably not going to get the loan. Yes,
you're not looking at rateful credit. What you're looking for
is good credit. But for people who just don't have
a deposit, yeah.
Speaker 2 (12:13):
And there's reasons for it. Mark, this is the thing,
you know, they've been put in this basket of people
are horrible with money. But some of our clients are
high earners, but they've just started earning high I mean,
the average Australian takes ten years to say for a deposit.
The average rent is six hundred dollars a week. If
you put that in context, they're paying thre hundred and
twenty thousand dollars for rent over the next ten years
before they even start their mortgage. In the same respect,
(12:36):
ten years ago twenty and fifteen, and the average house
price was a million and fifty now it's one point six.
So we're just looking for people who want to jump
the queue and save nine hundred thousand dollars by getting
in early. So if you've just started earning at age
twenty six, twenty seven, your hundreds, one hundred and ten,
one hundred and twenties or whatever it is, or whatever
the amount is that can now justify the affording of
(12:57):
a house instead of having to wait ten years. Let's
get you in there now if you can afford it,
Why are we waiting.
Speaker 1 (13:03):
You're and your your business empower money. You're prepared to
take the risk. You manage. Maybe it's not take the risk,
you're prepared to manage the risk.
Speaker 2 (13:12):
We do take a risk mark because we actually co
invest in the fund. So one of the things you
mentioned in the disclosure is that you know there's a
property aspect to this. And the reason why there's a
property aspect to this is two parts. One, we want
to make sure we're not contributing the housing crisis, which
is we're going to give you a loan one hundred
(13:32):
and five percent, but now you're going to go to
the actual market, go to an auction, now that you
have money, and now there's twelve more bidders in there,
and the price goes up. So a new dwelling is
paramount to our system, and it's either through us or
through a partner, but it's really a union between lenders,
the client and also builders, developers or land providers, because
(13:53):
whether it's the builder being us or third parties, each
of the builders actually contributes five percent from their money
into the fund at cost price.
Speaker 1 (14:03):
So you know, I've got to get this right now.
So you're saying, you're saying that by a borrower also
becomes a buyer obviously, but a buyer of a house
land package or just land or just or a house
that's already on land through town terrace. But which one
(14:27):
of you, either you or one of your partners or
one of your one of your subsidiaries or one of
your partner relationship people. They're not partners of relationship developers,
I guess provide to the borrower.
Speaker 2 (14:40):
Yes, and if we don't have them on panel that
you can introduce them to us. We're not tired. We
want to vet them to obviously make sure their quality
is significant because we are backing this.
Speaker 1 (14:48):
It could be someone's gonna be buying a house that's
already been built by Marster, are going to get a
bit of land with it. We're going to put a
master and home or home on it. Let's assume you're
happy with masters. You don't need to a pine on
They but let's say you're happy with marsteron quality, you'll
lend those people one hundred and five percent of their
purchase price. Yes, but what would you expect Masters to do?
(15:08):
You said, you put it, so.
Speaker 2 (15:09):
We contribute five percent. So the builder us as our
capacity as a builder, contribute five percent of masterton in
this scenario, would also contribute five percent into the loan
of the sale price of the full sell price. So
if the land and the build, if the land is
four hundred and the build is four hundred, let's say
five hundred, five hundred for ease of numbers, there's fifty
k owing it's five percent of the whole sum. Now,
(15:33):
what that does is that five percent goes into cost price,
and also our warehouse partner also provides five percent of
cost price and cost price for those who don't understand,
is BBSW banks bill swap paper. Basically even when they
announced the.
Speaker 1 (15:46):
Cash debt though, yeah, they put us alone alone.
Speaker 2 (15:49):
But at cost price. So it's like three percent funding
and that brings a whole interest rate to the client
down significantly, So we're actually investing back into the client
to use the interest rate significantly.
Speaker 1 (16:01):
So okay, so just to be clear when you say
we you're talking about your your business and how money
or whatever the name of the company subsidiary is you
you invest five percent of the purchase price or the
title purchase price or the house cost total purchase, you
put five percent of that. Let's say some million bucks,
you put fifty grand into this fund. This where the
(16:24):
warehouse is. And on the example you just use Marsden,
they would put fifty thousand dollars in as well. So
there's one hundred purchase price million bucks, there's one hundred.
So really the warehouse is only funding nine hundred thousand,
which makes it more comfortable because there are there exposures,
not one hundred and five. It is now ninety five
(16:45):
fifty much per nine and fifty thousand, which means but
on top of that they've got mortgage insurance just in
case everything for terms of shit the and that moregasurance
insures been funded as well. So really that's that's quite clever.
It means the warehouse has got less exposure than it
(17:07):
first looks like, which makes it more makes it more sensible,
because if the warehouse had one hundred percent exposure to
one hundred and five percent, they're going to charge a
crazy interest rate, which makes it means you got to
charge a grazy interest rate, which makes it non viable
for the borrower at the end of the day. So you,
you and marketing put your five percent and you also
get a return. Yes, you get an interest rate for that,
(17:30):
just like the warehouse does. And when you blend the
cost of all the money, yes, that's your return Marster's return.
The warehouse is return. You can still make a profit
in this sense, not too much, but you're making a
profit in this Yeah, there's lots.
Speaker 2 (17:45):
Of a little s mark. We were trying to branch
out and help as many Austrains as possible. Our goal
this year is to get thirteen hundred strains into their
own home. And when you look at the housing targets nationally,
we need to you know, every month or month, every
target each is basically putting forward to solve the housing crisis.
We're actually falling short each month. So what we're trying
(18:06):
to do is contribute and provide facilitate housing for Australians
who really wants it and give them the opportunities to
bypass the line and get in now.
Speaker 1 (18:16):
So these houses that you and or people that are
involved with your organization, where are they in Sydney, Melbourne's.
Speaker 2 (18:25):
So right now we are in New South Wales, Queensland.
By the end of this quarter, we expect to be
in Melbourne and potentially wa and eventually South Australia probably
by towards end of this year. Fully, it's basically where
there's dirt, Mark, so if there's an opportunity for you
to live there, we facilitate the house and land package
(18:46):
so it doesn't have to be through us. As we discussed,
Brooklyn Homes is our construction company that gets involved. Brooklyn Homes. Yeah,
so we get involved in the building where we can.
Where we don't, we use third parties out there who
are happy that. Yeah, we've met very strongly. We don't
want to be caught in a scenario where we're funding
something that doesn't build and we're using a lot of
new technologies as well. Mark, we're constantly you know, we've
(19:08):
signed a deal through Brooklyn Homes to look at you know,
over two hundred prefabbed sort of systems that gets house
built faster, better for the client, less expense, better for
in terms of quality. Sometimes because handmade comes with handmade solutions.
So we're just trying to get scale of volume out
there and again facilitate what is a really growing problem
(19:30):
right now.
Speaker 1 (19:31):
So effectively, what empowered Money is doing here is waned
any money to cover all the costs. Two, you're also
helping these individuals lock in a house or apartment or ten.
It doesn't have to be a house. It could be
(19:53):
multiple dwelling type.
Speaker 2 (19:54):
Property led by the finance.
Speaker 1 (19:55):
Whatever you can afford once and and you're not where's
your interest rates?
Speaker 2 (20:02):
Is?
Speaker 1 (20:02):
Like? Is it crazy? Will know?
Speaker 2 (20:04):
So today's day we're hoping for an interestrest decrease, so
hopefully if that comes to the table, even more competitive.
But right now we're all in at six point nine
to five for the whole one hundred and five percent.
So in context, that's in construction. So if you look
at context out in the competitive marketplace, a normal eighty
percent ELVIR is going high eights, mid eights for a
(20:24):
construction loan. So the bank sees construction is high risk.
But because of the hit us and the funder take
collectively by putting our five percent in, we've brought it
down to a really palatable rate.
Speaker 1 (20:35):
Yeah, that's that's a pretty competitive rate. Especially when you're
borrowing one hundred percent of the whole thing. What are
they going to put it? They go to find stamp,
dudio present stamp.
Speaker 2 (20:43):
So I mean there's stamps into other wise because obviously
that house prices that really fall to the stamp duty exemptions.
Places like Queensland and Melbourne, the government's a bit more
ahead in terms of providing facilitating opportunities for the clients
to get in without.
Speaker 1 (20:56):
Stamps, so first time bio etcetera.
Speaker 2 (20:58):
Well, yeah, so they're in Queensland. It's funny they get
thirty k back in the stamp treed exemption. If there
was land in Queensland would be amazing because you're actually
getting paid thirty k to buy your house for free
deposits and not only getting paid, but you're also getting
paid for the mortgage payments. With the way our system
works there and so otherwhiles it's just a stamp. But again,
the way we're doing it is because we're doing house
(21:18):
and land packages predominantly, you're only paying stamp on.
Speaker 1 (21:21):
The land on the land, not the house.
Speaker 2 (21:22):
Yeah, so you're saving a good forty fifty k there.
Speaker 1 (21:24):
Yeah, So is this available to only only owner occupier
or investors.
Speaker 2 (21:29):
So hold this space. Right now, it's own occupieres. We
are doing some some very hard negotiating work and hopefully
have some announcements relatively soon, you know, talk to you.
You're keep in touch with your local YBr broker because
they'll get the announcement first and pass it on to
you guys. But it will be an opportunity soon, we're hoping.
But right now, own occupies, we've got thirty hundred to get.
Speaker 1 (21:50):
Rid of so and our demand ridiculous, MIC.
Speaker 2 (21:53):
So it's led by demand as you said that first night.
As I said the first night, we put four and
a half thousand people on our social media host and
we've been knocking him back since we've made the move
though to do less, you know, people coming to us
because we just can't manage that workload. So we're going
to third party distribution networks, specifically YBr, for them to
manage the influx of demand, get the clients qualified, accredited,
(22:16):
and then we go do the back office work to
get them through the door. Austrains need this.
Speaker 1 (22:21):
So wouldn't you say you go to YBr for example?
There are lots of aggregators around like us with White
Bears is one example. You're you know, you've got to
be on the other people's panel, But if you're on
our panel, a YBr broken, we'll look at the product,
look at the client, and you'll will put the loan
up to the loan application up to you guys.
Speaker 2 (22:41):
That's how Also so that they'll go through to your
local broker and like a good broke we'll do they'll
explain the pros, the cons the is it suitable for you?
They'll do that, the credit assessment, can you afford it?
They'll do the checks to make sure there's no you know,
skeletons that they can't be done and not. They'll give
you guidance to make sure it's the right thing for you,
and whenever, if it's the right thing, they get it
(23:02):
to us, we get conditionally approve it and then from
there you sit down with one of our internal advisor
to sit there and actually help shape which property you
are after. I mean, there's no point getting understanding you're
probably not going to get a double bay, two story penthouse.
It's basically a stepping stone.
Speaker 1 (23:20):
Into the property market.
Speaker 2 (23:21):
Well yeah, but it could also be what you want, right,
It's not to say that you can't get what you want,
but it's led by finance. First, the whole goal is
to stop that rental trap because most people when they're
trying to say for a property, let's at the same time,
well yeah, but also it' running away from you. You're
trying to save eighty k ten years ago, now you're
trying to save two hundred k. Where does it stop.
So we're just trying to get you off because if
the market goes up and you're that you're on that ride,
(23:41):
You're it's not running away from you, you're running with it.
Speaker 1 (23:44):
So in terms of the demand that you've been getting
and or settlements like getting deals done is like which
are about like Western Sydney or so.
Speaker 2 (23:53):
Right now based on pricing, we're all over the place,
but we're getting we're doing forty right now in places
like the Hunter and Hunty. People have gone there, the
Hunter Hunter Valley train line, your Newcastaway. We've got Tarmil,
We've got Leppington, We've got box Hill, Queensland, We've got
Moray Fields, Kabulcha up near that Southeast corridor. But really,
(24:18):
again when I say we're everywhere where, everywhere, wherever the
land suits and hits. We try to get you know,
density of four or five, put them together and make
it happen. We're doing an apartment in Marylands. We're doing
you know, the sky is really the limit in terms
of where it fits. It comes down to you mark,
We do your serviceability, you service you know one point one.
(24:39):
I assume you do a bit more than that. But
let's just say one point one comes through. Together, we go, okay,
this is what you have. Where do you want You'll say,
within this area? Okay, with your price point, I can
probably get you to hear or we can get you
closer or right in there if you want to do
a townhouse or apartment. So with that finance, that starts
a discussion based on what you want, and then we
basically find that middle round or give you exactly what
(25:01):
you want if your your objectives are in line with
your affordability.
Speaker 1 (25:05):
If you were trying to pick the perfect client viewers, now,
how would you describe that person? Of those people? Like,
give me like, let's pick a couple for example.
Speaker 2 (25:14):
Yeah, I mean couple combined household income, say twenty thousand dollars,
credit score seven hundred and motivated again the property market. No,
no deposit, no deposit, I mean yeah, the.
Speaker 1 (25:25):
What purcha prise are they buying? What are they buying?
Speaker 2 (25:27):
Two hundred gets you around the million bucks mark from
the South Wales. That's cultus priced million dollars.
Speaker 1 (25:32):
So where does that get you? What does it get you?
Speaker 2 (25:33):
So, I mean we can go Campbelltowner, we can go
austral we can go apartments all over the place really,
and you know, all the way from Carlington to Chalora
to wherever.
Speaker 1 (25:44):
Are they new in you first time buyers or they.
Speaker 2 (25:46):
Do they have to be first time? Just just I
mean this scenario and occupies absolutely. And then obviously Melbourne's
a lot cheaper when we're going into Melbourney, like the
six hundred marks. So your service at you know, one fifty,
one hundred and twenty gets you there. Queensland House one
com one point sixty. Really it's more about the mindset market.
If you've got the income to service the loan, it's
(26:07):
just the willingness to fill out the application, do the
work and come in with the pretense that you're getting
into the property market, you're owning something you're no longer
you know, beholden to the landlord of things changing and
taking that first step. Most of our clients that you know,
we've now been around for eight years, so we've seen
a few cycles now. So an example of a client
(26:30):
we originally got through into a granny flat in Blacktown,
sorry not a granny flat apartment of Blacktown. Four years
later she sold it, made a significant capital gains off that,
but she was living in it, so there's no capital
gains tax. She took that profit from that house, from
that apartment, and we also topped up the loan and
got our house and land package in Warrington. And now
(26:51):
she's officially moved in and a big advocator for it.
But that was her dream. She's got three kids. Now
she's got that house and Lamd pack Well, she's actually
moved into the house. It's all completed, she's got the
backyard she wants and she doesn't need to do another
cycle because that's always where she wanted to live, close
to her work. She's a nurse Husbands and it works
(27:12):
from home, close to the kids' school. So she didn't
get the house right at Warrington. She couldn't afford it
at that time, and now she can and she's yeah,
and it was four years where the reality was we
met her and she had seven thousand dollars in the
bank account and that was where it was. So she
(27:32):
done the hard yards.
Speaker 1 (27:33):
It's pretty good case study case studies up. Do you
have a website?
Speaker 2 (27:37):
We do, absolutely cool. I think it goes We've got
to power money, dot com, dot you, and WPF Holdings,
which explains the whole ecosystem.
Speaker 1 (27:44):
If they want to go through the whole thing, they
go to WPF Holdings.
Speaker 2 (27:48):
Ye, dot com dot you but dot com do you yeah?
And empower money is.
Speaker 1 (27:53):
And do you have case studies on those pages?
Speaker 2 (27:55):
So we have testimonials being constantly written up right now.
And now that obviously we're mature. I mean again this
is a whole new iteration of our company that we
have this massive amount of scale. So when we were
doing deals a year and a half ago, we were
doing twenty to thirty deals, and then last year a
month in the year, like you know, because we're juggling
our own money, right, it's very difficult. I mean we've
(28:15):
gone from you know, two million to twenty million in
the space of six months off the mis the managed
fund that is, and now we've got about sixty in
the pipeline, so it builds that is and lending in
the space the next few months. And obviously this YBr
relationship is we believe going to be absolutely amazing to
help more astrands get in there. So our scale is
(28:37):
only going to be significantly greater. But again we have
oney three hundred two to get off, which doesn't sound
like a lot, but we can make a great, great impact.
And if we cleared that, then the next year's some
goes up by almost double. Yeah.
Speaker 1 (28:50):
So how many houses have you do you reckon you've
delivered in the last couple of years?
Speaker 2 (28:56):
Yeah, so from where to go slow start about two
hunred and eight so, which was really really hard mark.
At the starting days, there was very much a case
of one thousand handshakes just to get one deal across
the line, talking to the land development and I have
some commissions here, and then we'ld factor that into the
deal and we talked to the builder, we have some
commissions here, We talked to the client and go okay,
I need fine ten grand from somewhere, And each deal
(29:20):
was like pulling teeth and then I got easier and easier.
Now it's now it's just a lending process and an
allocation process. So our scale and speed now is getting
delivered a lot faster so to eighty and like probably
seventy in the last last year.
Speaker 1 (29:36):
So it's just the biggest constraint, Peter, is your biggest
constraint getting enough stock housing stock. I mean, you got
the demand would be sitting. There would be plenty of
demand in terms of borrowers. What about the supply side.
Speaker 2 (29:54):
It's getting better. It's state to state, different problems for
different things, right, So I mean to be very clear,
each state is doing their own version of trying to
sold their housing crisis. Some I've got more right than
the other ones.
Speaker 1 (30:05):
A little more right.
Speaker 2 (30:07):
You know, they're having a few deficiencies. So I'll give
you example case by case New South Wales. They're trying
to push for the whole apartment to fix the housing crisis.
But apartment developers right now and actually making money the house
the apartment costs of delivery is thirty percent year on
year increasing costs, but the actual housing apartment prices have
gone down. So unless you're delivering scars like the big
(30:27):
boys out there, of six to seven hundred, you're not
making money. So and then they have plenty of land
and good opportunities there, but with something with like homeowner's
warranty for example, quite limits our ability to do. So
we're looking at acquisitions partnerships to get more and more
facilitation of these bills to make it all a reality
for them, and that's something that we're trying to do.
(30:49):
We're trying to work with government, we're trying to work
with parties. Everyone's motivated to fix it. That's trying to
figure out the how Queensland is really good on the
first home bias front and really motivating them. But they've
had a focus on affordable housing, so they've brought up
all the land in Queensland and allocated them to affordable housing,
given all the contracts to mett invest. But what that
means is there's a massive land supply for every day
(31:09):
Australians trying to own a home. So we're going out
there and there's literally five to six blocks of land
and to give you one example, I just bought a
block of land myself for Moray Fiel purely because it
was on the market and sometimes takes that client a
few weeks to get across the line. We can't wait
that block of land went for four hundred and ten thousand,
and the next release is going on in September, smaller
(31:31):
block of land for five point sixty Why because the
land developers can. There's a land developer on Almo who's
basically gone and increase his prices by three hundred thousand
dollars over the last three months, purely because you can.
Land supply is so much so short that the comparables
are going through the roof.
Speaker 1 (31:47):
When you say queens and you're talking about where we.
Speaker 2 (31:49):
To Southeast Corridor, so from Sunshine Coast to Gold Coast
to Brisbane.
Speaker 1 (31:52):
From Sunshine Coast which is now so for example down to.
Speaker 2 (31:55):
So Gold Coast, Yeah, Gold Coast and Brisbane, So that
little triangle there and that's creating some some massive issues.
It's seventeen percent year on year growth in Queensland right now,
just trying to facilitate the demand. And we all know Queensland,
but there's good everywhere. But it's just the case of
the deliveries of land subdivisions in line with the fact
that all the stock's being brought up.
Speaker 1 (32:15):
So when you sell the stocks, it's been brought up
by developers.
Speaker 2 (32:18):
Queensland government's border all the government. Yeah, they really, they've
they've bought a lot of it for that affordable housing,
and that's causing a massive shortage. I mean, this is
from all the landlights we're talking to. It's all brought up.
But now the developers have gone, Okay, I've got the rest.
So if I've got the rest, I'm just going to
musk the price. So we're doing everything we can there.
Homeowner's warrant is great, everything's great there. So demand is great,
(32:42):
Supply is not.
Speaker 1 (32:42):
There hard to find. Builders are hard to find.
Speaker 2 (32:46):
Well, we're the builder there, so I mean, sorry Queens,
that's probably got the biggest ray of builders out there.
You know, the big players that are all out there.
So each state is just trying to solve it, but
they're not I don't know, I don't feel like they're
talking to actual people on the ground as to what
it really looks like, what the solutions look like, because
you know, and I don't want to discredit what they're doing,
(33:08):
that they're doing their best, but I just think, you know,
motivating the private sector to get it done will get
yield better results. And you know, we're trying our absolute best.
And again we try to work with government with policy.
We know the constraints of what we have. We're not
demanding help from them, but we want to work with
them to get this outcome. And it's not the stock,
(33:31):
it's the issue now. It's just overcoming the challenges of
the amazing amount of demand. So from going from you know,
seventy to to seven hundred to thirteen hundred next year,
it's just a lot of partnerships, a lot of deal
making and I think we can deliver it now. But
you know, it's not going to be a straight line.
And you've been in business for quite a long time.
Market it's never a straight line, no matter.
Speaker 1 (33:51):
So you're simple, but it's never simple. They goes do
introducing to go the other day and he's not in
this position, but he was. He thought he was in
his position a couple of years ago. But he's like
his financial situation has changed. But he's got good income,
always rented apartment in Sydney, never bothered, lived his life.
(34:14):
He's youngish, he's always lived his life to the best
of holidays and you know whatever. So he didn't save
any deposit. And one of the things he's now doing
is looking at going into buying in the Southern Highlands
and your sort of product would suit him perfectly because
he's got a good income and he's also now settled
down so he'd be a good borrower. He's got good income,
(34:37):
so he'd qualifying that part of stuff. He wouldn't have
any riskless. I don't think he'd have any risk associated
with him. But he's been constrained because now he's never
been out to buy. He doesn want to live an
apartment and where he's got a dog. He wants like
a house and maybe in square meters or five and
square meters whatever. He wants a house like where he
can sort of and he does, where he can sort
(34:58):
of move around a little bit. He doesn't need to
be in Sydney for work. He does his stuff remote
and if he doesn't need to be in Sydney, can
be here an hour from the mis Southern Islands hour
and a half and your product would be perfect for him.
You don't just look at one individual as being more
risky than say a couple.
Speaker 2 (35:17):
No, not at all, not at all. It's about service
in Mark and I mean we do have some post
co restrictions. Obviously we have to accrue for that.
Speaker 1 (35:25):
But you also you also need to have the property
sell to him, don't you.
Speaker 2 (35:29):
Yeah. I mean, and again, let's say, for example, you
have your own dirt. Let's say he's got a place there.
Let's say lend there land. If he says, hey, I
just want to build on it, we can do the deal. Right.
There's a thousand ways to skin the cut. We're not
too concerned about you know exactly what it is. I mean,
we're a lender, but we're a bit unconventional because we
kind of sit on the side of our client. How
do we get it done? Right?
Speaker 1 (35:50):
But you can build a house from using.
Speaker 2 (35:51):
Yeah, yeah, yeah, asolutely. Third, we can make it.
Speaker 1 (35:54):
Happen, so you don't have to be doing house land
packages down there already. You can just send your building
to him down there and build the house.
Speaker 2 (36:01):
We don't care about which part we sit in. The
only reason we have to build it or get someone
else to build it is so they can facilitate the
investment into the client to reduce it dramatically back to.
Speaker 1 (36:11):
The fund absolutely, yeah, and at the building costs at
market like just normal mine.
Speaker 2 (36:17):
Yeah. So that's so they're protected, as you know, through
the Valex system. And for those who don't know what
the VALEX system is, yeah, it's it's when you're applying
for a loan, you send it off to a valuer
to confirm that it is exactly what it's worth. So
the Valex system means there's no control by the lender
or the client as to who picks up the valuation.
So if we've got a build in there at four
(36:39):
hundred and four fifty and the land is four hundred,
the valuer takes it a random value which we have
no control of based on post code. They pick it
up and they value it according to what they believe
is a reasonable valuation.
Speaker 1 (36:50):
Yeah, not finished, but valuation build what it's.
Speaker 2 (36:53):
Going to be finished. Yeah, what it's going to be
finished as the valuation built right now. That means that
we can't the prices up. We have to give what
the price is, and we generally follow the HIA standard
of building profit margins on top as articulated by them
to make sure that we're solvent, because the building industry
wants to make sure the builder doesn't go bankrupt yet, right,
(37:16):
So when we put our pricing of the building, it
goes to the valuer and we can't cheat. The valuer
keeps us accountable and they'll say, yeah, this is a
reasonable cost to build this project on this block of land.
So there is security measures all over the place to
make sure that no one's taking advantage, not just us,
but whichever builder takes this responsibility on. And you know,
we again lots of a littles by doing twenty or
(37:38):
thirty builds, then we have the sizable profit to invest
into the warehouse as well as get some profit and
stay solved.
Speaker 1 (37:46):
Generally speaking, when you lend the money, say on that example,
someone owns a block of land and you're funding or
and building the property of the house down the Southern Islands,
for example, maybe you explain to people that you might
approve like a four hund thousand dollars loan, but you
(38:08):
don't give four thousand dollars day one. Is it based
on drawdowns?
Speaker 2 (38:11):
Yeah? Yeah, So so let's say the land is four
hundred and the builder is four hundred. So we give
the loan the empower money product funds the land and
then the builder then does you get to deposit from
that component and then we would lay the slab. For example,
the slab is the first fundamental part of the building process.
And then when that slab is laid, we put an
(38:31):
application through to Power Money to say we've done the slab,
and they will send out a valuer again a third
party to come in and say yep, there is a
slab here, right to fact check. When that slab comes in,
we get a progress claim. So let's say if the
whole build for ease of use is five hundred thousand
dollars and each progress payment is one hundred thousand, which
is never the case. Is normally less of the start
(38:53):
and more at the end. When they see the slab
comes then we get one hundred thousand dollars which pays
for all the materials, all the trades, all the costs.
And then we start doing the frame and then get
another draw down. So the actual loan is only fully
drawn down when the house is fully complete and sort
of ready to move in, which is called the occupational certificate.
Each point is checked by a valuer, but also just
(39:15):
the general quality controls are checked by the certifier on
each level to make.
Speaker 1 (39:19):
Sure certify for the builder, for the builder.
Speaker 2 (39:22):
From the council right. It's really there to protect the
client as much as the builder interacts with them, they
really represent the client to make sure that the build
quality is there, but also get all the genuine insurances
that come with that with whether it's us or anyone. Again,
this is a finance product, but I just want to
be clear it doesn't exist without the support of whether
(39:43):
it be the land developer or the builder or the
developer working with the funder to support the client. We
are all actually investing back into the client to give
them opportunity. If you go to anywhere else, if you
go to a using your example, a Masterton, they're making
the same profit of us go to the land. They're
still going the same land commission. That money that we
get for facilitating your end to end service goes back
(40:07):
in to facilitate the opportunity, whereas if you go with them,
they're just getting the money and everyone's happy.
Speaker 1 (40:12):
Yeah yeah, So where to from here for empower money
and all your subsidies.
Speaker 2 (40:19):
The goal is very simple in one line, helping more
Australians to get more properties, well get their property get
out of the rental trap. So our goal is deliver
thirteen hundred this year next year to take it to
two thousand the year after three thy three hundred. Our
first milestone is just to really embed that partnership with
(40:41):
YB to make sure that you know, everyone understands that
we're going to a few of your conferences. We're doing
that the training out there. You guys have been great
and kind of engaging and supporting us to make sure
our message is out there. So it's just about delivering more,
helping more. The short fall, I think is one point
two million houses of the next fell years, So we
(41:02):
know we're not going to facilitate all of that, but
we will give the blueprint to support those who need
it most, the opportunities. If they can afford it, we
can prove it. Then they can have their own home
right and they don't have to forever be worried that
the landlord changes their mind and wants to knock it down,
and they don't have to be concerned about hanging pictures
on their wall. And we want to give them the
(41:23):
opportunity to hand down that asset to their children, because
if they've got a hard time now, you can only
imagine what the children going to have twenty thirty years
down the track when there's no one to support them
with that.
Speaker 1 (41:33):
And as the promise invited you down to the round
Table conference this month.
Speaker 2 (41:38):
I would love to have thee marks and maybe I've
put a few good words.
Speaker 1 (41:42):
For me, that's for sure, because they didn't invite me either.
But this is the sort of stuff that they're trying
to work out, like how can people afford it by
property And I'm not talking about affordability. I'm talking about
how can people get in onto the loan game, like
borrow enough money where they don't have a deposit, and
how can they also supply enough housing for those people.
(42:03):
I mean, they're both those things big issues in this
country at the moment. In fact, three egg extentially big.
They're huge risk to our stand of living in Australia.
Because you mentioned earlier. But if you're on the rental
thing and you're there for the next twenty years, you
could end up being there for the rest of your life.
(42:23):
Your stand of living is reduced. And you know, if
one thing governments need to be concerned about, one thing
the governments must deliver at least in this country, is
the maintenance of our stand of living over the last
one hundred years. Where it's got to we don't want
to see a contraction in that we don't want to
see they go backwards. And it is going backwards. It
has been going backwards for years and they've got to
(42:47):
put a full stop on that. And one way to
do it is what you're doing is make housing or
borrowing more accessible. It's not making it more affordable, it's
just make it more accessible. In other words, I can
borrow the money one hundred percent of the money, one
hundred and five percent of the money to buy that property.
And this this this company in power money through as subsidiary,
(43:10):
is going to help me find that property as well.
It might not be as you said, might not be
in the middle of Ersconville or in the middle of
CBD or wherever, but it's for people who are looking
at Generally speaking, most people can't who want to buy
don't want to live there anyway. They want to buy
in where or wherever it is you're talking.
Speaker 2 (43:25):
About where their parents aren't.
Speaker 1 (43:28):
Cooper Rule or some playout, some place up in Brisbane
and equivalent down in Victoria. Yeah, close to where their
families are, or close where they went to school, close
where grew up Labington and in South Wales, Sydney great
area actually, and so your approach covers both off the
empower money dot com dot You and your holding company's
name is again.
Speaker 2 (43:49):
WPF Holdings, White Picket Fence Holdings.
Speaker 1 (43:51):
Is it white picket fence or as a WPF white
picket fence so they tie in white picket fence.
Speaker 2 (43:57):
I think it's WPF Holdings for that, But we'll give
you the dresses to probably put on the link below link.
Speaker 1 (44:02):
So but right now you got to empower money dot
com dot and you can start your journey.
Speaker 2 (44:08):
Absolutely. I mean, I think that the strongest suit. I
don't know you're you're plugging me, but I'm going to go.
It's probably why were yellow brick roads. Yeah, they're the
best place to deal with the scale and volume generally
speaking at our green with them is even the guys
who come to us, But we're kind of sending off
to you guys anyway, and you guys have got the
manpower and the spread to be able to deal with
(44:29):
the volume. And I'm confident it's going to basically come
very high volumes that they're getting out there. But I
just want to make one point what you said with
the rental crisis and dropping it's the housing christ but
it's also the renting crisis because people can't actually even
get rent. Yeah, so I mean that's if they can
get rent, they'll be stuck for twenty years. But our
numbers are showing that they probably won't even be able
(44:50):
to get rent soon. We're looking at a scenario where
people are going to be co renting families, co renting
with families, or you know, worst case, a state of
home holmelessness or more affordable housing and government funded housing.
It's not looking pretty. So, yes, this solves for the
people who want to buy the house and forego all that,
(45:11):
but it solves for those who are really staring down
the barrel of you know, eviction because their landlord's moving
in or knocking down and doing duplex and they just
can't simply find a place. And the amount of course
we get like we want to buy a property right now,
I've got three months, and then we're basically scurrying to
get them into a scenario where they have shelter. And
(45:31):
these are people on two fifty three hundred K income.
Speaker 1 (45:33):
Yeah, people who are stressful.
Speaker 2 (45:35):
The exactly right, incredible what's going on at the moment.
Speaker 1 (45:39):
Well, Peter Corey, founder of empower money dot Com, do you,
and as you said earlier, you can. Your product is
available through the Wyburt branches. But I thank you very
much for coming in today. I think it's a I
know we had to go through a little bit of
process to break it down because it's reasonably complicated. Not that,
by the way, the consumer really needs to know those complications,
(45:59):
but none less, I'm some people will be interested in it.
But the bottom line is, gatt a broker, go to
your website and just you guys are doing all the
work for them, will wipe out do all the work
for it. But it does work. I know it works
because our guys are selling it right now. So thanks
so much for coming today, Peter.
Speaker 2 (46:13):
Thanks so much for having me Mark. Thank you.
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