From Engineer to Advocate: Steve Palise on Building Wealth with Data, Not Hype

The biggest property gains often come from the most boring moves—and that’s exactly where Steve Palise thrives. We sit down with the engineer‑turned‑buyers’ advocate and author to dismantle catchy myths, unpack the fundamentals that actually drive returns, and show how to pick between residential, commercial, and development without getting lost in the hype. Steve shares how he scaled a buyers’ agency from overseas using deep-work blocks, SOPs, and a serious CRM, then channelled that structure into three practical books and a free 10‑hour course built to answer the questions everyone keeps asking.

We dive into the numbers that matter: vacancy risk, lease quality, and realistic lender appetite. Steve explains why Perth and Brisbane have delivered strong net yields and tight industrial/retail vacancies while Sydney’s sub‑5% returns demand bigger cheques—and how those relative values shift as yields converge. 

We break down ROI vs return on capital, the role of leverage in the early years, and why a “cash flow positive” badge means little without a decade‑long view of demand and rental growth. On the development front, Steve doesn’t sugarcoat it: margins have been squeezed, holding costs hurt, approvals take time, and banks want 15%+ profit on cost before they even listen. Small infill projects can work for the right operators, but the horror stories are real and avoidable only with proper feasibility.

If you’re tired of “one true strategy” gurus, you’ll appreciate Steve’s approach: define the goal, set the time frame, map finance constraints, then choose the least risky path that still hits the target. Expect candid talk on postcode restrictions, specialised assets, valuation traps, and the unglamorous diligence that protects your downside. 

Want more of the good stuff? Grab Steve’s free resources, then listen and tell us which market you’re eyeing next. If this helped, follow, share with a mate, and leave a quick review so more investors find facts over noise.

Follow us for more property news and mortgage advice!

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Episode Transcript

SPEAKER_04 (00:00):
There's a weird arrogance with property because
people live in it.

SPEAKER_02 (00:02):
They think they understand the concept.
They understand the numbers, butthey don't really understand
what those numbers truly mean.

SPEAKER_04 (00:07):
We're joined by Steve Pelosi, the founder of
Pelesi Property, one ofAustralia's fastest growing real
estate businesses.
Property is not actuallycomplicated.

SPEAKER_01 (00:16):
It's literally just plus and minus things.
The thing that I've noticed witha lot of buyers agents is they
advocate for the things thatworks for themselves.
And they don't advocate so muchfor the thing that might work
for the client, but all thebiggest hurdles that you kind of
faced along the way.

SPEAKER_04 (00:27):
I would probably say cash flow will help maintain
your lifestyle, but it's not astrategy.
It's to get rid of all thebullshit of people saying this
is the right strategy.

SPEAKER_01 (00:37):
Is there anything that you want to tell our
listeners what this book mightentail?
Hey everyone, welcome back tothe Five Air Show with Joe.
As always, I am your host, Joe.
This is Michael.
Hey.
And today we have adistinguished guest, which we
have, we're gonna go withdistinguished.
Yeah, so we have with us StevePallis.

(01:00):
Did I say that right?

SPEAKER_04 (01:01):
No, I say Pallisi, they say Pallisa.
Okay.
When I was in Italy, they weresaying I'll say my name wrong,
and I'm like, oh my god.
Which is hilarious.
My partner's called Lisa, soshe'll be Lisa Paliser.

SPEAKER_02 (01:09):
Oh my god, that's brilliant.

SPEAKER_01 (01:12):
That's perfect.
We're here with Steve Pallisafrom Palisar Property, who
established his business fiveyears ago.
He's helped buyers purchase over2,000 properties in that time.
He specializes in buyersadvocacy by presenting data,
numbers, and ensuring that everysingle buyer that comes to him
is wealthier afterwards.

(01:33):
He has written three books, andtoday we're going to discuss all
of it.
So, Steve, thanks so much forcoming on.
Thank you so much for having meon, man.
There's so much that I want tounpack here, but the first thing
I want to get into, what droveyou towards buyer's agency?
Now, off camera, we discussedthis a little bit.
Tell us how how you first gotinto the property market.

SPEAKER_04 (01:50):
With jealousy of some people, actually.

SPEAKER_01 (01:53):
That's the honest answer.

SPEAKER_04 (01:54):
But I'll start at the beginning.
So I'm actually a charteredstructural mechanical design
engineer.
So again, did really well atschool, got 99.5 in high school.
Was like, oh yeah, if you workhard and you're smart, you'll
make money.
Realize that wasn't the case.
So I went and did engineering.
You don't earn bad money inengineering, but you never go
next level.
You're in that kind of 150-ish,and that's kind of it.
Um, but I started buying someresidential because there was a

(02:15):
few young gurus back in the day.
It was like the Nathan Birchersand Zachy Amir's and all these
young guys with like NathanBirch went to my high school and
he had like 20 properties whenhe was like 23.
I'm like, what am I doing wronghere?
Yeah.
So I bought my first one inSydney's West for 230 grand.
Wow.
That jumped to about 300 grandin the first year.
Yeah.
So I'm at work being like, whyam I working 12 hour days when

(02:35):
I've just made like five yearsworth of savings buying a
property?
Yeah.
Um, and then that was the bit ofaddiction moment.
Then I started reading everybook and any podcast I could
find and stuff.
And then slowly accumulated.
I saw when I left Engineer, Ithink I had about seven
residential properties.
Um, I was known as the propertyguy at work.
Like I'd literally have the CEOof the mining company in my
office every week chattingproperty.

(02:56):
Yeah.
Uh, and then I was going througha divorce at the time and I was
kind of like, but I need a bitof a life change.
Let's go.
So go joined a startup buyersagency, helped that grow to
about 20 staff, uh, and then hadanother stuff at life moment,
moved overseas and started myown one.

SPEAKER_01 (03:09):
So you were operating a buyer's agency,
buyers advocacy group offshorefor Australians.

SPEAKER_04 (03:15):
Yep.
So when I moved overseas, Ireleased my commercial book at
the time.
Yep.
And I was like, to be honest, Iwas actually going to get a job
over there in real estate justto learn another skill.
And then like a lead would comethrough once a month from my
books and I want to work withyou.
And buyers agents we charge apretty penny.
So I was like, oh, 15 grand,cool, let's do one of those a
month.
And then one became two, twobecame three, then we started
doing five.
Then I had to hire people.

(03:36):
So I when I came back, Iactually met five staff that
I've never even met, just seenthem on Zoom.
Yeah, because it was duringCOVID, those lockdowns.
Yeah, exactly.
Funny enough, the the UK COVIDwas out of lockdown, and Sydney
was in lockdown, or Australiawas in lockdown.
So I was gallivanting aroundEurope while they're all locked
in.
But in all seriousness, the bestthing that happened for my
business was working remotelybecause it actually forced me to

(03:58):
get like the best CRM system,implement like systems and
procedures because I wasn'tthere anymore.
Like I was off for 12 hours ofthe day.
And it meant I could actuallyscale, I could actually turn up
the marketing and just scale it.
Whereas if I stayed in Sydney, Ijust would have been running
around doing everything myself.
So I just forced it's like Ineed someone for this to fill
this period.
I'm gonna hire someone.
I need them to know what I woulddo in this situation.

(04:19):
So let's write a procedure.
Let's write a um so that thatactually, yeah, that's right.
So that's I didn't even knowwhat a SOP was back then.
So um, but then I just wrote allthe positions and then
engineered the hell out of myCRM.
So everything was ticked offwithout me doing it, and then it
became easy.
It's just uh crank the socials,crank the leads, and the leads
from minutes is run itself,basically.

SPEAKER_01 (04:38):
This is actually the funniest thing I've ever heard
because as Michael knows, I'mgoing through this period right
now where I've literally builtmy own app.
I've uh it's a web app that youcould download, bookmark it and
stuff.
But I built all the flowsmyself, web hooked it all in
into our CRM because our CRM wasso clunky.
You need that ease of access ifyou want to be able to scale a
business.
You can't focus on scale orbeing able to help more people

(05:02):
if you are trapped behind a, orsorry, not so much trapped, but
if you're driving aroundeverywhere meeting this client,
meeting this client, meetingthis client.
You need to be able to find thetime to be able to.
I've got a funny story aboutthat.

SPEAKER_04 (05:11):
So you know those companies that are like the CRM
builders, there's onespecifically for buyers agents.
They come in, like, oh, we'llset up your CRM so it makes it
easy and blah, blah, blah.
I'd have had an hour Zoom withthem.
They jumped on, I showed themwhat I had, and they're like, Oh
yeah, that's 10 times betterthan ours.
I'm like, You're the experts.

SPEAKER_00 (05:26):
Hell what are you selling?

SPEAKER_04 (05:28):
But we spoke off air about how like I was very
productive when I was over therebecause I had like a seven-hour
window where no one disturbedme.
Australia was asleep.
So that's where I could likework on the CRM, write books, do
courses, and it was just waymore productive.
It also meant I learned I didn'thave to be reactive.
Most business owners get anemail or a call and they're
like, let's get up, get a showgood service.
I only could actually block outyour day.

(05:49):
Yeah.
And like, this is for calls,this is for emails, this is for
self-work.
Yeah.
And I actually structured my dayaround that.
So it was the it was literallythe best thing that happened to
me.

SPEAKER_01 (05:56):
Wow, that's actually really amazing.
Obviously, we mentioned youstarted the buyer's advocacy or
the buyers agency group back in2020.
Tell our listeners what were thebiggest challenges and the
hurdles?
I know we've got a lot ofsolutions that we just
discussed, but what were thebiggest hurdles that you kind of
faced along the way?

SPEAKER_04 (06:10):
I would probably say people is uh the unexpected
problem I had.
Variable.
Yeah.
There's just variable you, andwe we we spoke a little bit
about this as well.
Um, just what people's goalsare.
I I thought everyone would belike me.
Just cool, put your head down,get the work done, fix the
problems.
Everyone's got a different goal.
Some people want the nine tofive, some people want the lazy

(06:31):
three-day week and they earn the150k.
Some people would come to me andthis be like, Oh, I want to be
paid 200k.
And I'm like, Well, you're notmaking 200k for the business.
Where do you think it's gonnacome from?
Oh, yeah, but I want to earn200k, and you're just like, this
is baffling.
So the the realization of peoplewas probably the biggest
challenge for me because the thework of telling what a good
property is, I can do writing asystem procedure, doing

(06:52):
education, I can do all that.
Um, the people would justbaffled me a little bit.

SPEAKER_01 (06:56):
Yeah, it does.
It is a little bit startling.
Michael, you're looking at meand I'm looking at you, and
we're laughing.

SPEAKER_00 (07:04):
We're laughing because it's just I'm looking at
myself in five years' time, andI'm just like, is what's going
on here?

SPEAKER_01 (07:10):
Are we related?
Are we not?
Um you just remind me so much ofmy older brother and also 99.5
at in his HSC, also was anengineer, got into property as
well.
Um, I was the bad one of thefamily.
I was the one that was like lazyin school and everything.
And then I was like, hey, wait asecond, I know how to do maths.
So I would have got a mathsdegree, an economics degree
afterwards and stuff.
So it's just so cool to hearsuch a uh a forward trajectory

(07:32):
of what I could potentially lookforward to after you know
everything is kind of gone.

SPEAKER_04 (07:36):
It can be different businesses.
So my older brother, probablysimilar, he didn't do that great
in school.
He's got like a 20 million plusbusiness in the fruit industry,
which is a way simpler industry.
Like it's buy fruit, sell it tocoals and woolies and things
like that.
There's no NCCP involved withthat.
Whereas like mine's way morething, but um, I get a bigger
return.
So like I buy someone aproperty, so I'm less less
people, yeah, but a bigger cost.

(07:57):
He's got to do 10 times more,but it's a simpler business.
Yeah, so he works well at that.
I wouldn't be able to do thatbecause I'm just like, well,
this is I can't add value here,yeah.
But he's got the the balls toactually be able to do it.
Whereas I sell my expertise,which is I think why I'm doing
well as well.

SPEAKER_01 (08:11):
But it's also you have a gen, it sounds like
you've got a genuine passion forwanting to educate people.
Um, you know, you've written youwrote your first book in 2020.
Where did the inspiration comefrom to want to want to do that?

SPEAKER_02 (08:23):
Was that a lockdown project?

SPEAKER_04 (08:25):
Uh no, that's what finished it.
So it took me over a couple ofyears to write it.
It was actually that was thekick up the bum when when COVID
actually caused lockdown, no onebought properties for about two
months.
Everyone was just like, world'sending.
And I literally locked myself ina room like nine to five, being
like, I need to get this done.
Yeah.
Um, funny enough, I wrote thebook to stop answering the same
questions to annoying clients.
Like every sales call, they werelike, How do leases work?

(08:48):
Who poses the archons?
And I was just like a sales callis going for an hour and a half,
and an hour of it was the samething.
So I was like, I'm just gonnawrite a little 20-page e-book,
send that to them before thecall so they can say, read this.
When we have a call, then wechat about the good stuff.
And then kind of 20 went out to80.
And then I was like, there'sprobably a book here, and then
just finished it off.
Yeah, um, I wasn't planning toself-publish it or anything.

(09:09):
I was planning to self-publish.
Uh, and then I was like, I'lljust try send it to a publisher
because I read another book andI was like, this book's
terrible.
Mine's better than that.
Send it to the publisher, andshe called me back within 10
minutes and was like, You wrotea book.
And I'm like, Isn't that whatauthors do?
And she's like, No, you're thefirst, first business owner that
we've actually had written aword-for-word book.
She's like, Yeah, we can editthis and publish it.
I'm like, Wow.

SPEAKER_02 (09:28):
Okay, so it got published.
Well, I did to most of them,like I assume ghostwrite and
stuff like that.
Yeah.

SPEAKER_04 (09:32):
But but that's also why I didn't have a big enough
name that I would have been ableto get published after that
because normally it's like asuccessful business.
You've already got a bit of aname to it.
They're selling somethingalready.
I was a nobody, but she was justlike, I've just got to edit
this.
It's a really good book.
And now she keeps being the oneto push more books.
She wants to get a fourth bookat the moment on strategies.

SPEAKER_01 (09:49):
That's that's amazing.
Uh, you locked yourself in yourroom, you're writing out
basically a commercial propertycourse.
It's the worst thing in theworld, by the way.

SPEAKER_04 (09:57):
But first 20%'s exciting.
No, no, no.

SPEAKER_02 (10:00):
20 to 70 percent is just the grind of oh it's like
pulling out teeth and trying totry to write a novel, and it's
the same thing.

SPEAKER_04 (10:09):
When you get to the last 10, 20% that you're gonna
do.

SPEAKER_02 (10:11):
It's exciting again, yeah.

SPEAKER_01 (10:14):
But it's you are always your own harshest critic
because you're looking back atthat book and you're going to
yourself, oh, I should haveadded this here, I should have
put this formula here.
This could have really used thetable on this page, and you're
kind of sitting there.
But you have to remember fromthe outside perspective, someone
like myself, who back in 2020knew probably 15% of anything to
do with commercial property.

(10:35):
Um, if I picked that up and Iread it, I would have said, Oh,
this book is amazing.
This guy should write more.
Yeah.
So I love the fact that you'vegot the growth mindset and
everything, but don't beatyourself up, man.
I think uh, you know, if so ifan or if the publishing
company's calling you up for afourth, you did something, you
did something wrong.

SPEAKER_04 (10:48):
It's funny you say that.
So I probably read the first one20 plus times, trying to fix
everything.
My book publisher at the timesaid she's like, Steve, getting
everything perfect won't sellmore books.
No, like when you pick up,you're not going, oh, page 197,
he's done a typo here kind ofthing.

SPEAKER_02 (11:02):
No one's line reading this.
That's right.

SPEAKER_04 (11:03):
So you get to the thing, and then my second book I
probably read three or fourtimes, and then the development
one twice.
It's just like, yep, make surethe content's there, make sure
it's correct.
Happy days, let's move on.

SPEAKER_01 (11:12):
Because the thing is, you're you're you're
constantly involving.
You're not sitting therethinking to yourself, oh, I'm
going to uh not write again.
You're thinking to yourself,okay, how can we do a commercial
property uh update for 2025 orsomething?
I'm assuming that's in your headright now, isn't it?
Yeah, yeah.
But that that to be honest,that's that's an easy one.
Like But so this brings me to mynext question.

(11:33):
We've got 2020, we've got thecommercial property handbook.
We've got 2022, we've got theone on Resi.
2025, we've done propertydevelopment.
A lot of things have changed inthe property market in that
time.

SPEAKER_04 (11:44):
It has, but the the way I write my books, so mine,
my books are called ExplainSimply.
So it's like commercial propertyinvesting explains with me.
Resident, it's actually all thefundamental.
So it's actually like atextbook.
The the book publisher was like,there's nothing on the mark of
this.
You're effectively doing thenew, remember the for dummies?
Oh, yes, yes, yes.
It's kind of like you've donelike a textbook version of the
dummies, whereas most otherbusiness owners, because they're

(12:04):
not actually writing theirbooks, will do it out in dot
points and then a ghostwriterwill fluff it up into dream
selling, yeah, which is moreinspirational.
You read those books and you getmore motivated.
Mine, if you want to know aboutleases, go to page 160.
There's 20 pages on how toanalyze a lease.
So it's a bit more boring.
Um, but because I've done itover data of 30 years, you can
extrapolate what you want.

(12:24):
So I've actually done interestrates at 5% for my resie book.
Okay.
Because I looked at the averageand I was like, oh, they're five
and a half percent.
Let's go five percent.
It's a nice, easy round numberwhen you're doing million dollar
assets.
But then the tables I have inthe book actually go from like
2% to 12%.
So you can look at the cash flowon that.
So that the fundamentals thoughwith property investing don't
change.
Just the areas you buy and thereturns you get due, and that's
what changes the strategy.

(12:45):
Yeah, hence the fourth book ofstrategy.
We're gonna do one on all thedifferent types of strategies,
pros and cons.
Yeah.
And that might get me away fromactually revamping them.
But to be honest, going throughand changing some figures, yeah.
Um, nothing's changed in thefive years of like fundamentals
of how you buy property and cashflow versus negative the gear
and all that stuff.
Like, so it's just updating thefigures.
But the way I did it, it'sdoesn't actually matter because

(13:06):
I had tables that cover bothends of the spectrum.
Yeah, because you need to planfor that.
If interest rates go up, yougotta plan for that.
If they go down, happy days.
But like you got to choosesomewhere in the middle.

SPEAKER_01 (13:15):
I absolutely love hearing that because people
always come to me when andthey're like, Oh, how do you do
when uh the interest rates areso high?
Or how do you build up businesswhen interest rates are low?
And you kind of touched on this,and I'm like, you have to
understand people always have aneed and it's the same
strategies every single time,only you're turning up different
points where interest rates aredown right now.

(13:36):
I'm still going to have peoplesay to me, Hey, I need to
refinance.
Okay, I need to save money.
When interest rates are higherand the banks are putting up
their effective cash rate overand over again and the customers
not noticing it, guess what?
They still need to refinance andsave money.

SPEAKER_04 (13:50):
The best thing for mortgage brokers are when
interest rates are going up orinterests are going down because
there's an incentive to go lookat your loans.
Um, the worst thing is ifinterest rates stay the same for
you guys for five years, becausethen people are like, Why am I
bothered doing all this effort?
Yeah.
Um so your job's actuallyeasier.
But one of one of themisconceptions I keep getting at
the moment is people go, Oh, I'mwaiting for interest rates to
come down, then I'm gonna buy.
Oh, and I'm like, but interestrates went up and property

(14:12):
prices went up.
So shouldn't it be actually ifwe're looking at that logic, it
should be the opposite.
Interest rates go down, pricesgo down.
But there's this this I don'tknow where they get it from.

SPEAKER_01 (14:19):
Uh, it's uh there's a basic economic principle
supply, demand.
We don't have enough supply onthe market.
We don't have enough propertieson the market for people to be
able to go purchase.
Michael, you mentioned this afew weeks ago where your dad
said, Oh, why don't you tellyour friends to buy in Mount
Druid?
Yes, please say this againbecause I just I just wanted to
say that.

SPEAKER_02 (14:38):
No, it was basically what it was.
It's like, why don't yeah, youjust he's he's sort of one of
those people that uh doesn'tbelieve that it's harder for
young people to buy into themarket.
He's like, just go to MountDruid like we all did and just
buy something that's reallycheap.
And I looked at the prices andI'm like, I mean, it's still not
that cheap, and I don't know ifthis is going up either.

SPEAKER_01 (14:53):
Hey, uh, I still remember what he said.
He goes, Oh, can't you just gobuy a house in Mount Druid for
$400,000?
I fell over.
I fell over.
Like what is where is thiscoming from, sort of thing?
Sydney's million dollar ringfrom Bondi to I'm pretty sure
now.

SPEAKER_04 (15:08):
It's 1.2 in Sydney.
Just for a house.
Yeah, yeah.

SPEAKER_01 (15:11):
Fireboro built in the 70s or the 80s, million
dollars now costs because of theland.

SPEAKER_05 (15:16):
Yeah, okay.

SPEAKER_01 (15:17):
Like Sydney is a very restrictive city, and a lot
of people don't realize that.
I understand that we've got umparcels of land that haven't
been developed yet.
There's a lot of, you know,farmland or greenery, especially
down in the southwest pocket,like Campbelltown and Oran Park,
Camden, those sorts of things.
But there isn't enough peoplejumping into the market.

(15:38):
And this actually brings me toone of the questions I did want
to ask you.
There's not enough developerscoming into the market and
wanting to build because therisk is too high at the moment
for them.
And this I do we will go, wewill go back to the residential
investing, but I do want totouch on the property
development board.
So 2025, you launch your newproperty development board.
On my side, I'm seeing a lot ofdevelopers and builders leave

(16:01):
the market.
They they don't want to getinvolved anymore because there's
all these new regulations,holding costs are through the
roof.
Um, you know, uh the people areless trusting to purchase off
the plan these days, and thenyou're coming up with a book on
it.

SPEAKER_04 (16:15):
So well, we'll take a step back.
So funny enough, um, people askme, I'm I'm known as the
commercial guy, yeah, but I hadnine residentials before my
bought my first commercial.
So I'm not I'm not thecommercial guy.
I love residential because youget more leverage.
I actually wrote the residentialbook because I got sick of
people saying, Oh, you're justgonna push me to buy a
commercial.
I'm like, no, no, Resi's got aplace.
So I begrudgingly wrote the Resibook just to show people I'm

(16:35):
giving them both options.
And then the development one isjust to because people go, Oh,
yeah, Resi's great, but I canmake more in development.
I'm like, well, you can, butthere's also a lot more risk.
So I was just kind of closed outthe trilogy, being like, look,
these are your typical threeoptions.
Here's the pros and cons of eachone.
Yeah, um, but you gotta becareful when I when I talk about
developments, there's two scalesof developers.
Like most mom and dad clientsare not building a 10-story

(16:58):
apartment off the plan type one.
Um, they're not doing a wholegreenfield estate where they buy
like 20 plots.
Yeah, they're doing a verysimilar, this is what the basic
premise of the book is likesubdivisions, granny flats,
maybe building townhouses or avery small apartment block.
Yeah, you can sort of do that inwell-established areas.
You don't necessarily have to doit in an off the plan, uh like a

(17:19):
big greenfield site.
Yeah, those ones have risks, butthen they also potentially have
bigger margins.
Correct.
And that that's why mostdevelopers have stopped now
because the margins just aren'tthere.
One, we've got a fewdevelopments at the moment, um,
but they're high-end, high-riskones.
So we're doing like six milliondollar like duplexes down in
Kayama and areas like that.
That's the only way we can getour 20%.
You try to do it in Mount Druid,the margins are nothing because

(17:41):
bill costs have just outstrippedthe bill costs of around 20%.
Yeah.
So if the market's not movingwith that, it's a lot harder to
do.
And like you said, holding costsand all that.
So um that's why it stopped.
That'll that'll change though.
Interest rates will come down.
The the demand will get evenmore there where people can't
get in and they want to buy apremium.
Um, but yeah, let's just makesure we there's a distinction
between apartment towers.

(18:01):
Yeah, that's that's different.
That's like um the big, the bigticket stuff and the small ones.
Um, that needs to come back to15% plus.
Otherwise, why would you do it?

SPEAKER_01 (18:10):
Banks aren't funding it.
We do have banks trying tocreate niches for you know the
large-scale guys, uh, but unlessyou could show 15% plus profit
margin, yeah, they won't fundthe project.

SPEAKER_04 (18:22):
Yeah, well, we're all the ones we have to do, we
have basically have to buy theland, cash.
Yeah, and then then we can getlike with the trobe, get a
build-on completion price.
But that's that's the biggestbottleneck for most people to
do.
Yeah, but that's also anopportunity.
If 99% of people can't dolending, you leave a small group
of individuals if they know whatthey're doing, um, you can
actually make some money.
But again, developing's highrisk.
My partner's actually aninsurance broker, and I can't

(18:44):
remember the stat.
It was something like 50% ofdevelopers went bust during
COVID.
Yeah, 50%.
Like that's they they if thatdoesn't give you signs of risk
from the start.
Like the and then you get momand dad investors being like,
I'm gonna do a development.
You're like, well, good luck.

SPEAKER_02 (18:59):
Yeah, good luck.

SPEAKER_04 (19:00):
Yeah, even the successful ones I know, they've
all been burnt multiple times.
Yeah, just kind of got back onthe horse.

SPEAKER_02 (19:06):
Yeah, well, that's yeah.
My dad's a developer, as abuilder, and stuff like that.
He's had projects do well, dopoorly, all that sort of stuff.
But yeah, we're building nowthree towns.
Well, we're trying to buildthree townhouses in Quakers
Hill.
So we'll see how that turns out.

SPEAKER_04 (19:17):
Builders have a better shot because they've got
margins on both sides, they'vegot margins on being the
developer and things.
So if they've got like, let'ssay most builders, what, 20%,
30% margin sometime?
Yeah, and then they're trying tomake a 15% margin.
If something happens and theylose 15%, at least one entity is
still fine.
Yeah, yeah.
Um, so that's that's a the goodthing for builders, and they
know they can get how things arecost price without to markup.

(19:40):
Yeah, the everyday investorwho's got to pay cost price,
it's it's actually tough.
Like I we we can't make it workfor under like sub four million
dollar deals.
Yeah, it doesn't.

SPEAKER_01 (19:48):
Like, I'm just gonna be honest.

SPEAKER_04 (19:49):
Sub four million, yeah.

SPEAKER_01 (19:50):
I got a viso the other day from my cousin, the
one in photo frame over there,Issa.
Um, he sends me the the the themost back of an envelope
feasibility I've ever seen, andhe's expecting to build two
luxury duplexes in Belmore for$750,000 a side.
Luxury.

(20:11):
Like he wants high-end andeverything.
I go, uh You can't build astandard house for$750,000.
I go, where did you get thesenumbers?
He's not a builder, yeah.
He's a he's a technical.
And I'm sitting I'm sittingthere and I'm like, uh, who's
building this for you?
And he's like, oh, my mates, uhmy mates are gonna give me good
prices.
And I'm like, do you understandthat$250?
This is mates are gonna give megood price.

(20:31):
But this is my favorite thingabout that just generic
statement.
Oh, oh, I've got a friend who'sa plumber, he's gonna give me a
good price.
So you're telling me the plumberwho has kids, who has bills, who
has his own mortgage, who hashis own properties, his own
ambitions, is going to spend hisnine to five making less money
for the next three monthsbecause he's your mate.

SPEAKER_04 (20:53):
I I've actually got a counter-argument to that.
I actually, whenever I've got afriend doing something for me, I
actually pay them full price nowbecause I want their business to
do well.

SPEAKER_02 (21:02):
Actually supporting your friends.

SPEAKER_04 (21:03):
Yeah, supporting them is not by getting a
discount and having them workfor Pima.
One of the things I actuallyhate is pretty much every
armchair investor says they wantto be a developer, but they
don't actually want to be adeveloper.
They just want to tell peoplethey're a developer and make
lots of money.
The actual doing of the work,I've done it before, it's
horrible.
It's never a feel-good.
The builder never calls you upbeing like, great, it's on time,

(21:24):
no extra costs.
It's just, it's just 18 monthsof hell.
Yeah.
Um, the feel good is when youmake a profit at the end if you
do.
Yeah.
But no, they don't actually wantto do that.
They just want to tell people,oh, I'm doing this development
and I've made a 30%.
It doesn't work that way.

SPEAKER_01 (21:37):
Yeah.

SPEAKER_04 (21:38):
If it was, you wouldn't be making the money
someone else smarter than youwould be anyway.

SPEAKER_01 (21:42):
It's yeah, I there is a notion in Australia in
particular where everybody hasthis aspiring dream to be a
property developer and do thesetownhouse projects or do these,
do these large-scale builds.
I'm not saying don't go for it.
But the people who are doing thebest at it actually don't want
other people to know thatthey're doing it a lot of the

(22:04):
time because they are worriedabout number one, the tall poppy
that occurs in our culture.
But number two, there are somany variations involved with
development, with scale, withlarge property things that
things can go pear shaped veryquickly.
You want to minimize your risk,not increase it.

SPEAKER_04 (22:20):
What killed it was from like 2012?
Anyone who did something in likeSydney or most capital cities,
the market did all the heavylifting.
So they bought this asset, itwent up 20%, they had a 10%
margin.
They're like, oh, I made 30%.
They didn't.
That made 10%.
Um, but part of my book, I'm I'mnot a development expert.
Like, I've I've done three, andI've got my but my business
partner who has done a few aswell.
We interviewed 10 developers.

(22:40):
So, like, we're claiming we'renot experts, we're just like,
here's all the knowledge we gainfrom 10 of the best developers
we could find.
And finally, at the back of thebook, we do five case studies of
the horror stories of thedevelopments from the experts.
So, so there's no sugar coatingin this book.
The end of the book is this iswhat goes wrong, and like stuff
like one of the case studies ishe had squatters.

SPEAKER_02 (22:59):
He had his oh, we had that issue too.

unknown (23:02):
Wait, what?

SPEAKER_02 (23:03):
We had homeless people stuck in there, we have
to clean up needles and stuff.

SPEAKER_04 (23:06):
But not in that, you couldn't you couldn't get them
out.

SPEAKER_02 (23:07):
It took him out.
No, we got them out.
Oh wow, oh, because squattersare rights and stuff like that.

SPEAKER_04 (23:14):
There's just little things like that, you know.
Another one, just the boundaryline was wrong.
So, like they didn't do enoughdue diligence, completely
stuffed the project.
Just the boundary line being 30centimeters out changed
everything.

SPEAKER_01 (23:28):
So I went on your website last night and I noticed
something in particular.
Now I don't know how often yourwebsite gets updated, if it's a
live feed or anything like that,but there was one key statistic
I noticed, and that was one inyour last 14 properties that you
helped buyers purchase was inSydney.
Everything else was in Perth.
All the other things were inBrisbane.
I think we had one in the ACTthere somewhere.

(23:50):
Can you highlight to me why dowe have a lot of people from the
East Coast purchasing out westor why they've got not out west,
but west of the West.
Yeah, yeah, yeah, yeah.
The real West.

SPEAKER_04 (23:59):
So good, good pair.
We actually purchase a littlebit more.
It's about 70% of what we buy isa mix between Brisbane and
Perth.
And then the other 30% is a mixbetween Canberra, Sydney, and uh
we occasionally buy in likeMelbourne and Adelaide or
regional, but regional forcommercial typically needs an X
factor, i.e., like medicaltenant, multi-tenancy, some big
value add because you're takingon an extra risk from being the

(24:20):
regional area.
Um, those come from our socialmedia.
So we post around three or foura week on social media and they
just get doubled up on thewebsite.
The annoying reality of it, if Ipost the stuff that we're buying
in Sydney, it doesn't do well onsocials because it's like, look
at this bulletproof four and ahalf percent yielding warehouse
we got, and then the otherbuyers agents are plugging seven

(24:40):
percent crap they're buying inMount Isa.
Yeah, like, and it's like youdon't get any traction.
So, like, that's the socialmedia team pick and choose a
little bit there.
But in reality, the stuff webuy, like North Sydney, for
instance, zero percent vacancyrate for commercial industrial.
Wow, like Brookville, where Ilive, zero percent.
So you're like, Why doesn'teveryone buy there?
Budget one, you got to spendfour mil to get a warehouse, and

(25:01):
you're getting sub 5% yield.
And then this goes on to thequestion of well, why would you
buy Perth?
Vacancy rates where we buyaround 1% there.
Wow.
Still, still tight.
That's still a tightly heldarea.
So that's like three months,four months vacancy.
But you get a six, six and ahalf percent net yield.
So you're getting bigger return,way more bang for buck.
You go spend four mil on Perthand get your whole shopping

(25:22):
center.
I can get your whole industrial,like with two or three tenants
or freestanding, more value add.
So it's the balance between riskand reward.
So a lot of the Sydney ones willbuy just for like the older
clients who want a retirement.
The people who are middle-agedand younger, we can take on that
little bit more risk by buyingin these areas, but you get a
better return, a better bang forbang for buck, and the property
washes its own face.

(25:42):
There's no right answer.
Like the other buyers' agentsbuying the 7% yielding ones in
mining towns will say, Well,we're getting an extra 30% more
rent than you, so it can sitvacant for 30% longer.

SPEAKER_05 (25:52):
Yeah.

SPEAKER_04 (25:53):
My counter-argument, and I know I'm right because
it's proved in the last fiveyears, is you buy in a tightly
held area, you get more capitalgrowth, you get more rental
increases, and you have shorterperiods of vacancy.
Your ROI is way better.

unknown (26:05):
Right.

SPEAKER_04 (26:06):
Um, but you need to kind of shift with the market.
So, like most of our stuff webought in Perth is close to
doubled in value.
Most of it's 50 to 100% in thelast three to four years.
We're not going to keep buyingthere if that keeps occurring
because we're going to get tothe end of the growth curve.

SPEAKER_03 (26:20):
Yeah.

SPEAKER_04 (26:20):
And that's why we've got a keen eye on Adelaide and
Melbourne and Sydney because allof a sudden the yields are
getting closer.
Like you were buying Perth for5.4%.
Buying a 5% one in Sydney all ofa sudden becomes way more
attractive.

SPEAKER_03 (26:32):
Yeah.

SPEAKER_04 (26:32):
Um, but again, the questions I always ask when I
get a client is what are wetrying to achieve over what time
frame do we want to do it in?
What do we have to work withwith finance?
Which is to be honest, no,normally the one that dictates
it.
It's normally like I'm out ofservicing, I need to buy
commercial, get a lease stockloan.
Oh, I that was gonna be versusversus what your risk profile
is.
Um, so like an example, I justbought a little shopping center

(26:55):
for myself in in uh Brisbane for3.175 mil, eight tenants,
nothing special about the deal.
6% net yield.
I could buy other ones for 6.5,but big land play, 3,500 square
meters, next to a public school,next to a primary school.
In the last 10 years, I only hadtwo vacancies, longest period of
vacancy, six months.
That is because I've got a childand I want to park my money in a
reliable asset, right?

(27:15):
So I can keep traveling fourmonths of the year.
Yeah.
So it's like it's just wavebusiness profits and I sold some
residentials, get that.
It's gonna be paid off in sevenyears just because I put a 50%
deposit on it.
That I could actually, I've gota team of 20 people.
I could buy a really cool valueadd or a high risk, high yield.
No, I'm busy enough with work.
That for me, my risk profile,perfect.

SPEAKER_05 (27:34):
Yeah.

SPEAKER_04 (27:34):
For 25-year-old Steve, terrible.
Yeah, let's get the value add.

SPEAKER_05 (27:38):
Yeah.

SPEAKER_04 (27:38):
For 65-year-old Steve, yeah, all right, probably
could do better, probably couldbuy a lower risk one with less
an issue.
So it's just balancing thosefour kind of parts.

SPEAKER_01 (27:46):
Uh I you you brought something up there.
Could you explain to ourlisteners that just because a
buyer's agent is advocating fornine, 10% yield or whatever it
is, you might not be able to buythere because would you be able
to explain the postcoderestrictions?
Because that I've explained thatthousands of times.

SPEAKER_04 (28:00):
I need someone else to be able to lenders are just
assessing risk.
They're literally giving you abig bucket of money, and they
and this is also why you have abigger deposit with commercial.
Yeah.
Because they know if shit hits afan, like they want to get their
money back, and that's why youtypically need a 30% deposit.
Or if it's a lease stock line,you need a 35%, 40% deposit.
So they're just riding me togetting risk.

SPEAKER_03 (28:19):
Yeah.

SPEAKER_04 (28:20):
That can be through postcodes and like the state.
Um, weirdly, it can also bebetween where they're too
heavily leveraged.
So if they own too muchindustrial in Queensland,
they're like, let's stop doingthat.
We're too leveraged there.

SPEAKER_03 (28:30):
Yeah.

SPEAKER_04 (28:31):
Um, but normally they'll just look at the asset
and certain types of assets, noteven just postcode, they'll put
a high risk on like a petrolstation, for instance, because
it's one-dimensional.
They've got land contamination,office spaces, they have a high
restriction.
So that that'll kind of do.
I don't really have to deal withthat because I'm buying really
in-demand properties.
I'm buying suburban retail,industrial in really, really
tightly held areas.

(28:51):
Um, but the other buyers'agents, they always get short
valuations or the banks don'ttouch them.
Or then, like you mentioned,need a higher loan-to-value
ratio.
Correct.
Um, but again, it's just it'sjust matching up what the client
actually needs.
I always focus on long term.
If the property is gonna be inmore demand in 10 years' time
than it is now, I'll buy it.
I don't care that you're gettinga 7% in Mount Isa.
Vacancy periods are one to twoyears.
It's not a 7%.

(29:12):
If you lose your tenant, it's anegative two or three percent.

SPEAKER_01 (29:15):
I'm gonna give you the best niche story.
So I helped fund the purchaseand refinance of a nursing home
recently.
Base of Sydney.
Yep.
Uh,$8.2 million property.
And we had to go, guess how manybanks were able to fund this?
We did lease stock application.

SPEAKER_04 (29:29):
Because it's a specialized asset.
Four.

SPEAKER_01 (29:31):
Four.
All the big four.
So when it comes to the big fourand big four lending, what do
you need to have?
Clear tax portals, no adversehistory, all these things.
The sponsor, our director at thetime was owed money from one of
his um uh he was uh listed as acreditor for a building company
that went into liquidationbecause he owns a separate
business and he's purchasingthis as an investment.

(29:52):
And so that pops up and they go,Oh, why is he, you know, asking
for this?
Is he not getting paid hisinvoices?
There was hell on earth to getthis deal.
But we got it funded.
People don't realize that justbecause something is attracting
an extremely high yield orbecause it's you know in it's a
cheaper price, it might becheaper on purpose.
Yeah, you know, just becausesomething is$300,000 and it's

(30:14):
netting a 9% yield does not meanthat the banks are gonna give
you a 70% loan on it or a six uh65% loan on it.
You need to always be able tospeak, and this is where I'm
gonna do my shameless plug.
Speak to a broker that has dealtwith these sorts of things
before.

SPEAKER_04 (30:27):
I don't understand people who don't talk to
brokers.
Like it's it's free.
It's free.
Go go go wait go waste theirtime.

SPEAKER_01 (30:35):
Like, even if you're gonna go behind their we are a
phone call away, and that is thetruth.
Go speak to a broker.
Shameless plug, yet again, it'ssimple.com.au.
But we are built here, we arehere to make it simple.
Like, I don't know.

SPEAKER_04 (30:49):
But people, it's the same with the buyer's agents.
People go, well, I would pay youXYZ, I can just go do it myself.
I'm like, well, I still makemistakes after 2,000
acquisitions, so good luck onyou first.

SPEAKER_01 (30:58):
Um, I I hear that all the time.
And oh yeah, why would you usebuyers agent?
A buyer's agent from 9 a.m.
to 5 p.m., a regular buyer'sagent, not someone like
yourself.
They're looking at propertiesall day, analyzing statistics,
working with the budget, makingsure that certain um property
fits your profile.
If a property doesn't fit yourprofile, okay, and you're

(31:18):
sitting there and you're going,oh, this one's good, you're
going to waste your own time,okay?
Not speaking to a professional.

SPEAKER_04 (31:25):
One of the unspoken things with buyers agent, I call
it the kick up the bum factor,is I save you from six months
sitting on the couch with yourpartner going through
realestate.com looking at prettypictures.
Yeah.
Like at least someone's beenlike, here's the deal.
You need to give me a reason whyyou're not buying it.
And then they kind of like, oh,and then it just gets them
going.
And then the property grows by30 grand, cool.
You've paid for yourself.

SPEAKER_01 (31:43):
Yeah.
The best time to purchaseproperty was yesterday.
The next best time is topurchase today.
If you're sitting there on thecouch doing six months worth of
research, the property that theypresented to you, and you said
it best, has already grown inthat capital growth that you
spent on the buyer's agent.
All you're doing is purchasingyour time back.
Yeah.
Okay.
How much is your time worth?
How much do you get your value,your stress?
Those sorts of items are veryimportant.

(32:05):
Yes, you can do it on your own,but is it going to affect your
everyday life?
Are you going to be sitting atwork stressed because you don't
know if your offer's beenaccepted or not?
Do you know if the real estateagent is reputable?
The person that's selling it,the person that's presenting the
property, are they uh, you know,giving you fake offers or fake
bids?
I oh, perfect story.
Property, me and my wife werepurchasing in Koji.

(32:26):
We want it to live in.
We put in an offer, okay, nineminutes before auction.
Nine minutes because it was anemotional buyer.
It was next to my in-laws wherethey live, an apartment.
And then four minutes later,I've literally sent the contract
to my conveyance.
He's looked at it, he's gone,no, no, no, get all this out.
Uh rescind your offer.
Rescinded it one minute beforeauction started.

(32:47):
Yeah.
That agent took our offer, theone that was in the email, and
started presenting it to people.
The property's still not sold.
Started it presenting it.
This is what I got off it.
This is what I got off it.
I'm not accepting a dollar over.
She's lost the listing now.

SPEAKER_03 (32:57):
Yeah.

SPEAKER_01 (32:58):
But that is an example of where we could have
used a uh a buyer's agent, youknow, to research the area and
tell us earlier than a daybeforehand, hey, there's this
auction for the apartment nextdoor to your in laws.

SPEAKER_04 (33:11):
There's there's a weird arrogance with property
because people live in it.
They think they understand theconcept.

SPEAKER_01 (33:16):
Yeah.

SPEAKER_04 (33:17):
But I I could I could remodel my kitchen.
Like I'm competent enough.
I think I could spend threemonths like learning the trades,
doing it and redo my kitchen andprobably save 10 or 20 grand.
But why would I do that?
Like, it's something simplerthan buying property, but people
for some reason go, oh yeah,I'll I'll do the big financial
risk one myself, but not the thetrade.

SPEAKER_02 (33:34):
Yeah, it's never I've never understood it because
people like they under theythink they understand the
numbers, but they don't reallyunderstand what those numbers
truly mean.
Like they're like, well, uhsubtract this from this, and
it's like, well, it goes up invalue.
It's like, okay, but have youconsidered all the costs that go
into it?
And like you said, holding costsand all those kinds of things.
The hidden fees, yada yada.

SPEAKER_04 (33:49):
But residential, I get a little bit because it's
it's not straightforward, it'sjust less complicated.
I explain it like a bit of astaircase.
So like Resi is your three orfour steps up.
As long as you don't dosomething really stupid like
buying a flood zone or a miningtown or a termite rental house
or whatever, there's a few stepsyou can fall down on.
Yeah, long-term, you'll be okay.
Yeah.
But again, why would you riskwe'll do that long-term strategy

(34:11):
when you can get someone who'san expert and making money in
the short term as well?
Commercial, you're like 20 stepsup because you got lease review,
contract review, tenantinterviews, road and traffic
analysis, vacancy studies,occupancy studies, credit
history checks, you're lookingat PNL statements, you've got a
rental ledger.
Like there's literally a hundredthings where it takes like 30
hours to actually do it.
So you're 20 steps up.

(34:31):
Development, you're 30 steps up.
It's way more things that can gowrong that are out of your
control.
Do you see the pain in my facewhenever we say the word
development?
Just because some so it's aglorified word that we shouldn't
be calling.

SPEAKER_01 (34:43):
No, no, it's it's an over-glorified word because I'll
have somebody come to me andthey'll be like, Hey, I want to
do this.
Have you done a feaso?
Oh, yeah, here they give me theback of the envelope, and then
I'll show them one of my phasos,and they're like, oh nah.
And I'm like, what do you meanoh no?
This is the development.

SPEAKER_04 (34:57):
So we do feas for clients in place and property,
uh, and it's nine tabs long.
And it's like, that's like allthat.
So we don't, and literally we'veyet to have someone who we've
charged to do a feeso that'sactually gone through.
So, which is a good thing.
Like, we've stopped people frommaking a mistake, but out of
we've probably done 30, 40 ofthem now?
Wow, not one has beenprofitable.
Wow.
So they haven't even gone aheadwith it enough.

(35:18):
So they've they've paid a couplegrand for our feeso and went,
oh, yeah, I'm not done that.

SPEAKER_01 (35:21):
Okay.
So give us a could you give us aserious, like a moment where you
really saved someone money onthat fee if feasibility?
Like let's say you presented itto them, they thought they were
gonna walk away with 30% profitwhen in reality they were
actually walking away with youknow 7% or even a loss.

SPEAKER_04 (35:38):
It all of them.
So that most people just don'tdo the work.
Like you mentioned it beforeabout was it your brother-in-law
or brother that is the back ofthe envelope.

SPEAKER_00 (35:45):
No, that was my cousin.

SPEAKER_04 (35:46):
Yes, cousin.
Yeah, um, they all do that.
They just go build cost, X, Y,Z, that they're not even taking
account of like holding costs,which are huge.
Yeah, like 18 months of having aloan is ridiculous.
Yeah, and that's if they'redoing a little one as well, most
of them are like one to two mil.
Yeah, having 70 to 100 grand ofinterest repayments destroys
your profit.

SPEAKER_03 (36:04):
Yeah.

SPEAKER_04 (36:04):
Um, so it's always that they just don't know what
they have to do.
Then even all the applications,it's just purchase price, build
price, profit.
Yeah, it's the old South Parkthing.
You remember the underpantunderpent gnomes?
Yes.
Where they steal the underpantsare like steal underpants.
Next step, profit.
What's that?
Um, we'll be right back for thehe broke this man.

SPEAKER_01 (36:28):
There's a few key questions I do want to know
because you've written yourthree books.
You've got number four coming.
The manuscript is built out, andyou're in talks with the
publisher.
Is there anything that you wantto tell our listeners what this
book might entail?
Anything that, you know, just alittle couple sneak peeks of the
next textbook.

SPEAKER_04 (36:46):
It's to get rid of all the bullshit of people
saying this is the rightstrategy because everyone's got
a different strategy.
So we're gonna break down like10 different strategies for
people.
Because you know the whole like,oh, I'm doing the negative
gearing, I'm doing the positivecash flow, I'm gonna do the
sub-division, I'm gonna do thegranny flat, I'm gonna do the
commercial, I'm gonna do thedevelopment.
Like, there's all thesesub-strategies, but you can make

(37:07):
all of them work, but they'veall got a negative.
So it's just to get rid of allthe noise of like, oh, I'm
gonna, it's like my biggest petpeeve is when people go, I'm
doing the cash flow positivestrategy with residential.
And I'm like, what does thatmean?
Like, I'm only gonna buyproperties that are cash flow
positive.
And I'm like, you think there'sa difference in your whole life
of what your portfolio is gonnalook like if you buy a property
that's five grand positiveversus five grand negative?

(37:28):
Like, you're an idiot.
Like, go pack shelves at Kohl'sone night a week, and you'll
make up that difference.
And you could probably buy abetter asset, better
depreciation, better location,more capital growth.
Like, why are we talking aboutlike we should be talking about
ROI, not cash flow?
Yeah, cash flow is just a partof it.
Cash flow will help maintainyour lifestyle, but it's not a
strategy.
It's not the strategy is ROI.

(37:48):
Look at the capital growth plusthe cash flow plus any other
return you get from the asset.
That's what you should belooking at.
The strategy will come based onleverage, and this is where
sometimes commercial and we'rebad mouthing lease doc loans and
that and low doc.
That that will sometimes helpsome people, but just look at
ROI, like look at where whatyou're actually trying to
achieve.

SPEAKER_01 (38:06):
There's two things I want to touch on.
Number one is I don't look atROI so much anymore in my own
personal investment strategy.
I look at an RO say return oncapital.
If I put$100,000 in but I'mgetting a million dollar asset,
and that million dollar asset,you know, grows by 20% over the
next two years, which currentproperty trends are moving that

(38:27):
way.
People look at ROI and they lookat the final purchase price.
I bought for one a milliondollars and I, you know, the
property's grown to 1.2.
I've got a 20% ROI.
Yeah, that's a great way to lookat it.
But look at the return oncapital as well.
You've invested$100,000.
You've made this many principaland interest repayments, you've
been able to claim the negativegearing um from the interest,

(38:47):
and then you know, yourprincipal has gone towards your
return on capital as well, orthe capital that you're
injecting into the property.
Your return on capital, if theproperty's grown by$200,000, is
actually higher than that.
So that's the that's the thoughtprocess of.

SPEAKER_04 (38:58):
Even taking a step back from it, when you're first
initializing your plan, and thisis so so like with commercial
property, we can talk aboutthis.
Like, you actually get the samecapital growth.
Uh, funnily enough, SydneyIndustrial has beat every other
capital city for residential.

SPEAKER_01 (39:09):
Anything in Patsow or Canterbury or Banksdown, that
that emphasis.

SPEAKER_04 (39:14):
But commercial, we can go into it.
Like commercial has the samecapital growth and actually has
to.
Anyone who argues with me, I'mlike, cool, is commercial
expensive?
Like, yep.
I'm like, how do it get moreexpensive if it hasn't had the
same capital growth?

SPEAKER_03 (39:24):
Yeah.

SPEAKER_04 (39:24):
Um, so you get the same capital growth and you also
get three times the cash flow.
So you're like, well, if I'mgetting the same capital growth
three times the cash flow, whyaren't I buying it?
And it's the return on capitalbecause if I'm starting out in
25-year-old Steve and I've got150 grand, I can go leverage
that up to the eyeballs.
And my first property is Iliterally got a 90%, then I got
100%, then I got 105%.
So I bought three properties offa 10% deposit.

(39:47):
Um, if I went and bought acommercial at a sub 70% loan to
value ratio, I've got aliterally like one-fifth the
less portfolio.

SPEAKER_05 (39:54):
Yeah.

SPEAKER_04 (39:55):
So I'm not leveraging the money in the
right way, which is the wholething of property.
I don't actually care aboutproperty.
It's all about a game ofleverage.
It's one asset where banks arelike, here's lots of money,
Steve, go have some fun.
Um, that's why I chose property.
Um, but that's the crux of thestart.
And then, like you said, thenyou look at the return on
capital after that, and that'swhere your plan plays out.

SPEAKER_01 (40:12):
Yeah, and I think this is key.
Like, this is uh free advicethat you're basically giving to
listeners.
And I wouldn't even call itadvice, but free tips in the
sense of don't listen to everysingle TikTok ad that you're
getting hit with.

SPEAKER_02 (40:24):
Only ours.

SPEAKER_01 (40:24):
Only ours.
Trust me, don't trust anyoneelse.
The thing that I've noticed witha lot of buyers agents is they
advocate for the things thatworks for themselves, and they
don't advocate so much for thething that might work for the
client.
People take negative gearing asa strategy, and I it's my least
favorite thing to use as astrategy because you still have
to make the repayments up untilit's tax time.

(40:46):
It's not, it's it's not, ohyeah, just negative gear the
property.
What does that even mean?

SPEAKER_02 (40:50):
Yeah, what are you gonna do for the whole year?

SPEAKER_01 (40:52):
If you are a salaried employee, negative
gearing your property is youknow not the smartest thing in
the world because you don't seethose returns until the end of
the year.
If you are a small businessowner and you want to possibly
decrease your uh, you know, youroverall profit because you want
to claim back interest andincrease your cash flow, maybe

(41:12):
negative gearing is a smarterstrategy for you.

SPEAKER_04 (41:15):
Anyways, I'm nerding out a little bit here, but the
only positive to negativegearing is if you're buying a
property that you think negativethe gear is going to outperform
a positive the gear on.
That's the only argument you canactually make.
Otherwise, you're still losingmoney.

SPEAKER_01 (41:26):
Yeah.
And uh you like it's it's to me,it's just don't listen to these
catchy hooks all the time.
Uh kind of delve deep into itand understand what your cash
flow is.
Basically, what I'm trying tosay is don't buy a property on
emotion.
Okay.
It's I think I think that's thebest thing.

SPEAKER_04 (41:43):
It's literally, and this is with the buyer's agent
as well, it's a businesstransaction, not the me and the
client.
The buying of the property is abusiness decision.
Like, if you were if you'regonna buy a property uh for a
business for a million dollarsand it ran at 35 grand a year
loss, and you're like, don'tworry, it might be worth 1.5 mil
in five years' time.
Most people aren't gonna buythat business.
Yeah, unless there is somethingyou can do with that business,

(42:04):
like, oh no, I'm gonna bolt itonto a mortgage broker and it'll
make a profit that way.
But for some reason, propertywe've got this sit and hope.
That's I'm being a bitfacetious.
That still makes sense as longas there's data to indicate that
it's gonna do well.
You buy an Amazon, they run at aloss, but that's because they're
building lots of warehouses.
You're like, I can see someeffort on the horizon coming.
Yeah, so it's just it'sbalancing that.
It's just literally a businessdecision because it is.

SPEAKER_01 (42:25):
So in your textbook, bring the question back.
Um, but so in your textbook, areyou highlighting are the
everything that we justmentioned now?
Is it all part of your 10different strategies?
Is it all part of, you know,different buyers that have um
effectively performed usingthese different strategies as
well?

SPEAKER_04 (42:42):
Yeah, the good thing with, and we we spoke about our
parents like in Mount Druid andstuff like that.
And then we were complainingthat, like, oh, that's an
affordable market, they got ineasier.
They also didn't have access toall this stuff.
Like, I can literally gethundreds of points of data all
over Australia, literally aclick of a button.
There's a few websites you cando it instantly.
Yeah, they didn't have that.
So that's bringing it back tothat.
But they're gonna go througheach strategy and actually just

(43:04):
say pros and cons and who's itfor.
That's that's generally theoutcome.
Property's not actuallycomplicated, it's literally just
plus and minuses.
It's simple.
It's actually simple.
Yeah, um, but like you said,they hear the noise and they
just they just go down oneroute.

SPEAKER_01 (43:18):
I think uh ease of access to so many different
things, uh, you know, websites,seminars, um uh YouTube videos,
uh, you know, I could watch 30hours on Australian property uh
over the next over the nextweekend easily on YouTube.

SPEAKER_04 (43:34):
There, however, most people are lazy.
So I'll use an example.
So my commercial course is 10hours long.
So you gotta watch my facetalking nonsense for 10 hours.
I filmed 20 hours of content forthat course, yeah, and my social
media team are like, no one isgonna spend 20 hours researching
this.
You need to make it shorter.
So we make we cut it down to 10hours for the crucial, and then
we did some extra like YouTubemodules for people who want to

(43:55):
get into it.
However, um, I most of myclients that come from the
course are like, oh Steve, lovedyour course, want to work with
you, you really know your stuff,yada yada.
Well, they don't realize on myhost site, I can actually see
the percentage of the coursethey've done.
Pretty much all of them havedone less than 30%.
Yeah, really?
But yeah, so they get to likethe due diligence section,
they're like, This is over myhead, I'm just gonna get Steve
to do it.

SPEAKER_02 (44:14):
They must have been the people that didn't go to the
lectures at uni.

SPEAKER_04 (44:17):
But most I'll admit, I'm not gonna sit there and
watch at night.
I've got a two-year-old.
There's no way with my partnertwo, I'm sitting there at night
time for three hours, which Ineed to compress with.
So people are lazy now as well.

SPEAKER_01 (44:28):
It's it's uh you're saying music to my ears, and
it's something that I'm gonnajust talk about myself, like the
what I've done in the business.
I always try and tell thebrokers in the business,
salespeople in the business, thehuman is lazy.
We have so many things todistract us and give us instant
dopamine hits that people don'twant to focus anymore.
They don't want to sit there andfocus on you know building
websites, or they don't want tofocus and read out all the due

(44:51):
diligence, like you just said.
But you need to be able tocreate that ease of access as
well so that people keep comingto you.
And the reason I bring this upis the buyers, the buyer's
advocacy market is gettingextremely busy.
Okay.
You've created ease of access bygiving your course out for free,
you know?
And my books are free as well.

SPEAKER_04 (45:09):
So I've given out 50,000 books now.

SPEAKER_01 (45:11):
You know, but that's ease of access now.

SPEAKER_04 (45:13):
Actually, I'll touch on that quickly because the
people are lazy.
So the course has had about15,000 people do it, but not
most people do it.
What we've done with the book, Ifind most people come back after
holidays and be like, I readyour book, because it's the only
time they can actually that's agood medium for some people.
They like sit in their loungechair, they can knock it out in
a couple days.
Then we actually we're gonna doan audio book, but me kind of
reading out a textbook didn'treally make sense.

(45:35):
So we did like the first 10episodes of my podcast series,
uh, us going through the book,but in a conversational.
So we've got like a host andit's like this, we have a good
chat.
So we're still we've got thebooks in front of us.
Yeah, yeah.
And we're literally like, okay,we're gonna talk about leases,
make sure we say this.

SPEAKER_02 (45:47):
So it's it's kind of like a university like a
tutorial or something like that.

SPEAKER_04 (45:50):
So the same 10 hours is there in 10 podcast episodes
as the course, but I know 99% ofpeople are listening that way
because like I listened toHormosy on the drive in today to
come do this podcast, so it'sjust a bit easier.
I'm not gonna buy his book andread it just because of the
two-year-olds, no chance at all.
Yeah, so you just have themediums that work for some
people.

SPEAKER_01 (46:06):
I I actually can't listen to Hormosy, funnily
enough, even though he does uhmotivate me quite a bit.
I can't sit there and listen to20 to 35 minutes of him talking,
and I don't know what it is.
I can I can re-watch HarryPotter a million and one times.
Not re-watch it, sorry,re-listen to the audiobooks a
million and one times.
I cannot listen to Alex Hormosyfor 35 minutes at a time because

(46:29):
I feel like he has created it atsuch, and I'm not bad mouthing
him, but he's created it at sucha generic level that I'm just
like, okay, like Alex, I knowthat you know, can we move on to
the people?

SPEAKER_02 (46:38):
You're just not his target audience anymore.

SPEAKER_04 (46:40):
I guess so.
Well, you you're kind of pastit.
So I was literally justlistening to the hundred million
money model things because oflike I heaped Kim and clients
and other people.
Oh, I gotta listen and listen.
And like you said, it's justlike, yeah, it's all right.

SPEAKER_01 (46:49):
Like the diary of a CEO bloke.
Um, I look I've listened to hisepisodes with Hormosy for two
and a half hours, and I've lovedthat stuff.
I it's a I don't know, I justhave to touch on that for a
second.

SPEAKER_04 (47:00):
You you need the you need the back and forth.
It's the same as like back inthe day he's listening to Joe
Rogan when he interviews ascientist.
I always do that on a car tripbecause they were long episodes,
so it turns like two and a halfhours go really quick on the way
to Kyama.
That's it.
But but without that, if it'sjust one person talking, it's
hard.
Like um, I went down the rabbithole.
You know Andrew Huberman.

SPEAKER_00 (47:17):
Yes, oh I love him.

SPEAKER_04 (47:18):
Yeah, but but again, after half hour, he gets hard
because it's just him talking.
But when he interviews someone,it's it's all right.

SPEAKER_01 (47:24):
Imagine my so this was the last trip I went on,
last overstace trip.
We went to um uh Argentina,okay, and we did the hiking
through um oh what's it calledagain?
Patagonia.
So imagine we're driving fromlike small town to small town,
okay, four hours at a time, andshe has to listen to Alex
Huberman the whole way.
And I'm like, yeah, cult therapyis good for you.

(47:45):
She's like, this is the worstcar trip of my life every single
time.

SPEAKER_04 (47:49):
I'm leaving you.

SPEAKER_00 (47:50):
Yeah, yeah, yeah.
Pretty much.

SPEAKER_01 (47:51):
I'm leaving you at the top of the mountain and I'm
walking down on my own.
You figure out your way.

SPEAKER_04 (47:55):
I got the opposite problem.
My partner's an ultrarunner, soanytime we go on holiday, she's
like, Oh, let's just run 30 daysup to the top of that hill.

SPEAKER_01 (48:00):
And I'm like, Oh no, I love that stuff, man.
I love that stuff.
Okay, I want to ask you somerapid fire questions if that's
okay.
100k deposit.
Where are you helping someonebuy?

SPEAKER_04 (48:09):
Geelong.

SPEAKER_01 (48:09):
250k.

SPEAKER_04 (48:11):
Uh commercial Brisbane.
500.
Uh, commercial, any capitalcity.
Um, this I want to, I know it'snot a rapid answer, but this is
the annoying part withcommercial.
Residential, you pick thesuburbs you like in certain
brackets or versus the riskprofile.
You don't get to do that incommercial.
So, like, funny enough, someonedid um a resie course, one of

(48:32):
the well-known like Resi courseeducators, like, it was great.
He told me all the keys to thesecret of how to choose the
hotspot.
And then all the people from mycommercial course will be like,
you don't really tell us whereto buy and what suburbs.
I'm like, well, it can't becauseit changes based on your budget,
and there's no definition ofwhat a good property is.
So let's use this is like Perth.
Like, we'll buy in Perth as a 1%vacancy rate, and you've got a

(48:52):
500 grand deposit, which willget you a 1.3 mil warehouse.
I could buy you in five commentsfrom the CBD and get you really
tight vacancy rate, a bodycorporate warehouse, single
tenant, optics, all the boringboxes.
Or I could go down to Rockinghamand get your freestanding
warehouse with two tenants, andthe one close to the CBD is say
5.4%, the one down an hour southis 6.4.

(49:13):
Which one's better?
There's no actual right answer.
They've both got a pro and acon.
And you've got to make thatdecision on a case-by-case
basis.
Um, my little shopping center Isent to two clients and they
didn't like it because there wasnothing special about it.
Um, and so that's that's thehard thing.
Whereas with most residential,you can put them in a bucket
risk category and you know yoursuburb, and then you just keep
an eye on the market,off-marketrealestate.com and see

(49:35):
what comes up.
Commercial, you don't kind ofhave that, and that's why to
answer your question, that's whyI said everywhere.
But Perth, you'll get an awesomebang for buck at the moment.
Favorite meal, favorite meal, orchicken schnitty, uh best way to
wind down.
Um, swim in the ocean.
Morning or night person?
Night.
Although I've we've got atwo-year-old, so I've been
waking up at 4 a.m.
the last year.

SPEAKER_01 (49:56):
Tropical vacation or winter?

SPEAKER_04 (49:58):
Oh.
Um, I'm a heat guy, but I lovesnowboarding.
I actually met my partner skiingand we got engaged in Italy and
the Dolomites.
So like both.
Um, but ocean.
I live in freshwater on thenorthern beaches.
Yeah.

SPEAKER_01 (50:11):
Okay.
And the suburb that gave youyour most wins or city?

SPEAKER_04 (50:16):
For me personally, Western Sydney, so Blacktown and
those areas, because I got inearly at 2012.
Uh, for clients in residential,it was probably the southeast
corridor, Logan kind of areawhere we're buying houses sub
300k.
And then the last five yearsthey're 650 plus now.
So again, it was just quantity.
We I've literally bought 200,300 plus residentials there, and
everyone had a good time.
Yeah, um, that's that's notclaiming that's me, that's just

(50:38):
the market was there, but we sawvacancy rates days on market
reducing.
It was the right time to buythem.

SPEAKER_01 (50:43):
Always remember, guys, general advice on this
channel if you need specific.

SPEAKER_04 (50:47):
No, no, go out and buy an Eagleby and Logan, no
matter what the price, pay amillion dollars plus.
Don't worry about the yield,don't worry if it's got
termites.
Go ahead, guys.

SPEAKER_01 (50:55):
Steve, thank you so much for coming on.
Where can people find you?

SPEAKER_04 (50:58):
Um, bit of a social media all over the place.
So just type in Steve Police orPlesi Property.
Um, my YouTube channel is theone where we've got a lot of
kind of nuggets, but um, PlesiProperty, all my spreadsheets,
books, course, podcasts,everything's free on there.
Um, you can go to town and spend30 hours watching my face.

SPEAKER_01 (51:13):
Well, thank you so much for coming on.
And if you need any help withyour finance, if you're looking
to purchase residential orcommercial, you can visit us at
www.itsiple.com.au.
And they're free.

SPEAKER_02 (51:24):
And not stress how much they are free.

unknown (51:26):
Yeah.