WCC 13: How 3 years can turn into 1 million dollar loss!

Hey, good morning. Good morning everybody, Jason here. Tuning in for another “a Coffee and a Chat.” Marvelous Monday back at it, hopefully everyone had a good weekend, got some stuff done, a little bit of stuff around the house myself and hang out with the fam, which was always nice, hopefully you guys did too. Well again jumping on, just quick intro, Jason Witten is my name. For those joining for the first time or watching the replay, I’ve been property investing for . I have 20 years and coaching property investors across Australia and New Zealand over 18 now. So along the way, learn a few things, and each morning I jump on a quick five or 10 minute chat. Good morning my love. With the crew, with the tribe, just to share some wisdom, experiences, ideas, opinions, information about the property world. You know, lots of things fly at as all as property investors, you know, left, right and center, so sometimes it’s just good to sort of check in and see where everyone’s at. So, that’s what “A Coffee and a Chat” is all about. So, thanks for joining me gang on this marvelous Monday. So, listen, you know, I chucked a little headline in here, “How Three Years Can Turn Into a Million Dollar Loss.” And I chat with people all the time. I meet want to be property investors or property investors who’ve started there investing. Morning Johnny, Morning Chris. Ah, new investor, welcome buddy, thank you. Meet property investors who started their journey or are thinking about their journey, and obviously sometimes getting going, sometimes doing something that you’ve never done before, sometimes buying a piece of real estate is a very big deal, often some of the biggest things that people do in their lives. They say the most stressful things in their lives is something like public speaking and buying a house. But the idea that as a property investor, if you’ve got the resources, if you’ve got the capacity, if you’ve got the ability to invest, why do you wait? And I see this all the time. The opportunity costs… Morning trainer. Oh, is it not too good today? Now let me have a look. Hopefully the streaming’s okay. Maybe the old wireless is a bit dodgy, let me quickly see. Yeah, it’s on full wireless. Hopefully it comes good trainer. But yeah, listen, you know, I meet people all the time who’ve got the resources, who’ve got the capacity, there’s nothing really stopping to invest in property or buy their properties, they’ve decided they wanna buy some properties, and they just take forever to do that, to take that action, to buy their properties, to buy the next one and the next one. They say, listen, what I’ll do… Here’s a few mistakes that I see property investors do. Oh, you know what? Just to begin with, I’ll buy a cheap one. I’ll buy a buyer cheap one and see how it goes. What a terrible idea. Buying the cheap piece of rubbish to see how it goes will end up in a terrible outcome. I see that all the time. So, I see that buy cheap one and we’ll see how it goes. You know what? I’ll buy one and then I’ll wait a fair while, I’ll wait three, five years before I buy my next one. And the other one is I’ll buy one, I’ll pay that one off and then I’ll buy the next one. All right, and all of those are stupid ideas as far as I’m concerned, I’ve seen the opportunity cost be huge, been massive for property investors. And I’ve done some mathematics calculations, you can chuck it in a spreadsheet yourself. You can put in whatever calculation you wanna put in there, but you wait one year to buy a property, and in 15 years time, let’s say that property grows at 6% with some tax deductions and some cash flow, you will miss out on the opportunity cost of waiting one year in 15 years will be just over $400,000. Wait, one year when you could have anyway, when you could’ve bought the property. Right now, if you can buy that extra investment, you’ve got the resources, you’ve got the capacity, What are you waiting for? Like the world ain’t gonna get any cheaper in Australia for real estate, let me tell you it ain’t. So many people wait around the GFC, I’ll wait until it plummets 50%, you’ve got rocks in your head, mate, it’s not gonna happen. Australia doesn’t work like that you guys okay, never has never will. Our real estate system is not like Europe and not like America, and stop listening to those idiots like Harry Dent, who say it’s going to be like that. Like, listen, only this month in Byron Bay, record house price set in Byron Bay, record house price in Byron Bay, Sydney record price paid for a house in Sydney at auction. This last week or the week before record price paid for a piece of land in a suburb in Brisbane. All right, the prices aren’t gonna drop 50%, what are you waiting for? Okay, what’s going to happen, and we’ve said this for a while, is prices are going to go up in certain places, and you’re gonna pay more 30, 40, 50K more to be in Brisbane, to be in Canberra and other places like that, if you want to invest in those places. So, why wait? You wait one year it’s 400 grand in 15 years time, the compounding effect. You might two years, all right, it’s between 650 and $700,000, the compounding effect in 15 years time. You wait three years, it’s a million dollar cost to you. Million dollars of value in 15 years time, because you waited three years, because I’ll see how it goes. No, don’t. The point is, and I’ve talked about this a few times gang, your acquisition phase, acquisition buying the properties that you want, you should crack on with it, just get on with it. There’s no reason to wait around, there’s no reason to I’m gonna certainly negotiate, and drive a good deal and find the right one, and diversify and get a good spot. And you know, but I’d mix it up with houses and townhouses and apartments, if you wanna diversified portfolio, those exactly, absolutely excellent stuff, excellent stuff. And I see this all the time too, I see people take on projects. Oh, you know, I’ll make a hundred grand profit in a project. And I’ve seen this so many times with splitters, like subdivisions. Subdivision people go, oh, I’m gonna take on a project. And you know, inevitably it takes three years, I don’t know if anyone is listening in here, you know, you think it’s gonna take six months, it takes 24 months. It takes a long time to do a project when it comes to real estate. You’ve got three years, you made a hundred grand, maybe you didn’t make that much, because you thought it was going to take 18. It delayed or ate into your interest or your profits, and in three years time you make 60 grand, and what was the point? Someone else bought a property, got a discount or a cashback straight up front of 30, 50 grand. It grew 5% for a couple of years and they’ve made more money than you, and they didn’t have to do anything, didn’t have to take any risk. Not that I’m against subdivisions or anything like that, I just wanna get across this morning with our chat, there is no time to waste, because for us as property investors, the point is to get our buying, our acquisition done as fast as possible in a safe manner, because we wanna get onto the bit, the lifestyle bit. We wanna get onto the income bit as quick as possible. So, if you’ve got the resources, you’ve done your numbers, you’ve got your strategy with your coach, you’re feeling safe, you know where you’re going, then there’s no reason to faff around, it’s a good time to crack on and go for a deal. All right, that’s the way I see it gang. So, hopefully that makes sense, maybe even a little bit of a rant this morning with the all “Coffee and a Chat” as we’re going along. But yeah, listen, don’t wait around, and if you’re feeling unsure, if the reason you’re feeling unsure is like, oh, I don’t wanna make a mistake, I get it a hundred percent, then get yourself a coach, like get someone who can help you make those decisions. Another set of eyeballs, another brain, another idea across it, because then you feel a little bit more confident to make those decisions. Don’t give over all the power, we’ve talked about this before your six experts, your six star team on your team. Get a coach, just check my rationale, check my strategy here, am I going in the right direction? Do you see anything with the numbers and the challenges? No you looking good. Go for it, let’s make this happen and away you go. But anyway guys, that’s it for me for a Monday quick “Coffee and a Chat,” a little bit of a shorter one today, but hopefully that makes sense. And you guys have an awesome Monday and have a good rest of your week. If you wanna join me tomorrow, same time, around about the same time, about eight o’clock each day, quick “Coffee and a Chat” and away you go, kick the morning off well, that’s pretty good. A couple of questions coming in as you go. Hi, Jason, you wanna speak with me direct? Richard, if you wanna connect with me or one of my coaching team, you can track us down on our Facebook pages and send us a message. That’s the easiest way to just flick us a direct message. Same as you Trent, love to catch up with you sometime if you want, that’s all good clearly. And understand your strategy is good, because Marie, if you’ve got the money and you know your strategy, and you’ve got an extra buffers put in place, there’s no reason not to buy three in one month if you can, like there’s none. I’ve done it before, our clients have done it before, you know, buying three properties in three months, getting it done. Buy the properties, get them done okay. So, it’s a good question. How long should I wait? And maybe your nervousness is you’re waiting, because you don’t know your numbers very well. You don’t know your strategy very well. You don’t know your buffer very well. And Marie, if that’s the case, then you need someone to help you get that sorted, tighten that up, and then you’ll feel confident. You know you’ve got the numbers, you know you’ve got the money, the budget, the equity, the cashflow, the servicing to do the deals, so good question and away you go. Sarah said, “Do I have any thoughts on region of Victoria?” Hey, Sarah, thanks for a good question. I’m always a fan of having your money in better location Sarah, and, you know, depending on what regional you’re asking, if it’s like Bendigo, Ballarat or depending on if you’re asking on like Cobham, you know, or somewhere smaller, the smaller towns it’s a big fat no for me, like don’t do it. Don’t do it, it carries no longterm economic power, the Cobras of the world, even though they’re nice little towns. Nothing wrong with living there and having a home in that town, if that’s where you’re at, so it’s a big fat no for those. Now Bendigo and Ballarat it’s okay, but you can for an extra 50 grand, maybe a hundred grand, which by the way is only $10,000 more in deposit, you can be balling in Melbourne, Sarah, depending on your capacity to borrow. So for me Sarah, it wouldn’t be my first choice for an investment, it’s fine for your home, but it certainly wouldn’t be a choice for investment. I would invest my money in strong economic, long-term economic locations that are powerful, like major cities and most budgets can get there, most budgets can get there. But if your borrowing power is a little bit limited, sometimes you just have to work with what you got. So, hopefully that makes sense Sarah. Again, it’s a great question, one that sort of is good to answer from an overall strategy point of view, with your buying and servicing, your borrowing power done, your long-term strategy and yeah, go Melbourne buddy. Hey listen, Melbourne’s awesome. Melbourne still one of the cheapest cities in Australia to invest in, so have a good crack at Melbourne. Be careful how you buy right now, because you don’t wanna end up in some short-term rental stress, that’s what you gotta be careful of at the moment. It’s not normal, it’s completely abnormal. It’s not gonna stay forever, it’s probably going to wash out after six to nine months, but just be careful of how you’re getting there Sarah. Just give us a shout out if you need some help, buddy. Yeah Heidi, Adelaide doesn’t get a mention often. Listen, Adelaide’s, you know you can buy the same price property in Brisbane as you can in Adelaide, and Brisbane is a stronger city, Heidi. We’ve got a heap of clients in Adelaide, nothing wrong with owning your own home there. May be one investment there maybe, ’cause you know it is a strong little town. It’s got some strong little capital growth, but it’s economic power, Heidi longterm is really limited. It’s a limited city and it’s fabulous place, I love it, we used to visit all the time when we could fly around, great wine, great food, great people, great little compact city, but I certainly believe that you should be spreading your money into better locations longterm, it’s called the migration of your money, and I might talk about that tomorrow actually, that’s a good one. Good shout out. All right gang, well, thanks for the questions. Awesome, to have you guys chucking some out there. If anyone’s still listening, chuck some more questions over the fence, I’ll have a look at the chat later on today and maybe answer them tomorrow. Hopefully that answers a few of your questions. Thanks for chucking them out there, and I’m gonna coff off and get my day started. All right, hopefully that was a useful gang. Take care, be safe and catch you tomorrow, around about the same time, eight o’clock, for another “Coffee and a Chat.” All right, bye, bye gang.

 

About the Author
From a small town boy growing up in the remote outback of rural Queensland, to becoming the founder of Australasia’s most powerful property wealth creation engine – Positive Real Estate Group CEO Jason Whitton is on a mission to change the way we look at wealth.