Ep2: Joe Tucker

Victor Lagos: 0:03

Welcome to the Debt to Financial Freedom podcast. I’m your host, Victor Lagos, and the founder of Lagos Financial. I’ve been in the finance and lending industry for 16 years, and I’ve personally made financial mistakes and learn from them. I started this podcast to share stories and lessons on my own journey, and to share insights that may help others on their journey. And I interviewed people that I’ve connected with that share the same values and mission to help others create financial freedom. My goal this podcast is to share raw, honest, transparent and helpful stories that you can relate to, and inspires you to take control of your finances and only have debt that brings you closer to financial freedom. Everything on this podcast is general in nature. And for education purposes only. None of your personal objectives, financial situation or needs has been taken into consideration. I highly recommend you seek personal financial, legal taxation and credit advice before you take any action on what has been heard on this podcast. Welcome to episode two of the debt to financial freedom podcast. I’m your host, Victor loggers. Today, I’m excited. I’ve got a pretty good guest, friend of mine, my buyer’s agent, my personal buyer’s agent, Joe Tucker. So for those of you who don’t know, Joe Tucker, he has his own buyer’s agents agency called property principles. And he is a co founder of the very infamous, that famous, very famous group as property investors on Facebook, which correct me if I’m wrong, Joe, it’s got about 27,000 followers now, about 30,000. Okay, Wow, impressive. So, John, welcome.

Joe Tucker: 1:55

Thanks for having me here. This is this is awesome. I feel like we’ve spent so much time together as well. It’s just literally, it’s good to catch up. And it’ll have the guests listen in. The funny thing is,

Victor Lagos: 2:05

we really got to know each other over the phone. And after a while, it kind of felt like we’ve known each other for ages. You know, we’re just always checking in, give me the property deals. And yeah, you know, actually, the main reason I want to get you on the show was because it was such a goodbye. And I wanted to just share that to my audience, because so many people don’t understand how does buyer’s agency work? And why would you like, why would you use one, and I can share my story, and I want to share how you actually helped me like you helped my wife and I a lot. And but before we get to that, actually, I wanted to maybe just hear a bit of your story. And then I can sort of go into into mine and how you helped me?

Joe Tucker: 2:44

Yeah, awesome. Well, it’s awesome to be here. And I think that buyer’s agents are not for everyone, like using a buyer’s agent isn’t the most be all and end all of everything. You can go out there like we’ve created, like you said, as property investors, it’s about investors getting out there and doing this stuff themselves. But yeah, my story’s a bit of an interesting one. So my first deal was through a buyer’s agent. And I was terrible, it was terrible mistake that I made to go down the buyer’s agent route, this specific one, but it took taught me a lot of lessons about how to actually buy property. So back in the day, when I was getting my first investment property, actually, I had about $60,000 in savings, and even in when you know 2018, it’s, it’s not that’s still not a lot of money to be able to go out there and buy. So I actually used a guarantor loan and a bit of a different way than normal to buy a property. So one of the things is I met a bit of a mentor of a mentor of mine who bought investment properties throughout Sydney, he was getting renovation projects, and he was buying a property that was under market value, adding value through a renovation and then withdrawing the equity, which will allow him to go again.

Victor Lagos: 4:01

So instead of selling it, he was actually keeping it and extracting the equity.

Joe Tucker: 4:05

Yeah, yeah. I mean, you don’t have to sell you don’t have to sell the property to get the equity out. That’s, that’s what I learned. I thought you had to buy Reno sell, buy rent, sell, and then accumulate the money and then buy a better house. But for me, I only had $60,000. So for stamp duties and legals and deposit. That’s not enough to do it. So instead, I asked the question, how can I make this happen? Like how can I continue my my investing journey because right now with 60,000, I can only buy buy and hold, and I’ll have $0 left for a renovation. So instead, I actually utilize the guarantor loan, which was from my parents, so I’m very grateful for that. Amazing, amazing I like to think about it is not so much a handout. They didn’t give me $60,000 on top to help me through but they gave me the ability to leverage off of their property to go in and purchase my own deal. Yeah, that then left me with C $60,000 to do some renovation work on the property and also pay for stamp duty and everything like that.

Victor Lagos: 5:05

Yeah, that’s a good, that’s a good play. And not all brokers know how to do guarantor loans, either. They’re a little bit confusing. Oh, yeah, not all banks will do them. And especially not all banks will do them for investment properties as well. Or did you buy it as an owner occupy?

Joe Tucker: 5:20

No, no, it was an investment. It was absolutely an investment. Yeah. Yeah. It’s interesting. I can’t remember the bank we use. But we had a great, you know, great broker at the time that helped me through all of that process, for sure.

Victor Lagos: 5:31

Awesome. And just so just so our audience can understand. At what point did you realize, you know, what, I want to help other people on that journey to financial freedom, because I’ve figured it out. And I don’t want to keep it in I want to share with other people. Well,

Joe Tucker: 5:49

it was the experience that I had of using my first buyer’s agency that I went with, and essentially, it was the coolest guy he has, he spent hundreds of $1,000, hundreds of 1000s of dollars on media and marketing. He had all the Facebook ads, he was on all the podcast, he had a slick suit, slick hair, the best, best looking guy and and you just think, Oh, well, the media perception is he’s the best. And then I engaged his services. He ended up finding me this amazing hotspot location in Queensland, a place that I’d never heard about. And deal done happened in a couple of weeks. And it started to unravel when I actually flew down to the property and checked it out. Because it’s settled, and I flew there, the day it settled to pick up the keys, I was expecting to do a $10,000 renovation, $12,000 renovation and that would help me release that guarantor loan. But I didn’t do the due diligence, I handed my financial future over to this guy. And that’s where I think people go a little bit sideways. And this is why we created the group is because you got to get educated on property first, don’t just call up a buyer’s agent. I’ve heard about buyer’s agents, I need to just someone else here, take my financial future here, take the keys, you drive, you need to still be the one driving so I didn’t do that big mistake and ended up with a dud property. On Dave settlement, I was walking up the stairs to go in and check the property out. They were the stairs that I had to pay $12,000 on defects $30,000 later, we got the property for 280,000 30,000 on the Reno and that got revalued at 310,000. So $1 in and $1 out in equity, but that pretty much just locked my money away. So what I learned from that was not every buyer’s agent is the same. If it’s a massive large scale, buyer’s agent, it may not be the best fit for you like you want to have communication, you want to make sure that they’ve got your incentives aligned as well. And make sure that they’re not getting any kickbacks or referrals from anybody. That’s a big one. Ask the question. Hey, have you how do you get paid? Is it just me that paying or do you get paid by mortgage brokers conveyances property managers and those type of things who’s going to be doing the inspections because the real estate agent did the inspection. So they got the camera and we’re going up, down, left, right and moved all the bad stuff. And it’s only until then I realized when I was too late that it was too was too late and I am crappy deal?

Victor Lagos: 8:14

Well, actually, I did not know this part of your story. So no, thanks for sharing that. And I feel like there’s a lot of people out there that have gone through something similar, where they were sold the idea someone had really good, you know, content out there. And they were, you know, all over the shop and in terms of social media. And more importantly, there was so the dream or the idea of, of financial freedom. And after a while, they realized that they were sold at that. Yeah. And many of them, you know, it ends up their journey. Yeah, and I say this to a lot of people, the first property you buy can either make you or break you. Yeah,

Joe Tucker: 8:53

and is the most important one, the most important one is the first one, then the second one, then the third one. And then once you get to five, you can you can be a little bit looser, I’d like to get to five, with your help. Well, we will it will be getting there. And I think that that’s actually a good point as well, that you need to think and this is the broking side of things. This is your broker. So it was awesome to have these in depth conversations about strategy and structuring. Because the way I like to think about it is what is this deal got to be to allow you to get into the next one. So you don’t just look at the first deal like oh, great, I’ve got a $600,000 Borrowing policy or an $800,000 borrowing capacity. Should I just buy one property? No, if you your goal is to get to 3 million over the next, you know, however many years, you need to be strict and structured about lining up the right properties at the right time. Because if you get a cash flow here and growth here, it might not give you the leverage to get into the next one.

Victor Lagos: 9:49

Yeah, good point and just understanding where you are on that journey. Some you might talk to someone that’s already got a few properties. So then you kind of assess their portfolio. Yeah. Or you might talk to someone that’s buying them First, and it’s about understanding what are the goals in the short term? And in the long term? And what’s going to help them achieve that. Yeah. And balancing that with the right property, the right strategy, and obviously the right finance structures?

Joe Tucker: 10:12

Absolutely. Well, that’s what I found interesting about your story, because you have got a great financial background. You’re brokering of the amazing Loggos. Financial. Why did you decide to use a buyer’s agent? Like what was it that because you already bought property previously to this? What made you go, Hey, I need to use a buyer’s agent this time.

Victor Lagos: 10:30

Look, what it’s a good question. Thanks for asking that because I a lot of people, you know, they want to go out and do it on their own. And I was one of them. And I did, I spent probably about two or three months, maybe a bit less researching the market. Like you said, it’s about getting educated, alright, it’s not just jump in here, take my money, find a property for me. And I just, you know, do my own thing. You got to know what you’re looking at. So you can guide the buyer’s agent the right way. So I’m still glad I bought the first time because I learned a lot. And so basically, what the time was around lock downs. Last year, September, a little bit before that. So everyone was inside, right? couldn’t really get out there. So I spent that time looking at other markets. And to be honest, we weren’t well, I found out we weren’t actually fully thinking about pure investment. We were thinking, where could we move to? Because obviously, Sydney was locked down. And we’re like, Where can we actually have a better lifestyle? That’s more affordable. And everyone was buying in Queensland, you know, in Melbourne, and where can we buy somewhere different, and Tasmania came up. So I looked, I looked into Tasmania, different suburbs, and I started talking to property managers. And it wasn’t just a random property manager actually went online, I looked up property managers actually had good reviews. And I spoke to her. And you know, the ones that are responsive, because when you deal with professionals, you want to make sure that they’re actually going to be responsive and come back to you. So the first one that came back to me I talked to, she was great. She she told me the suburbs that I should probably be considering around that price point that I was aiming for. And but it was tough. I gotta say, like, we missed out on three properties. And we won the fourth one. Wow. And it was a hard market because everyone was offering much more than, than the guide to win. So we lost on price. Yeah. And in Tassie, like you can’t just put an offer in, like in Sydney, or we just use an email. This is my offer, like you have to sign a contract with all your conditions, and has to be witnessed. So can imagine when you’re stuck at home, how do you do that? Like, yeah, you have to print and sign I had to get my wife to sign the witness and send that off to the agent to see if they’ll accept the offer. But you know, but I’m glad the third one that all three didn’t go through because the fourth one was a great one. So we bought and I thought this was a great investment until the next one which you helped me with. So this was we bought a it was in Launceston. It was a three bedroom, two bathroom on 1100 square meter block. We the starting price is about 500,000. We ended up winning it at just over 600,000. Well done. I was very happy. It’s a good it’s a good property. It’s a bit outside of Launceston, but it’s it’s got potential. And I made sure that it was an area that had some potential for growth. So there was a bit of new development around the area. But this was an established property. It was brick veneer, still is brick veneer. And it rented out for 560 a week. So decent yield five and a bit percent. So that was good. Because firstly, what what happened was we revalidated after about a year, it became we found that they went up close to $100,000.

Joe Tucker: 13:56

Crazy. Well, then

Victor Lagos: 13:59

it was just the market to be honest, but it was also buying the right location. Yeah, we then extracted the equity. So we borrowed the money, took that out and use that as a deposit to buy another. And that’s when you and I connected. And I thought you know what I’d like to I’d like to work with a buyer’s agent this time around. First and foremost, I didn’t have the time working my business and I really just, I knew that I wanted to buy in Adelaide, I just didn’t have time to research where didn’t have time to talk to agents. But you know, when you and I spoke, we got a better understanding of what that looked like. And that’s thing you got to be clear about what it is that you want, right? And I share that with you. You went out looking for it. And look, I’ll pass it over to you like because, you know, tell me what you did to help find a safe place because it

Joe Tucker: 14:45

was a cracker. Yeah, no. Well to give people a bit of context about the deal. So this is in a suburb that we are currently buying in. It is a good growth location. It is doing incredibly well. It’s done incredibly well. So we put adjust this property for 580,000. And it was after some negotiation. So we’ll walk through a step by step process of, I guess, under unpacking the deal. So, the deal was purchased at 418. But sorry, 518. But we did some negotiation. So in South Australia, and this is the importance of knowing the market that you’re buying in, right, you need to know what you can and can’t do. So in Tasmania, it’s a little bit different. In New South Wales, the rules around negotiation and different cooling off period, if you pull out of the cooling off period, you’ve got to pay point two 5%. In Queensland, it’s a little bit different in WA, they don’t even have a buddy cooling off South Australia, they’ve got a two day cooling off period that allows you to pull out of the deal for whatever reason, you know, my cat doesn’t like this property I’m going to pull out. So you can use those type of things to your advantage. So what we what we did on this one is instead of having a pest and building clause in the agreement in the contract, we did it. So we did the piston building during the cooling off during the two days. So you’ve got to be quick with that you’ve got to have the right people in the right locations to be able to do those piston building inspections. So you’ve got to organize that quickly. But it makes your deal a lot more cleaner, if that makes sense. So we negotiated down which we’ll chat to in a little bit, I’m sure 508,250. And it’s renting out at $670,670 a week, which is 6.8% yield. Not in a flood zone, no easements, no fire, we do all the due diligence, obviously, to make sure that that’s happened. There’s no covenants on the title. So if you want to subdivide into the future, there may be that potential for you. You’ve just got to get all the council, everything like that. But an unreal deal. Absolutely, absolutely mental. But the reason why we got that is, and I guess this is something to be aware of is I’m doing this every single day, my full time, like my full time job is finding, negotiating securing properties. And people out there in the marketplace against buyers, like they’re against me like these are this is my competition, and I’m your competition if you’re going out there to buy it. But I always say if you put a part time effort into something, you’re going to get a part time result. So you do have to put a lot of hours in to get those deals to build those relationships with the agents to get that. And that’s exactly what we did with this, this agent here.

Victor Lagos: 17:24

You know, it’s funny, because I do share that with a lot of people who asked me like, Why did I use a buyer’s agent? And it’s like, well, it’s not just the time because that was obviously a big benefit for me. Yeah, it’s because I know that a real estate agent is going to look at selling their property for most of the time, the highest price that they can get, right. But they’re gonna think about a commercially so that if they’re building a long term relationship with you, as a buyer’s agent, they’re gonna get future business. Yeah, they do right by you, right? So and they’re also going to be more transparent with you because you speak the language, right? You understand how, how it works, how to price it, how to negotiate with buyers, and sellers, etc. So if I called up a real estate agent, who was interstate, I’m just a one off buyer, right? Interstate investor? Yeah. So why would they want to give me the best deal and be transparent with me when they can do that with the local buyer, or they can try to get a higher price or local buyers? So if anything, they’ll probably try to get me to pay more. Because they can’t see me they gotta meet me. Yeah. And it’s a one off transaction. They’ll never meet me again. Yeah. So that’s where I think you really leverage that. And we’re able to find out, you know, rough estimate of what I needed to come in to win, right, because the agent can’t tell you directly what the price needs to be right?

Joe Tucker: 18:44

They do, sometimes, not all the time. But it is illegal for them to tell you that. They should not, they should not. But I think what you were talking about before of, I just don’t know, the agent would put you know, 500 to 560 on the guide price or whatever the number is for whatever the property is. But you need to be an area expert know so well what your walkaway price is. So for me, I set my own target price of I’m not going to buy this property like this one here. I think it was that I think we worked it out to be valued at 540,000 or 400. And whether we go 530 or something, and our walkaway price was 525, and might be messing up the numbers there.

Victor Lagos: 19:29

Well, this is what I like about you, as well as that when we were talking about this, you wanted to get me a deal that you were able to Well, first and foremost, it had to be in an area that had growth and a decent rental yield like the 670 a week. That was like icing on the cake. We didn’t plan to get that much rent that was just, you know, really, really good deal. Right. But in terms of when you were looking for the deal, you wanted to get it below market value. You weren’t just gonna go in and say let’s get the best price Buying at market or above?

Joe Tucker: 20:01

Yeah, right. That’s easy to do. Like anyone can do that, right? Anyone can walk in and do that.

Victor Lagos: 20:05

And I because I’m a broker, I’ve got access to tools to tell me what properties are worth based on bank valuations, right? Rather than RP Data core logic, you know, that’s a guide, but my one is like, what will banks lend against? So I checked that, and it just so happened that it was worth 569,000. Right. So yeah, you know, you got it for at 518. That’s what 3040 grand something like that below market? Well, on top of that, during that window, you talked about two days, there was some work that needed to get down, right, so owner occupiers who, you know, this area was more owner occupier investors, so people who did go check the property out, probably want to move in. And because there was work that needed to get done, they were probably thinking, How much money do I need to spend before I can move in? Or if I’m renting? Yeah, I gotta, I gotta like pay double rent and the mortgage while renovate blah, blah, blah. Yeah. So that then meant that we were able to get the price of the property at X amount. 518. Yeah. But then when, during that window, you organize the piston bill, and I didn’t know who to contact but you knew someone on the ground, they did a really thorough job. And then you leverage that went back to the selling agent. And then they then said, X amount needs to be repaired. Yeah. So you did you said this is the cost. And we dropped the price by like, nine grand. Further this guy?

Joe Tucker: 21:24

Yeah. Well, I mean, that’s, that’s what we’re doing. Like, like communication is the most important thing and setting it up so that the agent knows that you also have to find out what the value of things are. So that one of the things was, there’s a bit of rust on the Goddess. Now I know that the gutters were fine. The Pest and building guy said the gutters were fine, but I think they might need to be replaced. So we’ve got a quote for how much it cost to replace the gutters, how much the cost to fix the garage at the back, because it had this false wall built in nefarious activities. So we had to remove that and fix the electrical in there. So all of a sudden, I speak to an electrician, hey, how much does this cost, and you start to build a case of justifying that $9,000 discount. So the no going negotiation came in with, Hey, Mr. vendor, I would love to buy this property, but we bought it on the proviso that, you know, the gutters, were fine. And all of these things were fixed. So you know, please give us a discount for that amount, but you kind of build it. So it was $15,000 of works. But we’re going to come to the table and you know, discount it, and it’ll only be 9700. And then you get it all fixed. And it’s you know, eight grand, or six grand, or whatever it was, I

Victor Lagos: 22:29

actually want to touch on that. Because, you know, something that’s important to me is transparency. And also just, you know, sharing things for what they are, you know, being rural. And I want to share this to the listeners because you know, some of you might be thinking, well, I want to get a deal like this. Sounds awesome. 70 a week? Yeah. 20%. Yeah,

Joe Tucker: 22:49

promise these type of amazing results?

Victor Lagos: 22:51

Well, you can’t because this was a rare case, it was actually a mortgage in possession. So the bank had taken possession of it, and it wasn’t being sold by a by the original owners. So their incentive is just to get it sold quickly. And for a reasonable price, right. They don’t want it to be, you know, let’s get the best price and keep it on the market for too long. They just want to go on. And of course, you know, the end borrower, or sorry, the original borrower obviously wants to be debt free as well, because they’re being charged default interest and all these extra fees. So it’s important that it’s gone quickly. So that’s why it was a bit of a rundown state. But it wasn’t just run down. That nefarious activity talked about what we found out when we did the person build is that there was a shed that had previously been used to to grow. Weed. And I find it funny because I when I when I saw the photos of it, it was actually done quite professionally. They had power in there. They had lining inside the shed, I had to pay to get that removed, because I didn’t want to give the new tenants any ideas. Don’t take on any risks. Keep out

Joe Tucker: 24:02

the money. I don’t know. But this is this is one of the things of of the property is that it was a bit of an ugly duckling as well. Yeah. That there was a smashed window. It was a mortgage in possession. And it did need a bit of work. So when owner occupied and this is why the the agent sold it, you know, presented it to me before before he sent it live. And it was this is a little bit ugly. I know. owner occupiers don’t want to see a smashed window when they walk into walk into a place that it needs to be painted. It needs. It needs the gutters fixed it needs these little things. But as an investor, we need to see past that. Yeah. But one of the important questions that you have to ask a real estate agent is what terms do the vendor want? And this vendor was obviously a mortgagee in possession. So he just said like, we just need to be a little bit flexible at settlement because there’s going to be a lot of back and forth between you, me and the bank. And it’s not necessary. Really the highest price that they want, they want an easy deal. And my goal then is to prove to the agent, that you’re absolutely sound investor, you’ve already bought properties, you’re a mortgage broker, you’ve got the you’ve got the money you’ve got finance is going to not be a problem. And that we’re going to be an easy person to deal with. And when you’re a problem, like you need to ask key questions to the agents. When you’re in an investor, and you just come up, oh, hey, you know, I want to, you know, I want to buy this property, I’ll give you a 60 day settlement. Was that what the vendor wants? You’ve got to ask the question and find out what the vendor actually actually wants, and then tailor your offer to suit them. Yeah, to help that deal go through.

Victor Lagos: 25:40

Yeah. And, yeah, fortunately, I was quite flexible with that. But it was also a bit tricky. I must say, Yeah. And, you know, just for our listeners, I want to I want to share that story as well. I was I’m in a different position to a lot of other people in terms of risk, I’m willing to take bigger risks, whereas other people probably won’t. And, and the reason for that is, you know, now I run my own company. So I have the ability to earn more, right. So the more work I put in, I can earn more. So even if I’m over leveraged or borrow too much, I know that in time, I can pay that down. Even as interest rates rise. There’s a lot of other investors, the ones that are sort of working PAYG. Now the income can only grow, maybe, you know, 5% a year, whatever. Yeah, they need to be more aware of this stuff. They can’t jump in at, you know, 95% like I did, so I went yeah, 95% LVR. And I also took out a personal loan to come up with extra money. We just called gap finance. I don’t I never recommend this to any of my customers. The only people that would really be able to do this is people that are disciplined enough to pay that back and and have the ability to earn more so don’t carry too much debt for a prolonged period of time.

Joe Tucker: 26:59

Yeah. And that’s why the the cashflow positive, that’s why we specifically had to chase after a more cashflow, positive property, just so happens to be that it was bought on the market in a great growth location. So you’re going to have future growth as well. But at 6.8%, you can weather the storm of interest rate rises, even at a 90% LVR.

Victor Lagos: 27:19

Yeah. Now it’s true that interest rates have been rising a lot lately, but because of that high rental return, it’s pretty much positive cash flow or at least neutrally geared right now. Yeah. So that means it’s covering the costs of interest for the loan, because I did interest only, and it’s covering the agent fees, insurance council rates or all the outgoings. Yeah, so a lot of people might ask that Right. They’ll say why what were the interest only and not p&i

Joe Tucker: 27:45

QUESTION Right. But from a strategy point of view, would p&i have helped you in this situation? Or would have made it harder to borrow? Would you be able to even have done it on piano

Victor Lagos: 27:56

p&i would have made me get that would have meant I get a better interest rate? That’s the main benefit of p&i. But what that would have done was, it would have put it into a negative gearing position. It meant that I’d have to come up with money every single month, in order to hold on to this property. And that’s okay, if I’ve got lots of income, right? But because I’ve got a business that’s growing, it’s an early days of growing, I really want the property to be self sufficient. Yeah. All right. And you got to remember that if you’re paying principal and interest, that’s not the requirement of the bank, that’s your choice. The bank cares about interest. So they’ll let you go up to five years interest only. And I’ve got a bank that even got 10 years interest only. All they care about is making the interest and fees. So if you’ve got a tenant that’s tying a good rental return, good yield, then the tenant is the one paying the interest, not you. Right, because every principal payment is your equity. So that’s not the bank saying you need to have equity. That’s you deciding you want to have equity. So just because you’re paying interest only doesn’t mean you can’t pay PMI. Yeah, you can well, you do because you want to do not because the magnitude of

Joe Tucker: 29:02

Yeah, well, then you can just put, and this is what I chat with some of my clients about this, because like, no, no, I want to pay P and I want to pay PMI. But do that but have an offset account attached? Or is that kind of what you recommend for the people? So offset

Victor Lagos: 29:17

accounts are really good for that. Because if the if the money goes in the offset, then you’re not paying interest on the loan. But if it’s p&i, it’s not reducing your minimum repayments. So a lot of people think if I’ve got money offset, and my payments are coming down, yeah, well, no, if you’re in a p&i repayment, that’s based on what you originally borrowed. Yeah, offset money is your money. Yeah, right. That reduces the interest. So if you’ve got an interest only loan and you put the money in the offset, then your payments will come down. But your offset will be will be growing because interest is going down. You’re putting more money in the opposite. Yeah. So if you then decide one day, I don’t want to use that money to invest into another property or to buy something, you know, something else with that money, you want to actually pay back the principal. It’s very easy to do You just call the bank and say, look, I’ve got 20,000 offset, I now want to pay that straight off the principal of my loan, transfer 20,000 in, and then they do what’s called reignite re amortization. Right? So then the say it’s, you know, 500 grand loan, yeah, you put 20 grand in. Now, it’s 480. They’ll calculate repayments of 480,000. Yeah, but you don’t have access to 20 grand, but

Joe Tucker: 30:20

you don’t have access to 20 grand, and you’ve got that liquidity when you need it. If you do need it, you’ve been pulled 20 grand out and do whatever you want, buy another property. But I guess I’ll just leave the listeners with this. When it comes to buying a property, because we want people to go out there and buy their own properties. I’m not just saying the buyer’s agent is definitely not the only way of doing it. If you’ve got the time, energy and resources and the availability to jump on the phone quickly, and talk to agents talk to brokers and all of that stuff. So for the way I like to look at areas and locations is using a framework called fab. So it’s fundamentals, analytics and boots on the ground. Okay. Yeah. So a little bit like it’s just you come up with that? Yeah. My London, my wife’s British, and they say fab a lot. So. So fundamentals are things like looking at an area from a holistic point of view of what is the fundamentals for this area, like what we did for your property? Is their employment? Is their growth? Like, where’s the growth going to come from? What are the drivers of demand to the area? What’s the population, what infrastructure is going in those types of things, then the analysis is the hard science, the hard data stuff, so supply and demand vacancy rates, where is everything trending from a data perspective, and the data leads you to the location, the location does 80% of the heavy lifting, and it gets you there to that place. So you go down to that location. And the most important thing to get that 20% tip for us to achieve that result in that location was because of the boots on the ground, you have to fly, this is one of the largest investments of your entire life, fly down to the location, meet some of the agents meet some of the property managers meet some of the inspectors, ask people about all of the areas, what do you think of here? What do you think of that? And then all of a sudden, are they going to want to speak with that random investor from Sydney? Or are they going to want to speak to the person they met a couple of weeks ago talking about finding an investment property. So I think boots on the ground is so crucial, and you’re spending hundreds and hundreds of 1000s of dollars. Just get out there, jump on a flight and you get a free holiday almost doesn’t mean you can’t write it off as an expense. But

Victor Lagos: 32:26

I must say I took a risk buying Tassie because I couldn’t fly down even if I wanted to. I was locked down. Yeah. And when I tell people that oh, one Tassie Oh, have you guys been there? No, never. Never been there. Now they’re like, how do you even even exist? I’m like, good question. Well, I didn’t you know, I didn’t organize an inspection. And the good thing about the property manager I used, she also did the videos. So she recorded the inspections. So it wasn’t the selling agent. Yeah, very important. hiding things, it was showing everything that was wrong. And then she gave me a detailed list of what you know, what are the going to be some of the costs that will come up that I need to be aware of? You know, you did the same thing, but it was it was with a you know,

Joe Tucker: 33:08

with the rest team, right? You gotta have you got to have your team built Yeah, built you got to build the team and and then test them and see if they’re good. That’s

Victor Lagos: 33:16

one other thing I want to share actually about Adalet. So I like this story, because it’s actually worked out for for the property manager you introduced with the property manager. Great guy. He he had a contact that was going to do the paint, right? Yeah. Quoted quoted to paint the entire place four bedroom house. He said it’s going to be probably around the 10 Grand Mark, I think maybe a little bit, just a little bit under and, and I didn’t want to spend that just on painting I have work to do to get rid of that shed, and and fix that window. So I spoke to one of our clients who is based in Adelaide, and he told me and I told him the story. Well, I actually told him the predicament that I was in. And he said, I recently got my house renovated. Why don’t you talk to my painter he’s, he’s great, did a great job. He’s Brazilian and my clients Brazilian. And he went out he quoted it up for gray Property Management Believe it or whatnot. He was not for for grades. Well, you did a good job my client so let’s let’s test him out. He went out he did it. He got it done in two days. Wow. And the property manager was like wow, like I’m really impressed with that he’s among us you’re gonna start using him? Yeah, future Joe we use him for all Yeah, so now he’s got future work. Yeah, right. recurring income, you know, a better deal for for the investor. And obviously the property manager. It’s a win win win scenario for you because now he’s

Joe Tucker: 34:41

finally get and this is the thing you didn’t have to lift a finger for any of this renovation stuff, nothing. You didn’t have to do anything and we get it all kind of set up. And if there’s little things to fix, we just make it a part of the process. I think just communication throughout the entire process. So you know, I like to think you kind of handheld throughout the entire journey. You’re We’re in control. You’re in the driver’s seat, you make the decisions of yes, I want to go for this one or no. And but you’re kind of handhold through the entire thing.

Victor Lagos: 35:08

Well, that’s what I like, also the way you operate, because you said not all buyer’s agents are the same, right? Some of them are really large, and they’re out there all over the show, helping, supposedly helping a lot of people. But I think when you when you when you kind of give more of a tailored approach, and you and you’re there, holding the hand a lot all along the way, you can actually answer all the questions. And just also give guidance. I got it. I didn’t know exactly what it was like, we didn’t know what to look for. But you helped us. Yeah. Thank you. Yeah.

Joe Tucker: 35:39

Thank you. Thank you for trusting me with it. I think we got a stellar job. And it’s, it’s been awesome. Yeah. Looking forward to the next one. We’ll make sure to again, yeah,

Victor Lagos: 35:47

definitely. Yeah. And I also want to mention that I met Joe, through a mutual contact Steve polisi. Great guy, you know, you do quite a bit of dealings with Yeah,

Joe Tucker: 35:57

I mean, commercial, this is how portfolios kind of get built out. They start in the residential space. And then you need that cash flow play, which is where it then lends itself to commercial property. And this is where Steve police is an absolute expert and legend in the space. So he is, by far the best if you’re going down that commercial route. Usually you build your portfolio resi boom into commercial, and he’s a great, and yeah,

Victor Lagos: 36:20

I was actually thinking about getting commercial. But then I thought about where I’m at in my, my life and my journey and my financial freedom. Timeline. And it made more sense to get residential right now. Yep, higher leverage 95%. If you buy commercial, you need a larger deposit massive. And also, it’s harder to extract the equity from a commercial property. If you want to keep growing. It’s much easier to take residential. Okay, yeah. So alrighty. Well, I think we’ve covered up a lot. Now, I really want to say thank you for coming on the show. I think you’ve shared some really valuable insights. I think the listeners will be pretty privileged to hear some of these I don’t think you’ve gone into as much detail before.

Joe Tucker: 37:03

Not not as much now. But yeah, thanks for having me here. Hopefully, it adds value to anybody that’s listening. And if you guys have any questions, just reach out join those property investor group. It’s not that not about my business. It’s about people growing as investors. And yeah, great. Let’s do it.

Victor Lagos: 37:19

You heard that, guys. So look up, Joe, on property principles. And as property investors on Facebook, you can join the group, you have weekly live webinars, you bring on guests, I’ve seen quite a lot of that I’ve actually connected to some of your contacts because of that. So highly recommend, right? You can actually read a lot of the comments from other investors as well that share some insight. Yeah,

Joe Tucker: 37:43

everyone’s at different stages. You’ve got multimillionaires with 20 million plus portfolios, and you’ve got people that just bought their first and just got their second and struggling and have lots of questions. And there’s no question to silly because everyone started somewhere at the beginning. And they just want to everyone just wants to help them through the process.

Victor Lagos: 38:00

Yeah, that’s what I love about it. It’s really a community of helping each other. Yeah, awesome. Well, if you guys enjoy that, and you want to hear future episodes, please follow my podcast. Follow my channel. You’ll see me on the socials and looking forward to the next episode. Thank you