First Time InvestorMasterclass

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• Portfolio Manager with over 500 clients

• 9 years investing experience• Recently acquired two off-the-

plan properties• Current real estate license

Danielle Tasses

• Portfolio Manager with over 500 clients

• Bachelor degree in Real Estate & Property Development

• Member of the Urban Development Institute of Australia

• Almost a qualified real estate agent

Tehana Payne

• 3,000 current subscribers• Mix of personal users, brokers,

buyers agents and accountants• 250,000+ members use us for

market information, calculators, investment news and updates

Real Estate Investar

ASX:REV

• Heavy investment in product• Public company governance • Strong and focused board;

• Simon Baker – Former CEO of REA

• Anthony Catalano – CEO of Domain

In partnership with…

Our mission is to provide property investors around the world with the best advice, guidance, products and services to enable them to create wealth through

property investment.

• What is your actual goal?• Hint: If you are watching, it should

involve buying a property!• How do you plan to achieve this

goal?• Is it reasonable to expect you can

complete that goal?• Do you have the time?• Do you have the know how?

Setting achievable property investment goals

• Start at the end!• Identify where you are now• What are the steps you need to take

to get to your goal• Your goal should be comprised of

several smaller goals• What do you need to complete those

smaller goals, write out those details• Start!• The number one reason most people

fail is they don’t do that last step!

Setting goals, some helpful tips

Choosing a Strategy• Property investing should be first and foremost: an

unemotional purchase• Do not financially overcommit – know your costs, e.g:

• Stamp Duty – on settlement• Solicitors Fees – on settlement• Council Rates – quarterly• Repairs & Maintenance – as required

Choosing a StrategyIdentify what you want to achieve out of purchasing an investment property, e.g:• cash flow/ passive income • accumulate equity so you can purchase more property,• manufacture growth• replace your income by a certain date• assist with your retirement

Choosing a StrategyCash Flow = This is where the rent has come in, you have paid all your expenses and loan repayments, and you end up gaining money. Where the money comes out of your pocket to pay for these expenses or your loan, this is cash flow negative, or negatively geared.the rent is more than your loan repayments and expenses, so you make money each week from owning it. This will give you passive income, adding to your current salary, or replace your income over time (with multiple properties).Discount – purchase property below market value (usually through divorce, deceased estate, mortgagee, owner bought elsewhere)Renovation – purchase a property that is outdated or run down, do a renovation to increase the value of the property and therefore your equity, either to sell or rent out at a higher rate than first purchased.

Choosing a Strategy – Cash Flow

What are your goals?Example: “I want to have 10 investment properties in the next 10 years”This is not necessarily going to be financially viable for you, if you choose the wrong property, or don’t analyse the numbers.

Choosing a Strategy – Cash Flow

Think about the long term. Can you afford to make poor property choices like this?

EXAMPLE – CASH FLOW Negatively Geared Positively Geared $400,000 $400,000 Capital Growth Rate 2% 6% Rental Income $250 per week $550 per week Cash Flow – per week -$47 $147 Cash Flow – per annum -$2,446 $7,658 Cash Flow per week x 10 properties -$470 $1,470 Cash Flow per annum x 10 properties -$24,460 $76,580

Why Purchase a Cash Flow Positive Property?

• Replace your salary• Retire by a certain age, or add to your retirement• Purchase multiple properties over time

Choosing a Strategy - Discount

EXAMPLE - DISCOUNT If bought at Discount

If bought at Market Value

Purchase Price $400,000 $500,000Market Value $500,000 $500,000Equity from Day 1 (with 20% deposit) 163,189 83,189Equity in 10 years 558,613 478,613Surplus Equity to Re-invest, from Day 1 63,189 -$16,811Loan Repayments vs if you bought it at market value

15,156 18,756

Why Purchase a Discount Property?

• Lack of funds to purchase full price property in an area;

• Entering a market below median (opportunities to manufacture growth);

• Increasing cash flow at reduced price; • To save money, short and long-term (interest paid,

upfront

Choosing a Strategy - Renovation

EXAMPLE - RENOVATION  

Purchase price: $260,000

Reno costs: $10,000

New Value: $350,000

Equity Growth: $68,445

Why Purchase a Renovation Property?

• Lack of funds to purchase full price property in an area;

• Entering a market below median (opportunities to manufacture growth);

• accumulate equity so you can purchase more property,

• manufacture growth

Poll: Which Strategy do you think will help you to achieve your goals?

1.9m Australians

1 Property

2-4 Properties5+ Properties

• Pays shortfall for 5 years+.

• Eventually sells and pays down personal debt.

• No retirement income.

• Strategy & numbers.

• Self funding portfolio.

• $100-$250k+ passive income in retirement.

• Has high income or buys every few years.

• Freehold in retirement.

• Min. retirement income.

Source ATO/ABS

3 levels of Property Investment

1.9m Australians

1 Property1.4m73%

2-4 Properties470,000

25%

5+ Properties30,000

2%

• Pays shortfall for 5 years+.

• Eventually sells and pays down personal debt.

• No retirement income.

• Strategy & numbers.

• Self funding portfolio.

• End up freehold• $100-$250k+

passive income in retirement.

• Has high income or buys every few years.

• Freehold in retirement.

• Min. retirement income.

Source ATO/ABS

What level are you aiming for?

Poll: When are you purchasing your first property?

Negotiation

Steps to Negotiation

1. Understand the method of sale2. Prepare to negotiate3. Assess the sellers situation4. What to do at the negotiating

stage5. Prepare to close the deal 6. What to do if the deal falls apart

1. Understand the method of sale

• Auctions today are more competitive than in the past six months

• Private sale ‘competition’ can sometimes just be you up against yourself.

2. Prepare to negotiateDo your homework/research; • Acquire 3rd party assistance with negotiation (buyers

agent, solicitor, family/friend); • Sales comparisons of similar properties sold over the

last 3, 6 and 12 months

• Organise a pre-purchase building

and pest report (structural and

maintenance issues may provide

leverage).

3. Assess the sellers situation• Locate distressed vendors;• Death, divorce, debt, disaster etc.;

Ask questions: • Why are they selling?• Have they purchased another property?• Which settlement terms are preferred?• Have they had any offers?• How long has it been on the market?

4. What to do at the negotiating table

Be prepared; • Aim 10% below the estimated market value of the

property; • Always start lower so you have room to negotiate; • Don’t play your final or ‘best offer’ at the beginning; • 5-10% difference can provide instant equity-

purchasing sooner.

5. Prepare to close the deal

• Have an upper price limit; • Use the terms of your

offer to negotiate: price, settlement terms, deposit, conditions;

• Make offers as unconditional as possible (creates win-win);

5. Prepare to close the deal cont.

Increase chances of closing the deal: 1. Organise finance, building reports and

contract approvals first; 2. Have a back up property to use as leverage; 3. Find out if there are other offers and the

terms; 4. Present offers in writing with a 10% deposit

cheque.

6. What to do if the deal falls apart

• Sometimes waiting is the best strategy (time); • Tell the agent to get back to you before selling; • Find out what the ideal settlement is; • Offer a larger deposit where possible• Always end your offer in uneven numbers to

demonstrate ‘pushing your limit’.

The Settlement Process

• Property settlement is a complex legal process. It is recommended to employ the services of a solicitor or conveyancer to assist you.

• The settlement period is typically 30-90 days, but this can vary.

• Settlement day is when ownership of a property is transferred to you and you pay the balance of the sale price.

• Once settlement is complete, you can collect the keys and take possession of your new property.

• By the time you have decided to put an offer on a property, you would have already engaged with a broker or bank, and need to organize all the money you need to complete the sale (stamp duty, lenders mortgage insurance and other fees and charges)

• contact a solicitor or conveyancer to act as your agent in the settlement process

From Purchase to Settlement

From Purchase to Settlement – cont’d

• the sales contract is signed and dated with the correct settlement date (agreed to by both you and the seller)

• Organize building and pest inspections• Organize any insurances effective from the purchase

date• complete a final inspection of the property, often

done the day before or on the morning of settlement.

Contract of Sale

Market Resear

ch

Type of Proper

ty

Location

Finance

The 5 Stages of Investing

Pro’s• Negotiates with

mortgage lenders based on your circumstances

• Presents a shortlist of best available deals for you

• Translates the often mystifying financial jargon

• Advises on the best one for you

Cons • Brokers rely on their

inside contacts, so offer a limited range of products

• Brokers get commissions from lenders for bringing them business, so they may have their favourites

• Non-commission-paying lenders, even if they have the very the best deals, are likely to be ignored

Pro’s and Con’s of contacting a broker

Pro’s• A loan officer can match

you with the best internal product available

• Experience working with bank, policies and loans

• Sometimes lower interest rates

• Linked accounts with existing profile for automation

Cons • No competitors- means

that there are less options available/less competitive rates and offers

• Potential for being overcharged (not transparent with commission)

• They do not disclose the yield-spread premium

Pro’s and con’s of contacting your bank

Poll: Would you like a free financial health check?

Investar Search

Searching discount opportunities

3 Easy to use filters to source discount opportunities based on your preference

Search results

My Valuer/My Research

Estimate value

Estimate value continued.

Sale history

Sale history

• Suburb • Timeframe• Property type • Land size • # of bedrooms

What’s happening in the area?

Property sales location

Know the agent

• Agents that negotiate are your friends, get to know them (whether it be through P2P or research);

• Track agents/agencies that have a record of discounting;

• Understand what the current Vendor’s agent.

Approximating rental return

You’ve found the property, what now?

Property Analyser

Analysis

• Gross yield 5.31%• LVR below 80%• Buying power over

400K

• We’ve searched 900k to 1.2m properties.

• We’ve narrowed our search based on our specific criteria.

• We’ve valued and researched the property to understand it’s market value.

So what have we achieved thus far?

• We will help you get the bank feeds active.

• We’ll help you get your portfolio setup and integrated with Xero.

• We even offer up to 5 hours 1 on 1 training to help you get started using our platform. Open to all trialists and members.

We’ll even help you set it up!

We can help you build and manage

your property portfolio

Join Real Estate Investar today….

• Use the most advanced management tools in real estate.

• Dramatically increase your results and save hours every week.

• Build a profitable portfolio quickly and easily.

• Avoid financial mistakes.• Plan & succeed.

Get started now…

www.realestateinvestar.com.au

Your subscription includes

And support for everyone

Extra support bonus to get you started

All new members will receive up to 5 hours complimentary

1-on-1 training valued at $745.

And remember…

Immediate advantage over 99% of investors.Your subscription is tax deductible.You can pay with your SMSF.Unlimited help and support.First 21 days are free, with no obligation.

Bonus: free 1-on-1 training session, valued at $745.

Boost your Rental Income

Being able to increase your rental income is a skill as an investor that will help you increase your return on investment and will allow you to grow your property portfolio more quickly.

Boost your Rental Income#1 Charge Market Rate RentsIn order to make the most out of your investment, you will need to increase the rent from time to time. By not reviewing your rental rates, you could be missing out. Think about losing out on $25 per week … that is $1,300 per year that is Not going in to your bank account.

Boost your Rental Income#2 Re-evaluate Your Property ManagerIt is always worth shopping around for the best deal. Find out what other Agents/ Property Managers can offer, and what they charge for their service, and re-evaluate what you are getting out of your current Property Manager.

Boost your Rental Income#3 Ask Your Tenants“is there anything I can do this house that is lacking?” “I would need to increase the rent for those modifications, are you happy to pay extra?”

By talking to your tenants, and finding out what they want, you can increase your rental income and get a better return on investment. The best thing is that your tenants are telling you and so they’re willing to pay for it.

Boost your Rental Income#4 Add An Airconditioner

For those properties where there is no air conditioner, you could offer to install one, and increase the rent by say $20 per week. Now, $20 per week works out to about $1,000 per year.

You could make your money back in a year or less by adding in an air conditioner to your property.

Boost your Rental Income#5 Do A Quick Kitchen Makeover

1. Replace the handles on the cabinetry 2. Paint the kitchen 3. Replace the bench top4. Replace the taps in the sink

Small changes like these can make the Kitchen appear to be brand new.

Boost your Rental Income#6 Do A Bathroom Makeover

1. Paint the tiles white or neutral2. Replace the handles and taps for the vanity3. Replace the vanity

You don’t have to spend a lot of money or replace the entire bathroom to get it looking new.

Boost your Rental Income#7 Add A Fresh Coat Of Paint To The House

• Don’t limit the number of potential tenants with different coloured walls

• Neutral colours attract more people, and you want to appeal to the most tenants.

Boost your Rental Income#8 Refresh The Flooring

Think about new carpets, new floorboards or new floating floorboards.

You don’t need to spend a lot on carpet. If you’ve got old stained carpet, look at replacing it.

Boost your Rental Income#9 Convert A Garage Into An Extra Room Or Living Area

Depending on the area that you are in, you may have a 3 bedroom house, and you are competing with 4 bedroom houses. Consider converting a garage into an extra bedroom, or even a living space.

Enhancements like this can put your property in the next price bracket for rental income

Set up a team of experts to help you

• Accountant• Solicitor/conveyancer• Broker • Property Manager • Real Estate Investar

Poll: What’s your biggest challenge with investing right now?

• Loved what I saw, but I am time poor?

• I want to do these deals, but I am not confident doing it alone?

• I’m not sure how to identify a suitable deal for me?

What if?

Issues to consider

• Will you get the right investment property given your circumstances and goals?

• Is it a guarantee you will purchase a property?

• What are the risks?• Will you be able to identify

potential issues if you are not aware of the signs?

Introducing Premium Membership

For the hands-off investor who wants an easy way to purchase their next investment property. Using a six step, strategic approach we help:• First time investors purchase their first property• Existing investors grow their portfolio

Six step, strategic approach

Which property is right for you?We’ll work together to determine your property investing goals and the investing strategy you intend to use. For example:

1. Boost or replace your income with passive cash flow

2. Generate equity through subdivisions or renovations

We help first time and existing investors purchase

• Existing houses and units in growth markets

• Brand new off the plan apartments, dual occupancy property and duplexes in growth markets

Premium Membership advantages

• 100% money back if you can’t obtain finance pre-approval

• Leverage our experience, professional ties and partners

• Receive a $5,000 cash rebate on settlement for off-the-plan

• ASX listed business• Exclusive access to stock

Finance & Professional ServicesProperty Deals Service

Investor Platform & Information

Recent member purchases

Recent deals clients have done:Holmview subdivision

Purchase Price

$310,000

Purchase Costs $10,000Subdivision Costs

$80,000

TOTAL $400,000

House End Value

$300,000

Block End Value $220,000TOTAL $520,000

600sqm

400sqm

$120,000 increase in equity

on completion

Do you have?

• A well-defined investing strategy in place?

• An acquisition plan to find and research your next property investment opportunity?

• The time or know-how to implement your investing goals to create sustainable wealth?

If you want some help…

We find out:

• Your current situation• The outcomes you want to achieve• Challenges currently standing in your way• How we can help you purchase properties • Next action steps

Register at info.realestateinvestar.com.au/premium-membership-consultation

88

Membership Comparison

Poll: Would you like a call to discuss the Pro or Premium Membership?

Access at www.realestateinvestar.com.au/save50

Special Webinar Offer – Casual Subscription $99 per monthNormally $149 per month – Save 33%

Questions?

Book a Free Consultation at info.realestateinvestar.com.au/premium-membership-consultation