Timestamps:
03:41 | Why Commercial Over Residential?
08:58 | Why Spend $10,000 to Fix a Property When You Can Make $1M by Doing Nothing?
13:20 | Life is Like a Game of Football
17:00 | Want to Sleep Like a Baby? Make an Onion
21:56 | It’s an Ant’s World
27:06 | Shops are Steps
31:05 | Graph to Generate
33:24 | Get Started on Your Snowball
37:53 | Admit Your Mistakes
39:12 | Love What You Do

Resources and Links:

[00:12:30] He also valued the pizza and the doctors and the chemist and the beautician and the hairdresser. All of those individual shops, he valued higher, because there was this modern new national brand supermarket in the complex. I got a valuation back $1 million higher than what they valued it at the year before. 

This is Property Investory where we talk to successful property investors to find out more about their stories, mindset and strategies.

I’m Tyrone Shum and in this episode, we’re back with Phillip King, author of Engines of Wealth and owner of over 50 commercial properties. He explains why an owner of a retail shop could be his ideal commercial tenant, the reasons the sharemarket just isn’t for him, and how life may be less a box of chocolates, and more a game of football.

King explains why he prefers commercial investments over residential, a realisation he came to after a $10,000 incident.

Phillip King:   

[00:08:58] The tenants themselves, you're going to keep in mind, they spend their own money on the fitout. But it's also their job. It's their livelihood. If they can't pay the rent, they'll borrow it off their mother, their auntie, their uncle, their father, their sister, their cousin. Anyone but you. But they're not gonna let you evict them. Because their fitout is suddenly worthless if you lock the doors. 

[00:09:24] And unlike the courts [say about residential properties], there's no children living there. And the courts acknowledge that they're renting the commercial property for the purposes of making a profit. And no children live there. So if they've gone 14 days in breach of their lease and haven't paid their rent, you're legally allowed to go and padlock the door. And when you do that, they've lost their job. So they're going to go find and help.

[00:10:20] Telling you my worst experience— that would have been it. Like, having to take the two weeks off work, or having to take two weeks out of your retirement, and go and fix up your property and drop $10,000 into it. It's not what you want to be doing. 

Once he made the transition to commercial real estate, he never looked back. He shares a story about one particular tenant that will blow your mind!

[00:10:33] The best experience in my life— I had a tenant that basically ran a no name, no brand, grocery store, and it was rundown, their lease expired. They rang me up and said, 'Oh, unless you halve the rent, we're not going to renew.' I said, 'Thanks. That's okay. I don't think you're adding any value to my building anyway.' And I had an IGA franchisee, and this is a shopping center with 10 shops in it that I own in Yarrawarrah in the Sutherland Shire, God's country, as I said. 

[00:11:08] And 10 shops in that shopping centre, and IGA signed a 15 year lease with me. At the time I thought 'I'm not even sure I'll be alive in 15 years!' But I'm happy to sign it because the longer lease tenure you have, well, the more investors want to pay for that safety and security. And IGA is a national tenant. 

[00:11:13] And what then shocked me is the franchisee came in and stripped the supermarket. They spent around $500,000 of their own money, putting in new roof, new flooring, new fridges, new freezers, new shelving, new signage. I went up there, literally my jaw dropped and hit the ground. And I said, 'Oh my god, I own this. Wow.' And I'd only had it value for the purposes of buying a building 12 months earlier. And when that finished, I went back and said to the bank, 'Hey, could you go and value that again, now that IGA has gone in there? Because I really think that that's added significant value to the building as a whole.' 

[00:12:22] And what happened was, the valuer that went out there, Herron Todd White, valued each and every shop, not just the supermarket. He also valued the pizza and the doctors and the chemist and the beautician and the hairdresser. All of those individual shops, he valued higher, because there was this modern new national brand supermarket in the complex. I got a valuation back $1 million higher than what they valued it at the year before. So that's probably the best moment ever in my investing life, was when I leased the property out to IGA. And they spent $500,000 of their own dilly beautifying and upgrading my property.

Tyrone Shum:   

[00:13:09] So a $500,000 investment which was in yours, and you got a $1 million uplift in your own property. Phenomenal.

Phillip King:   

[00:13:20] In the book, when people read the book, there's an analysis there. I talk about if you really want to be wealthy in life, who do you ask? And there's an analogy that I heard that said, 'Let's treat life as like a game of football.' And I would teach graduates at IBM property investing in the lunch hour. I enjoyed helping the graduates. And the most common answer that I would get is, 'I would ask a financial planner, they're going to be able to set me a plan for wealth.' And look, some of them do. Definitely, some of them do. 

[00:14:05] But what in my experience I've found is that they're the first aid guys running up and down the sidelines of the football field. They want to come out and sell you life insurance. Which is important, of course, and you need it. So if you get injured out there you're going to need third party, disability insurance, you're going to need income protection, insurance, life insurance. So you need to have it but a lot of people just get that through their Super fund. 

[00:14:34] And I've even had financial planners, when I've said to them, 'You're coming out to tell me how I can make money or you're coming out to sell me insurance. I've already got my insurances set up.' They've turned around and walked away. And I've also had them coming out in their Hyundais and I've opened my garage and said, 'I've got a Mercedes here, and you're gonna tell me how to get wealthy? Really? So, how are you going to do that?' So that sums up the answer for financial planners. 

[00:15:01] A lot of people would ask about the accountants. 'I'd ask my accountant.' Now in my case, yes, I think my uncle was rare. He had a passion for property. He was a property investor before he was an accountant, first and foremost. But for me, accountants, typically you tell them how much you work. They tell you what your legal deductions are, and they help you minimise your tax legally. And they tell you how much tax you've got to pay. So they're just the score boys. They're the scoreboard boys in the footy field. They're just keeping score, tell you what you're paying. 

[00:15:40] And the third surprising answer that I got was, 'I'd ask my lawyer.' Now who, when they're 25 [to] 30, even has a lawyer? I don't think so. But maybe it's just because you think they're the smartest people, because they do a six year law degree that they'll know how to get wealthy. And to me, that's just the referee on the football field. You know, the lawyers, they just penalise you if you're breaking the rule, and you need them if you've earnt that money illegally. 

[00:16:05] So the answer come down: who do you ask if you want to be wealthy in life? You ask one of the players. You ask the richest person you know. And you ask how did they get wealthy. And that's what I would say to the graduates to kick off the meeting. And I'd never say to them, 'I have an investment portfolio of 50 odd commercial properties, I'm able to generate an income that will fuel my retirement now. And I can teach you how I did that.' And all that knowledge and that lesson is front and centre in the book. 

While there are many ways to make money, King sees this as the most secure way. And when it comes to making a meal of wealth, there’s only two key ingredients.

[00:17:00] Obviously knowledge and strategy is number one, which I provide through commercial property. But the other element that you need is leverage. You need an asset that you can borrow lots of money against. If you make 50% on a $100 investment, well you've made $50. You're not going to be too happy, it's not going to be able to retire on that. Whereas if you make 5% on $100,000, you make $5,000, and that's something to talk about. So the message here is, right now today, I owe the bank $50 million. And people say, 'Oh, my God, how do you sleep at night?!'

[00:17:42] And I say, 'Like a baby.' Because you have all of these layers of onion rings that you could sell, that you can get rid of that are generating a positively geared income, that I can offload if I want, I can sell them if I want, before I get to my domicile residence. So largely I'm well-protected by this investment. And it's generating a positive income stream. So I collect my rent, I pay all the expenses, I pay the bank their interest, and there's money left over that can fuel my life. So I don't require a job to pay the loans anymore. The commercial properties have always looked after themselves. 

[00:18:26] And that's the best thing when I'm talking to investors. I buy a property worth 500,000. And if we're buying it at a 6.5% return, the bank at the moment, we're only paying 2.5% on the interest. So we're making 4%, which is $20,000 a year on $500,000. And you look at that and think, 'Okay, that's $500 a week.' Imagine going down the pub every Friday night and playing the poker machine, sticking $5 in, winning $500 every Friday night for the rest of your life. You'd think you're the luckiest person in the world.

Tyrone Shum:   

[00:19:06] Yeah. And you multiply that.

Phillip King:   

[00:19:09] This is exactly what you can achieve when you go and buy a commercial property on a 6.5% return. And you get our eyes wide open to look at what it is you're buying. Let's say the tenant in that shop was an accountant. And he'd been there for 15 years. I asked people: do you use the same accountant every year?

Tyrone Shum:   

[00:19:34] Of course, most people do.

Phillip King:   

[00:19:36] Most people do, right? So I've been using the same accountant for 30 years. And I've never changed and I wouldn't think to change and he's got all my details on file. He's got all my depreciation schedules in his computer. It could be a mess changing. So if I buy a little shop, which has got an accountant and he's been there for 15 years, odds are he's got a loyal, well established client base. He's not going to go anywhere. 

[00:20:04] Likewise, one of my favorite tenant types is hairdressers. Because girls typically are fiercely loyal to their hairdresser. My wife goes to the same hairdresser, I actually go to the same barber. So again, if I find a hairdresser that's been there for 15 years or 10 years, odds are she's got a great clientele of loyal customers already built up, she'll be there another 10 years. So these are the types of investments that we're looking for.

[00:20:38] Just to summarise it quickly, and if people want to email you, I'll forward you a PowerPoint presentation if you don't have time to read the book, and it captures a lot of the key points that I've discussed today. But if I look at this one here, the characteristics of a great retail shop, it's obviously location, location, location. You imagine a cafe opposite Bondi Beach— pretty well, it's never going to be vacant, right? There's plenty of examples like that— a cafe next to a hospital, next to a park where lots of mothers frequent. So we're looking at those location attributes in the shop. I've discussed a tenant with a long trading history— hairdressers, accountants, etc. Modern expensive fitouts. Do you think that that IGA tenant that's spent $500,000 on his fitout, do you think he's gonna go anytime soon? No, he's gonna stay there so that he gets the benefit back of the $500,000 that he invested.

Tyrone Shum:  

The best way to find a commercial property goldmine is to think like an insect.

Phillip King:   

[00:21:56] The other thing I love about Google, I say in the book: we want to buy a property in an ant's nest. So people are watching it in a heavily populated area where there's lots of houses around, and you get up on Google Earth. And you zoom up to three kilometres in the air, and you just make sure that it's a mature, densely populated, that there's plenty of houses around there. So you know that there's going to be lots of foot traffic and lots of people to ensure that that tenant's business is successful, and well [patronised].

Coming up after the break, King gives an overview of Engines of Wealth and how following its steps can take you to where you might not have thought possible...

[00:27:06] There's basically a table in the book where I take you through step by step. Ultimately, you can see the shop, shop one, shop two, shop three. So the book starts off with buying one shop. 

The mistakes he’s made in the past and how he’s overcome them to become the powerhouse he is now...

[00:38:04] I'm very open with my life. I am someone that says I did make a mistake, and I have made errors. 

He shares what kind of income you can secure with just one singular purchase.

[00:45:11] That's $800 a week. With an $800 win on the pokies, how would you feel? That can give you $800 a week extra income because you bought that shop. And you've made that strategic decision not to sit on your hands, and to be brave. 

And that’s up next. I’m Tyrone Shum and you’re listening to Property Investory.

Tyrone Shum:   

Coming back, King reveals where the title of his book Engines of Wealth came from, and what it means.

Phillip King:   

[00:22:47] I was sitting in Vietnam in a place called Nha Trang, which has a big dragon going over the bridge, and every half hour, the thing shoots fire out of his mouth. And I sat there with a bottle of bourbon and started writing out potential names for the book. And I think that night, I wrote down 50 names. But the one that stuck with me was Engines of Wealth. 

 

[00:23:15] And if you have a look at the logo up here on the back, I hand drew this logo, and then they digitised it for me. It's the engine blocks: bakery, doctor, hairdresser, food, takeaway. And that's your engine block, you've got this portfolio of shops, and they're pumping out money. So I wish it could shake like an engine revving. But that's pretty well what I did, I just sat there writing down names, and I discussed them with my wife the next day. 

[00:23:49] And that was pretty well, the night I also said, 'I'm going to write a book, I'm going to write a book on commercial property.' And then I planned out the chapters. And one of the other really important things, just to finish off on those characteristics: Often, the number of employees when you're buying a shop is a sign of the health of the business and the volume of business they do. And obviously, if it's the tenant itself, if it's a national chain, like KFC, Subway— you try buying a KFC or a Hungry Jack's, they're trading at yields at sub 4%. So they're hard to get. 

[00:24:28] There's an article on my website, which is called The Cost of Quality. And it's an analysis on the last 12 Bunnings. I always like to say there's always a bigger fish out there. I personally can't afford to buy Bunnings. The one at Caringbah here in the Shire, it sold for $59 million. That's a lot of money. That's not me. But another important thing is that there's a whole chapter in the book about my top tenants that I love. And I've mentioned a couple of them. My number one would be hairdressing salons. Bottle shops. If you get bad news, like you've lost your job, you'll go and buy a carton of beer. Drown your sorrows. Commiserate. But if you get a promotion at work, you're gonna buy a bottle of champagne and celebrate. So it doesn't matter what's going on, bottleos are selling something. 

[00:25:27] Cafes are good. We all love our coffee in Australia. Restaurants, especially, I've noticed a lot of my restaurants actually have had an uptick in business. Because people can't go out they're saving a lot of money. So they're ordering in. So Thai, Chinese, Italian, seafood. These are popular restaurants with the Australian people and we order out quite a lot. So they do very well. 

Tyrone Shum:   

To own such a large portfolio is impressive by any standards, but over 50 commercial properties takes it to a whole new level. King walks us through how he did it.

Phillip King:   

[00:27:06] There's basically a table in the book where I take you through step by step. Ultimately, you can see the shop, shop one, shop two, shop three. So the book starts off with buying one shop. One little cafe. It explains how we value it, how we work out the net rent, all of the outgoings are there, and make sure that they're all being accurately sighted when you're going to buy that shop. 

[00:27:40] So we buy one shop, and you probably keep it two years. As I said, it's about you working, going back, focusing on your job, saving and paying the loan down. The property when you buy it will be earning 6.5% percent. So the tenant will be helping you pay the loan down as well. 

[00:27:58] And then built into the lease, there'll be 3% or CPI increases built into the lease. So your shop will be rising in value about 3% per year. So if you're talking a $500,000 shop that's $15,000 or $20,000 a year, that property is going to go up in value. So in two or three years' time when you go to the bank and have it revalued, you've got this building equity from the positive cash flow, the capital growth from the rental increase, plus your savings. And you're able to then leverage that to go and buy your second shop. 

[00:28:35] And then the book takes you through how you go and buy that second shop. And you'll be 100% borrowed on that second shop. Plus you're probably borrow the stamp duty and legal fees. So if that second shop cost you $500,000 it'll probably cost you $530,000 by the time you've added on purchase costs. But you're using equity from the first one and so the bank now holds the two titles over both shops. And we'll give you the full loan for that second shop.

At this point, those following the steps will need to keep saving hard for another two years, but will also be building equity in both shops at the same time.

[00:29:15] So if you're building $15,000 in the first year, now you're building $30,000 a year. And that's before you wake up and get out of bed and go to work. At the end of the year you've got $30,000 sitting there in equity growth. Plus you've got the cash flow, and if you're positively geared 4%, that's $20,000 a year in the tenant's cash flow. 

[00:29:34] Now you do have to pay tax on that. That's income. So maybe you'll get to keep $15,000 of that as well. But you're now talking $45,000 plus what you can save over two years. And a lot of people can save $20,000 [or] $30,000, it isn't out of the question. Some people say, 'Rubbish, I can save $10,000.' Okay, well isn't it great to know that you've got equity growth and the tenant positive income that's adding $45,000 a year in equity to the two shops. 

[00:30:06] So after a couple of years, you can go and borrow against that new equity now and buy a third. So the book takes you step by step through the process of buying five shops. And you'll eventually— it takes about 11 years in the book to do it. Now all the numbers are in there, if you don't understand the numbers, that's when you if you want, you can go to my website and order a one on one with myself or anyone in my team. I've got three other staff that run one on one consulting seminars. 

[00:30:44] Or, go and have a chat to your accountant, or a property investor. Any other property investor loves talking about property. My wife said to me, 'How long is this podcast?' Tyrone, and I said, 'I think it's about an hour.' She said, 'Oh, that's a long time with the spoon.' She thinks that I have the spoon for an hour. Oh my god. So she couldn't possibly listen to me. 

[00:31:05] But the book takes you through step by step, building that first portfolio of five shops. And I think by the time you own five shops, you're going to be generating $100,000 a year in income per year. That's enough to retire on. And you mentioned is there anything I would recommend people reading. There's a great book that I first read, my first property investment book I read. And it's a book by Robert G. Allen. And it's called Creating Wealth Through Property. And he talks about buying residential houses. He's a US author. It's about the US market. It's not as relevant today to the Australian market.

[00:31:56] But I first read that and there's a graph in there. And he basically believes by the time you own five properties, you will be what he calls 'in financial orbit'. Where you're building equity and cash flow faster than you can spend it. You never met my wife, she can spend it faster than that. But I got to this point where I just felt: why stop? Aren't we supposed to be the best we can be in life? So I just had a passion and thought well, I may as well keep going, and I just never really stopped. 

Tyrone Shum:   

He reset his strategy from residential to commercial 25 years ago. While he didn’t start his commercial portfolio from scratch, it has taken him 30 years to get to where he is today. 

Phillip King:   

[00:33:24] It is like a snowball running down the hill. When you first buy your first shop, it might be three years before you built that equity, that you can go and buy your second one. And then it might be two and a half years before you can buy your third. But then it'll only be two years before you buy your fourth. And then it might be a year. And what happened to me is actually I bought two in one year. I sat back and waited. And when I went and got them all revalued, they'd all popped in value. And I found that I could go and buy two that year. But now when I've got a portfolio as large as it is today, yeah, I can buy a property, I'll have enough equity after six months.

Tyrone Shum:   

His takeaway is not to underestimate the power of leverage when it comes to property.

Phillip King:   

[00:34:53] I owe a lot of money on that portfolio that I have. So I don't own them. I owe the bank a lot of money. And so the bank are very comfortable with shops. Now if that was a share portfolio, and the share market goes up and down, you're right, I wouldn't be able to sleep at night. The moment when COVID hit the world, the share price of lots of companies...

Tyrone Shum:   

[00:35:20] Oh, 50% drop, straight away.

Phillip King:   

[00:35:22] Just dropped. I'm sure when Scott Morrison banned international travel, I'm sure that the share market of Qantas took a dip that day. And if your bank manager, if your share manager, your bank manager rang you up and said, 'Philip, your portfolio's dipped, you need to stick $1 million or $2 million in it's called a margin call.' And I don't have it. I don't have that sort of money, I don't have any money in the bank. I can't tip that money in. Well, they would sell my share portfolio, crystallise my loss, and I'd be tossed to the side. 

[00:35:55] So I don't think that shares and share portfolio is a safe way to borrow and use leverage and to borrow large amounts of money. Now, it might be perfectly good for those people that actually have money in the bank, and can take the risk, and it doesn't matter. And they're only risking 10% [or] 15% [or] 20% of their portfolio. And I'm sure there's lots of millionaires out there that did it through share trading and options and futures. 

[00:36:24] But the pure and simple thing is that's not how I built my portfolio. It's not how I generate a solid income to retire on and live on. I did that using commercial shops. And I think it's a very, very stable, reliable way. The tenants are invested with me, they've got their money in the fit out. It's their job, their livelihood, they look after the property, they spend their own money, making it beautiful. And I haven't got that problem when I'm retired to fix it. 

[00:36:56] And the other good thing is that it allows us to remote manage easily. So because we are in a concrete box, and the tenant, it's their job, they're there on site every day. This means I don't need to live around the corner. I don't need to be there. I can buy it and own it in Queensland. And if there's a problem, a water leak, the tenant can ring a plumber, get it fixed, send me the bill. Done. So it's very simple to remote manage something that's so low maintenance.

Tyrone Shum:   

For anybody who thinks they made a mistake early on, it can be hard to break out of that mindset. But King’s words to his younger self are a reminder that you can always switch gears.

Phillip King:   

[00:37:53] I would have said: 'It worked. Well done. It worked.' Because I made that decision. And I talk about it as a full chapter in the book, I'm very open with my life. I am someone that says I did make a mistake, and I have made errors. The first big error I made is I chose the wrong vehicle. I chose residential property. I was negatively geared, I spent a fortune on maintenance and repairs. And I had lots of problems with tenants that didn't keep the property nice. Had lots of times where I took weeks and weeks off work to go in and fix properties up and re-let them. And the whole time I'm paying real estate agents exorbitant fees, 15% of the first year's rent to find me a new tenant. 

[00:38:45] So I switched strategies over to commercial retail shops. And I'd love to go back to myself and say, 'That was a great decision. And it really worked. Well done.' And now if I'd had have said, 'One day you're going to write a book on it', I would say, 'Rubbish.'

Tyrone Shum:   

[00:39:12] Looking forward into the future. What are you most excited about in your journey for the next five years? Whether it be in property or helping your clients, what do you see yourself doing in five years' time?

Phillip King:   

[00:39:24] I would say to you, I absolutely love doing what I'm doing today. I didn't really like being a corporate executive of IBM. I was the National Sales Manager. That role took a pound of flesh out of you. They were 10 hour days, lots of travel, lots of time away from the family, and doing something that I really didn't enjoy. 

 

[00:39:51] I've retired, I'm now doing something that I love. I love keeping my eye on the market. I love talking to real estate agents. It's like being in charge of the ice cream. I'm watching fantastic investment options come through, I really enjoy getting those good quality properties in the hands of my clients. I've got lots of clients and if people are looking for references I can happily provide those. Some of my clients have had meteoric rises over the last two and three years in the values of their properties. Now we all know the market has the yields of contract. And more and more I'm seeing properties listed 5- 5.5% in Queensland now. So a lot of my clients that only 12 months ago bought at 6.5- 7%. Well, they've done really well. 

[00:40:45] And I love seeing the fact that I'm teaching them how to replicate what's worked for me. I enjoy coaching and mentoring young people. And I wish someone when I was 20 had steed me into commercial property. And I wouldn't have needed to go through that residential learning curve. But I guess our experience make us what we are today. But both those journeys are discussed in the book. And that's really one of the highlights. And I've always been doing that. When university graduates joined IBM, they would come along to my— I used to call it the Lunch and Learn Sessions. So I would run property investment Lunch and Learn sessions for the graduates, and I think they got a lot out of that. And I know, there's lots of those graduates today that have been now in it for 10 [or] 15 years. So that's how long I've been coaching people. 

Tyrone Shum:   

[00:41:51] That's fantastic. You're impacting a lot of young kids, especially the younger generation. I'm so grateful to hear that that's what's happening as well, because there is a lot of education that I think is missing in our current education system about building wealth about property. And if we can tap into that and help the younger generation, they'll be much better off for the future.

Phillip King:   

[00:42:12] We need to because as I said, they've got it harder than us. Believe me, they have. They do.

Tyrone Shum:   

[00:42:23] You've done a lot in your life, you've built up a successful commercial property portfolio. How much of that do you think has been due to your skill, intelligence and hard work? And how much of it do you think is because of luck?

Phillip King:   

[00:42:38] It's absolutely been due to a strategic decision not to live your life in a normal manner. So I think when I look at that normal manner, my mother and father, that you buy a house. And a lot of couples do, and they pay that house off. And they don't even think about another investment, or leveraging the equity in their property until it's paid off. And then they want to save the money. They're against debt, and they're against borrowing money. They think 'If I borrow money and get loans, I'll end up going broke.' Well, that comes down to borrowing money for quality investments, and income producing investments. 

[00:43:23] And that's a very different thing to borrowing money to buy a car, or a holiday, or expensive Christmas presents for your kids. So it's definitely a strategic decision you need to make to say, 'Right, I am going to live my life this way. I am going to make a strategic decision to invest. I'm not going to just buy a domiciled residence. As soon as I've built up equity in that domicile residence, I'm going to leverage it, and I'm going to look and go and buy a shop that will now help me with a positive income, capital growth occurring.' 

[00:44:04] And by the way, the positive income that's being generated from the shop, you use to pay your domicile residence off first. I mean, any accountant is going to give you that advice. You can still then go to the bank and borrow against that domicile equity and buy the other property. There's a discussion in the book where I talk about this very point, where I say a lot of couples that I meet, they've been paying their house off. 

[00:44:35] And one couple reached out to me and said, 'Oh, well we own our house.' And I said, 'How much is it?' And they said, 'Oh, well, we think it'd be worth $1.2 million.' Wow. Okay, so the bank would lend you 80% of that. So let's say the bank lends you $1 million, and that means you've got $1 million, you can go and buy a $1 million dollar shop. And again if we're buying it at 6.5% return and the bank's charging us 2.5% on the money, we're making $40,000 a year. That's $800 a week. With an $800 win on the pokies, how would you feel? That can give you $800 a week extra income because you bought that shop. And you've made that strategic decision not to sit on your hands, and to be brave. 

He’s learnt a lot over the years, but he’s come to realise knowledge does more than just educate.

[00:45:27] And the one thing that removes the fear is knowledge. Knowledge, if you understand it, and you're fully immersed in what you're doing, and you've got advice from other experts. There's lots of people out there. I'm one property investor, but I have this strategy that I say to people about learning to get the knowledge. It's step one, read the book. Step two, book a one on one with me, they go for about two and a half hours, you can log on to the website, put your details in there. And we can jump on a two and a half hour call, with me or my staff.

[00:46:09] And step three is you can sign up as an Engines of Wealth client, and I produce reports on properties. And I can email some of your listeners a few of those example reports that I've done on properties that I've already purchased. And they can see in there, here's a property. There's one on the Taunton fruit shop that I bought for a client. Here's what I like about it, it's in the main street, Woolworths is across the road. So it's in the middle of an ant nest. It's got a mother and daughter team that are the tenants. They spent $250,000 on the fit out. It's beautiful, modern, it's in a fairly new building with good depreciation benefits. If we're buying it at this price, these are the outgoings, this is the profit it's going to return. This is what money you're going to make each year.

Thank you to Phillip King, our guest on this episode of Property Investory.