Property Investory
Simon Loo - Timing The Market: How To Invest In 12 Positive Geared Properties
September 15, 2017
We’re chatting to Simon Loo, a successful buyer’s agent who has built a portfolio of 12 investment properties. You’ll hear how he learned from his mistakes and began building his portfolio, the pivotal moment when everything clicked for him and how he unlocked his portfolio’s potential by timing the market!
You will also discover why he chose property investing over other wealth creation vehicles, why investing in positive geared properties is more beneficial and how his humble beginnings in a nine-to-five sales job eventually led him to broaden his horizons through property.

Timestamps:

Resources and Links:

Transcript:


Simon Loo:
[00:08:09] One of the most fascinating things is just the simple fact of just timing the property right. You can achieve incredible growth and financial results. And I thought to myself, ‘You know, people are making more from just buying one or two properties if they time it right.’

**Intro music**

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

I’m Tyrone Shum and in this episode we speak to Simon Loo, a successful buyer’s agent who has built a portfolio of 12 investment properties. You’ll hear how he learned from his mistakes, how he began building his portfolio, the pivotal moment when everything clicked for him and how he unlocked his portfolio’s potential by timing the market!

*** End Intro Music ***

*** Start new background music ***

Tyrone Shum:
Starting out in a nine to five sales job, Loo was looking to broaden his horizons when he started researching the mechanics of the property investing scene. Excited by the possibilities, he set forth on his property investing path. With hectic days, Loo says it’s important to prioritise.

Simon Loo:
[00:01:38] I would like to have as much structure in my day as possible as an active buyer’s agent. If there's a property that needs to go on the contract immediately, then I have to deal with all of the negotiations and put everything aside. So I have to prioritise a lot of things.

But essentially, my day starts from when I wake up to when I go to sleep and everything in between involves talking to clients, finding properties, talking to agents, talking to my contacts, to solicitors, to brokers, to tradespeople, property managers all across the board. And it's a bit of a passion of mine. So I don't really have an issue doing it. But it is pretty full on.

[00:00:28] I've been a property investor for about six, seven years now. I've been a buyer's agent for a little while now, helping fellow investors reach their goals through property investments. Part of my services also include mentoring a lot of my clients as well, in terms of how to reach financial freedom, or financial security, or whatever goals that they have in mind. And it's basically off the back of my own property investment journey. I guess through that, I've learned quite a lot in terms of experiences and lessons.

Tyrone Shum:
As a property investor, he says that his primary focus is understanding the numbers and using them to create wealth.

Simon Loo:
[00:02:48] Basically I focus purely on numbers. Property investment to me is a means to achieve my goals. It's really just about how to make money. At the end of the day, I try to be completely unemotional and as detached as possible so when I talk about numbers, it's all about things like what a property is worth, or the actual market value of a property. How much I'm paying for that property, whether it is cash flow positive, cash flow neutral or negatively geared.

[00:03:29] And obviously if there's potential for adding value to the property, whether it's a cosmetic result, or maybe a development opportunity down the track. I don't really focus too much on how nice looking a property is or whether I want to live in the proxy or not, because I know realistically I'm never going to live in it - let alone probably see it more than twice in my entire ownership. So basically, just really focussing on the numbers, the investments, fundamentals of the property. And yeah, that's how I stick to my strategy and grow the portfolio. 

**PERSONAL STORY/BACKGROUND**

Tyrone Shum:
Growing up with a non-English speaking parent in Australia, it taught Loo to make the most out of every opportunity from a young age.

Simon Loo:
[00:04:36] I grew up in Sydney, New South Wales in the Hills area. I came to Australia when I was four years old, from Hong Kong. My dad was working overseas, whereas my mum was here looking after me and my brother.

[00:05:19] I was mostly growing up with my mum and back then my mum was new to the country as well, she spoke very limited English. And I guess from that perspective, I saw how she struggled to raise two young kids by herself largely in a country where she didn't speak English and she had to learn to adapt. And it just made me make the most out of the situation there.

Tyrone Shum:
Educating himself on how to create and then build his property investment portfolio was how he managed to get away from a typical nine to five job.

Simon Loo:
[00:06:22] My mum told me recently, that apparently I told her that all I wanted to do when I grew up was just to get a normal job and just work until I was 60. Because that was actually what I told my mother as a kid! But I guess as I was growing up, I think I was never very good academically. I struggled in high school, studying and trying to get good grades. And I think through that experience, even after high school when I was just [00:07:04] going to music college, I wasn't really interested but I just did it for the hell of it. Like I think that started to shape, ‘OK, what do I really want to do? What are my passions and what, most importantly, I don't like to do.’ Because when you're not in university getting like a commerce degree or a medical degree, or whatever it is, you're kind of forced to enter the workforce - which I did.

[00:07:33] One of the most common things that people start doing when they don't have a university education is sales. So I entered sales roles fairly quickly after high school. And I think from there, it started to instill the fact that I really don't like the 9 to 5 mentality. I don't like getting up super early and having to work on someone else's schedule and obviously not get paid. 

[00:08:09] You know what I did what I thought I should be getting paid or what I wanted to be getting paid. And naturally, I started looking for ways to get out of that. So that kind of lifestyle. And I've always been actually interested in property, like one of the most fascinating things is just the simple fact of just timing the property right. You can achieve incredible growth and financial results. And I thought to myself, ‘You know, people are making more from just buying one or two properties if they time it right. Then they're making in five years worth of work, working a normal 9 to 5 job.’

So all the while, just thinking to myself, ‘How can I make that happen for myself?’ And reading a lot of books and self educating myself on how to make a start. And I was saving my deposit there as well, so I guess it’s slowly led to starting to build upon itself and as it does, your goals change and your expectations change as well. So it's just become bigger and better at every step. 

Tyrone Shum:
Before beginning his role as a property investor and buyer’s agent, his time spent in sales positions gave him some freedom to research and develop transferable skills.

Simon Loo:
[00:09:58] I did recruitments, I did selling events from selling the tickets to attend events, to actual venues for people to hold events. There was a stage where I did transport sales. So basically anything I could really do at the time. When you develop your sales skills along the way, you can pretty much apply it to any industry.

So what I was actually looking for along the way were roles that gave me a lot of time to focus on property investing as well. So quite autonomous sales jobs. And I can only say this while I'm obviously not in the workforce anymore, but I think it's important because property investing, while you're doing a nine to five, is very time consuming. Unless you take on a buyer's agent such as myself, it is actually quite difficult while you're working from nine to five, especially if it is quite demanding. So I was deliberately looking at roles where I did have a bit of freedom to do a bit of research on the side and just invest, as well as to fill the role.

**PROPERTY INVESTING JOURNEY**

Tyrone Shum:
It is widely known that the first property you invest in is the most challenging. Loo took the time to research as much as possible before eventually purchasing his first property.

Simon Loo:
[00:12:20] It was actually off the back of a lot of research and build up towards that first property, as most people when they're about to buy their first property often undertake. From memory I think it was late 2009, but even before then I really spent every weekend checking out units in various suburbs around the place. I remember I spent a lot of time in Newcastle, just looking everywhere and getting my foot in the door of as many open houses as possible. I'd do all the research the week before, then find out which properties I'd go to and line them up on the Saturday - just go bang, bang, bang, one after the other.

And it got to a stage where I got actually quite frustrated, because I was always over analysing each property and talking myself out of buying whatever property that I saw. It just came to a point where I was like, ‘The next property that I see that ticks most of the boxes, I'm just gonna go for it.’ So I ended up buying my first property in West Ryde in Sydney. We had a crazy Sydney boom that we've just experienced, but in hindsight it was a bit of a mistake. I paid probably a little bit too much for it based on the market value at the time and I was also lured in by the first home buyer’s grant. [00:13:51] I remember back in the day it was like $50 000. That was just the first experience, so when I first bought it I did a bit of renovation on it -  it was the older two bedroom walk-up unit. So it was painted, changed the tiles around in the kitchen and the bathroom, and I had to live in it for six months to get the $15 000 grants. Which was great for me just to experience living in the home as well. So yeah, that was basically the first property that I bought. 

[00:14:53] I mean we all got lucky with the Sydney boom. No one saw it coming. And if it didn't boom, if it was still stagnant then it would probably still be where I bought it initially; and the cash flow didn't really make sense as well. When I first bought it, it was costing me. I remember back then it was a couple of hundred bucks a week to maintain the amount of money actually covering after a year.

[00:15:24] I was on an average of $17 000 a week, you know it's a big chunk of your paycheck every week to have to service this property. And that's not taking into account any maintenance or vacancies. So if there was a vacant period or if there was any maintenance issues, that'd be extra money on top of that $200 that I was losing out of my pocket. So in that sense it was a bit of a a bit of a mistake. That experience of seeing that negative cash flow in my bank every single month, I think that sort of inspired me to look at other avenues of investing in property. And that's when I started getting really focused on getting properties that have a positive cash flow. And basically I just built on that. 

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Tyrone Shum:
Coming up after the break, we will delve into how Loo grew his property portfolio.

Simon Loo:
We're still very interested in property and I'm quite stubborn as a person - I wasn't going to let something like negative cash flow deter me from buying more property. So that's when I looked at properties that had more cash flow.

Tyrone Shum:
his ah-ha moment

Simon Loo:
When I first started getting the bank statements, when I first started getting the proxy management statements, it was a bit of an a-ha moment.

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

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**CONTINUED**

Tyrone Shum:
After purchasing his first property, Loo continued searching for more properties to invest in, which lead him to look into those which generated more cash flow. 

Simon Loo:
[00:16:27] We're still very interested in property and I'm quite stubborn as a person - I wasn't going to let something like negative cash flow deter me from buying more property. So that's when I looked at properties that had more cash flow. Back then there was the granny flat craze was just starting out in Sydney. So I was specifically looking in lower cost areas, lower socioeconomic areas too that had the opportunity to build a granny flat on, purely for the purpose of generating more cash flow. Partly to even out the West Ryde property, but I saw it as a bit of a learning curve as well to actually develop something myself even though it's just a simple granny flat. After many months of searching every week and going out checking out properties in Western Sydney, [00:17:42] I ended up buying a house in Blacktown. And as soon as I bought it, it was another mistake because back in the day I actually didn't know the implications of a best loss. So I went to see this property - it ticked the boxes in terms of me being able to put a granny flat on the back and actually sectioned it off, so it looks like a bit of a battleaxe job as well. But the actual house owner was super old and it was all fibro or asbestos and even the boundary fence was made of asbestos - it was very naive of me to obviously not even pick that up.

I did a building and pest and report on it as well. And I guess the building was average because I didn't read into it. It didn't say on the actual building of his report that it had that much stock in it. So I bought the property, found out about the asbestos and... look, you just have to learn from your mistakes. You can't cry over spilt milk, especially when you're investing in property. After all’s said and done, you just have to deal with it. So I had to pay a lot of money for people to replace the whole boundary fence and professionals removed the pests. And it also made the renovation of that front house a little bit more difficult, because everything, all the walls and everything, were all fibro so I had to be careful about painting it and sanding it too much.

[00:19:14] You live, you learn and once again I bought it, I put the granny flat on. I did a lot of research with builders and the rules and regulations; and putting the granny flat on the house, not needing to go through council and all that kind of stuff. And I ended up getting a loan for the granny flat as well. And back then the light approvals were quite relaxed so it wasn't that difficult for me to finance the whole thing. And after it was done, I just rented the properties out and got immediately got like 7.5% rental on it. Luckily when I refinanced, they also had quite a bit of equity in it as well. So I pulled equity out, then started and moved on.

Tyrone Shum:
He developed a passion and understanding for property investing, finding that it resonated with him as a wealth creation vehicle more than other investing opportunities.

Simon Loo:
[00:20:45] If you're really wanting to get to a point where you're buying several properties, whether it's within the next year or five years or 10 years, it's something that you intrinsically need to have a bit of a passion for. Because whether you're investing in shares or properties or whatever, there's a lot of research that's involved before you pull the trigger to buy whatever you're going to buy. You really need to have a certain level of dedication, patience and passion to be able to get to a stage where you know the ins and outs, the pitfalls and the different strategies involved. So I think my passion for property grew as I kept buying properties and I just felt like it came naturally to me, like I don't know much about investing in shares and all that kind of stuff, but property is something that just clicked with me personally. So I just sort of ran with it.

Tyrone Shum:
After purchasing the property in Blacktown, Loo diversified and began searching for more properties in Queensland. Although this turned out to be a mistake, he remains adamant that taking action will always be more beneficial to him than over-analysing his next move.

Simon Loo:
[00:22:20] After I bought that property in Blacktown, I started looking in Queensland because a lot of the properties up there offered significantly higher cash flow. So the first property I bought in Queensland was a property was in Logan, in the local area. Now this was a townhouse, a three bedroom townhouse and on paper it looked like it had excellent rental yields. So I got really excited and then I just decided to purchase it. It was really, really cheap. I think from memory it was like $150 000 or something like that for a three bedroom townhouse. It's really easy to not put things in perspective because you're used to paying hundreds, thousands, millions of dollars in Sydney for properties. So I got really excited about this property I guess.

And then I did the research on it after buying it. I started to realise that it probably wasn't the best property, the best type of investment I could buy, primarily because of the huge body corporate. So this wanted $3 000 a year in body corporate fees. Actually no, $3 500 which was a lot to stomach for a property that's only worth up to $252 000 at the time. So even though it was posting on paper 8.9% gross rental yield, my cash flow was only positive very marginally. 

[00:24:12] And only later on after I after I purchased it and owned it for a little bit, I realised where there's probably better value in the area. Again, it was one of those things. Lesson learned. You’ve just got to take it as it is and move on, obviously make sure that you don't make the same mistakes again. But taking action for me was way more important than analysing and making sure that I'm investing in the right thing. Every single time. 

Tyrone Shum:
Having overcome many obstacles in his property investing journey, it was all worth it when he had that shining, a-ha moment where it felt like everything was falling into place. 

Simon Loo:
[00:25:16] When I bought the Blacktown place earlier on, even though it had those asbestos problems. After I actually did the renovation, I put the granny flat on, fixed the fence up and let the dust settle, it just started to work it’s way as an investment property.

When I first started getting the bank statements, when I first started getting the proxy management statements, it was a bit of an a-ha moment. Just the fact that when I was putting them in my spreadsheet every month, the income I was getting from this property was way more than what the property was costing me to hold. And that was a really good feeling, that I owned this property, this house that I've bought. And it's actually not costing me any money. If anything it's actually putting money in my pocket, as I'm holding on to this asset that over time is going to go up in value. So that was just a really good like lightbulb moment for me, that this is the way of investing that I want to continue for myself. And for someone that was quite young and quite new to the game I guess that's really exciting, that you've spent whatever deposit you've put into the property and you can actually see the results every single month as it happens!

[00:26:55] And subsequently, we had a bit of a Sydney boom as you've probably experienced. And you just start to think, ‘OK, how can I replicate this? How can I do this more? How can I get 10 or 20 of these properties and just keep doing it this way?’

Tyrone Shum:
So what’s next for Loo in his current business venture?

Simon Loo:
[00:28:11] I've bought a lot of these types of properties for myself and they're all sort of reaping their own benefits. And I guess I'm at a stage where I've quit my nine to five job, so hopefully that life is behind me. I've started this buyer's agency and I'm really working hard on growing this as a business as well and just looking at the next stage of my investment journey.

It's probably going to be a little bit different to what I've been doing, I want to get into maybe some bigger and more interesting types of property investment. I'm still going to be in the property industry, but maybe not just buying three bedroom houses in Logan, or in Western Sydney. So yeah, just really looking forward to see what's next. At the moment I'm working my way towards a point where I can actually do this type of investing financially, in terms of getting the appropriate loans and the like. 

Simon Loo:
[00:15:36] A lot of people are like, ‘Simon, you must be crazy! You have $4.5 million worth of properties and all these loans. You must be a big burden.’ And I just see it as long as I keep these proxies rented, there's really no risk. I mean there's risk in investing in any property, but the risk is minimised as long as I keep these properties rented and the cash flow coming in.

**Intro music, continues quieter in background**

Tyrone Shum:
This is Property Investory where we talk to successful property investors, find out more about their stories, mindset and strategy.
 
I’m Tyrone Shum and in this episode on Property Investory we’re continuing the conversation with Simon Loo, director of buyer’s agency House Finder. We will uncover the nuts and bolts of his property investing strategy, which has allowed him to build a portfolio worth over $4.5 million with over $1.7 million in equity!

**End Intro Music**
**Start background music**

Tyrone Shum:
Initially, what held him back from investing into property?

Simon Loo:
[00:00:31] Probably blocking out a lot of the white noise around me. In Australia everyone is a property expert, you're going to get a lot of opinions on what to buy, where to buy, different strategies and across the spectrum you're going to get a lot of people telling you how you should invest. A lot of that is going to come from people that are closest to you - your family, your friends. That can have a big influence on you, especially when you first start and you don't know what you're doing. It's very easy to be led down a certain path.

So that was a bit of a I guess I wouldn't say it was a huge challenge but it was obviously something that I was conscious of. And obviously you know part of the maybe part of the reason that I bought some of the early properties that I did buy was because of that some kind of white noise around me. The other thing that was probably a little bit a little bit of a challenge for me was just really saving that first deposit. 

As someone who's quite young, you’re influenced by things like travel, cars and living life as a young person should be going out on Saturday, Friday nights. And keeping your focus on saving that deposit and maintaining discipline was a bit of a big step. 

Tyrone Shum:
Do you remember roughly how much you had to save up to get your first investment property. 

Simon Loo:
[00:02:36] I believe it was a roundabout's from memory. I think it was around about 60 70000 dollars. 

Tyrone Shum:
Wow. [5.9]

Simon Loo:
[00:02:43] And also I'd like to save up that much money at that age. [3.1]

Tyrone Shum:
[00:02:46] Yeah. [0.2]

Simon Loo:
[00:02:47] Well look as I said previously I was never that good at academics so I started working just with know whether it was part time jobs or or or you know the sales jobs that I've been through pretty much as soon as I finish high school. And from memory we actually were through high school as well but some. But yeah look I was actually I've always been quite good with my money. Like I don't you know I don't really spend on on on on too much. You know I don't I don't spend more than I earn or anything like that. So it's a gradual process that I save up the deposit box. I guess when you when you buy the first property and you've spent years saving up a deposit and to let that go I guess that's a bit of a mess. It was a bit of a mental barrier as well. So just obviously being able to take that action and just have faith that your your your buying the right property because you know after saving that hard to let that deposit go. Is is is that it is actually a big step mentally as well. [1:05.4]


Tyrone Shum:
Loo utilised several different resources when learning about property investing, including helpful online forums.

Simon Loo:
[00:04:15] In this day and age it's so easy to get resources, you know you just jump online. I used online forums a lot, property forums. There was one called Somersoft that I would frequent every single day, just reading up on what successful investors were doing, what they weren't doing. I asked a lot of questions myself. And it's interesting how when you actually ask for help, how generous some people are in actually helping you without vested interests. I guess I just used that to my advantage as much as possible.

I read some books about property investment, different types of strategy. At the end of the day you just have to make an educated decision on what works best for you and take action accordingly. I can guarantee you you're going to make mistakes, like that's a 100% given - there's no such thing as the perfect property and there's no such thing as getting it right every single time. So not being afraid to take that step is super important, whether you spent five years analysing the entire property market and having really good mentors; or whether you're just jumping into the deep end, which I don't advise by the way.

[00:06:33] Every couple of months in your area, wherever you're at in Australia it's always good to actually attend these meet ups - they're free and you meet a whole bunch of people that are starting out in their investment journey, people that are really experienced in their investment journey. If you're ready to and are at a stage in life where you want to go as a beginner, just talk to everyone and get different perspectives. It's an invaluable and free resource that anyone can use.

Tyrone Shum:
So what’s the best advice he has ever received? To keep his game face on and stick to his strategy!

Simon Loo:
[00:07:24] Probably the main thing for me is to remain unemotional when you're investing in property. And that can work both ways - it's not just about being unemotional in terms of choosing what properties to buy. Owning properties can have a lot of pitfalls. Sometimes when you own a property, you might come across a lot of maintenance issues, a lot of surprises, tenancy issues, vacancies. There's a lot of things that can affect you mentally and like it is just so easy when these things happen to say, ‘I'm not doing this anymore.’

But when you take 10 steps back and look at the journey as a whole and even the ownership of a property as a whole, a lot of these issues are just a drop in the ocean in terms of the whole ownership journey. It sucks when things happen at the time and they will happen, but it's really important to remain unemotional and stick to your strategy and your goals and just power through it.

[00:09:11] I have to keep reminding myself at times as well because it's so easy to get caught up in poverty and become emotional about it, especially if you're buying your home. There's a lot of emotion attached to that. But as an investor, we know that numbers are the key and looking at the environment, remaining unemotional and just looking at it from the figures and the stats.

**PROPERTY INVESTING STRATEGY**

Tyrone Shum:
Delving into the foundations of Loo’s strategy, he also shares with us how much his portfolio of 12 properties is currently worth in the market.

Simon Loo:
[00:10:16] You're probably looking at around $4.5 million. 

[00:10:49] The strategy for me has always been about buying properties that are below market value and buying properties that have positive cash flow. That's the bare fundamentals of anything that I purchase. If you do it that way, it enables you do two things: it enables you to keep purchasing properties, unless you're earning half a million dollars a year in your salary; then leverage or getting money from the banks is the most important thing for you as an investor.

So you have to buy properties that are conducive to banks being able to look at you as a whole and say, ‘Yep, we're happy to give you more money so you can buy your next property.’ So having cash flow is paramount to that equation. If you're earning $70 000 a year and you've got two or three properties that are costing you $300-400 a year already, then the bank may be a bit reluctant - on top of all your living expenses and all that kind of stuff - and say ‘I think you're a bit too risky.’ So having cash flow is super important.

Tyrone Shum:
Loo says that it is possible to purchase a property priced at below the market value - sometimes, it happens when someone needs to sell their property urgently.

Simon Loo:
The below market value thing is something that gets argued a lot because there are people out there that don't believe in properties that are below market value. [00:12:22] Because a lot of people argue that whatever you’re buying is what the bottom market value is. But there are a lot of circumstances that can enable you to actually buy properties below the current market value. So if we're talking like a three bedroom, one bathroom, one garage house in a particular suburb. Let's say it's worth $350 000 and it might be a distressed property, like the results of a separation or divorce, or it might be a power of attorney thing where the parents have passed away and the kids say they don't really care about the value, they just want to get the money out as soon as possible. There's a lot of reasons why people need to sell properties urgently.

So that's when people like me, as a buyer's agent, get exposed to a lot of these types of deals and that's where I come in and, depending on the price side, I do my own research based on the last three months of what's sold in the same suburb that are of a three bedroom, one bathroom, one garage nature. If I could pick up the property for say $310 000 then that's below market value. You're getting a decent deal if there's not too much issues with the house and you’ve got to look at it as it is and what the comparables are.

[00:14:00] So in doing that, it's like coupling that below market value elements and obviously the cash flow element as well. In a couple of months time, when you go back to the bank and they do a new valuation on your portfolio, they might go back to your property and say, ‘OK cool, this house is actually worth $350 000.’ So with that $20 000, $30 000 or $40 000 difference, you're not going to get all that money out. But say for example you manage to pull $20 000 out of their equity coupled with another $20 000 that you saved up over the past 6-12 months - then that will enable you to buy your next property. And the cash flow balance as you're accruing these properties will ensure that your portfolio as a whole isn't impacting on you, isn't costing you any money to hold these properties. It is a bit of a balancing act as you go along. You're just buying properties of that nature with the fundamentals in place and it enables you to grow a portfolio much quicker. 

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Tyrone Shum:
Coming up after the break we will continue the conversation about how Loo managed to leapfrog from 2 properties to the 12 properties.

Simon Loo:
With law as well, there's a safety in numbers element when you're owning a lot of properties. 

Tyrone Shum:
Learn how Loo built his portfolio.

Simon Loo:
To hold those properties once again cash flow is super important - otherwise there's no way you're going to be able to hold it for five to eight years.

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

Are you enjoying this podcast? Subscribe to it now on iTunes! We’re also available on Google Play, Android, Stitcher and TuneIn. Don’t forget to leave us a kick-ass rating and review while you’re over there - five stars never hurt anyone! If you want to learn more about Property Investory, or just find more of our episodes, jump onto our website at propertyinvestory.com and check it out.




Tyrone Shum:
So how did Loo manage to leapfrog from 2 properties to the 12 properties he has accumulated in his portfolio?

Simon Loo:
[00:15:36] The more disciplined you are and the more you stick to the strategy, the quicker you're going to grow. And a lot of people are like, ‘Simon, you must be crazy! You have $4.5 million worth of properties and all these loans. You must be a big burden.’ And I just see it as long as I keep these proxies rented, there's really no risk. I mean there's risk in investing in any property, but the risk is minimised as long as I keep these properties rented and the cash flow coming in.

With law as well, there's a safety in numbers element when you're owning a lot of properties. Each of them is giving you a bit of cash flow, even if you've got a couple of properties that are struggling. Say you've got a whole bunch of other properties that can lend a helping hand and if you have 10-20 properties, even if the market grows just 5 or 10%, if you're exposed to more value of properties you're going to make more capital gains even if there's just a small increment of growth. So I think that element is is quite important, to accrue a large quantity or large net value of properties.

Tyrone Shum:
This in turn has created a substantial amount of equity for him.

Simon Loo:
[00:18:51] So it was $1.5-17 million maybe two years ago. So it's probably more around the $2 million mark now. Some of the properties that I've had have grown quite a bit over the past two years. It just sort of cements what I meant when I said having a large net value of properties, even the slightest bit of growth in an area or in a market and if you're exposed to enough value of properties, it doesn't actually take that much growth for you to make some real money out of it.

But to hold those properties once again cash flow is super important - otherwise there's no way you're going to be able to hold it for five to eight years. A lot of things can change in that time, you might change jobs, might lose your job, you might come under financial strain in other areas of your life. So that's where cash flow lets you have these properties just sitting in the background waiting and watching it grow. Even if there was a small downturn during the ownership of that property, as long as you keep them rented. It's not going to have too much of an impact on your lifestyle. You're not going to have to make too many drastic decisions.

Tyrone Shum:
The time lapse between the accumulation of his investment properties varied, however he learned that it was vital to remind himself of his goals and to continue applying his strategy.

Simon Loo:
[00:20:28] I haven't bought a property for quite a while now, so it's probably been about one year or one and a half years since I bought my last property. But during the accumulation stage it varies. Like there were times when I bought two or three properties within a few months and there were times where I didn’t buy a property for eight or nine months. 

[00:20:55] It's just really hard to say and when you're actually accumulating properties, there's a lot of moving parts as to whether you can buy your next one or whether you want to buy your next one. A lot of it comes down to your finances, the market conditions and to you personally as well. Again coming back to being unemotional, if you have five properties and two or three of them are going through some large maintenance issues or some kind of vacancy issues, it can deter your attitude to not sort of progress. And then it might be a bit of a gap before it clicks in your brain that it was really nothing, time to move on.

The most important thing from that is to stick to the goal, stick to your strategy - what did you start off trying to achieve? What are you trying to achieve now? Look at your situation and everything you have and see what you can do right now to get you one step closer to your goal. But it’ll vary, like you can't buy one property every single month for the next three years. [00:22:24] Sometimes if there's a change in lending policy you might not be able to buy property for several months. So there's a lot of moving parts that will dictate how aggressive, or how you invest as well.

**PERSONAL HABITS/BOOKS**

Tyrone Shum:
There are certain personal habits which has contributed to Loo’s success throughout his property investing journey, such as effective money management.

Simon Loo:
[00:23:05] I'm always looking at property in my spare time, whenever I've got a moment I'm checking out realestate.com.au.

I'm always focused on my goals as well, always thinking, ‘OK what am I trying to achieve here? What am I doing today or right now to get me a tiny step closer?’

Another habit is money management - not spending on stupid things or excessive spending on things you don't need and just setting money aside so that when an opportunity does come up, you're ready to take action. So having that discipline and your money saving skills as well, money management skills is probably a good combination to help you progress. 

Tyrone Shum:
There was one book that Loo could recommend and this was it

Simon Loo:
[00:24:29] Definitely Rich Dad Poor Dad. I think every single serious investor that I've ever met have read that book, usually quite early on and it just instills that mindset of what money can achieve and what money actually is. It just gets your brain started working on it and basically sets you on the right path in terms of investing that money correctly. 

Tyrone Shum:
If you want to connect with Loo or find out more from his valuable experience, then...

Simon Loo:
[00:25:37] The best thing to do is check up my website. It's www.housefinder.net.au. A lot of information on my buyers agents and what I do is on the website. Very transparent, everything's on there. I've even got properties that I've bought recently on the website as well, so you can have a look at some of the stuff that I've been buying to achieve their investment goals. 

[00:26:10] In a sense I’m helping others achieve financial freedom as I've done myself and just sticking to those fundamentals. I find properties that are below market value, I find properties that have cash flow and I also like to find properties that have the ability to add value - whether it's a minor renovation or there’s potential to develop that property down the track. Part of my property journey is through me as a buyer's agents. I like to mentor a lot of my clients, get them to a stage where they can buy properties themselves. As silly as it sounds, at the end of the day maybe after two or three properties you've got the skill set to do it yourself, there might not be a reason that you would need to use a buyer's agent (even though a lot of my colleagues still use me because they're tidepool). But if you know what to look for and you've got the skill set to do it yourself, then that's an invaluable skill that you can have for the rest of your life.

**OUTRO**

Tyrone Shum:
Thank you to Simon Loo, our guest on this episode of Property Investory.