Timestamps:
00:11 | From Liverpool to Leichhardt
04:26 | Diving into Dubai
07:16 | Lessons Learnt
10:16 | A Very Successful Strategy
17:36 | Building Trust
19:54 | The Cooldown
25:38 | From Dreams to Reality
28:43 | Do What You Love

Resources and Links:

[00:29:37] Now that warmth has come back when I'm presenting a property to someone and I got it for a really good deal. And they're smiling. I'm smiling. The transaction's finished, and then you go off and have a few drinks with your mates and it's a great night. And you just can't wait to do it again! 

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 Dragan Dimovski, founder of Buyers Agency Australia. He delves into the tried and trusted strategy he uses, and the rise of the humble granny flat. Dimovski also explains how a 980 metre square block of land he purchased has doubled in value in just eight months, before he even set his builders on it!

Tyrone Shum:  

When Dimovski first started purchasing property, his plan was to utilise the ‘buy, renovate, and hold’ strategy to invest into his first property and build up his portfolio. However, things changed, and he and his negatively geared portfolio took a new route.

Dragan Dimovski:   

[00:00:11] From there I purchased another one in Liverpool again, same strategy. [It] probably wasn't the best idea that time. [The] reason I did purchase in Liverpool was because... [I'm] not sure if you remember, Tyrone, they were meant to build a casino.

 

[00:01:46] Unfortunately, that did not get built. So I held that property for a little while with no real gain. And I kept it, I still kept it. 

  

[00:02:00] From there, I moved on. 

 

[00:02:01] I went with my heart on this one. And I purchased one in Leichhardt. Which was... it wasn't off the plan, but it was about a few months to completion. So at that time, I didn't really know the area too well, and it was more of a glossy catalogue and it looked good. I walked into the sample and I said, 'Okay, I love it'. And I purchased that. It was slightly overpriced from what I wanted. But anyway, you do what you do. 

 

[00:02:41] So three properties, three apartments, [negatively] geared. And now I'm in a stage where I'm actually forking out a bit of money every month. If I knew then what I knew now, I would have done everything totally different.

 

[00:03:05] Sorry, sorry, negatively geared. Negatively geared, my mistake. They were negatively geared. And I was paying paying every month and I was feeling the pinch. Even though you've got a successful business that time, you don't want to be spending money. 

Tyrone Shum:   

His portfolio consists of 13 properties, not including the three villas that were purchased off the plan in Dubai. He’s experienced some great moments in these handfuls of transactions, but not all were quite so great.

Dragan Dimovski:   

[00:04:26] The one that sort of really sticks out was probably Liverpool, but then it didn't cost too much so it wasn't too painful. But no, the one that hurt the most was going into another country, in the UAE, in Dubai, purchasing going off a recommendation. 

  

[00:04:49] And look, they were genuine friends. They were making a lot of money in those 10 years. And the idea was buying three villas off the plan. Each six months to a year, these grow. So those villas were to be completed within three years. 

  

[00:05:13] And what happens is you sell one after a year. You've got the money to pay off the other two and then you sell off the other one, and you pay off that one, you pretty much have one unencumbered. That was the idea. But that didn't work.

 

[00:05:37] So how it works in Dubai over there, they build suburbs. They don't just build one building or a handful of villas or duplexes. Okay, so they build suburbs, and it's backed also by the government. 

 

[00:05:56] And what happens is, you have another suburb that was built five [to] 10 years prior to that. Okay, and that three bedroom, three bathroom, double lock up garage villa, cost $1 million, roughly. 

  

[00:06:12] The one that you're picking up off the plan, you'll pick it up for $550,000. I'm using now, US dollars, so to speak. It all has to be paid by cash. You've got every three months or something— depends on the on the agreement, [sometimes it's] six months— that you actually have to pay cash for these payments as they go. So it's divided over three years.  

 

[00:06:39] And each six months to a year, these properties rise [in value] because there's more demand for it. The less they have, the more demand. And this is how they attract people from overseas for the investment. To invest in Dubai.  

  

[00:06:55] But unfortunately, I came at the tail end of it all. Something happened over there economically. And yeah, from the value of the villas that were at one stage decreased quite a lot. And then I just sold out and walked away with my losses.

Tyrone Shum:   

[00:07:16] So what do you think that was one of the learning lessons in that?

Dragan Dimovski:   

[00:07:27] Know your market. I think [you should always] study the market that you're going to invest in. I've known this, but when the carrot is dangled in front of you from your friends, and they're making— let me tell you, to this day they are [making a lot of money]. Sometimes you just go, 'You know what? I've got this much that I'll invest. I'll just see what happens'. 

 

[00:08:00] You're always gung ho when you've got the money, but when you lose it, yeah, you you feel the pinch.

Tyrone Shum:   

[00:08:04] And you're a lot more cautious as well, for the next few deals, too.

Dragan Dimovski:   

[00:08:08] Exactly, exactly. And thankfully for that, I'm much more careful what I do now.

Tyrone Shum:   

On the bright side, the pros in property investment far outweigh the cons. While most of his aha moments have been in small doses, the sheer amount of them more than make up for it.

Dragan Dimovski:   

[00:08:44] I guess that the switch from apartments to houses [was] my aha moment, [one of] my bigger aha moments. And the last, you know, 10 years that I'm doing the strategies. The strategy now that I do is buy the slightly rundown house that is positively geared that [is] on a much larger block that you have the option to add a granny flat at the back [or] subdivide it. Knock it down, put a duplex. Things like that. 

  

[00:09:26] And this is what I've been doing the last few... many years. So [I] purchase that land bank then or throw a granny flat [on it] to get that additional income. And that works very well. And I do a lot of that with the clients as well.

Tyrone Shum:   

Dimovski’s latest deal features a strategy that’s simple to understand, and elaborates on it with a simple way to find out even more.

Dragan Dimovski:    

[00:10:16] I'll give you an example. And I can even actually give you the address to it too, just so your listeners can actually jump in and actually see what's what I do. 

  

[00:10:28] Roughly a little over a year ago, I purchased a 980 square metres block. A big block down in Ulladulla. So, that one I purchased [for] $410,000. It's block a land. And the idea is to build a duplex on it. And within six months, I got that piece of piece of land valued at $750,000.

Tyrone Shum:   

[00:15:07] Without building anything on it yet?

Dragan Dimovski:   

[00:11:10] Nothing. Zero. So that was obviously good negotiation, and a bit of back and forth there. And mind you, as you know, if you're picking up a good deal prior to that, and you're building a duplex, or what have you, you're already making some profits at the end of it. So just on the land alone, it got valued at about $750,000...

 

[00:11:40] About eight months later.

 

[00:11:49] And I'll give you the address if people want to have a sticky beak. It's number 28 Red Gum Drive, Ulladulla [NSW]. So they can check what it was purchased for.

Tyrone Shum:   

The property was likely worth much more than what Dimovski paid for it, but he wasn’t enlighted on how he was able to score such a deal. In fact, he nearly didn’t.

Dragan Dimovski:   

[00:12:19] My understanding [is] they had quite a few properties [and they were of] older age, retirement [age], they were just offloading a handful of properties. There could have been other reasons, but that's all I know.

 

[00:25:39] I actually almost didn't get it because there was a much higher offer, but their finances didn't come through, and they wanted a quick move. And I was the next person. 

  

[00:12:57] After that once purchased, then, of course, I went through the standard DA, architect drawings for the duplex, three bedroom duplex. But then there was a bit of a halt during COVID time. [There were] problems getting materials, which was the timber, then there was a waiting period of six months [or] thereabouts. 

  

[00:13:28] Then, once the timber prices went up, I was slugged with another about $13,000 on top of the contract. Even though it was a set contract with the builders, you sort of can't argue because you don't know if they're going to undercut you on something else, if you know what I mean. So, you cop it on the chin and move forward. 

 

[00:13:52] Look, I can't complain. The profit was there that was major in the land. So, okay, $12,000 [or] $13,000, I'll wear it and move forward from there. 

  

[00:14:03] Then the rains hit. That was January, February, March. And it's like, 'Ah, all right. So when are we starting?' 

  

[00:14:13] I got an email from them just a few days ago, saying they've just started with the concrete. So. Hurray! So you can get these things when you're developing little blocks of land like this. You've got to be aware that these are possible scenarios that can just pop up. Like anything, you've got your benefits, but then you've got your risk with that as well.

Tyrone Shum:   

His plan is to wait for the property to be built and completed before getting a valuation and putting a final figure on it. However, he has an idea of its expected price point.

Dragan Dimovski:   

[00:15:23] I've spoken to a few agents that they feel pretty confident that they can get about $880,000 to $900,000 each. I only just actually recently spoke to one yesterday, just to read just to get an idea. Because I knew you were gonna ask me that question! And the idea will be keeping both. Maybe I'll sell one and move on to something else. But yeah, the original idea was to keep both and just move forward [and] use the equity.

 

[00:16:28] You get a lot of benefits with a new build. I'm not going too hard on this yet. Once this finishes, I've got a couple of properties, larger blocks, then I'll make a decision what I do with them then. So far, so good.

Coming up after the break, he shares who he knows he can always count on…

Dragan Dimovski:   

[00:18:32] There's a lot of them out there that will look after you. 

His plan for the cooling market…

[00:20:02] Back two years or a year ago, you would pick up something for $500,000 and then within months, it's $600,000. Those days are over. 

He reveals how his property hobby turned into a career.

Dragan Dimovski:   

[00:26:47] It came to a point where I was, as mentioned, I came back to Australia, from Dubai. And it was like, 'Okay, well, what's my next move? I don't want to do photography'. 

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

→ Insert Dragan’s Exclusive Midroll.

Tyrone Shum:   

Dimovski puts a lot of trust in his builders, which is paramount for his success. Along with learning to trust his builders and the process itself, he’s garnered a lot of wisdom through his experiences.

Dragan Dimovski:   

[00:17:36] What I find [is] you've got builders out there, companies, that will actually do the full turnkey, from start to finish. Everything from DA approval to architecture to the completion. Full turnkey, right to the landscaping. And they'll give it to you for a good price. So what I've learnt is there's work to be done on knowing the area, but when it comes to the builders, it's becoming easier these days to deal with them. To deal with that company, that will give you a cookie cutter type of a build. 

  

[00:18:25] Of course, this is for investment purposes. I wouldn't do that for my own owner occupier home. But there's a lot of them out there that will look after you. Everything is set on a contract. And all you're really doing is making sure the contract is— which is important— that it's nice and tight. So there's no loose ends on it. And then you just move forward with them. And they're doing a great job.

Tyrone Shum:   

He manages to avoid the three hour drive down from Sydney to Ulladulla thanks to having a dependable team. 

Dragan Dimovski:   

[00:19:06] I'm actually going to get an external manager to look over the project. Which I feel, that little additional cost where he'll pop in every month, I guess, he'll come in and just tick the boxes and then come back with a report, which I think is worth the money. 

Tyrone Shum:   

[00:19:30] It's like a QRS report, I guess, because the bank will probably want that for construction. So I guess you'll be checking up to see how it's going. 

Dragan Dimovski:   

[00:19:37] It won't be internal through the building company. It'll be external through the building manager.

Tyrone Shum:   

He plans to stick with this strategy for now, especially considering the cooling of the market.

Dragan Dimovski:   

[00:20:02] Back two years or a year ago, you would pick up something for $500,000 and then within months, it's $600,000. Those days are over. 

  

[00:20:13] Anyone can purchase a property and gain $100,000. It's not too hard. But now that the market's slowing down, the demand will be slowing down. And obviously, with that, the prices will also not be as dramatic as they were. You've got to find another strategy like this. 

 

[00:20:38] And I think by me having done this for a long time, this always works. This always works. And this is what I tell my clients, that this strategy will always work no matter what market you're in. And they're seeing the benefits.

   

[00:21:26] This strategy I do for myself is also what I recommend for my clients. There's just so much benefit in purchasing a property that has potential for building a duplex. All it is is main banking, that's all you're doing. 

  

[00:21:56] You're purchasing a house that possibly needs a renovation. You spend $15,000 [to] $20,000 on that reno, make it look really nice. It's positively geared, you hold that for several years, depending on their plan, and you have these benefits. 

  

[00:22:20] Interest rates skyrocket? Okay, well, then let's put a granny flat [out the back] and increase the rental. I think what people aren't realising is when they have a property with a larger block of land, they can add. 

  

[00:22:34] In Brisbane, where I'm working at the moment, we're adding a 100 square metre, two bedroom, two bathroom granny flat that's costing roughly about $150,000. So they invested $150,000 [and] they're getting $340 rental [per week]. But they will get $340. So suddenly that increases their rental. And people who are worried about the interest rates going up— they shouldn't be worried. There's there's so many strategies that work in their favour.

 

[00:23:37] Tyrone, you should see some of these places. They've got three metre ceilings full of lights. I'm telling you, these granny flats, they look identical to houses these days. And you walk in, and I think, 'I could live in this! Easily!' 

Tyrone Shum:   

While granny flats used to conjure up images of brown ‘70s couches and dingy lighting fixtures, today they’re a lot more sophisticated.

Dragan Dimovski:   

[00:24:42] A lot of people have that impression or that image of back in the day when they walked into a granny flat and it was... there was no light, it was smelly. You know what I'm saying? There was probably some old guy living there. 

Tyrone Shum:   

[00:24:57] That's why they call it a granny [flat]!

Dragan Dimovski:   

[00:24:59] That's right, and these places are amazing. And they're cheap to build!

Tyrone Shum:   

His main driving force has been present for longer than it may appear, seeing as he started property window shopping long before he entered the market.

Dragan Dimovski:   

[00:25:49] Even from back in the day when I couldn't afford a house, I was always online looking at houses. I'm a bit of a dreamer, I guess. A slight creative side. This is why I had the interest in renovations as well. And sometimes I would overspend in the renos, but that's another story! 

  

[00:26:16] I have three real passions. Photography, fitness, and property. So even prior to setting up my own buyer's agency, I've always had the passion of just constantly looking at properties and talking about them and what this property does and what that property isn't doing and what that suburb is doing. All that sort of flashy stuff. 

  

[00:26:47] It came to a point where I was, as mentioned, I came back to Australia, from Dubai. And it was like, 'Okay, well, what's my next move? I don't want to do photography'. And thinking about it, my mother in law said, 'Hey, you love property. Why don't you get into property?' 

  

[00:27:09] And I thought, 'You know what, I don't want to be a selling agent. I don't want to do open homes. I don't want to do auctions. It's not me, it's not what I do'. 

 

[00:27:16] And months into it, while you're in that sort of mindset, and the energy must have spat out the frequency out there. And a friend of mine said, 'Why don't you become a buyer's agent?' I said, 'A buyer's agent?' And I was like, 'Yeah, I've heard of what a buyer's agent is, let me look into it'. 

  

[00:27:37] So I got into it. And then [I found out] you could be a buyer's agent with investment property. I thought, 'Wow, that's fantastic'. Then it was it was from there I looked into it further. Got my real estate license, I actually worked with a handful of buyer's agents for a couple of years. Some of them have been on your show, and I'm sure you know a couple of them I mentioned. 

  

[00:28:03] And that was the idea. And it was to go in there and actually pluck out what they do, and then eventually pick the best things of what they do, and then start up my own thing. 

Tyrone Shum:   

He’s a big believer in the idea behind doing what you love, because then it doesn’t feel like work. Luckily for him, he’s always had that guiding his career path.

Dragan Dimovski:   

[00:28:49] That was always my motto. Do what you love doing, it will never feel like work. 

  

[00:28:54] And I was very fortunate enough, from a young age, to always be doing that. And even when I was working for the other buyer's agents, it never felt like work. And I loved it. I absolutely loved it. I still love it.

 

[00:29:18] A part of it was when I was doing photography, and I [saw] the mothers with the babies. And some of them would actually get teary, because the shots were amazing. And when they walked out, I felt this warmth in my chest. 

  

[00:29:37] Now that warmth has come back when I'm presenting a property to someone and I got it for a really good deal. And they're smiling. I'm smiling. The transaction's finished, and then you go off and have a few drinks with your mates and it's a great night. And you just can't wait to do it again! 

  

[00:30:01] I was in Europe, I just only got back two weeks ago. I spent three weeks there. And to be honest, Tyrone, after the first week, I could not wait to get back home to get into it. Seriously. So it's the passion. It doesn't feel like work.

  

[00:30:40] You wake up super early in the morning, you bounce out of bed, because you know your day is set up with what you love doing. I can't remember the last time— minus me being sick— that I had to roll around in bed and think, 'Oh, I've gotta get up today'. I can't remember that.

Tyrone Shum:   

While the mentor he mentioned earlier with the flashy cars is a private person and so his identity will remain a mystery, the other resources he’s drawn from have been much more publicly accessible.

Dragan Dimovski:   

[00:31:30] He would throw some information here and there. But they were really to the point and valid. So he wasn't one of those mentors that spent a lot of time sitting there. He would give you the solid information, and you would go and research it yourself. Which I found was probably a good way to be. Other mentors? Not really, no. No. It was just trial and error.

Tyrone Shum:   

[00:31:56] Trial and error. Yeah. And resources wise, I guess did you have any sort of books? You mentioned you listen to the podcast. Anything that you could share? 

Dragan Dimovski:   

[00:32:07] Definitely podcasts. I mean, I've been listening to your show for two years now, I think. And you've got some great talent that comes to your show, and [I've] picked up some of their books. 

 

[00:32:24] This industry is always a learning journey. 

  

[00:32:29] Books, I do have to— I knew you're gonna ask me this question, from your podcast— How to Win Friends and Influence People. 

  

[00:32:29] And I'll tell you why. Because I find... 

  

[00:32:45] This has helped me through my journey. And my clients' journ[ies] quite a lot. 

  

[00:32:55] You've got to be genuine. One thing I don't like doing is working with people that I don't like. I actually don't do it. And I don't like dealing with selling agents that I don't like. And with the selling agents, I'm upfront with them, and I tell them. 

   

[00:33:22] The reason I like this book is because not only does it give you that knowledge on how to win friends and influence people, but it gives you a really strong relationship with the real estate agents. And you know what? When they get deals, they want to work with you. They call you. 

  

[00:33:45] And this is, I guess, part of the success of my business at the moment. I love working with these agents, and I think they love working with me as well. Because I constantly get good deals from them. And they're always happy when they're talking to me, or when I'm talking to them, and we spend time. And so it's never a quick transaction. It's always, 'Hey, Dragan, I've got this for you. What do you think?' [And I'm like], 'Yeah, let me have a look'. I'll go to my clients and the clients say, 'Love it. Great deal. Let's move forward'.

Tyrone Shum:   

Property requires you to have a strong team on hand to help you out, which Dimovski is proud to have. While his next mentor of sorts isn’t so much a person as it is a book, it’s a resource that listeners will know well.

Dragan Dimovski:   

[00:35:00] Rich Dad Poor Dad, I would recommend that book. It's great knowing what to do within property investment, and I do recommend people do reading that. But after a while, when you're in a business of being an agent, it's not all about the property all the time. I mean, it is, but it's also about the people you're dealing with to get those good deals. And that, to me is a key element to my business.

Tyrone Shum:   

[00:35:55] If you actually met yourself, so 10 years ago, what do you think you would have said to him?

Dragan Dimovski:   

[00:36:01] I would say probably go a little bit harder with the quality of the properties. Look, 10 years ago, is almost... I would first say go to the buyer, have the experience, but don't buy those properties. I would go back to 10 years ago and go, 'Go back another 10 years and do this'.

Tyrone Shum:   

[00:36:25] Let's go 20 years then! 

Dragan Dimovski:   

[00:36:28] I would honestly say, 'Start purchasing properties [in] low economic areas. Buy the house that has a larger block of land, and then hold on to them'. That's what I would say. It's a strategy I'm doing now. But I would have told me 20 years ago to do that, then.

Tyrone Shum:   

His plans for the next handful of years aren’t set in stone just yet, but he has an idea of where they will look like thanks to his trusty strategy.

Dragan Dimovski:   

[00:37:32] [In the] next five years I'm looking at moving forward with developing on these blocks of land that I'm doing. And using up as much as I can, what I can with that.

  

[00:38:08] So doing either a duplex or triplex. I hadn't thought about it yet. But that's the plan. And that's the direction it's going. 

Tyrone Shum:   

[00:38:27] How much of your success currently has been due to your skill, intelligence and hard work, and how much of it has been due to luck?

Dragan Dimovski:   

[00:38:38] You know what they say: Luck is what you put out there, really. I would say a lot of it is trial and error. A lot has to do with trial and error. Luck comes with that.  

  

[00:38:53] You can't just sit there and expect luck to fall on your lap. Put it that way. So, yeah, so a lot of it is hard work, a lot of it is knowledge, and I would say a small percentage of luck.

  

[00:39:13] But also you have to have a family or a partner to sort of back that up. Because if you don't have that, then you're going nowhere fast.

Thank you to Dragan Dimovski, our guest on this episode of Property Investory. As a special offer for Property Investory listeners, Dimovski is offering a free 45 minute strategy call, normally valued at $500. To take advantage of this amazing opportunity, contact him via his website at www.buyersagencyaustralia.com.au.