In this episode he provides a real-life example of how two people can experience the same situation and take away completely different perspectives. We also dive into his personal portfolio, how he keeps his baggage collection light, and just how property can be made easy.

Timestamps:
00:12 | Cold Feet
02:23 | Differing Perspectives
06:44 | Hold On
09:46 | Same Same But Different
12:04 | Perspective, Part Two
16:13 | Little Things
21:30 | Research is Key
26:00 | Travelling Forward

Resources and Links:

[00:09:46] I really started to look at real estate and [was] following what was happening in real estate and looking everywhere, et cetera, et cetera. And then having a few mates in real estate and talking to them at the time, I went, 'Well, this looks like the perfect opportunity. I can go to work and really enjoy what I do'.

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 Craig Malvern, the real estate licensee at Linder Group with a strong real estate background. In exploring his family history, career highlights, and the importance of getting the right guidance, he’s shaping the vision younger people can have of the property market so that they can make it their own.

Tyrone Shum:   

After purchasing his second property, Malvern wondered what to do next. Thankfully he had his sister Kimberly to answer that question and many more! Together, they established how he could use his equity to push him further up the investment ladder— provided his icy feet didn’t slip on the rungs.

Craig Malvern:   

[00:00:12] After the second one, we got a bit of... not cold feet. But we thought, 'Oh, hang on, what's next? We're going to buy something a bit newer'. So we started looking at a couple of four bedroom homes, just established, and stuff we could build as well, and get some depreciation back through our tax. 

 

[00:00:34] And after sort of three or four, I was starting to think, 'We're carrying a fair bit of mortgage risk here', etc, etc. And to be honest, I sort of sat back and went, 'Oh, what do I do next?' And it was my wife that said, 'Let's just keep going. Just go for it'.

  

[00:00:57] Which was great. Because originally, she was the one who sort of was hesitant. I was hesitant as well, but then she said, 'No, let's just keep going', and she'd ring Kimberly and say, 'Yeah, we're just going to do this. [I] don't really care what Craig says. Let's just do it'. 

  

[00:01:11] So she sort of kickstarted us from that point again. And to be honest, since then, whenever an opportunity has come up, we've just gone, 'Yep, let's just jump on it'. And I guess one of the biggest regrets is not buying double of what we purchased over the last few years! Some great opportunities came up, and we went, 'Yeah, let's try something and build something there'. But if we would have done two or three in the same area, it just would have been so much better.

Tyrone Shum:   

For Malvern and his sister, it goes to show how perspective shapes who you become. For two people that experienced the same upbringing, they walked away with two different understandings.

Craig Malvern:   

[00:02:23] I know this is where Kimberly's passion and [drive] is coming from. And it probably didn't resonate with me as much. But I remember my dad saying, 'I wish we would have bought this'. We used to go to Forster 25 years ago, and Dad would go, 'I could have bought that, I could have bought that unit for $90,000 years ago', and, 'We were going to buy this and we were going to and we were going to and we never did'. 

  

[00:02:45] And you think 'Well, if you did buy it it's now worth $900,000'. So, you know. And Kimberly, I think, always picked up on that. And I probably never did. Dad was going to buy a pub, 'We're going to do this, we're going to [do that]'. And I think Kimberly definitely picked up on all that. I didn't. But I've never heard anyone say, 'I wish I didn't I didn't do something'. Especially when it's real estate, it's, 'I wish I would have done this' or, 'I could have done this', or, 'I could have bought this in 1960. I could have done this. And look what it's worth now'. 

  

[00:03:22] And I think if you can have that perspective going forward, going, 'Okay, well, yes, I did do it. What's it going to be worth in 10 [or] 20 years?' If you look at it that way, rather than, 'If I don't do it', then you're always going to be okay.

Tyrone Shum:   

His perspective today is that if you buy in the right area, it’s never going to be a lemon, even if you buy at the wrong time. If you hold it long enough, there's going to be a right time.

Craig Malvern:   

[00:04:36] We've built a couple of dual key properties, so we looked at building doing house and land packages. So we could gain the depreciation on the fields for tax. So even though they'd build it as positively geared properties, there's quite a good return on depreciation on a newer home. 

  

[00:04:58] Having older properties too, there is a lot of maintenance with them, you have water heaters, you have air conditioners and those sorts of things, so there is that risk that any day that could be $2,000 or $3,000 costs to replace something. 

  

[00:05:13] So you don't have that with a brand new property. And brand new properties tend to get more rent. And being a brand new property, tenants tend to look after the property a lot better, too. So I guess that's why we went down that track. 

  

[00:05:37] And the two we've got on the go, one's a dual key, and one's just a good size four bedroom home, because the area we're building in is that sort of community. There's not a lot of investment properties in that area. And there's not a lot of that dual living. So it sort of fits in really well with that community.

Tyrone Shum:   

One factor to consider with new properties is waiting for the build to be completed, as this can impact holding costs. However, if you can hold it, the end result can be well worth it. 

Craig Malvern:   

[00:06:44] The ones we're building at the moment, I think, October 2020 is when we were to sign the land contract for one of them. So that's been two years that we've had to hold the land. 

  

[00:06:57] With a lot of the builders, you can get rebates. So a lot of time, there's a rebate, which can go towards a lot of your holding costs at that time. But it does become a cost of doing business. And I guess you've just got to be in a position where you can hold it. 

  

[00:07:14] And the beauty of a few of these is that we have had quite good capital growth on the blocks of land in the time. And I guess what we've done beforehand has allowed us to be able to hold something and then be able to hold something until we get some income, knowing that it's going to have really good capital growth. And once it's built, it's going to pay itself back tenfold. So it is a different strategy. 

  

[00:07:43] And having a sister that's a mortgage broker, too, is a very, very good advantage. And being able to use different types of lenders, and not always just relying on the top four banks, but there are great lenders out there will allow you to do things a little bit differently.

 

[00:08:03] And that's one of the biggest learnings: Don't just always look at a bank. Talk to a broker. The brokers have so many better options than a bank. The bank thinks about them and that's it, whereas a broker is thinking about the client themselves. 

  

[00:08:16] So there are ways and means, especially with construction loans and things like that, to make sure you always, always, always make something work.

[00:08:53] The strategy that we employ is to use the equity to be able to go on and do the next property. If we had to come up with our own cash, we just wouldn't be able to do it. So it's the decisions you've made beforehand that really allow you to make the next decisions. And using the equity from one to move on to the other.

Tyrone Shum:   

When he was bitten by the real estate bug, it did a great job of latching on. From there, he became as emotionally invested as he was financially.

Craig Malvern:   

[00:09:46] I really started to look at real estate and [was] following what was happening in real estate and looking everywhere, et cetera, et cetera. And then having a few mates in real estate and talking to them at the time, I went, 'Well, this looks like the perfect opportunity. I can go to work and really enjoy what I do'.

  

[00:10:03] And also real estate, it's very similar to the hospitality industry. You're dealing with people and customers all the time. So you're not stuck in an office nine to five, you're out and about talking to people and meeting with people, going into their homes. I love going in and having a look at people's homes, what they've done to them. Some of the older homes as well, some big mansions and things like that. So I've just got a real passion for real estate. 

  

[00:10:30] And the biggest part of it, and something that I probably didn't look at when I moved in, is just every day you get a chance to change someone's life. You get the opportunity to sell them a dream home or make their dream their dream come true. 

  

[00:10:46] And when you do— and I think you mentioned it earlier— when you do have a sale, that is such a high that until you've done it, you can't explain it.

  

[00:10:55] There are a lot of lows in real estate and you do a lot of hours for no work. But when something does come off, and you just see someone handing someone some keys, and they're just so excited to move into a new home, that just resonates within just everything, everything comes back to you that at that point and you go, 'Yeah, this is why I'm doing this'.

Coming up after the break, we discuss the importance of seeing others’ perspectives…

Craig Malvern:   

[00:12:30] But it gave me a really good perspective for a lot of my clients to go, 'Okay, well, this is what I've done. This is the sort of property you should look at'.

The time that was a bit bleaker than the rest…

Craig Malvern:   

[00:16:13] We've been very, very lucky. We haven't had too many challenges. During COVID [it] was pretty tough.

He shares why the younger generation have it much better than he did.

Craig Malvern:   

[00:19:17] And so many of Kimberly's kids' friends have come on board and been able to buy a property. And I just think, 'Wow, look at the opportunities they've got at 22 [or] 23 years of age'.

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

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Tyrone Shum:   

One of Malvern’s greatest passions is to help people, which real estate allows him to do. It also allows him to spot some gems for himself to add to his own portfolio, but he’s careful not to take advantage of his position.

Craig Malvern:   

[00:12:04] And being in that situation, if the right property came up then, I probably had other people or other buyers that I'd let know about those opportunities as well. So I think I didn't, sort of at that stage we were looking more to Queensland at that stage because of the land tax. And then different opportunities with building rather than buying established properties.

  

[00:12:30] But it gave me a really good perspective for a lot of my clients to go, 'Okay, well, this is what I've done. This is the sort of property you should look at'. And still I've got a lot of clients from those days that are really good clients of ours that have gone on and built dual key homes and newer homes. 

  

[00:12:45] And that just sort of gives you an advantage, I think, in that industry. Especially when you're talking to investors, you can talk on a different level on what they're actually looking for. And most people I've found really don't know what they want. But you can help them discover what they want. And when you let them know what opportunities are available and what's around, and when that perfect property comes on the books and you ring that person and say, 'Hey, you have to come around and see this property now, because he's exactly what you need', that's the best part of real estate.

Tyrone Shum:   

He was at his previous real estate agency for nine years, and leapt straight into sales.

Craig Malvern:   

[00:14:05] Before we started Linder Group, I'd never done any property management. So I learnt very quickly what property management was all about. And [I'm] still learning every day. Because it is different based to sales. But no, purely sales in the Penrith area.

  

[00:14:41] And to me, it doesn't matter if it's I'm leasing a house out or I'm selling a house, I still get the same buzz. And one of the things I really pride myself on in property management is I can see from an investor's perspective how important it is to get your tenants into your house and get them in as quick as you can. 

  

[00:15:04] And that's one of the things I really pride myself on, is getting— if someone's moving out of a house, well, how do we get a tenant in here as quick as we can? So there's no loss of income to the owner. You know all those little tips and tricks and those sort of things from dealing in sales and being in it for so long that, okay, well, we can we can make this work.

  

[00:15:28] So I guess I've come to property management with a completely different perspective. And not a lot of property management baggage, I guess.

Tyrone Shum:   

With over 130 properties that he’s managing, he has no fewer than 130 stories to share.

Craig Malvern:   

[00:16:13] We've been very, very lucky. We haven't had too many challenges. During COVID [it] was pretty tough. We had a lot of tenants obviously that couldn't work and pay their rent every week. And that sort of thing. So they start to fall behind. But we've been lucky, we've had some really good owners that went, 'Okay, it's COVID, we understand'. 

  

[00:16:40] And if people are genuinely having problems, most people are quite [accepting] of that and they'll work with them. We had someone who fell quite far behind, about $6,000 behind in rent during COVID, and they've now caught all their rent up and they're one of our best tenants. Just someone that COVID just hit them that bad that they had no income etc etc. But yeah, haven't had too many dramas. 

  

[00:17:12] You get the day to day things, silly things to do with air conditioners and light switches and light bulbs and those sorts of things. You know, people ringing on a Sunday, saying, 'I need my light bulbs changed'. Just all those little things that, I guess, they can do your head in at some stage if you look at them the wrong way. Which I tend to do sometimes. But once again, it's like any job you do, it's managing people and being able to manage it the right way.

Tyrone Shum:   

When it comes to working with his sister, Malvern appreciates that it feels like it’s all come full circle.

Craig Malvern:   

[00:18:02] And I guess when we sat down three years ago, it was, 'Okay, well, how can we make this a full circle thing? How can we be a one stop shop for all of our existing clients?' Which Kimberly has thousands of over the years. So how can we be that one stop shop?

  

[00:18:21] I guess our tagline is Linder Group: Property made easy. And that's what we want to do for people, we want to make property easy. Because it's not a hard thing if you know what you're doing, and you've got the right tools, it is very easy. And it's not just for investors or landlords, it's for tenants as well. 

  

[00:18:39] So one of our biggest things is we love to educate people. And we've got so many young people now that are buying their first and second properties through an investment arm and that gives us the greatest pleasure. 

  

[00:18:58] My son bought his first investment property last year. Which is a dual key property up in Gillieston Heights in the Hunter area. And he's got enough equity now he's going to do his second one, which is over in Perth. 

  

[00:19:17] And so many of Kimberly's kids' friends have come on board and been able to buy a property. And I just think, 'Wow, look at the opportunities they've got at 22 [or] 23 years of age'. When they get to my age, which I'm 52 now, if I would have been able to do that at 22, oh my god, what position would I be in now? I just think it's absolutely fantastic. 

 

[00:19:43] And that gives me the greatest pleasure, seeing these young people [and] going, 'You know what? They're gonna have a great life'. They could stop at two or three properties, they could get to Kimberly's point and have 40 odd. But they've started that journey already. And they see the power of property and the power of where they're going to be in 10 [or] 15 [or] 20 years.

Tyrone Shum:   

Much of the younger generation says that it’s too hard to get into the market and they don’t know where to start. Thankfully, Malvern has a solution for all of them.

Craig Malvern:   

[00:20:35] And kids these days seem to have a lot of disposable income. They are earning good money, especially all the young tradies and plumbers and things like that. But they just don't know what to do. 

  

[00:20:46] They don't have the education. And that's all it is. It's knowing and trusting a process. And once you know and trust that process, it can be quite easy.

Tyrone Shum:   

Despite his connections, he isn’t one to take others’ knowledge without learning all he can himself.

Craig Malvern:   

[00:21:30] I've never been a massive reader, or a podcaster. Sorry about that. But I do look at magazines and things and read a lot. I now do a lot of research online. realestate.com and read up property investment articles and things like that, but I never use that as a resource. I've always sort of done my own research and looked at areas and driven to areas and had a look at them and, and done that sort of thing, sort of got out and about rather than listening and reading what other people have done. 

  

[00:22:11] I guess I've had Kimberly there to guide me for a long way. And what she's done is inspirational, incredible. But I've also had a lot of support from other people in the family, too. That sort of support and just knowing and trusting a process, that's, I think, sometimes more valuable than actually doing podcasts and research and things like that.

  

[00:22:41] I used to go to a lot of seminars and things like that, when I was with my previous real estate agency, but those sort of things used to sort of get me excited for a week or so. [They] get you motivated, but then I never really did anything from that. So it's sort of like an addiction, I guess, it gave you a bit of a high for a week and motivation. And then, okay, when's the next seminar?

Tyrone Shum:   

Accountability and a support system are great things to have, as is a good pair of listening ears. 

Craig Malvern:   

[00:24:10] I guess one of the thing[s] I've always [done] in all my career is [I’ve] always listened to others, and look to the people that are the leaders in organisations and things like that, and go, 'Okay, well what can I gain from someone like that?' and take their advice rather than sort of just going and seeing someone at a seminar. People that have been there done that. 

  

[00:24:38] And I think that's one of the things I've always looked to try and find someone who's been there and had a chat to them about: ‘How did this work? What happened? Why did you get into it?’ And find out the how and the why, rather than sort of reading someone else's opinion or listening to someone else. I think face to face talking to people gets you so much more benefit than going to a seminar or something like that.

Tyrone Shum:   

[00:25:04] If you met yourself, say, 10 years ago, what do you think you would have said to him?

Craig Malvern:   

[00:25:15] Probably the same thing I say to myself now, [which] is: Why didn't you start earlier? Go back and start in early 2000. Buy more property. And just enjoy the journey. It can be stressful, it can be hard. But always look at the end goal, where things are gonna go. It's an ends to a means where when I'm 60, where am I going to be? Is superannuation going to keep me in a lifestyle that I like? No, it's not. So how do we create a life for ourselves moving forward in the sort of 20 [to] 30 years?

Tyrone Shum:   

[00:26:00] And moving forward, into the future. What are you most excited about in your journey, in your property journey, in your life?

Craig Malvern:   

[00:26:08] Retirement and travel, which [has] nothing to do with property, but property will allow us to do that. I guess we're at the point now, where once the next two are built, we'll step back and say, 'Okay, exactly what position are we in at the moment? Can we consolidate some properties? What are we going to want and need to be able to take that next journey in life?' 

  

[00:26:35] We haven't traveled a lot. But we want to really start travelling the world. We've got a trip booked for America at the end of this year. So I'm sure I'm going to really get the travel bug from that. That was a trip I was supposed to do for my 50th, but COVID put an end to that. But that's alright, hopefully, we're going to be in a position where we can  really enjoy what we've created over the last 10 [to] 15 years and getting into property, that's what allows you to have that lifestyle that you're going to enjoy.

Tyrone Shum:   

[00:27:11] What are some of the places that you'd love to go to as well, besides America?

Craig Malvern:   

[00:27:20] We want to go over to Italy [and] Greece. We do love cruising. Just  cruising anywhere, at any time. So mostly America, Hawaii, we've been to Hawaii. That's probably about it, I guess, at the start. I want to go and have a look at Canada. But I guess once I start doing some more travelling and doing a bit more research, there'll probably [be] other places to go yet. We have to go and see those areas.

Tyrone Shum:   

[00:28:30] How much of your success do you think has been due to hard work, intelligence, [and] skill? And how much of it do you think has been due to luck?

Craig Malvern:   

[00:28:44] I'd say 100% to hard work, and skill. Because I've always said that the harder you work, the luckier you get. I guess that's a motto I've always lived by. And if you work hard, you will get lucky. So I think it all works into the one. 

  

[00:29:04] Yes, we have been lucky. Yes, we've had some periods where we bought at the right time and the market's exploded. But I think with property, it's always the right time to buy. And then wait. 

  

[00:29:20] So I guess there is a bit of luck. You may buy right now and all of a sudden the market crashes, who knows? But in 10 years' time, you're not going to be behind. The property market's going to bounce back at some stage. 

  

[00:29:37] One of the best pieces of advice I've ever got[ten] was: To predict the future, look back at the past. And if you have a look at the past and have a look at how property has performed in Australian history, that'll give you a really good idea on what's going to happen into the future. And if you just trust that it's a long process rather than a short term investment, then you're gonna be fine.

Tyrone Shum:   

History can say a lot about the present and the future, which Malvern knows all too well.

Craig Malvern:   

[00:30:26] The media drives a lot of the property market. And you look at the moment and it's not a great time for property. Record interest, or not record interest rates, but the highest interest rates we've had in 10 years. Banks are going broke over in America. 

  

[00:30:42] So there are scary things at the moment. But as you said, if you look back at 2008, the GFC, what happened and then look at what house prices were in 2008, then look in 2010. And just see how much they kicked. 

  

[00:30:57] And then they kicked again in 2013. And I remember being in the Penrith area where a three bedroom home was $350,000. And overnight, it was $500,000. So it [was] just crazy. And I was ringing clients and saying, 'Hey, I can get you $500,000 for your home, do you want to sell?' And they'd go, 'No, you couldn't', and I'd say, 'Well, yeah, come on the market, and we'll get your $500,000'. And they were upgrading. And yeah, it was a great time. But you just look at that and go, 'Okay, well, that is going to happen again, at some stage'.

Thank you to Craig Malvern, our guest on this episode of Property Investory.