Timestamps:
1:07 | Research Before Purchase
4:42 | Rent Vesting Implications
7:01 | Different Types of Investors
10:50 | Valuable Resources
15:19 | Investing in Yourself
16:20 | Have Confidence
20:05 | Exciting Future
21:31 | Create Your Own Luck

Resources and Links:

[22:09] If you're making these mistakes, you're failing forward and that's a good thing. Rather than sitting still and accepting the status quo. It's like, no, you're not trying hard enough if you're not. You know, like in basketball you will miss a few shots, but it means you just take enough to miss a few as well.

 

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 mortgage broker and managing director of Atelier Wealth, Aaron Christie-David. He will share some investing strategies, including his view on rentvesting. As well as this, hear about the importance of surrounding yourself with the right people and how believing in yourself can have long term benefits.

 

 **END INTRO MUSIC**

 

 

In our last conversation with Christie-David, he explained some mistakes that he made when he first started investing. Now, when looking for a property to buy, he looks at a variety of criterias.

 

[0:45] I'm going to speak to a number of buyer's agents and where they're looking to buy. So, now it's expanding the search and going, okay, how are we going to buy this? What's the intention? So, do we look at subdivisions? Do we look at doing a building on it? You know, knock it down for duplexes. So, we'll go through the motions of going through our chats with our accountant, financial planner, we've got our numbers sorted.

 

[1:09] Sometimes we just need to pull the trigger and make the damn decision on what we're going to buy. But yeah, we, I feel like we've got to this point and like anyone, you get a little bit gun shy because you're like, look, things are working at the moment. Business is good from a cash flow perspective. We look at market risk, just like everyone else and when's the right time but ultimately, it's just fortune favours the brave or make a decision.

 

[1:32] So, I'm really excited about the next decision and again, like I said, knowing what I know now I'm like, give it to a professional. Hand it over to a professional, give them the brief. Don't worry about where it is because that's what we tell our own clients and like we need to take our own advice as well.

 

In his business, Christie-David can see his clients come across dilemmas. In particular, his younger clients have some tough choices to make.

 

[6:59] This type of Crossroads is where it gets with a lot of our younger clients going okay look, you're double income, no kids. So, you've got two options. You buy what I call a stepping stone property. So, it could be a townhouse, for example, or a unit. But you are going to outgrow this. So, what happens when you outgrow it? You've got two decisions. You either keep it or you sell it.

 

[7:19] Versus you buy what I call a stretch property and so you use your income to buy a good house. Now that house is going to serve you for at least the next five to seven years, but you can grow into it. Potentially, you can then do some renovations or extensions but you're not paying too lots of stamp duty. You're paying one bigger amount of stamp duty but it means you've got, you don't have that extra move in you.

 

[7:39] That deposit can then be stretched, for example. But your most importantly, your borrowing capacities when you got two incomes, they going to be great versus the decision when you go to buy typically is now under duress, which is what we're now down to one full time income, maybe one part time income but a dependent and your borrowing capacity is lowered.

 

Having a lowered borrowing capacity is a potential problem for many people.

 

[8:13] You don't want to compromise location because you're like this is where we want to be for our family and I think there's nothing wrong with that. People may judge and go well go to a cheaper location. No, if this is where you want to raise your family, this is where you want to be, how do we help you get there? May not be now, it may be eventually you get there but here's the pathway to get there.

 

[8:32] And that's where I feel like people ask me what business we're in, we're in the confidence business. To go this is how you can do it. These are your options. This is how it can be done and as long as we can show people a roadmap or a journey or a pathway to get to where they want to, they know what they're working towards. And I'm, look rentvesting was great.

 

[8:52] It served us at a certain time in our place. But just knowing its limitations, is I feel like where we need to open that chat up a little bit more to go, okay, just have a think about what happens if you then go to buy your own home. And then which properties may you have to sell, or highly leveraged to try and pull that cash out? Because where is that cash going to come from to buy your own home? And that's the question a lot of people can't seem to answer.

 

 

Although rentvesting can be a viable option for some, others are starting to shift away from the idea. Let’s explore the drive behind this shift.

 

[10:08] Property acceleration, property price growth acceleration has just, the challenges is typically those type of sharp prices being reserved for say, Sydney, Melbourne and Hobart monitored as well. But when you've got like, the Sunshine Coast, the Gold Coast, Adelaide, Perth going through the same motions, like, you can't seem to escape it.

 

[10:29] So, you can say, rent where you want to live — Yeah, mate but the rents are through the roof across the whole country in lifestyle areas. So, rent where you want to live, typically you choose a great location. By the beach, in a city, whatever it's going to be — sea chain [or] tree chain. But those areas are through the roof, even to rent. So, renting where you want to live now has its own limitations. And then buy where you can afford, well then affordability just kind of took the backseat because again, the whole country was on fire.

 

[10:59] So, it's like this double edged sword for a lot of people. It's like, and then with rates so low is actually parity between renting and the mortgage repayment. Which hasn't, that hasn't been around for quite some time. So, it's like hang on you could rent, or it could be your own place but this very similar cost. The challenge has been deposits because people needed the deposit to get in. And because price growth just accelerate so quick, no one had the ability to say that deposit that quickly.

 

[11:53] And then the other part of that is people don't want to let the property go because if it's a good quality property, they then want to keep that as part of their portfolio. So, then it's this like arm wrestle to go, okay, so you have to pull the equity out which means you then have a higher home loan to balance versus a lower investment loan balance. It's like contrary but it's like, well, this is the only way unless you had the foresight to make your home loan interest only. Which again, we have that conversation with a lot of people. Like this is why you need to do it if you're going to, if you're going to not be in this home forever.

 

[12:25] So, again, these are all newer conversations that are coming up off the back of some of these stories that we see or experience or that people go through and these are some of the headwinds that you may come across that people won't realise sometimes until it's too late as well. Now, they might be forced to sell that to liquidate to have the cash because no one wants to lug around this giant mortgage either. So, that's one and extinguish the debt.

 

Although he has his own strategies, Christie-David has made some observations about other investors and their strategies…

 

[13:07] From my experience, there's two types of investors. The ones that are just gun ho, they're just gonna keep buying. And then there's, I'd say majority are, I'm just going to wait and see. And that type of intensity from the market has come out a little bit. Rightly so. They wanna see what happens after the election which has been done. And then I was like what's happened with rates and let's see what the flow on effect there is, as well. You know, vendors have price expectations from over a year ago. So, let's just wait for them to negotiate [and] drop the price a little bit.

 

[13:38] So, because we don't have that rampant market anymore, people can afford to sit around and wait. Maybe not in markets like Brisbane and Adelaide at the moment because they're still pretty active. But most of the other markets is, okay, it's time just to cool off a little bit. And so, people are just waiting to see. That's great. That's cool. You don't you don't need to buy a property tomorrow but at some point you need to make a decision.

 

[14:03] And the other part behind this is I'm seeing a lot more of our investor clients now start to be open to commercial. And I feel like that's two parts. One is the yields are great, but also the increased proposition of commercial buyers agents. I feel that's become strengthened and a lot of people are now getting confidence off the back, you know, they got equity property value going up.

 

[14:29] That's the issue always been that commercial is getting the deposit because they've had such a good run on their resi properties, they can pull that out and have a 30% deposit 20% deposit for a commercial property, which is on parity from purchase price for resi property but much better yields. And yeah, I feel like that's the next frontier for a lot of investors going, I could buy resi or I could buy commercial and the commercial seems to be a bit more of a win at the moment.

 

 

Coming up after the break, we’ll hear what resources Aaron Christie-Davis used throughout his property investing journey…

 

[15:46] Resources would be, I mean, this was all when I was back in the day buying property there weren't the Facebook groups.

 

He explains the value of his long term mentors…

 

[17:26] So, someone like I mentioned, Brad Seymour, over when I worked for him under Wizard, he's someone that I've still kept in touch with to this day.

 

He shares the value of a good mindset…

 

[18:19] But the mindset, I mean, that's where the battle is.

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

 

Let’s jump into what resources Christie-David has found helpful along his journey.

 

[15:48] I mean, this was all when I was back in the day buying property there weren't the Facebook groups. They were meet ups, right? Or they will like seminars. And everyone had their guard up at seminars. You always feel like you're being sold to in one of those seminars. And you went to them, but I don't know you went there with almost like, an expectation you're being sold to being spruit to.

 

[16:13] So, I felt like that almost gave me, what's the word? Maybe a false BS radar because some of them were very good and hindsight show that they were, they had the goods, it's just how they went about it felt very salesy. And the buyer's agent proposition just wasn't a thing. It was only a handful of them. So, I didn't even know they existed, right. So, to me, I'm like I had a few good friends that were buying property, again, we were younger. You know, there was some good examples about how to buy but I think what happened was, they bought but they gave up their lifestyle and being 20 something, I was like I'd rather have the lifestyle.

 

[16:54] And again, I'd travel and party and I bought an expensive sports car. I made all the mistakes but I guess I got that out of my system as a young wine as well. But I was very fortunate. I feel I've gravitated to business maybe a little bit more than property and that's probably why [I] invest a little bit more in our business as well, because I can control the returns or the performance of this business. And I think that's where your mindset question comes into it.

 

One particular resource that Christie-David found to be valuable talks about surrounding himself with successful people.

 

[17:26] So, someone like I mentioned, Brad Seymour, over when I worked for him under Wizard, he's someone that I've still kept in touch with to this day. And he can give us a nudge, we have a great business coach as well. I hang around top brokers, for example. I want to surround myself with people that are doing well and I, from a mindset perspective, I feel like it's important to give back to our industry. I do coaching for newer brokers because I've been very fortunate to make it past the first three years, which is the danger zone in mortgage broking, and in small business as well.

 

[18:01] So, I feel like there's so many people that have helped me on my path. There's so many big, big brokers, top brokers, successful businesses that have opened their door to me, shown me here's what you need to do, hard work and to be smart, here's what you need to do. And so, I feel like now it's my role to then pay that forward a little bit as well and pass the baton on.

 

As well as being surrounded by great people, Christie-David also thinks that you need to believe in and take care of yourself.

 

[18:19] The mindset, I mean, that's where the battle is. That's where, I don't want to use a war analogy, but I mean that's where the that real, that's where it's won or lost. You've got to believe in yourself, you've got to back yourself, you've got to know that you can deliver for people as well and the next part of that is in having a good quality team around you. And I'm really fortunate that the team that we've gotten the team that has evolved to what it is today, they're a team of winners and we think that people trust these people come to us.

 

[18:19] Hey, man, we're not perfect, we may lose a few clients along the way. That's cool. That's all part of life. And I think we're open to having [a] chat about the wins and the losses as well. That's all part of that mindset and how do we grow? How do we get better? You know, Bernie and I we've done personal developments. Put a lot of time and effort into a Tony Robbins, for example. Into our own well-being and I feel like the next iteration for us is now the wellness side of it.

 

[19:25] You know, really good success in business and as brokers. Now we need to make sure that we don't burn out and I feel like our team of experts are a little bit more woo woo these days. Kinesiologist, Bernie sees someone in Reiki, I've got an acupuncturist for example [and a] personal trainer. Now, it's all about well-being as opposed to we've proven our path as business owners and as brokers. But now to stay at this, call it an elite level, you need a different type of energy around you as well.

 

Maintaining self care and investing in yourself is crucial when working towards a goal.

 

[20:38] What's the point in having success if you're not happy? What's the point of having the money if you can't enjoy it? What's the point of having family if you can't be active or being engaged? For example. So, yeah, I feel like the journey that we've gone has taught us, okay yep, you can do things for money but if that's the only motivator you're not going to feel that sense of fulfilment. And you see that when people have properties, we've got some clients who've got mega portfolios and we've got clients that got a couple and they're very happy versus one that I've got bigger portfolios.

 

[21:09] I don't know. Like, they're still pushing for more. It's like, hey look, let's just be grateful for what we have. We live in this amazing country, we are blessed with the lifestyles that we have. This is a country that rewards if you want to work more, you want to work harder, you will get the spoils. But if you want to enjoy and go to the beach, and knock off early and go for a surf, you can do that, too. It's like what an amazing country that we're in.

 

 

Christie-David has learned that it is important to believe in yourself, and this is the advice that he would give to his past self.

 

[23:14] Like, probably ... with confidence. Look, I think it channels that energy but also, and there's probably a saying that I live by these days, which is 'if you want to go fast, go alone. If you want to go far, go together'. And I'll probably say, I feel like I've always hired too late in our business and like, have that confidence to hire early and hire good quality team members would be my suggestion to my younger self.

 

[23:48] And yeah, don't overthink it. That's probably something that you hear a lot of people say. Don't overthink it, just do it and sometimes they do get stuck in third gear, for example, and say, no, no, just push ahead and go straight to fifth gear and having that courage to back yourself a little bit.

 

[24:06] Well said. Yeah, that's really good. I'm curious, just to want to sort of delve into asking the question. When you said higher earlier, when you mentioned that, [at] what stage though did you realise okay, maybe I should have hired this person early in the business?

 

[24:37] Yeah, cash flow aside, I probably and I was really lucky that Bernie gave up her career to join the business. Yeah so, technically, we hired but hired because she felt sorry for me. She knew I needed the help, right. It's a different one. But yeah, team members to help from a support perspective, you know. At the start you do the high value client work, for example, but support team members, even if it was a part time capacity.

 

[25:11] So, I might know my hourly rate and if I'm doing something that's below my hourly rate, can I find someone that can do that work? For example, picking up the phone all the time. Like it was just constantly interrupted. You couldn't be in flow, you couldn't be in any type of deep work because you're constantly just picking up the phone. It could be a bank, it could be a new client. Whereas if I had learned earlier just to go can someone just answer the calls, and I'll get back to them and batch my calls, for example, that would have been a smarter move in hindsight.

 

[25:37] So, taking someone on even a part time capacity because we think we've got to hire someone full time, get them in the office, and we're gonna work — well start them off part time. Like, that's what I could have or should have done. The penny dropped for me Tyrone was when I was like trying to hire again, more so recently, I need them today but technically, they're not going to be my business for [the] next three months.

 

[25:58] You know, you got a month to job ad, recruit, interview, then make the offer, go through the motions, then they've got to give their 30 days’ notice and then they're gonna need a month to onboard with my business and actually learn. They're not actually in any type of rhythm for the first two or three months anyway. So, like, I'm going to hire now but I don't actually have a resource in my business kicking goals for the next three to four months.

 

[26:24] And so, like, hang on, yeah hire fast. So, you hear this saying like, 'hire slow, fire fast'. I’m like, 'hire fast, fire fast' for example, would be my spin on it. Because yeah, you need them and it's like I call hiring a bit like dating. You don't know if you're right for each other until you're in it. And it's not to say it's just easy to flick anyone off, but it's like they sometimes aren't right for us and we're not right for them and be okay with that. And I feel like yeah, in hindsight, let's bring them in. Let's just keep trying to find the right team members that love what we do, and we love them as well.

Looking away from the past, let’s hear what Christie-David is excited for in the future.

 

[28:17] Super excited. I think on a business side we are looking to expand and we'll go through really good bringing on some brokers and we've got a good support system for brokers that we're looking to bring in. So, bring myself into a bit more of that trainer leader role and then bring brokers in and nurture the next round of brokers and the next generation of brokers.

 

[28:41] Five years, I look at it, I feel like we would have at least 3 or 4 properties that were bought over that next period as well. And then the next part is probably taking an extended break in there. So, before our girls start school been speaking about taking a couple months off, for example. We can still run the business. You know, put it out there and when you talk about it, you know, you either have to make it happen or you fall flat on your face. But yeah, I don't know we have spoken maybe we could live in Bali for a month or two.

 

[29:13] It's just like let's just live this lifestyle. We can still run the business, for example. Have the best of both worlds. We get to spend time with our girls before they go into school but that to me, I'm like that just gives us something to work towards. Okay, how do we engineer the business to not have me in at five days that I know what I'm doing but also the team is empowered to make decisions and help our clients if I'm not around as well and that's a good place to be.

 

[31:35] So, Aaron, you've achieved a lot and you run a successful business, you've got properties in your portfolio. How much of that success is due to intelligence, hard work, and skill? And how much of it do you think is because of luck?

 

[31:51] I tell this to clients when they say, oh, I got lucky. I'm like, no, no, you created your own luck because you made a decision. Yeah. So, to me, it's not luck. Yeah. Yeah, particularly the business side, you had to roll your sleeves up and get it done. So, that was all hard. That's hard work. It's blood, sweat and tears. The property side, look, you could buy at the right time and ride the wave.

 

[32:17] So, there is an element of being in the market but you still had to make a decision to be in the market and everything leading up to that point. So, our finances in order to do the savings. So, you had to create some luck as well and sometimes it's the market. And same with my business. The property market has been exceptional. So, I just had to be here but I also had to ride the wave and have the team and the support as well.

 

[32:27] So, there's a small element of luck but I'd say 90% is rolling your sleeves up and making decisions and living and dying by those decisions as well. You make a bad decision. That's cool. Fix it move on. And I feel like that has been, that's our secret sauce. Things haven't worked out well from a hiring perspective. Learnt it, move on. Things haven't worked from mortgage choice. That's alright. Learn, move on. Things haven't worked out with the software. That's it, learn [and] move on.

 

[33:10] I feel like if you dwell on what's not working, you can't move forward. Whereas if you just go mate, don't worry about it. Let's move on. And Bernie is really, really good at that going that didn't work, let's just cut it and move on. And I feel like you need that ying and yang energy. Where if it was just me, it could really sting.

 

[33:30] Whereas having Bernadette, Damien, team members around where it's can lift each other up a little bit, it's like that's where it just goes, yep, we're all in this together. Let's move forward. And we tried it. It didn't work. We tried it, it worked really well. Let's do more of that. And I feel like yeah, business can be particularly lonely, especially if you're the one making all the decisions. Whereas if you can share that load a little bit more with a good team, it makes it so much more enjoyable.

 

 

Thank you to Aaron Christie-David, our guest on this episode of Property Investory.