In this episode we continue speaking with Scott about his biggest motivations for success, the hurdles he has faced along the way, and how he has overcome the fear which stopped him from investing for so long. 

(19:05) Property investing is going to bring in a lot of emotions that are going to come to play, and I feel that if you can master your emotions, you're gonna make wiser better decisions, and then you actually can transform yourself into an action taker.

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 continue our conversation with Property Investor and Entrepreneur Scott Kuru, who has a property portfolio of almost 20 properties, and has founded three major successful companies in Australia. Kuru has achieved his own financial freedom and is now committed to helping you find yours. 

Scott Kuru has a property portfolio of close to 20 properties, and he has faced his fair share of challenges to go along with them. 

(0:21) I think the biggest challenge was when I had one particular property or really wanted this property. It was a great property. And I was maxing out on my borrowing capacity. I had like a lot of banks telling me, ‘No, you can't get financed for this’. So really, the tough thing for me was, I committed to the property. Even though I was being told I wouldn't get financed for it. So I put the deposit down, I just went screw this, like, I'm gonna somehow make this happen. I put the deposit down. And, you know, then settlement was coming around. And I had to talk to my tax guy, I had to balance things out on the tax side, or the balance things out on the income side. And then when it came close to settlement, I literally had to run around so many different places, to be able to settle on this property. And ultimately, I had to pay like a ridiculously high interest rate, I had to go to some lender that was going to give me 2 [or] 3% higher interest rate than what I could get in the market, but it meant that I could get the property. 

(1:28) So that was really, really, really tough because I was going through all the different lenders, and they're asking for documents and proof of this and proof of that. And you know, all of these requests for information and all this kind of stuff. So that was like a huge amount of stress. Because I had a date that I had to settle. If I didn't settle on that date, I was gonna start getting penalty interest. So we're talking, you know, a couple of thousand dollars I think it was from me, it was a couple of thousand dollars every week, but I didn't settle on this property. So that was probably the most stressful one. I ended up settling on it on a really high interest rate, waited six months, paid the higher interest rate within six months, and then I was able to refinance down, like onto a proper competitive loan. So that was probably, I guess, the toughest one for me. The properties that I've wanted, that I didn't want to miss out on. You know, I had another opportunity. I typically don't like apartments. But, you know, I had a deal that I came across where this apartment was discounted by 80 grand, basically, some overseas Chinese investors had put down a 20% deposit on it, and had literally disappeared.

(2:42) The developer, you know, just through the different contacts that I've got in the industry, and this is what we do for our members. But the developer basically had tried so many different ways and gotten legal advice. You know, we've emailed, called, we've done everything. This buyer has literally disappeared. And then they had some different things and needs for the money that they had. So they just said, ‘Look, we just need a buyer to come in, we need to sell it fast’. And the market at that time, because this is an apartment in Brisbane. And you might even remember Tyrone you know, if you go back, say what was this now three or four years? You go back three or four years, there was a so-called oversupply in Brisbane. The vacancy rate on those apartments now is down below 2%. Vacancy rate was about 8%. 

(3:28) So there was an oversupply of apartments. These builders, developers could not sell them, no one was buying them. And he had this Chinese buyer that had bought one and disappeared. There was 20% in the deal. So I said, ‘I'll buy it for your price, less 20%’. So yeah, it was an $80,000 discount, but again, I had problems. I didn't have much liquidity at that time. So what do I mean by liquidity? I didn't have a lot of cash laying around at that time. Because you know,  I had gone on a shopping spree of property. So people have to understand my mindset. Like I went to the reverse, I was very scared on my first one and then I went crazy. 

(4:10) Like crazy talking about what you bought.

(4:14) If I had anything more than $5000 or $6000 in my account, I would put it into property. So I built my property portfolio. Sometimes my bank account would go down to $2000, $3000, $4000, $5000, and when I did that apartment deal, when I did it, I had left in my name about $5000, right? I didn't have our multi multi million dollar business. 2000, I didn't have that then. So I was taking a big risk, but I wanted the deals because I knew that I did these deals, the cash flow came in and it would repay me so I just took all the liquidity I had out. I put it in to secure it, I hadn't got the finance secured, or had to sign a contract that fully locked me in to be able to do it quickly, because so many other people wanted to come in and jump in on this deal.

(5:15) And they didn't want it without the 20%. But once it was 20% everyone wanted it, you know, the brother-in-law of the developer wanted it. So I did that, I took that risk. I went out, I did eventually figure out the finance. So probably my biggest challenge has been in growing my portfolio. My portfolio has been getting the loans and getting the debt, because I would have loved to have grown faster, I would have loved to have grown bigger. But my cap was always how much I could borrow. So I would love right now to get a loan for a trillion dollars. Like I'd love to get a loan. Sometimes I run into people and they go, ‘Oh, isn't that a big loan? That's scary’. I'm like, ‘I would love a loan for a trillion dollars’.

(6:01) You can imagine how many properties you could get for a trillion dollars!

(6:10) And then I had another one where it was actually a very similar deal. I was overseas at the time I did the deal. And the problem was that I couldn't complete the deal, because I needed to sign this contract in the presence of a lawyer or something like that. And they wouldn't accept an overseas lawyer. So I was going to miss out on the deal. I literally cancelled the holiday, I was gone, and flew back to get this deal. So that's how hungry I have been. If you want to know how anyone that's gone from, you know, two, three properties to like, 10, or more than that... That's the type of hunger you have to have. 

(7:03) Dedication and persistence.

(7:04) ‘I'm on holiday, man. I'm gonna miss out on this deal? No way. Over this dumb holiday!’ You know, and I'd called about eight, nine different solicitors and lawyers. ‘How do I do this deal? I've spoken to the bank, I was trying to get their paperwork change, they had this really stupid rule’. And yeah, I couldn't do the deal unless I flew back. So I flew back. And it was done. And I did it.

Kuru has had some hairy moments in the past. But what about the good stuff? I asked him what he remembers as his ‘aha’ moment. 

(7:55) I think the aha moment was when I took the massive action, like when I did my first few properties, and the big aha moment for me, because my big worry was, ‘I've got all this debt. So who's gonna pay it?’ And then when I got my first property, and I had the rent come in, and I got the rental statement for the first property, I'm looking at it and I went, ‘Hey, wow, that's real money’. And then you know, you log into the bank account, you see your wallet, there's money there, so I went, ‘Hold on, this actually works’. So that was like a big aha moment for me. And then the other big aha moment was when I did my first tax return. I did my first tax return, and I'm sitting down, I'm learning about things like appreciation and all this in the world. You know, I'm sitting there.

(8:37) And then I get my first tax return. And I go, ‘Damn, that's a big chunk of money back’. So those are two big things. And then when I started getting revaluations on property, and then I'm revaluing that one, or that's increased, you know, three months or went up by $30,000. I went, ‘Wow’. And then, you know, a year later, that's gone up. ‘$80,000? Oh, wow. This is great.’ So I think when the theory became real, it started. And I was like, ‘Damn, this works’. That's why I'm like cancelling overseas. I'm running around begging banks, ‘Please give me a loan’.

(9:27) You did whatever it took to be able to get those deals. And now, you know, obviously where they are now has actually helped you build that portfolio because it's compounded time. You know, 10 years is quite a good solid amount of time. That's at least one close to property cycles, actually, when you think about it. So you've seen so many great gains from it.

(9:45) Yeah, yeah. Time is really important. So yeah, the time goes really, really quick. You'd be surprised how even now though, some of these experiences, I'm just being reminded of them now. And if you think back the things that you did, you're grateful that you took action, you know,

(10:04) Yeah, clearly. So you've built a portfolio up to say 20 properties. What's been sort of the mix of the properties, the purchases? Then maybe let's talk about your strategy. It sounds like when you first purchased those properties, it was like a buy and hold, and then you pull equity out and you leapfrog into the next one. And you keep doing that. What's been your overall strategy since then, because to build it up to close to 20 properties, it's not just something you just go and buy and hold, and you do it over the next 10 years or something like that easily. You have to actually have some kind of specific plan to be able to achieve that.

(10:34) Yeah, well, my strategy is just to get, number one, undervalued location, and then get an undervalued property, because a lot of people talk about how to fast track your gains. They talk about manufacturing equity. So what that means is you get a property, you make some adds to it, some changes to it, you add a granny flat, or you add a second story or you renovate or something like that, you revalue it, and then the price becomes higher. Now, I didn't have the time to do that. I didn't have the expertise to do that, that took more cash. And I'd run all the numbers on it. And I said, ‘Alright, if I get one property and put more money in it and make some changes, and maybe possibly, possibly maybe get a higher revalue on it’.

(11:18) And I put all that time into it, which I didn't even have, so I couldn't even do it. I thought, ‘I don't really like that’. But when I looked at the strategy of getting an undervalued suburb, an undervalued property in an undervalued suburb, then that suburb, if you look at the trend line and growth, what I'd also found through Lianna’s research is that most of the growth for a suburb, 70% of the growth for a suburb came in 30% of the time. So she'd run all these numbers. And she'd worked out based on a number of really complicated factors, how you could pick an area that would have that long term growth trend, but the bulk of that growth would be within the first one, two or three years of me owning that property. 

(12:08) So what we were trying to do was to position a property in an undervalued suburb and an undervalued property in an area that we felt was going to have more immediate growth, not growth out into the future. So we did that. And so that's still our base strategy today. And then I was able to create equity that way, not through the manufacturing, I'm not talking hundreds and hundreds of thousands of dollars, but I'm talking, you know, maybe you can make a $30,000 equity there, get a tax refund of $9000 there, another $12,000 of savings. Alright, there's the deposit for property number two, so if you can keep repeating that, you can move.

(12:48) Now, when you get your first one or two or three properties, it's pretty slow. But when you've got say, three or four or five properties, and they're kind of growing like the equity or the growth across the four [or] five, the tax deductions across the four [or] five, so it becomes exponential. So you know, one becomes two, very slow, two becomes three, quite slow, but three can become five a bit faster, and five can become nine, a little bit faster. So that was my base strategy. The other strategy for me was to always keep the cash flow positive. So as much as possible, I mean, sometimes there were deals, but if we can do deals, when you look at the property, and you go, that's not cash flow positive, with the asking price today, but if we can get that ask asking price lower, then we can turn a non cash flow positive property into a cash flow positive property, not through a renovation not through anything like that, but through using my mouth.

Kuru puts it into perspective using some basic numbers. 

(13:47) So, you know, we use a bit of data to find where are the areas where we can sort of strike a deal like that, and then just, you know, use the mouth, like a half hour conversation to do the deal. Not 10 weekends of slavery, doing the renovation. So that's pretty much been my strategy. Now, this will not turn you into a multi millionaire in the next five years. But a strategy like this, if you're looking at market averages and things like that, probably an average income earner could, if you get at least, you know, a market growth rate of say, 7–7.5%, if you're able to create equity along the way, then you may be able to create something like one and a half million, two million, two and a half million over like at least a 10 year period. If you wanted to create more than that you need to give it more years. So if you want 3 million, 4 million, 5 million, well, you probably need a 15 year investment window or you've got to have a higher or above average salary or income so that you can borrow more and put more assets into your portfolio earlier on. 

(15:01) But typically what I see, because right now I'm seeing like over 200 people every single month join our community. Me and Lianna are right in there, we help them out with their strategies. And yet, typically, you know, I think a great outcome would be one and a half million to two million over a 10 year and over a 10 year investment window, minimum. And I would say to anyone that thinks that doing better than that through any strategy, renovating, doing whatever, anyone who thinks they can go from like a normal income, and a normal amount of savings I’m talking $50,000 to $100,000, anyone who thinks that they can do probably better than that.

(15:46) As an investor, you really can't. Now there's another way to be in property. The other way to be in property is to have property as a business. So like, I would say, someone that's buying property, renovating it and selling it, that's a business. Or I would say someone that's doing developments, many developments or larger developments, medium sized developments, that's a business. So it is possible to make more money than what I've just said, as a business. But if you're what I call an ordinary investor, and so I'm talking about someone on ordinary income, ordinary employee, ordinary savings, then, you know, target something like a couple of million dollars in 10 to 15 years. And if you can actually achieve that, that is massive, because if you set up your chief 2 million in 10 years, well, that could be 4 million, 6 million in 20 or 25 years. And if you're getting started in this journey at around 40, then by 60, you can be a multi-millionaire, if you're getting started at 40, in whatever time by 50. That's possible. And if you're getting started at 30 or lower, then you could be a multi-millionaire by you know, 40 [or] 50.

Coming up next, we discuss the mindset which enabled Kuru to expand his portfolio.

(17:45) So the discount you're getting on the way in is not the big thing, the big thing is going to be how does that property perform.

He shares the advice he would give to his younger self.

(23:31) Ten years ago I was stressed out, I was worried, I was fearful, I was anxious. I was worried about the future. 

he reveals the details of his strategy and which kind of investor it’s designed for. 

(20:43) Now there are many strategies in property. And you know, all of them do work to varying levels, but you have to find the right strategy for you. 

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

Welcome back. Kuru suggests a realistic plan for those he would call ‘ordinary earners’. 

(17:06) As an investor, as an ordinary earner, ordinary savings as an investor, typically trying to aim for more than 2 million in less than a 10 year window. Very hard to do. You have to be very, very fortunate, even with all of the negotiating discounts, because if you think about it, you’ve got a half a million dollar property, you negotiate a $25,000 discount in the whole big scheme of things. But when people really learn this math, in the whole big scheme of things, that's nothing. That doesn't get you any further. So I would rather get a $500,000 property with no discount, and get an 8 or 9% growth on it, than get a $500,000 property with a $25,000 discount with a 5% growth on it.

(17:45) So the discount you're getting on the way in is not the big thing, the big thing is going to be, how does that property perform? And typically it's going to perform based on the location that it's in, and then the quality of the property of the location, but I hope your audience can understand... Because what'll happen is, if you've got an unrealistic expectation, or if you're desperate, you've made yourself desperate through your mindset, you're in this desperate mindset. If you're later on in life and you're desperate, what will happen is, you'll go to these events and you'll get stitched up. Because you’re desperate. 

(18:24) And you make poor decisions based on some of those things due to emotion rather than facts and figures. I've got a few more things I wanted to just touch on as well. You mentioned mentors, Lianna has obviously been extremely extremely important and crucial to support you. Have you sought any other mentors? Or did you have any mentors you could share along the way? And what's been the impact on your whole journey?

(18:48) Yeah, I think a real big mentor for me has been Tony Robbins and if you don't know Tony Robbins he's not particularly a property person but he's definitely like a mindset person. Some of this helps you to stay positive you know, because you know like property investing is going to bring in a lot of emotions that are going to come to play and I feel that if you can master your emotions you're gonna make wiser better decisions and then you actually can transform yourself into an action taker. So I really look up to Tony. I've done a lot of his programmes and courses. I watch him a lot on YouTube. And I'm really inspired. I'm really inspired by Tony. And then you know, Lianna has been like a really good dear friend. I mean, she's got a unique skill with the data and I mean, that's a real tangible thing. And then just as a friend for someone to give you, you know, reassurance. Sometimes you need that so, you know, definitely you know, those have been the two big people that have really helped transform my life in terms of my property.

(20:00) Also to talk about, I guess, resources along the way. You've said you've pretty much attended all those courses, you've learnt so much. At this point in time, do you have anything that you think you could share with the audience? Which is a fantastic resource that you have actually thought of, that, you know, has impacted you and has been able to help you along your journey?

(20:18) Yeah, well, what I've done, like, together with Lianna, we thought, ‘Look, what can we do?’ Because we don't sell courses and things like that. But obviously, people want some information, some education. So we put together a really powerful live event. So we run this event, you know, a couple of times during the month, and it's a two hour live event. And what we actually do is we step people through our exact strategy. Now there are many strategies in property. And you know, all of them do work to varying levels, but you have to find the right strategy for you. So on to our live event, we actually break down step by step, our exact strategy, what we do. And again, our strategy is more for a time poor, ordinary investor, that's aiming, you know, to reach financial freedom, like in a realistic window. But not maybe get it… Definitely get it. In a 10 year, 12 year window. So that's a really powerful experience. Yeah, if you can make it along to that.

Kuru shares the most influential book he’s read, and suggests all of you read it too.

(21:34) I think a really good book that really helped me, I read this book years and years and years ago, there's a guy named John Lindeman, and he's written some really good books about the property market. And it gives you a really good historical perspective on what the market has done, what some of the key drivers are of the market. So he'll give you a really good base fundamental. So I just say that is really good mandatory reading, for anyone that wants to invest. So John, I think now he's got two or three books out. So I'm talking about his original and first one, I would absolutely, definitely read that. It's mandatory reading for anyone that comes and joins us as staff here at Freedom Property Investors. I go, ‘Well, I actually got copies of it, you know, take this book’. So absolutely read that. But anything, anything from John is really good.

(22:20) Yeah, I've had John on the podcast, he has been amazing. And the knowledge and, you know, the research he does is just phenomenal. He's very, very meticulous, and also very factual as well, which, you know, allows him to be able to make the right decision. So he's done really, really well. That's great. And also, what do you think's been the best advice you've received?

(22:39) Oh, wow, jeez, that's that's a tough one. That's a really, really tough one. Best advice that I have received? Well, probably Lianna, look, if I can be honest, like Lianna basically bullied me to get my foot in the door. She was like, ‘You are a moron if you don't buy this property’. I'm like, ‘Really?’ So I think it was her bullying me to do my first one. Because if I hadn't done that first one, I wouldn't be where I am today. So you know, those first few steps are the most fearful or the most gut wrenching, but you know, they're the best ones. They're the best ones. So I'll hand that one to Lianna.

So what advice would Kuru give to himself, if he could go back 10 years? 

(23:28) Well, you know, 10 years ago I was stressed out, I was worried, I was fearful, I was anxious. I was worried about the future. I would have said, ‘Scott, look, enjoy everything that you've got now. Be grateful for what you have and really enjoy it. It's gonna be okay and you're doing great. You're doing really really great ,everything's gonna be okay. Enjoy your kids, enjoy the ages that they are, even enjoy your job that you hate so much, even find things there to enjoy’. I would say like literally enjoy it because I was so worried about the future and time and succeeding and getting more money that I put a lot of energy into that worry and it just took some of the shine out of life, I really enjoyed all those times but you know, it just took some of the shine off it because of this worry.

(24:17) And I would also say to have more courage, take more action, just take more action, because I was so... Not making a mistake was more important to me than having success, if that makes sense. So I would rather, at that point, I would rather not achieve much but not make a mistake, than make a mistake, but have success. So I really changed my target subconsciously. I didn't realise this was going on. Subconsciously I moved from waking up every day saying, ‘Scott, don't make a mistake, don't make a mistake, don't make a mistake’, I moved from that to ‘Scott, get what you want, get what you want, have success, move forward, take action’. So it's that shift in the mindset that I, you know, encouraged myself or coached myself to do. 

(25:17) Wow that's, that's amazing. I resonate with that, because I think about the fear that holds us back, it's usually fear. And you just don't know what's up ahead. But it's when you start taking that action, then that fear starts to subside, it sounds like that's what happened over that period of time, it just with all that action, you know, it just kind of alleviated all of it. And there's not much to worry about, as you said there. So that's a really, really good response. Let's take a step forward, you know, looking at five years, what do you think you're most excited about in this next five year journey that you've got here?

(25:50) I've achieved my financial freedom. I'm gonna keep investing, obviously, I love to do that. But it's transformed for me now, because I've reached that point where I am free, I do feel safe achieving those things. And I feel like I've won the respect of, you know, my family, my children, and they're safe. So, you know, my life now is more about building a legacy for my family. And it's more about, you know, building a legacy for all of the members and all that kind of thing. So what I really, really love now is like, every time I go online, and I don't know how this sounds to people, but sometimes I'll go online, and I'll type in Freedom Property Investors, and I'll go to Google reviews, and I'll just read them.

(26:30) And I really love reading them. Yeah, there's some bad ones in there, that's fine. But you know, there's so many great ones there. And, you know, every single day, there's new ones going in, and I just love reading them. And, you know, I had to try and find some purpose for my life, because the purpose of my life was to make my family safe. So like, that was the ultimate guiding mission programmed into my head and I achieved that, and I kind of thought, well, what's my life going to be about now? Now my life is about helping other people, other providers, you know, other people with families that might be struggling, it's about trying to help them. 

(27:07) And then it's also about all the other great people that work in the group of ‘Freedom’ companies as well, you know, helping them to grow and expand. And so that's where I get a lot of my joy and fulfilment now, it’s just helping people to grow, helping people to expand, whether it's expanding professionally if they work with us, or whether it's them, you know, growing and expanding their property, their wealth, their futures, because like you and I will know, 80% of people are going to wind up on a pension. And even if these people get one property, and not even a very good one, but hold it for 20 years, they’ll probably avoid that. And if they can get two or three, in a really great location, they can have a really, really good life in their later years.

(27:56) We're all gonna live much longer, we're all gonna live probably until 85 (or) 90. So we need 30 (or) 40 years of, you know, the government, will the government have money to support us? We don't know. Because I don't have a full time job as such, you know, I mean, I spend a lot of time out during the day. And that's when you see a lot of the older people that are in retirement, they come out, you see them around, and you see them scratching around for $1, just to buy a coffee from Donut King. They're struggling. There's a royal commission right now into aged care, because it's that bad, people are dying in aged care, people are mistreated and abused in aged care. So you don't want to be 60, 70 or 80, laying in some bed with some person, vulnerable. 

(28:40) So, you know, I have a special heart for young children and older people. And I just think it's because they're vulnerable. And I think that we should take care of them. But I think the responsibility is on people right now, like to just have a little bit of foresight, 30 (or) 40 years down the road, start preparing for that. And when I look around how to prepare for that,  I'm still 100%—property is 100% the way. That’s why your listeners are in the right place, you're doing a great job, thank you, you're promoting it, you're putting it out there, I love your content, your audience, your audience love you and the value they get. So the more people out there, you know, promoting the positive side of property is really, really great. 

(29:23) I appreciate that. Yeah. And that has always been my value. And I'm just as passionate as you because I want to be able to help as many people as well. And this podcast is able to impact and do that as well. And you know, it doesn't cost you anything to listen and learn from people like yourself, you know, all the successes. It's definitely out there and possible too. So the last question I have for you, Scott, I always ask this question to all my guests. How much of your success is due to your hard work intelligence and skill? Or how much of it is based on luck?

(29:58) I would say 100% it would be just down to me. So, you know, I feel whatever the answer is, I think that you should decide that the answer is, 100% of your life is up to you, and live your life that way. I mean, that's something I learned from my mentor Tony Robbins, like, take 100% full responsibility for everything in your life, and take 100% responsibility for everyone else in your life and every event in your life. So, you know, I was very fortunate, because, you know, when I began my journey, it was right before the 2012 [or] 2013 massive property boom. So that absolutely gave me a really great opportunity to grow through equity, and to be able to get the number of properties that I was getting.

(30:47) So like, that was a great opportunity that was there. But if I hadn't done all the work or anything like that, well, then I wouldn't have been positioned for that. And people are sitting right now, as we record this, people are sitting right now, in the middle of another boom. So we're predicting a very strong price growth boom, over the next two to three years, and we predict the next 10 years will be really, really great for Australian property. So people have another opportunity. So, you know, the people that invest now, is it down to them? Or is it down to luck? I would say it would be down to them.

Thank you to Scott Kuru, our guest on this episode of Property Investory. 

If you want to hear more about his journey and get a copy of this episode guide on the website head over to PropertyInvestory.com/guide

This guide will give you the inside scoop on the little gold nuggets of wisdom all our guest's share from their backstory and all their overall strategies and philosophies. Plus, you’ll get a copy of their advice broken down and shared in a quick and easy-to-consume format!

Just head over to PropertyInvestory.com/guide and download it today.

Thanks for listening!