Chi Lam on Travelling Rough Seas and Plunging Into Property

In this episode he shares all about his childhood and adolescence and explains how they helped to form the man he is today. From five-day-long boat trips and pirates to learning a new language and moving all around Sydney, Lam’s life has been nothing short of an adventure— and he’s only just getting started.

Transcript:
Chi Lam:

[00:29:18] And it was just an oldish and quite an old rundown house in Punchbowl. [I] renovated it a bit and rented it out, and I really had no interest because at that point in my life, I was just wanting to have fun. I didn't want to have a mortgage debt at that point. So in a way my start in property investment was very reluctant and had to be pushed.

**INTRO MUSIC**

Tyrone Shum:

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 speaking with Chi Lam, devoted husband, father, director and founder of his own company. His earliest memories are something most of us can’t even imagine, which is to escape from Vietnam as refugees on a small boat. But using his resilience and strength he came out the other end all the better for it.

**END INTRO MUSIC**

**START BACKGROUND MUSIC**

Hustlin’

Tyrone Shum:

Chi Lam is the embodiment of having your cake and eating it too. However, that’s not to say he hasn’t overcome his fair share of challenges. His childhood was less than perfect and contained some harrowing experiences many of us could never dream of. Today, he runs a business and is a full-time hands on dad to his kids, proving you really can have it all.

Chi Lam:

[00:00:27] My title at the moment is a director of a company that I founded. That was the side business, which was originally a side hustle. And now it's pretty much my full time thing, although my time during the week is split into various things.

[00:00:44] I'm the primary care of my girls. I've got two girls. So I'm the one that picks them up from school, drops them off, takes them to after school activities, and all that sort of stuff. My wife works full time. So my time is very much a split as to what's needed.

Chi Lam:

[00:01:07] The business [is] a case of how much time I can put into it is what I get back. And then there's no nine to five with the business. So yeah, it's just obviously when orders come in, I have to deal with those fairly quickly. But apart from that, yeah, the time is very flexible. And that's one of the advantages, I guess, of what I've currently got going.

A Family Man

Tyrone Shum:

Thanks to his unconventional approach to work and family, no two days ever look the same for Lam.

Chi Lam:

[00:01:39] There's no real typical day, but like generally speaking, since I'm the one that drops the kids off, I need to get them ready. So I get them ready in the morning.

[00:01:50] I'm focused on fitness these days and personal health. So after that, I might do a bit of work to kind of catch up on any sort of urgent work with the business, then I go and I do a bit of yoga or some gym work.

[00:02:06] And then usually get back into sort of more business stuff. Depending on the day, I might go and play some touch footy with some friends of mine, ex-workmates of mine.

[00:02:19] [We play at] around lunchtime. We have like a local touch footy gathering every Tuesday and Friday. So if the weather's good, and we get enough people, we all just rock up at a field in Bella Vista and just play some touch footy. It's fantastic. It gets the blood pumping. We all really look forward to it.

[00:02:41] And then after that, it's either a bit more work and then picking [the kids] up, after school activities, dinner, and that's generally kind of the school week. And when when it's school holidays, it's completely random. It could be whatever.

[00:03:10] The business and kind of work takes a backseat, in a way, during school holidays. So a lot of the case it's like, if we've arranged playdates with their friends, then I need to be there or I need to take them there, whatever. Or the kids come over. It's all a mixed bag when it comes to school holidays.

A Rough Journey

Tyrone Shum:

Lam’ was born and raised in Vietnam for the first six years of his life. Those formative years coincided with some of the country’s darkest times, and ultimately saw his family make the decision to leave the country.

Chi Lam:

[00:04:03] I still have some memories of it. And then we escaped Vietnam, communism, I guess, after the war as boat refugees. [We] spent about a week— it was quite a treacherous sort of five day boat journey— and we eventually got to Malaysia, where we spent about a year in the refugee camp in Malaysia. So I've got memories of that as well.

Tyrone Shum:

[00:04:30] Talk a little bit about that. So [the] first six years when you were born in Vietnam, because you would have been quite young, it's amazing that you remember a lot of that. Can you just explain to us like what was the feeling when you were actually having to leave Vietnam because of the war?

Chi Lam:

[00:04:46] I was quite young, right? So I was six. And I wouldn't say I have a lot of memories of it. It's more moments, and in particular kind of the journey. Maybe because it was quite impactful, even at that age. How did I feel at that age? As a kid, you're a passenger in life type [of] thing. You get carried along, and your parents take you wherever they want, and you're just along for the ride.

[00:05:09] I remember a fair bit about the trip actually, so it must have been quite, I guess, traumatic for me to remember some of that. And remembering how squishy [it was], how hot [it was], the smell of diesel, nausea because I was seasick. And I think I was actually also ill from some sort of cold or flu or whatever for most of that journey, actually.

[00:05:09] But I do remember things like leaving the country in the middle of the night, like, going out into somewhere. pitch black, on bicycles or scooters, I don't remember exactly. Getting into a dinghy out to the bigger sort of fishing boat, which is the vessel that we eventually came out of, well, left Vietnam in. It was kind of like your typical fishing vessel that you see when you see news articles of boat people coming to Australia. Everyone was crammed into the hull, I remember all that.

[00:06:14] I remember things like the waves, the the crazy big waves. And being a naive little six year old, I was asking Mum, 'Why are the waves so big?' or something like that, something along those lines. I can imagine that for the adults, they must have been terrified. Like, it's the ocean. You've seen how big the ocean can be and you're in this little 11 [or] 12 metre fishing vessel, just getting sloshed about.

Tyrone Shum:

[00:06:42] Do you remember asking [your] mum and dad why you were on this vessel?

Chi Lam:

[00:06:45] I don't remember that exact[ly], I don't remember asking them that. As kids, maybe you just don't question that.

[00:06:58] I do remember being scared, which is the weird thing. That's probably the first memory of being... it's almost like, I don't know if it's too young to even have these feelings of being scared for your life. It's like, you're just scared. Because you know this is not right. But I guess as a kid, the memory is just kind of fleeting. I guess. I have memories of moments.

[00:07:30] The memories in Vietnam, some of them were quite good. I remember I had a little Bruce Lee toy. Balloons. I remember that place roughly where we lived. And as a child, geez, that house in Vietnam felt so big. But when we went back there many years later, it's like tiny.

[00:07:54] I've got just little memories of my life back in Vietnam, it was quite nice. But the journey, the refugee journey was quite harrowing, I guess.

Rations and Pirates

Tyrone Shum:

The trip from Vietnam to Malaysia took about five days, and although Lam’s memories of it are hazy, the trip made a huge impact on his family.

Chi Lam:

[00:08:15] It was pretty rough on everyone on the ship, because things like food was rationed, [and] water was rationed. It's a case of you don't really know how long [it will be]. They kind of do, but you always prepare for the worst, just in case there's not enough [supplies]. If you get lost at sea, you don't know how long the food or the water's going to last.

[00:08:34] I don't know when we got attacked by the pirates. It started as contact with some boats. This is what my mum told me. I think she said that there were initially boats which then contacted us and then realised that we were refugees. And we were, I guess, easy targets. I believe they were Thailand fishermen.

[00:09:04] And I think we had a failed attempt earlier on too, because I remember one time we tried to go and we came back in the middle of the night. [We] kind of went on a journey to nowhere. And as a kid I probably asked my mum, 'What was going on there? Why did we come back? I thought we were going somewhere'. But I think that was a failed attempt.

[00:09:04] It was probably more profitable to rob refugees than to fish at that time, because there were a lot of refugees doing what we were doing, paying to escape the country and carrying with them as much gold or US dollars or whatever that you can kind of liquidate in Vietnam without raising suspicion. Because the government wouldn't let you leave, obviously, they would capture you.

[00:09:55] Anyway, so going back to the refugee trip. After they made contact, they kind of realised we were just refugees. Because I think our ship was painted in military colours to try and deceive any sort of pirates. But that didn't work, so they realised we were [a] refugee boat.

[00:10:11] And then not long later we were surrounded by, I don't know, I think Mum said six or 12 [pirates] or something. Like, we were surrounded, I don't know the number exactly. But we were surrounded by these boats and they just basically boarded us [and] robbed everyone on board. My mum said they even took a few of the women onto their boat. I don't know what happened after that. I think my mum said they ruined the engine. My auntie said they pushed my mum at one point and she almost fell into this hole in the boat, kind of like into the engine bay or something. And my auntie was quick enough to kind of save her, like just grab onto her before she fell.

[00:10:54] And I guess luckily, they didn't kill us. And they just kind of left us. I believe they left us with a broken engine or something, so the boat couldn't go anywhere. And we were just floating.

[00:11:10] And I think later on another boat came by and they were a bit more friendly. And they helped us out, I believe. This is all kind of what my mum's told me. And yeah, and helped us maybe fix the engine and point us in the right direction. [They] gave us rations, too, because I remember at one point we started eating kanji, fish, kanji, really fishy kanji, eating that.

[00:11:38] And so we were on our way. And I think we eventually made it to Malaysia. And that was a nice moment, you know, hitting the beach. And then it's almost like, once you get there, I remember that first night we got there. My mum and my aunties were catching up with people that they might have even known back in Vietnam who had made it into the camp. Whereas us kids, we were so tired I think we just fell asleep at the table.

Tyrone Shum:

[00:12:04] I'm on the edge of my seat, and I'm like, oh, my gosh. You'd be crying as soon as you [arrived], like, because of sense of flight. We made it, we didn't die. We got over the line to arrive in Malaysia.

Chi Lam:

[00:12:20] It's amazing. It's the fact that my mum and my dad and aunties all kind of went on this trip, even though my mum had already lost siblings on a previous trip. I think a few years earlier, they went and no sign was heard from them. So they were presumed drowned at sea.

[00:12:41] It kind of goes to show maybe at that point in time how bad the situation was in Vietnam, or that how bad the prospects for the future [were] for people that this was worth it, even though it was risking life and death. And talking to my mum nowadays, she said it's hard to believe that she made that decision back then. But she probably forgot how bad it was.

Tyrone Shum:

He recognises that things could have turned out completely differently than how they did, and he’s eternally grateful that they had the opportunity to start anew in Australia.

Chi Lam:

[00:13:30] It's one of those moments where it's like a sliding doors moment, right, where your parents made a decision one way or the other and that affected our lives tremendously. We had, after coming to Australia, plenty of opportunities here. [It's a] peaceful country, people were great, growing up with lots of opportunities to be successful in life. I think those opportunities would have been very much diminished back in Vietnam.

[00:13:55] And you see that when you go back, kinda how hard life can be in Vietnam. And a lot of it depends on the family that you're born into, in a way. So it's like even if you're brilliant and great, very capable, the opportunities are obviously a lot less in Vietnam, compared to Australia.

Two Roads Diverged

Tyrone Shum:

After arriving in Malaysia, his mother and the other refugees were given a choice to some degree of where to migrate to. Australia, the US, and Canada were all possibilities, and it was the pull of family that brought them to Australia.

Chi Lam:

[00:14:51] If you were [a] women and children sort of group, like me, my sisters, and my aunties were, you kind of get higher priority than if you were a single male sort of thing. We had an uncle who went before us, I think they got sponsored by some an Australian couple or something to Australia. So they came over to Australia a few years before. And so we decided we would follow him, I guess. I think my mum had a choice even, maybe even America or even Canada, but she decided to go to Australia with this uncle.

[00:15:26] So then it was a case of just getting the paperwork processed, and then once everything was done they'd fly us from Malaysia to Australia. So that part of the journey was nice. Being on a plane, it's like, you probably see it as a kid, you expect to walk up to the plane and look at and climb up the ladder. But I think it was one of those passageways that you don't really get to see the plane. I remember sitting down on the seat and asking Mum, 'Mum, are we on the plane?' Like, I wasn't sure! The expectations were different. So yeah, that was very uneventful, like, just coming to Australia by plane was just normal.

Tyrone Shum:

After living through so many changes already in his short life, Lam arrived in Australia at the age of seven and went into school at the end of year two.

Chi Lam:

[00:16:35] We lived in Marrickville at the time. I think initially we pretty much lived with our uncle. I don't think we were allowed to, because I remember when the landlady came around to collect rent, we would all have to hide. While he went to the door and paid the landlord.

[00:16:55] But eventually we got a flat, my mum and auntie rented a flat in Marrickville. And I went to Marrickville West Public at the time. Year two, year three and year four. So that would have been about '86 or '87 [or] '88, around then.

Tyrone Shum:

Starting school in a new country where everything was new and different certainly isn’t easy, especially for a young refugee who doesn’t speak the local language.

Chi Lam:

[00:17:27] It was a big shock in a way. First day of school, I remember that, not speaking the language at all, not really understanding what everyone [was] saying. That was quite hard in a way. I was in a class where there was a girl who spoke Cantonese and they got her to kind of show me around the first day or so. And that was really nice. I think the school knew that we were refugees, obviously, because we were coming in midterm and didn't speak a word of English.

[00:17:56] But I remember initially probably the first few months being a bit lonely. Because I didn't have many friends. I think the language barrier would have [impacted that]. And also coming in midterm. There would have been established friendship groups, even in year two. And so I do remember times where I was just walking around the playground by myself, a bit bored, a bit sad.

[00:18:22] But I think by about year three, I had four friends, I had some good friends. We played at lunchtime. I was in ESL for about a year, I think, all of year two and then year three as well. And I think as my English got better, and I started to kind of fit into the culture here, it just felt normal.

[00:19:25] It's not a unique story in that when I read Anh Do's book about how he came over, [it was] very similar [to my story]. And I think for a lot of Vietnamese Australians it's a very common story that gets told [by] people around kind of my age around that time.

On the Move

Tyrone Shum:

The transitions didn’t end there, as Lam’s family moved around Sydney several times starting from the end of primary school. They moved from Marrickville to Greenacre, where he attended the selective Sefton High.

Chi Lam:

[00:20:19] At the time, the whole selective process wasn't probably as big as nowadays or as competitive. But that was an interesting experience. It was a bit of a shock in that I was doing quite well in primary school in terms of academics, and then going into a selective school where you kind of see how academically great everyone was.

[00:20:45] And it was a big moment, I remember the first test where I accepted that I failed. And I was like, 'Wow, okay, I'm not as clever as I thought I was'. And it was a grounding moment. So I went to school in Sefton, and then my parents moved again. So we spent about five years living in Mount Druitt from about year 10 to about [my] third year of uni. So we moved around Sydney a fair bit.

Tyrone Shum:

[00:21:15] Do you know why your parents continued to move around Sydney?

Chi Lam:

[00:21:21] I think Marrickville to Greenacre was [because] they went from a flat to a house. So they worked quite hard to save up. And I think at the time, the interest rates were bloody expensive too, like a lot higher than it was today. My mum would say they would work long hours doing sewing, basically. Piece work, so every garment they sewed they'd get, like, 20 cents or something.

[00:21:50] And so they saved up enough where they bought a house in Greenacre. And I think the move from Greenacre to Mount Druitt was kind of a bit of a split between my mum and my auntie. Probably arguments of some sort and they kind of wanted to go separate ways. And when they sold the house in Greenacre, they didn't have enough to buy back in Greenacre. So they had to go further out west and the only place we could afford was out in Mount Druitt so we moved out there.

[00:22:16] And Mount Druitt was very different from what it is today, it was pretty rough back then. So the travel from Mount Druitt to high school, to Sefton was quite an effort in the morning and eventually even to uni, the old way through to the city, that was quite a trek.

Tyrone Shum:

By the end of year 12 Lam wasn’t sure what he wanted to study at university. He chose to focus on an area that interested him, which was computers.

Chi Lam:

[00:23:09] I picked Computer Systems Engineering at UTS. And I managed to just scrape in I think, my ATR just got me into that course based on the previous year's cut off. So that's what I did. It was a sandwich course, actually, so meaning that you had to do full time semesters of study followed by full time semesters of work, which was industry experience, they call it and it's what you have to find. So it's just like sandwiching work with study so that by the end of six [or] five and a half years, you could come out and say that you've got one and a half years of industrial experience. So it's only a four year degree.

[00:24:17] And that sounded good at the time. I mean, it has its positives and negatives, too, I think. It is a long time to be in uni, to be studying. And I think you had companies where even though you came out with industry experience, in terms of let's say, paying you a certain salary, they would say, 'Well, that doesn't really count because that's like work experience. That's not industry experience'. So there was a little bit of that, I think.

[00:24:43] I had friends who did computer science, well that was only a three year degree. By the time I graduated they'd already had three years of work experience, right? And they would be much higher wages and things like that. So you felt like, 'Oh god I've spent six years doing this and I come out, I'm just a graduate' type thing.

Tyrone Shum:

During his studies he learnt that he had an interest in the biomedical technology side of computers, which is using technology in the medical field.

Chi Lam:

[00:25:55] I did a sub major at UTS [in] biomedical technology. And when I graduated, I got a job at ResMed. It's a relatively big Australian bio medical device company.

[00:26:14] Ever since then, I was pretty much always in the medical devices industry. So I went from ResMed to Ventricle at one stage after ResMed and then Cochlear. But yeah, that's a bit later.

London Calling

Tyrone Shum:

Lam was keen to see more of the world and explore it on his own terms after he graduated from university.

Chi Lam:

[00:26:49] I did what most people around my age at that time were doing, which was going to, like, spend a couple of years in London on a working holiday visa. So that's exactly what I did. So after my stint at Ventricle, I think I was in my mid 20s at the time, it was like I'd kind of seen enough of Sydney and got a bit bored, I decided to do what my friends were all kind of doing. And so we all went over there and just kind of worked and travelled as much of Europe as we could.

[00:27:31] It was a bit difficult, because in London, it was very finance orientated. So it was quite hard to get a job that was high paying without that prior finance experience. So I think my travels would have been a lot better if I'd gotten, like, a contracting role in London.

[00:27:52] But I'd end up getting a consultancy kind of permanent role with the consultant house. The pay wasn't as good, which means we couldn't travel as much. But it was an amazing experience in terms of for the first time living away from home, just feeling like really independent and feeling like an adult. In my late 20s.

Tyrone Shum:

Turning to property, he admits that investment wasn’t always on his radar. Although he found himself with an investment property somewhat unwillingly, he acknowledges that it was one of the best things that could have happened to him.

Chi Lam:

[00:28:54] When I was younger, I didn't really have that much of an interest in property. My mum, and my uncle, who was interested in property investment, they kind of pushed me to buy an investment property around 2005, before we went over to London.

[00:29:48] As you grow older, your mindset changes. And so at that age, I probably wasn't ready. But I did it anyway, because I had a job I was able to get a loan and bought that property. Didn't do much with it apart from just a reno and rented it out and just kind of left it as is whilst we were in London.

[00:30:07] And it wasn't until we came back from London when we were decided. So I went with my girlfriend at the time. And then we got engaged and we came back to Australia to get married and settle down. Because by that stage, we were [in our] late 20s [or] early 30s, we were thinking about starting a family and all that.

[00:30:35] It wasn't until we came back that I really started thinking seriously about property investment. But even after we came back from London, we bought an apartment in the city because it was close to everything. We didn't have kids at the time. Obviously we just wanted to [live in] a great location. So we bought one bedder in Chippendale and we lived there.

Heading for the Hills

Tyrone Shum:
It wasn’t until they had their first child that they realised their home was no longer large enough for them. With space in mind, they decided to head out to the Hills district.

Chi Lam:

[00:31:15] And then I think around that time is when [we] had our first daughter that the things that were important to me changed, obviously. Family became more of a focus and future, wealth and security and all that sort of thing. And that kind of led me away from working in a full time job to wanting to invest more, and to seek wealth via other means. So that's when the property stuff really started kicking off.

[00:31:58] I think it was 2012.

[00:32:03] It's interesting because I kind of got the inspiration from my mum and what she did with her place in Sefton at the time. She had a house on a corner block and she built a granny flat at the back. And that allowed her to rent out the front. And I saw that concept and I was thinking, 'This is really good'. If I buy an investment property that's on a corner and I'm able to build a granny flat at the back and rent it out— and you can rent it out for good money in Sydney, particularly one that's on a corner block where it's got its own side entrance, like you can design it such as like a little house in itself.

[00:32:38] So for an extra $100,000... at the time, initially, it was only $100,000 [or] $120,000 the prices went up over time, up to maybe $150,000. But even that's not that much. For an extra $100,000 [to] $150,000 to get an extra $300 [or] $400 back in rent for the entire property kind of made it a very good deal. You couldn't get that sort of returns anywhere.

[00:33:02] So what I ended up doing was I sold the Punchbowl place because it wasn't on a corner. And I wasn't good enough returns on it. So I basically sold that and bought a place in Chester Hill, straight away.

[00:33:19] And then in that five year period between 2012 to 2017 I was just accumulating as much as I could on that strategy of just buying corner blocks. And doing exactly that, like building a granny flat and also renovating the front house and then just kind of do like a refinance after everything was done to kind of pull out the equity that I put in, and the deposit, and then move on to the next one.

Tyrone Shum:

He was lucky in that during that time, property prices were increasing. As a result, he was able to keep rolling and accumulated four investment properties in Sydney over a five year period.

Chi Lam:

[00:34:10] I considered investing in other states at the time as well. But it was just for this strategy to work, I wanted to be more intimately involved in the granny flat builds. And it was always going to be harder to do that interstate. So it was a case of 'Just do it as local as I can'.

[00:34:27] I remember the time I was doing all this whilst I was working as well. So I remember I was using real estate and I had what I had to find these corner blocks which wasn't easy. So I got a list of the postcodes in Sydney. I was then able to kind of create searches on realestate.com that [could] give me alerts. I was searching for keywords like corner, but only in Sydney area. So that kind of helped a lot in narrowing down the kinds of properties that I could shortlist.

[00:35:06] And I'd then use Google Maps and I'd check out their backyard to see how big they are. And I'd measure the distances to kind of see, 'Oh, yeah, that's possible. You can probably put a granny flat in there'. So I had certain criteria that needed to be met before I would even then go and look at the property. So there needed to be a way to automate some of that to make it manageable.

[00:35:27] A lot of weekend work, a lot of after hours work. But it was interesting. Because you're building your future, it didn't feel like work. Well, it was work but I was driven because of that.

Stop Right There

Tyrone Shum:

Lam was on a roll in 2017. In the five years before that he’d purchased four investment properties, and had found that getting finance for his property dreams was an easy and straightforward process. However, something rolled along and put a stone in his spokes.

Chi Lam:

[00:00:39] APRA stepped in and just made it a lot harder.

[00:00:46] We got to a point where we kind of had to stop in 2017 because we couldn't get any more financing. Partially due to APRA, partially, probably due to the fact that we had that many loans. It's a case of if I'd been more picky in some of the properties, it would have taken longer, first of all. It would have taken more time to find these properties. I would have maybe gone further, you know what I mean?

[00:01:18] But I wasn't super picky in that as soon as we had the funds and as soon as we found a property and had a spreadsheet to calculate whether or not it was worth buying— and at what price, that was the important thing, I had to calculate what price it was going to be neutrally geared or slightly positively geared after the granny flat was built and after the renos. There's a lot of error involved, because I'm predicting how much rent I'll be getting and everything. But it was all in that spreadsheet. And then [that] allowed me to go to the auctions with a level of confidence as to how much I wanted to bid. So that helped.

Ready, Set, Bid

Tyrone Shum:

The strategy he implemented was relatively simple, making it an easy process for him. When the tides began to turn in 2017, suddenly APRA wasn’t the only thing rocking the boat.

Chi Lam:

[00:02:46] I was fairly well prepared in terms of I had kind of the set prices, so I was never going to overpay. Although that last property, I was very, very doubtful. The last one that we bought, we bought at the peak. We bought in 2017. And that was probably past the peak, I'd say. And that was on its way down even. We were umming and ahhing about whether to buy it.

[00:03:10] But I figured we were at the end of our accumulation. Because I knew by that stage that this would probably be the last. I don't think we'd be able to get more finance.

[00:03:19] The auction was a very strange one in that it was only me and this other person that was bidding. And I used a very kind of aggressive bidding strategy whereas I would just bid quickly and try not to give the other party much time to think about their next bid type thing. I put pressure on them in a way.

[00:03:43] So we got up to a point it had stopped and I'd reached my limit and I'd said, 'Okay, well that's it, I'm done'. I told the agent I was done. But the agent managed to kind of convince me to go an extra $1,000, right? So I was like, 'Alright, I'll put an extra $1,000 in'.

[00:03:59] And then the other party got super angry. They got really upset, they were like, 'What is this?! I had it and now you're...' Anyway, he stormed off and then that kind of got me suspicious. I'm thinking, 'Whoa, whoa, whoa, is this guy being paid by the agent? Am I being stitched up here?' It led to push this price to a point where the other party just stormed off!

Tyrone Shum:
Somewhat stunned, Lam ended up taking the deal, but the drama was far from over.

Chi Lam:

[00:04:35] And then after that there was even further issues we had with the financing, because the property that I bought had a corner shop attached to it and so the loan that we end up getting could not be a simple residential loan. It had to be commercial but commercial wasn't going to work either for some reason, I can't remember now. The broker had issues with it.

[00:04:59] So I ended up having to go with like a second tier lender who was able to do the sort of riskier loans, I suppose. But the rates were higher. So I guess a lesson learnt there would be [to] maybe [do] a bit more research.

[00:05:20] And so we ended up paying a high rate, you could argue we were kind of paying top dollar for that property. I saw potential in it, because I saw that the shop, if it was successful with the person that was running this shop was successful, then I believe the amount of returns we could get from the property would be high. So that that was pretty much the only saving grace. I wouldn't even pay anywhere near that sort of figure if it didn't have a shop attached to it. So it came with its issues. And that's probably a learning experience, to know about those things in advance.

All in One

Tyrone Shum:

As the property was on a corner block, it fitted his template of being able to accommodate a granny flat. Last but certainly not least, the shop was the icing on the cake.

Chi Lam:

[00:06:36] So what's happened with that property ever since is, now we've got a good tenant in there. And they are running a business out of that. The lease we have in it is an all in one lease, meaning the people that are living in the house [are] also running the business. So we just have a residential lease. So we don't have three incomes, so to speak.

[00:06:53] But the rent is higher, [it] is a little bit higher. But it's not anywhere near like if you had a commercial lease. But look, we don't know what the future would hold with it. But I'm hoping the business, their business is successful, and we can share in that success, I suppose.

[00:07:20] Because the interest rate was so high, that property has always kind of been teetering on neutrally geared to negatively geared. Whereas the other ones were a bit easier to become positive. I think it just makes it easier to hold.

Tyrone Shum:

He’s since gone back to refinance the most recent purchase, and while today the interest rate remains high, it hasn’t deterred him from his dream one bit.

Chi Lam:

[00:08:22] I guess it goes back quite a way to kind of when I started property investing. It was really a goal to not be working in a full time job for the rest of my career.

[00:08:38] The initial plan was to use property as a way to generate wealth. And over time, with the capital growth, I'd then be able to step back from my work.

[00:08:52] I started investing [in] 2012. But I kind of went part time [in] about 2017 or so. I quit my job at ResMed because I joined them again, in a second stint after coming back from London. I quit my job there because they weren't able to offer a part time role.

[00:09:11] And I joined up with Cochlear, and they were able to give me a part time role there. So that was great. So then I was able to continue doing this. And at that time I also started the side hustle.

[00:09:25] So I've always been kind of thinking I just wanted to do this more than I wanted to work the previous role. And I guess over time with the capital growth, definitely, that's helped. Although it's capital growth, but we haven't refinanced after the original refinance. So if we're just letting the loan to value ratio drop, and as the rent slowly rose over time, becoming a slightly more positively geared.

[00:10:01] The properties provide a little bit of extra income a year. Not a huge amount, I think. Most of its value is in the locked in equity. But just then switching over to concentrating more on the side hustle, which eventually turned into a side business, eventually turning into a full time business, that kind of gave me the opportunity to completely quit.

A Wise Investment

Tyrone Shum:
It got to a stage where he was happy with the income from it. That, along with his wife’s full time job, gave him the resolve to step away.

Chi Lam:

[00:10:38] That is an awesome security blanket. So having at least one partner making that full time wage. And then I was able to do that, I suppose, able to quit completely. I think it was [in] 2019, so a couple years after [we purchased] the last property.

[00:10:59] And also around 2017, we also invested in a company, Tesla. Who you might have heard of! It was all after reading a book on Elon Musk, actually, I read the biography by Ashley Vance.

[00:11:23] Because I'd seen some articles online about this. Because I heard about this guy, probably even back in London days, about this guy doing an electric vehicle. My mind wasn't really much in the share market at the time or anything in investing anything at the time, so I didn't pursue it.

[00:11:37] But by 2017, I was obviously on the lookout for [investments]. I had more time as well. That's the other thing, like, not working that extra day gives you so much time to explore opportunities that I'd missed. Because previously, I was too busy working five days a week, and I was knackered by the weekend. And I just want to enjoy my weekend.

[00:11:59] It's the opportunity cost, I think is very important here. Working part time is just the best. So I was able to kind of explore that opportunity after reading the book and just kind of [thinking he] was really interesting, what he'd achieved by that time.

[00:12:16] [In] 2017, I was comfortable enough to put a decent chunk of money in the company in the stock market. And that's our biggest investment at that point in terms of the stock market. We never really were too big into the stock market. And so that's done quite well. Obviously, over the years, as the company has grown, we've added to it, we've added to our position in that.

[00:12:17] So I think that's also contributed to being able to have the freedom of time now. It's not like we can just drop everything now. We're not in a position where we can just drop everything and say we're retired and not have to work at all. We still have living expenses to pay for, and mortgages to pay. So I don't think we've hit FIRE yet.

Playing With Fire

Tyrone Shum:

FIRE is an acronym for Financial Independence, Retire Early. Lam was new to it himself, and it stumbled across him more so than the other way around.

Chi Lam:

[00:13:29] The host of the Aussie Firebug, Matt, I think, he must have seen the article.

[00:13:37] It all goes back to the article that my friend wrote. I had a friend who's the editor at the ABC for a column on... I think it was parenting and work life balance and that sort of stuff. And so he wanted to share my story about how I went from a full time job to being kind of almost a stay at home dad in a way. Being a primary carer is probably more accurate, being the primary care of my kids. Which was fairly uncommon, mostly you see women doing that role. So he wanted to share that story on the ABC. So he wrote an article about that.

[00:14:17] And Matt, I think, on his forums, some of his members would have seen that article and posted it up and had some comments and Matt invited me on to that podcast. So I did a podcast with them. And I believe that's how you found me.

Tyrone Shum:

He’s well on his way to his goal of having enough cash flow to cover everything life throws his way, something he admires Aussie Firebug Matt for.

Chi Lam:

[00:15:22] He posts on his blog his net worth and how his investments have been going since, like, forever, and how you don't actually need that much money to hit FIRE as long as your expenses are not extravagant.

[00:15:37] So that's quite an interesting concept. And I wasn't really aware of that [when I was] younger, so I kind of went about my way of doing it. But it's a similar concept of about freeing up your time to use your time in ways that [are] more valuable to you.

[00:15:55] Because working a full time job is great for some people, I think. They love it. And that's absolutely great for them. But I think for a lot of other people as well, it's not what they want to do, either. And trying to trying to reach financial independence is a good goal to have.

Paving a Prominent Path

Tyrone Shum:

Recognising and reaching for your goal is one of Lam’s top pieces of advice. Knowing why that’s your goal is just as important, if not more so.

Chi Lam:

[00:16:36] You've got to really step back and kind of look at: What are you doing all this for? And I think as you get older the question becomes louder and louder in your mind as to well, why why am I doing all this? It's got to be for a reason. And then you kind of assess what's important to you in life. And you've got to prioritise those things and try to do more the important stuff.

Tyrone Shum:

Lam considers his granny flat revelation to be his biggest ‘aha’ moment, as he helped to pave the path that many others walk on today.

Chi Lam:

[00:17:30] Back then when I was doing it, I don't think it was as prominent. I don't think as many people [were doing it]. There were people doing it. Okay, there were people building granny flats. But I was aiming specifically for corner blocks where I would do it up so that it's like a little house. I think that's a big advantage in terms of getting it rented out.

[00:17:51] I know you can have private access on a normal block. And that's better than nothing. But I think a corner block just makes it so much nicer. So the aha moment was like, wow, putting in $100,000 to $150,000 and getting back an extra $400 [or] $500 in rent. Wow. And that allows me then to just keep going. I can just refinance it and just move on to the next one. That was all until APRA shut it down.

Tyrone Shum:

[00:18:21] Even with $100,000 [to] $250k, you can even borrow that, couldn't you? You know, through the equity that you built up.

Chi Lam:

[00:18:26] That probably would have been the smart way to do it. I didn't do it that way. I kind of use personal funds, personal savings to do the build and then kind of refinanced.

[00:18:39] Obviously, yeah, there would have been things that I probably would have done again, if I did it again I'd probably change, I'll probably try and borrow the funds instead of using personal equity.

Tyrone Shum:

Turning back to recognising your ‘why’, Lam reveals his own.

Chi Lam:

[00:19:29] I think it's pretty much doing it so that we can spend more time with our kids.

[00:19:40] I've got a seven year old and a 10 year old at the moment. The reason why we're doing all this is just so that whilst they're still young and whilst they still want to be with their parents, to go out with their parents and all that, that's our aim.

[00:19:59] Obviously I am used to trying get it so that my wife doesn't need to work her full time job. If she doesn't want to. I mean, she's very happy there at the moment. But it's nice to have that option. So that's what's kind of important.

[00:20:16] And I think moving forward even further, like into the future, i's almost like, if you're happy once you've achieved your goal, then what's your next goal? What do you do then? And I think maybe philanthropy later, if that becomes an option, is probably super long term at the moment.

Learning on the Go

Tyrone Shum:

His mum and uncle definitely gave him the first push to buy an investment property, and it could have ended there if he chose to. The investment bug had bitten him hard though, and he was keen to soak up as much information as he could.

Chi Lam:

[00:22:20] I remember attending various property...

[00:22:23] I guess they'd be workshops, although it was always presented— there's always a money making thing behind it. There's always a course you could sign up [for]. And then I think that was just to learn about the whole adding value to a property once you've purchased it to increase the returns.

[00:22:53] I found the online forums are really great place. I'm a member of Property Chat. It's a great place to kind of learn about property investment.

[00:23:22] And I remember— and this was a while ago, as well— when I was reading a book by I think it was Steve McKnight about cash flow positive properties or something like that. And that was quite interesting. I didn't realise at the time that you could buy a property and it would pay you back more than what the loan could, the interest would be charged on.

[00:23:49] But I think over the years, I've learnt it's a case of usually those properties, the potential for capital growth isn't as high. And so I think it opened my eyes in that sort of respect. But I kind of went the other way, didn't I? I went and I bought a place, I bought properties in Sydney, which was not great for cash flow, but had much higher potential growth.

[00:24:10] And I think that was probably the right decision. I think. I'm not sure. I mean, I say that, but then there are people out there with 100 properties or making a ton of money. So they probably made the right decision. It's very interesting how they do that.

[00:24:28] I think you make your money when you buy it. Basically you find a good deal that works out fantastically. And it's time consuming to do, actually. And that's what I meant earlier, when I could have probably been a bit more picky in terms of choosing my properties where I really just jumped into it because time was of the essence, I guess.

[00:24:49] I think those people who were able to accumulate large portfolios, they bought really well and they must have had a lot of good connections and a lot of time and whatnot to buy those properties which [gave them] fantastic returns and just keep rolling. And even with APRA and everything, they were not stopped in that they were able to continue servicing their loans. That's great. I think that's, like, elite level property investing.

Tyrone Shum:

He understands that even the people with the largest property portfolios hit a ceiling at one point or another, and has wisely diversified his assets as a result.

Chi Lam:

[00:26:12] At one stage all our eggs were in one basket, so to speak, in that all our assets were in Sydney properties. And then we diversified into the stock market with Tesla. So now all our eggs are in two baskets.

[00:26:31] I don't know what the future holds in terms of property investment for us. I don't know if we will accumulate more. I'm not sure. That's certainly a possibility. Or do we then invest in other companies? Because I've learnt a fair bit in the last few years about... not property investment, but a lot more on the investing in companies that have good growth potential, solid growth prospects that are not super risky, I suppose.

[00:27:01] So that's been a bit of a learning experience for me, because when I was younger, I was always told that the stock market was a gambling house. And I don't believe that anymore. I think there are things you can do on the stock market that are kind of gambling, like short term trading is a little bit risky, because of the price fluctuations, it's hard to predict.

[00:27:21] Whereas I think it's easier to predict long term trends and where companies are well positioned, and if you're willing to wait. It's kind of like property investment, it's a long term investment, if you see the potential and you see a path there, and it's a bit easier to predict. I mean, everything comes with risk, but I think it's less risky.

[00:28:01] Sydney property has done fantastic over the last 10 years, because Sydney is a great place to live. There's a lot of demand, we have population growth. But if all those things change, it could go the other way. It's unlikely for that to happen. And that's why we were happy at the time to put all our eggs in one basket, because of all that all those things. Population growth, fantastic place to live in, infrastructure was growing.

Looking Backwards and Forwards

Tyrone Shum:

[00:28:42] If you met yourself, say 10 years ago, what would you have said to him?

Chi Lam:

[00:28:50] Start earlier in investing, I think would be the [first thing]. But I'm sure me 10 years ago would not listen to that advice. I was like, 'Nah, not important'. But yeah, it's always a case of if I bought earlier, then geez, I would have picked up a lot of cheaper properties.

[00:29:10] But there's a time and a place I think. I always kind of step back and think yeah, it just wasn't ready at the time. And that's the case with a lot of people. And when you're young, you're not ready to think about that stuff.

Tyrone Shum:

[00:29:20] Hindsight, it's always a good thing. Well, I guess in the future, you kind of already touched on it as well, too. You're interested in I guess looking at diversifying at the moment, but what are you most excited [about] in your journey over the next, say, five years?

Chi Lam:

[00:29:38] I'm hoping we reach our goal of reaching complete financial independence.

[00:29:47] That would look like, say, for example, if my wife would choose to do so, probably not working a full time job maybe and she would probably spend a bit more time with our girls. And that's something that could possibly change in next five years.

[00:30:06] I think I'd still run my business. So my business has a philanthropic component to it where every sale we make, we donate a portion of our profits to a charity of the customer's choice. I've always liked to tie, find our business success with kind of social responsibility and kind of give back to the community. I think that's important.

[00:30:31] And I think— this is this is probably really like pie in the sky vision— where if one day, maybe the business can just be giving all profits to charity, that'll be fantastic. If I don't need that money for personal use, then why not? Then it comes down to how much time I want to spend on the business. Or if I want to let someone else run the business, perhaps.

[00:31:03] If we can get there in five years time, that'd be fantastic. If our investments have reached a point where we can just have the business donate more to charity, that'd be great. Or even be more picky on maybe choosing some of the charities or supporting more local causes? Yeah, that'd be awesome. I think it's quite a lofty goal.

Tyrone Shum:

[00:31:35] Chi, you've achieved quite a lot, your property journey has been so inspiring. I've learnt so much as well, just from hearing your story. How much of it do you think has been in your success due to skill, intelligence, hard work? And how much of it do you think has been due to luck?

Chi Lam:

[00:31:51] I think it's a bit of both. I think perseverance, being driven in kind of what you want your future to be is part of it. So putting in the hard yards is important in having the right strategy. But also believe we kind of got lucky in a way, in that we started buying properties around the time where properties were going up. We started in 2012, that's when it kind of started to lift off in Sydney. And during that period. So I guess that that part of it was luck.

[00:32:26] You have to put yourself in the game, though. You can't just step back and not make decisions. And I think that's important and that you need to have actions with your goals. Just little things, even if it's doing a little thing a little bit a day, if your workday's busy just do a little bit each day to reach that goal. And that's important.

[00:32:47] And we kind of got lucky too, with that Tesla investment, too, with how the company has done fantastically since 2017. But once again, you've got to be in the game.

[00:33:00] So to answer that question, it's a bit of both. I think it's hard work thinking of the right strategies, being focused and doing it and following that strategy. And then luck Is luck. If you ever get it, that's great. It's one of those things.

**OUTRO**

Tyrone Shum:

Thank you to Chi Lam, our guest on this episode of Property Investory.