In this episode, he opens about the ups-and-downs of selling and purchasing both property and businesses, the changes he has witnessed between microfiche and ChatGPT, and just exactly why he is so fond of his area of Sydney.

Timestamps:
01:04 | Building and Wrangling
03:40 | Mr. Five Kilometres
10:03 | Getting Started
14:38 | Micro-Who?
17:03 | The Value of Data
19:32 | The Valuer General
24:05 | Rossi’s First Property
31:42 | A Sweet Idea

Resources and Links:

[00:17:47] Now we have technology, and you look at the AIs and you look at what we can do now. We can actually wash databases and deliver them back to people with that up to date property and the people around that property. And that's where the keys come in.

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 Joe Rossi, the National Sales Manager for National Property Group. He shares the ups and downs of selling and buying both property and businesses, the changes he’s witnessed between microfiche and ChatGPT, and just why he’s so fond of his area of Sydney.

Tyrone Shum:   

With over 25 years of experience in the real estate industry and a wealth of knowledge in property data systems and software, Rossi has had a front row seat to the changes over the decades. After buying his first property at 21 and starting a business at 22, he’s as involved as ever, though his days look a little different now than they used to.

[00:01:04] First of all, I'm building a team. So I'm wrangling my salespeople. And what I mean by that is helping them fit our data services to our customers and making sure they're looking for new customers. 

  

[00:01:20] Also, some boring parts of it is reading contracts and agreements. But what I find the most interesting is looking at how data fits with our customers now. And the interesting part is that it can be a home investor to all the way to a large prop tech organisation or a big franchise organisation. 

  

[00:01:49] And that's what keeps me interested all the time, is just helping people use property data. 

Tyrone Shum:   

A lover of acronyms for good reason, he explains what prop tech is.

Joe Rossi:   

[00:02:07] I love using acronyms here, Tyrone, because it keeps me in a job, you see. So if I speak that language, you know that he must be a specialist, he must be really smart. No, just joking!

  

[00:02:21] A prop tech is a company that either helps or holds property information. So as an example of that, we are a prop tech company, we deliver property insights. We deliver property insights via either an app, a platform, or raw data. 

  

[00:02:43] Now, another one would be realestate.com and Domain which a lot of people know are the general listing portals for real estate, they are in the prop tech space. And then anyone that's actually trying to develop any form of application that requires property information. 

Tyrone Shum:   

His surname gives away that he’s from Italy, where his parents immigrated from when he was two years old. Since then, he’s kept close to the inner west suburbs of Sydney.

Joe Rossi:   

[00:03:40] I call myself Mr. Five Kilometres because I landed on a boat. And I've lived in the inner west in Abbotsford, then Drummoyne, and then Summer Hill. And that's it. That's where I've always lived. So that's about as interesting as I get. 

  

[00:04:02] So as an example, when COVID was here, and there was that five kilometre radius, I just visited my grandma, my mother's place. It was all within five kilometres.

  

[00:04:20] So we rode five kilometres around that. But basically, yeah, I love cycling. That's another part of what I do. And I'm also passionate about investing in property as well. 

Tyrone Shum:   

He’s proud of his strong connection to Italy, and sees the great value both his birth country and Australia have to offer.

Joe Rossi:   

[00:04:51] I've been back and I've got lots of relatives. So I still have a connection, a strong connection, to not only Italy but where I was born and grew up.

  

[00:05:01] I've got cousins now, most of the older uncles and aunties have passed, but I've got cousins there. Look, at the end of the day they were economic migrants, as simple as that. 

  

[00:05:14] Our family had fantastic land holdings, and they had... if you can imagine an Italian village up on the hillside, olive trees, the vines...

  

[00:05:30] And I've been back and I go, 'Why did we move from here? How powerful is this?!' The food, the pizzas, all that stuff that you can imagine is there. And where we [came] from is right in the middle of Italy, just north of Rome. It's the southernmost ski fields. So you can ski one day and go to the sea the next day. So it was really quite idyllic, and I love going back there.

  

[00:05:55] But postwar, Italy was a basket case. And Australia presented as a opportunity to earn and they probably didn't have great ideas of staying there forever. But once they got here, I think, like all migrants, they get here and they like the lifestyle, they love the quality of life and the opportunities that the kids had.

Tyrone Shum:   

If you’re looking for authentic Italian food, Rossi knows just the place— and knows it well.

Joe Rossi:   

[00:06:32] My favourite Italian restaurant is in Haberfield, called La Disfida. So write that down, guys. It's beautiful. 

   

[00:06:55] I grew up in the '70s around that area, and the inner west was still very, very industrial. So growing up, it was very working class. My parents were obviously immigrants and working in factories, and that's typical of Greeks and Italians that came out. 

  

[00:07:16] So my memory basically started forming in my early teens. We grew up around Parramatta River and boats and skiing around that area. I was keen rower as well, I was a member of the Sydney Rowing Club, and yada yada yada. So growing up was this adventure around the water. And then obviously we're not that far from the beach, so you either went to the beach or not. And surfing. Which was funny because Italians don't surf, but there you go.

Tyrone Shum:  

Today, he’s swapped his surfboard for Lycra.

Joe Rossi:   

[00:08:14] As you get older you realise that running and playing those physical sports, you stop and when you turn around you think, 'Oh well, cycling does it'. No, it's funny, around Summer Hill there's a really good social club. And one of the parents for my kids invited me along because I started riding to work on a flat bar, you know, those heavy bikes. And then obviously he invited me over and everybody's got their carbon fibres and that's it, you have to buy a carbon fibre now. So thousands of dollars down the track, your Peloton, in Lycra, annoying people at the coffee shops, hogging the lanes.

Tyrone Shum:   

He completed the HSC in 1976; a time where many people, Rossi included, didn’t go to university.

Joe Rossi:   

[00:10:03] My first job was a cadetship with a large auto spares company. So cars was my thing, like all the Italians around, that's what you do, [it] was cars. And so university wasn't for me, but a cadetship and training and all that sort of stuff was still really quite strong. 

  

[00:10:28] And I'm going to skip a bit out of my childhood a little bit because it segues to a schoolmate of mine, who I surfed with. His path was computers.

  

[00:10:44] So you can imagine they weren't around. They were big rooms.

  

[00:10:50] But he got this first... [for] all intents and purposes, a big bloody calculator.

  

[00:11:10] He wrote this really simple accounting package for [a] real estate agent, for one real estate agent that he was commissioned, which basically did the ledgers for the receipts, the rental receipts, and produced a statement for an owner. Really simple back then. 

  

[00:11:36] It was all ledger sheets and manual books and things like that. So when you looked at property management departments, most of them were bookkeepers. It cost a fortune for their end of month statements.

  

[00:11:56] I was selling at that time, I was a rep on the road. And this is at 19. So I'm still quite young, [a] rep on the road at 19. At about 21, he says, 'Oh, hey, you should sell this program that I wrote to real estate agents. Let's start a business'. So that business now, that platform called REST just sold to MRI Software for [unintelligible] million dollars.

  

[00:12:29] We started REST, I sold it for a lousy $150,000, Tyrone, can you imagine that?

  

[00:12:40] $150,000 in 1984 or something like that, it was ridiculous.

 

[00:12:47] We kept it going, we revamped it and eventually sold in 1994 for a reasonable amount of money to rock in and then rock in sold it for squillions later on. But obviously the investment for two young dudes that were just writing code. 

  

[00:13:14] And I used to lug the computers around. You'd never guess how many megabytes we could run a full trust accounting program. 

[00:13:28] I mean, I grew up in the days with the floppy disk, you know, the floppy, small floppy disk 1.44. And then the really, really black big ones, I think, having 720 kilobytes. 

Joe Rossi:   

[00:13:42] We had two of those. One for the program, one for the data. And that ran the whole trust accounting for about 400 properties.

  

[00:14:03] So here we go. And we transition now and I don't know whether you want to stay in my personal life, but this is still the road that we take is that one of the sales people came back from an office. So I had a sales team then, and he said, 'You know what? I've got this microfiche, and it's got council records of properties and how much they sold for'. 

Tyrone Shum:   

Microfiche is a film method of storing and preserving large amounts of information that was used between the ‘60s and ‘90s.

Joe Rossi:   

[00:14:38] So it's film, and libraries used to have them and you'd go into a library and you'd pull out, say, the newspapers. And you'd pull the microfiche out, which is this wobbly film, and put it into a microfiche reader which is like a hybrid of an overhead projector and it would blow up the film. And you would read the newspapers on the microfiche.

  

[00:15:04] Now, this was in every real estate agent's office, because they would buy the microfiche from the councils and they would look at comparable properties via the microfiche. 

  

[00:15:20] So we had this great idea of buying a microfiche reader printer, and we would print the microfiche out. And we sent it off shore, this was in 1987, and got it keyed up in a CSV file. Back then it wasn't actually called CSV file, it was just a database that we used called A&A. And we just fed it in.

  

[00:15:47] We built up a library of 40 councils in Sydney. This before RP Data, this is before they started in 1986 [or] '87. And we had 40 councils, and we sold each council for $3,500. And then the updates.

  

[00:16:05] That was a lot of money. And that was making more than our trust accounting program.

  

[00:16:11] So data was the key, right? Property data was the key way back then. 

Coming up after the break, we do some comparisons of now and then in the real estate world…

[00:17:47] Now we have technology, and you look at the AIs and you look at what we can do now.

How he purchased a property when borrowing money wasn’t an option…

Joe Rossi:   

[00:24:26] That was our first renovation and first experience into doing major restoration as well.

He debates on where to go next.

Joe Rossi:   

[00:31:42] That's something that's now... I'm trying to decide.

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

—-> INSERT NEW National Property Data Advert (Ask Tyrone)

Tyrone Shum:   

Rossi found that the problem with the concept of National Property Group was that back then, real estate agents didn’t understand the value of the data they held.

Joe Rossi:   

[00:17:03] Some of the leading agents that were switched on, they were on the bleeding edge of that technology. They were keeping their own databases. But it was difficult to maintain, it was difficult to keep updated.

  

[00:17:18] And, as a matter of fact, one of the major projects that we're working on now is data cleansing. Because if you take— we were speaking about Barry Plant— they've got, say, 500,000 addresses and people in their database, but they don't know who's current. 

   

[00:17:47] Now we have technology, and you look at the AIs and you look at what we can do now. We can actually wash databases and deliver them back to people with that up to date property and the people around that property. And that's where the keys come in.

Tyrone Shum:   

The microfiche held simple data similar to the valuer general, and showed transactional information.

Joe Rossi:   

[00:18:36] So you know that when a property is settled, the valuer generals hold that data, and it's the sale date, the sale price, who bought it, and any history on that property as far as the previous transactions on that property.

  

[00:18:54] And that's what was on the microfiche. And guess what? Today, that's what we get from the valuer general. It's [the] exact same thing.

Tyrone Shum:   

He gives an overview of what the valuer general does, who they are, and what they hold.

Joe Rossi:   

[00:19:32] It's the government body that holds and transfers title of property. So if we understand that everybody holds the title. We use Torrens title here in Australia, which means that our titles are secure, and they're securely held with the government. And when you transfer title from one person to the next, it has to be registered with the valuer general. 

  

[00:20:00] So you have a conveyency that does all the work from an exchange contract to a settlement of the property. And during that conveyency, they check titles, they check probity and all those things. And then the property's ready to transfer title. In other words, it's settled and the new person actually owns it. And then the title transferred. 

 

[00:20:26] And you'll find you have a title document that often, if you're borrowing money, will sit with the bank. The banks will hold your title as mortgage. 

  

[00:20:36] So all of that is held by the valuers general, and each state has different valuers general. And each state has different databases. And that's why it's not easy to get into this business. Because you collate all this information, and it's all in different formats. And if you think, 'It's a government database, it's going to be clean', it's [as] dirty as any database becomes.

Tyrone Shum:   

Turning back to his cadetship, he recalls that he was there from when he finished school at 18 through to 21 or 22.

Joe Rossi:   

[00:22:06] In that cadetship the way people back then you actually were trained, and some companies still do it. They'll take someone young without any experience, and then they drop them into different roles. So I was in computers, I was in payroll, I was in sales. And you'll notice that's where I landed, that's where I got my jammy jims.

  

[00:22:38] So we had lots of branches. It wasn't quite national, but it was all over New South Wales. So we had branches in regional areas, in inner city suburbs. So I actually worked in Wentworth Avenue in the city for most of the time, and then out at Five Dork where they actually had branches as well. 

 

[00:23:02] And then I [got] promoted... I don't know whether it was a promotion. You're [a] rep on the road and you would be a commercial traveller and visit all these auto parts and mechanics and all those sorts of things. 

 

[00:23:13] So that sales and relationship build, that's where I learnt that core skill of maintaining a rhythm of sales and pipelines and relationships and so on. 

  

[00:23:33] Door knocking on real estate agents was basically what I did for a long time until I could build a team that would do it for me. 

Tyrone Shum:   

He bought his first property for $80,000. It was a four bedroom, single-fronted, two storey property, and was of course in his five kilometre radius.

Joe Rossi:   

[00:24:05] I'm gonna call it a... it's not a terrace, but it was sort of shaped like a terrace. In Summer Hill, but it was boarded up at the front because it was used as a boarding house. So it was all locked up. It looked like a block of flats in Manly because it had a Norfolk Island pine in the front of it.

  

[00:24:26] That was our first renovation and first experience into doing major restoration as well. So we brought it back to the Victorian, because it was built in the late 1880s. So it had the bull nose, the fret work, so we then did the classic renovation at the back. 

  

[00:24:49] What the interesting thing was though, and I think it's really pointed now about interest rates, financing, and how much we could finance, we could only get a $25,000 loan.

  

[00:25:05] We had to get $10,000 as a personal loan at a higher interest rate. And the interest rates back then were quite high anyway. And we fell into that really quite high interest rate. So this concept of borrowing lots of money just wasn't available to us. And we were both working. This was just before I started my own business, otherwise, I probably would have had no chance at financing at that level.

Instead of using the Mum and Dad bank, he ran a market stall in Haymarket selling cane furniture to fund his house.

Joe Rossi:  

[00:25:52] Cane furniture, like, cane baskets and shelves and cupboards. And it was horrible stuff. But back then it was on trend. 

  

[00:26:06] We ran it Saturday morning and Sunday morning and out at other markets. And it was a cash business too. So we were building up cash in hand.

  

[00:26:23] It was all cash, and that's how we got the deposit for the house and [were] able to borrow the money. And off we went, it was quite amazing. 

  

[00:26:33] So that part of that first investment was quite interesting.

  

[00:26:42] So we lived in that. And the way we supported it was basically was four bedrooms, and we were young. And so it was [a] share house. So we had our friends sharing, and that helped us pay the mortgage off.

  

[00:26:58] So you just do what you need to do. And I think it was the ethic, and I'm gonna go back to my heritage, and we know that there is a culture of property ownership with Greeks and Italians. 

  

[00:27:15] So that was the thing. 'Why are you paying rent? You can't pay rent, that's wasted money'.

  

[00:27:25] Security, security, security. That was what it was all about. So that was our first foray. We then decided to buy a second property. And that was, again, a fixer upper. But this time we rented it.

  

[00:27:41] And we then renovated that and flipped it. And it was really interesting. Because back then your median price in the inner west... 

   

[00:28:28] What it does is it smooths out those big mansions on the hill and the little dog boxes that get sold. They're both three bedrooms, in the same suburb, [but] they're completely different properties. 

  

[00:28:40] So by using the medium, so So getting back to the stories, or 

  

[00:28:43] The median for, say, houses around the inner west was still quite cheap. Like, I mean $250,000 to $350,000.

Tyrone Shum:
He bought that property for $142,000 and sold it two years later.

Joe Rossi:  

[00:29:02] We sold it for $315,000. So that was great. And that gave us the taste of it. We dabbled in buying off the plan in Balmain. Not so successful there. The builder was slow. It took a long time.

  

[00:29:20] And that's when we gave family and I spoke earlier when we were talking about helping other people and getting in and partnering. We partnered with those people, and they wanted to sell out a unit in Jindabyne, a unit in Port Macquarie. We were diversing our portfolio.

  

[00:29:49] I think that's important. You don't necessarily invest where you want to live, because that's fraught with danger. We did that because the inner west had the opportunity of flipping and renovating, so you could buy something that was really quite... not dilapidated, but in disrepair. Put the nice little back on, put the picket fence at the front, paint it up and off you go. And you would make good money. That's the Cherie Barber formula is an example of that. Manufactured equity.

Tyrone Shum:   

All in all, he ended up buying, renovating, and selling between 10 and 12 properties.

Joe Rossi:   

[00:30:47] Because I've always had a day job, it's always been this, 'Alright. Yeah, we're ready to do it again'. You have a rest, do it again. So over the years, we've had breaks. I've had four children, and I've got two grandchildren. So trying to have four children [and] do the renovations. So you have these long breaks in between.

  

[00:31:18] Here's the thing, though. Here's the thing. My oldest is a builder. My youngest is an architect. So what do you think I'm doing here?

Tyrone Shum:   

According to Rossi, the most interesting one is one he bought two years ago, which is, of course, in Summer Hill.

Joe Rossi:   

[00:31:42] That's something that's now... I'm trying to decide. I've got two sets of plans made up. And I'm trying to decide whether to keep it as one property or split it. It's a corner block. It's an old shop that's been residential for the last 25 [to] 30 years. It's an old... I love restoring old places, right? So if you imagine it's Victorian in its shape, corner shop, it's still got the stained glass saying 'confectionery'.

   

[00:32:26] But it came up. And I've always looked at it. And I thought, 'This would be a great development. And because it's on the corner, I can put a terrace on the back. That's one property, and then renovate the shop, which is two storey'. 

  

[00:32:42] I've got tenants in it at the moment. It's too flat at the bottom flat at the top. But there's enough land. But it's becoming a bit of a nightmare. So I'm thinking that I'll just renovate and put a granny flat and a garage at the back and then have the whole thing renovated and flip it over. 

Tyrone Shum:   

[00:33:06] And you said it's becoming more of a nightmare? What's been the issue? 

Joe Rossi:   

[00:33:09] The issues, I suppose, is I've just squeezed in the land size to split the block. But it's just the size of the house. And to tell you the truth, I live in a fairly large house now. And we're thinking of moving into... having that as a little bolt hole for us to downsize to, because it's close to the cafes. And if you know Summer Hill, it's a beautiful little suburb. It's got coffee shops, blah, blah, blah. So it's really nice to be closer, and we're a bit further up. So it's [a] 15 minute walk down to the shop. 

  

[00:33:51] So this gives us this little bolt hole, we can then go and buy a property out in rural and do all those sorts of things. So that's the thinking we're doing, is if we're going to live there, we want the garden, we want that, but do we cut the garden out? 

  

[00:34:07] So it's not really any problem. It's more a personal decision that we're going through and we've got two plans. We're trying to decide how it's going to work.

 

[00:34:18] So you need to do that research and what suits you personally as far as what type of development is going to look like, are you going to be there, Is it going to be you? If it was hands off, I'd just split it and then sell the both of them.

Joe Rossi’s story continues in the next episode of Property Investory. He shares why he didn’t hold on as long as he planned…

 

[00:00:25] [We] basically said, 'We've had enough of this place, let's sell it and get out'.

 

How to get an eagle eye view without taking a flight…

 

[00:04:29] So I always took a helicopter view of a suburb.

He delves into the retirement that wasn’t.

[00:11:07] I started thinking that I'd have a rest from sales.

 

And that’s next time on Property Investory.