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:
00:01:04 | Building and Wrangling
00:03:40 | Mr. Five Kilometres
00:10:03 | Getting Started
00:14:38 | Micro-Who?
00:17:03 | The Value of Data
00:19:32 | The Valuer General
00:24:05 | Rossi’s First Property
00:31:42 | A Sweet Idea

 |

00:00:00 | Dedicated to Data
00:05:48 | Growth Areas
00:09:03 | Busy with Businesses
00:16:49 | If You Can’t Beat ‘Em, Join ‘Em
00:18:48 | Technology
00:22:28 | Cooperating
00:26:34 | Turning Point
00:35:52 | Now and Then

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. 

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.

Dedicated to Data

Rossi is passionate about developing training programs to help property professionals gain insights into their business and investment decisions. As a property data systems and software specialist, he has a wealth of knowledge to share from the good stories to the not-so-good.

Joe Rossi:   

[00:00:00] I think the worst deal was buying off the plan in Balmain. They were two storey apartments. And a lot of stuff wasn't... like, the settlement, the handover, and then the ongoing problems we had with that particular block. 

  

[00:00:20] And [we] basically said, 'We've had enough of this place, let's sell it and get out'. And we usually would hold longer, remember I said I like to hold. And if you're gonna make a lot of money, that's how you make money, you look at the growth over a period of time, and we'll get to what data and how you work that stuff out. You hold in Sydney, you need five years, right? Whereas that property, we probably flipped after two and a half years. Purely because it was just too much trouble with maintenance and things like that. 

  

[00:01:01] It could have been fine. But that was... we were always buying all the properties. 'Let's buy off the plan. Just do it. We'll hold it. And then when the market goes again, we'll sell it and make money', and we ended up doing it probably... we still made money. It wasn't a loss. But not the sort of investment that we would have liked, the return that we would have liked. That's probably the worst. 

  

[00:01:28] The best was the little... well, I tell you what, the Port Macquarie unit, I just invested in that, held, and I've still got it 15 years later. And it's been positively geared for the last five years. Regular tenants, barely any maintenance on it. It's been the perfect investment and just sits there, my little superannuation sitting there and off it goes. So I'd like a few more of those, that's for sure.

Tyrone Shum:   

[00:02:04] You would have fundamental capital growth in there as well.

Joe Rossi:   

[00:02:07] That's exactly right. We bought under $100,000 for a lovely two bedroom unit walking distance to the beach.

Tyrone Shum:   

Having done a lot in terms of property over the years, he’s well-versed in doing his due diligence and knowing the top tips and tricks.

Joe Rossi:   

[00:03:06] One is being present on the market. So you need, first of all, I had good contacts with real estate agents, where I was looking. I always drove around the suburbs. So these are physical aspects of thinking about where. 

  

[00:03:31] Now, sometimes if you're going interstate to invest, you might not be able to do that. And that comes back to now, how do you work out what to buy before you actually go interstate? Because I was about to invest in Logan in Queensland as an example, because that was a big growing area. It was a real working class, housing commission area that's starting to change because the rail that went down there. 

  

[00:03:59] So they're the things that when I say be present in the market is just understand what's going on in the suburb. 

  

[00:04:06] And then I was fortunate, I've worked 25 years with my competitor now is which is Core Logic. And I was able to gain... obviously, I had access to data all through my working life. 

 

[00:04:22] So what I always did was, one, look at the capital growth in an area. So I always took a helicopter view of a suburb. What does that mean? Is a suburb transacting? How many are transacting? What's been the growth over, say, to five to 10 years depending on your investment cycle? And what type of properties are transacting and turning over? 

  

[00:04:56] So all of these platforms— and I'll give a plug to National Property Group— gives you that insight on one report. So whether it's a neighbourhood report, or whether you do a sales history report, all of those, or you use the map and see where those transactions are. 

  

[00:05:14] So all of them give you that insight. And so you can jump from one suburb, to another suburb to another postcode to another LGA really quite quickly, trying to work out where they invest. 

He looked in the south inner city areas, but decided that buying a house surrounded by apartments wasn’t for him.

Joe Rossi: 

[00:05:48] Because I thought, well, the houses may not grow, but units are going up all over the place there. So hey, if you plan on developing units, perfect.

  

[00:06:02] And as people like my kids push out to those areas, because that's where they can afford to buy, so I see those as growth areas. Belmore, for instance, very... as the migrant kids, the Lebanese community, those sorts of communities that went in those areas, say, 20 years ago, their kids are quite well off now. So they want to live next to Mum and Dad. 

  

[00:06:33] So you look at those areas and say, 'Well, they're my growth areas'. And then I look at the stats and see whether that's panning out. Are we seeing flatlining? And maybe you'll take a risk. Or is it as you growing over those periods? So that's that helicopter view of the suburb that I take.

  

[00:07:03] So if I'm finding properties now, I'm using that days on market on that property. We all know that the longer the days on the market, the more desperate the vendor gets. 

  

[00:07:15] There's usually two reasons why properties are not selling. First reason is price. The second reason is price.

  

[00:07:30] Because you can sell anything anywhere in any condition if the price is right. So the longer they stay on the market, the bigger the fall, and we see that in the stats. Because the stints that I've had working so closely with real estate is the stories that they tell. And then we turn around and collaborate those stories with the data and you'll see a property come on the market, the agent's overpriced [it]. And you can tell that by looking at the sales and the sales history, and you think, 'Oh, that doesn't sound quite right'. And you'll see the prices starting to fall. And you'll get passed in at auction at week four.

  

[00:08:19] And then it hits the right price.

Tyrone Shum:   

After setting up Rest with its co-founder and making his way into data, there seems to be a piece of the puzzle missing. As an open book, Rossi puts the pieces together.

Joe Rossi:   

[00:09:03] So basically, I sold out as I said, for that paltry amount which is killing me every day in my life. You know how people have regrets? I've only got one or two regrets: Having four children— no, no, I'm joking!— and selling too cheaply. 

  

[00:09:20] But anyway, it was a recession that we had to have. 1994. I had two years restraint of trade. So I just did sales work and things like that. And my restraint of trade out of property management finished. And I found a company called Micro Development that did trust accounting software, because that was in my DNA by then. So I worked for them for a year and a half and they got bought out by RP Data.

  

[00:10:00] I knew I could help them, I knew that they needed help in New South Wales, because they were a Queensland based company. And so this is before RP Data came along. So I ran their software division in New South Wales, selling to real estate agents and running the teams there. 

  

[00:10:17] And they got bought out. And I went into the software division of RP Data, because what they were trying to do is own the desktop. So they had data, but they didn't have the trust accounting side.

  

[00:10:37] So I ran that for four or five years, until they sold that off. And I came across to the data side, mainly because I had the experience of setting up databases and understanding data and how, where the uses were. 

  

[00:10:55] So I was then Sales Manager for New South Wales. That was that opportunity, and then I got a national position. And then on it went. 

  

[00:11:07] I started thinking that I'd have a rest from sales. So I became the trainer, national training. So I did the internal and external training. I had a team of 10 trainers and customer success managers in there. So that data and working with data and training data was always what I enjoyed and what I loved. 

Tyrone Shum:
When National Property Group came along, CoreLogic got taken over by a large private equity group.

Joe Rossi: 

[00:11:43] So RP Data got taken over by Macquarie Group, Macquarie Group listed again, compulsory buyout, sold to CoreLogic, CoreLogic then got bought out by private equity. 

  

[00:11:55] And that private equity changed the culture to the point where it wasn't a culture of innovation anymore. It was a culture of just buy companies and see which ones actually floated. And it just wasn't fitting for me anymore. 

  

[00:12:11] And so I thought I was going to retire, and then National Property Group just interest[ed] me, it was really perplexing. How could I get a small company snapping at the heels of these big behemoth companies? Annoy the hell out of them! What we're going to do is annoy the hell out of them. A nice, simple product with good data. And not getting too sophisticated on it. 

  

[00:12:42] Because if you look at the investor groups like that you're involved in, Tyrone, what do they want? They want this historical data, they want to be able to find a property for starters, that's in their zone.

Tyrone Shum:  

He gives the background information on the major players in the industry.

Joe Rossi:   

[00:13:33] So 1994, you saw RP Data started by two Queenslanders in based out of Cairns. Interesting background, those two Italians. Once again, bloody Italians, you can't get rid of them! But they owned a concreting business.

  

[00:14:01] But what happened was that it was concrete mixing, they deliver[ed] wet concrete. And Pioneer and Boral came into the market and they colluded. And it was the first prosecution of the new price colluding laws. How interesting is this? 

  

[00:14:22] So they won the case, the two brothers, or the one brother. And he went off to the States looking for a business to buy and he looked at a company called First American and they did property data over there. 

  

[00:14:40] So he basically licensed the platform and brought it over here, which was the first platform that delivered data via modem. You can imagine real estate agents sharing their fax machine. Remember when modems first came in? You shared your fax machine. 

  

[00:15:04] This was in 1994. It wasn't internet based. It was basically dumb terminal based, text based data coming through. We were selling floppy disks and delivering updates once a month. They had it online delivering updates in real time.

[00:16:03] So basically, RP Data [were] real big innovators. They were the first with mapping. They were the first to go online with pictures. They had people walking the streets taking photos before Google took their street views. So you could see the front photos.

Tyrone Shum:   

This was in 2004, when digital cameras were gaining popularity. Then in 2006, Price Finder came along and used council records.

Joe Rossi:   

[00:16:49] Another Queensland based company. Basically coming out of the Ray White organisation. So Ray White, Tom White being a nephew of the Ray White family funding a real estate. You can imagine how that happened, right?

   

[00:17:14] Council records. The VG government didn't start giving us feeds until 2001.

  

[00:17:35] Council records had the transactions and the owners. Remember I was talking about the films? They were doing that, they were doing the microfiche, but delivering via modem, having updates basically daily. We used to type up, we used to give it to them on a monthly basis. So we were a month out.

Tyrone Shum:   

[00:17:59] How did that impact your business?

Joe Rossi:   

[00:18:01] They basically stole our database, and I gave up.

  

[00:18:09] You can't beat them, go and join them. That's basically what I did.

Tyrone Shum:  

Because he had so many different roles and found that technology and its usage evolved, these aspects helped him in his journey.

Joe Rossi:   

[00:18:48] So if you look at that, exclusively real estate agents were our customers. And as real estate agents were competing [against] each other, you would start generating very bespoke reports. And the first one was the comparable market analysis.

  

[00:19:11] Very bespoke. Real estate agents would bring them along and show them to prospective vendors to manage their price expectations.

Tyrone Shum:   

[00:19:21] And was that report previously available to agents prior to CoreLogic or RP Data being available? 

Joe Rossi:   

[00:19:29] No. 

Tyrone Shum:   

[00:19:30] So basically, agents never really had this additional tool, they must have just gone in, buy… 

Joe Rossi:   

[00:19:34] Lists. Come in with a bit of paper. This is what I think, this is what I think. 

  

[00:19:40] The first agent that came into my place to sell a property, he measured the rooms and did a square metreage, which the US still use quite a bit. Price per square metre.

[00:20:06] It works when you've got large markets in the US where basically every house is the same. And then it's [figuring out] which house is bigger or smaller.

  

[00:20:36] We had teams of people that were paid per photograph. They'd just go out in the streets. And then we'd have teams inside straightening photos up and matching the number. 

 

[00:20:54] The hardest thing was matching the property, because if you imagine they had books, and if they just got one number out, all the photos were out in the street.

 

[00:21:04] So it was a big project. Insane. But this guy who started RP Data was quite revolutionary. And so he was first with a CMA, first with a photography, first with the mapping. Which, again, I'm going to give NPG a bit of a plug, because they were there around '98 [or] '99 now, as the New South Wales players, our competitors, with a map, with photos, at the same time. 

  

[00:21:38] Now, their photos came from their realtor magazines. So that was their physical magazines, and then bringing that into a database. So in New South Wales, NPG have had these things as long as RP Data and had the mapping almost as long as well.

Tyrone Shum:   

In the 1960s, National Property Group was a cooperative of real estate agents who got together to share their listings.

Joe Rossi:   

[00:22:28] Because back then, buyers were very rare. Lots of listings, no buyers. So they basically had a system called multi list and they would have books.

  

[00:22:51] So the cooperative then became not only a listing engine, it was also an advocacy, it had membership, and they would get together and network and do those things, and they would share their listings. In other words, 'Hey, I've got a listing, have you got any buyers?' So an agent down the road would have an open listing, and you would sell someone else's listing. 

  

[00:23:18] So you could actually start up as an agent, and not have one listing and still make a buck by selling other people's listings. And it was that type of environment where you'd share commission.

Tyrone Shum:
Much like how video killed the radio star, the internet had a similar effect on real estate listings.

 

[00:23:30] As the internet came along, and realestate.com[.au] and Domain [came along], it just wiped that whole process out. Just like digital versus newspaper has wiped out. It happened sooner in real estate.

 

[00:23:47] But they had all this data, so they developed the platform, which was Red Square. And Red Square was sold exclusively to their membership. So doing a CMA, being able to do the history, all the things that we've just spoken about, you could do within Red Square, but it was only New South Wales based.

  

[00:24:15] And unfortunately, when you've got this corralling, the investment wasn't there to move it into other areas, to move it into national. So if you look at RP Data, one of the biggest RP Data moves was to move into the banks and valuations that the banks use. 

  

[00:24:32] And I'm gonna come back to the spread of data and the spread outside of real estate into the finance area. And the bank suddenly realised that they could save...

 

[00:24:56] a shitload of money with valuers by doing the primary valuation on a desktop via the data. And hence the genesis of the auto valuation model. The AVM. 

  

[00:25:13] So, the AVM is just an algorithm that compares like for like, and spits out a number that can be quite accurate, and can be a great guide. So the banks use that AVM before real estate agents because the real estate agents and valuers were threatened by the AVM.

  

[00:25:41] Valuers hate RP Data, they hate NPG. But they use it. It's a love hate relationship, because they use the data to do the valuations as well.

  

[00:26:03] But the industries turned the valuation industry on its head. Absolutely on its head. So banks using it suddenly turned around and said, 'If banks can use it, well, hang on. Developers can use it. And general investors should be using it'. So you've got this whole ecosystem of data now being available to everybody.

Tyrone Shum:   

[00:26:34] Wow, that's a really interesting backstory and history. And then how did that cooperative become National Property Group? Where did that turn? Because initially it was only New South Wales data?

Joe Rossi:   

[00:26:48] I think one of the problems that they experienced was losing their membership. And then you had some key people inside the AC group that understood the value of the data. We have Don Harb, that's been here for 20 years as an example, and seen this growth through. And he saw the value. And he wanted investment in the data, and the cooperative couldn't. So Gary came along and said, 'Look, I'll buy the data business off you'.

  

[00:27:32] Now, he has since bought the EAC model over as well, in the business, because it's got a really good forms engine that we're trying to expand nationally as well. 

  

[00:27:44] But essentially, Gary's investment allowed us to go into Queensland, into Victoria, and we've just signed the deal with Tasmania. And I think we've just been recently approved with South Australia. 

  

[00:28:01] So suddenly, we're national. And we can now do those national franchise deals, which we couldn't do before. And when I said snapping at the heels of CoreLogic, and Price Finder, I really believe that when you look at, say, Price Finder and what they're doing, their focus is on the listing portal, because they're owned by Domain. 

  

[00:28:25] When you look at CoreLogic, their focus is on the banks, because that's where most of the revenue come in. So we can really fit really nicely with a pure focus on the data and real estate industry, developers and investors. And it suits us really well. That's where we see ourselves fit really well.

  

[00:29:07] Do I need this or do I [not] need this? Why don't I have this access? 

  

[00:29:13] So we're going to stay with the philosophy of one platform, make it simple, and give you as much data as you can and need to do either your investment or development. That's what you want to do. You want to be able to find it, analyse it, [unintelligible] if you're developing, or hold and invest.

Tyrone Shum:   

EAC originally stood for Estate Agents Cooperative, but now that it’s no longer a cooperative, the initialism now stands for Estate Agents Community.

Joe Rossi:   

[00:30:00] They are our ears and eyes. They provide a lot of data to us. So as an example, we talked about the valuer general. And that's really bland data. But where the richness of the data comes from is from the agents listing when they sell the property. So suddenly, if you look at our data now, we've got all this history of photographs of the property. But not just the front door, you walk in and you see the bathroom and the kitchen and you see the backyard. That's all coming from agents. You get the rich descriptors of it. So that is the CMI, the current market information.

[00:31:13] You can scroll through the photos, but you can't search on the floor plan. So just identifying. That's our next project, just use a bit of AI. Because you can always identify what a floor plan looks like. It's not that hard. So that's the next nice thing that we've put in. 

 

[00:31:34] As an example, we just signed a deal for DA applications. So if you've got [a property] and you know there's a DA application on that property, that's sometimes good, right? Or maybe that DA was three years ago, consummated, and they've renovated, for as a developer, it's probably too much. They've over capitalised on the property.

  

[00:32:14] Just simply the map alone saves the developer an enormous amount of time. Because the developer's looking for position. The developer is looking [and thinking], 'Is it flat land? Or is it on a hillside? Because we have contours'. So if you know how to read a contour map, if they're close together, you know it's on a cliff. 

 

[00:32:37] So that makes your decision. Or maybe it's on top of the hill, and it might have a view. So it's even more desirable, right? So all of these things are data points that I can do from my desk, get a whole lot of the analys[ing] and research done before I get in the car and then do the drive. 

  

[00:32:57] So I think finding properties is [about] excluding properties quickly. And getting that shortlist down. That's the bit that takes a lot of time is the exclusion part.

Tyrone Shum:   

[00:33:54] If you met yourself, say 10 years ago, what do you think you would have said to him?

Joe Rossi:   

[00:33:57] Be bolder. I'm so conservative, it's not funny. Just be bolder.

  

[00:34:09] Obviously, within your finances and your capacity and all those sorts of things. I've got to be really careful. I don't recommend to anyone. I present to a lot of these forums and people will come up in the meet and greets, and the tea and coffee moments and they ask me, 'Should I do this? Should I do that?' Unless I know their personal circumstances, I just can't recommend it. 

  

[00:34:36] But for me, I always say be a little bit bolder. Because I could have probably stretched out a little bit further and made even more. Because we're in it to make money.

  

[00:34:52] I'd love to leave a legacy for my children as well. There's nothing wrong with that. And investing and making money and passive income is so good. I can retire early if I want to, because of the passive income that we're built. So absolutely be a bit bolder when you've got the chance.

  

[00:35:26] I'm already a Mum and Dad bank. My first two boys have already dipped their toe[s] in and bought property. So that's what we want to do.

Tyrone Shum:   

Looking forward to the future, Rossi has exciting plans for both his personal life and his career.

Joe Rossi:   

[00:35:52] I think my work life is get this business national and get a rhythm and a cadence of revenue and making sales. That's what it's been missing because of the cooperative. It's almost coming into a public service, Tyrone. 

 

[00:36:14] 'That's a $300,000 deal. Why aren't we concentrating [on that]?' 

  

[00:36:18] That excites me and just building the team and training the team involved in that. That's my work.

  

[00:36:27] My personal life, I've got my project that I'm right in the middle of it, we're at the stage of... I'm using Pinterest and taking photos now of how I want the place to look. So that internal space. And I'm driving around looking at granny flats. So that's the development side. I'm really excited about that. And that's going to give me the means to buy my rural property that's not going to be an investment. It's going to be a hobby. Just that tree change.

  

[00:37:11] We're keen gardeners, so we want a tree change where we've got a bit more space. So that's for me, over the next couple of years anyway.

  

[00:37:29] We're doing a cycling trip in New Zealand. The Otago rail trail. I'm looking forward to that as well.

Tyrone Shum:   

[00:38:32] You've achieved quite a lot of success, not only in your personal life, but also your work career and so forth. And you've got a really, really good experience in your career there. How much of that success has been due to your skill, intelligence and hard work? And how much do you think has been through luck?

Joe Rossi:   

[00:38:50] I think in respects of starting that business, that was happenchance. Sliding doors moment, make a decision. But I think the rest is that drive of wanting to do something. And I'm always a 'What's next?' [type of person].

  

[00:39:23] I treat everything I do as my own personal business. So while I'm here, and while I was at RP Data, and then CoreLogic, it was always my business division or my business that I'm trying to work. And I think that plays into it. 

  

[00:39:41] As far as intelligence goes, who knows how smart people are? I've seen what I thought were really dumb people be really successful. I don't play on intelligence. It's luck, it's hard work and attitude, really. And I think attitude and what's next is how I recruit people as well.

[00:40:49] You can be successful and treat people quite well. Make them work. Make them work hard. That doesn't mean you treat them badly, though. That's what leadership is.

Thank you to Joe Rossi, our guest on this episode of Property Investory.