Shum takes us on his journey through never-before heard details, from his days in university through to Property Investory’s success in an unpredictable and fast-moving world. His journey was anything but linear as he took two steps forward and three steps back multiple times, but he would never trade the invaluable lessons he learnt along the way.

Timestamps:
01:24 | A Story Not Unlike Many Others
06:11 | Step One: Start a Business
13:44 | A Bit of a Blunder
18:19 | Diving Into Dragon Boating
23:39 | Paddling Into New Waters
27:46 | Timing It Right
32:30 | The Business Venture That Went Down the Toilet
38:36 | From Project Manager to Podcaster
45:30 | The Ins and Outs of Equity
52:46 | Education is Power
01:01:59 | Uh-Oh
01:09:18 | Onwards and Upwards

Resources and Links:

[00:07:14] I come from a family of business owners. Every single one of my family members, all my uncles all run their own businesses, and they've been successful in doing all that. And it's kind of been drummed into you as a child, going, 'Don't always work for someone. Run your own business, you'll be a lot more successful that way'. And I [went], 'Okay, fine, I'll do that'. 

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 take a step back in time as Rob Flux interviews me pre-Property Investory. My journey has been full of twists and turns, complete with stints in the corporate world as well as attempts to start my own businesses. While you know where I ended up, you may be surprised to hear about the times I was nearly left up a creek without a paddle.

Property Investory has been running since 2017, and in that time has garnered over 300 episodes. However, the journey to get here wasn’t as simple as it may appear. I tried my hand in many different industries, from web development to digital marketing, where I hit many of the pain points my guests have also experienced.

Rob Flux:   

[00:01:24] He actually started all the way back in the IT space, [he] ran a couple of businesses did a whole bunch of things where he— just like you— had lots of pain, lots of challenges. And we're going to find out exactly what it was that actually got Tyrone to get the action and take the action to be where he is today. 

  

[00:01:53] This is [the] return serve, because you recently had me on your show. And it's always good to get the message out to the folks out there. The audience that you've got are very similar to ours, with very similar journeys and that sort of thing. A lot of yours are in the property investment space, [and] mine are in the property development space. But there's going to be a lot of similarities between the issues and challenges between both I'm sure.

Tyrone Shum:   

[00:02:20] Absolutely. And I totally resonate. And that's the reason why I wanted to bring you on the show, because we're getting a lot more investors who are turning into developers. And there are also a lot of developers on our show, too, who really, really follow because they not only have developed, but they also keep investment properties for themselves. So they are considered both investors and developers, which is great.

Rob Flux:   

[00:02:38] And I guess you've gone through a similar sort of journey, started out doing investing. And now I guess you're doing funding in the development space. So you're one of those people that have transitioned all the way through to the end. So firstly, let's tell people a little bit about your Property Investory podcast. How long have you been running it? And I think you're up to episode 300 and something? 

Tyrone Shum:  

[00:03:03] Thanks so much, Rob. Yeah, Property Investory, we started back in 2017. It was just a podcast that I really wanted to share some stories. Because I was listening to a lot of property investment podcasts [while] driving to work every day. And we'll go into that shortly, because I was working full time for a large building company. 

 

[00:03:22] It was actually probably something I just really, really wanted to learn about. And as well, one of my friends who had been investing in property, he was— when I first met him, like couple years back when I was doing a bit of work with him— he only had, like, three properties when he started. And then literally two years later, he was featured in Australian Property Investor magazine, and they were saying that he had, like, 12 properties. 

 

[00:03:45] And I said, 'What did you do in two years time?' And I've still got only a property, then I go, 'I've go do something different'. Because I know him, he's just like me. But I think he was a lot more determined and motivated and really jumped in. And that kind of just sparked my journey to go, 'Okay, I've gotta do something different'. 

  

[00:04:05] At that point in time, I had some knowledge because I had taken a number of courses many years back, but I was also running my business and then went back into the workforce full time. But I didn't have enough knowledge to know what to really do. 

  

[00:04:19] And I was like, 'Okay, what did you do?' [He] said, 'I educated myself, took a lot of action'. And I thought, 'Okay, this is what I've gotta do. I got to do education'. 

 

[00:04:26] And one thing I wanted to do was to go in and actually interview people and find out how they did it, what their stories were, and so forth. And I guess selfishly, it was mostly for me! That was the reason why I actually started the podcast, because I wanted to learn. But luckily, it turned out fantastic because I found out there was a market there for that and to share. 

  

[00:04:50] When I actually started the podcast, it was because I was listening to a tonne of other podcasts out there. And a lot of them were just talking about the how tos, and it didn't really delve into the why, the real journey and the stories behind why these property investors got to where they were. 

 

[00:5:05] Because it's great to be able to go, 'Okay, I've got 10 different properties, and each one's generating X, Y, and Z', but it doesn't really [explain], 'Why did they do that? Was it for their family? Was it for the lifestyle? Etc'. And that's where I really, really wanted to delve in. And that's where it really started. So it has been fantastic. 

Rob Flux:  

[00:05:23] What a fantastic segue, because that's exactly what we're doing with you today. So the journey has come full circle. And it's now our chance to interview you to understand how and why. 

  

[00:05:33] And as I said in the intro, we want to take you all the way back to before you were in the property space and understand where you were, what was happening, what were the issues and challenges happening in your life. And then what was the thing that sparked the fact that you were wanting to kickstart your property journey? 

 

[00:05:51] And then how did that happen? You don't just go from zero to infinity in no time flat. There's issues and challenges. And, mate, let's dive deep. You ready? 

Tyrone Shum:   

[00:06:02] Ready as you are. 

Rob Flux:   

[00:06:05] Let's go back before you even got into the property space. What were you doing? What was your career back then?

Tyrone Shum:   

[00:06:11] I've been in the IT side. So I guess when I went to school and I studied at university, I went into computer science after I finished high school. So I've been pretty much in the IT space for a while. Now, IT is very, very broad. You know, there's so many different areas. And as you know, Rob, you know from your story, you've been in that space for a while, but there's so many different facets of it. 

  

[00:06:32] And when I first started, I kind of jumped into sort of the web development side, making websites. And back in... what, 1990, the end of 1900, or 1999 to 2000.

Rob Flux:   

[00:06:45] 1900! You were carving chisel into stone. 

Tyrone Shum:   

[00:06:54] That's right, you know, ready to get it downloaded! I think it was actually early, 2000s, I'm thinking back now. And after I finished my university degree, which was back in 2004, I had two choices. Either I could go into IT. Or I could actually go out and run a business. 

 

[00:07:14] Because I come from a family of business owners. Every single one of my family members, all my uncles all run their own businesses, and they've been successful in doing all that. And it's kind of been drummed into you as a child, going, 'Don't always work for someone. Run your own business, you'll be a lot more successful that way'. And I [went], 'Okay, fine, I'll do that'. 

 

[00:07:32] But at the same time, I had this contradictory thing that my dad said, 'Look, finish your degree, go out and gain some experience and work for a few years'. And I thought, 'I better take that advice on because that's what he said'. So that's what I did. I jumped in and went into IT just for a few months just to explore what it's like. And that's where I started web development. 

  

[00:07:51] Now, at that same point in time, in the first year of uni, I flunked out. So this was going back a few years ago. I literally failed a number of subjects. And I was... you know, being a uni student, you kind of felt devastated and you go, 'It's the end of my life'. But it's like you go, that's just being childish. But that's all you kind of grown up to. 

 

[00:08:09] And at that same point in time, I really, really felt like, 'What am I really doing? Do I really want to do IT? Do I want to do something else?' And I guess that's where my auntie realised, 'Look, there's more to life'. And she handed me this book, which most of you would probably have heard of is Rich Dad, Poor Dad by Robert Kiyosaki. 

Rob Flux:   

[00:08:30] It's one of the classics back there, mate.

Tyrone Shum:  

[00:08:31] That's right. One of the classics. You know, I wish I actually had it right here. But everyone knows about it. 

  

[00:08:36] And when she gave me that book to read, I couldn't put it down. I literally picked it up at night and was up until, like, two or 3am and completely finished it. It was just so easy to read. But it also resonated with me because I'm going, 'Wow, there's more to life than just studying and going out to work full time'. 

 

[00:08:51] And that's where it kind of just got stuck in my head subconsciously, that, 'Okay, I've got to run my own business, I've got to be in the B quadrant', which is an investor or business owner. And that's always stuck in my mind for the longest time since uni. 

 

[00:09:04] So I guess what I did was I did what my parents told me to do— just go out, get a job and just start working first to gain some experience. But in the back of my mind. during uni days, I actually got involved in a bit of learning about real estate. I started a vending machine business. And that kind of just opened up my mind to what was possible, because I needed some cash on the side. 

  

[00:09:25] Luckily for me, I guess [it's] been drummed in at a very young age to be a good saver. So everything that I earnt, I always put away and I didn't really spend much. And even today, my family and my wife knows I'm pretty frugal. I don't really spend that much and I'm very strong at saving. And I think that's kind of ingrained into me for a very, very long time. 

 

[00:09:43] So at that point in time, when I started running a business during my uni days, I'd made a little bit of money but I also got involved in real estate. Or property, I guess you can say. And I guess at that point in time, I was trying to educate myself and learn a little bit more. 

 

[00:09:58] And luckily I've been very fortunate to be able to be working [under] the wing— or not working, but learning on the wing of a successful property investor, [who] I have had on my podcast, and he's quite well known. And he started to give me some ideas on how to actually go about training and looking at the right deals. 

  

[00:10:17] Because back then, when you were looking at the market then, you could literally pick up properties in the regional areas for like, $40,000 [or] $50,000. It's like going to the candy shop, just picking up. And they're all positive cash flow from day one. You're earning like, $80 [or] $100 a week from that. 

  

[00:10:32] And there was a specific formula that was very easy to work out. So I thought, 'All right, well, let's do what he's done'. And I kind of started that journey to go, Okay, I'm gonna start looking for positive cash flow properties. And at that point in time, I think that first year or second year out of university... 

Rob Flux:   

[00:10:46] That was Steve McKnight, yeah? 

Tyrone Shum:   

[00:10:48] Yeah, that's right. That was Steve McKnight. Steve McKnight was one of my first mentors in property. And he was really the... I guess you can say, the start of this journey of buying lots and lots of property. A lot of people wanted to do positive cash flow. And he's written a successful book [titled] From 0 to 130 Properties in 3.5 Years. And I think that's what a lot of us actually wanted to do exactly the same thing. Because if he can do it, and we can learn from him, it's just following his strategy and his model. And that's how I got started.

  

[00:11:19] I went out look for a property in a regional town and purchased it. And [I] purchased it [for], like, $105,000 and [it] was returning like, $230 a week. And that was my first property investing journey back when I was very young, back in uni and in [my] first days of working.

Rob Flux:   

[00:11:35] So what was it that actually made you go buy that property? So it's all well and good to say, 'Hey, I studied under Steve', but what made you think that you wanted to do that? What was the mechanism? Was that the ticket that you pulled it out of the book? Or was that something else that you saw? What was the thing that went, 'Hey, I just need to do this?' 

Tyrone Shum:   

[00:11:54] Coming full circle, thinking back at it, it was because of I think, Rich Dad, Poor Dad. Thinking, 'Okay, gotta start becoming an investor, in the B quadrant, looking at running a business and see how you can do that'. 

 

[00:12:04] Because when I look back at the journey, the reason why I went into a vending machine business was because I was trying to set up some systems or set up some businesses where [I could] just generate passive income. And that was, the whole focus for me is to generate passive income. 

  

[00:12:17] If I can buy multiple properties, buy multiple vending machines, I can do a lot of those, then I get passive income. 

  

[00:12:23] And I guess at that age, when you're [in your] early 20s, you go, 'Wow, if I can earn an extra $1000 [to] $2,000 a week, I feel like I'm on top of the world, and I could pretty much live like a king. And then I don't have to go out and work full time in a job or anything like that'. And that was really the driving, motivating force. 

  

[00:12:39] And at that point in time, I thought, 'If I do enough of this, I can just pretty much live on my own terms'. And that's the start of where I jumped into learning more about business, learning a bit more about IT, and getting into those things, because that's what I was really passionate about. 

 

[00:12:54] And at that point in time, if I could find myself to just have a place where I could live, moving out of my home with my parents— because I still living at home with my parents at that age— then I think I could start to live my own life and live my own terms. And that's exactly what I did. 

  

[00:13:10] I found a place locally rented a place where I could actually get one of the rooms, which I could live in, and then rent out the other three. And literally, the other three that rented from us in that house, which is share accommodation, paid for my room. And I was literally was living rent free. And I thought, 'That's perfect. I don't have to worry about boarding, I don't have to worry about all that. I just pay for groceries, and I'm sweet and then run my own business'. I thought that would be the dream. Which is what I did. But it didn't turn out that way, obviously.

Rob Flux:   

[00:13:40] So why not, mate? What happened?

Tyrone Shum:   

[00:13:44] Back then, [the] Internet was just starting to [take] off. And a lot of people were starting to get online and make money online. You know, 'make your first million' and all that kind of stuff. And there's a lot of... you can say, scams out there that kind of entice you to do that. And I kind of got stuck in that too. 

  

[00:13:59] I'm thinking, 'Wow, I can live the dream, selling Palmer's and sipping pina colada and make money passively'. Unfortunately, it's not like that. There's a lot of hard work, and you've got to find the right opportunity. 

  

[00:14:12] And I searched and searched for so many different types of things to do. I jumped into doing, like, marketing, [I] jumped into learning about how to set up websites and sell, that kind of stuff. But it still didn't cut it because I didn't have enough experience or confidence to be able to sell these kinds of things. And no matter how much I offered, I just didn't get the volume. And that was the challenge.

  

[00:14:33] Membership courses back then were very popular. If you did the numbers— say for example, you could sell a monthly subscription to sign up for $50 a month. And you get, say, 1,000 students in. 1,000 students paying $50 a month, that's like $50,000 a month. That is [an] insane amount of money for [a] very young kid like me. And I thought, 'All right, well, let's let's try and do that'. 

  

[00:15:01] The reality is, is that most of the time when you're trying to find 1,000 subscribers to subscribe to course paying you $50 a month, it's a numbers game. And you might only get maybe a percentage, like 1% or 2% conversion over to be able to do that. 

  

[00:15:14] So that means if you were to try and find 1,000, you will need to [at] least tap into a database of more than, say, 10,000 if I'm doing the maths right. No, more than [that] actually, 100,000 potential prospects to be able to get 1,000 members. 

 

[00:15:27] And that I didn't realise until I started the journey. And that was not realistic. Because then that means you'd have a huge database of 100,000 engaged prospects that would be interested in your course. 

  

[00:15:42] And what I was selling back then was pretty simple. But it wasn't enticing enough. And yeah, obviously, that didn't work for me. And probably when I first started my first course, I only had maybe about 50 members. And I thought, 'This is really, really hard work'. So you can imagine some of the challenges I faced. 

Rob Flux:   

[00:16:02] I know lots of people that have gone on similar journeys. They've tried to do Amazon sales, they've tried to do all sorts of Internet marketing, share trading options, all sorts of things. And I think all of us at one stage that end up being successful have done lots of things that we've failed along the way. Like that, only to go, ‘Well, that's not the thing that's for me'.

Tyrone Shum:   

[00:16:25] No. I mean, I was passionate about that stuff. The challenge was that the dream that was sold was not realistic. And if people actually understood and see the numbers behind it— because they never tell you that you need to get at least a database of 100,000 people to do this— then you'd realise, 'Gosh, this is really, really difficult to actually get in'. 

  

[00:16:46] And the people that really make it is usually the one percenters. And people don't say that. You get this dream sold right in front of you, [and] you go, 'Wow, this is great'. And obviously, they're trying to sell you something at the end of the day. And that's how they're able to make their money.

Rob Flux:   

[00:16:59] Well I've reverse engineered how it is that they are successful, because they're trying to sell you on how you do it. And that, then, in itself, they're teaching you how to teach yourself. They're the people who get the million people, because all of us are desperate in those early stages and we all want to learn that. 

  

[00:17:21] But then when we go and implement that, that's when we work out that actually that's the bit that's the hard bit. 

  

[00:17:25] So I've done lots of those mate, you're not the only one there. Trust me. I've probably burnt a good $100,000 odd on schemes like that, easily.

Tyrone Shum:   

[00:17:42] I think we've all been down that rabbit hole. And I guess for people who are starting out in that kind of site— just be cautious. That's all I can say. Ask people who've done it and see what their experience is. 

  

[00:17:53] I'm not saying that it's not possible. But just be prepared that it is extremely, extremely challenging. Especially in today's times, there's so much out there, and so much competition you're fighting against to get people's attention. And that's the challenge that I think we're facing even today. 

  

[00:18:08] I wanted to also take a step back and just share something else that was really interesting. And this is where I guess I can say I kind of made it and started a successful business, because as I was saying, I was trying so many different things. 

Tyrone Shum:  

[00:18:19] Back at uni days, I was trying to find a sport. Because growing up in high school, I was always very active. And I guess once you get kind of ingrained to do activities and sport during the Saturdays and the weekends, and train two or three times a week, you kind of can't stop that because it's just kind of part of you. 

 

[00:18:38] And I've always been active and very fit and doing athletics and some type of active thing. And I guess once you kind of get used to that, you kind of want to find that when you go into university. 

  

[00:18:48] And unfortunately, at uni, you're kind of slacking off. Especially when they go, 'Okay, it's your responsibility to turn up to lectures, your responsibility to complete these tutorials and attend these exams'. If you don't attend, no one's gonna give you a slap on the wrist like they do at school. 

  

[00:19:04] I learnt the hard way, because that's how I failed in the first year, because I spent too much time partying. Chasing after girls, going to play basketball all the time. And you learn these lessons along the way. You realise, 'Gosh, you missed that too. But who cares?' But at the end of the day, it affects your results. 

Rob Flux:   

[00:19:20] I always laugh, because university is one of those places where Mum and Dad are really proud of the fact that you're going. And yet that's the very place that you're partying, you're slacking off. So behind the scenes everyone's proud, and in the end it doesn't get you where you really want to get to.

Tyrone Shum:   

[00:19:37] So true, so true. It's a shock to the system to be honest. That first year, man, I was like what the...!

Rob Flux:   

[00:19:44] So your sport, you took up dragon boating, yes?

Tyrone Shum:   

[00:19:47] Correct. Yeah. It was really around about the second year and third year actually, I took up the sport. It was actually funny because I was trying to find something to do, and at the same time I was looking for a social event. And a person from uni introduced me actually to dragon boating and said 'Look, just come along, have a look and hop on the boat with us'. And I thought, 'All right, this sounds interesting, I'll go and check it out'. 

 

[00:19:47] And I'd never heard of it before. I didn't realise that there was so many people in the community, it was only when I attended. And it's only by Glebe, like Glebe is like literally next to Darling Harbour, it's not far from there. 

  

[00:20:21] When I attended, I was like, 'Hold on, is this actually for real?' You can actually lift up a 20 man boat, like you have 20 people carrying this boat, lift it out and then just drop it into the water down at Glebe, down at Darling Harbour. Because I thought, 'There's got to be some rules behind all this. You can't just hop on to the water without permission'. They said, 'It's all checked out' and all that kind of stuff. 

  

[00:20:41] So they have a permanent spot down there, and all locked up all their boats and paddles and stuff like that. I went in on that first journey, and I thought, 'Wow, this seems pretty fun'. It's social, you get 19 other people on the boat. You're actually training, enjoying the fun of it. I don't think people always enjoy training, but I did. 

  

[00:20:41] But also at the same time, you have a bit of a view, because you're looking out by the ocean too. Because you can paddle all the way out from where you are in Darling Harbour. 

 

[00:20:50] And I thought, 'This would be a fantastic way to get fit and get back into doing some exercise and socialise at the same time'. And that's what I did. I attended for a good 12 months, just to try and get into the sport. 

  

[00:21:22] Because there were so many different clubs, you have to choose which club you were in. And luckily for that particular person that I was introduced to, I really became part of that club without knowing that I was part of that club. I just paid a membership fee, and off and away I was. 

  

[00:21:37] Now after about 12 months or so, I kind of got a little bit competitive, as I usually do with any type of sport. And I started competing in the local states, then I went to Nationals. And after that I could have been invited and gone over to compete internationally. And I didn't even know that was possible, until they actually started running these events. 

  

[00:21:55] And I didn't have the funding. Being a university student I couldn't take time off to train, because you have to train, like, five days a week and travel overseas and all that, and I didn't have the money. And I said, 'I'm more than happy to support you guys from the back end, but I can't go and travel overseas and do all that stuff'. 

  

[00:22:12] So all I did was I got to the national level. We competed. And I remember that first year when I competed, we went to Canberra, and there was a lot of different states coming from other places and competing against us. And so many of them were really excited to come to Sydney, and to compete, and then afterwards go to Canberra to compete as well for the finals. 

 

[00:22:37] And what was really interesting was, you realise looking around, there's so many people involved in this sport. And a lot of people were demanding or interested in buying a specific type of paddle. 

  

[00:22:47] And back then, if you saw dragon boating as it stood, back in China, they had these wooden paddles. And it was pretty much hand carved. And it's just [a] plain stick. You pull it through the water and that's it. Nothing fancy. 

  

[00:23:00] But as the dragon boating sport took off not only in the States and Canada— because it's such a large sport, it's as big as an Olympic sport over there— Australia started take that on. People were going, 'Man, if I can improve my stroke and time by a few split seconds, because I wasn't carrying so much weight due to these wooden paddles, we could actually go faster than the boat'. 

 

[00:23:23] So that's where people started finding out about come five paddles. And these things, man, they were so light. You can imagine, they were only 350 grams. Some of them got down to 300 grams. Compared to a wooden paddle, which would weigh almost twice that, about almost a kilo.

Tyrone Shum:  

[00:23:39] And that's where my journey started. [I thought], 'Okay, there must be an opportunity here. I want to get a paddle myself, too. I want to find out: Where do I buy these things?' 

  

[00:23:48] And unfortunately in Australia, there's only really one— at most, two— suppliers that offer that. And those one or two suppliers that offer it charged quite an expensive amount. I think for memory, it was, like, $350 for a paddle. And I know that another mob was selling them for, like, $400 a paddle. 

 

[00:24:08] And I thought, 'There's got to be a better way to be able to get these from overseas'. Because no one was actually importing them as such as a business. Our local club leader— I think her name was Mel if I remember correctly— she would do a batch order to this company over in Canada, I think it was, to say, 'Hey guys, who wants to order these paddles? I'm doing batch for 50. If you want it, just let me know'. 

 

[00:24:32] And she was just doing this out of kindness. She didn't make any money out of it. She was just trying to get these paddles across. And I think she bought them in for about, like, $280 a pop or something like that. Because she bought them in bulk and cost and save. 

  

[00:24:42] And I thought, 'Man, if I could actually tap into this resource and call the supplier and say, "Hey, have you got a distributer in Australia?"— which I found they didn't— would you like me to actually help you guys do that? And on top of that, would you throw in a free paddle for me too?' 

  

[00:24:57] And that's exactly what I did. I basically contacted them and started a relationship. And I became pretty much the distributor for that particular product and kind of took off the hands of Mel, because she was saying,'Tthis is burning me [out], I've got better things to do rather than just do these orders for everyone'.

Rob Flux:   

[00:25:12] So you've turned your passion into a business, effectively. 

Tyrone Shum:   

[00:25:16] Pretty much, yeah. And it really, really was an eye opener because I didn't realise I could do it. And I think once you're passionate about something, you will find any way in every way possible to make it work for you. And that's what I did, because I want to my motivation, get a free paddle, but at the same time, make some money from it. And that particular first deal, man that just took off, and people got the word that I started importing these things.

Rob Flux:   

[00:25:39] And there's probably a huge lesson, I guess, for our audience in there. Mum and Dad always tell you work hard, get a job, go to uni, that sort of thing. But you tend to get your successes in the things that you love and the things that you actually put all of your energy into because you genuinely want to. And you'll find those little niches like you just touched on. 

 

[00:26:02] So that was a relatively successful business for you from what I understand. How long did you run that business for?

Tyrone Shum:   

[00:26:11] I think it was a good probably three to four years, actually, before I sold it. Because what happened was, that was only the first part. And when I started discovering and doing some research online, and luckily, the internet had started to get really, really reliable. And that's when websites start popping up a lot more. And I could actually find out where all the different distributors were. 

  

[00:26:32] So I started reaching out to all the distributors in [the] US because there was no no one here in Australia. And I started taking on the exclusive distribution of that. And by the end of that second year or so, I had pretty much dominated all the dragon boating distribution rights across Australia. And I pretty much imported every single possible product that they had into my business. 

  

[00:26:54] And there's only one other brand that I couldn't have. Because he already had distribution rights in Australia. But because I had such a wide variety of them, people could pick and choose which which brand they like[d]. 

  

[00:27:03] So if you think about it, it's almost like as though you're going to a Rebel store, and you have multiple brands in there. And you can pick and choose which one is suitable. You might choose based on price, based on performance, quality, and so forth. 

  

[00:27:14] And that's what I did. I pretty much put it all on a website, turned it into a 24/7 online store. And people could just click online and just shop. And they literally would. You'd get clubs ordering 20 [or] 30 paddles all in one go. And you get still done online. And [I was] like, 'Wow, this is fantastic'. 

  

[00:27:31] And all we'd do is just place the order overseas, bring it here, pack it, and then redistributed and then get it out to the clubs. And that's where we'd make our money. So, volume, it was fun. It was [a] great, great business to do.

Rob Flux:   

[00:27:46] I guess the segue there for your property journey, that would have been improving your cash flows and things like that. And I guess giving you [an] opportunity to go and buy more property. But my understanding is at that point in time you didn't kick start and take on the original investment a little bit further. So what was the roadblock that kind of stopped that from happening?

Tyrone Shum:   

[00:28:10] My first investment property that I discussed very, very briefly was I purchased this property in a regional town. It was a commercial property. And this is one thing I learnt looking back in hindsight, I guess my mistake was to jump into commercial at that point in a regional town at that point in time as well. It was too early. 

  

[00:28:28] Because with commercial, it's slightly different to how residential [lending works]. Banks, for example, lend up to about 80%, usually, for residential. So all you have to do is probably come up with a 20% deposit, and some extra percentage for stamp duty and fees and so forth. So at all, you probably need a 25% cash deposit. 

 

[00:28:47] With commercial, it's slightly different. For that particular property, if I remember, I think I need[ed] to come up [with] about a 35% to 40% deposit to be able to purchase that property. 

  

[00:28:57] Luckily, it wasn't too much, it was only a $105,000 property. So I had to come up with about $40,000. But as a university student, I saved up a lot to be able to do that. And I thought, 'Gosh, this is quite a lot of money to be tied up in there'. 

Rob Flux:   

[00:29:11] And we need to put this in context. This is a long time ago. So that's a lot of money, right? I remember buying my first house at $55,000. I wish I could buy houses like that now. But just remember folks, time changes things. But you need[ed] a lot of capital and you weren't able to generate that capital, yeah?

Tyrone Shum:   

[00:29:29] That's exactly right. And the challenge was, I still needed the money for the business as well, too. Because running any business, to be successful, you still need to have some kind of cash. You can't just draw that money out. If you're making money, it's great. And the cash flow is fantastic. But you still need to plough that back in. 

 

[00:29:45] Because we were basically a physical goods business. It's not like online nowadays that you could actually just have a course on there and then ship it and then still get paid and you hold that. With these physical goods, you need to have some kind of cash buffer to be able to pay your suppliers back as well, too. 

  

[00:30:01] And I will buy more and more stock at that point in time to be able to sustain, because the the demand was very high. Especially in the peak season. You want to make sure that you've got quite a few number paddles, like, hundreds of paddles available at the minute of a call. 

  

[00:30:14] Because otherwise, if you don't have any stock, they'll go to someone else. And then in the end, they'd be disappointed customers. So I was literally paying all my money back into the business. Which I guess you can say that I couldn't pull any more money out to be able to buy another investment property. 

  

[00:30:29] Now, as most people know— and this is where I guess the journey sort of turns and I learnt a lot since interviewing so many people on the podcast— a lot of people leapfrog from one property to another. In order to do that, you need to be able to have another cash deposit. Whether it be from equity from a property or you save up. 

  

[00:30:47] Now as you know, I couldn't save up because I had to use that cash for the business. So the only other way was possibly refinance that particular property and draw out equity. 

  

[00:30:56] Unfortunately, that property didn't generate any uplift or capital growth, being regional. And it was a very positive cash flow property. I went back to the bank numerous times, they just couldn't revalue it. And even when I did sell it, in the end, after about five years, I sold for the exact same amount, which was really disappointing.

Rob Flux:   

[00:31:16] Well, that's a reflection of commercial because commercial is valued on the rent it generates and the yield. So unless you can increase the rent, the value doesn't actually change. 

 

[00:31:28] Unlike residential property where the market demand will actually drive that up. Unless you can actually drive that extra rent, you're kind of stuck. It's a cash flow business being in commercial rather than a wealth creation, which is capital growth. 

 

[00:31:46] So you hit the glass ceiling that a lot of people hit, but you hit it in a different way. Because you were trying to get that capital growth which you couldn't pull out. So you weren't able to reinvest. 

  

[00:31:58] So that business was trying to generate the next purchase. But as you said, because you were reinvesting the cash, you just weren't able to get there. So you're hitting the same roadblocks that most other people are hitting. Right? So what did you try to do from there? 

 

[00:32:18] Like you've got a successful business, it's actually doing really well, but you still couldn't kickstart your property side of things. What was the next thing that you tried to do from there to try and go, 'How do kickstart this journey?'

Tyrone Shum:   

[00:32:30] This is a great question that you've asked, because that's where I started going, 'Okay, what other opportunities can I find? Not necessarily in property, but in business to be able to do that?' 

  

[00:32:40] And being young, you want to try different things. And once again, as I said, I tried Internet marketing, that didn't work for me. I also did try and import a little drop, we can say, a deodoriser, that was trying to deodorise the smell of going after number two. 

Rob Flux:   

[00:33:02] I've seen these things. You drop basically some oil or essence into the toilet that creates a surface so that the smell doesn't get out. 

Tyrone Shum:   

[00:33:11] Exactly. And it wasn't something that I found, it was actually my wife. She said to me, 'I saw this online, and I thought let's see if we can find out if they've got a [distributer]'. Because once you kind of get on that distribution learning curve, and you go, 'Okay, if I can actually buy more distribution rights in different countries like Australia, from another country, and distribute these exclusively, there's potentially money to be made'. 

  

[00:33:34] So I thought, 'I'll take the same model that I had from dragon boating and apply to the same thing'. Because this particular company— which their name was Just a Drop, which is a funny, interesting name— and it was a blue drop, as Rob has mentioned, you put that little drop in there that creates a little film. They didn't have any exclusive distribution rights in Australia yet. They were actually spreading across the US and they [were] doing very successfully there. And same thing as in Canada, because that's originally where they're made. And they're looking also at UK as well. But in Australia, they didn't have anyone. 

  

[00:34:05] So I thought [it was] the perfect opportunity to be able to have a look and see if we can sign some kind of exclusive agreement. Which we end up doing, because we thought there would be a market for it. And they said, 'Look, we'll provide you all the training, we'll help you and support you from over here, give you some ideas on how to do it'. 

  

[00:34:19] And they said to us, the way that they were successful and able to distribute it and actually get the word out was through PR. Which is basically to appear in as much publicity [and] media outlets and so forth, as much as possible. 

  

[00:34:32] So we did that. We started to learn a little bit more about how to do that. And we got featured in newspapers, we started getting out onto different areas. And back then actually, they didn't really have podcasts, and I wish they did. I could have distributed through that way as well. Or market it that way. 

 

[00:34:46] But once we started getting into newspapers, and we started doing some marketing online, we started to actually see some people actually purchasing it. And that's why we had a website set up, because people [would] come on online to order. So we kind of replicated what we did in dragon boating to Just a Drop. 

  

[00:35:03] Now, the challenge was was that we had to purchase quite a bit of stock initially. And this is the challenge with any physical businesses, is that you have to be able to inject more cash into the business to be able to sustain that. And that's what we did. 

  

[00:35:16] So I had to pull a lot more money out— once again, from dragon boating— to invest into this business, and also spend a lot of my time and effort to be able to promote it and market it. 

  

[00:35:26] And unfortunately, when we got to, say, the second batch to be able to purchase, the dollar had also dropped as well, quite substantially. And that also impacted us being able to buy a lot more. 

  

[00:35:37] Because instead of purchasing say, one dollar equivalent to about 80 cents, it dropped down to about one to 70 cents. So that had a huge 10% impact on the cost of purchasing these out. And therefore the margins dropped quite drastically. 

  

[00:35:54] And don't forget, these products were not selling for $100 a pop. They were only selling for, like, $5.95 or, you know, if you buy a pack of that you get it for $39.95. And that's what we were trying to do, sell these in volume so that way we can get that through. 

  

[00:36:08] Unfortunately, after about 12 months or so, putting a lot of cash [and] a lot of time and effort into it, we just had to let it go. Because the dollar also impacted it. We couldn't get enough traction, because people just didn't really catch on [and] understand why you wanted to do that. And it just turned out to be almost like a gimmick for them. And yeah, we just had to unfortunately close shop. 

 

[00:36:28] So we lost quite a substantial amount of money and a lot of stock at the end of the day. And we end up just giving those things away to family and friends and stuff like that. And since then I haven't really heard much of it, 20 years later, many people wanting to use it.

Rob Flux:   

[00:36:43] I recall one of your competitors had a little bit more of, I guess, a memorable catchy name. Poopourri.

Tyrone Shum:   

[00:36:50] Poopourri. Yeah, I do remember.

Rob Flux:   

[00:36:55] So you were well ahead of the curve by the sound of it, mate. But sometimes you can be a little bit too much of an early adopter.

Tyrone Shum:   

[00:37:02] Yeah, it was way too early, I think. Sometimes you've just got to go with the flow. But it's kind of interesting that we didn't continue down that path. Because after running about three different product based businesses or physical type of businesses, I realised, 'I've gotta get out of that type [of business]'. 

  

[00:37:20] Because it's really cash intensive, and also physically intensive. Even though for example, in today's market, we've got Amazon and drop shipping and all that, it still requires some form of huge capital injection to keep these things running. 

  

[00:37:36] And that's why at that point in time, I made a decision not to go back into that path. Because I didn't want to be helping pack stuff. I mean, I had already done a lot of it for dragon boating, I was mostly the packer for distribution. We got a lot of accessories, like Croc shoes, for example, we had a lot of that, [I] had a lot of packing for that, and it tires you out. 

 

[00:37:55] And yes, I could have hired people. But every time I do that, it obviously impacts our profitability of the business. So I said to myself, the next business I go into will have to be either property— which is what I did— or something that doesn't require physical products. Which is where I went, [I] ended up going back into finance or IT. So that's kind of where it landed.

Coming up after the break, we delve into the power of passion…

[00:43:20] And again, it's one of those things where you're following your passion.

The difference between delegation and abdication… 

[00:55:38] Going out and getting a buyer's agent to bring you a deal is a fantastic way of outsourcing the effort. 

We discuss the time where it all started to turn around, which came as a surprise for many reasons.

[01:01:59] Anyone know that date, folks?

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

After trying so many different routes and avenues, I knew it was time to do something. While I knew I wanted to be in property, I had hit the glass ceiling so many times before and was determined to break through it this time.

Rob Flux:   

[00:38:36] And then I guess the idea of the podcast came along, and I think you said you saw a mate go from three properties to 12 in a really short period of time. And that's kickstarted that [thought], 'Hey, I want to do something about it'. So how did that start the podcast element of things?

Tyrone Shum:   

[00:39:00] As I mentioned, I've been running businesses for many, many years. I think it was a total about seven or eight years. And by that point in time, my first child came along, which is my son, back in about 2014. 

  

[00:39:12] And at that point in time, as you know, with running a business, it's very cashflow intensive. And we needed stability, because one month you might have a huge month, another month [might be] low and so forth. It depends on the season of things. 

  

[00:39:26] And at that point in time, we need some kind of stability. So my wife and I decided that it'd be best that I go back into [the] workforce to work full time. And that's that's what I did. And at that point in time, I went into work as a project manager slash digital marketing manager as well, too, at a large building company. 

  

[00:39:46] And I had been there already probably about three years, since 2014 to 2017. And at that point in time I [was] still searching. [In the] early stages when you have your first child, for any parent that knows this, the first probably two to three years, you've just don't get much sleep. You don't think about anything else except survival. That's really it. 

  

[00:39:46] And that's why it never occurred to me that I needed to look for something else, because I could not have run another business again. It would have been too stressful, and we just needed that stable income coming in. 

 

[00:40:17] And once you hit the third year with the child, you decide, 'Oh, let's have another baby'. What am I thinking?!

Rob Flux:   

[00:40:26] Don't do that, mate!

Tyrone Shum:   

[00:40:29] So that's what happened. But at that point in time, I guess when you have your second child, it's a little bit easier, because you know what to expect. And by then she was already one year old in about 2017, and I thought, 'Alright, I think I've gotta make a change'. 

  

[00:40:46] Because ultimately, I could not see myself working in [a] full time job for the rest of my life. You've got a fixed income, which is great, it's stable. But every time I see the pay slip come in, I saw how much tax I was paying, how many hours I was working. And I was thinking every time I go back to ask for a raise, my boss would only give me maybe $1,000 or $2,000 in a year. This is not talking about every month or something like that. It's insane. 

 

[00:41:12] And I thought, 'Man, I'm going to be hitting the ceiling here very soon, because I'll never be able to get out of this. I'm stuck in this rat race'. 

  

[00:41:18] And once again, it's a ceiling issue. Because I want[ed] to earn more money so I [could] buy more property, and I couldn't. So that's where it kinda hit me and [I thought], 'Okay, I've got to do something different'. 

  

[00:41:30] My friend who I knew a couple of years back, that he was only having like, three properties. And then [he was] featured in the magazine two years later. And I went, 'Wow, what has he done differently?' And he was also working full time. I mean— he's okay for me to disclose this— he was only earning $70,000 a year. And he said exactly the same thing. I've got to find another way, because no matter what he does, even though he loved his job and he'd been doing it for 10 years, he can never earn more income than he had, because that's his limit. 

  

[00:41:59] Unless you're climbing the corporate ladder, getting up to like a CEO position to be earning six figures easily, there's no way you can get out of that. And when you're working in a company with 1,000 employees, it's very challenging. 

  

[00:42:12] So the only way to really get out was to: one either invest more into property, either having more cash flow, or start another business. And I thought, 'All right. That's the only other way'.

  

[00:42:26] Done this before, just depends on when.

 

[00:42:28] And it kind of rung true. As I said, at the beginning, my father said, 'You'll never be able to earn enough or make a lot of money just working for someone. So you've got to go out there and start your business'. 

 

[00:42:39] And I think at that point in time, I needed to educate myself, I needed to make some changes. And I thought, 'This might be the way to actually change my life. I don't know how long it's gonna take. But if I stick with it, it will definitely get there'. And obviously, from 2017 to now, it's been five years, it's really, really had a huge change. 

Rob Flux:   

[00:43:00] The business you're talking about is the podcast, yes?

Tyrone Shum:   

[00:43:04] Yes, the business is the podcast, that's right, with Property Investory. But ultimately, at the end of the day, to be realistic, it has taken three to four years to get to where it is today. For the first couple of years, it didn't really do much at all. And that's the reason why I was still in full time employment, because I just had to keep building it.

Rob Flux:   

[00:43:20] And again, it's one of those things where you're following your passion. And I guess that's twice now [you've] follow[ed] your passion [and] turn[ed] that into a business. I guess that's how and where you start to get success. 

  

[00:43:32] So I guess when you came up with the idea of the podcast, who was person number one? Who was the first interview? And how did you convince them to come on when you've got absolutely no experience in podcasting, and no audience and nothing? So who was it and how'd you get them on? 

Tyrone Shum:   

[00:43:52] That's something I should have probably mentioned. I did have some experience in podcasting, because as I mentioned, I tried internet marketing.

  

[00:44:03] I did video marketing, I did podcasting and did all that in there. And I kind of loved podcasting because it was just having these conversations with people who I've never ever met before. And I really, really enjoy that because one, as you know, there was blogging that was taking off. There [were] all these other kinds of forms of media.

  

[00:44:20] And I tried blogging for a stage as well, as you would try. And it just didn't work for me because I could not sit there and just everyday force myself to write. I'm not naturally a great writer, nor am I great at writing anything at all. I actually failed English at school. 

  

[00:44:34] But when it comes to having casual chats, like how we're doing right now and getting on to a podcast, I just felt very comfortable with it. And that's the reason why I kind of just jumped back into it. And you could literally be sitting behind a screen without people seeing you, in your pyjamas, interviewing someone else

Rob Flux:   

[00:44:52] I'm wearing nothing down here, mate. This is an easy job.

  

[00:44:58] So that's why I loved it.

Tyrone Shum:   

[00:45:00] It could exactly be that. So that's why I guess I went back into it. And I thought this would be an easier way for me. 

 

[00:45:06] But to answer your question, yes, my first ever guest was Chris Gray that came on to the podcast. Now some of you may know who he is, he's a contrarian, he's got a fantastic lifestyle, has a huge portfolio, but he lives off his equity. 

  

[00:45:21] And for a lot of us, I find that quite contradictory, because a lot of us have been trained as investors that you want to try and keep your debt low not to keep building up your debt.

Rob Flux:   

[00:45:30] So we might kind of delve into that a little bit deeper as to how that works. Basically, when you've got a portfolio large enough, the market is doing a lot of the heavy lifting for you, and your equity just keeps growing every year irrespective [of that]. 

  

[00:45:44] And so he's just drawing down on some of that equity in order to live his lifestyle. So the the property goes up, and he draws some out, and then he goes up, and he draws them out. 

  

[00:45:55] So clearly, you have to get into enough properties to make that sustainable. So there's a couple of steps that need to happen before that works. But when you get to there, it works really well. But like you said, you still have a large amount of debt. And the debt gets bigger and bigger every year as you draw more and more equity out of it.

Tyrone Shum:   

[00:46:15] Yes. And also, I guess, you make the assumption that your property values go up every year. And that doesn't always happen, as you've seen. It might happen in spurts. 

  

[00:46:23] So I guess the challenge that I see with that kind of strategy is unless your properties go up, you won't be able to refinance. And if you've got nothing to refinance, you can't draw more equity out. So hence the reason why I think you'd have to have some other forms of cash flow. Which [is] the reason why he's also got buyer's agency as well is to obviously fund that kind of cash flow as well, too. 

 

[00:46:44] But yes, you have to get to that point. I mean, he's got, like, 14 plus properties, and they're all located all in Sydney. So for anyone who can do the maths on that, he's had that for more than I think, probably 20 years or something like that. There's probably enough in there.

Rob Flux:   

[00:46:58] So that's working really well for him. But he had to get to the point, where he had to buy the 20 properties at the first place. And so more and more people are coming on your podcasts, you're learning more and more different ways to acquire and manufacture and all sorts of things like that. 

  

[00:47:12] As you started to do this, and you're starting to learn all these different ways of doing property differently, what [were] some of the ones that stood out? From just an ideas perspective?

Tyrone Shum:   

[00:47:28] I think what I'll do is just sort of give people a bit of perspective of who's come onto the podcast, and just touch on some of those people, ideas and suggestions. 

  

[00:47:36] So I've had people like John Linderman, Jan Somers, Steve McKnight, who has been one of my favourite ones. As you know, at the beginning, he was my mentor. And for me, it was like, 'Wow, I'm so honoured, Steve, to have you on my podcast, because you've been my teacher, my mentor, and stuff like that. And for you to share your story with the listeners and myself, I just felt like as though I won the lottery'. So having him on it was fantastic. 

 

[00:47:59] I've had people like Cherie Barber, who's a celebrity renovator on a lot of the media and TV shows. John L. Fitzgerald. And I should make it clear, actually. A lot of these people actually reached out to us because they actually saw the success and wanted to share their story on the podcast. I'm very grateful for having all that knowledge. 

 

[00:48:53] A lot of these people who I've met initially were property investors that have come on, and invested into a lot of properties. But eventually, what happens is that they actually move on to do property development, or some kind of development of adding value. Whether it be renovations, subdividing, or building up townhouses and so forth, or construction of some sort. 

  

[00:49:22] And that's what I've learnt along the journey, because I've interviewed so many guests. And yes, there's a lot of buy and hold investors out there. But they get to a point [where they] go, 'Okay, I've got 20 plus properties. What am I gonna do next? Well, I can either add value or start development'. Typically, that's what happens.

Rob Flux:   

[00:49:38] They hit the glass ceiling. Because you're waiting for the market to do the lifting, right? 

Tyrone Shum:   

[00:49:43] That's right. 

Rob Flux:   

[00:49:44] But when you do the property development, and there's lots of ways to add value, you're manufacturing the profit. Which means that you're not reliant on the market. And that's probably the key. And we find in our audience, a lot of the people that have had that same journey that you had then get to the point [where] they go, 'Well, how do I start to manufacture this?' 

 

[00:50:04] So you've kind of realised that through your podcast. What are the some of the creative ways you've seen to manufacture it?

Tyrone Shum:   

[00:50:15] I think the easiest path for a lot of them who have started was to jump in and do a subdivision. Because it's very low risk in the sense that you don't have to actually think about building. Especially as you've seen and heard during the COVID times, prices of supplies have gone up so much, especially timber. And the cost of actually find[ing] that, finding tradespeople and getting builders and so forth is quite challenging. 

 

[00:50:38] But a lot of people [have been] able to just find a block of land and subdivide it— maybe one into two, one into three, or whatever mountains that they can subdivide it into— can actually make [a] reasonable amount of profit, and also add value. 

  

[00:50:51] And it's a matter of just knowing what's involved. Working with the council and getting the right team on board to be able to help you [with] that. And I found that that's probably the simplest and the most interesting way, or easiest way, to get started. 

 

[00:51:04] Now, some of the interesting ones I've seen is quite substantial developments that I couldn't even think that was possible. Like, I'm just thinking of a commercial block that was done in Sydney, one of the developers I've had on there. 

  

[00:51:18] And literally, from what I remember, he initially purchased that office space and said they converted it directly into almost like a hotel, or lots of rooming accommodations. And I thought, 'Wow, that is insane'. 

  

[00:51:31] Because to convert the structure to do all that means that you have to really gut out a lot of things. And a lot of people wouldn't probably take on that challenge, because it's quite risky. Especially when it's already zoned for office, and you've got already existing tenants in there. 

  

[00:51:45] But then he's obviously done the numbers on it and realised, 'Wow, if you actually turn it into more of residential unit spaces, and could actually sell each individual one, then there's probably a lot more profit [to be] made'. 

  

[00:51:57] So that's been a very different way of looking at things that I've had on an interview. I'm trying to think of any other sort of developments, but mostly, I think a lot of developers go in there with in mind to ensure that they minimise the risks to be able to go and do what they need to. Because the last thing you want to do is take on something that's too big to chew. 

  

[00:52:17] And I've seen that happen already with a few developers I've worked with as well, that they've just taken on too much. And unfortunately with the market turning [and] interest rates rising, [they've] pretty much gone almost bust. Not necessarily gone completely under, but you can already start to see they've overcommitted themselves. 

  

[00:52:34] So I think that's the challenge that we've seen in the market. And how developers can really make sure that they want to try and mitigate the risks and reduce the kind of things that go into, that's not too challenging.

Rob Flux:   

[00:52:46] Agreed wholeheartedly, and that's really about educating yourself and making sure you understand what the process is, what your issues and challenges are, and put some risk mitigation plans in place. 

 

[00:52:59] And I think that's where a lot of people fall down, is [they] don't put that education side in. Now, as I understand it, but you're in a really fortunate position in running the podcast, and you've got a lot of people that do education that have kind of come on to your show and said, 'Hey, Tyrone, why don't you come to my programme?' So you've learnt a lot of that stuff along the way. 

  

[00:53:23] And we don't have to go into how, it's like falling off the back of a truck, but you've learnt those things. So you've learnt the skills in how to actually apply it. But was learning the skills enough? As soon as you had the knowledge, were you able to take action straight away?

Tyrone Shum:   

[00:53:40] No. So let me share a little bit of background story. So I wholeheartedly encourage anyone listening to spend as much time as you can to educate yourself, because that's the key thing. 

  

[00:53:51] When I first started the podcast, as I said, I kind of did it because I really wanted to learn, I wanted to educate myself. And very luckily for me, I managed to get a lot of guests from attending a lot of these courses and educations and stuff like that. So it did save me a lot of money. 

 

[00:54:06] But if I actually had to pay it, I probably spent over easily $100,000 on all the courses that I would have attended. But I would highly recommend anyone who's who's getting into this to actually educate themselves, and ensure that you learn and try to apply as much as possible. 

  

[00:54:22] Now, as Rob has asked, even if you pick up all these skills, educate yourself, it wasn't enough. And for me in my journey, no, it wasn't. Because the thing is, if you're not taking an action, nothing will happen. 

  

[00:54:34] And this is what happened. I did take numerous courses. And for me, I tried to take as much action, and I kind of got to a point after about 12 months of learning and also trying to implement door knocking, letter dropping and trying to find deals, I didn't get anywhere after 12 months. 

 

[00:54:53] And I spoke to my coach about it at that point in time. I said to him, 'What am I doing wrong? What do I need to do?' And he gave me a little shook and said, 'Just find a buyer's agent and get someone to find the deal for you instead of you going out there'. 

 

[00:55:04] And I realised, 'Well, if I had known that 12 months ago, I would have saved a lot of time'. But obviously, it's part of that learning. And I thought, 'Alright, well, I've got to find another way to do it'. 

 

[00:55:17] So I took his advice, but I also went on and found another coach that could also support me. Because this particular coach was supporting me from a friend point of view. And that was fantastic. But obviously, I needed someone who I can be more accountable to and dedicated [to]. And that's the reason why I went and saw another coach. 

Rob Flux:   

[00:55:33] Before we jumped down that one, I just want to do a point of clarification if I can. Because going out and getting a buyer's agent to bring you a deal is a fantastic way of outsourcing the effort. 

 

[00:55:46] But where I see a lot of people go wrong— and you might be able to comment on this— is the difference between delegation and abdication. 

  

[00:55:56] Delegating the work for someone else to do is great. But abdicating and getting them to make the decisions for you and then just going, 'Yeah, it must be a great deal'. 

  

[00:56:06] So for anyone who wants to outsource it, make sure you have the education in the first place to be able to qualify that the deal they're bringing you back is actually a deal. Because there's many times where that deal not necessarily is. 

  

[00:56:20] And you're fortunate in that you had the education to be able to assess the deal on its merits. So that was fantastic. But I see a lot of people try to shortcut early when they haven't got the ability to just sanity check that.

Tyrone Shum:   

[00:56:32] Absolutely, I mean, this is the thing. I think it was worthwhile for me to spend a good 12 months to become an area expert, to actually go and meet the real estate agents, to actually do my own due diligence [and] learn about it. 

 

[00:56:43] Because if I actually jumped out and went and found a buyer's agent from day one, I probably would have believed every single word that a buyer's agent [said], and he would have sold me on something that could have been a lemon. And I would have been stuck at that point in time. 

 

[00:56:54] So now that I have that experience, that knowledge, if I went to the buyer's agent, I know exactly what I'm looking for, I can communicate exactly what I need from them. And then whatever deal they send back to me, I know exactly what due diligence I need to complete to make sure that is the right deal. 

 

[00:57:08] Because ultimately, you make your money going into any deal, not when you've actually purchased it. Because by then you would have, hopefully, made sure that there's enough buffer in it. So I think it was important to actually do that, but not spend 12 months, which is what I did. I think I could have shortcut it and done it in, say, three months, learnt a lot about the area, but found a buyer's agent and then worked with them to actually get moving. 

  

[00:57:29] Because after about, say 12 months, I just got frustrated and said, 'This is not for me, it's not working'. You kind of throw in the towel and go, 'I've gotta try something else'. Because I thought I gave it enough time.

 

[00:57:40] But luckily I didn't give up. I said, 'I'm gonna try and find another person to hold me accountable, give me support'. And that's what she did. She was fantastic in that sense. 

  

[00:57:49] She said, 'Look Tyrone, you've got a lot experience. You've got a great podcast, you've got a lot of people following you who've had potentially some money here, like money partners, and so forth. You could actually try and tee up with someone who has deals, and you put together the deal and make it work so that way you can actually get started. Otherwise, if you want to try and do it yourself, it's going to take twice as long or even longer than that you'll make a lot of mistakes. So why not just partner with someone?' 

  

[00:58:15] And that was a big aha moment for me as well, because it was that mindset shift that I needed. I mean, I could learn so much, I could do so much. But if I didn't have the mindset shift that she gave me and put things in perspective, I probably would have still been stuck. 

  

[00:58:31] And also something that was holding me back in terms of my limiting beliefs was that I thought it's going to be too hard to get money. Because who's going to trust me? I've never done this before. And that was probably something that just stalled me for awhile, because I said, 'I'm gonna go and find the deal. And if the deal is that good, I'll go and find the money'. But I didn't have confidence to know that that was gonna happen. That's probably why I procrastinated not to do the deals a lot of times. Because I was shown a lot of deals by agents, but I just never jumped on board. 

Rob Flux:   

[00:58:59] And that's a common problem a lot of people have. They believe that nobody will invest in them for deal number one. And they put these limiting beliefs in front of them to say, 'I need to prove myself first before someone will actually come'.

  

[00592:17] I would spin that on its head and go, 'Well, it's not about whether you've done it before or not. It's whether or not you can solve somebody's problem'. 

[00:59:25] And for the people that have the money, the problem you're solving is: Well, you've done the education, you've done the effort, you've done the research, you've done the effort, you're providing your skills and knowledge, which they haven't done. So you're solving a problem for them by making their money work, where they don't have the time, energy, resources, or knowledge to do [so]. And so it's about if you can solve their problem, they'll happily invest.

Tyrone Shum:   

[00:59:51] That's spot on, actually, Rob, because I didn't know it at that time and that's what I actually did. So it was like I kind of almost stumbled in it by accident and that's exactly what happened. And this is where my coach said to me, 'Look, I've got someone who's interested. He's got actually a deal right now. He needs a money partner to be able to come in and fund this deal'. And she said, basically to me, 'Tyrone, you go and find that money partner, and we'll do the deal together, like, we'll just get you together'. 

 

[01:00:17] She didn't have to tell me. She wasn't involved in that deal. She just basically said, 'Do this, do that'. And I said, 'Alright'. 

Rob Flux:   

[01:00:26] You became the facilitator. So you weren't finding the deal. And you went and found the money partner, and you were the facilitator, the kind of glue that join[s] those together.

Tyrone Shum:   

[01:00:36] Exactly. And then at the end, I managed to [strike up] a fantastic joint venture partnership in place, which I still was able to take a profit share out of that deal as well, too. 

  

[01:00:48] Now, that was back in 2019, April 2019. 

Rob Flux:   

[01:00:53] So not that long ago. 

Tyrone Shum:   

[01:00:54] No, not that long ago. So that was my actual first property development that I actually officially did. And [it was] up in Queensland. So that one was a simple one into two lot subdivision. The front half of the house or the front half of the block, I should say, that we were going to subdivide, had just basically a rundown house. It just needed a bit of TLC. And, essentially, we did the full renovation to make it look the way it was, that we were going to go and put it on the market literally about nine months later. 

  

[01:01:24] Now, we had that valued after it was fully renovated. And the real estate agent said to us, 'Look, you'll probably get more than what you had anticipated, like $100,000 more'. And I thought, 'Great. We've made some money already'. 

  

[01:01:36] But that was on paper. It wasn't necessarily sold yet. I thought, 'This is exciting'. And then we finally got our subdivision approved [by] the council to sell off the back of the lot to get the title and so forth. Luckily, that was all done, and we were really on a high by March 2020. And we put it on the market.

Rob Flux:   

[01:01:59] Anyone know that date, folks?

Tyrone Shum:   

[01:02:02] Yes, we put on the market. And yeah, like we anticipated we had lots of people come through, and we were all on a high. But unfortunately, as you all know, by about April 2020, COVID hit pretty hard. Everything went locked down, people went quiet. And unfortunately, this property didn't sell. Both properties actually, the land and the house. 

  

[01:02:22] And unfortunately for us, the next 12 months [were] really a hard journey, because we tried to find people to buy it. And yeah, it took literally 12 months before we could sell it. And we finally offloaded it in April 2021. 

 

[01:02:36] Now unfortunately, we didn't make any money. 

Rob Flux:   

[01:02:39] But you didn't lose money either. 

Tyrone Shum:   

[01:02:41] Yeah, I didn't lose money at all. But it was the time. Time and effort and opportunity cost. Because potentially we could have been doing something else with that money as well, too. 

  

[01:02:50] Luckily, for the investor who put his money in, he still got his return. So as we promised him, we would pay him back for it. And there was enough money in that to pay him down. But in terms of all the effort and time and our profit share that we were supposed to make from that deal— zip. We got nothing back from it. 

  

[01:03:04] And I guess I put it to a learning experience. Because if I didn't do that, I don't think I would have stumbled across my next deal, which is where things started to change. 

  

[01:03:14] And I may as well jump into that. Luckily, at that point in time, at the end of 2019, around about [the] end of November [or] early December, I was still going through this property [in] Queensland. And I thought, things are going really well. So I thought, 'Let's try and open up an opportunity to do another deal'. 

  

[01:03:33] And once again, my coach actually brought this one to me. She said, 'Look, since you've done well with that one so far, not knowing COVID was going to come along...'

Rob Flux:   

[01:03:40] It wasn't finished at that point. So it was going great. 

Tyrone Shum:    

[01:03:44] Yeah, [she said], 'I'd like to introduce you to another developer who has another deal, one into four down in Victoria'. And I thought, 'All right, well, great. This is going well, I'm happy to fund it as well'. 

  

[01:03:54] This time around, I didn't actually need to do any work. All I had to do was basically come in with debt funding, and just lend money across to the deal and help him out. 

  

[01:04:02] It was a sad situation, though, because he had everything fully funded at that point in time. And then one of his family members passed away, suddenly, it was just out of the blue. And when that happened, he couldn't... not afford, but he couldn't take the money because it was a deceased person's. 

 

[01:04:19] So he returned the money back to this family. And he said, 'Look, I'm a bit stuck. I need some help'. So I said, 'I'll come in and fund that with another investor'. And that's what we kind of did. 

  

[01:04:19] We put in, like, $200,000 odd. And it was [the] end of December, then literally in two weeks time, we managed to do it. And he agreed to pay us in 12 months time, that amount. 

  

[01:04:40] Now, 12 months, later, as you know, it was end of 2020. But we didn't get to that point. By about April 2020 he reached out to me. And I thought, 'Gosh, this is not looking good as well'. I was worried that I had the same situation [that] we had with the one up in Queensland. 

 

[01:04:55] But he said to me, 'Look, I'm actually calling you to let you know that we've got a developer who wants to refinance us out or pay us out. Would you like to get your money and I'll pay you the interest?' I said, 'For 12 months, I'll pay you now', which is literally six months. 'If I can do that, would you be interested in taking the money?' I said, 'Heck yeah. Why not?'

Rob Flux:   

[01:05:13] Everyone wants their money back early. Absolutely.

Tyrone Shum:   

[01:05:16] Exactly. And it was COVID, [so] you [didn't] know what was going to happen. So it was the perfect timing for me to exit. So within a couple of weeks, everything was done, [we] signed [the] papers, and we got our money back. 

  

[01:05:25] And I was like, 'Wow, this is the first time I actually experienced what it's like to do what we call like a loan, like a debt deal against the security, and we get our interest back and paid pretty much on time, or even earlier'. 

  

[01:05:39] So that's kind of where the journey started. And since then, since COVID time, we've done about 22 of these type [of] deals, doing about $25 million worth of funding. 

  

[01:05:50] Obviously, it's not all my own money. But it's organically grown from there, because I only had so much money I could invest into these type[s] of deals. So I just started sharing with the community. And it's just organically grown.

Rob Flux:   

[01:06:00] So you jumped there really quick. So I just want to rewind that and play that back for everyone. So they actually catch it. 

  

[01:06:05] So you've gone from attempting to do your own things and hitting glass ceilings, to 'How do I build businesses?' So you've got years and years of of trying but having all these false starts. 

  

[01:06:19] And then when it finally happened, it kind of went bang, bang, bang, bang, bang, really quick. And it's that really quick escalation point that I want to highlight here. Because it sometimes will take you years and years and years to become an overnight success. And it's all the lessons that you picked up along the way that are really the key that said, 'Well, I can actually recognise the opportunity'.

  

[01:06:47] And you've assembled those pieces. So I'm going to replay those numbers, you said 22 deals that you are funding right now, for approximately $25 million. And that's largely happened in three years.

Tyrone Shum:   

[01:07:03] Two years, I'd say, from COVID. So basically, at the start of COVID, about March [or] April, that's when I said I got my first deal out. It was about three or four months later, that's when I actually found the deals. Because I said myself, 'Man, if this actually could work, I want to do more of these deals, because I don't like having my cash sitting in the account, I might as well just fund more of these'. 

  

[01:07:26] And that's where I started looking for opportunities like that. And I started stumbling across a few of them, and obviously got sent across a few more from my coach as well. I think realistically, we kind of started funding a lot of these deals about mid to [the] end of 2020, because that's when the market started to improve. And I think that's when also the market was also tightening up because there's not much cash in the market. 

  

[01:07:51] So opportunity came out of COVID. And [it was] very, very, amazing how in such a short space of time this all happened. And we had to move pretty quickly. Because I think a lot of people just had cash pent up and wanted to do something with it, rather than actually just let it sit in the bank. And I was exactly in that same position. 

  

[01:08:08] So [there were] very, very big, big learning lessons in that. Because I think for me, the challenges that I faced running a business before was that, yes, once you actually started getting a lot of demand, how you meet that with supply. And my challenge back then [was] I had a lot of demand, especially from the investors. And I wasn't able to get enough deals. And I just kept hav[ing] to go out and find these deals, and eventually a lot more deals will come through. 

  

[01:08:39] And it's kind of still that way, actually. We've still got a lot of demand in the market, because we've got a lot of funding, but we're just not able to find all the great deals that we're trying to provide for them. 

  

[01:08:51] And I think my biggest learning lesson and mindset shift in this is that there's always going to be money. Because as I said to you, my biggest limiting belief when I first started was like, 'Who's gonna fund this? I don't have any money. I don't know how I'm going to be able to find all this money'. But obviously, it's [a] complete 360 for me right now, because the fact is there's so much money available. And if the deal is so good, people will want to fund it. And that's what's happened.

Rob Flux:   

[01:09:18] People say that. People say, 'If the deal is good enough, the money will come', right? But I genuinely see thousands of people in my community that don't have that belief. And because they don't have the belief, they kind of go half hearted into it. 

  

[01:09:34] So what would be your guidance? Just the fact that we've got those limiting beliefs that sit in front of us, what would be your guidance on how do you actually overcome that? 

Tyrone Shum:   

[01:09:46] I'll tell you how I overcame that— just by doing it. You can't just shift it in your mind. It's hard. I can tell you that. When I first started, as I said, I kept worrying about the fear, the procrastination that prevented me from actually doing a lot of the deals. Because I was worried that people were not going to be able to fund it. 

  

[01:10:05] The first deal I funded, as I said, it was a couple of hundred thousand [dollars], then the next deal after that was about half a mil[lion dollars], and they were all sort of hovering me about the half a mil[lion dollars] to about $600,000 for many, many months. 

  

[01:10:15] Because I was saying, 'Oh, who's gonna fund a [million dollar deal]?' And then when the deal came to a mil[lion dollars], I put it out there, and it just got funded. If there's a demand for it, then why not? And then obviously, we're putting out larger and larger deals. 

  

[01:10:31] There will be a certain time that I will put a cap to it, because obviously I've got to mitigate the risk and protect investors' funds and so forth. But at the same time, as I said, to help overcome that limiting belief, is actually just do one. 

  

[01:10:45] Do small ones to start off to get comfortable and go, Okay, wow, if I can actually get someone to fund maybe a $300,000 development, it gives you that confidence. And make sure, obviously, it's completed. 

  

[01:10:55] And then once you've done it and got your money back, then you go and do the next one. And you keep doing it until you get more and more comfortable. And that's what happened with me, because I thought $200,000 was going to be the most people gonna fund. I proved that wrong. 

  

[01:11:10] And at this point, where I am, $25 million, that is insane for me, because it has completely shifted my mindset. I go, ‘Well, if there's that much money that's available, I'm sure there's going to be $50 mil[lion or] $100 mil[lion] that's available. And I've learned that if you just put it out there, and trust that the deal is good, people will come and fund.

Rob Flux:   

[01:11:28] And the moment you can work out that you can do a deal when you've got no money is the moment that you can work out you can do any deal on Earth. 

Tyrone Shum:   

[01:11:37] That is so true. Absolutely. This is this is where the confidence comes in. At the moment, I'm looking at another deal, where I don't have the money, but I know that the deal stacks up so [well], I've just got to present it to a few investors and it's close to $10 mil[lion]. 

[01:11:52] Back then I would have said, ‘I can't do it, because I don't know how’. But now I just go, ‘Okay, close the deal by negotiating the best you can and then put it back to the lenders or the investors and then it’ll come, it’ll work’.

Rob Flux:   

[01:12:06] There you go. Mate, some really powerful lessons that have come out of that, at lots of different stages of your journey. What would be some of the biggest takeaways that you want our audience to actually take away [from this]? What are the big ticket items that were a stumbling block for you that if they just took this one piece of advice on, that would kickstart them and save them years heartache?

Tyrone Shum:   

[01:12:33] For me, as I said, I think the key thing was overcoming the fear and procrastinating factor. As I said to you, when I was spending 12 months looking for a deal, I think that was just me procrastinating. Because even though I did a lot of action and went on site, met a lot of real estate agents, [and] stuff like that, I never closed the deal, as per se. I just never took that plunge to do it. 

[01:12:58] And it's it was because I was fearful going, ‘Okay, what happens if I purchased this triplex site and I wouldn't be able to raise the funds for it?’ What happens if I did all this?’ And I put all these limiting factors in my mind, fearful that it wouldn't work out. If I had actually just taken the plunge and actually went out and found like a potential developer, and did the numbers with a financier and put this all together, it's a deal and made sure the numbers are stacked up, I should have just gone and done it. 

[01:13:25] But I think it was just at that point when I went, ‘The numbers don't look good, the site looked crap’, blah, blah, blah, just made all these excuses, and I ended up not doing anything. 

[01:13:34] And I think that's the key. One [piece of] advice I'd say [is to] surround yourself with really, really confident people. People who are very, very much strong expertise in their field. And tap on the shoulders and learn from them. And I guess get them to help you in that side of things. Because you can never do this yourself. 

[01:13:52] And it's changing that mindset of going rather than do it myself, like how, I'm trying to think, ‘How can Tyrone do it?’ So who can actually help you with this? And that makes a huge, huge mindset shift. And that's probably one of the key takeaways I'd probably pass on to your listeners.

Rob Flux:   

[01:14:08] So three words, folks: Who, not how.

Thank you to Rob Flux, for interviewing me on this special episode of Property Investory.