Timestamps:
1.08 | Getting The Ball Rolling
3.35 | Bigger Isn’t Always Better
8.39 | There’s Got To Be Another Way
10.38 | ‘No One’s Advocating’
14.31 | Distant Predictions
15.25 | Property - An Often Bittersweet Taste
18.08 | Take Opportunities
21.17 | We Don’t Have To Look Far For Wisdom
24.33 | Big Things to Come

Resources and Links:

[13:58] It was a deceased estate at the time and I think from memory, there wasn't a lot of interest around the property, it needed a bit of work. I thought that was a perfect opportunity for me to try to get into the market. 

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 continuing the conversation with TechLend CEO Aaron Bassin, whose determination to beat the banks will leave you  with a new perspective. Listen in to hear why the Big 4 aren’t built for bridging finance and why it literally pays to do your research before buying your next property! 

 

Despite being so young, Bassin’s first property purchase was a long time coming. 

[13:26] From an early age, I was always kind of reading the paper, seeing where properties were being listed and I downloaded the REA app or domain app and had  parameters around small apartments that I could try for. I just kept looking, kept looking, kept saving, trying to find the right property. We ended up finding the place that I bought now and was fortunate to be able to actually buy it. It was a deceased estate at the time and I think from memory, there wasn't a lot of interest around the property, it needed a bit of work. I thought that was a perfect opportunity for me to try to get into the market. My parents agreed to help me with the gap and funds that I needed to purchase it and having a mortgage I obviously couldn't afford to go and move in. I didn't even have a full time job at the time, I was still at university. So, I put some tenants in there who were paying rent and that would allow me to make repayments on the mortgage. The price of the property side started to appreciate, when we got married, I refinanced that property and took out some equity through the bank to do a renovation. I loved that project that was so awesome, like literally painting walls and pulling out carpets and installing lights - It was a DIY kind of renovation. It was just such an amazing bonding experience for the entire family to go and contribute towards that. Then after the renovation we moved in and shortly had my first daughter. So, it's just been an incredible kind of journey and it's been awesome.

[16:11] I bought another investment property a couple years ago in Bondi, but at that point, that's the extent of my property portfolio at the moment.

Tyrone Shum
Similar to the strategy of his first purchase, Bassin’s strategy with TechLend has risen from a huge gap in the market… and it all starts, or stops, with the banks. 

[0:34] What you'll find is, there are some banks, which actually won't even provide that loan anyway, so it's just not a well thought-out process. From their perspective, it takes far too long if a big four bank can take up to two months to give you an approval on a bridging loan, or any loan to be honest. So, it's just not a good customer experience, and so by providing customers with real time outcomes, same day approval,  it's just an amazing product for anyone considering to bridge. 

Tyrone Shum
Bassin, like many visionaries, thinks technology is the future of property finance. Making our lives easier so we don’t have to think too hard when it comes to financing a property. 

[1:52] The technology underpins why we can do what we do and why we're better than the traditional lenders. So, we use a lot of data to help underpin our decisions. The data is based more around the property values, the property dynamics, we look at a unique approach and a new lens to how we approach our lending, which is why we can make much faster and much more agile decisions. Further, we've bought this business in 2021  and so we're using brand new modern technologies that didn't exist even six years ago.  The banks are using things that were built 50 years ago, and they're trying to spend millions of dollars a month to try and improve what they have. To be honest, they need to throw that stuff in the bin and start from scratch, because you can't continue just to add more complexity on complexity. We've started with a clean palette, we're using the most innovative and simple technologies to create a complex and amazing infrastructure, and ultimately provide customers with faster decisioning, with faster experiences - and with more smarts and analytics. That's what's really important about how we analyse our lending, is to be able to make really analytical and smart decisions. That's why our technology is first class.

Not only does TechLend make the bridging process smoother, Bassin says unlike traditional lenders it can’t make mistakes. 

[4:33] It's technology being used to make those risk assessments. So, we've got a digital application process, there's no paperwork involved. We don't accept anything in paper and we have customers up to the age of 80-something applying and they love it because they can do it on their fingertips. They Google TechLend and within a few minutes they're getting outcomes. So, it starts with a really simple and user-friendly application process where we ask questions in plain English, because some of these mortgage forms are so complicated and it's confusing to be able to actually complete.  Sometimes you get it wrong and the broker has to come back to you or the bank has to come back to you. So, we've designed that application process to have a really simple and clear layout and language. Once it comes into our system, we have frameworks and decisioning engines and rules around how we assess that customer's application.

[5:33] We've done that in a codified environment so that there is no bias. It doesn't matter what someone ate for breakfast, if they didn't have breakfast, and they're grumpy, and they don't want to approve a loan - that can't happen. There's no human bias. The system says, "Yes, this is a pass," or, "this is a fail." We've also tried to turn things into it. Yes, we are an all size fits all, inclusive lender, whereas a lot of banks out there and other lenders are one size only - only if you fit within this small box of parameters, will they approve you. Whereas, we try to have an open inclusive lending criteria, so that a bridging loan is a bridging loan for anyone. As long as the information that you're putting through the application is verified through our platform and makes sense and you can service that loan - it is a regulated consumer credit loan and it's responsible - then we'll approve you. So, we're happy to take the time to understand our customers and give them the outcomes that they deserve. 

Through seeing the frustration and difficulty of current bridging finance schemes, Bassin has set his team a goal - to give ordinary Australians an easier option. 

[7:10] We developed that all in house. So, none of that is licensed off the shelf or taken from anywhere else. It's all bespoke, built in house, and specifically tailored for bridging finance. That's why we can do what we do, because we are a single focus of bridging finance and what I seek to go and build with Techland is to be the most trusted and preferred bridging finance company in Australia. If you think bridging finance, I want Australians to think TechLend and you know it because right now if I asked you Tyrone do you know any bridging finance company? The answer is probably no, because it doesn't exist. The bank says that they have a product that they will consider, but they don't, they don't do it. If they do it, they don't do it well.

[8:31] On that point about mortgage brokers - their commissions at the banks pay them - they actually get clawed back for a bridging loan. So, if the loan gets repaid, or restructured or reduced in the first 12 months, the broker doesn't get paid for the work, so they'll take away their commission. So, a lot of brokers actually are turning away bridging loans. They don't want to write them because they're not going to get paid, because it's a free service for the customer, which is a great service, but they're not incentivized to help customers who need bridging loans. They'll say, "go try to deal directly with a bank," so what TechLend does is we pay our brokers a fair, upfront commission -it's not clawed back - we know what they're providing for us, and they're helping their customer and we're shifting that conversation.

Bassin’s desire to disrupt the property finance space comes from personal experience. 

[9:40] We just saw that it was not a competitive part of the lending market. There's not a lot of focus. There's some great fintechs out there disrupting the big four banks and traditional mortgages - you've got Athena and 86 400 doing a great job, you've got Tic Toc, but they're all fighting against the same customer. No one's advocating for bridging clients, and no one's providing that service that really benefits the consumer. I think about my grandparents and my parents, if they need a bridging loan, who are they going to go to? Who's got their back?  I want TechLend to be that trusted brand that can help really provide some social good. Of course, we make financial gain in the process as a business, but we're actually benefiting society. 

[12:15] Time, time - you don't want to be stressed and rushed into making a wrong decision.  This allows them to make the right decision, but also costs - they never had to pay stamp duty twice. As a downsizing retiree that's what you're going to live off, it's that money. So paying 5% of stamp duty, that can actually go a long way given that property prices are so expensive. 

[10:39] There's a perfect example of part of our customer base, which is the downsizer - so it's your grandparents. So, mum and dad, they're approaching retirement, they already retired, no one will lend to them, no one will give them a bridging loan. So, they actually have to sell their house and go live with you, or go and rent and it's a huge inconvenience. Whereas, they're a perfect customer for us. We help them with that bridging loan, we help them buy that downsized apartment and give them the time that they need to not be stressed and sell their existing house. There's 1.6 million downsizes in Australia over the next five years. They don't have a solution. I genuinely believe that TechLend is providing a benefit to society with our product.

Coming up after the break, we’ll dive into Aaron Bassin’s mindset in both life and investing, as well as hear his advice for any property investor…

[20:08]I think when the borders open, I do expect prices to come down. I think there'll be people leaving Australia to go live overseas and travel. So, there'll be an increase in supply and I think that will ultimately drive prices down.

We’ll hear about how he copes with the fear of losses… 

[17:50] Understand that markets do fluctuate. Property investment, it should be a long term investment, it's not a short term strategy to be able to try and make some quick bucks.

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

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While a firm believer in long-term property capital growth, Bassin is hesitant about the near future. While this isn’t great for owners, new buyers could enter the market easier…

[20:08] I think when the borders open, I do expect prices to come down. I think there'll be people leaving Australia to go live overseas and travel. So, there'll be an increase in supply and I think that will ultimately drive prices down. Complemented with the possibility of RBA increasing rates and all the banks already increasing rates, so even before the RBA will I think it would be naive to think that prices will just keep increasing forever.

Bassin certainly knows the often unmentioned reality of owning properties. His best advice stems from his own experiences.

[16:49]I don't know if it's a lesson but just a reflection that I hate auctions - they're so stressful.  There are so many places that we tried to buy, especially for my investment property, we try to buy and I would always get outbid. It's just so stressful, and knowing whether you pay the right price or not... it always feels expensive at the time, and we don't know the direction of where the market will move. During 2019, when COVID did come around there was a big shock to the market and prices had dropped, people were quite worried. So even though on average, for the past 25 years, prices have increased at like 6.4% per annum every year, on average. So, it's like a 3,000% return if you held properties for the past 25 years, but there have been down periods during that time. So, the advice I'd give around property investment, just with any investment, is to really do your research and to understand that markets do fluctuate. Property investment, it should be a long term investment, it's not a short term strategy to be able to try and make some quick bucks. You've got to think about capital gains tax, you've got stamp duty costs, you've got to manage the property - there's a lot of headaches - when you've got tenants and you have to actually maintain that property, things break and you have to replace them so there's costs involved. So, it's not straightforward.

[18:26] Now with uncertainty where interest rates are going to increase as well, being able to be confident that you've got the job stability and security to be able to meet your servicing repayments, because the last thing you want to do is fall behind on mortgage repayments. It's a very serious concept too and the repercussions are very significant. So, my advice is do your research, be really sure that this is the right property that is right for you at this time. You don't want to be rushing into such a major financial decision, especially now when the market is hot. There's a lot of FOMO investing, borrowers say, "I want to buy this place, because if I don't, it's going to be more expensive or I'm going to miss out." Well, that's okay. Make sure that you're buying the right property, because the cost of buying the wrong property is more dear than missing out at the auction at that time.

Reflecting on his journey so far, Bassin doesn’t take anything for granted. 

[21:13] I think it's been a combination of aha moments. There's a lot of luck involved in timing - I applied to a lot of graduate jobs and got rejected a lot - it happened to be that some of those companies were the ones that accepted me. If I hadn't taken that position, my life would be very, very different today. So, I think it's just being grateful around knowing when an opportunity presents itself, and being brave enough to take it. When I took the job at Money Me, the company had at the time had five full time employees. It was a very small startup but it was the best decision I've made in my career so far. So, it's really knowing when an opportunity presents itself and not being afraid to take it and take a risk. What you currently know you can always fall back on that, you can always go back, but if you don't have a crack and give yourself an opportunity to evolve and better yourself, then I think that would be a shame to miss out on those opportunities.

Bassin hasn’t always been a fully formed CEO investor, in fact, he’d say he is still learning and developing. He says the best way to improve is by being teachable and curious, but it requires the support of others. 

[22:52] I love reading the AFR. That's definitely something I recommend all your listeners to to get on and keep up with news. I read Bloomberg and also the Sydney Morning Herald, just to keep up with what's happening. Being in the property space, I subscribe to Core Logic, they provide a lot of interesting trends around what's happening. From a mental perspective, my greatest mentor in life has been my mother. I call her almost every day, and discuss with her and talk about my challenges and opportunities and get her advice. So, it's really important to have that close person - it doesn't have to be relative, but to have someone in your life who you can turn to and help you through decisions that need to be made and help guide and support you. Also through my career I've had many managers and mentors. When I was at Deloitte and KPMG, I had colleagues, managers who helped me when I needed to and took the time to teach me. So, one of the big things that I encourage at TechLend is pausing and being able to support other employees and help guide them and better themselves and create an environment where everyone can continue to learn and develop.

Despite having numerous professional mentors that have helped forge his various skills, Bassin’s mother is his greatest teacher. 

[24:38] She's a very strong, passionate and amazing woman. Her everyday sacrifices, just phenomenal. Some of the things that she's done, I just think it's something that you'd read in a story, in a book or watching one of those movies. She's also really tough and she pushed me to be who I am. Yeah, she's awesome. 

While Bassin has learnt lessons about investing and the property market, he is slowly realising that some of his best teachable moments aren’t about money at all. 

Aaron Bassin  

[25:36] I always knew, from an early age, I wanted to be a dad. It was always really career driven, I kind of set those goals really quite early. I think I've delivered on most of what I had set out to achieve, where I am today. So, I would say well done, mate, keep up the good work and don't lose sight on setting those goals and trying to better yourself, and make sure you find time for yourself as well. I think sometimes, even now, I kind of work really hard and aren't able to always invest time in myself. I think that's really important as I get older and building our family is to be able to switch off from work and focus on family and myself.

[26:56] I'll be in the shower and I'll just be thinking about work, or eating breakfast and it's sometimes just hard to turn it off. It's important to try and disconnect and spend quality time with family. We spend most of our day at work, and so the time that we're not there it's important to be present with our families and our loved ones.

Bassin is aware that good circumstances play a part in any investor’s success, but he also knows they can’t entirely dictate the outcome. 

[29:32] I have to say it's probably 50-50. Nothing happens without luck in this world - timing, people you know, where you are, your upbringing, all of that is luck. Having been born to my parents, that is lucky. At the same time I did, and have worked my butt off. I've put in a lot of effort into getting myself where I am. I've really tried to push myself and be ambitious and make sure that I can meet those goals. So, it's both, and I think that anyone in my position would probably think the same. So, luck and hard work - they go hand in hand. 

So what does the future hold for Bassin? 

[27:31] On a personal note, continuing to build my family and maybe own some more properties. In terms of TechLend I have ambitions to expand this product globally. So, New Zealand, Canada, the US, the UK, it's a global problem. We have very similar property dynamics in many of those geographies that I listed. So, I want to continue just to expand the product, provide customers with the best and most trusted bridging finance product in the world. If I can succeed at providing customers a good outcome, then the rest will follow. We have ambitions to IPO this business as well and continue to raise capital to support it - to build amazing teams and employees who are proud of wearing that TechLend T-Shirt and be part of that journey is what I have planned for the next five years. So it's quite a lot. I won’t deny that, but setting those goals and knowing what that could look like now, visualising that, it really helps.

Thank you to Aaron Bassin, our guest on this episode of Property Investory.