Timestamps:
1:08 | Been There Done That
2:52 | Follow My Lead
6:07 | Couch Clarity
8:15 | Striking Property Gold
15:39 | A Way Out Through Education
17:04 | Basketball and Business
22:54 | In Another Life

Resources and Links:

[7:52] if that property grows by 5% per year, and you're putting 10% in, well guess what? On growth, you're getting 50% ROI cash on cash. So I was like, 'Is this for real?' So what I did was I projected and I thought, okay, in 12 years time, I'm going to be a billionaire.

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 back with financial advisor and founder of Plenitude Wealth Andrew David Courtney. He takes us behind the scenes of his 10 year plan to financial freedom. Plus, tells us why stepping inside the mind of an NBA legend will radically change the way you look at your business.

Despite being an advisor by trade, Courtney puts his money where his mouth is. He’s experienced the ups and downs of investing for himself, so clients don’t have too. 

[0:27] The first investment that we made, it was a good short term investment, but long term it didn't appreciate and value that much. So essentially, because it was a one bed, it was a 56 square metre— lucky I didn't buy under 50 square metres, right?— One bedroom apartment in a 96 apartment block, basically. So very, very low land content. That was a big lesson for me because I would have kept it by now. I sold it off a few years ago, because it just wasn't performing and we needed my borrowing capacity to ensure that we keep we keep moving forward with confidence. So, in terms of worst investments, that was it. But I don't really see it as a worse investment because the lessons that we got out of that, it allowed us to propel into the next chapter, to acquire our next home, basically. So, essentially, that's pretty much it. I think that's the big lesson.

Looking back on his first property purchase, Courtney can even pinpoint the reasoning behind it. 

[1:42] Affordability for sure. So we went to the bank, what can we borrow? This is how much you can borrow? Off we go. So affordability, we got in and and essentially as soon as my wife saw my wife's rent—we had a long distance relationship for a little while there— she moved over here, found her first job and we combined forces and bought our first home, first house, I should say. And then from there, didn't really look back. So, worst house in a good street. Great suburb, we renovated it, pulled out equity, acquired another property and off we went basically from there.

Courtney’s current property portfolio uses all the investment techniques he’s picked up along the way.

[2:22] Well, currently, we only have two. So this financial year is the first financial year where we're quite profitable when it comes to the business. So, for next financial year, we're looking to—so that that third property that we picked up has got development potential. So we picked that up in 2011, so it's appreciated, it's more than doubled in value. We're just about to pull some equity out, reinvest back into the development and then build out two more properties behind it. That will be cashflow positive, plenty of equity and go again, essentially. 

[3:02] So it's a Marsden property. We picked it up back in 2011 and we knew at that time—we did a few renovations at the time, we did a reno for our current home. And we did one reno at the time and we added about 170k worth of upside. We put in about 50k worth of reno and we had 170k worth of upside, we pulled out about I think it was about 70k. And then from that 70k we plowed that into this other one and we knew we wanted to renovate it. So as far as I'm concerned, there are four key strategies in residential properties. Buying hold. Buy, renovate and hold. Buy, develop and hold. Buy, renovate, develop and hold. So essentially, we wanted a renovate, develop and hold deal. So we picked this one up for for 300k back in 2011. In Marsden it had a 1500 meter block. And essentially we looked at the council, the zoning and all that kind of jazz and made sure that we could develop. And it was a bit of a crapper to be honest, it needed it, it needed a good renovation. So, what we did was we negotiated access prior to settlement. 

[3:36] This is one of the common strategies that we do for our clients. Access prior to settlement to renovate and make better, because there were a few holes in the wall, obviously a bad tenant previously and the owner just wanted to get rid of it. So, we picked it up. We had access for three weeks prior to settlement and we renovated the whole thing, settled, put a tenant in there. So we increased the rent by about 50 bucks per week, so we automatically got our cash back. We plowed in 15k on the reno and it valued 30k above. This is day one right? Of acquiring it. So, we knew we had a good one and we knew we had the option or the lever to pull the development in the near future. And during that time, we knew that it was only a matter of time until we develop it. So really, that's when I was transitioning from science into finance and basically working out what the story was. So, we didn't develop sooner purely because the idea was a career change. The idea was to chase after freedom. And to do that it was to go down the path of building a business, and a successful one at that. And then build enough enterprise growth, right value, so that we can go ahead and keep acquiring properties, along with building businesses as well.

For all investors, especially in property, there are moments where everything becomes clearer. Clarity can appear from out of the blue. For Courtney, it took one lazy night on the couch for everything to click.  

[6:44] The biggest one was the the fact that you can leverage up. That was the biggest one back in 2008, when I first realized this. So we bought that first property, right? One bedroom, one bath. I was thinking, let's plow in as much money into the offset account and save myself two bucks for every $1,000. Two bucks per week, for every $1,000 that I put in. I'm gonna save so much money to save on interest, right? So at that time, I was thinking, 'This is the strategy.’ And then I came across a particular DVD and that DVD showed the power of leverage. And I can't remember the exact name of the person there. But at the end of the day, he talked about putting in as little as 5% deposit and gaining control, rather than ownership. So during that time I was like, 'Okay, this is different. Okay, let me run the numbers.' 

[7:42] So obviously, I'm very analytical, right? So I ran the numbers and I thought, 'Wow, okay, you're putting in maybe 10% max, to control the upside of the property.' And if that property grows by 5% per year and you're putting 10% in, guess what? On growth, you're getting 50% ROI cash on cash. So I was like, 'Is this for real?' So what I did was I projected and I thought, okay, in 12 years time, I'm going to be a billionaire. I was projecting at a 10- 15% growth per year at that juncture right? So, very excited at that time. So that was the aha moment. I was like, 'Okay, well how do I leverage up? How do I ensure that I buy the right propert first and foremos? And make sure that it's research backed? And make sure that you're buying well, because a lot of people fall for that trap obviously, thinking that every property is the same. The aha moment is the leverage play and amplifying the return on investment with good debt. That was the aha moment. 

If you have truly good news, there is an overwhelming need to share it. For Courtney, this means exclusively sharing with listeners real, life-changing stories.

[9:25] Quick case study. You've got a client who didn't know how to get into property. So  I talked to them. Okay, they've got plenty of plenty of savings, this is back in 2019. I thought, 'Okay, this is what you can do, 20% deposit, we've got more than enough for that. You don't need to do much more than that. These guys had 900 grand in the bank— professionals— they were really just struggling to take the next step. So, they had 900 grand in the bank, they had 900 grand in gold believe it or not and then they had about 200 grand in the bank. I was telling them, 'You know what, what you can do is you can actually acquire a property with debt, right? And it's not really going to cost you that much.' So what's your rent? They told me they were paying about 600 per week. And I said, 'Well, if you look at it from a perspective of principal and interest payments, you're capable of borrowing $800,000, equivalent to $600 per week.' And they're like, 'Whoa, really?' Yeah, that's how it works. And then I talked them through and I said, ‘You don't have to put in a 50% deposit suys, it's fine.’ You’ve got enough cash, just put in 20%, and see what happens. So what we did was we helped them negotiate a particular property and we bought this property under market by at least 200 grand for them. And believe it or not, it was on our street. 

[10:43] So, they acquired this property for 900.  One year later, guess what the valuation came back at.

[10:54] $1.3 mil right? And they still had 900 grand in gold. So, I started talking to them. ‘Well, why don't we look at a different property? Why don't we acquire a different one?’ Because we can make your money work for you. So, we started diversifying their portfolio across different asset classes as well, because you obviously don't want to put all your eggs in one basket. And then the next property that we looked at acquiring is a property in Toowoomba. So, we acquired this property and this one we bought it for 395. The valuation came back at 440. So, the key is to buy under median, it's really as simple as that, under median. Now, we bought it at three-nine because it was a bit of a crapper unfortunately. So there was a family there, old person living there for quite some time that needed to go to retirement. Lived there for 30 years, vinyl flooring, ugly paint, walls, all of that kind of stuff.  So, we facilitated the renovation and it's costing them 12 grand to rip up the floor, new painting, new kitchen, right? And we've got this four bedroom house right now. I would say if we were to sell it in the market, we'd get 460, 470 for it easy. So, now they've pooled out, they've acquired a property and it's grown. So, the first property has grown by 400 grand, the second property has grown by 70 grand upon settlement, 60 grand upon two months or one month after settlement. And they're thinking to themselves, well of course, we're gonna go again, right? It doesn't make sense not to, as they divest out of gold its also getting them a diversified return on investment around that 14% mark. 

One thing that separates Courtney from others is he doesn’t stop there. He believes the growth process should be used on more than just money.

[12:25] They're doing really well for themselves and they start to see 'Holy crap, we're not actually stuck here, we're in a really powerful position.' We're working with their cash flows, we make sure we automate a few things. So suddenly, we are dollar-cost averaging in a diversified portfolio, we're building up the equities in their property portfolio, we're helping them with their debt strategy, we're doing some debt wash. So we're just about to do a debt wash with their current principal place of residence. Then the question is, well, how much risk are you willing to take? Because at the end of the day, they're in a really powerful position. So they can go hard and pull out a bunch of equity and go up to an 80% loan to value ratio and the principal place of residence as an investment loan, and go again, maybe acquire two or three more properties. Or just do it one step at a time, acquire one property every one or two years. And they're going down that path, because they just want to see more results, build momentum, build confidence and see more results. Now we're talking about acquiring a discretionary trust. Because it makes sense, the children are starting to get older, but as they get older, you can start distributing income towards the children. And potentially, when they sell, with different rules with the taxes, we need to make sure that that's right to distribute capital gains towards children. So as you can probably tell, the next venture they will be looking to start in terms of the business is definitely going to be accounting.

[13:54] Because it's all about providing our clients the most seamless experience as possible. So, let's not forget, there's the superannuation piece, you’ve gotta get that right. So, we build a portfolio that's outperforming by 2% against all the majority of industry super funds—well, over the long term. So that's obviously going to be a big, big, big difference So, we look at the different strategies within the financial planning context, we look at the different strategies within the finance strategy context, right? And then we look at the buyers agency piece and build out their property portfolio as strategically as possible to get as high cash-on-cash return on the equity that they've got. Control the upside and basically minimize the downside risk. And hey, presto, you've got a really solid optimized portfolio, optimized for growth. And then it becomes unstoppable mate. 

Coming up after the break, Andrew David Courtney talks about the one percenters that can have huge impact.

[25:08] Fear is in between your ears, you don't have to fear things, just understand what the worst case scenario is and really define it. Far too many people talk about it broadly without really defining it. 

The most common mistakes as a first time investor, and importantly, how to avoid them. 

[33:08] Far too many people jump in and take step five, when they haven't even taken step one, two and three yet.

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

 

So why does Courtney use his knowledge to help others? He could very easily keep the tools to himself. The reason is, it hits close to home. 

[17:03] Well, look, as I was sharing earlier, I wasn't well-to-do, my family is not well-to-do financially. So I knew I needed to get out to get my freedom and flexibility, which is what life is all about for me. So, my biggest way is helping as many people to do that, right? And how we do that is through educating people. So we're pumping out a bunch of content. And the idea and one of the big missions in the company, in Plenitude, is to educate 1 million people before we get to 10 years in business. So we're now almost six years. We're at about 70,000 and so we need some help. So, as far as I'm concerned, my goal is to build out our team doing the same stuff. Doing more podcasts like this, making sure that we spread the word, making sure that people understand that there is financial education out there, it's time to get financially literate and understand your real options, rather than what the government's telling you. Because I can tell you right now, $60,000 in retirement is nowhere near enough. And the government's telling people that's enough. I mean, what is this? This is just, it's complete bull crap really. So what we need to do is we want to get that right and the biggest way is increasing financial literacy across the board. 

Remember at the start of this episode? When I spoke about basketball and business? Don’t take my word for it, take Courtney’s. 

[19:26] Look, one of the things I'd love for the audience to have a look at is, type in Kobe Bryant valuetainment. Type that in and get your mind blown about the mentality that you need to achieve success or greatness in your endeavors. One of the biggest things that really struck me with that one, [19:49] one of the biggest lessons that I got from that one was from Kobe Bryant, obviously one of the best basketball players ever. He said he treats the world as his library to solve every problem that he's currently facing. So, that was the biggest thing and as soon as I heard that I was like, ‘That's exactly what I've been doing for the past 10 years in my life, right?’ This is the way to do it. You've got so many people who have written a ton of books, you've got people like yourselves making a ton of content to actually lift people up. So, all you need to do is work out what problem you're trying to solve. There are a bunch of books out there so you may as well stand on the shoulders of giants. It doesn't make sense to reinvent the wheel.

[20:32] So, there's this particular psychological concept called the zone of proximal development. There's only so much you can achieve as a person, right? So this is what you can achieve as a person. But if your goal is out here, it's gonna be very difficult for you to do that because you need to stretch out what you can achieve. Now, there's only so much stretching you can do. So what you need to do to get to these kinds of targets, is you need to get the right people in your team. You need to get the right coaches, consultants, the right team members to allow you to expand the output that you are capable of doing. So, as soon as I learned that I was like, ‘Wow, yes, that's exactly what I need to do.’ And ultimately, we've gotten to where we are because we've gotten the right consultants, the right teachers, the right mentors at the exact time that we needed it. So, what I suggest your audience do is have a think about well, who are the players in my team. And who's the next one that we need in there to get us to the next level? Because there are levels to this game. If you get the right people behind you, it's amazing what you can achieve within one to two years, let alone 15. 

Just like Kobe, Courtney doesn’t leave anything to chance. If it needs doing, it will get done. 

[32:29] I think it's definitely not luck, I can guarantee that much. It's definitely hard work. It's an obsession. I boil it down to what Kobe said, right? If you can solve a problem, solve your problems one problem at a time. And use the world as your resource and as your library, right? It's amazing how many problems you can solve and how much momentum you can build. So that curiosity piece is important, coming from place of abundance is important. And really throwing yourself in the deep end and understanding it from first principles is crucial. Far too many people jump in and take step five, when they haven't even taken step one, two and three yet. So, you make sure you surround yourself with the right people and build up towards the goals that you're heading towards. Far too many people aim for luck, you don't want to be hoping for anything. You want to plan things out and pivot if it doesn't work out.

Courtney’s own library of life has provided some powerful lessons. 

[22:25] The fear factor is really one of those things that you decide. You decide what you fear the most, right? I mean, back to my original story of coming from the Philippines. I've come from nothing, I will easily go back to nothing, easily. And I will build up a hell of a lot faster because of the lessons along the way. So, if you've got that kind of growth mentality and a mentality of abundance, I think that's the key. If you're grateful for what you have and you understand how you got to where you are, you learned your lessons along the way and you come from an abundance mentality rather than a scarcity mentality. You know you can get it back. Therefore, what's the worst case scenario? You're living in Australia. 

[23:17] Worst case scenario, you live in Australia, you move to a low-socio economic environment and you rebuild in a three to five year period. That's the worst case scenario for me. That's nothing, that's comfortable. You know what I'm saying? And that's the thing people need to toughen up their mind. We need to build calluses in our minds. And one of the key things that I do to help build those calluses is put myself in really uncomfortable situations and one of the key things that I've learned over the past few years is you can fast. I fasted for 26 days straight, no food, just water. Just water. And I put myself in a position where I was in agony and I know what the depths of hell feels like. So all of this stuff is nothing. It's nothing really. All of the fears, it's nothing. You'll be fine, it'll be fine, just push through. It's all good, who's done it before?

 [25:08] Fear is in between your ears, you don't have to fear things, just understand what's the worst case scenario? And really define it, because far too many people talk about it broadly without really defining it. As soon as you define it, then you can start risk mitigating against every single line item that you come up with. People make a big monster out of it when the fact of the matter is that they're only little thoughts. So, what I suggest people do is, if any fear comes up what you need to do is to find exactly what the worst case scenarios are. And all of the little bits and pieces, because far too many people blow it up to be something huge, but its not.

The Courtney of today wouldn't be the man he is without countless past mistakes. But looking back, there are a few things he wish he knew.  

[26:18] I was just transitioning from science into finance. [26:24] I would give him some some stock tips. I would definitely share the story of Amazon and talk about Elon and Tesla for sure. Yes, I would definitely drop the crypto gem on that person. I'd be telling them to go all in mate, let's make it. Just get a cash-out loan, load up, load up  and wait and see what happens. That's on the finance side. Keep doing what you're doing, get help sooner, stop being a hero. Stop doing everything yourself, because there's only so much you can do, one person could do. So, if you get the right team behind you, you can move a hell of a lot faster. And always, always, always stay curious. I'm a very curious individual. So, make sure I keep that going and then make sure you take care of your health. 

Property investing can unlock so much more then extra profits. In Courtney’s own life it’s even allowed him to protecting those he loves. 

[27:52] I guess the most recent thing that we've done is we've taken on my parents and my wife's mum to help take care of them basically. So, they live in our house and we've got three kids as well—I'm hoping for a fourth. So, back to the abundance mentality thing. I’ve got three girls and I'm hoping for a boy, fingers crossed for a boy mate, we'll see how we go. I'll take four girls though, don't get me wrong. Four is enough, it was enough for me because I grew up in a four kid household. So back to the question, mate. Yeah, helping my parents currently. They were living in an area in the Gold Coast that's not the best area. They were literally 50 meters away from a major highway, a major freeway. And we just realised in the past few months that my mom was having lung issues and she couldn't get over this cough that she's had. She said she's had a infection in her lungs and she couldn't get over it. And we never understood how she got to that stage. until such a time where we moved her over here and where we live. 

[29:00] We live on an island. We live on an island called Coochiemudlo Island here in Brisbane. We took her on and suddenly she started to stop coughing. And then we realize 'Damn, it must have been the pollution.' So, I put two and two together and I said, 'Well, you're surrounded by cars, you're right next to the bloody freeway.’ So, it makes sense that you're not healing properly. So we brought them on and essentially now they've lost a ton of weight, they're looking really healthy and they're spending a bunch of time with their grandchildren, which is awesome. And all and all mate it's a massive change to their lifestyle. So, that's one of the big things and ultimately I want to pay it back. I want to make sure that that decision that they made from the front end, back in 1995 when they decided to sell everything in the Philippines, will be paid back.

So what’s next for him? 

[30:43] Look, apart from growing my family and getting that boy or girl. I'll take whatever comes. It's building the team, creating a training program for future advisors in the future, touching as many people's lives as possible and making a big difference. Now, one of the things that I didn't share earlier is, I'm also a treasurer for a not-for-profit called Alive, which is a youth suicide prevention program. So what I always share with my clients is my goal is to get you to your financial goals fast, and during that journey we plant the seed of philanthropy. Because without St. Vincent DePaul, we wouldn't be where we are today. My mum, my family, would have starved. So, I want to make sure we pass that on, we want to create that kind of philanthropic drive. So, what am I excited about really making a mark? Creating that education, building a better financial education system for people, creating a philanthropic drive in the community so that we can help more people who are in need. And really helping build my team and help them to achieve their version of financial freedom. Because it's not all about me, it's about what kind of impact you can make in other people's lives. So that's what drives me moving forward.

Thank you to Andrew David Courtney, our guest on this episode of Property Investory.