Property Podcast
How to Earn $300,000 A Year by 28 With Scott O’Neill
March 10, 2021
Scott O’Neill is the founder and director of Rethink Investing. Before landing in property, O’Neill worked a nine to five job as a civil engineer, but found the hours invested did not match what he wanted from his career. He took a leap of faith and by the young age of 28, he had completed his goal of earning a passive income of $300,000 per annum. Now 33, O’Neill has the property portfolio of somebody who has been in business longer than he has been alive.
Join us in this episode of Property Investory to hear about O’Neill’s childhood growing up in the Sutherland Shire, his stories of working as a civil engineer before turning to property, and how he got started in residential real estate.

Timestamps:
Time
| Text
1:56 | Growing Up in The Shire
3:48 | The Positives of Positive Gearing
7:19 | The Road to Engineering
9:21 | Start When You’re Young— It All Adds Up
13:22 | Invest Your Time
17:31 | The Career Game
23:46 | The Golden Goose
27:13 | The Best Purchase We Ever Made
30:35 | Trials and Tribulations
32:20 | With One Day to Spare

Resources and Links:

Transcript:

Scott O'Neill:
[00:24:24] Add that to the two properties we'd previously got, all of a sudden we had kind of a pretty decent portfolio. A couple of Sydney ones and a high yielding regional Australia unit block. Then basically from that point I was obsessed. I was like, 'I need to find another unit block just like this because this is absolute gold'. 

**INTRO MUSIC**
 
Tyrone Shum:
This is Property Investory where we talk to successful property investors to find out more about their stories, mindset and strategies.
 
I’m Tyrone Shum and in this episode we’re speaking with Scott O’Neill, who at the young age of 28, had completed his goal of earning a passive income of $300,000 per annum from property. Growing up in the Sutherland Shire, O’Neill worked as a civil engineer and contractor while buying property, before becoming a full time investor many years later.
 
**END INTRO MUSIC**
 
**START BACKGROUND MUSIC**

Tyrone Shum:  
Most people retire at the age of 65 when employment opportunities are no longer available to them. O’Neill retired at the age of 28 and for the past few years has been the founder and director of a company called Rethink Investing. This is how he describes himself.

Scott O'Neill:  
[00:00:05] I'm a residential and commercial investor. I've come from engineering roots. I basically purchase properties full-time now.

Tyrone Shum:  
O’Neill gives us some insight into what his day to day life looks like at the moment, being a young person who chooses to work when he no longer needs to.

Scott O'Neill:  
[00:00:47] We've got a one year old baby girl now, so starts off with the routine. After that I get into my day job, which is running Rethink Investing. It's a company that's very busy these days, it's been a strange year with COVID. And kind of a good year for business because a lot of people have prioritised setting themselves up for their future with property. 

[00:01:14] So my day is literally talking to agents and clients all day. I've been working very long hours at the moment. So the lifestyle by design's kind of blown out a bit. But what can you do, I do enjoy the job. It doesn't have that nine to five feel, or nine to seven at night feel kind of thing. It's just a busy day talking property, really.

Growing Up in the Shire

Tyrone Shum: 
He grew up and studied in the Sutherland Shire, south of Sydney. He shares what his childhood was like and how it has made him who he is today.

Scott O'Neill:  
[00:01:56] I grew up in suburbs like Miranda and Yowie Bay. I did buy my first property down that way in Sutherland. It was a good childhood, we were really into sport; surfing, golf, tennis. It was a very active childhood down there and I still play all those sports now. So it's good lessons. I moved about five, six years ago, to the eastern suburbs. My wife is originally from this location, and I prefer the lifestyle up here, it's a little bit busier. But you know, you're close to the city. I like the hustle and bustle. 

[00:02:44] I've spent time in regional Australia for jobs, working in places like Port Macquarie, Orange, different parts of western New South Wales as well, for brief moments. So I lived in the Gold Coast for a little bit as well. So, in between this, I've done some travelling trips, as well. 

[00:03:05] I went to Sydney Uni, and during those long summer holidays, I'd go to different places. I worked in Canada as a chef— a pretty terrible chef— literally just a pub chef, but still, I've never cooked so many hamburgers and steaks and all that in my life. And it was hard work. But it allowed us to ski every day. We did things like heli skiing and all that fun stuff. It's so hard to do now with a child. It was that freedom that you very rarely get unless you're a young single person. So yeah, it was a good leadup. 

The Positives of Positive Gearing

Scott O'Neill:  
[00:03:48] Once I was getting ready to settle down, this is sort of around 21, 22, I started looking constantly at property. And that's when I bought my first property at 23. That property was in Sutherland and I paid $480,000 for it. It was a house and granny flat arrangement; it was renting for about $650 a week. I was positively geared in Sydney, and this was back in 2010. Many of your listeners may remember 2010 as a pretty bad year for property. Sydney did decline. It later recovered, but it was a pretty flat market for two years. So it wasn't a super strong start into property investing. It took me two years of pretty much no growth before it got going. But as we all know, Sydney then boomed after that. 

[00:04:42] So that $480,000 property turned into a $1 million plus property quite quickly. But the good part of that property was it was positively geared. I was getting about $200 a week clear every week, and that adds up, and that helped with future lending. I guess that's why I'm a very staunch positively geared investor. I don't believe in negative gearing. It doesn't help with lending, it doesn't help with retirement, you're really relying on growth only and hoping your rents will grow with it. But there's better ways, I found, and that's buying things like that house. And in more recent years, I'm more commercial, because the numbers worked so much better. Multiple times better, in fact. We're finding the growth in commercial, as more people realise this is a bit of a winner is growing quicker than most residential as well, because stock is low. So everything in commercial is really highly positively geared, and really good growth as well for now. 

Tyrone Shum:  
O’Neill expands on his teenage years into his early twenties, where he travelled and worked around Australia and internationally, but not in the jobs you would expect.

Scott O'Neill: 
[00:06:20] I went to Newington College. That was a school in Stanmore, Sydney. It was a good school, and it definitely contributed to getting into a good uni and all that. I think I needed it as I wasn't the best student— I didn't like discipline, I had a terrible attention span in class. So going to a better school definitely straightened me out a little bit and prepared you for university. So that was a benefit. Honestly things like, we just had to travel an hour and a half on a train every day as well, so it wasn't easy, but you look back on those things. And I think it's good to sort of grow up with things where you've got to travel. I was always just open to travelling long distances, but a lot of other people would prefer not to do that. So for me, it's just normal day to day life. 

The Road to Engineering

Scott O'Neill:  
[00:07:19] I got through school. I really didn't like school, but I loved all the sports components. And that's what those schools were good for. So cricket and rugby, and all those types of sports were very big. That was the best part of school for me. But the foundations we've been set were more an analytical base than anything. So I knew I needed to do a uni degree that had some type of maths in it. And it was either economics or engineering. 

[00:07:34] And I chose engineering because basically, I like the idea of being outdoors a bit more. So I chose civil engineering because I didn't want to be stuck behind a desk. I liked the idea of managing sites and just walking around and seeing buildings and building bridges and all that kind of stuff. I did electives in university around economics as well. 

[00:07:52] I was looking at shares at the age of 15, I actually bought Telstra shares at 15, and was just watching them go up and understanding what dividends meant at a very young age. Because if you've got $500, you can go buy $500 of shares, and instead of getting zero return out of a bank, you can get a few dollars a quarter out of a dividend. At the time, that was free money. And I liked that idea. 

[00:08:44] And that obviously propagated through to investing later on with houses and commercial property. But obviously, there are stepping stones to get there because deposits are hard. University was a good period where I worked a lot too. I worked in bar jobs, leagues clubs, I worked in car dealerships, cleaning cars, I worked as a surveying field hand, carrying the little surveyor light around, measuring heights of buildings and all that kind of stuff. And it was all just part-time work. 

Start When You’re Young— It All Adds Up

Scott O'Neill:   
[00:09:21] But it was good during uni because it meant that I was earning an income. So even though it wasn't much, it was forming a deposit for a later date. And the university degree went over four years. So, four years of working part-time, it does add up. And now I see many of my clients follow similar trends. Like if you could work part-time, as much as you can, I think the life skills you get out of that are probably better than the uni degree itself. 

[00:09:37] And I haven't really got much out of my uni university degree and, in fact, I actually did a thesis on how little the engineering degree prepares you for engineering jobs. I was quite passionate about it because we would sit in class and it was pure theory, there was never anything to do with management or safety or public speaking or... nothing to do with that. That's what engineering really is. It's about managing people, it's thinking on your feet, training, problem solving, essentially. And I guess the uni degree for me didn't really hit that mark. But then when I look back at it, it does change how you think, the preparing for exams, and all that. It doesn't really matter what you study. It's just the discipline of it which is important.

Tyrone Shum:  
O’Neill reveals how he got through university with the help of some friends, as he wasn’t in the right headspace— or the right physical location— at the time. He then goes on to detail his early working years in the construction area.

Scott O'Neill:   
[00:11:38] I was travelling during the summer breaks. In Canada, for example, I actually overstayed that trip and missed a couple months of the semester. So I had people marking me off in class just so I wouldn't fail. But I got back in time for the meaty end of the semester and did get through— just—some of those subjects. Because I was just not in the right headspace with studying, that's for sure.

[00:12:07] I did live in the Gold Coast for one of those breaks as well. So again, I did about four or five months, over the summer break up there, and then started doing a little bit of long-distance studying and that stuff. Once uni finished, I jumped straight into a job. So I worked for the company called Leighton Contractors—I think they've got a new name these days. But essentially, my job was to look after small construction sites on building rail lines. We were building in Sydney, it was basically like turning two tracks into four. And obviously, there's big retaining walls, there's bridges, there's moving utilities, it's massive jobs. And it was extremely long hours. So, think about when you do work on train lines, you've kind of got to do most of the heavy stuff outside commuters hours. So that led to a lot of weekend, Sunday work, Christmas shutdown, Easter shutdowns, New Year's shutdowns, it was the worst case scenario for someone who's coming straight out of uni, who wanted a lifestyle because you don't get that in those jobs. 

Invest Your Time 

Scott O'Neill:   
[00:13:22] For me, it was good pay. And that's one of the reasons I went that direction. Because as a graduate with no experience it was better than what I was going to get anywhere else. And that helped for investing. But that job was what really set me off to go, 'I need to invest heavily than anyone else, because I don't want to end up doing this forever'. And that would put the fire in the belly to actually take property seriously. I basically treated it like a full time job, even though it wasn't, it was just something I needed to invest time in. Because if it went well, I wouldn't have to work until 65, maybe I only had to work until 55, or 45 if we went really well, that was an absolute pipe dream.

[00:14:07] Just buying that first Sutherland property where it cleared $200 a week, if I just multiply that out five times, it's $1,000 a week plus growth, all of a sudden, retirement doesn't seem that crazy, if you're hitting those numbers. You could go live in Bali on $1,000 a week like a king. You can go to many parts of Europe and do the same thing. You could go live in regional Australia and just have a cheap place to rent and live off the rent. If you want to retire on $1,000 a week, you can, unless you've got a lot of kids and obviously then you need to start upping your passive income goals. And that's sort of what we did. I had an initial goal to replace my wife's Mainers income. And then after that it was my income, and then after that our end goal was to get $300,000 passive income, which we did by the age of 28. 
  
[00:15:06] I'm 33 now. So we've pushed through those numbers now, we've got an income enough that we don't ever have to work again. And I literally run this business because I love the property markets. I really enjoy working with clients. I still take on about two clients every week. And that's manageable for me because we really can benefit them from helping them buy the same types of property. Particularly in commercial where there's just not much knowledge in this space. And we've been just getting great results for clients. And that's enjoyable, seeing people actually appreciate that. And that's what gets us out of bed in terms of the business each day now.

Tyrone Shum:   
[00:16:06] So how long were you actually in the engineering space for before you actually jumped out? Because we're trying to track that history now to understand and then talk a little bit about your journey on the property too, but we'll talk about that first. How long were you actually in engineering for?

Scott O'Neill:  
[00:16:32] So I worked for Leighton Contractors for about two years. And then I took a role in a building material business. So it was like a process improvement role, similar type roles. So we were looking after concrete plants and mines. That was a more business orientated role, which I liked, because I like p&l, trying to sort of improve the business. There was a lot of travel involved in that role, because we were sort of a New South Wales centric type business. That was a company called Wholesome. Wholesome is a massive company there, they've got about 80,000 employees, and we were just in the New South Wales region. So that role was really enjoyable. I worked for Wholesome for about two and a half years after I left Leighton Contractors. 

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Tyrone Shum:
Coming up after the break we will delve further into O’Neill’s ambitions and strong working history from a young age...
 
Scott O’Neill:
[00:21:57] So it was a lot to deal with at that age, but I did like it, I liked the idea of progressing in those businesses. But at the same time, I felt like even at that age, I was like, well, what's next? I don't want to just have this same job, just a larger responsibility. 

Tyrone Shum:
We also discuss O’Neill’s early days in property, starting with residential unit blocks.
 
Scott O’Neill:
[00:24:47] And the best part was we revalued it 12 months later and it went up about $90,000 as well. I was actually disappointed with that valuation. I thought it was worth more because there was a similar comparable sell for about $200,000. 

Tyrone Shum:
In amongst his successes, O’Neill has run into some roadblocks during his career.
 
Scott O’Neill:
[00:31:27] And we got this property negotiated for a four month period. So we had to then get a loan approved in that period, which was done very quickly, but then APRA changed the rules on us, so we had to come up with about $500,000 cash that we didn't have.

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

Tyrone Shum:   
O’Neill continues sharing where he developed his strong ambition through the jobs he took on at a young age.

Scott O'Neill:   
[00:17:31] So first job was a process improvement manager. So my job was to kind of help improve the efficiency of concrete plants and the logistics side of the business. So very truck related, very concrete plant related, but it was a really good sort of entry to understanding industrial areas, and the logistics businesses and stuff like that. I got promoted in that to a production manager. So that's where I had full responsibility of a major concrete plant in Alexandria in Sydney. So we're managing about 20 staff, there were about 15 trucks in that area. I did that for a little while, and then got promoted to managing fire plants. So I was looking after about 70 stuff, and I was quite young at the time. And I got told for me to go to the next level of job, I had to study for an MBA. So I was basically told that was required. So I then started an MBA at  the Uni of New South Wales, because I wasn't really thinking I was going to retire from property. I was still playing the career game. 

[00:18:47] And I didn't mind it, but it was just something I knew I couldn't do forever. But if an MBA helped me get a better job, then that's why I did it. So I ended up studying an MBA at AGSM for three years. That was a tough moment in our life, because at the same time as I started that, I took another role in Port Macquarie for a different company called Adelaide Brighton. I had full strategic and operation and sales performance responsibility for this northern New South Wales business. So there were four mines. So there were three business units: quarries, logistics and concrete production. So I had to learn about quarries really quickly. I knew the logistics and the concrete part pretty well, but that business was complex. You're obviously dealing with environmental issues, heritage issues, there's always a lot of safety related problems on highways and we're basically helping supply all the material for the Pacific Highway upgrade up there. So we were basically building the big road up there, turning it into a proper freeway where there's dangerous corners and stuff like that. So, massive jobs. 

[00:20:04] And at the same time my wife's mother was very sick. So we were living in Port Macquarie at the time, and we were driving back to Sydney every weekend. We literally did it for about six months in a row every weekend, that 400 or 500 kilometre drive every time. And that on top of working those hours and doing an MBA, it was a bit of a rough period. And that's, again, a bit of a reminder that property had to be the way out from this, because this was not sustainable.

Tyrone Shum: 
[00:20:42] How old were you by that age, by that time?

Scott O'Neill:  
[00:20:46] So I was about 25, 26, 27.

Tyrone Shum:   
[00:20:50] You're still very young Scott. You're in senior management, you're already doing your MBA, plus, also, you've already started your property journey at that point, right? 

Scott O'Neill:   
[00:21:00] Yeah. I was burning the candle at both ends. It sounds silly, but I felt like I was just ageing quick. I felt like I was an old head in a young body because I was having to deal with big employee conflicts at work, like, there were union problems. I remember I had staff that had... in regional Australia, there's big ice problems out there. So you had staff that were once good staff get on the ice, and then you're dealing with that type of stuff as well. So there's a lot of conflict we had to deal with. There was the ever pressure of developing a good monthly report to your manager. Obviously, we had to produce profitable results, otherwise the job's under pressure, how do we perform, go find some new customers, all that kind of stuff. 

[00:21:57] So it was a lot to deal with at that age, but I did like it, I liked the idea of progressing in those businesses. But at the same time, I felt like even at that age, I was like, well, what's next? I don't want to just have this same job, just a larger responsibility. I felt like there wasn't really going to be much variance in the next 20 years of my work life, because I was doing what I thought I was gonna do, I'd just have more employees or bigger problems. And then obviously, that would have come with different salaries and stuff like that. It was starting to not become really about the salary at that point.

Tyrone Shum: 
O’Neill dives into his property journey, which started in 2010 with a local Sutherland property. After that he moved to Port Macquarie, where his property career really started to take off.

Scott O'Neill:   
[00:23:01] I bought the Sutherland property in 2010. Then we didn't do anything for two and a bit years with property. We couldn't. We maxed out on a 90% loan at the time. So I saved about $60,000 which came from all those previous years working part-time. And then my wife and I purchased a unit in Maroubra. We did an 85% loan on that, we used a little bit of equity from the first house and obviously we saved for two years as well. So we had a deposit that we worked for. And then after that, moving to Port Macquarie. So it was about another year and a half after that we then bought in Port Macquarie. 

The Golden Goose

Scott O'Neill:   
[00:23:46] This was when it really started for us. So it was a unit block, four units on one title. It was basically four two bedroom units. It was one three bedroom unit, one one bedroom unit and two two bedroom units. So the combined income of that property was over $800 a week. We paid $425,000 for it. So it was an instant $17,000, $18,000 cash flow per annum clear. And that was at the interest rates back then as well. So the numbers worked really well. Add that to the two properties we'd previously got, all of a sudden we had kind of a pretty decent portfolio. A couple of Sydney ones and a high yielding regional Australia unit block. Then basically from that point I was obsessed. I was like, 'I need to find another unit block just like this because this is absolute gold'. 

[00:24:47] And the best part was we revalued it 12 months later and it went up about $90,000 as well. I was actually disappointed with that valuation. I thought it was worth more because there was a similar comparable sell for about $200,000. And I remember I challenged the valuation. The guy was kind of quite smug about it, going, 'you must think you're the best investor in the world getting numbers like that'. And I'm like, 'well look, there's a comparable there that's sold for a much better price. What's the difference?'. And then he was literally just attached to the previous price I paid. And I got lucky on the purchase, definitely. There was a bit of work needed on the property, things like that. It turned enough people off on the day and I was ready to do a short settlement and things like that. So it was sort of the right place at the right time. I was a local in town as well, so I did benefit from numerous little things like that to get it at the right price. 

Tyrone Shum:
After that O’Neill headed further north to the Gold Coast to try his hand at the Queensland market. He found that unit blocks were the winner for him.

Scott O'Neill:   
[00:25:51] The next property came pretty quick after that. I basically used the $90,000 from the valuation uplift, and went straight into the Gold Coast, which is a market that I knew because I lived very close to the area we bought. We bought in Labrador. And that was three units on one title. And that was about $1,000 a week return. We paid about $450,000 for that one. Huge yield on that one again. These numbers don't exist in unit blocks anymore. I've tried. 

[00:26:30] Because I was onto a winner with each unit blocks back in that sort of 2014 period, where I was using that job was in northern New South Wales to letterbox drop hundreds of similar unit blocks I'd see when I was just driving around. I printed off a bunch of letters and just said, I will purchase your property for above market value if you want to sell to me directly. Skip the agent, you'll be financially ahead. Something along those lines. I dropped hundreds of these. And it didn't work, because no one wanted to sell. So I thought I was going to clean up, to be honest. I was like, 'yeah, this is great, they're gonna want to skip'. And people weren't selling. 

The Best Purchase We Ever Made

Scott O'Neill:   
[00:27:13] I bought another unit block in Port Macquarie which came onto the market. I think I've mentioned it in the previous show we did, but it was five units on one title. And this one I bought the day it was listed. I remember the agent said there's five or six people from Sydney driving up on the weekend to view it. He listed it for $710,000, I tried to get it for $650,000, then $660,000, and then $670,000. And then literally I had to pay the asking price for it. But it was the best purchase I've ever made. Because we strata titled it.

[00:27:50] And my wife and I, we basically got a revaluation of $1.2 million, so it went from $710,000 to $1.2 million. So we made very quick, easy money through a strata title process, because individually, the units were worth more per square metre. Because it's easy to finance those deals. And you could see we're making good cash flow, but making good equity as well. And this is the point where the market in 2014 started to really grow, particularly in Sydney. So what happened is the yield started dropping because rents weren't growing at the same pace as the prices of houses and units and all that kind of stuff. So that's where my positively geared strategy was starting to hit walls. We bought a couple of houses around Brisbane and things like that, which were covering themselves, but I wasn't really getting the same returns. And that's when we started looking at commercial.

Tyrone Shum:  28:50  
He gives an overview of how many properties he’s purchased and sold, and how many he currently has. He classifies himself as a ‘classic rent investor’.

Scott O'Neill:   
[00:29:09] Currently, I have 32. I've sold five. So I currently own 32. And obviously, we've bought and sold a couple in that period. So 32 properties are currently worth... it'd be north of $20 million currently, got a debt level on that. It's under 50%. So we're quite conservative in that, and a big portion of that recent purchases was like we bought in Sydney, which was our first emotional purchase since the Maroubra one, so there was no cash flow out of that, it's just a place to live. 

[00:29:47] But we bought 29 properties prior to buying a house to live in. So we're a classic rent investor story. If I was buying a Sydney property to live in earlier, like especially a high value one, there's no chance I would have been able to buy the following properties after that. So investing came first, purchasing a home came second.

Trials and Tribulations

Tyrone Shum:  
As with most investors, O’Neill’s property journey has had its ups and downs. He shares his misadventures and misfortunes.

Scott O'Neill:   
[00:30:35] I guess... buying a house in Sydney, it was a multiple million dollar place to live in. What I found through that process, it was right when APRA was starting to tighten the reins. So we got a pre-approval, I purchased this property, because I knew it was like the worst house on the best street scenario, it was one we had to have. And we weren't quite ready financially because we were waiting for a couple of things to settle and stuff like that. But negotiated a four month settlement, there was an auction, no one showed up at the auction because this was in March 2018. So it wasn't a great time for Sydney property. Remember that was when it kind of started to drop at that period. 

[00:31:27] And we got this property negotiated for a four month period. So we had to then get a loan approved in that period, which was done very quickly, but then APRA changed the rules on us, so we had to come up with about $500,000 cash that we didn't have. But otherwise, I would have lost the deposit, and the deposit was a very large deposit. So it would have been pretty backbreaking, it would have set us back a long time. But I took on the risk, because I knew it was an 80% chance of going through and if that went through, we're onto a winner. So good enough odds for our situation. But it was very stressful, because we had to sell a couple of properties that we didn't want to. I mentioned before when we sold five properties, and that that came up with deposits, freed up lending. 

With One Day to Spare

Scott O'Neill:   
[00:32:20] But doing all that within four months was tough. And there were many sleepless nights, and there was a vendor that would have definitely taken our deposit and relisted the property because as soon as they accepted the offer, they regretted it, because I believe they kind of knew they sold it for too little. And they would have taken the deposit if they could have. So there was no chance of extending settlements and stuff like that. So the pressure was on to get it done. And it was a rough four months of having to just work out solutions. And the stakes were high, like, we weren't buying a $200,000 unit. This is a large one. We would have lost a lot of money if it didn't go well. 

[00:33:08] But we got there by about a day. And thanks to my broker who was taking calls at 10 o'clock at night, going through my portfolio to work out which one we should sell, because it might help with lending, or basically free up the biggest deposit, I just sell one of my best commercial properties, which we're lucky enough to sell in seven days on the open market. So, you know, a little example of how commercial property can grow. I paid $405,000 for it, and we sold it for $500,000 12 months later. So it went up 25% in a year. And that was great. That was a big chunk of the deposit sorted just for that one thing. 

[00:33:54] And then last minute, the bank kept throwing extra curveballs and we had to show extra pay slips and all sorts of things like that. So there was a massive amount of conditions on their approval. There were about 30, in fact, and we had to tick them, because when you own a lot of properties, it's hard to get residential loans. Especially larger ones like that, because there's extra restrictions once you go over a certain level of debt.

Tyrone Shum:
O’Neill gives some insight into how he settled properties in as little as seven days, as opposed to the six to seven weeks it typically takes.

Scott O'Neill:   
[00:34:42] So first probably we sold our Maroubra unit off market, to our plumber who loved it. And we sorted that out quickly. I mentioned a commercial property that sold seven days on the open market. Settlement periods were standard, like you said, but we had four months. So we were getting it done— just— but there was no chance we could have run long marketing campaigns. And that was the hard bit. So, again, there was a bit of luck involved, but we hadn't good properties too. So they weren't hard to sell. It's just the timing of it. 

[00:35:20] And I guess the lesson learned out of that is I'll never do anything like that again, you'd be better off just getting a pre-approval when it comes to residential. Get the pre-approval, then buy. If you're doing what I did, and buying without it, you're crazy. And I guess I just took the risk due to the fact I've done so much in property. And it was a calculated risk. But yeah, I didn't know how close it would be. And obviously, we had the uncontrolling factors of APRA's rulings on lending, which were getting harder. If the goalposts didn't change, it would have been fine. But we were dealing with, like I said, there was an extra $500,000 we had to come up with because they restricted our LVR on the loan.

Tyrone Shum:  36:05  
Wow, that is very, very challenging. And obviously you survived through it. So basically, from what I can gather, it's just very crucial to have actually got a pre-approval before jumping into this. You guys found a great deal and you thought you could calculate that you could possibly afford this and then at the end of day you wiped it all out. Wow. I love that story.

**OUTRO**
 
Tyrone Shum:
Scott O’Neill’s story continues in the next episode of Property Investory. Join us for part two where we’ll talk about his move from residential to commercial...
 
(Snippet from part 2 episode)
Scott O’Neill:
[00:03:01] I landed on the fact I wanted a supermarket, or a food related business because this is five years plus ago. And I always thought, ‘food can't go out of fashion’. People have got to eat.
 
Tyrone Shum:
We’ll find out his thoughts on purchasing commercial property during a pandemic.
 
(Snippet from part 2 episode)
Scott O’Neill:
[00:08:28] So this is why I like commercial because you can go into sub market. So there's three main areas— office, retail, and industrial. So we all know, office is not looking good right now. People are working from home, the CBD is quite vacant, there's a bit of a question mark on will it go back to 100% of what it was.

Tyrone Shum:
O’Neill shares more on the potential struggles with going from residential to commercial property.

(Snippet from part 2 episode)
Scott O’Neill:
[00:14:08] It's quite involved, and every property is different, too. So this is where a lot of residential investors struggle. I've seen even experienced residential buyer's agents try commercial and they get it so wrong because they're assuming the information is correct, that's being presented to them. And you can't do that. 
 
Tyrone Shum:
And that’s next time on Property Investory.